Whiskey Cask Investing: The guest pitches bourbon and whiskey cask ownership as a tangible alternative asset, emphasizing 8-year aging, included storage/insurance, and historical returns around low double-digits.
Aging Economics: New make spirit appreciates as it ages in barrel (angel’s share concentrates flavor), with significant value uplift by years 5–8, when secondary market demand spikes.
Premium Spirits Trend: Consumers are drinking less but higher quality, with growing age statements and premiumization supporting long-term pricing power for aged bourbon.
Global Demand & Tariffs: India—world’s largest whiskey consumer—cut tariffs materially, and Hong Kong removed tariffs, aiding exports; diversified global demand helps offset occasional negative tariff news.
Distillery Partners: Focus on proven Kentucky/Tennessee producers such as Jackson Purchase, Bardstown, Green River, and Old Glory to enhance exit liquidity to brands buying aged barrels.
Risk Management: Barrels remain at distilleries for proper provenance; Lloyd’s insurance covers fire/flood with replacement, and the firm assists exits (typical 5% brokerage) when barrels reach 6–8 years.
Investor Access: Minimum ~24 barrels (~$56K) with VIP distillery visits available; investors own the actual barrels and can opt for customized bottlings via a barrel-pick program.
Macro Context: Host notes stable U.S. data and discusses market cycles, but the core opportunity presented is long-dated bourbon cask appreciation tied to aging and premium demand.
Transcript
This episode is sponsored by Interactive Brokers. And listen, it's your research and it's your investments. You analyze markets, you manage risk, but did you research your broker? In 2025, IBKR's clients outperformed the S&P 500. Yep. Retail clients averaged 19.2% while hedge fund clients averaged 28.91% compared to the index's 17.9%. IBKR's lower trading costs, competitive rates, efficient execution, and access to more than 170 global markets helped investors keep more of what they earn and put more capital to work over time. The broker you choose makes a difference. Interactive Brokers, member SIPC. If you care about performance, find out why the best informed investors choose Interactive Brokers at idbkr.com/2025. The Disciplined Investor is all about you, your money, and the markets. Sit back and get ready for this edition of the Disciplined Investor podcast. >> This episode of The Disciplined Investor is sponsored by Horowits & Company. If you're looking for a portfolio manager, look no further. Horowits and company. From seed through harvest, cultivating financial success. Greenland Babel sinks and then boosts markets. Natural gas prices skyrocket. Small caps continue to lead markets. And our guest today is Jeremy Castler, founder of Cass X. Yes, we're talking about whiskey. All this and much more on episode number 957 of the Disciplined Investor podcast. Hey there kids, Andrew Horowitz here and welcome to the discipline investor podcast. It's another great week in store for you. And yeah, we have a guest on. And guess what they sent me? He sent me whiskey samples. So, we're going to taste some while we're talking to him about this interesting idea of ownership of whiskey, bourbons, rise. Yes, that's something you can do. I I been looking at this for a long time, wondering about it. So, I have so many questions lined up for him. That is going to be a good time. But let's talk about what's going on in the markets right now. Well, with natural gas prices, why? Well, that snow that's about to befall this huge swath of the United States of America is going to be covered in icy cold conditions. And what we saw was that the Henry Hub US benchmark, this is the natural gas prices, went berserk, skyrocket, surging over, I don't know, it was like 70% at one point. I think it settled in at about 30 something% for the week ending the 22nd. 20 actually 23rd. It was the week ending the 23rd this week. And that's pretty amazing. reaching as high as about five bucks per British thermal mu unit. And uh this is this is this is pretty incredible. This marks the largest weekly gain. Listen to this since 1990 and the highest price since 2022. Again, this this huge arctic blast that that's what's causing a lot of this most severe weather we've seen in in years hitting most of the US. And uh hopefully you are taking care to make sure that you are safe. A lot of flights are canceled. A lot of uh ground stops being seen. A lot of people saying just the hell with this. I'm not traveling. I'm not going outside. I'm not even I'm just I'm just closing the doors. I'm doing the heat on and I'm doing our thing. We're going to see all those horrible stories about people doing strange things like bringing their barbecues inside the house and all that. But what we saw was a massive spike in the heating demand as households are cranking up the thermostats. And that is just in front of this whole thing because a gas I don't know if you know this but gas heats about 47% of the homes in the US and powers a huge amount of electricity generation. So both sides right whether you're getting heat by electric whether it's your water heater whether it's your heat in your house that's coming maybe from electricity or maybe even natural gas. Yes. Some of you use heating oil and you have those giant um furnaces in the basement that are cranking out that loud heat and some of the apartments around the country are still using steam heat that is based on furnaces in the basement maybe from heating oil. But all of that is part of this process and that is going to be a bit of a crimp on pricing over the next couple of months. expectations of depleting storage is very high and there's this big issue they're talking about now the potential for production disruptions right because of these freeze offs where water is freezing and wells and pipelines especially in Texas and other areas is is also reducing supply at the worst possible time well of course when else would it be so this is creating a a tight near-term supply demand and imbalance and it amplified this short squeeze for people that are investing in it or maybe not investing only, but it's maybe some of the places that are looking to hedge their positions as well from the power company standpoint. And all these traders that were bearish or short on gas earlier had a rush to cover their positions as forecasts turned to this cold or horrible weather. But these events, they don't they don't last forever. We have seen this kind of weather before. action in in weather that has done things like whether it's hurricanes and we talk about this on a regular basis sometime in May we pick up a company a lot of times due to the seasonality of it called Generrack. Generrack is a company that and actually if you look at Gener over the last few days it's done very well. It's a it's a you know a battery or a um a company that does generators. Uh so generators and holds some storage and then charges your whole house up. This is is very similar to what we see in the hurricane season and the the wicked weather season of the summertime. And every time there's a storm or the there's a discussion of a storm or a prediction of something coming our way, Generax seems to get a little bit of a lift. Buyers come in. This is exactly what happens. Then if we have a really tough season of either no storms at all that were really significant enough for people to say, you know what, I need a generator. I need to replace my generator. I need a new generator. What happens is that unless there is a huge amount of new houses being built that will be built with generators. Generrack usually comes down after the summertime after hurricane season. We're talking let's talk about October, November and it troughs and kind of hangs out for the year and then we see maybe even a roll off downside and then sometime again in May the seasonality kicks in with this kind of weather event that we're talking about right now. It's very shortlived. Now there could be more things heading into the winter. We're just starting. But the reality is that this kind of event, this Arctic blast sometimes they they look at the polar vortex. These are things that are temporary and shortlived. Let's keep an eye on this just for the fun of it, shall we? In terms of the price of natural gas, watching if maybe the storm isn't as severe as we initially thought. But this is something that is a really good lesson to learn and understand and we could take that and really expand that as well into even what's happening with AI right now. Quantum computing the risk on sentiment with certain areas that are getting uh bought up and short squeezed these things don't usually last forever and there is a natural cycle. It deals with the psychology of the markets. It deals with how we are like disbelievers then believers that oh my god I need to get in and man let me just throw everything I have at it and oh my god what a mistake I made and then oh boy I'm going to be ruined it's going to go and then it goes up and down the peak to trough this is an economic reality it is a financial investment reality we've seen it time and time again that will not change when we're talking about something as near and dear to us as our own money the investment cycle is going to be there it may elongate it may enlarge The peaks may be higher, the troughs may be lower or vice versa. We may see a thinning out of that and we may see even a time period where right now dips are bought in a matter of a day. Look what happened with Greenland last week. President was huffing and puffing and and and talking about how, you know, under no circumstance am I going to remove these until we get to until we buy Greenland. And we knew it. Literally, we're talking about this in the office that, you know, let's not panic about this right now because I think when they go the the the ensemble gets off the planes and the helicopters in Greenland and and then and then or in Davos actually uh to talk about Greenland and and shake hands and meet and greet, there'll be a magical framework of a deal that will be created that nobody will have any idea what it actually is, but it'll be a great deal. and then the tariffs will come off and markets will react. Seem like something that we've seen before. So, keep an eye on natural gas. Keep an eye on what's going on. I don't think the Greenland deal is really a deal at all. It's just, you know, we're just going to allow to have uh better the dome maybe, of course, in the Arctic. a guess and possibly even some more security there, but I don't know how much uh mineral rights we're going to get that we wanted for the whole country, but we'll probably just get what was do us anyway. Everybody will get all excited that it didn't get any further. We can't go anywhere else talking about things like uh today we have to talk about other economics. And by the way, we saw a GDP number come out. We saw an ISM services number come out. We saw initial claims. Really not much changing. We saw even a PCE number come out. Everything's kind of status quo and I think that is a good thing for markets. Nothing's too bad, nothing's too good. It's just right down the middle. Now, I mean, we did see some productivity and GDP numbers and expectations that look like we're going to continue to have really good growth moving forward. So, that's good. Employment numbers strong relatively where we should be. uh consumer spending down uh uh uh excuse me, consumer spending up, personal income down. Not a great combo right there. That will play out over the next couple of months with uh consumers sentiment in line with where expectations were were for the week. Uh the still that K-shaped economy issue that's going on right now. And we can't we can't go any further. Also, unless we talk about silver, what a what am I do? I have this here somewhere. I think I have uh do we have it here? There we go. Somewhere on the board. I knew there was that. Give him a big round of applause. I mean, silver hitting 100 on Friday. 100. It was up huge last year. It's up 40 what? 40 41% this year, which is by the way three weeks old. We talked about this at length on DH Unplugged this week. Myself and John De'vorak on Tuesday nights where we're live. We talked about this and talked about some of the reasons and rationale. I was also fielding some calls from colleagues and clients on this this week talking about where to go. You have questions. You know what? There's a place for you to go too. You can go over to the disciplinedinvestor.com. Click on askandrew. There's a little button on the top says ask Andrew and ask me whatever you want. The email comes right here, right to the studio, right to the offices. is a studio in the offices and there's a mailbox that says ask Andrew. Magically it appears. So go over to the disciplinedinves investor.com right now and ask away. Um before we get to guest I want to talk also about last week some of the things we talked about. We talked a lot about earning season and this is right in front of us right now. the potential we have, I think, for either this idea of a stretched valuation market and disappointments, uh, or prices still have room to run to fill the future opportunity. That that's kind of where we are right now. And I don't think those two sides are much different. And I think that where we are in terms of investor sentiment, which is high and hot, and allowing for most companies to believing that we have a lot more room to run ahead of us is something that's I think there some companies like we saw this week uh had some problems. some companies that were worried about the Microsoft's uh Dell's few others down you know chunk others down 10 20% over the last month or so as the concern about capex spending is a big issue and whether or not we really are ahead of our skis right now we've already seen some of the prices come down but I don't think that most investors right now or institutions are ready to throw in the towel just yet just by the looks of market action reported this week. It was a miserable quarter forward. They they they met their revenue expectations. They did fine on on earnings, which was, you know, low numbers generally speaking. But, uh, I don't think anybody was surprised about there was going to be a little bit hiccup in here, right? Because the only reason the stock took that massive pop was that it was propped up by who? Uncle Sam or Big Daddy, whatever we're calling it today. You know, the stock was hit by Guys. was down about 15% on Friday after a pretty stellar run. And um this something we may want to watch this is this the canary in the coal mine. I don't know. You know, we've seen incredible runs on MU, AMD, all the peripheral companies, we'll call non AI, but the companies that are are powering the machines that have the AI also as well as the automation when it comes to automobiles. And uh I guess we'll go back to the old Cisco term of of thinking about uh the internet of things IoT and what's happening with devices even like washing machines, toasters. Look, I