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Andrew Tobias
Andrew Tobias

Money and Other Subjects

Drinking

October 9, 2014October 6, 2014

An appendix in the only investment guide you’ll ever need (ever) explains how buying wine by the case — if that gets you a 10% discount and you drink one bottle a week — works out to an internal rate of return on your investment of 177%.  (Your investment is the extra cash required to buy a whole case.)  If this is not intuitively obvious, buy the book.  (If it is intuitively obvious, you must be at the extreme end of the spectrum.)

In the book I use a $10 bottle of Bordeaux, to keep the math simple, though of course the rate of return is the same at any price point and just as good with a nice Pinot Grigio or Cabernet Sauvignon.

The one problem I see with trying to get rich by consuming vast quantities of wine by-the-case is that this 177% return . . . well, if I have to explain the difficulty with getting rich this way, you must be at the extreme other end of the spectrum — no offense — which I know you are not.

This all springs to my stone sober mind because a dinner guest brought me a bottle of wine this summer that, as we drank it, even I could tell was very, very nice.  (I know nothing about wine.)  I went on-line to see whether I could afford it and was astonished to find it for $6.99 a bottle.  Needless to say, as brilliant as is a 177% return on a ten-dollar bottle of wine, it’s even more brilliant (if fewer actual dollars) at $6.99.  I bought four cases, largely to serve others . . . excited . . . but nervously thinking – what do I know about wine?  (Really: I know nothing about wine.) What if they hate it?

I poured a glass for a connoisseur without letting him see the bottle.  He started speaking Wine — a language I do not — telling me he was guessing it was French (it is South African), possibly from 2010 (2013), and commenting on its notes and hints and palate (or was it his palate? whatever).  He may have said something about bacon.  But the gist was that he liked it.

What might it cost, I asked?

He guessed it was perhaps in the $20-$30 range (I paid $6.29 with the discount, free shipping); $50-$60 in a restaurant.  At which point I bought six more cases.  Oracle Pinotage 2013.

Enjoy.

 

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