Paul Swinand: Right now, we're seeing a lot of worry in the global luxury sector. There are global macro issues: protests in Hong Kong, the crisis in Russia, Middle East tourism has been affected by the Syrian situation. So, there are a lot of worries in global luxury right now.
We think actually that, for once, this sector is starting to look more attractive because the valuations have come in. Among the group, our favorite pick is actually Swatch Group (SWGAY). Although there are some near-term negatives, we think that in the long run Swatch should outperform other groups such as Richemont.
Also, another interesting group that is more liquid for global or U.S. investors is LVMH (MC). It has almost never traded at a discount to our fair value. It is a little more diversified. They have wines and spirits, fashion, and leather goods. So, they are much less susceptible to any one sector having a downturn.
So again, we think, for once, global luxury is more attractive despite some of the headwinds that we're seeing in the market right now.