got a new oven coming in. And I got to tell you something. I am going to have to spend time looking at the the book instruction manual. I have one that's your basic. You turn the knob is 350 or whatever it is. Great. This other one, I got to tell you something. It's like a whole computer system. It doesn't just push a button turn on like the old days. So, we have some concerns about the companies and we've been seeing the sluggish nature of their shares like the uh like I mentioned Dell, Microsoft been dialed down for a while. The big issue is what's going to happen when Apple reports. That's what I'm thinking about because if we have the prices for hardware that have gone up so much as there is an inventory problem, right? We've seen the prices of all of these, you know, this this is a supply and a demand problem. It's it's both sides of it. uh with the chips and all that that that all goes into where into an Apple device and what that is that is something we need to keep an eye on because it's it's a very big possibility that we're going to see a margin crunch moving forward. Everybody gives Apple a relative buy on a lot of things, but now they have the AI situation figured out which is not their own. They're going to use Gemini, right? They're going to use that for Siri and uh but they have a lot of hardware. They have a heap of hardware they sell and that hardware requires other hardware to make it work that is a lot more expensive hardware right now. So that's something and markets well um the S&P equal weight is beating the S&P 500 so far this year. That says a couple of things, right? One is the possibility that it's a rally that's broadening or or maybe even the big names are pulling things down. I don't know. You can look at it either way. But we know that the small caps are on fire. And as I was reviewing portfolios this week, we're pretty pleased. I gotta tell you, it's pretty good with our updated allocations and the positions we have currently in in both small caps and in EM emerging markets. Wow. And there's a question I was thinking about as I was looking at this. I was thinking, you know, I'm going to talk to everybody on the podcast about how much emerging markets do you own in your portfolio? Think about it. And and how is it owned? Is it dollar denominated? Is it in local currency? What countries is it in? Because we make some specific um positioning when it comes to that. We have positioning in EM that that favors China for example and there's some that favor let's say like India, right? Two of the majors. Then there's some that are in local currency fully, partially or even hedged back into dollars. Which one is the right one? And if you're thinking I just have emerging markets in my portfolio and that's it. That's all I have to do. I mean, come on. There's a lot more involved than that. And as a disciplined investor, you need to understand where it is that you have your positioning. We spent an inordinate amount of time creating portfolios for clients and understanding the intermarketplace of how it works of where we want to be and for what reason inside even down to the currency exposure and to the actual sector country and and um and uh and sector exposure of that country inside of the portfolios inside of those particular assets. So, an ETF that just says is it emerging markets? I got to tell you something. For a long time, there was an ETF that was the emerging market play that was like, I don't know, 60% Brazil. That's just dumb. You know, you could own things like an ETF or a mutual fund that is in Japan equities. Great. You did great, right? Oh my god, look how great Japan it did. Was it denominated in yen or dollars? If it was not denominated in yen, you lost a great chunk of your gains. You erased them, obliterated them because the yen has been weakening dramatically. Again, this is something that you should know before you just own a a pulled investment. And these are things again, I'm going to say it again, you should know as a disciplined investor. And if it's if listen, if it's too tough for you, I get it. It's not easy to find out all this information or maybe you just don't have the tools to do it or the desire. That's possible too. I get it. This is something where you need to understand. But if it's that difficult, I get it. Where you need to understand how it works in terms of risk for your portfolio and how these work together and what the expected returns will be on that position. Find an adviser that can help you with that. We're in a new year. Maybe it's time to take that leap for the future. Maybe it's time to take that leap for the future. Your financial future. Get a second opinion. You do with doctors all the time. You don't just bring your car and go, "Okay, how much it going to cost?" You shop around. Let me ask with your portfolio. You're the only one doing it right now. Maybe you should bring in a second opinion. Something to think about. Something to think about. All right. Before we get to our guest today, I have something to say. I have something to say and that is about interactive brokers because there's a question that tags along what we just discussed. The question is what's driving your portfolio's performance? Have you ever thought of that? Ask IBKR. Ask IBKR is a breakthrough AI powered tool from Interactive Brokers and let you interact with your portfolio using plain English. Ask a question and get an instant datadriven answer about positions, risk, and returns. It's built right into the IBKR platform, too. Check it out at ibkr.com/ask because the best informed investors choose Interactive Brokers. Now, our guest coming on today. Yes, we're dealing with booze, we're dealing with whiskey, we're talking about bourbons and how to actually invest in them, which is kind of cool. But I have a couple of bottles right here, right here, right here. You can You can hear him swishing around right there. Some sample bottles I was sent and a really nice um snifter. Uh and we're going to check those out as we talk. But our guest is Jeremy Castler. He's an entrepreneur and an alternative asset innovator with more than 25 years of experience in specialty finance, alternative assets, and corporate strategy. He is best known as the founder and CEO of Cask X, a global whiskey cask investment platform that launched in 2019 to merge his passions for whiskey and his background in building pioneering investment ventures. Uh we could do that, right? Let's try to check that out. Nothing wrong with that. Yeah, he he founded in 2019. It was launched in 2020. Um it built momentum and uh pretty interesting thing. So Cask X is uh they manage like 300,000 no excuse me 30,000 casks over valued over 50 million serving 700 plus investors worldwide operating in Beverly Hills, Louisville, Sydney, Hong Kong, London, Toronto and De Moine. I got that got in there but in De Moine. Let's welcome our guest right now. So Jeremy, glad to uh have you. I'm glad you're here. How are you? What's happening? >> Yeah, thanks very much for having me. Uh yeah, great to be on the show and uh looking forward to some uh amazing chats. >> So, you know, we don't we don't usually talk about booze very often. In fact, I want to set the stage for a moment. This is um the booze show uh where I have a few samples that actually cask sent me. They sent me some beautiful brochures and um information about the whole uh process. But I somewhere in this discussion, maybe we'll start up front, too. But well, well, let's get to the background. We're gonna crack two of these small little uh uh sample bottles and put it in the what's the right word? The uh the bourbon sniffter. The whiskey snifter. >> I think that's that's definitely Yeah. >> And uh and taste them and and and talk about it. But let's talk about you first because I'm kind of interested in you. You started selling things as a kid. This is part of your your story. You know, you you had you sold hot dogs, which Okay. Uh that's that's a thing. You know, people talk about selling and and and delivering papers, newspapers, you know, but you sold hot dogs and wrapping paper. I don't know if you wrapped the paper, the hot dog with the wrap paper and eventually, you know, built this this this major venture in art and whiskey. >> Take me through the early days of the uh you know, baby Jeremy entrepreneur with the hot dogs that you're selling somewhere. Um and then to some of the things that you're doing now. Yeah, I mean u I yeah I started very early. I left school very very early. Uh I felt you know at the time that really uh education was not my way forward if you know and I think >> I think that's uh important for a lot of people that you know you shouldn't just be judged by your academic results. Some people fit you know different profiles have different uh different journeys. Uh and I yeah was from a very early age from sort of 15 16 was uh entrepreneurial uh you're right I started off uh selling initially Christmas wrapping paper I think that was the first thing that I saw on the street eight sheets for 50 p at the time and uh so on and so forth and then I uh kind of moved into hot dogs because obviously it's less seasonal and >> did you have a cart >> was it sorry >> did you have a cart some kind of a hot Yeah. Drive my my wagon up to near Marble Arch in London. And you know, I'd start work at 9:00 p.m. uh and work through till 4:00 a.m. >> And you can only imagine uh some of the people I met, some of the sites. Uh it certainly gave me at a very early age life's experiences. Yeah. >> Uh some very interesting people. Now, before before you got involved in the current venture that you're involved in, you um were you were dealing with with art and I have a little bit of a history with art. I took some >> in college took a bunch of art courses, always enjoyed them. Been to a variety of the museums around the world, including the ones in your home country as well as all over Europe and plus places in Egypt. And you know, there's art and there's history and there's all that >> somewhere in between, right? There's that that thing which art obviously tells of our history, right? It's a wonderful uh step through time of the culture and uh the appreciation. Um you founded something called the art futures group which became a a major broker in Chinese contemporary art. How did that happen? >> Yeah, that's a good question. Well, I'll go back a little bit before that. So I initially I I entered the uh the world of alternative investments with wine and I uh I was living in Sydney, Australia at the time. I got a job with a company that sold wine for investment. Uh I very quickly realized that this was a business that that I could probably launch myself. Uh and we we found a great market in Singapore. So myself and my my business partner who's a colleague, we said, "Right, we're going to start our own business. We're going to do marketing into Singapore because uh red wine at the time was just kind of exploding. The uh the Asian palette was changing from uh if you like lots of spirits to uh red wines etc. So we started a business and we launched a great business and uh expanded and after about seven or eight years we sold the business and I took a year off. I took a gap year very late gap year >> right >> uh most most kids are students when they say gap years. I was a little bit older and >> I want to take a I want to take a gap year. >> Yeah. Anyway, I was based in Asia >> and I I traveled to Hong Kong for the weekend just to renew my my visa at the time and I couldn't believe the amount of wealth in Hong Kong at that time. It was >> around about 201. Everyone you saw had shopping bags with Hermes and Prada and it just felt like uh a place where I should be because I've always had this this idea that you know you can be smart as anything but you need to put yourself where the money is and Hong Kong at the time felt like right that's where the money is. I couldn't uh enter the wine business because I had an understanding when I sold the business that I wouldn't compete. And I thought to myself, well, what can I sell? And someone kind of uh suggested to me, look, people buy art for investment. And I completely started from scratch. I I knew nothing about the art world. I was an art lover to a degree. Uh but I did some research. We we realize that uh that you know good uh mid-career art pieces tend to go up in value over a period of time. Uh and the Chinese contemporary market was booming at the time as well with all this influx of new Chinese money and uh I think there were 10,000 apartments every month being built in Shanghai alone. >> Yeah. Um, and these apartments were million-dollar plus, so they all needed to be fitted out with nice artworks, etc. So, we decided to sell art for investment. And everyone said, "You'll never sell art over the phone. Uh, it's not possible because all the galleries were poo pooing the idea." And we created a really successful business selling Chinese contemporary art to investors over the phone in Hong Kong. >> Wow. >> Sight unseen. >> Well, yeah. I mean, well, yes and no. I mean, of course, with the inset now, we were able to, of course, we were sending uh images. Um, but part of the the reason for the success of the business was we set up a rental program. So, for example, someone would buy an art piece and then we would keep the art piece and we would rent that art piece out to a a bank or >> whoever, you know, an office in Hong Kong and we would share the proceeds from that. So it enables >> it's like somebody buying a boat and then renting the boat as a charter. >> Yeah. Because one of the issues would have been that in Hong Kong there's only so many art pieces you can put on your wall because most people living in small apartments. >> So we set up the the rental side which enabled investors to buy 20 30 40 50 pieces if they needed and receive a dividend every quarter. So, it's more like a property purchase where you kind of receive a rent and you get the capital growth as well. >> I love that. That's cool. That's cool. >> There you go. So, when you sold that, um, how did you then find the next thing that you were going to do? Yeah, I mean again you know I over the period of time from selling wine to selling art although there were there were different products the the idea is the same. It's a passion investment. >> Yeah. >> And people are investing into something that they you know that they really love uh and and that they enjoy. Uh so before we sold the art business, we began to get uh inquiries about can we source whiskey and this came out of nowhere, you know, just one day, first person asked and then a few weeks later someone else asked. >> Was this was this primarily out of China though? >> This was in Hong Kong. >> Yeah. Because they're they're big on they love whiskey there. >> Oh yeah. Yeah. >> Love. I mean, China also India, believe it or not, um there's India is the highest consumer of whiskey on the planet. >> Yeah, I was I was there actually was either beer or whiskey. >> Yeah, >> there was like no wine. There was like no wine