# Nobody asks questions about Pandora anymore. All is well.
We have learned a lot with Pandora. We made several mistakes, of which the two main ones were un- derestimating the company’s internal damage after years of mismanagement and underestimating Pan- dora's dependence on its commercial success. The latter is however a factor that is always difficult to anticipate.
We nonetheless believe our strategic analysis was correct: the business has strong barriers to entry, mainly scale and costs/logistics, as well as some switching costs (once consumers buy a bracelet, they tend to buy more charms), and — to a lesser extent — the network effect, which is possibly more com- mercial, brand, and fashion related than anything else.
6/16
The stock is certainly a counterexample of the “efficient market”, with lows in 2011 close to DKK 30 per share, highs of DKK 1000 five years later in 2016 (x33), back down to DKK 200 in 2020 (-80%) and up to DKK 815 in October 2021 (x4) whilst the group has always been one of the leading luxury brands in the world, one of the few selling more than 100 million pieces per year.
Pandora has been a headache for us for around 3 years. We jumped in at levels of 600 DKK per share in 2017 and patiently averaged down during 2018 and 2019. However, since the arrival of the new man- agement team (2019) and the restructuring of the company (2019/2020), Pandora has become a source of good news and positive contribution to the Classic Fund. The stock is now trading above 850 DKK per share, yielding a very good net return to us.
Having experienced the whole process we are now strongly aligned with Pandora’s new management team. Consequently, we are still invested in the company, but with a slightly smaller position after real- izing some profits, and surprised that no one is asking us about Pandora anymore.
This means that all is well.

Translation (ENES, 2021-09-30):
# Ya nadie nos pregunta por Pandora. Todo va bien
Hemos aprendido mucho con Pandora. Cometimos varios errores, aunque principalmente fueron dos, infraestimar el daño interno en la empresa tras años de mala gestión e infravalorar la dependencia de Pandora de su éxito comercial, un factor que es siempre difícil de anticipar.
A pesar de ello, entendemos que nuestro análisis estratégico fue correcto: fuertes barreras de entrada, principalmente escala y costes/logística, y algo de switching costs (una vez que compras una pulsera hay tendencia a comprar más charms) y en menor medida network effect, posiblemente más comer- cial/marca/moda que otra cosa.
La acción desde luego es un contra-ejemplo de la eficiencia del mercado, con mínimos en 2011 cercanos a 30 DKK por acción, para tocar máximos de 1000 DKK cinco años después en 2016 (x33), volver a bajar a 200 DKK en 2020 (-80%) y situarse en 815DKK estos últimos días (x4).
Pandora nos ha dado muchos disgustos porque entramos a niveles de 600 DKK por acción y fuimos ha- ciendo average down en la caída, etapa que ha llevado unos 3 años. Pero tras la llegada del nuevo equipo gestor (2019) y la restructuración de la empresa, Pandora se ha convertido en fuente de buenas noticias y contribución positiva al Classic.
7/16
Hemos vivido todo el proceso y estamos muy alineados con el nuevo equipo gestor de Pandora que lo está haciendo de fábula. Seguimos invertidos en la empresa, pero con una posición algo menor, tras rea- lizar algo de beneficios, y sorprendidos de que ya nadie nos pregunte por Pandora. Esto significa que todo va bien.