Vol. 2 No. 23…why care about someone else’s rating?

(TB must be getting old…just realized he had used this same title just two posts ago!!! Aarrgghh!! Growing old is hell! Hope this one works better and is more descriptive!)

Does a rating matter? Is it smart or dumb to buy wine based on someone’s rating. Here is a brief history of rating scores and how they work:

Prior to 1978, when Robert Parker started his newsletter which a year or so later morphed into The Wine Advocate, the only tasting scores were in professional tastings or wine festivals, state and county fairs, and others. The predominant scoring system was the one developed by UC Davis in 1959 (http://finias.com/wine/ucd_scoring.htm).  It is a 20-point system, which made it easy to combine scores and then average them to determine the best wines. Judges and their knowledge of wines varied and even in professional tastings, going through the lineup then reversing the order created confusion and inconsistency.

Years ago, I accompanied a friend who entered in Chili cook-offs. His chili was outstanding! We made it to the state level and then he lost. Why? Thanks to a friend who was also a judge I later found out that the chili right before his was mouth-burning hot and that is what caused him to lose. The next year he won the national title. Same goes for wine…on any given day, under different conditions, and with the same or other wines, huge discrepancies in scores can occur.

Parker’s contribution was the 100-point system which he compared to school test scores but with one major difference. 50 points is the base, meaning any wine will score at least a 50. Then there are several categories such as color, aroma, taste, etc., but here’s the biggie: 25 points is subjective! So one person might score a wine 100 and another as low as 75, even when all other categories are equal. Of course this is an extreme, but between 85 and 95? Clearly possible depending on what the reviewer likes in a wine. In addition, the 25 qualitative points vary from system to system. Parker for instance loves big, bold wines capable of aging, but since the majority of wines are purchased for immediate or near immediate consumption, that should not mean a thing to you, in fact, you might hate it. Read in Parker’s own words how it works: https://www.erobertparker.com/info/legend.asp

Not to confuse you, but so you can see the problem, here are rating classifications of several scorers: http://www.wine.com/v6/aboutwine/wineratings.aspx?ArticleTypeId=2

Parker came on the scene with the 1982 vintage of Bordeaux. Robert Finnegan, the former guru for buyers of these wines, panned the vintage. Shortly after, Parker declared it the vintage of the century. Goodbye Finnegan. Frankly, I bought a mixed case of those as futures on his recommendation. I didn’t, nor did some of my friends, see them as exceptional, but never mind, I sold them years later for a very healthy profit. Thanks, Mr. Parker!!!

Now read this:

“Scores, however, do not reveal the important facts about a wine. The written commentary that accompanies the ratings is a better source of information regarding the wine’s style and personality, its relative quality vis-à-vis its peers, and its value and aging potential than any score could ever indicate.”  Robert M. Parker

Huh? See, Parker is to himself and many others alleged to have the best tasting nose in the world. You know, insured with Lloyd’s of London for $1 million, like Bob Hope’s nose, or a singer’s voice.

As for his love of big, bold wines: he was criticized for years by Bourgogne winemakers for his lower ratings on his wines, finally some years ago he stopped rating them, turning it over to an associate. He is also a one-third partner in an Oregon Pinot Noir winery, Beaux Fréres, which to his credit he doesn’t rate…after all having his name gives it the imprimatur required to attract buyers anyway. Nothing wrong with that but compare and contrast to French burgundies and lo and behold  Beaux Fréres is not the same style and many Oregon vintners are now copying that style. If you like it fine, but TB prefers a pinot that is balanced and has more subtle flavors: to each his own.

Today there are literally dozens of critics using 100-point systems…some (many?) working with a distributor or retailer. Thus we have scoring escalation just like grade escalation in schools. Is 95, the new 90? If memory serves, in the 1982 vintage there were only two 100-point wines. That has increased and as one wine merchant quipped, “I can’t sell a wine with an 89 point rating; I can sell all the wine with a 90 rating but I can’t get them.”

Ah, but it gets worse as that translates into price! Not to mention 2008 when the Bordelaise were concerned about losing money in the financial crisis. No problem, the Chinese stepped in, buying up Lafite Rothschild, and other premier cru Bordeaux’s and driving the price to the moon, Alice, the moon! Of course, Lafite is a status symbol to wealthy Chinese. Most of it is given as gifts, or was, until the government forbid giving government officials gifts, and even when drunk it is commonly mixed with…I kid you not…tea or coke (the real thing not the drug)!  As with so many other products it has even been counterfeited the key being that Lafite is spelled with TWO ‘t’s on that label. That is where most Bordeaux wine goes today, and they have also bought up some smaller chateaux, the prestige ones are owned by conglomerates or mega-billionaires (too bad The Donald didn’t buy one of those when he instead bombed out on his ‘Trump Wine’).  The U.S. and Great Britain, once the primary markets were abandoned more or less due to the high prices…and by the way the use of herbicides and pesticides has grown at a time when other regions are cutting back.

But the era of prices going ballistic on a high, 90+ rating is coming to a close. A friend who owns a winery the 25-50% increases have withered, instead take a look online at any of the e-retailers. They show the list price, say $90, then offer them for $60…or even  $30. You never see a wine with a rating less than 90 there and the average is probably 92!

Then of course there is ‘Parkerizaton’. This is not his fault but winemakers are blending wine to get those high Parker ratings. So? So do you want to buy wine from anywhere in the world and have it taste the same…no character or terroir? TB doesn’t. Instead, he prefers wine made well in a style the winemaker chooses. He is risking his reputation and money to do that, just as he does when competing to the mega-producers who blend for consistency. As winemaker Carles Pastrana of Clos de l’Obac told Robert Mondavi when he visited his winery in Priorat, Spain: he used exactly the same blend of grapes each year. Mondavi said: that’s crazy, in different years you get varying amounts of fruit. Carles replied, “then I must be crazy. But tell me this, if you always make your wine taste the same why bother putting the year on the bottle” Mondavi was not pleased with this. Frankly, any large or ‘bulk’ producer must do this because those buyers expect the wine to taste the same every time. But Carles is not crazy…he is smart and passionate about his wine!

Lest I leave you thinking ill of Mr. Parker, remember an early statement of TB: globally good wine is chasing out bad. Several articles lately have criticized or outright condemned the 100-point systems. Frankly, many of those 90+ ratings, especially by sellers, are probably 87-90 point wines. What to do? Trust your local wine purveyor…support him/her over the supermarkets and big box wine stores that have appeared on the scene. In closing here is a joke that indicates whether  someone is a wine snob:

Customer tasting wine in a wine shop: “This wine is horrible, worst I have ever tasted.”

Clerk: “Really? Parker gave it a 90.

Customer: “I’ll take two cases!”

There you go…pay more and get less…less of what YOU like and as stated earlier, you are the only critic that counts…

Hope you enjoyed reading this as much as TB enjoyed writing it!

TB

©2016, Traderbillonwine.com

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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

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