that was good. >> Yeah, that's a lot of local whiskey. Anyway, that's the story. So we began to get these inquiries and we're like okay this is peing our interest and we we looked at the market and then we're like yeah this this would be a valid business but I was so focused on the art business and then when I sold the business it was a natural progression we we looked at the market um there were a number of whiskey investment brokers in in the UK primarily because most people were selling stocks for investment and of course you know being local it was easy source uh and we looked and thought right we're going to sell whiskey for investment and then of course the next question was where are we going to base business >> and we looked all over the world uh of course the first port call probably would have been Hong Kong uh but then we thought hang on a minute there's a huge market here that doesn't have any whiskey investment brokers in uh in the US and that's where we are we we launched the first business uh selling scotch originally and then very quickly of course our American clients were saying look can we um can we get bourbon so we reached out uh had a few meetings in Kentucky in Tennessee and now 95% of what we do is in the uh in the bourbon market in the US >> wow that's great so let's talk about uh bourbon let's talk about let's just let's go forward and come back let's talk about the idea of investing >> in bourbon and and why and how. And we know there's been a lot of things that have happened recently. There's a lot of geopolitical issues that have happened. We had a big what was it? Big flood um in in in Kentucky uh in um you just I can see the bottle. It's part of the Sazzarak. It's it's it's there was a big uh oh I can't remember. I I'll remember the name. Anyway, there's a huge huge problem there and all the barrels were were spent gone. >> Um, so but >> talk to me about investing specifically in in whiskey and and casks and the life cycle from purchase to payoff. Kind of take me through the beginnings to the end. >> Sure. So, okay. So, we as a company will go out and we will do deals with distilleries. So we will uh reach out to Jackson Purchase which is one of the bottlers you're >> Yeah, I got right here. This is a newbie >> wonderful distillery. Uh I could talk you know the reasons why we we we highlight or or target that distillery. Uh one of the reasons would be that uh Craig Beam is the mass distiller. uh Beam, I'm sure you've heard that name. Fairly well known in the whiskey circles, but uh he's in the uh you know the the Bourbon Hall of Fame uh you know something like sixth generation uh massive distiller. So we look at the people behind the whiskey, not just the whiskey. So then we go out and we'll place an order for say let's say 2,000 barrels of of new make bourbon or new make whiskey. So in other words we will place an order for those barrels to be filled uh on a certain date normally you know so many first quarter, second quarter, third quarter etc. Mhm. >> We will then reach out to uh not just our client base, but obviously potentially new clients as well. So, look, we have this offering. Uh it's new make bourbon, which is uh what you're also tasting today, which is like clear liquid. Uh and we will sell those in smaller quantities of say 50 barrels here, 100 barrels here, you know, less than 2,000. Obviously all our investors are accredited investors which they have to be for SEC purposes. Uh but we will then sell them the 50 barrels. We include eight years of storage and insurance in the purchase. Now that's obviously very important because the whole um premise of investing in Suburban is that it increases in value over time as it ages. So there's there's very few uh assets that you know regardless of market conditions if market conditions stay exactly the same that asset will be far more valuable after eight years than it was after you know day one. >> Mhm. >> Because you know as you can taste for yourself today. Uh >> well let's talk about that. So this one is this is a new make which is means pretty much it's distilled and put in a bottle. >> Yeah. Exactly. There's no there's no there's nothing softening this. >> No. >> And it says the mash bill is 6525 W and 10. I'm assuming it's there is some wheat in there. I assume in this one. Is that what that means? The W. >> That sound like a high wheat. So be it's to be a bourbon of any description. It's got to be 51% corn. So it's always predominantly corn, but you'll have that sounds like a high uh high wheat bourbon without being there and tasting it. >> Right. And then there there is high weeded bourbons. And there's also things like I mean one of my favorites. I'll just throw this out there now. Just just get it off. Uh is there is a Weller 12 which some people call the baby papy. And uh I've had it many times and it's impossible to get in Florida. And we did get a bottle recently and if you want to buy buy it it's 50 bucks. If you want to buy it on the secondary it's like 250 to 300 >> for for a well of 12. I had it as a a drink that somebody mixed the Manhattan in when I was in Texas and I'm like, "What is that? That's delicious." Not realiz couldn't get it. But this is much different. I'm going to just just tell you, I've had this before. I'm not having this one again. >> This one smells delicious, by the way. It smells absolutely delicious. This is clear. It's a bourbon. It's kind of like if it was a baby, it would be the fetus. >> Am I right? >> Well, no, you're right. You're exactly right. I mean, it it smells great, but it tastes >> Oh my god, it tastes like rot gut. >> Yeah, it's quite shocking, but it's all about the barrel. So, everything that creates the flavor is because of the barrel. If if it was in a a steel fat and aging, it would taste exactly the same in in six years, 8 years, 10 years. >> But it also loses some of its proof, doesn't it? Over time, when you have the the the evaporation or what do we call it? The uh the the angel share. >> Angel share. Yeah. which which tell me what that is but not not everybody knows what that means. >> Well the angel share um you can talk in approximate terms sort of 3 to 5% would be lost by by by evaporation each year and it depends on the climate of course in summertime it will be more winter time less. Uh but the angel share essentially means that there's less liquid in the barrel but the flavors become more intense. So, >> and the first thing to evaporate is the high amount of alcohol content that evaporates a lot faster than water. >> Yes, that's right. >> So, you have this evaporation. That's why this while if I tasted this right now, I did taste this yesterday actually. Um, and if I taste that right now, it is shocking. It is It is It is totally different from the smell. The smell is literally delicious. >> And I'm smelling it right now. It has a lot of cherry, a lot of lot of sweetness, a lot of sugary smell. Mhm. >> It It smells It smells almost like a grapa to be honest with you. It smells very much like a grapa. >> And it looks like a grappa. >> Looks like a grapa, which is uh obviously made from the the um the the the uh grape um skin. >> Um Sure. And and and >> and grapa is also very shocking when you drink it. After the first sip, it goes down very easy. Like anything, >> it's almost like a fruit ripening. Yeah. you know, if you get a really ripe banana, it's kind of sharp and uh kind of bitter to the mouth. It it's not it's not dissimilar. So, over time, it becomes more mellow. Uh you know, with bourbon, you can age it for, you know, 20 25 years in some cases. Scotch even longer because of the climate. We've got some bottle here that's 72 years old. >> And the other one the other one that I have which is going into a a class right now. Hang on. Yeah, >> you heard that go in. Uh is a five-year-old 100p proof uh from Old Glory. Now, we talked about this. I described it to you and let's let's talk to everybody. I see the nice legs hanging out on the side of the snifter. >> Uh very slowly moving down. Very nice. Uh I describe this with many different factors. And let's for the hell of it tell people do I do I know anything that I'm talking about when it comes to verbal >> doesn't matter your opinion is the most important thing. >> Well my wife doesn't say that my wife does not say that as long as you enjoy it then your opinion is >> I'm going to take a little bit of a what do you call it a snort of this five-year-old and this is this is a a one of the uh uh one one of the makers that you invested and then you have available. Oh. Oh, Gloria. Yeah. In in Tennessee, basically. But but you've got a perfect example there of >> That's delicious. >> Two uh two bourbons, one is one week old, one's five years old. And that is the process in a nutshell that if you just leave it alone in a nice uh uh dark uh brick house, >> uh don't do anything. just let the uh the climate do its job and let the barrels contract and and uh the angels share go up into the heavens. Then after five years, six years, eight years, you have a more valuable asset than it was day one because you know nobody's going to drink what is essentially moonshine or nobody in the retail market. Don't say nobody >> might be a few people out there would but uh but yeah it becomes particularly after five six seven eight years you've got something that is is sought after uh not just in the states but internationally and carries a very very high value. >> All right so I'm I'm going to be a client. Here we go. So take take me through how this looks. First of all I'm assuming you have to be accredited >> for this. So I have to be an accredited investor and I can give you x amount of dollars. I don't know what the minimum is. Let's just use a round number for the heck of it. $100,000 for again just examples here. Um I'm going to I'm going to say that I'm obviously we know that the difference between the one week old that I have right here and the five-year-old which I just tasted is is night and day, right? There's a delicious factor. I'd love a little I'd like to drink it just like Papy would, by the way, with a drop of water and maybe a little lemon. That's that's that's that's how how Papy himself would drink that. Um just open it up a little bit and let it just speak or maybe even one ice cube. I like a one ice cube. I'm one ice cube. >> Okay. One one big one. >> One. No, no, one small one. I like one small one just just to make it like a cold drop of water >> to to dissipate slowly. Um >> and and by the way, folks, if you are drinking, this is my opinion and I'm going to I'm going to push this on everybody right now. >> Y >> ice comes in different ice comes in different sizes and shapes for a reason. If you put uh crushed ice in a glass and you pour the whiskey over it, it's going to immediately melt and it's going to water it down. That may be the way you like to drink it, so be it. You put regular ice cubes, a little slower. You put a fat big frozen bowl in there, one ice cube, it's going to take a very long time for that to to go. And then you go even further. If you just want it cool, you can put whiskey stones in there, which are just cold rocks or pieces of metal that are sanitized just to uh co make it colder for you to drink, per se. >> Um, and that's a way to drink it, too. So, I'm I'm usually a a large rock guy. >> I I like the one big Yeah. I like the square. Yep. Exactly. When you've got an old fashioned, exact. >> So, I I I give $100,000. What is the general time frame on this? >> Yeah. So, uh, like I said, we we include eight years of storage insurance. So, you know, uh, legally you have to hold on to your your investment for at least one year. That's SEC guidelines. But, but, you know, nobody's buying one year old bourbon barrels. So, when when we get to years four, five, six, then we see the supply reducing a lot. there's, you know, there's very few uh bourbon barrels aging on the market that are five, six, seven, eight years old. Uh and the the market would be or the secondary market is most uh most bourbon brands don't actually make their own bourbon. It's not like scotch where you see the name of the distillery and generally speaking that's where it's been made for the last, you know, 300 years. Um, if you look, go to your liquor store, probably at least 50% of the bourbon brands, buy the barrels in aged, bottle them, the following day, and then sell sell that as their uh their blended product if you like. So, >> but they won't tell you that. They say it's their own except for I think they say lararseny. Larseny, you know, larseny. Well, the whole point of I think the name of Larseny, >> that bourbon is that they stole the recipe from somebody else and they rebottled it. That's the point. I'm not surprised. Yeah. But yeah, so a lot of the uh previous a lot of the uh developments came from MGP >> uh which is isn't in Kentucky Indiana. So it's, you know, it's um there's a lot of marketing involved, but what it means is that for people or investors who are holding six, seven, eight year old barrels, they've got a a valuable asset and there's a there's a lot of demand uh because as I say, there's there's very few age barrels in in the marketplace. >> So uh after that, you're basically you said you get you're you're you're including eight years of storage and insurance. Are you actually you actually have warehouses or you leaving them at the distillers for a period of time because they you you don't just get a barrel and let it sit. They got to work it and they got to taste test it and all that, right? >> Yeah. Yeah. No, that's right. So, no, we leave them at distillery. So, it's it's a little bit like we wine that the provenence is is very important. So, if anybody's going to buy uh, you know, 50, 100, a thousand barrels for their brand, they want to know. Of course, they're going to they're going to try and test it and taste it, but they want to know they've been stored correctly. So, you couldn't get a better storage facility than where it's made because like anything, the less traveled, the better. >> Yeah. And what about the insurance? That's an interesting thing because the name I was trying to think of before was Buffalo Trace. Buffalo Trace had a big flood. It ruined a ton of the bourbon that they had and a variety of their I think they do blade and bow. They do a variety of different uh uh uh brands there. >> What is What does the insurance cover? How does that work? >> Yeah. No, we everything's covered by Lloyds of London. So, of course, this is a a highly combustible uh element. Um, interestingly, if if you go and visit the distillery, you'll always see by the uh by the front door, it could be like, you know, 40,000 barrels in there, and they have like a pocket-size fire extinguisher by the front door and it always like, you know, go, "Yeah, I know. It's ridiculous, but we have to have it." But, uh, but yeah, obviously technologies improved, uh, these days, and there used to be a lot more people smoking, I guess, which was one of the main risks. Oh, >> it's like smoking in the gas station. It's