Richest man in the world: but can he code?

Scarcity | No Mercy / No Malice

Scott Galloway writes:

The richest man in the world doesn’t make cars, rockets, or enterprise software — he makes handbags. Bernard Arnault, the CEO of LVMH, is now worth more than Warren Buffett and Mark Zuckerberg combined. He’s made his fortune not selling things people need, but things they want. LVMH controls the most prestigious luxury brands in the world, from Tiffany & Co. to Loro Piana to Louis Vuitton.

When you assemble artisans and create scarcity that results in a supply/demand imbalance, you generate a cash volcano that you can cap the same way you do an oil well — and turn on/off as needed. Businesses are either supply-constrained (e.g., rare earth minerals, 1945 Château Mouton wine, etc.) or demand-constrained (pretty much everything else). The companies that trade at the greatest multiples are those that are artificially supply-constrained, where the supply/demand imbalance puts a dial on the spigot the managers control. Imagine the decision to have more revenue is just a function of when you’d like more revenue (see above: Hermès).