Vol 3 No 8…a ‘sideways’ look at the Central Coast – prelude to a guide

Back in March, TB wrote a series of posts on his trip from the Central Coast up to Washington (Vol 3 No. 2.0-2.5). In light of all that has happened since I thought I would provide some ideas if you are making a trip there soon. This was prompted by a chance meeting with a friend…in a wine shop of course (Wine Republic, Excelsior MN), and promised to provide the names of some wineries to visit. Given the way the harvest is looking September would be a much better time to go than August…as always!

Let’s recap the weather in California (or the entire West Coast for that matter), over the past decade. Until 2016 it can be summed up in a word: drought!!! Not just drought, mind you, but the equivalent of right before the Great Flood. Imagine, a 900 year record drought…not just in one area of California but the entire state and much of the rest of the West Coast too!

TB grew up in Southern California…Santa Monica to be exact in the early years of surfing…although he was really a body surfer. In those bygone days one would go to the beach and spend a day – sans sunscreen, get a bad sunburn that peeled and then have a great tan for the rest of the summer…fortunately no melanoma so far!

About the time TB got married in 1969, he noticed a change. It didn’t take all afternoon to get burned…in fact he had it happen in about an hour at the beach one day! Rains? We always had a wet rainy season…can’t recall a dry years. Oh, and fires…Malibu, one year, Mandeville Canyon the next, Bel Air the next, then the San Fernando Valley…like clockwork. TB recalls being at school and knowing there was a fire starting: Santa Ana winds, a dryness in the hair, above normal temperatures and finally the sun would turn orange and the temperature would soar into the hundreds. Later, the destruction on the evening news…but it was simply a fact of life in Southern California.

So what happened to the weather? Dare I say climate change or the dreaded ‘global warming’? The naysayers…of which I have never found among winemakers…say it always changes…yes it does but over much longer time periods and we have, through burning fossil fuels destroyed the ozone layer which is our insulation from ultra violet rays, and in a nutshell, that is the argument for why we must change our ways or leave our grandchildren in a very precarious position. Take a look at Burgundy, where the weather is becoming more extreme, or Bordeaux where winemakers say there will be no more merlot in a decade or so. Alarmist? Hell no, that is their livelihood. Now you know.

To those who think we can relax again…think about the fires so far this year, following that incredible rainfall (except in the Central Coast between Santa Barbara and Santa Maria. Lake Cachuma provides the water supply for Santa Barbara and it was virtually empty at the start of the season and unlike the other dams in the state is the only one that isn’t full to capacity. Note that is the lack of rainfall that stresses the vines and produces rich, intense fruit, but this is ridiculous. As of yesterday, Cachuma is at just 49% of capacity! That is not much margin for error…or another dry year.

Ah, but there were few vineyards in the 1960’s…although there was one just east of Los Angeles that went back to the days of the Spanish explorers…Virgina Dare – now gone and the site was between two freeways (San Bernardino and Riverside). About the only other ones were in Livermore, where Wente, the first, and Concannon reigned supreme. Today there are about a dozen.

Moving north to Napa Valley there were also perhaps a dozen…mostly In Napa, such as Beaulieu (aka BV), Beringer, Inglenook, Charles Krug, Christian Brothers and a few others, until 1966 when Robert Mondavi built his beautiful winery and that kicked off a surge in winery openings. His was the only one that looked like a winery, sleek, and reminiscent of the California missions, instead of an industrial warehouse. That was all about to change. In 1969, vineyard land in the valley was $5,000 an acre…but you had to buy a minimum 20 acre parcel. Compare to today’s $350-450,000 an acre going price, and you cannot make money at that price…so more McMansions of the wealthy, producing their 50-100 cases of wine a year, getting 90 point ratings and selling for upwards of $150 a bottle. Still not profitable…but they don’t care…they call it passion but is it really? Not unless you do the grunt work yourself and few do (Rupert Murdoch bought one of the two in Los Angeles (Moraga), a second one is in Malibu…which also provides the name. Not recognized as great growing areas….unless the terroir is smog? But who cares?

Moving back to the north again, Contra Costa County had a few small ones, bulk producers where you brought your jug to the winery in those days. There are now even some in Orinda where TB lived before being transplanted to Minnesota (Lamorinda AVA…huh?). Oh, wait. Lake County had Konocti Winery and Sonoma had Buena Vista and a couple of others that went back to the 1800’s.

Ah, but the Central Coast? Nothing, nada, zip, zilch…not until 1978 when six investors took a chance and started Zaca Mesa in the belief that good wine could be made there. How right they were, especially when a young Ken Brown was hired as winemaker. Ken in turn hired numerous luminaries to work for him including Adam Tolmach, Jim Clendenon, Bob Lindquist, Lane Tanner and others. A ‘who’s who’ of the Central Coast!

Still, even as the winemakers above started their own wineries, the area was virtually unknown except to locals and people from Los Angeles. However, they started a project that continues today: the Central Coast Classic and Wine Auction organized by local radio personality, Archie McClaren. Only because we had friends who moved to Santa Maria did we learn of it in its infancy in about 1989…it began in 1986 and is a charitable event second only to the Napa Valley Wine Auction, but to TB a lot more fun. It became and remains the second largest wine event in California!

Still, it was pretty much virgin territory except to locals but that event started a change. This was augmented and superseded in notoriety by the movie, Sideways, which while fun, gave a distorted view of wine, denigrating merlot while elevating pinot noir to star status. Within weeks, merlot moved to the bottom shelf, replaced by pinot at eye level there is a certain irony to this as protagonist Miles’ favorite wine was Cheval Blanc which is…primarily merlot (by the way if you decide to read the book, you will find that Miles is really just another wine snob and it gets disgusting in the sequel – avoid!).

It also created so much demand for the grape that Napa vintners were buying it and driving the price up to where many of the locals couldn’t compete. Wait…what about Paso Robles?

There are two initiators of the fame of Paso: Gary Eberle and Kermit Lynch. Eberle was the first to plant syrah and also provided the shoots for Randall Graham who was called the ‘Rhone Ranger’ in an article in Wine Spectator and the name stuck for the region. However, he, Bob Lindquist and others traveled to Berkeley, California to talk to a budding wine importer with a penchant for Rhone style wines. After tasting them, including Vieux Telegraphe, Domaine Tempier, August Clape, and more.

Kermit’s book Adventures Along the Wine Route is a fantastic addition to anyone’s library and love of wine…highly recommended…it was a game-changer for TB!

All of the names in the previous paragraph our passionate about wine and winemaking…it is not a rich man’s hobby for them…respect that! Besides they make some of the best wines on the planet!

Wow…talk about a diversion from my original outline…so I will follow this up with suggested wineries to visit on the Central Coast.

Back soon.

 

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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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