crazy. >> Yeah. Everything's fully insured. And you know, if if worst counts of worst, uh, there's a fire or a flood or a tornado, then the barrels are replaced, fully replaced, and we provide another 80ear storage. >> So, what's been the rate of return over the eight year cycle? Again, you know, we can't we can't there's no guarantees, but what we've seen historically, it's somewhere around about the sort of 12% peranom mark, something like this to the client. >> Yeah. So, in the double figures, so you know, the the reason people invest, well, there's a number of reasons. One, of course, for the for the returns, like any investment, how much you going to make, but there's other elements to it. So, people are looking at healthy returns. It's it's a very safe investment. It's it's tangible. It's something that uh we actually provide VIP tours. You can actually go and visit your barrels. So, every client hopefully at some point goes to visit the distillery uh meets these amazing people that produce these these brilliant bourbons, stirs the corn, uh etc., etc., and they appreciate them. They they can actually see with their own eyes and touch it and feel it and taste it. So there's that safety issue. It's uh you know asset security if you like. >> Yeah. No, it's it's tangible. It's it's >> Yeah, it's real. >> And it's probably when the lights go out and the bunkers get closed at the end of the day when you come back. Probably easier to barter with a bottle of good old, you know, bottled in bond 100 than it is to uh try to get some gold off. >> Yeah. No. Yeah. Absolutely. So yeah, it will always carry value. You know, it's never uh, you know, it's never going to be something you wake up and oh my gosh, it's the market's down and it's got no value. But I think almost 50% of the reason people love to invest, it's because they really enjoy bourbon. >> And it's it's really nice to be able to invest into something that you're passionate about. >> What What are your what are your top distilleries? I think that our our top distillery Jackson purchase >> uh would probably be our one of our main ones. BStown uh quite a famous well-known distillery in obviously Barstown in Kentucky. Uh Green River uh I would say they're the top four. Oh Glory is a is a great one that you've got there. You've got a 5-year-old. That's one one of our main ones in Tennessee. Mhm. >> Um we we tend to stick to primarily Kentucky and Tennessee because it's kind of, you know, the path of easiest resistance. Uh we're not looking to find the next amazing distillery. We're looking for distilleries with a, you know, really proven track record. Uh that when it becomes time to exit and of course we can uh should the client wish, we can help them to to sell the barrels. Of course, most clients do. uh we charge a 5% uh brokerage fee, but yeah, we're looking for the for the uh distilleries that are easiest to sell when they're eight years uh old in Yeah, eight years time. >> And B make a made a big move. I mean, tequila's taking over a little bit right now. I mean, old fashions became extraordinarily popular. I'm by the way, if you want you want to ask me, I'm sure you're dying to know what's my drink of of preference, right? >> Go on. >> A tra a traditional sazzarak. >> Lovely. Okay. So, a little bit of absin uh dusted glass with a >> uh with pinchods bitters, a little bit of one sugar cube that is muddled and throw sazzrack itself rye over that with a big ice cube after stirred. That's right. What I want. >> Beautiful. I mean, I like an oldfashioned. >> Yeah, good old fashioned. You know, I started making my own bitters. >> All right. >> I have a whole b kit with all sorts of really strange things like >> You can make bitters. I I wasn't aware. >> Yeah. Yeah. Maybe I'll send you a little bit of those. >> Okay. Yeah. concern. >> He's made a batch of chocolate bters actually. >> Okay. To those. >> So, what about geopolitics, tariffs, things like that, trade wars? You know, you had a situation, have a situation right now where Canada said, uh, thanks, but no thanks. >> Yeah. No, that's right. So, look, you know, tariffs come and go. uh you know the whole political scene you know when when one uh country stops buying bourbon the focus goes on other countries and the marketing budget goes elsewhere so it all tends to even up in the end and you know this is part of the reason why we include eight years storage that if if you look at the reality over eight years things almost always sort of balance out uh so what what you don't read about is the good news like for example uh India which surprised said before was the biggest market in the world for whiskey uh slashed the tariffs by by 100%. >> Yes, >> it was it was huge. It was 150. It's down to 50. Uh Hong Kong, which is of course is the gateway to China, which is also, as you can imagine, a you know, huge market. They uh completely took away any tariffs on on whiskey. So, you tend to hear the bad news, not the good news. Yeah, it's good news. But you but you also find there is some really interesting trends going on though that must be something that you're looking at which is the slowdown in drinking in the next generations. >> You know, I'm very involved in a particular club down here that >> it's a it's a yacht club. Everybody knows that. And uh you know, I get all the stats from them and from all the different clubs around Florida, around the country. And it's an interesting trend that people are looking for, first of all, alternatives to drinking for the same result. you know, they're looking at cannabis and various drinks like that, but there's also, forget dry January. Um, there's also a trend for the next generation, whether it's cost or whatever, to go to RTDs, the ready to drinks, >> you know, they just get some junk in a can. I'm not talking about beer, by the way. I'm talking about some other something. >> Oh, no. Yeah. >> Uh, that that that by the way started out not even as real alcohol. It was um you know some of the stuff that that first came out was uh like ferment uh basically a fermentation well alcohol ferment but fermented it wasn't real vodka wasn't real tequila it wasn't real bourbon um but there's there's that going on that's happening isn't it but but again it may be cyclical I guess right >> yeah it is I mean it's it's cycl cyclical I can't say that word but you've also got premiumization that is taking effect as well so you know the fact is that people are becoming more fussy and more choosy about what they drink. Uh if you if you go back, you know, 15 20 years, it was Jack Daniels uh or it was, you know, Jim Bean, it was those sort of generic brands that, you know, you go on liquor store, you might have seen, you know, six or eight brands. Now you'll see 100, 200. And the quality is going up. The the uh the the time that the barrels are being aged for important is going up as well. So people less pe people people are drinking less less people are drinking but what they are drinking is of a higher value. >> Yeah it's you know because you look at some of the brands some of the core brands like the makers which has been there forever right but they have a higher level brand. Look at four roses. Four roses has a really crappy >> cheap but drinkable uh bourbon but they have their small batch which is wonderful. >> Yeah. And you're seeing more and more aged offerings as well. You didn't used to see many age statements on bottles, but now you're seeing more and more is following Scotch where 8, 12, 15, 20 years. >> Yeah, that's good stuff. You know, um I I find uh that the idea of alternative investing in some things. Now, you know, there there's different types of alternative. There's hardcore alternative, but there's also investing in other things than the basic things that are out there, right? the stocks, bonds, ETFs, and even real estate for that matter. There's something to be said about uh investing with your passion. A lot of people have a passion to drink, by the way. A lot of people have a passion. Look, I have a lot of friends that have we went through tequ we went through bourbon together. I stayed there. Bourbons and rise. Um they they're on to tequilas and there is talk about a selection. >> Tequila is absurdly >> uh different. Seems all the same to me, by the way. Um, and tequila can get tequila can get really pricey. I mean, bourbons can get pricey, too. You know, you most bourbons are kind of that middle of the range, though. Even good ones, tequila gets absurd. >> No, that's right. But very quickly, no, you're right. I mean, you know, it's very easy to pay $1,000 for a bottle of tequila. Uh, we see 10, 15, $20,000, but yeah, a good tequila is is in the hundreds of dollars, whereas a good bourbon is, you know, 80, 100, 150. Uh you you can pay a lot of money for bourbon, but you shouldn't. >> So now you said that people um will get to see, touch, feel, meet uh where their barrels are. I mean, >> if I was to enter into this program, I'm buying multiple barrels, right? I'm not buying one barrel. >> Yeah. >> At least 50 or 100. Yeah. >> Yeah. I mean, I'm going to be on a piece of 100 barrels. That's the point. I'm not buying a 100 barrels. I'm buying a piece of it. No, you're buying 100 barrels. >> Me personally, >> you're buying the actual barrels. Yeah. So, you know, like I say, if we saw say 2,000 barrels in one year from the will sell 50 barrels to yourself, 100 barrels to somebody else. >> So, you you'll physically those barrels will essentially have your name on it. >> I thought it was I thought you um you were in a pool. >> No, no, no, no. Sorry, I should have made that clear. So, you actually own the barrels themselves. So, you know, uh you decide. There's no uh decisions other than yourselves on on how they're stored, where they're stored, when they're sold. You own the actual barrels. Those barrels have got your name on it. Uh when you sell them, >> while barrels can cost a big range, I get that. >> Yeah. >> What's a barrel cost, give or take? >> Around about $2,400 make. >> That's it. >> That's it. >> Well, it's new, right? Because if you buy something that's done done, it's a whole different thing. It's a compounded. Let's call it, you know, you got to say at least X amount. Uh, which, you know, the compound, listen, you're gonna get 12, but I'm gonna get 12, but it may be a compound of 20 because you gota the cost of the the the the storage, the production, the the fees involved, and all the other people involved in the deal. So, you're talking about that, you know, going up by by a magnitude by the time it's actually drinkable. >> Yeah. I mean, we would we would expect, and again, there's no guarantees. We can't give actual projections, but we look historically, but you know, uh, 8-y old barrels would sell, you know, somewhere between 6 to $8,000, something like that. >> And how many bottles are in a barrel of seven ms? >> That's a good I mean, it depends how it's uh it's 50 gallons uh which is about 200 liters. Uh so when it's bottled, >> yeah, >> more more than often it's brought down to uh 40% proof. >> So you you would be looking at around about >> 80 80 proof, 40% alcohol. >> Yeah. Yeah. So round about uh around say 300 bottles. >> 300 bottles, right? >> Yeah. >> And when it's bottled, do I get to get one of the bottles in the end? >> I mean, you can keep them all if you like. >> I could keep the whole darn darn thing if I want keep the barrels. We are actually launching a a barrel pick program as well. So because our clients generally if they buy 50 barrels they sell 50 barrels uh to keep it simple. But we are launching a barrel pick where you can actually buy one aged barrel and uh and we'll bottle it and create a beautiful logo and uh you know personalized bottle for you. >> What's the minimum investment? >> The minimum that's 24 barrels. So it's about 56,000. >> And that's that's all in to start or is there an extra piece on top? That's everything. There's nothing more to pay. Like I say, the uh the only time you pay anything more is if you want us to help you to sell the barrels, which you probably will, then we'll charge a 5% trading fee after the generally after the eight years. But yeah, it's everything's paid up front. Uh there's no weeklies or yearlies or taxes or >> right because otherwise I gota take I got to take I got to take the barrels. >> I gota call. Come on, Andrew. Pick them up. 24 barrels. What are you doing? That might be a challenge, but uh yeah, for most people because you know you've got eight years of storage, you might as well use it. So most of our clients are saying, "Yeah, look, I'm going to hold for eight years and then then sell them." >> Good stuff. >> Jeremy Castler, I appreciate you coming on, informing us, educating us, and uh I'll take a little bit of a sip again before hang uh about uh whisies, bourbons, and the the the idea of alternative investing. We're going to have information on the show notes, episode number 957 on the disciplinedinvestor.com to get to caskx.com so you can find out all sorts of information uh on what's going there and how to get involved if you if you so choose to. Thanks so much. Thanks so much for joining me. Appreciate it. >> Thank you for having me. >> All right. Thanks. >> Bye-bye. >> All right. I'm taking the rest of these uh sample bottles. We're going to finish them up and then we'll come back next week and see how it goes. Thanks for joining me this week. Thanks for joining me every week. Go over to the disciplinedinvestor.com, click on the askandrew, let me know what you're thinking. Love to hear from you. I'll respond right back to you with uh comments and uh and my thoughts. Thank you for joining me again. I'll see you again next week. This podcast is intended forformational purposes only and does not constitute personalized investment advice. Investing involves risk, including the possible loss of principle and past performance is not indicative of future results. The views and opinions expressed are those of the host and any guests and may not necessarily reflect those of Horowits and Company, Inc., an investment adviser registered with the US Securities and Exchange Commission. Registration with the SEC does not imply a certain level of training or skill. Advisory services are only offered to a client or prospective clients where Horowits a company is properly registered or is excluded from registration requirements. Any mention of thirdparty companies, products, or services is provided forformational purposes only and does not constitute an endorsement. Hypothetical scenarios or forward-looking statements are for illustrated purposes and should not be viewed as guarantees. Content is intended for US residents only and may not be applicable in other jurisdictions. Listeners should consult a qualified financial adviser before making any investment decisions. Please visit our website for additional information, disclosures, as well as a copy of our form CS. Advertisements are not related to the host or affiliates and are not considered recommendations by the host of the show or any affiliate support.
