My Hedge Fund

Back in the 1980’s and 90’s I invested in a personal hedge fund. At the time there wasn’t any overriding strategy other than perhaps a hedonistic one. I started out with little investments here and there, and one thing led to another. A little trading, some long-term holdings, some quick-turn-around buys. All this over a period of the past 20 years.

In these days the market is in the tank, up and down like a yo-yo, heavily driven by an emotionalism I find too volatile to deal with. But along the way I have been lucky enough to dodge the important bullets and my hedge fund has grown. Now, what should I do about it?

Several cases of La Chapelle Hermitage from Paul Jaboulet, from 1985 and 1989. These have been the house wine for the past 15 or so Christmas dinners. Initial cost was about $20 a bottle. Current appx. street value $150-300 a bottle. But if I sold the remaining cases, how could I tell how an Hermitage will taste at 50 years of age? After all that was the reason, to buy a wine that everyone told me would age for 50 years. I have 30 years to go, which is just about how long I expect to last as well. Position:Hold and Drink

A magnum of the 1960 Vega Sicilia Unico Artist Series, bought a very long time ago for about $100. About now this bottle is going for appx. $1600-2500. I’ll probably keep it and open it when it is 50 years old, which is in two years. It’d also be great for anyone who was born or married in that year. Maybe there is a hedge fund manager who is swimming in dough and was born in 1960? I’m not married to the Vega Sicilia, but seeing as it represents an amount that I would never spend on a bottle of wine, maybe I’ll just open the damn thing for the hell of it. Position:Hold or Sell.

Chateau Mouton-Rothschild. I bought many different years of this wine because I liked to collect the labels, from 1982 to 1990. Now these wines represent a lot of capital, but none of which I really tied up. I think the most I paid for a bottle ( the 1990) was $50. And while I cannot sell them all and buy a Porsche Speedster, it really wouldn’t matter. I don’t want a Porsche Speedster again. I do like the Francis Bacon label, though. It reminds me of the time I did a tasting in Bordeaux at a famous negociant. They showed us a wall of first growths and told us how many millions of dollars it was worth. They neglected to say the triptych of Bacon’s that they had in the hallway leading to the wine vaults was worth about $50 million. Position:Hold for Now.

I’ve had my flirtations with Super Tuscans over the years. There still is a good stash of Sassicaia from 1979 to 1990 in my portfolio. The most I ever paid for a bottle was about $70.00. I remember actually selling the 1968 for about $28 to my clients. I had found a cache of the first bottling in a cellar in Florence in the early 1980’s. It wasn’t an easy sell. So I tended to keep the early wines, drinking a few here and there. I’m not as interested in Sassicaia these days (when they go for about $200), but the older ones still have a sense of place and lack of manipulation. Position:Hold or Drink.

I also dabbled with a little Solaia, the 1997. I am not sure if Doc Micro-Ox or if Miss Perverse Osmosis infected this wine. I traded it for 3 bottles of Montepulciano d’Abruzzo Riserva. Now it has a street value of about $400.Position: Sell.

A few years ago I traded a bottle of Mouton, a bottle of Sassicaia and a bottle of Tignanello for a Hasty-Bake wood barbeque grill. Now that was one of my better trades.

Back in the early 1990’s I walked into a river-bottom liquor store and they had 1988 Bruno Giacosa Barbaresco for $14.99. I bought all they had (and got a 10% discount). Today that wine is easily worth $150. So delicious and now just about ready. Position: Drink what is left. With pleasure.

Lastly, I bought a bunch of Port, thinking 1990-1994 would be good wines to drink when they are 20 years old. The oldest of that bunch are starting to get close. I am particularly fond of Quinta Vesuvio for several reasons. It was one of the quintas farthest up the Douro. I had probably the best bacala I have ever had, there. And during crush one year we pressed the grapes, by our feet, in the ancient lagars. Truly a transcendental experience. We're talking Old-World, Old-School stuff here. Not some snotty California wine-camp-crush stuff. The real deal. So I love my Port and my hedge fund portfolio is weighted well in these long term holdings. Position: Hold.

