Loch Fyne Whiskies - Scotch Whisky Review

I’m not consulted often as to what people should do with their money. Mind you, this could have something to do with my track record. Let’s leave aside for the moment my portfolio of shares, where some wide-boy has successfully managed to lose half the value of my investment. Nothing odd there you may say, hasn’t everyone’s portfolio suffered similarly? Probably, but that may be due as much to following the herd instinct as against picking bummers in terms of companies or indeed sectors. I’m sure if I had left my investments in certain drinks companies I would not have had the losses I now sadly contemplate. So I am probably a supporter of drinks in their widest sense… in more ways than one perhaps.

However I was really referring in the opening paragraph to my other major self managed investments, and these could give the first clue as to why I am not called upon often to dispense financial advice. You’ll want to know what these blue chip investments are no doubt: well, with not a little embarrassment, I’ll tell you—if you promise not to spread it around.

How’s about a 25% stake in the holding company which has a controlling interest in a Second Division Scottish League football team. A “ stormer” that one… a licence to print money. Or there’s my classic car… never depreciates… a hedge against the vagaries of the stock market. If one forgets about the never ending garage bills, the rebuilds, the entry fees for the odd event or two and the other costs associated with keeping going a 38 year old example of British engineering at its best… I really can’t lose with this one either. Then there is the racehorse—well two of them actually—although one is almost constantly injured and doesn’t do a lot other than eat regularly and get new shoes... often! And there are another three joint owners to share the costs—and the glory—with, so I’ve cleverly minimised my exposure. I’m really something of a guru then when it comes to investing. So pay attention.

I note with interest the spectacular investment opportunities that are currently being touted in other whisky publications. You know the kind of thing... a bond payment... anything from £500 to £2000. Unique club membership, bottles now or at some time in the future. Some cleverly worded blurb that the as-yet unbuilt distillery will make the product in the original way... whatever the hell that means. Some implied criticism (a Grouse perhaps?) of the way existing distillery owners go about their business... and a promise of great future opportunities specific to the bondholder. Bells are ringing here – and I don’t mean the UK’s no 1 blend either.

It’s not that many years ago we were urged to buy casks of whisky for investment purposes. Remember that one? That was where the major companies allegedly never carried sufficient stocks for their future sales and therefore bought from the market in future years. The returns were mindblowing. Sadly, however, the arithmetic—whilst correct—was based on seriously unrelated numbers. It was easy to get a 2- or 300% “return” on investment if one started with a filling price from the distillery (no duty, no warehouse rent) and then work up the numbers of bottles one could expect from the cask in 5, 8 or 12 years time multiplied by the selling price of a 5, 8 or 12 year bottle of an equivalent product... this time inclusive of duty!

“Investors” also had “opportunities” to buy young previously distilled spirit. This was based on someone’s perception of “market price”—and other examples of market prices were often quoted demonstrating what the “investment” would be worth if you simply sat tight. Maybe they forgot to explain warehouse rental charges, or that market prices—like my shares—can fluctuate wildly.

Many “investors” wanted out after a year or two. It was then that they discovered that the major whisky companies had no need or desire to purchase casks of whisky. Even if they did, “market prices” were far lower than the “investors” had been led to believe. A con trick they cried... groupings came together to seek justice. Too late, The Scotch Whisky Association made a statement warning the gullible. The damage was done however. The Serious Fraud Squad became involved... arrests in London, and Gibraltar... companies wound up... eventually jail sentences for some and others on the periphery of all the shenanigans desperately buying back stocks from disillusioned investors.

Now, far be it from me to suggest that “investing” in new distilleries—as yet unbuilt—is in any way risky. Far be it from me to link the investment scams of the 90s to the new thinking around boutique distilleries in hitherto virgin areas of Scotland. But go in with your eyes wide open. Do remember these other “investment opportunities” of past years. There are still people out there hurting... and I am something of an expert on hurting given the investments I have!

Why bother “owning” a distillery... it’s only a factory after all. A means to an end. Save your money on the factory investment... buy a bottle or two of the output from many years ago instead. The mighty Loch Fyne Whiskies will be delighted to advise... hell the editor will parcel and post your order to you personally! You’ll also be able to partake of your purchase there and then... no waiting till it matures!

If you crave club membership... join the Scotch Malt Whisky Society. A choice of selected single malts, cask strength, filtered only through unwashed ladies tights—or should that have been ladies unwashed tights—whatever! They have Club Rooms, newsletter, special offers... even accommodation. They don’t need to own the factory... if they don’t, why should you?

If, however, you are determined to go ahead, if you have money burning a hole in your pocket, if you crave club membership, if you need a conversation stopper at parties... maybe I can help. Shares can be made available in Raith Rovers Football Club. You may want to sponsor a wheel or a wing on a 1965 Mini Cooper S. Or hows about a fetlock or two on a couple of racehorses? I know the editor will pass on to me all of your enquiries. I look forward to hearing from you.