TDI Podcast: Bourbon Ta$ting (#957)
Summary
Transcript
This episode is sponsored by Interactive Brokers. And listen, it's your research and it's your investments. You analyze markets, you manage risk, but did you research your broker? In 2025, IBKR's clients outperformed the S&P 500. Yep. Retail clients averaged 19.2% while hedge fund clients averaged 28.91% compared to the index's 17.9%. IBKR's lower trading costs, competitive rates, efficient execution, and access to more than 170 global markets helped investors keep more of what they earn and put more capital to work over time. The broker you choose makes a difference. Interactive Brokers, member SIPC. If you care about performance, find out why the best informed investors choose Interactive Brokers at idbkr.com/2025. The Disciplined Investor is all about you, your money, and the markets. Sit back and get ready for this edition of the Disciplined Investor podcast. >> This episode of The Disciplined Investor is sponsored by Horowits & Company. If you're looking for a portfolio manager, look no further. Horowits and company. From seed through harvest, cultivating financial success. Greenland Babel sinks and then boosts markets. Natural gas prices skyrocket. Small caps continue to lead markets. And our guest today is Jeremy Castler, founder of Cass X. Yes, we're talking about whiskey. All this and much more on episode number 957 of the Disciplined Investor podcast. Hey there kids, Andrew Horowitz here and welcome to the discipline investor podcast. It's another great week in store for you. And yeah, we have a guest on. And guess what they sent me? He sent me whiskey samples. So, we're going to taste some while we're talking to him about this interesting idea of ownership of whiskey, bourbons, rise. Yes, that's something you can do. I I been looking at this for a long time, wondering about it. So, I have so many questions lined up for him. That is going to be a good time. But let's talk about what's going on in the markets right now. Well, with natural gas prices, why? Well, that snow that's about to befall this huge swath of the United States of America is going to be covered in icy cold conditions. And what we saw was that the Henry Hub US benchmark, this is the natural gas prices, went berserk, skyrocket, surging over, I don't know, it was like 70% at one point. I think it settled in at about 30 something% for the week ending the 22nd. 20 actually 23rd. It was the week ending the 23rd this week. And that's pretty amazing. reaching as high as about five bucks per British thermal mu unit. And uh this is this is this is pretty incredible. This marks the largest weekly gain. Listen to this since 1990 and the highest price since 2022. Again, this this huge arctic blast that that's what's causing a lot of this most severe weather we've seen in in years hitting most of the US. And uh hopefully you are taking care to make sure that you are safe. A lot of flights are canceled. A lot of uh ground stops being seen. A lot of people saying just the hell with this. I'm not traveling. I'm not going outside. I'm not even I'm just I'm just closing the doors. I'm doing the heat on and I'm doing our thing. We're going to see all those horrible stories about people doing strange things like bringing their barbecues inside the house and all that. But what we saw was a massive spike in the heating demand as households are cranking up the thermostats. And that is just in front of this whole thing because a gas I don't know if you know this but gas heats about 47% of the homes in the US and powers a huge amount of electricity generation. So both sides right whether you're getting heat by electric whether it's your water heater whether it's your heat in your house that's coming maybe from electricity or maybe even natural gas. Yes. Some of you use heating oil and you have those giant um furnaces in the basement that are cranking out that loud heat and some of the apartments around the country are still using steam heat that is based on furnaces in the basement maybe from heating oil. But all of that is part of this process and that is going to be a bit of a crimp on pricing over the next couple of months. expectations of depleting storage is very high and there's this big issue they're talking about now the potential for production disruptions right because of these freeze offs where water is freezing and wells and pipelines especially in Texas and other areas is is also reducing supply at the worst possible time well of course when else would it be so this is creating a a tight near-term supply demand and imbalance and it amplified this short squeeze for people that are investing in it or maybe not investing only, but it's maybe some of the places that are looking to hedge their positions as well from the power company standpoint. And all these traders that were bearish or short on gas earlier had a rush to cover their positions as forecasts turned to this cold or horrible weather. But these events, they don't they don't last forever. We have seen this kind of weather before. action in in weather that has done things like whether it's hurricanes and we talk about this on a regular basis sometime in May we pick up a company a lot of times due to the seasonality of it called Generrack. Generrack is a company that and actually if you look at Gener over the last few days it's done very well. It's a it's a you know a battery or a um a company that does generators. Uh so generators and holds some storage and then charges your whole house up. This is is very similar to what we see in the hurricane season and the the wicked weather season of the summertime. And every time there's a storm or the there's a discussion of a storm or a prediction of something coming our way, Generax seems to get a little bit of a lift. Buyers come in. This is exactly what happens. Then if we have a really tough season of either no storms at all that were really significant enough for people to say, you know what, I need a generator. I need to replace my generator. I need a new generator. What happens is that unless there is a huge amount of new houses being built that will be built with generators. Generrack usually comes down after the summertime after hurricane season. We're talking let's talk about October, November and it troughs and kind of hangs out for the year and then we see maybe even a roll off downside and then sometime again in May the seasonality kicks in with this kind of weather event that we're talking about right now. It's very shortlived. Now there could be more things heading into the winter. We're just starting. But the reality is that this kind of event, this Arctic blast sometimes they they look at the polar vortex. These are things that are temporary and shortlived. Let's keep an eye on this just for the fun of it, shall we? In terms of the price of natural gas, watching if maybe the storm isn't as severe as we initially thought. But this is something that is a really good lesson to learn and understand and we could take that and really expand that as well into even what's happening with AI right now. Quantum computing the risk on sentiment with certain areas that are getting uh bought up and short squeezed these things don't usually last forever and there is a natural cycle. It deals with the psychology of the markets. It deals with how we are like disbelievers then believers that oh my god I need to get in and man let me just throw everything I have at it and oh my god what a mistake I made and then oh boy I'm going to be ruined it's going to go and then it goes up and down the peak to trough this is an economic reality it is a financial investment reality we've seen it time and time again that will not change when we're talking about something as near and dear to us as our own money the investment cycle is going to be there it may elongate it may enlarge The peaks may be higher, the troughs may be lower or vice versa. We may see a thinning out of that and we may see even a time period where right now dips are bought in a matter of a day. Look what happened with Greenland last week. President was huffing and puffing and and and talking about how, you know, under no circumstance am I going to remove these until we get to until we buy Greenland. And we knew it. Literally, we're talking about this in the office that, you know, let's not panic about this right now because I think when they go the the the ensemble gets off the planes and the helicopters in Greenland and and then and then or in Davos actually uh to talk about Greenland and and shake hands and meet and greet, there'll be a magical framework of a deal that will be created that nobody will have any idea what it actually is, but it'll be a great deal. and then the tariffs will come off and markets will react. Seem like something that we've seen before. So, keep an eye on natural gas. Keep an eye on what's going on. I don't think the Greenland deal is really a deal at all. It's just, you know, we're just going to allow to have uh better the dome maybe, of course, in the Arctic. a guess and possibly even some more security there, but I don't know how much uh mineral rights we're going to get that we wanted for the whole country, but we'll probably just get what was do us anyway. Everybody will get all excited that it didn't get any further. We can't go anywhere else talking about things like uh today we have to talk about other economics. And by the way, we saw a GDP number come out. We saw an ISM services number come out. We saw initial claims. Really not much changing. We saw even a PCE number come out. Everything's kind of status quo and I think that is a good thing for markets. Nothing's too bad, nothing's too good. It's just right down the middle. Now, I mean, we did see some productivity and GDP numbers and expectations that look like we're going to continue to have really good growth moving forward. So, that's good. Employment numbers strong relatively where we should be. uh consumer spending down uh uh uh excuse me, consumer spending up, personal income down. Not a great combo right there. That will play out over the next couple of months with uh consumers sentiment in line with where expectations were were for the week. Uh the still that K-shaped economy issue that's going on right now. And we can't we can't go any further. Also, unless we talk about silver, what a what am I do? I have this here somewhere. I think I have uh do we have it here? There we go. Somewhere on the board. I knew there was that. Give him a big round of applause. I mean, silver hitting 100 on Friday. 100. It was up huge last year. It's up 40 what? 40 41% this year, which is by the way three weeks old. We talked about this at length on DH Unplugged this week. Myself and John De'vorak on Tuesday nights where we're live. We talked about this and talked about some of the reasons and rationale. I was also fielding some calls from colleagues and clients on this this week talking about where to go. You have questions. You know what? There's a place for you to go too. You can go over to the disciplinedinvestor.com. Click on askandrew. There's a little button on the top says ask Andrew and ask me whatever you want. The email comes right here, right to the studio, right to the offices. is a studio in the offices and there's a mailbox that says ask Andrew. Magically it appears. So go over to the disciplinedinves investor.com right now and ask away. Um before we get to guest I want to talk also about last week some of the things we talked about. We talked a lot about earning season and this is right in front of us right now. the potential we have, I think, for either this idea of a stretched valuation market and disappointments, uh, or prices still have room to run to fill the future opportunity. That that's kind of where we are right now. And I don't think those two sides are much different. And I think that where we are in terms of investor sentiment, which is high and hot, and allowing for most companies to believing that we have a lot more room to run ahead of us is something that's I think there some companies like we saw this week uh had some problems. some companies that were worried about the Microsoft's uh Dell's few others down you know chunk others down 10 20% over the last month or so as the concern about capex spending is a big issue and whether or not we really are ahead of our skis right now we've already seen some of the prices come down but I don't think that most investors right now or institutions are ready to throw in the towel just yet just by the looks of market action reported this week. It was a miserable quarter forward. They they they met their revenue expectations. They did fine on on earnings, which was, you know, low numbers generally speaking. But, uh, I don't think anybody was surprised about there was going to be a little bit hiccup in here, right? Because the only reason the stock took that massive pop was that it was propped up by who? Uncle Sam or Big Daddy, whatever we're calling it today. You know, the stock was hit by Guys. was down about 15% on Friday after a pretty stellar run. And um this something we may want to watch this is this the canary in the coal mine. I don't know. You know, we've seen incredible runs on MU, AMD, all the peripheral companies, we'll call non AI, but the companies that are are powering the machines that have the AI also as well as the automation when it comes to automobiles. And uh I guess we'll go back to the old Cisco term of of thinking about uh the internet of things IoT and what's happening with devices even like washing machines, toasters. Look, I got a new oven coming in. And I got to tell you something. I am going to have to spend time looking at the the book instruction manual. I have one that's your basic. You turn the knob is 350 or whatever it is. Great. This other one, I got to tell you something. It's like a whole computer system. It doesn't just push a button turn on like the old days. So, we have some concerns about the companies and we've been seeing the sluggish nature of their shares like the uh like I mentioned Dell, Microsoft been dialed down for a while. The big issue is what's going to happen when Apple reports. That's what I'm thinking about because if we have the prices for hardware that have gone up so much as there is an inventory problem, right? We've