There’s a lot of weeping and gnashing of teeth in these days. It seems a lot of people are poorer on paper than they were a month ago. But really how poor are you, if your closet if filled with all these long-term high-return wines? I have been visiting my wine closet a bit more lately, if for no reason other than to reassure myself that even though I will need to work quite a few years more, there will be a continuous supply of great wine, bought at low prices, available for those lean years ahead.

"Dale a tu cuerpo alegría, Ma'dalena, que tu cuerpo e' pa' darle alegría y cosa' buena'"

written by Alfonso Cevola limited rights reserved On the Wine Trail in Italy

The Trophy Wine

With all the signs that have been hovering about us lately you would have thought our collective unconscious would take the hint. But as it seems to be less collective and more unconscious, maybe this should be no surprise. The past few days in tastings and with encounters there are still people looking for that peak experience when it comes to drinking a wine. One such gent was regaling over his latest trip to Casanova di Neri, where he secured a stash of verticals of their single vineyard reds. Forget that there is a cloud over the whole of Montalcino. What was that old Jim Morrison line, “We want the world and we want it now?”

So as with everything else, it appears to be that way as well with wine. Big, bold, powerful, rich. Pre-recession fantasies craving for that in a wine which is just out of our grasp for other longings.

When was the last time you heard someone asking for a little housemaid of a wine, something inconspicuous and barely noticeable, a little fruit, no tannins, easy to forget? It just doesn't appear we are wired to recognize the unremarkable. Why is that? Take cars for example. It seems that what so many people are looking for in a wine is akin to a Hummer H2. But those vehicles are sitting on car lots piling up. Meanwhile try and find a deal on a VW Jetta TDI. Not a spectacular car in terms of styling or sex appeal. But they are hard to find.

Yesterday at a wine store I was in during a 20% off sale, most of the people were asking for wines under $15. 90% of them wanted value and then a deal on top of that. They weren’t asking for the big old Amarone that will last for 20 years. It was selling for $70 ($56 after discount). Nope, they just wanted to talk about the big old bathing beauty red, but they were slipping the housemaid wines in the carts.

That same day I was invited to dinner at a “French” restaurant of some repute. Not many of those around these parts any more. I was asked to pick the wine. Now usually there is a token wine on the list for the wine lover who just doesn't want to spring for Silver Oak or Corton. As I looked around the dining room, in an alto-borghese neighborhood, I noticed people were ordering wine as they were perusing the food menu. Odd, but not altogether unusual in a mid-western town on the Big Night Out. Cabernet was king in this room, even though the food was tempered to the tastes of a Burgundian or Loire or Rhone setting. After seven very difficult minutes the folks at my table were getting impatient with me. My inner Alice was fuming; there was nothing of interest on this wine list. Finally after some peer pressure, I ordered a (negociant) Beaune. A 2004. For $95. With some trepidation. Where was a Gigondas or a Crozes-Hermitage? Some wonderful Julienas or Chiroubles? Surely they are available; I see them on the printouts from the various distributors. Wine that would go so well with the fois gras or the duck or the veal or the scallops.

Just as the $250,000 Bentley was parked proudly in front of the establishment, so would it be expected that we would be plunking down $250 for a Caymus Special Select on our tables? After all, half the men in the room had parked their trophy wives (or goomadas) next to them in the plush velvety seats.

In these times, when so many of us are being compelled to look at some of the decisions we have made, as if we get another 10 or 15 minutes before reality sets in, we attempt to take one more shot at the titanic illusion. Subtlety is admission of defeat, bleacher seats, a used economy car. No, let’s take one more huff, one more puff, and see if we can blow our friends away with an outdated view of conspicuous consumption veiled as connoisseurship.

