Dom Perignon and Long Term Investing

My wife recently handed me her copy of Town & Country magazine. I am certain that T&C is not at the top of many, if any, value investor’s monthly reading lists. However, the article she referred me to, “The Bubble Machine,” about Richard Geoffroy chef de cave of Dom Perignon, proved to be quite intriguing.

The article details Geoffroy’s disciplined process for creating some of the finest champagnes vintages in the world on a consistent basis. Dom Perignon champagne is a compilation of the finest grapes grown on their estate in a given year. There are zero compromises in their grape selection process that goes into specific vintages. The selection criteria is so demanding that often there are several years between vintages that are released.

In the article, Geoffrey points out that “time is not linear” when discussing the way he believes champagne develops slowly, but with occasional leaps of evolution he calls plenitudes. Geoffroy and his team believe that champagne does not age at a steady rate but plateaus for years and then blossoms in quantum leaps. Geoffroy’s patient process allows him the luxury of time to only select and release vintages to the public when the moment is right.

At Gullane, we look at the investment research and portfolio construction process in a similar light. We focus on investing for the long term only when the time is right by selecting wonderful businesses, run by honorable-capable management, that will grow and hopefully allow us to arbitrage time. Similar to the process at Dom Perignon, often times we go long periods of time before making portfolio changes. Additionally, we believe that investments and their returns often plateau for periods of time before growing in large leaps. If you’d like to learn more about how Gullane Capital’s investment process helps our clients achieve their investment goals, please give us a call at (901) 766-1969.

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