The Humble Brag: Durable, Contrarian and LeBron James

I hadn’t encountered the term “humble brag” until I met Mark Landecker, co-portfolio manager of the Nedgroup Investments Contrarian Value Equity Fund. But the concept—signalling wealth without uttering a word—has been around for millennia, from the gold-laden elites of ancient Egypt to the bling on the wrists of LeBron James. And for us, as long-term investors in quality businesses, this subtle form of status expression is more than cultural—it’s durable, contrarian, and investible.

Luxury’s uneven path to recovery

The post-pandemic recovery in luxury has been anything but linear. China, once the engine of global luxury demand, has lagged expectations. Yet, international travel is gradually returning, and with it, tourism-related luxury spending is beginning to recover—albeit not yet at pre-pandemic levels.

In this environment, we’ve maintained high conviction in one particular name:Richemont. Despite industry headwinds, Richemont’s sales have remained resilient—and even grown. This is not a short-term anomaly. It’s a reflection of a business model built on heritage, scarcity, and timeless appeal -qualities that reflect how we think about durable growth.

Jewellery, the quiet compounder

The personal luxury goods industry has compounded at 6% annually over the past 15 years, consistently outpacing global GDP. Within that,jewellerystands out as the most resilient category. It’s less cyclical, less trend-sensitive, and underpinned by intrinsic value. Jewellery doesn’t go out of style—it gets passed down.

Among the many brands in the space, few feature a prominent logo and even fewer have iconic collections with a widely recognised motif that signals wealth. Richemont owns two of the most powerful brands:CartierandVan Cleef & Arpels. Cartier, arguably the most iconic jewellery house in the world, boasts a portfolio of collections—Panthère, Trinity, Love, Juste un Clou—that have endured for more than half a century. Even newer lines like Clash have gained traction. Van Cleef’s Alhambra, a design launched nearly sixty years ago, continues to resonate with new generations. These are not fashion statements—they are heirlooms.

Heritage as a moat

In an age of rapid innovation and AI-driven disruption, heritage remains one of the few competitive advantages that cannot be replicated or accelerated. The combined sales of Cartier and Van Cleef & Arpels now exceed those of all other major jewellery brands combined. That’s not just brand equity—it’s pricing power, customer loyalty, and margin resilience.

This heritage translates directly into financial performance. Cartier and Van Cleef have delivered consistent revenue growth and enviable operating margins through multiple economic cycles—including the Global Financial Crisis and the COVID-19 pandemic.

Contrast that with fashion brands like Gucci, whose fortunes have risen and fallen with each new creative director, or Burberry, which has seen a decade of flatlining revenue and operating income.

Contrarian conviction

Our position in Richemont was not built in a bull market. It was initiated in early 2020, in the depths of the pandemic, when sentiment around hard luxury was deeply negative. Lockdowns, collapsing tourism, and economic uncertainty painted a bleak picture. The sell-side called it a “perfect storm”. We saw a perfect opportunity to invest in a high-quality cyclical business with durability, at attractive valuations. Compared to its luxury peers, Richemont stood out for its resilience amid the uncertainty of the pandemic, given its strong balance sheet, healthy cash flow, focus on jewellery, heritage brands and disciplined pricing.

Our approach is rooted in deep fundamental research and a long-term perspective. We had already completed extensive due diligence on Richemont and Tiffany in 2019, engaging with several former luxury brand CEOs and industry analysts. When the market turned fearful, we leaned into our conviction. As contrarian investors, we are wired to lean into discomfort.

The question we ask ourselves now is not whether we were right—but whether we were bold enough.