I started the week off right with a Wine event on Monday night at the coolest new Wine Cave in the city (so cool that you have to walk down a back alley, look for the graffiti doors and knock a certain pattern to get in). Ok, I made up the knocking part.
Ange Aiello, Founder of the iYellow Wine Club and I hosted our second Women of Ambition series event on Monday night educating our guests on the key elements we look for when investing in wine and in wealth. While you missed out on the luscious wine selections and delectable cheese platter, I can fill you in on some of the key takeaways:
Innovative Management
Wealth – When investing in a company for the long term, I look for a strong management team with pronounced leadership & vision and an ability to adapt to changing market conditions.
Wine – Ange selected the Small Talk Faux Pas Riesling Sauvignon Blanc which has recently implemented an expensive branding and labeling overhaul to get with the times and appeal to their target demographic. Check out the label here.
Long Term Indicators
Wealth – A big theme with long term, value investors is a strong financial / economic moat. Considering factors such as market cap, PEG ratio, earnings growth, debt ratio, dividend yields, etc.
Wine - Determining if a wine will last is not an exact science (much like investing in the market). Most wine experts use deductive reasoning based on their past experiences to determine what wines age well – that said, there are 4 characteristics that most wine people agree on when tasting a wine to determine if it will last: high acidity, tannin structure, low alcohol level and residual sugar. Check out this article on Wines that age well for more on these traits.
Sector Analysis / Cyclical Timing
First it’s important to say that the key here is to be a disciplined investor and not just follow trends. That said knowing when to own/overweight stocks that accelerate in certain stages of the economic cycle can be one of the most important elements of successful investing. Key pointers for example are to own defensive stocks (utilities, consumer staples, telecoms) when an economy is slowing down - i.e. inelastic consumer staples like Johnson & Johnson who sell the things that you’ll continue to purchase regardless of your budget (i.e. toilet paper). Emerging out of a recession, look for sectors associated with recovery – i.e. companies within the forestry industry have gone up on average more than 200% in the past 2 years as a result of US housing recovery.
Wine – Out comes the ice wine. Besides tasting like heaven, ice wine is very particular when it comes to timing. In preparation for Icewine season, the grape vines are netted in the autumn when the grapes are ripening (to protect them from being devoured by birds) and then left on the vine until a sustained temperature of minus 8 degrees Celsius or lower is reached. Depending on the season, this could happen anytime from December to February. Wineries and grape growers keep a careful watch on the weather forecast looking for an optimum stretch of temperatures between -10 and -12 °C and as soon as this happens, they hand pick the grapes overnight in parkas.
Enjoy the weekend.
D.
Dian Chaaban
Investment & Wealth Advisor
Chaaban Wealth Management Group
416.842.4234