It’s like the captain of a luxury ship that is sinking, but he has promised to stay on board until the end. And then when everybody who can get off safely does and they are floating away in their lifeboats, while no one is noticing, on the other side of the doomed boat, a skiff is being prepared to deliver the schifo to a far and safe shore.

written by Alfonso Cevola limited rights reserved On the Wine Trail in Italy

Sottosopra

Is it just me, or are we smack-dab in the middle of topsy-turvy times? I gotta tell you, it’s exciting, exhilarating and a jolt of terrificante in my espresso. Really a great time to be engaged in whatever it is that takes you to the top, fires you up, makes you feel the breeze in your face, the cold, biting wind and the last of the setting sun as we head away from summer. And with all this excitement there’s this slightly disorienting facet that has one looking to recalibrate and check for balance. Not.

Like our social and political circuses that surround us, so the world of wine, and Italy, really seem to be in sync with this slightly out of register skew to things. Is this merely lucid dreaming or are the bathing beauties of Tuscany and Alto-Adige and Campania really vying for our attention? Or are they merely engaged in some kind of commercial cat-fight for our hearts and dollars? Happiness is a warm warehouse.

Sitting around some of the smaller corporate campfires lately, discussions have been had about the state of the wine business, and there seems to be a confluenza of notions and trends. I heard from a gent tonight who was the domestic head of an online service that finds buyers for rare and valuable wine. They were cutting his department and he was handed a pink slip. Eighteen months ago, that would have been unthinkable. Less than a month ago the delivery company DHL announced they would no longer be shipping wine domestically. So this little ray of hope, to the folks who think the three tier system is obsolete, is dimming. Money is tight, things get downsized.

In the world in which I live, there isn’t a day that doesn’t go by that I don’t get a note or three from some Italian wine company wanting to get onto the Ark. The smaller companies don’t have the capital, the ability to pay their bills. Everybody is trying to fit their animals on our ship. We are desirable, like this is some kind of beauty pageant. Hey folks, winter is coming, time to put the swimsuits in the drawer. Pass the grappa and cuddle up on a couch somewhere and find something to do. Not the time to plant tomatoes.

There’s something to be said about traveling the road with a camera and a bag of wine. It’s quite the spectacle. Today San Antonio, tomorrow Austin, the next day Dallas, then on to El Paso, McAllen and back to Longview. The Big Amarone Circus is coming to town with the killer B’s, Barolo, Barbaresco and Brunello. An exhibition of rarities so rare the Italian restaurateur doesn't even know about it. And the whole time the ringmaster’s friend, the ace photographer, is snapping away at the parade of models in their finest swimwear.

Will no one tell these bathing beauties, vying for the attention of the Maggiordomo, that Persephone is on the horizon, heralding the approach of the cold winds and winter? After all, they shoot the messenger in an upside-down world, don’t they?

Say cheese?

written by Alfonso Cevola limited rights reserved On the Wine Trail in Italy

images from SquareAmerica.com

American Politics with a Tuscan Twist

While traveling across the central width of Italy last month there were signs of interest in the coming election in the United States. Italians love to display their opinions. Anyone who traveled in Italy in early 2003 saw a preponderance of multi-colored flags with the word PACE streaming from balconies and balustrades across the country. In that moment the sentiment was of protestation against an imminent invasion and war against Iraq.

This time the PACE flags have faded. In windows and as fashion accessories, the Italians once again express their thoughts on an election they can neither vote in nor influence. That is unless some of those Italians also happen to be American citizens.

We visited one such family in Florence. I have been friends with photographer Maurizio Berlincioni since the early 1970’s. So as we traveled from Castiglione della Pescaia to San Benedetto del Tronto (one side of the country to the other – left to right) we took a break for lunch with Maurizio and his two kids, who can vote, because their momma is an Americana.

It appears from all signs that the Italians greatly favor Obama. The fact that Biden in a Roman Catholic also adds a connection, just as it did when Kennedy ran in 1960. The Italians don’t forget so easily when one comes along that inspires and causes many of us to look up and beyond the current mire we have found ourselves wallowing in.

