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August 10 2006
Inspired by these two articles (and perspectives) from the same research:
Wine & Spirits Wholesalers of America
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August 9 2006

Wineries are terrible as investments—mostly because wineis obviously an agricultural product that is variable, labor intensive,equipment intensive and difficult to sell downstream because the commerce has agood deal of friction with distributors.
I’vetried to look at wine as an investment in the past and mostly come up empty andincreasingly so as many public wineries have been consolidated into biggerpublic companies, or have taken themselves private.
Onecompany that is straddling the fence between public and private is Scheid Vineyards(SVIN-PK).
ScheidVineyards operates 5,700 acres of land, mostly in Monterey County,California. They sell grapes oncontract and they sell wine in bulk and are now developing a winery that willsell ultra premium wine.
OnAugust 8th they announced their performance for the 2nd quarterand initiated a stock re-purchase program.
Scheidis an OTC (over the counter) company which means they used to be publiclytraded on a major stock exchange and had to be de-listed because their stockwas under $1 or took the steps to remove themselves at their own discretion inorder to avoid a lot of the headaches in reporting that go along with beingpublicly traded.
InScheid’s case they chose to remove themselves from a major exchange byexecuting a reverse stock split that bought out any stockholder that had lessthen 5 shares—this effectively reduced the number of stockholders from 387 to145. This allows them to still betraded as an OTC stock, but save several hundred thousand dollars in feespayable to NASDAQ or the NYSE—specifically, in their case, this site indicatesthey are saving $485K a year in fees alone to NASDAQ—not an inconsequentialamount of money.
Afterthe reverse stock split, a newly announced stock re-purchase program means thatthey are trying to buyout available stock that is available for purchase by thegeneral public i.e. increase their own control.
But, more materially, it’s interesting to read a proxystatement and understand where a business is trying to head—particularly afamily business like Scheid where virtually every major shareholder has thesame last name.
Any wine lover should have an interest in a company likeScheid because they happen to sell grapes to a lot of wineries we all love,including David Bruce, De Loach, Don Sebastiani & Sons, J. Lohr, Wente,Kendall-Jackson and Humanitas Winery.
Now, I’m not a stock analyst so I can’t recommend Scheidas an investment. I’m not sure, afterhaving looked at their proxy statement and their numbers that I even knowenough to try and buy any stock myself.
But, what I do know is that I like De Loach, I like DonSebastiani, I like J. Lohr and I like several of the other wineries they sellgrapes to and Humanitas is the wine of the day today at RadCru today.
And, Humanitas donates 100% of their profitsto charity ... and ... Humanitas is a brand that works with Inertia Beverage Group, acompany that is on the cutting edge in technologically enabling wineries.
Humanitas,2003 Santa Barbara County Chardonnay
Humanitas Winery has the exact same business model as actor Paul Newman’s –Newman’s Own, 100% of profits are donated to charity. What Humanitas doesn’thave is Paul Newman’s mug and celebrity to sell their wine. Because of this andHumanitas’ great cause, RadCru is donating 100% of our sales back to Humanitas.Please, pass on today’s compelling offer to some friends. (The wine really isterrific.) Make sure to check in at http://www.radcru.com for more information on Humanitas Winery and their excellentmission.
PS.Did I mention the wine is awesome? As always, we look forward to bringing you SmallVines, Rad Wines.
Cheers, Team RadCru
So, if you feel likemaking an investment a good way to go is in the form of a bottle of vino—you’re making an investment in yourself, society and small business. What’s better than that?
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August 8 2006
Icontinue to follow the ongoing evolution of Stormhoek Winery and their
This red paperclip iscurrently sitting on my desk next to my computer. I want to trade thispaperclip with you for something bigger or better, maybe a pen, a spoon, orperhaps a boot. If you promise to make the trade I will come and visit you,wherever you are, to trade. So, if you have something bigger or better than ared paperclip to trade, email me with the details at oneredpaperclip@gmail.com Hope totrade with you soon! Kyle PS I’m going to make a continuous chain of ‘uptrades’ until I get a house. Or an island. Or a house on an island. You get the idea.
Iam going to make a continuous chain of ‘up trades’ until I get 12 2005Lafite Rothschild wine futures …
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August 7 2006
Iwent to an independent newsstand by my house on Saturday. I wanted to pick up the current WineSpectator and check out the dining and wine list awards.
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August 7 2006
Doyou ever run across a somebodys name, a word or a phrase that you’ve never seenbefore and then all of sudden you run across this new found knowledge fivetimes in the next couple of days, leaving you wondering if you’ve lived under arock for all of these years or just that the world moves to its own interestingrhythm letting you discover it as it unfolds?
AuthorJim Harrison is like that for me right now. An author of some repute, he has flown under my radar to this point.
Heis a noted author, poet, playwright and columnist with some connected friends. One of his more famous novellas is the 100-page or so book Legendsof the Fall that was later turned into a movie starring a young Brad Pitt.
Isaw the movie when I was in college on a first date. I thought the movie was going to end seven times, but it kept truckingalong in tortured epic melodramatic fashion. By the time the credits rolled I was getting saddle sores in my seat and my date had lostall interest in me, the movie, and anything else besides penny beer night at“The Chug.”
So,it was with some surprise to find out that within the span of two days of my media consumption Harrisonis referenced in the book Heat that chronicles life in the kitchen atBabbo—Mario Batali’s restaurant and also in Kermit Lynch’s newsletter.
Harrisonand Batali apparently hang out occasionally and were the two linch pins in a 28bottle bacchanalian wine drinking epic in which the book captures the vignette.If you are to believe the quotes from Batali in the book he and Harrison werethe primary quaffers.
28bottles in a night?? Or, is that a month with 28 days!!??
Accordingto the book, it was one night.
Uncertain though I may be on all of the stars in the wine constellation system, I scanned theAugust edition of the Kermit Lynch newsletter and I see Harrison (again!).
Apparently,he’s a regular contributor and my radar just hadn’t been tuned.
Harrisonwrites very spare, evocative language that zips from one sentence to the nextwith each conveying stand-alone meaning and conviction. His writing speeds from one idea to the nextparagraph by incremental paragraph and then tidies up the mess in a way that is deeply ponderous and satisfying.
Inthe event that you haven’t guided your wine radar to Harrison and his place onthe fringes of the wine pantheon, check out some of his works in short form onAmazon, or review back issues of the newsletter at Kermit Lynch’s web site.
And,here, an excerpt from the August issue:
My bruises from Mondovino healed rather quicklywhen I realized yet again that taste is idiosyncratic. There is no MonoethicPalate to guide us, no numerical Ten Commandments to guide us with a steelyembrace. Of course this is a paint bynumber world. Learning the world formost of us is a permanent elementary school. If you need to know what refrigerator to buy, check out ConsumerReports, and any amateur with a chnky wallet can concentrate on the hundredbest vintages in the world. It’s the nextten thousand vintages that are up for grabs. Around here in Montana there are eco-ninnies who love the natural worldwith a severely limited and prescriptive guidebook. Everywhere we go we also meet the wine-ninnies.
Beautiful prose ... wine-ninnies aside.
Image: all rights reserved Kermit Lynch
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