Best of the Fool

Wednesday, May 26, 1999

The following article originally ran as a Fribble on May 4, 1998.

Magnum Opus

by Patrick White (fpwhite@concentric.net)

Fine wine and Foolishness have much in common. I have read recently that the Wise have been in a frenzy of conspicuous consumption, what with the record bonuses paid out by Wall Street firms since the beginning of the year. Bottles of wine that would ordinarily sell in restaurants for $1,000 have been fetching $1,500. How very Wise! (And where are the customers' $1,500 bottles of wine?) But I learned about the true Foolishness of fine wines as my wife and I toured California wine country in celebration of our tenth wedding anniversary. We have developed some new and expensive tastes, but not, it would seem, as costly as the truly Wise.

One of our tours was of the epicenter of fine winemaking, Opus One, a collaboration between the late Baron Phillipe de Rothschild of France and the USA's Robert Mondavi. No expense is spared and no effort is too great in making what is claimed to be the finest bordeaux-style wine in the world. The fruit is hand-picked from vines densely planted; the young wine is aged 18 months in barrels made of French oak (at least twice as long as any other winery we visited); and the process takes so long that vintages are not released until three years after the grapes are picked.

And then the Wise rush in.

You see, a good wine, blended from Cabernet Sauvignon, Cabernet Franc, and Merlot grapes, takes years to blossom. The 1994 Opus One that is on sale today should be "laid down" or "cellared" for at least five years before it begins to mature and give its greatest drinking pleasure. As Fools everywhere have come to understand in investing, holding the wine for 10 years or longer will further improve it. But more than half of any year's Opus One is bought and consumed in restaurants in the first year of its release. That's right, more than half of this painstakingly produced wine is consumed years before its time!

Even to my unsophisticated palate, the '94 that we tasted seemed tight and somehow unready. We bought a couple of '94 Opus Ones (with our debit card, Foolishly) and have decided to open them in celebration of our 20th wedding anniversary. The Foolishness of our purchase became clear when, at a fine restaurant, I saw that my $80 '94 Opus One was on the menu for $300. How very Wise! Pay more than three times retail to consume something that shouldn't really be drunk for ten years and over time will dramatically appreciate in quality and dollar value.

By the time we are ready to open our Opus One, it should be worth hundreds of dollars, but for my wife and me, the wine will have become priceless. So, my fellow Fools, buy those fine wines and fine stocks, and "lay them down" for a decade or longer. What I have learned in marriage applies in investing and wine drinking: Buying and holding is the way to true appreciation.

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