But seeing as we were (and are) on the wine trail in Italy, we thought we’d query the locals to offer vinous equivalents to the candidates and some of the supporting cast. And as we were in Tuscany the logical progression made it seem like we should stick to wines from that region. Here's our Tuscan tally:

Sarah Palin is a Chianti "in fiasco". A little wicker model, something fresh and fruity and not too deep. Not made for the ages, this is a wine to enjoy “for the moment” as it traditionally doesn’t offer much interest in the long run. It still has the dreaded DOCG appellation, but as many have commented elsewhere, that simple Chianti shares the highest denomination as a Chianti Classico or Brunello says more about the political wheeling and dealing than anything else. Pick a young one and sell it far and wide- take the money and run. A long shot.

Joe Biden is also a Chianti, but a Chianti Classico Riserva from a well known and time tested producer. And like some of those riservas folks often underestimate their power or their presence among the cognoscenti of Italian wine lovers. Anyone who has let one of those wines rest in the cellar for 10,15,20 years and then open it up on a late October night knows the untapped potential and surprise that awaits the patient ones. Elegance, restraint, depth, character, if the cellaring has gone well. A good value if properly kept.

Cindy McCain is a Vernaccia di San Gimignano. We like to quote the poetry of Michelangelo, especially the part that he wrote about Vernaccia when he said it was a wine that licks kisses, bites, pinches and stings. Ask Carol McCain (the 1st wife) about the sting. John probably could vouch for several of those descriptions as well, though he might not remember them after so many years. And a doctor or volunteer back in the day over at AVMT (American Voluntary Medical Team) might be able to Xerox their affidavits from 1992 to cover the pinch. Vernaccia is a thin, acidic wine that everybody praises but almost no one in Tuscany likes. The only reason for not hating Vernaccia would be to save that emotion for Galestro, which by this time has been laid to rest, hopefully. Praised but seldom enjoyed.

Michelle Obama is a Super Tuscan, one that hails from Greve. The Tuscans made her wine-avatar a blend called Batàr, 50% Pinot Blanc, 50% Chardonnay and one of the few recognized white wines to qualify as a Super Tuscan. Too new and blended to be marked as a traditional wine (or potential First Lady) but able to stand up to the Big Boys and fire away with plenty of power and aim. While this is a white wine and many folks suggest that white wines from Tuscany (and Italy) don’t have the ability to stay in the game for long, Batàr has been proven to withstand the rigors of time, in fact ageing quite remarkably well. “Sublime”, writes Parker. “Truly extraordinary,” says Jancis Robinson. To get both of those folks on the same page is a real feat. Rare, but worth the search.

John McCain is a Brunello in today’s political landscape. Under fire, not quite sure what is inside, elements of long-standing tradition, but somehow our Italians think his image has been “swift-boated” by his own party. The jury is still out, though they are being pressed to come in with a verdict. We might have to wait a little longer to find out what will happen to Brunello than to John McCain. If he doesn’t win, he can always drown his sorrows in buckets of beer and bucks, something he has access to both of in excess. Then again he can search one of his many cellars, from Sedona to Coronado and maybe find a bottle of red even older than he. Pray it isn’t corked, or cooked. He certainly seems to be of the latter disposition at this point. Their verdict for Brunello: When young, unstable, when older, unreliable. A wine we want to love but at this moment don’t quite trust.

Barack Obama is, like his wife, a Super Tuscan. He is an amalgam of indigenous and transported grapes. His vineyard is on the Maremma, the sunny coastal area which is new and relatively untested. But there is a great deal of enthusiasm for these wines and the wine that Obama reflects in the hearts and minds of our Tuscan prognosticators is, although untested, reminiscent of a once great one from the 1960’s. It might be that our Tuscans are just tired of the same old Sangiovese, they are ready for a change, and this Super Tuscan has arrived in time to anticipate their hopes and dreams. We shall see. Their conclusion for the Super Tuscan: Young and lively, with a mid-palate of composed notes, carefully composed and arranged. If it hasn’t been over-oaked, it might be ready within the next 4-8 years.

We went back and forth with the emails on the characters and the wines but it wasn’t until this past Sunday that we had our final entry.

