Vol.4 No.1 are premium wines worth the premium?

Happy New Year to all! Have been thinking about this piece since the beginning of the year. I have found, personally, the sweet spot in wines is about $25-30…if I win the lottery tomorrow night that will likely change, but if I do, would I be buying $100-150 wines?

First, I find the best value in the $25-30 range…not that there aren’t a lot in the class below of a slightly expanded $18-20 range,  and of course some sleepers in the $12-15 range. Below that are some well made wines but not to my liking…or I haven’t found them yet. The $15-20 range for the third straight year is the fast growing sector, and represents a step up from the under $10 range that held for so long. As an aside, Rosé’s continue to increase in popularity but remain less than 5% of the market which begs the question: who is making money with what seems like hundreds of them out there and growing continually? Most are in the $12-15 range.

About those high priced wines. I have mentioned Wine Till Sold Out (www.wtso.com) previously and have had excellent experiences with them. To recap: they post wines perhaps one or two an hour or until they are ‘sold out’. Here is an example of what I am talking about:

Saint-Émilion Grand Cru 2014 La Croix Saint Christophe
91 rating and 71% off!

Free Shipping on 4 or more


Comparable Price*: $70.00
Yesterday’s Best Web Price (With Shipping): $N/A
Our Price:

$19.99 71% OFF!

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wine bottle Description
Appellation Saint-Émilion Grand Cru
Unit Size 750 ml
Varietal/Grapes Red Blend
Vintage 2014
Country France
Region Bordeaux
Alcohol Content 14.00
Peter Kwok has been breathing life into aging Saint-Emilion chateaux for a couple of decades, giving us new, delightful opportunities to enjoy the wines of this classic region in Bordeaux. Sourced from vineyards nestled among Cru Classe estates, this Merlot-driven bottling effuses a fruity and smoky intensity that speaks to its premier situation among the Right Bank hills. Try this wonderful Saint-Emilion with kebabs and shawarma!
91 Points – International Wine Report!
“The 2014 La Croix Saint Christophe Saint-Émilion Grand Cru delivers lovely aromas of ripe cherries, blackberries followed by violets, tobacco, wet stones and a touch spice. This medium-bodied red is wrapped in fine silky tannins, showing great structure and balance all the way through the long finish, which is laced with even more dark fruits and tobacco flavors.”
Pretty complete, no? So here are the salient points:
1. Good description and note that you can get free shipping (the number of bottles required varies inversely with the price but four is standard).
2. Note that they ship quickly from their N.J. warehouse so if you aren’t going to be home for a few days, want to avoid it being shipped in extreme weather etc.,you just let them know with your  order, which, once set up is just a click.
My experience is limited as I have only had a need for a specific wine twice but it was consistent. Also, if you have a problem they are prompt in getting back to you to fix it.
First time, I bought was Meyer Family Vineyards, 2011 Syrah. This is the late Justin Meyer’s winery after he sold out of Silver Oak.  I bought six bottles for, if I recall, $15 each – on a $35 wine. It was summer and the day it arrived it was over 100 degrees! I cringed when I thought of drinking it as my laser thermometer showed a bottle temperature of 90 degrees! That night I tried the first one and it was ‘raisainy’, not undrinkable mind you but not what I had bargained for. I notified them of the problem and they told me I should have told them to hold the delivery and then let them know when to deliver. Surprisingly, they offered to send me six more bottles and hold them until the weather cooled down. I did and when I received them they were in excellent condition…and I did, by the way finish the others. Not bad, eh?
But I was curious, what would the winery say about this? So, I called and spoke to Justin’s son, Matt (Justin’s wife Bonnie, for whom a Silver Oak vineyard was named, is still alive and active in the winery). He said that the 2011 vintage received poor reviews, but that they had harvested and bottled late and it was very good. The problem was stores had too much of the vintage so there was no market for it. That is when they went to WTSO. Matt sold two pallets, roughly 98 cases per pallet, to clear their inventory.
So what did Matt accomplish? He sold wine that he couldn’t do anything with at a price that was acceptable to him (don’t know what that was), the wine wasn’t sitting on shelves at a deep discount price (think Trader Joe’s or any large retailer). Instead it was up for perhaps 20 minutes and then disappeared. Remember they still had wine left which they would bring up at another time. That is why you will get lots of emails in a day, and it forces you, if interested, to act quickly. Gradually, they will sell all the wine in the lot. A win win for all concerned.
Contrast this to the other wine sites that show the price for long periods of time and it can be compared to other lots they are selling. The other alternative is selling to someone like Total Wine at an even steeper discount which they will advertise as “Winery Direct”, with a large markup. The cheerful staff will direct you to these sometimes in response to a ‘do you carry’ question, saying if you like that you can save a lot by buying this instead. Nothing wrong with that but is it really the same quality?
So there you have it and if we didn’t have the post-Prohibition, three-tiered market all would be better off. Most distributors are reputable, but some including the biggest ones don’t do a good job of marketing ALL the wines, especially from smaller wineries which is unfair because storage costs can quickly eat up profits or worse, turning them into losses.
As with all internet sellers WTSO is having a big impact on wine strategy for buyers. It becomes increasingly difficult to shell out $100 and then find it on line for significantly less. If you can find a good wine specialty shop, support their effort, not some liquor store with lighting that is hard on wine, improper storage, and a lack of knowledgeable help. Since moving to the Twin Cities seven years ago I have been pleased to find FIVE, and all but one with in five miles of my home (that is even more than when I lived in the San Francisco Bay Area. It is worth the search!
I will close with this quote from the great Andre Tschelistcheff, who knew of what he spoke: “We spend far too much time tasting wine and not enough time drinking it.”
TB’s kind of guy!
NEXT: Should you join a wine club?
(c) Traderbillonwine.com 2018

 

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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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