How do you invest in the AI revolution? What’s the best way to ride a technological revolution that, the promoters say, will be as transformative as anything we’ve seen yet in the digital age? Here’s a counterintuitive idea, courtesy of Dhaval Joshi, chief strategist at BCA Research: puffed-up AI stocks themselves may not be the best bet; luxury goods companies, specifically French ones, could be.
Joshi observes that, while you would have done very well by owning a portfolio of US tech stocks since the mid-1990s, “the pre-eminent growth sector” has been French luxury stocks. You can see what he means in the first chart, showing total investment returns. The line that includes the likes of Amazon, Apple, Google et al has been beaten consistently by the one that has been boosted by the stellar stock market performances of the likes of LVMH, Hermès, Christian Dior and the Gucci owner Kering – four of the largest companies on the Paris exchange.