Colin Powell is a Vino Nobile di Montepulciano, for like the wine, they both served at the pleasure of their rulers. Often cast aside in favor of the more obstreperous Brunello, Vino Nobile is the phlegmatic one, calm under fire and very dependable, and a great dancer. Able to take the hill and "get down tonight". Our Tuscans thought the Colin Powell showed great strength of conviction even though his latest moves probably wouldn’t be too popular back in his grand old party. But like Vino Nobile, sometimes being the most popular one isn't the highest goal. To serve as an agent of change and veracity seeks higher ground and purpose.

And that dear readers, is how our Prada Italians are calling the race. We shall see, shan’t we?

written by Alfonso Cevola limited rights reserved On the Wine Trail in Italy

The Home Team

In keeping with my earlier post, The Joy of Selling, once I returned home there was a little surprise waiting for me. The dreaded semi-annual management meeting, a two day affair, with speakers, workshops, wining and dining ( that’s what we do) and some looking back or forward in this channel of the wine business we have found ourselves nestled within.

I read on the occasional blog about how misdirected the wholesale/distribution channel is. And there are many things that need addressing. But we are not evil people; in fact most of the folks I work around and with are good family people. Sure we might not all share the same political persuasion and we may look differently at the horizon of the wine future. But we are all in the boat together and we are rowing like hell to make a difference for our industry and our families. We are not the problem; perhaps those who look, from the outside in, do not know of our camaraderie or our devotion to this business. I am always humbled and impressed when I spend a day or two, sequestered with my peers. No, we definitely are not the problem. So let the whiners and the naysayers say whatever they like, we aren’t going away. In fact, we’re stronger than any dirt the toxic blogger or two can throw in our direction.

If it sounds like I'm drawing a line in the sand with the direct marketers, I’m not. Let them try to dismantle the last 75 years of this industry. And if they can build a better framework, so be it. But as a past president of India, Radhakrishnan, once said, it is easier to destroy than to create. Much easier to talk about how corrupt and outdated the wine industry is rather than pitch in an actually do the heavy lifting of raising the tide for all boats.

There are reports and studies that postulate how important this industry is. I don’t need to read every one of them. All I need to do is look in the eyes of my colleagues to know this is a vital and necessary business for now.

Over those two days last week, we took a break from meeting and piled into two buses, 79 of us. Our group represents the state management for a large wholesaler here in Texas. With about 2,700 employees, our mission is to provide leadership and direction, along with making money and building brands. And while there are plenty of essential employees up and down the org-chart, we are tasked with steering the ship. It’s a big ship, one in which on any given day, over 150,000 cases of product are being delivered. That’s about 1,200 40-foot containers. Amazon can’t handle that, nor can USPS, FedEx, UPS, DHL or any number of delivery companies. Physically improbable.

Our buses took us to the Milestone/Viking center, where we were broken into 9 groups (8-9 people per group) for an “Iron Chef” burger cook-off. We had a set time to assemble a burger. There were three essential segments of this contest; 1) the idea of the burger, what it was conceptually, 2) Selling it to the judge (the pitch), and 3) what it tasted like. Our group, made up of folks from their late 20’s to their late 60’s, got together and we moved pretty fast through the concept of the burger. Assembling it, along with eighth other groups, took a good deal of teamwork and co-ordination, along with making sure we didn’t “overwork” the idea of the burger. It all flowed pretty well. Meanwhile the other teams were brainstorming and trying to come up with their idea of the perfect burger.

Hey, it could have been anything, but the burger was the fulcrum upon which the teams directed their attention. The idea was to transfer some of that energy, in the days to come, with other projects and working outside of our normal groups.

Through the process I snapped shots of the other teams, people I have known, some for as long as 25 or more years. People I admire, but because we are all so darn busy and directed in our tasks, we seldom get the opportunity to hang out and do these kinds of exercises. Remember there are 2,700 people whom we usually are directing out attentions to.

I know this sounds real Pollyanna and I am sorry, I cant help it, but I was really stoked about getting to be involved in an exercise in which when it was all said and done we sat down and ate what we dreamt up along with a glass of wine or a nice pale ale.

