Weird Prices →$1k Wines, >$10k Stocks, And >$100k Trucks

• How do they get that way?
• Do any make sense?
• Are there better alternatives?

>$1k wine

What is it?

I’m fascinated by weird prices so like to figure out the story when I see something that doesn’t make much sense to me at first glance. How can a wine be good enough to justify a $6,500 price tag? This 1882 W&J Graham’s Ne Oublie Port costs that much in part because of the 1882 vintage. Prices are dictated by supply and demand and whatever the demand, there isn’t much supply left. Over the course of 141 years, someone has typically drunk, spilled, or swiped everything in a wine cellar. And apparently it is good, with reviewer Anthony Zhang saying that,

The sweetness of this good wine intensifies over time with layers of caramel, honey, sugar, orange zest, marzipan, apricot, and almond flavors.

Hit or miss?

I’m a hard pass. For the price I could buy a whole almond grove and get almond flavors for the rest of my life.

Caveat

The >$1k wine market is more liquid (ha ha) and there is actual resale value available. If you own a cheap bottle of wine, the only thing to do is drink it or give it away. But if you own first growth Bordeaux futures, you can flip them. If you want a monetizable wine collection, the most convenient purchases are probably well-known labels such as Chateau Margaux. I’m not a wine snob but there are plenty of them out there to resell to.

Substitute

Instead of the $6,500 version, this version is >90% as good. You can get four bottles for $180 (or $130 using this sign up bonus).

>$10k stocks

What is it?

In and of itself the per share stock price is inconsequential without knowing the share count. But as many stocks IPO at $10–100 ($10 very common for demutualizations and SPACs), something went wrong along the way if they trade beneath $10. And they aren’t courting retail interest if they trade over $10,000. In many cases, you can go along for the ride with great investors, Warren Buffett’s $542,900 Berkshire Hathaway (BRK.A) being the most famous example.

But if you want to get in bed with billionaires, there are other less famous examples. Craig McCaw is a multibillionaire cell phone pioneer whose vehicle Pendrell (OTC:PCOA) trades on the OTC’s expert market, last for a price of $150k. Multibillionaire Gerald J. Ford’s Mechanics Bank (OTC:MCHB) trades for around $23k and is likely a takeover candidate within the next few years.

Hit or miss?

These aren’t terrible stocks to own if you’re willing to be a long-term holder of an illiquid asset in a somewhat inconveniently large bite (a pain for estates, etc. compared to more easily divisible increments).

Caveat

If something is liquid, you can trade it all day (and for real degenerates, brokers are looking to launch 24-hour weekday trading). But there’s also something nice about these shares’ illiquidity. You won’t screw them up with overtrading because you can’t! Most investors destroy their returns with trading. Comically, they did worse over a 20-year period than any available asset class:

In my (admittedly humble because the vast majority of my money is in my hedge fund) personal account, I invest almost exclusively in the dark/expert market where there is almost no liquidity. When shares are put on this market, retail brokers have a specific notation telling their clients that they can only sell but cannot buy them. But who are they supposed to sell to? No major institution is buying. No fellow retail traders can. It is basically… me. And a few other accredited investors willing to take negligible liquidity in return for huge price discounts.

Substitute

There are more convenient alternatives. Berkshire offers cheaper B shares (BRK.B). And while I like MCHB for a takeout candidate over the next several years, I love W.T.B. (WTBFB) for a similar thesis and a lower price.

>$100k truck

What is it?

For years I loved Defenders, especially my 1986 Wolf with side facing bench seats, and awaited their return to the States. My sister in England was baffled by my enthusiasm for something that is fun and hard to get here but just an ordinary truck farmers drive over there. My feelings on the relaunch are mixed; the price shoots above $100k with even modest options. That puts it squarely in the price range of G Wagons, which isn’t that easy to justify. And aesthetically, it spent too much time in a wind tunnel. Toyota did far better with their Land Cruiser relaunch at keeping the brand’s soul. I’ve done overland driving courses in both and found some truth in the Aussi saying,

If you want to go into the bush, take a Land Rover.

If you want to get out of the bush, take a Land Cruiser.

Hit or miss?

A narrow, narrow miss. I’d waited for this for a long time but wish it had more family resemblance with my vintage version.

Caveat

It is a beautiful, capable vehicle for something that can fit the whole family. Also, you can drive it for a long time. If you have a muddy car, it means you’re sloppy. If you have a muddy Land Rover, it means you have 10,000 acres.

Substitute

Thank goodness that someone worth about $22 billion more than me had the precise reaction to the new Land Rover. Jim Ratcliffe launched the Grenadier, a real truck far truer to the capability, aesthetic, and soul of classic Land Rovers. It is English so there are a few quirks — the driver petal well is slightly cramped and uneven, the windshield wipers work only approximately, and it looks best in black as there’s otherwise too much black trim along the doors which stands out too much in other colors. That is just throat clearing: it is a glorious truck that you can keep forever. It is almost whimsical in its classic touches. The ordering process is easy and clear, leaving it solidly in the 5-figures ($80kish with everything I want). It lives up to its motto,

Built on purpose.

There is a lot to love, including the tactile buttons on the center of the dash and above head:

Conclusion

There’s a story behind quirky prices. They are usually worth reading and less frequently worth paying. Skip pricey booze; drink water. The best deal on a vehicle is the one you already own. And it often pays to get in bed with billionaires (figuratively or literally depending upon the circumstances). Just collect their thinly traded vehicles and forget about them. Check prices once a decade. But if you want to trade 24/7 Monday through Friday, you will soon be able to do so here.

TL; DR

Don’t buy expensive wine or vehicles, but sometimes it pays to buy expensive shares.