Vol 3 No 15 Fire post mortem and $3,000 for a bottle of champagne???

I was surprised and glad that so many tasting rooms have opened in Napa Valley this soon after the fire. Most if not all, are donating the fees to relief agencies. That is encouraging. I wasn’t sure at first about the re-openings but speaking with friends in the wine business there, they are encouraged to see the wineries coming together along with local support. They realize they need to boost the economy by bringing the tourist back, especially for those who work in the valley. Note also that the wineries are a soft touch for charities and are hit up all the time for donations, which they freely give.

It isn’t pretty like last Spring when I was there, and Sonoma County is in much worse shape. I am not in touch with any of the wineries in the Sonoma/Santa Rosa area, but everyone is saddened at the loss of life and homes in this multi-county tragedy. Let’s not forget Mendocino County where in the north they had destructive fires too.

One thing you might not have considered is marijuana growers, who are very active in Mendocino County…this time legally as they prepare for the arrival of the date of legalization of recreational marijuana in California. Due to the conflict with federal law, they have no insurance and are a cash basis as they can’t get credit either. They had harvested some the marijuana, much of which was destroyed by the fires along with warehouses. Also, about 50% remains in the fields which may be affected like wines with smoke taint. I mention the pot growers only as another victim of the fires, not as an endorsement…you decide.

If you watched finish of the United States Grand Prix from Austin, Texas, Sunday, you may have noticed the traditional champagne ‘brawl’ with the winner and other two top finishers. When I saw the three drivers shaking and spraying the bottles I noticed that all the jeroboams were lavender in collar and looked metallic. I freeze-framed it to see the name on the bottle but instead of the usual prestige house there was only one word on the bottle: CARBON, written in bold letters lengthwise on the bottle…huh???

Have any of you ever heard of CARBON?  Most likely not, but at $3,000 a bottle perhaps you should! Furthermore if you want to buy one (suit yourself, not me), you probably have to go to St. Tropez as it isn’t sold in the U.S. and is very limited production.

Is it that good? Uh…in a word: no. Not saying it isn’t ‘good’, just that it isn’t that good. So how do they get $3,000 for a bottle of it? Hey, how do lots of luxury goods go for what they do? Because the wealthy can afford them and that, folks, is status.

How did the custom of spraying the crowd come about. After winning the 24 Hours of Le Mans in 1996, driver Jo Siffert accidentally sprayed the crowd with his magnum bottle of Moët Chandon Brut. The following year, American Dan Gurney did the same and a tradition was born, a waste of good champagne if you ask TB, and messy too! Sacre Bleu!

In 2000, G.H. Mumm replaced Moët and the magnum was upgraded to a jeroboam so more people could be sprayed. They remained a Formula I sponsor until 2015 when Chandon – yes, the California ‘sparkler’ replaced them. Then in July of this year, CARBON replaced them as an official sponsor.

Now you know, but why a $3,000 bottle of champagne? Well, here’s the thing, you can buy Cuvée Carbon 2002 vintage champagne (same as used in the Ultra bottle), in a 1.5 litre bottle (jeroboam) for $990 from Amazon Wine Store* but that is in a standard champagne bottle that holds six bottles ($165 each). Actually, a 750 ml bottle will cost you about $80, the difference due to the cost of the bottle which in large format sizes has enormous pressure.

The difference? The company has created a process that covers the entire bottle in carbon creating the metallic look and it is expensive and very labor intensive. So if you, my friends, want to pay 3 times the price of a regular jeroboam, be my guest. That is also six time the cost of a standard bottle of CARBON. TB wonders if the drivers get to  keep the bottle? Most likely, yes. After all it only costs $9,000 to give them the bottles each race.

To TB, this is the same as the way people pay outrageous prices for Cognac in Baccarat crystal, and other prestige bottlings of alcohol products. If you have the money and you want it…go for it, but TB will take the normal bottling of the same product every time (he won’t however be buying any of the ‘gimmicky’ CARBON. C’est la vie!

That’s it for now…TB with the champagne love but cava budget is done for today.

TB

(c) Copyright, traderbillonwine.com 2017

*Note: Amazon is going out of the wine business at the end of the year due to their ownership of Whole Foods Markets. Reportedly, there are also licensing problems. Ouch!

 

 

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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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