Folks seemed to really light up over this event, lots of laughing and great, great memories.

The next day, we went back to the conference room and continued with our workshops and discussions, back to business. But as if to put icing on the cake, we took a short break to recognize one of our peers who was turning 70 that day.

As the cake rolled up and we all sang “Happy Birthday” to him, I saw a colleague who was not only surprised but also very pleased that we not only celebrated his birthday, but a birthday, that in many industries the person would already have been retired and celebrating it quietly. Not so in the wine and spirits business. No, we’re a spirited bunch and we need all hands on deck, from 24 to 70 and counting. That bodes well for some of us other silverbacks in the pack, who just want to swing from the trees and make a little difference in the world we have found ourselves in.

So, folks looking on the outside in want to call what we do, and who we are, wicked? I call it the home team, and am very proud to be on it.

written and photographed by Alfonso Cevola limited rights reserved On the Wine Trail in Italy

Gone Hollywood

A. How can we believe a man who would sell out his friends?
B. Who else are you supposed to sell out? You can't betray enemies!

I must admit, there is something about the persona of Luca Zaia that lends well to a merry pasquinade. Maybe it was the Chianti I had tonight. Or maybe it was the fava beans.

When I read a recent post, for some reason I just got into a riff and before you know it, we were breaking out the Time Machine and Photoshop and having a fine old time making light of the latest developments in Montalcino.

You can read all about it on Vino Wire. I'm taking the road less traveled to investigate the strange coincidence of similarities between Dr. Zaia and some famous folks from Hollywood. After all, he is loving the limelight, so why not cast him in the true light of celebrity and exult his magnanimousness?

Being born with a pair of beady eyes was the best

thing that ever happened to me. - Lee Van Cleef

Whether it's threatening winemakers or tending to mad cow disease, celebrity-heroes always have to be seen in action, doing things, making decisions. Don’t forget to bring the blackberry along in case something more important needs to be dealt with, like altering the nature of Brunello or making specific wine more universally nondescript.

Thank you Dr. Zaia, for going after weak insipid Brunello in Montalcino, rather than looking for tainted milk from China in Italy.

The Lone Ranger: Only you, Tonto, know I'm alive. To the world,

I'm buried here beside my brother and my friends... forever.
Tonto: You are alone now. Last man. You are lone ranger.
The Lone Ranger: Yes, Tonto, I am... the Lone Ranger

No, Dr. Zaia, you are the Lone Ranger.
Um, that right, Kemosabe.

I have hunted you so long, I have become you.

Dr. Zaia, you have become a modern day Zed
Zed: What is it you want?
Zaia: Sweet death. Oblivion.
Zed: For yourself, or for the whole Vortex?
Zaia: For Everybody. An end to the human race. It has plagued this pretty planet for far too long.
Zed: You stink of despair. Fight back! Fight for death, if that's what you want.
Zaia: I thought at first you were the one to help. But it's hopeless. All my powers have gone.

I think what I think. I hate you all.

I hate you all. I hate you all. Including me...

Zed: We've all been used...
Zaia: ...and reused...
Zed: ...and abused...
Zaia: ...and amused!
Zardoz: Zardoz is pleased.

How many times do I have to tell you?

Wear your gloves when you handle humans!

Zaia: A planet where rich red wine evolved from light,
delicate Sangiovese grapes? There's got to be an answer.
Zaius: Don't look for it. You may not like what you find.

Zaius: Have you forgotten your scripture, the thirteenth scroll? "And Proteus brought the upright beast into the garden and chained him to a tree and the children did make sport of him."
Zaia: Green grapes are good, all grapes are good, all grapes are Brunello.
Zaius: The Forbidden Zone was once a paradise. Your breed made a desert of it, ages ago.

Well, Clarice - have the lambs stopped screaming?

Sangiovese, blood of Jove. Isn’t that enough to make Brunello a winner?
"I do wish we could chat longer, but I'm having an old friend for dinner."

Never send a monkey to do a man's job.

written by Alfonso Cevola limited rights reserved On the Wine Trail in Italy