Strong Buy on The Last Tycoons
Catching up on my reading has been made more difficult by a commitment to WillIam D. Cohan's The Last Tycoons, The Secret History of Lazard Freres.
The book was released last spring to a bit of fanfare, all of which was lost on me as I was traveling. This book is a fascinating account of the nonsense that is typical of day to day life at the most political corporations in America, otherwise known as investment banks.Lazard, of course, is not just any investment bank, and dominated the league tables worldwide, making wealthy men of many partners. The authors stint was a brief one near the end of its long run as a partnership, encompassing 6 years in the early 1990's.
Still, Cohan performed exhaustive research to bring the 700-page tome together, and covers the origins of the firm and the succession of "Great Men", legendary and mercurial bankers who the current crop of working stiff MBA's can only hope to emulate. Of course, that is probably a good thing given the petty politics, backstabbing, deception, and greed displayed in the offices and boardrooms of Wall Street. The sterotype usually fits, although their are thankfully some exceptions.
Cohan covers everything from one of the first known rogue traders, who nearly bankrupted the firm in the 1930's, to the mad dash of many European partners to escape one step ahead of the Nazi's, to the eventual public offering of Lazard that enriched Bruce Wasserstein at the expense of many long-time employees.
Power and greed are everyday themes on Wall Street, along with sexual escapades. The book insinuates that Felix Rohatyn got busy behind locked doors, on the desk in his office, with Andre Meyer banging on the door telling the saviour of New York City to get a room. The many sexcapades of Rohatyn, Michel David-Weill and Wasserstein are chronicled along with the death of Edouard Stern, whose bizarre murder thankfully took place before the rise of most of the current crop of Wall Street blogs came of age. They would have had a field day with this one.
Porsche GT 2 Set to Roll
The wicked Porsche GT 2 is inching closer to the showrooms, and this beast should get tongues a wagging as the fastest factory produced 911 from Germany. Hard core fans thought the Cayenne made them soft, but this car should disprove that thought.
The first cars will be delivered in just a few weeks.
Respect Required
Porsche.com
48 Hours: Porsche GT 2
1440 Wall Street
Fine Wine Market Outperforming Chinese Equities
Has the ramp in Baidu (BIDU-NASDAQ) left you speechless? The market for fine wine has been on a tear that leaves Baidu in the dust. The Chinese have not really taken to wine yet, but with new millionaires being created daily it is only a matter of time until they begin to participate in the finite market that is wine. Giddyup.
Wine is a liquid market, and even allows you to participate in futures if you are so inclined. The five first growth Bordeaux estates typically produce 20,000 cases of wine in an average vintage. Seven years ago the 2000 vintage of Lafite Rothschild could have been purchased for $3,500 a case. That same wine is now selling for $18,000 case. Bottles disappear nearly every day as people open them, and the surviving wine becomes even more valuable. The only downside is fraud, as counterfeiters attempt to cash in on the game.
The fall auction season is heating up in New York, which is music to John Kapon’s ears. As director of NYC wine retailer Acker Merrall & Condit’s auction arm, next week’s $20 million “Golden Cellar” should net him several million dollars in commissions. Nice work if you can get it. As Kapon says in the auctions offering circular:
The breath of this offering is spectacular. This is literally the best of the best, both in producers and in vintages, and to try and recreate this type of collection in today’s market would near be impossible....If one were to buy wines as an investment, this would be a Warren Buffet portfolio. All these wines are not only some of the greatest tasting delicacies in the world, but they are also all investment worthy, if that matters to you. History does not lie. John Kapon
1990 Petrus Appreciation
Kapon has chronicled many of wine experiences in newsletters he has written, a taste of which you can get from perusing the ninety page book that comprises the auction. This auction is a dream for Burgundy lovers, with 4,838 bottles being offered including 223 magnums, 11 jereboams and 2 methuselahs. There are nearly 2,600 bottles of bordeaux and 128 bottles of desert wine dating back to 1795.
You can join Kapon & Co. at Le Bernardin for a pre-auction dinner October 26th, and tell him StockJockey sent you. Of course, John does not need my help, and was drumming up a little interest today on television:
“Wine prices have only gone one way, historically, and that’s up,” said John Kapon, Acker Merrall and Condit’s president and auction director. “Wine is great because you can always resell it; there will always be someone else who wants to drink it, and everyday there are less bottles available as they get consumed.”
But, wine auctioneers say, taking the risk can pay off. In recent years, the blockbuster bottles have shot up in price, and this collection, dubbed “The Man with the Golden Cellar” has some of the best-sellers.
The collection has twenty-two different vintages of Romanee Conti, as well as a 12-bottle case of 1962 Rousseau Chambertin, which is considered to be one of the best vintages of the century.
“Romanee Conti is the most expensive wine in the world - $3,000 to $4,000 a bottle on release and more expensive by the minute after that,” said Kapon.
Acker, Merrall & Condit
Auction Catalog
Why fine wine prices will keep rising
Vinfolio
48 Hours: Red Wine Weather
With the temperatures cooling off it is time to break out the red wines again. One of the hardest Aussie Reds to find is Henschke’s legendary Hill of Grace Shiraz. Wine Spectator spent some time there earlier this year and took a stroll among their vines, some of which were planted before the American Civil War.
Their fall harvest season falls in April and May; the southern hemisphere is funny that way. Winemakers seem to be less stressed out than money managers, you can meet Henschke’s family team below.
A cool, windy day will find me on Long Island’s North Fork, where we will check out Bedell Cellar’s 2005 Merlot Reserve. It is crush season in wine country, check it out if your get the chance.
Bedell Cellars has already released its 2005 Reserve Merlot ($40). And, despite its youth, the intensity of the vintage demands attention. Loads of blackberry preserve, fresh fig, and cafe mocha aromas reach right up out of the glass and pull you in. Big, lush blackberry flavors fill the mouth, with rich chocolate and a little vanilla in the background. The extracted, broad flavors carry through from beginning to end. The structure is a little firm and this wine is very full-bodied for the region. The finish is lengthy, if just slightly astringent. I expect the tannins to mellow, revealing layers of complexity and deliciousness rarely seen on the North Fork. In three to five years, when other wineries are just releasing their 05s, this wine could be a classic. Appellation America