seen the prices of all of these, you know, this this is a supply and a demand problem. It's it's both sides of it. uh with the chips and all that that that all goes into where into an Apple device and what that is that is something we need to keep an eye on because it's it's a very big possibility that we're going to see a margin crunch moving forward. Everybody gives Apple a relative buy on a lot of things, but now they have the AI situation figured out which is not their own. They're going to use Gemini, right? They're going to use that for Siri and uh but they have a lot of hardware. They have a heap of hardware they sell and that hardware requires other hardware to make it work that is a lot more expensive hardware right now. So that's something and markets well um the S&P equal weight is beating the S&P 500 so far this year. That says a couple of things, right? One is the possibility that it's a rally that's broadening or or maybe even the big names are pulling things down. I don't know. You can look at it either way. But we know that the small caps are on fire. And as I was reviewing portfolios this week, we're pretty pleased. I gotta tell you, it's pretty good with our updated allocations and the positions we have currently in in both small caps and in EM emerging markets. Wow. And there's a question I was thinking about as I was looking at this. I was thinking, you know, I'm going to talk to everybody on the podcast about how much emerging markets do you own in your portfolio? Think about it. And and how is it owned? Is it dollar denominated? Is it in local currency? What countries is it in? Because we make some specific um positioning when it comes to that. We have positioning in EM that that favors China for example and there's some that favor let's say like India, right? Two of the majors. Then there's some that are in local currency fully, partially or even hedged back into dollars. Which one is the right one? And if you're thinking I just have emerging markets in my portfolio and that's it. That's all I have to do. I mean, come on. There's a lot more involved than that. And as a disciplined investor, you need to understand where it is that you have your positioning. We spent an inordinate amount of time creating portfolios for clients and understanding the intermarketplace of how it works of where we want to be and for what reason inside even down to the currency exposure and to the actual sector country and and um and uh and sector exposure of that country inside of the portfolios inside of those particular assets. So, an ETF that just says is it emerging markets? I got to tell you something. For a long time, there was an ETF that was the emerging market play that was like, I don't know, 60% Brazil. That's just dumb. You know, you could own things like an ETF or a mutual fund that is in Japan equities. Great. You did great, right? Oh my god, look how great Japan it did. Was it denominated in yen or dollars? If it was not denominated in yen, you lost a great chunk of your gains. You erased them, obliterated them because the yen has been weakening dramatically. Again, this is something that you should know before you just own a a pulled investment. And these are things again, I'm going to say it again, you should know as a disciplined investor. And if it's if listen, if it's too tough for you, I get it. It's not easy to find out all this information or maybe you just don't have the tools to do it or the desire. That's possible too. I get it. This is something where you need to understand. But if it's that difficult, I get it. Where you need to understand how it works in terms of risk for your portfolio and how these work together and what the expected returns will be on that position. Find an adviser that can help you with that. We're in a new year. Maybe it's time to take that leap for the future. Maybe it's time to take that leap for the future. Your financial future. Get a second opinion. You do with doctors all the time. You don't just bring your car and go, "Okay, how much it going to cost?" You shop around. Let me ask with your portfolio. You're the only one doing it right now. Maybe you should bring in a second opinion. Something to think about. Something to think about. All right. Before we get to our guest today, I have something to say. I have something to say and that is about interactive brokers because there's a question that tags along what we just discussed. The question is what's driving your portfolio's performance? Have you ever thought of that? Ask IBKR. Ask IBKR is a breakthrough AI powered tool from Interactive Brokers and let you interact with your portfolio using plain English. Ask a question and get an instant datadriven answer about positions, risk, and returns. It's built right into the IBKR platform, too. Check it out at ibkr.com/ask because the best informed investors choose Interactive Brokers. Now, our guest coming on today. Yes, we're dealing with booze, we're dealing with whiskey, we're talking about bourbons and how to actually invest in them, which is kind of cool. But I have a couple of bottles right here, right here, right here. You can You can hear him swishing around right there. Some sample bottles I was sent and a really nice um snifter. Uh and we're going to check those out as we talk. But our guest is Jeremy Castler. He's an entrepreneur and an alternative asset innovator with more than 25 years of experience in specialty finance, alternative assets, and corporate strategy. He is best known as the founder and CEO of Cask X, a global whiskey cask investment platform that launched in 2019 to merge his passions for whiskey and his background in building pioneering investment ventures. Uh we could do that, right? Let's try to check that out. Nothing wrong with that. Yeah, he he founded in 2019. It was launched in 2020. Um it built momentum and uh pretty interesting thing. So Cask X is uh they manage like 300,000 no excuse me 30,000 casks over valued over 50 million serving 700 plus investors worldwide operating in Beverly Hills, Louisville, Sydney, Hong Kong, London, Toronto and De Moine. I got that got in there but in De Moine. Let's welcome our guest right now. So Jeremy, glad to uh have you. I'm glad you're here. How are you? What's happening? >> Yeah, thanks very much for having me. Uh yeah, great to be on the show and uh looking forward to some uh amazing chats. >> So, you know, we don't we don't usually talk about booze very often. In fact, I want to set the stage for a moment. This is um the booze show uh where I have a few samples that actually cask sent me. They sent me some beautiful brochures and um information about the whole uh process. But I somewhere in this discussion, maybe we'll start up front, too. But well, well, let's get to the background. We're gonna crack two of these small little uh uh sample bottles and put it in the what's the right word? The uh the bourbon sniffter. The whiskey snifter. >> I think that's that's definitely Yeah. >> And uh and taste them and and and talk about it. But let's talk about you first because I'm kind of interested in you. You started selling things as a kid. This is part of your your story. You know, you you had you sold hot dogs, which Okay. Uh that's that's a thing. You know, people talk about selling and and and delivering papers, newspapers, you know, but you sold hot dogs and wrapping paper. I don't know if you wrapped the paper, the hot dog with the wrap paper and eventually, you know, built this this this major venture in art and whiskey. >> Take me through the early days of the uh you know, baby Jeremy entrepreneur with the hot dogs that you're selling somewhere. Um and then to some of the things that you're doing now. Yeah, I mean u I yeah I started very early. I left school very very early. Uh I felt you know at the time that really uh education was not my way forward if you know and I think >> I think that's uh important for a lot of people that you know you shouldn't just be judged by your academic results. Some people fit you know different profiles have different uh different journeys. Uh and I yeah was from a very early age from sort of 15 16 was uh entrepreneurial uh you're right I started off uh selling initially Christmas wrapping paper I think that was the first thing that I saw on the street eight sheets for 50 p at the time and uh so on and so forth and then I uh kind of moved into hot dogs because obviously it's less seasonal and >> did you have a cart >> was it sorry >> did you have a cart some kind of a hot Yeah. Drive my my wagon up to near Marble Arch in London. And you know, I'd start work at 9:00 p.m. uh and work through till 4:00 a.m. >> And you can only imagine uh some of the people I met, some of the sites. Uh it certainly gave me at a very early age life's experiences. Yeah. >> Uh some very interesting people. Now, before before you got involved in the current venture that you're involved in, you um were you were dealing with with art and I have a little bit of a history with art. I took some >> in college took a bunch of art courses, always enjoyed them. Been to a variety of the museums around the world, including the ones in your home country as well as all over Europe and plus places in Egypt. And you know, there's art and there's history and there's all that >> somewhere in between, right? There's that that thing which art obviously tells of our history, right? It's a wonderful uh step through time of the culture and uh the appreciation. Um you founded something called the art futures group which became a a major broker in Chinese contemporary art. How did that happen? >> Yeah, that's a good question. Well, I'll go back a little bit before that. So I initially I I entered the uh the world of alternative investments with wine and I uh I was living in Sydney, Australia at the time. I got a job with a company that sold wine for investment. Uh I very quickly realized that this was a business that that I could probably launch myself. Uh and we we found a great market in Singapore. So myself and my my business partner who's a colleague, we said, "Right, we're going to start our own business. We're going to do marketing into Singapore because uh red wine at the time was just kind of exploding. The uh the Asian palette was changing from uh if you like lots of spirits to uh red wines etc. So we started a business and we launched a great business and uh expanded and after about seven or eight years we sold the business and I took a year off. I took a gap year very late gap year >> right >> uh most most kids are students when they say gap years. I was a little bit older and >> I want to take a I want to take a gap year. >> Yeah. Anyway, I was based in Asia >> and I I traveled to Hong Kong for the weekend just to renew my my visa at the time and I couldn't believe the amount of wealth in Hong Kong at that time. It was >> around about 201. Everyone you saw had shopping bags with Hermes and Prada and it just felt like uh a place where I should be because I've always had this this idea that you know you can be smart as anything but you need to put yourself where the money is and Hong Kong at the time felt like right that's where the money is. I couldn't uh enter the wine business because I had an understanding when I sold the business that I wouldn't compete. And I thought to myself, well, what can I sell? And someone kind of uh suggested to me, look, people buy art for investment. And I completely started from scratch. I I knew nothing about the art world. I was an art lover to a degree. Uh but I did some research. We we realize that uh that you know good uh mid-career art pieces tend to go up in value over a period of time. Uh and the Chinese contemporary market was booming at the time as well with all this influx of new Chinese money and uh I think there were 10,000 apartments every month being built in Shanghai alone. >> Yeah. Um, and these apartments were million-dollar plus, so they all needed to be fitted out with nice artworks, etc. So, we decided to sell art for investment. And everyone said, "You'll never sell art over the phone. Uh, it's not possible because all the galleries were poo pooing the idea." And we created a really successful business selling Chinese contemporary art to investors over the phone in Hong Kong. >> Wow. >> Sight unseen. >> Well, yeah. I mean, well, yes and no. I mean, of course, with the inset now, we were able to, of course, we were sending uh images. Um, but part of the the reason for the success of the business was we set up a rental program. So, for example, someone would buy an art piece and then we would keep the art piece and we would rent that art piece out to a a bank or >> whoever, you know, an office in Hong Kong and we would share the proceeds from that. So it enables >> it's like somebody buying a boat and then renting the boat as a charter. >> Yeah. Because one of the issues would have been that in Hong Kong there's only so many art pieces you can put on your wall because most people living in small apartments. >> So we set up the the rental side which enabled investors to buy 20 30 40 50 pieces if they needed and receive a dividend every quarter. So, it's more like a property purchase where you kind of receive a rent and you get the capital growth as well. >> I love that. That's cool. That's cool. >> There you go. So, when you sold that, um, how did you then find the next thing that you were going to do? Yeah, I mean again you know I over the period of time from selling wine to selling art although there were there were different products the the idea is the same. It's a passion investment. >> Yeah. >> And people are investing into something that they you know that they really love uh and and that they enjoy. Uh so before we sold the art business, we began to get uh inquiries about can we source whiskey and this came out of nowhere, you know, just one day, first person asked and then a few weeks later someone else asked. >> Was this was this primarily out of China though? >> This was in Hong Kong. >> Yeah. Because they're they're big on they love whiskey there. >> Oh yeah. Yeah. >> Love. I mean, China also India, believe it or not, um there's India is the highest consumer of whiskey on the planet. >> Yeah, I was I was there actually was either beer or whiskey. >> Yeah, >> there was like no wine. There was like