Vol. 1, No. 1…a new beginning…

“Wine is the answer. What was the Question?” – Anon

Trader Bill is a news junkie…before it was all about financial and political matters…this blog, however, will be entirely wine and travel related to wine.

The blog will be published every other Monday (hopefully).

Here is a nice kickoff story… well, interesting anyway:

On Christmas Day, some creep(s) crept into the cellar at the three-star Michelin, French Laundry, owned by the famous Thomas Keller (also Per Se in NYC). The restaurant was closed for remodeling and these guys knew what they were looking for: la creme de la creme. They only took the highest valued wines: Screaming Eagle, Domaine Romanee Conti (DRC), and other prized wines. The Napa County Sheriff’s Office put a value of $15,000 on it…low ball! Keller estimated it at $300,000. One bottle was reportedly worth $16,000 (let’s make this clear: to TB, no wine is worth that price…TB’s just sayin’). TB counts 77 bottles (that’s an average of $3,900 from the list provided on his blog by Keller…wonder why they didn’t fill up the last case? (Correcting as originally I thought there were 57 bottles but then found more on the list and forgot to remove the comment on 3 more bottles, mea culpa). Think this is rare? Try googling ‘wine theft’ and you will be amazed at the number…but should you be? It’s big and easy money!

Most, if not all, of these bottles have serial numbers so Keller and wine experts say they will be hard to sell. Hard to sell? Pullease…how many art thefts have we read of that are never seen again? Imagine owning some Picasso and not being able to show it to any for fear it would be reported to the authorities. Now with a bottle of wine from some well-heeled collector…or perhaps a wealthy Chinese…there are a lot of them out there and they are craving these names as they have been ‘speculated’ out of view.

According to the wine documentary, Red Obsession, Bordeaux futures of the top crus are purchased in the futures market (see TB can’t get away from his other blog), and when delivered stored in warehouses where they may be ‘flipped’ several times and it is not uncommon for the ‘owners’ (brief as that may be) to never even see them, let alone drink them!

Let’s say the wine is released in the futures market by the estate at $500. The buyer can then sell that for say $700, then to another for $900…in what could be a daisy chain, which succeeds in elevating the price worldwide. What a scam!…and you wondered why TB said that ‘no wine is worth that’. TB can’t even imagine what Trader Vic Bergeron would have said, after he picked himself up off the floor!

So to TB, those serial numbers aren’t worth the ‘label’ they are printed on. Besides, if they do recover them, who could attest to how they were stored? As for poor Keller, he posted the story first – on his Facebook page. Sadly, some of the responses mocked him which is really a cheap shot at one of the finest restaurants in the world…TB can attest to that having lunched there…although we did go to Burger King afterwards to sate our appetites due to the size of the portions. (For the record, TB favors Bistro Jeanty, just down the street in Yountville from the ‘Laundry’ and Keller’s bistro Bouchon…Philippe, no need to thank me for the plug…you have the bistro that people search for when they travel in France…but can never find!)

This brings us to another issue: celebrity wine auctions. While they serve worthy causes, they are merely places for the wealthy to ‘see and be seen’, and as for the bottles, TB has seen some with more than one sticker on it from the Napa Valley Wine Auction. By the way, at the auction, it is not uncommon for one winery owner to bid up another’s and then for that owner to return the favor…hey, it’s good advertising…not cheap, but good, just like the wine.

TB started buying Bordeaux in 1973 in Los Angeles. He had been buying California wines (note one of his 1969 Mondavi cabs, still had a price tag on it of $4.95!). The impetus was seeing Bordeaux priced at $20-30. This down from significantly higher prices just a year earlier. Why? Because there were a couple of scandals…one where some Italian winemakers were putting in ‘additives’, some of which turned out to be poisonous and resulted in a few deaths. As for French wines, a highly-respected wine negociant, Cruse, created a frenzy with the hot, Pouilly Fuisse, by selling bottles with ‘vin ordinaire’ inside and thus causing them to sell for as much as five times more than they really were worth. What is remarkable about this is Cruse was a well-respected broker. Furthermore, the family was in the process of trying to sell the brand, so they ended up ‘killing the goose that laid the golden egg’ – and they didn’t even get the foie gras!

Moving right along, counterfeiting of labels has occurred…hey if they are willing to do twenties, why wouldn’t they do it with wine that can cost several times more? One of the counterfeiters was a very respected wine collector who used his reputation to peddle the wine at auction to unsuspecting buyers. He even counterfeited some of the famous Jefferson wines…guess he figured that even if they tasted it they wouldn’t know if it was the real thing since the taste would have changed so much, right? For this reason, the restaurants…some at least…have taken to breaking the bottles so they cannot be reused, but how would you know if your prized bottle wasn’t ‘refilled’ and sold at auction?