no wine that was good. >> Yeah, that's a lot of local whiskey. Anyway, that's the story. So we began to get these inquiries and we're like okay this is peing our interest and we we looked at the market and then we're like yeah this this would be a valid business but I was so focused on the art business and then when I sold the business it was a natural progression we we looked at the market um there were a number of whiskey investment brokers in in the UK primarily because most people were selling stocks for investment and of course you know being local it was easy source uh and we looked and thought right we're going to sell whiskey for investment and then of course the next question was where are we going to base business >> and we looked all over the world uh of course the first port call probably would have been Hong Kong uh but then we thought hang on a minute there's a huge market here that doesn't have any whiskey investment brokers in uh in the US and that's where we are we we launched the first business uh selling scotch originally and then very quickly of course our American clients were saying look can we um can we get bourbon so we reached out uh had a few meetings in Kentucky in Tennessee and now 95% of what we do is in the uh in the bourbon market in the US >> wow that's great so let's talk about uh bourbon let's talk about let's just let's go forward and come back let's talk about the idea of investing >> in bourbon and and why and how. And we know there's been a lot of things that have happened recently. There's a lot of geopolitical issues that have happened. We had a big what was it? Big flood um in in in Kentucky uh in um you just I can see the bottle. It's part of the Sazzarak. It's it's it's there was a big uh oh I can't remember. I I'll remember the name. Anyway, there's a huge huge problem there and all the barrels were were spent gone. >> Um, so but >> talk to me about investing specifically in in whiskey and and casks and the life cycle from purchase to payoff. Kind of take me through the beginnings to the end. >> Sure. So, okay. So, we as a company will go out and we will do deals with distilleries. So we will uh reach out to Jackson Purchase which is one of the bottlers you're >> Yeah, I got right here. This is a newbie >> wonderful distillery. Uh I could talk you know the reasons why we we we highlight or or target that distillery. Uh one of the reasons would be that uh Craig Beam is the mass distiller. uh Beam, I'm sure you've heard that name. Fairly well known in the whiskey circles, but uh he's in the uh you know the the Bourbon Hall of Fame uh you know something like sixth generation uh massive distiller. So we look at the people behind the whiskey, not just the whiskey. So then we go out and we'll place an order for say let's say 2,000 barrels of of new make bourbon or new make whiskey. So in other words we will place an order for those barrels to be filled uh on a certain date normally you know so many first quarter, second quarter, third quarter etc. Mhm. >> We will then reach out to uh not just our client base, but obviously potentially new clients as well. So, look, we have this offering. Uh it's new make bourbon, which is uh what you're also tasting today, which is like clear liquid. Uh and we will sell those in smaller quantities of say 50 barrels here, 100 barrels here, you know, less than 2,000. Obviously all our investors are accredited investors which they have to be for SEC purposes. Uh but we will then sell them the 50 barrels. We include eight years of storage and insurance in the purchase. Now that's obviously very important because the whole um premise of investing in Suburban is that it increases in value over time as it ages. So there's there's very few uh assets that you know regardless of market conditions if market conditions stay exactly the same that asset will be far more valuable after eight years than it was after you know day one. >> Mhm. >> Because you know as you can taste for yourself today. Uh >> well let's talk about that. So this one is this is a new make which is means pretty much it's distilled and put in a bottle. >> Yeah. Exactly. There's no there's no there's nothing softening this. >> No. >> And it says the mash bill is 6525 W and 10. I'm assuming it's there is some wheat in there. I assume in this one. Is that what that means? The W. >> That sound like a high wheat. So be it's to be a bourbon of any description. It's got to be 51% corn. So it's always predominantly corn, but you'll have that sounds like a high uh high wheat bourbon without being there and tasting it. >> Right. And then there there is high weeded bourbons. And there's also things like I mean one of my favorites. I'll just throw this out there now. Just just get it off. Uh is there is a Weller 12 which some people call the baby papy. And uh I've had it many times and it's impossible to get in Florida. And we did get a bottle recently and if you want to buy buy it it's 50 bucks. If you want to buy it on the secondary it's like 250 to 300 >> for for a well of 12. I had it as a a drink that somebody mixed the Manhattan in when I was in Texas and I'm like, "What is that? That's delicious." Not realiz couldn't get it. But this is much different. I'm going to just just tell you, I've had this before. I'm not having this one again. >> This one smells delicious, by the way. It smells absolutely delicious. This is clear. It's a bourbon. It's kind of like if it was a baby, it would be the fetus. >> Am I right? >> Well, no, you're right. You're exactly right. I mean, it it smells great, but it tastes >> Oh my god, it tastes like rot gut. >> Yeah, it's quite shocking, but it's all about the barrel. So, everything that creates the flavor is because of the barrel. If if it was in a a steel fat and aging, it would taste exactly the same in in six years, 8 years, 10 years. >> But it also loses some of its proof, doesn't it? Over time, when you have the the the evaporation or what do we call it? The uh the the angel share. >> Angel share. Yeah. which which tell me what that is but not not everybody knows what that means. >> Well the angel share um you can talk in approximate terms sort of 3 to 5% would be lost by by by evaporation each year and it depends on the climate of course in summertime it will be more winter time less. Uh but the angel share essentially means that there's less liquid in the barrel but the flavors become more intense. So, >> and the first thing to evaporate is the high amount of alcohol content that evaporates a lot faster than water. >> Yes, that's right. >> So, you have this evaporation. That's why this while if I tasted this right now, I did taste this yesterday actually. Um, and if I taste that right now, it is shocking. It is It is It is totally different from the smell. The smell is literally delicious. >> And I'm smelling it right now. It has a lot of cherry, a lot of lot of sweetness, a lot of sugary smell. Mhm. >> It It smells It smells almost like a grapa to be honest with you. It smells very much like a grapa. >> And it looks like a grappa. >> Looks like a grapa, which is uh obviously made from the the um the the the uh grape um skin. >> Um Sure. And and and >> and grapa is also very shocking when you drink it. After the first sip, it goes down very easy. Like anything, >> it's almost like a fruit ripening. Yeah. you know, if you get a really ripe banana, it's kind of sharp and uh kind of bitter to the mouth. It it's not it's not dissimilar. So, over time, it becomes more mellow. Uh you know, with bourbon, you can age it for, you know, 20 25 years in some cases. Scotch even longer because of the climate. We've got some bottle here that's 72 years old. >> And the other one the other one that I have which is going into a a class right now. Hang on. Yeah, >> you heard that go in. Uh is a five-year-old 100p proof uh from Old Glory. Now, we talked about this. I described it to you and let's let's talk to everybody. I see the nice legs hanging out on the side of the snifter. >> Uh very slowly moving down. Very nice. Uh I describe this with many different factors. And let's for the hell of it tell people do I do I know anything that I'm talking about when it comes to verbal >> doesn't matter your opinion is the most important thing. >> Well my wife doesn't say that my wife does not say that as long as you enjoy it then your opinion is >> I'm going to take a little bit of a what do you call it a snort of this five-year-old and this is this is a a one of the uh uh one one of the makers that you invested and then you have available. Oh. Oh, Gloria. Yeah. In in Tennessee, basically. But but you've got a perfect example there of >> That's delicious. >> Two uh two bourbons, one is one week old, one's five years old. And that is the process in a nutshell that if you just leave it alone in a nice uh uh dark uh brick house, >> uh don't do anything. just let the uh the climate do its job and let the barrels contract and and uh the angels share go up into the heavens. Then after five years, six years, eight years, you have a more valuable asset than it was day one because you know nobody's going to drink what is essentially moonshine or nobody in the retail market. Don't say nobody >> might be a few people out there would but uh but yeah it becomes particularly after five six seven eight years you've got something that is is sought after uh not just in the states but internationally and carries a very very high value. >> All right so I'm I'm going to be a client. Here we go. So take take me through how this looks. First of all I'm assuming you have to be accredited >> for this. So I have to be an accredited investor and I can give you x amount of dollars. I don't know what the minimum is. Let's just use a round number for the heck of it. $100,000 for again just examples here. Um I'm going to I'm going to say that I'm obviously we know that the difference between the one week old that I have right here and the five-year-old which I just tasted is is night and day, right? There's a delicious factor. I'd love a little I'd like to drink it just like Papy would, by the way, with a drop of water and maybe a little lemon. That's that's that's that's how how Papy himself would drink that. Um just open it up a little bit and let it just speak or maybe even one ice cube. I like a one ice cube. I'm one ice cube. >> Okay. One one big one. >> One. No, no, one small one. I like one small one just just to make it like a cold drop of water >> to to dissipate slowly. Um >> and and by the way, folks, if you are drinking, this is my opinion and I'm going to I'm going to push this on everybody right now. >> Y >> ice comes in different ice comes in different sizes and shapes for a reason. If you put uh crushed ice in a glass and you pour the whiskey over it, it's going to immediately melt and it's going to water it down. That may be the way you like to drink it, so be it. You put regular ice cubes, a little slower. You put a fat big frozen bowl in there, one ice cube, it's going to take a very long time for that to to go. And then you go even further. If you just want it cool, you can put whiskey stones in there, which are just cold rocks or pieces of metal that are sanitized just to uh co make it colder for you to drink, per se. >> Um, and that's a way to drink it, too. So, I'm I'm usually a a large rock guy. >> I I like the one big Yeah. I like the square. Yep. Exactly. When you've got an old fashioned, exact. >> So, I I I give $100,000. What is the general time frame on this? >> Yeah. So, uh, like I said, we we include eight years of storage insurance. So, you know, uh, legally you have to hold on to your your investment for at least one year. That's SEC guidelines. But, but, you know, nobody's buying one year old bourbon barrels. So, when when we get to years four, five, six, then we see the supply reducing a lot. there's, you know, there's very few uh bourbon barrels aging on the market that are five, six, seven, eight years old. Uh and the the market would be or the secondary market is most uh most bourbon brands don't actually make their own bourbon. It's not like scotch where you see the name of the distillery and generally speaking that's where it's been made for the last, you know, 300 years. Um, if you look, go to your liquor store, probably at least 50% of the bourbon brands, buy the barrels in aged, bottle them, the following day, and then sell sell that as their uh their blended product if you like. So, >> but they won't tell you that. They say it's their own except for I think they say lararseny. Larseny, you know, larseny. Well, the whole point of I think the name of Larseny, >> that bourbon is that they stole the recipe from somebody else and they rebottled it. That's the point. I'm not surprised. Yeah. But yeah, so a lot of the uh previous a lot of the uh developments came from MGP >> uh which is isn't in Kentucky Indiana. So it's, you know, it's um there's a lot of marketing involved, but what it means is that for people or investors who are holding six, seven, eight year old barrels, they've got a a valuable asset and there's a there's a lot of demand uh because as I say, there's there's very few age barrels in in the marketplace. >> So uh after that, you're basically you said you get you're you're you're including eight years of storage and insurance. Are you actually you actually have warehouses or you leaving them at the distillers for a period of time because they you you don't just get a barrel and let it sit. They got to work it and they got to taste test it and all that, right? >> Yeah. Yeah. No, that's right. So, no, we leave them at distillery. So, it's it's a little bit like we wine that the provenence is is very important. So, if anybody's going to buy uh, you know, 50, 100, a thousand barrels for their brand, they want to know. Of course, they're going to they're going to try and test it and taste it, but they want to know they've been stored correctly. So, you couldn't get a better storage facility than where it's made because like anything, the less traveled, the better. >> Yeah. And what about the insurance? That's an interesting thing because the name I was trying to think of before was Buffalo Trace. Buffalo Trace had a big flood. It ruined a ton of the bourbon that they had and a variety of their I think they do blade and bow. They do a