Well, since I am approaching 1,000 words, it is about time to go but TB wishes to make one point: he abhors wine snobbery. Wine is food, wine is agriculture, and made to be enjoyed with food…of course it is also great on the side…especially with good friends. This point was made to TB decades ago by legendary Napa Valley vintner, Joe Heitz, at a delightful brunch on the deck his home and winery with some of his family…but that’s another story…after all, there are a ‘million stories in the Naked City and this is just one of them.’

a sante!

Trader Bill

©Copyright 2015 TBOW, all rights reserved.

 

 

 

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traderbill

How did Trader Bill originate? It was conceived by me as a way of providing information summaries of global financial markets so that friends and associates could bring themselves up to speed on events and changing market conditions upon their arrival at work. In addition, it provides information on speakers and economic releases that day with consensus estimates and level of last release so that the reader is prepared to react, or knows how the market might react upon the release of information. Who is Trader Bill? Initially any reference to me was as ‘i’. This is to remove the aura of ego and to suggest that i am but a humble reporter, albeit with 35 years of investment experience. Investments are demanding of ego, however, or one would not feel that he was qualified to manage someone else’s money in the first instance. Therefore i needed an ‘alter-ego’. Like Winchell and Mahoney, Edgar Bergen and Charlie McCarthy and especially Trader Vic and Mai Tai’s! Why Trader Vic? Because he was a likeable man who delivered pleasure to his customers and knew exactly what their desires were. The reason for the alter ego became obvious once I introduced Trader Bill into my commentaries: people started asking what Trader Bill thought. They had never asked me what I thought before, but suddenly they wanted to know what TB thought! Now mind you they KNEW that I was Trader Bill but for some reason he became bigger than life. Maybe it was the small ‘I’? What does Trader Bill try to do?His goal is to educate from his years of experience. Consider that most of the traders and people managing investments weren’t even around in 1987 for the crash! Consider that Graham and Dodd, and even Warren Buffet are not relevant to them, too old hat. Their historical perceptions of markets and fundamentals (earnings, price/earnings ratios, bonds, debt service coverage) are irrelevant in this fast moving world. This is the NEW ECONOMY, or is it? How did your style originate?Years ago i found that i had a knack and talent for writing. In addition, i developed an ability to analyze market news about 15 years ago. It took the Crash of ‘87. Prior to that i was just listening to what others said about the economy. But bond yields had been soaring in ‘87 yet the stock market just kept hitting new highs. That was when i began to learn about markets. i have both a dry and witty sense of humor (some call it inane!). Therefore i attempt to make even the worst news somewhat amusing: whether it is the absurdity of an economic release, or the comments of a CEO. This is trading desk humor (or gallows humor). It isn’t politically correct but it does ease tension. Ironically, it is seeing the light at the end of the tunnel (in the Navy they say: it’s always darkest before it’s pitch black!), that allows you to be more objective in your analysis, as bad as a situation is there will still be a tomorrow! You will see that i practice three-dot journalism, a style made famous by San Francisco reporter Herb Caen, whom i idolized. At least to me it is effective. What is so special about your analysis?Frankly, i don’t know that it is special, but at least it beats “the market closed down today on profit taking.” What i do know is that most of what you read is spat out without considering whether or not it is rational, like the above statement. Is it right? Sometimes yes and sometimes no, and that is the key to what is different about my analysis: it is meant to make you think. Is Dan Rather right or is Trader Bill right? If it causes you to stop and think about it, regardless of whether you agree, i win! Because THAT is my goal…not to have you think i am a guru, got that? Bet you never heard that ANYWHERE before in my business! Instead they want you to think just how smart they are but remember in this business if you are right 60% of the time you ARE a genius! Another thing that is different is when i am wrong on an analysis i will tell you, not hope you forget what i said. So now you have the tools to do what the speculators and hedge funds do: challenge authority, and if you make money it is because YOU did it not me. i was just a tool, your flunky to do the grunt work and let you decide…course you could be wrong too but at least you looked at the big picture. But the goal is also to have fun! This shouldn’t be a business of hushed tones and grim faces. It is a living, breathing thing and nowhere else in the world do you have the odds as much in your favor as here. Just beware of the guy who wants to put his arm around you and tell you he is your friend. So there you have it. I hope you select me as one of your sources for market information. If you do I promise to work my best for your financial success. Trader Bill

7 thoughts on “Vol. 1, No. 1…a new beginning…”

  1. With Trader Bill and Trader Vic on the scene, there has to be a Trader Joe’s Two Buck Chuck joke in there somewhere! This is fabulous Bill, I look forward to future musings!

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  2. TB–You’ve made my day! I know a wine snob or two in S.F. and hope to be able to dazzle them with some of your comments. All the best with this blog that looks like it will filled with delightful “purple prose.”–Yarnman

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  3. What a capital idea! Oh, and does wine considered worthy of investment, have a low duration? or is it simply continue that age old tradition of tell a great story as you sell to the nouveau rich?

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