variety of different uh uh uh brands there. >> What is What does the insurance cover? How does that work? >> Yeah. No, we everything's covered by Lloyds of London. So, of course, this is a a highly combustible uh element. Um, interestingly, if if you go and visit the distillery, you'll always see by the uh by the front door, it could be like, you know, 40,000 barrels in there, and they have like a pocket-size fire extinguisher by the front door and it always like, you know, go, "Yeah, I know. It's ridiculous, but we have to have it." But, uh, but yeah, obviously technologies improved, uh, these days, and there used to be a lot more people smoking, I guess, which was one of the main risks. Oh, >> it's like smoking in the gas station. It's crazy. >> Yeah. Everything's fully insured. And you know, if if worst counts of worst, uh, there's a fire or a flood or a tornado, then the barrels are replaced, fully replaced, and we provide another 80ear storage. >> So, what's been the rate of return over the eight year cycle? Again, you know, we can't we can't there's no guarantees, but what we've seen historically, it's somewhere around about the sort of 12% peranom mark, something like this to the client. >> Yeah. So, in the double figures, so you know, the the reason people invest, well, there's a number of reasons. One, of course, for the for the returns, like any investment, how much you going to make, but there's other elements to it. So, people are looking at healthy returns. It's it's a very safe investment. It's it's tangible. It's something that uh we actually provide VIP tours. You can actually go and visit your barrels. So, every client hopefully at some point goes to visit the distillery uh meets these amazing people that produce these these brilliant bourbons, stirs the corn, uh etc., etc., and they appreciate them. They they can actually see with their own eyes and touch it and feel it and taste it. So there's that safety issue. It's uh you know asset security if you like. >> Yeah. No, it's it's tangible. It's it's >> Yeah, it's real. >> And it's probably when the lights go out and the bunkers get closed at the end of the day when you come back. Probably easier to barter with a bottle of good old, you know, bottled in bond 100 than it is to uh try to get some gold off. >> Yeah. No. Yeah. Absolutely. So yeah, it will always carry value. You know, it's never uh, you know, it's never going to be something you wake up and oh my gosh, it's the market's down and it's got no value. But I think almost 50% of the reason people love to invest, it's because they really enjoy bourbon. >> And it's it's really nice to be able to invest into something that you're passionate about. >> What What are your what are your top distilleries? I think that our our top distillery Jackson purchase >> uh would probably be our one of our main ones. BStown uh quite a famous well-known distillery in obviously Barstown in Kentucky. Uh Green River uh I would say they're the top four. Oh Glory is a is a great one that you've got there. You've got a 5-year-old. That's one one of our main ones in Tennessee. Mhm. >> Um we we tend to stick to primarily Kentucky and Tennessee because it's kind of, you know, the path of easiest resistance. Uh we're not looking to find the next amazing distillery. We're looking for distilleries with a, you know, really proven track record. Uh that when it becomes time to exit and of course we can uh should the client wish, we can help them to to sell the barrels. Of course, most clients do. uh we charge a 5% uh brokerage fee, but yeah, we're looking for the for the uh distilleries that are easiest to sell when they're eight years uh old in Yeah, eight years time. >> And B make a made a big move. I mean, tequila's taking over a little bit right now. I mean, old fashions became extraordinarily popular. I'm by the way, if you want you want to ask me, I'm sure you're dying to know what's my drink of of preference, right? >> Go on. >> A tra a traditional sazzarak. >> Lovely. Okay. So, a little bit of absin uh dusted glass with a >> uh with pinchods bitters, a little bit of one sugar cube that is muddled and throw sazzrack itself rye over that with a big ice cube after stirred. That's right. What I want. >> Beautiful. I mean, I like an oldfashioned. >> Yeah, good old fashioned. You know, I started making my own bitters. >> All right. >> I have a whole b kit with all sorts of really strange things like >> You can make bitters. I I wasn't aware. >> Yeah. Yeah. Maybe I'll send you a little bit of those. >> Okay. Yeah. concern. >> He's made a batch of chocolate bters actually. >> Okay. To those. >> So, what about geopolitics, tariffs, things like that, trade wars? You know, you had a situation, have a situation right now where Canada said, uh, thanks, but no thanks. >> Yeah. No, that's right. So, look, you know, tariffs come and go. uh you know the whole political scene you know when when one uh country stops buying bourbon the focus goes on other countries and the marketing budget goes elsewhere so it all tends to even up in the end and you know this is part of the reason why we include eight years storage that if if you look at the reality over eight years things almost always sort of balance out uh so what what you don't read about is the good news like for example uh India which surprised said before was the biggest market in the world for whiskey uh slashed the tariffs by by 100%. >> Yes, >> it was it was huge. It was 150. It's down to 50. Uh Hong Kong, which is of course is the gateway to China, which is also, as you can imagine, a you know, huge market. They uh completely took away any tariffs on on whiskey. So, you tend to hear the bad news, not the good news. Yeah, it's good news. But you but you also find there is some really interesting trends going on though that must be something that you're looking at which is the slowdown in drinking in the next generations. >> You know, I'm very involved in a particular club down here that >> it's a it's a yacht club. Everybody knows that. And uh you know, I get all the stats from them and from all the different clubs around Florida, around the country. And it's an interesting trend that people are looking for, first of all, alternatives to drinking for the same result. you know, they're looking at cannabis and various drinks like that, but there's also, forget dry January. Um, there's also a trend for the next generation, whether it's cost or whatever, to go to RTDs, the ready to drinks, >> you know, they just get some junk in a can. I'm not talking about beer, by the way. I'm talking about some other something. >> Oh, no. Yeah. >> Uh, that that that by the way started out not even as real alcohol. It was um you know some of the stuff that that first came out was uh like ferment uh basically a fermentation well alcohol ferment but fermented it wasn't real vodka wasn't real tequila it wasn't real bourbon um but there's there's that going on that's happening isn't it but but again it may be cyclical I guess right >> yeah it is I mean it's it's cycl cyclical I can't say that word but you've also got premiumization that is taking effect as well so you know the fact is that people are becoming more fussy and more choosy about what they drink. Uh if you if you go back, you know, 15 20 years, it was Jack Daniels uh or it was, you know, Jim Bean, it was those sort of generic brands that, you know, you go on liquor store, you might have seen, you know, six or eight brands. Now you'll see 100, 200. And the quality is going up. The the uh the the time that the barrels are being aged for important is going up as well. So people less pe people people are drinking less less people are drinking but what they are drinking is of a higher value. >> Yeah it's you know because you look at some of the brands some of the core brands like the makers which has been there forever right but they have a higher level brand. Look at four roses. Four roses has a really crappy >> cheap but drinkable uh bourbon but they have their small batch which is wonderful. >> Yeah. And you're seeing more and more aged offerings as well. You didn't used to see many age statements on bottles, but now you're seeing more and more is following Scotch where 8, 12, 15, 20 years. >> Yeah, that's good stuff. You know, um I I find uh that the idea of alternative investing in some things. Now, you know, there there's different types of alternative. There's hardcore alternative, but there's also investing in other things than the basic things that are out there, right? the stocks, bonds, ETFs, and even real estate for that matter. There's something to be said about uh investing with your passion. A lot of people have a passion to drink, by the way. A lot of people have a passion. Look, I have a lot of friends that have we went through tequ we went through bourbon together. I stayed there. Bourbons and rise. Um they they're on to tequilas and there is talk about a selection. >> Tequila is absurdly >> uh different. Seems all the same to me, by the way. Um, and tequila can get tequila can get really pricey. I mean, bourbons can get pricey, too. You know, you most bourbons are kind of that middle of the range, though. Even good ones, tequila gets absurd. >> No, that's right. But very quickly, no, you're right. I mean, you know, it's very easy to pay $1,000 for a bottle of tequila. Uh, we see 10, 15, $20,000, but yeah, a good tequila is is in the hundreds of dollars, whereas a good bourbon is, you know, 80, 100, 150. Uh you you can pay a lot of money for bourbon, but you shouldn't. >> So now you said that people um will get to see, touch, feel, meet uh where their barrels are. I mean, >> if I was to enter into this program, I'm buying multiple barrels, right? I'm not buying one barrel. >> Yeah. >> At least 50 or 100. Yeah. >> Yeah. I mean, I'm going to be on a piece of 100 barrels. That's the point. I'm not buying a 100 barrels. I'm buying a piece of it. No, you're buying 100 barrels. >> Me personally, >> you're buying the actual barrels. Yeah. So, you know, like I say, if we saw say 2,000 barrels in one year from the will sell 50 barrels to yourself, 100 barrels to somebody else. >> So, you you'll physically those barrels will essentially have your name on it. >> I thought it was I thought you um you were in a pool. >> No, no, no, no. Sorry, I should have made that clear. So, you actually own the barrels themselves. So, you know, uh you decide. There's no uh decisions other than yourselves on on how they're stored, where they're stored, when they're sold. You own the actual barrels. Those barrels have got your name on it. Uh when you sell them, >> while barrels can cost a big range, I get that. >> Yeah. >> What's a barrel cost, give or take? >> Around about $2,400 make. >> That's it. >> That's it. >> Well, it's new, right? Because if you buy something that's done done, it's a whole different thing. It's a compounded. Let's call it, you know, you got to say at least X amount. Uh, which, you know, the compound, listen, you're gonna get 12, but I'm gonna get 12, but it may be a compound of 20 because you gota the cost of the the the the storage, the production, the the fees involved, and all the other people involved in the deal. So, you're talking about that, you know, going up by by a magnitude by the time it's actually drinkable. >> Yeah. I mean, we would we would expect, and again, there's no guarantees. We can't give actual projections, but we look historically, but you know, uh, 8-y old barrels would sell, you know, somewhere between 6 to $8,000, something like that. >> And how many bottles are in a barrel of seven ms? >> That's a good I mean, it depends how it's uh it's 50 gallons uh which is about 200 liters. Uh so when it's bottled, >> yeah, >> more more than often it's brought down to uh 40% proof. >> So you you would be looking at around about >> 80 80 proof, 40% alcohol. >> Yeah. Yeah. So round about uh around say 300 bottles. >> 300 bottles, right? >> Yeah. >> And when it's bottled, do I get to get one of the bottles in the end? >> I mean, you can keep them all if you like. >> I could keep the whole darn darn thing if I want keep the barrels. We are actually launching a a barrel pick program as well. So because our clients generally if they buy 50 barrels they sell 50 barrels uh to keep it simple. But we are launching a barrel pick where you can actually buy one aged barrel and uh and we'll bottle it and create a beautiful logo and uh you know personalized bottle for you. >> What's the minimum investment? >> The minimum that's 24 barrels. So it's about 56,000. >> And that's that's all in to start or is there an extra piece on top? That's everything. There's nothing more to pay. Like I say, the uh the only time you pay anything more is if you want us to help you to sell the barrels, which you probably will, then we'll charge a 5% trading fee after the generally after the eight years. But yeah, it's everything's paid up front. Uh there's no weeklies or yearlies or taxes or >> right because otherwise I gota take I got to take I got to take the barrels. >> I gota call. Come on, Andrew. Pick them up. 24 barrels. What are you doing? That might be a challenge, but uh yeah, for most people because you know you've got eight years of storage, you might as well use it. So most of our clients are saying, "Yeah, look, I'm going to hold for eight years and then then sell them." >> Good stuff. >> Jeremy Castler, I appreciate you coming on, informing us, educating us, and uh I'll take a little bit of a sip again before hang uh about uh whisies, bourbons, and the the the idea of alternative investing. We're going to have information on the show notes, episode number 957 on the disciplinedinvestor.com to get to caskx.com so you can find out all sorts of information uh on what's going there and how to get involved if you if you so choose to. Thanks so much. Thanks so much for joining me. Appreciate it. >> Thank you for having me. >> All right. Thanks. >> Bye-bye. >> All right. I'm taking the rest of these uh sample bottles. We're going to finish them up and then we'll come back next week and see how it goes. Thanks for joining me this week. Thanks for joining me every week. Go over to the disciplinedinvestor.com, click on the askandrew, let me know what you're thinking. Love to hear from you. I'll respond right back to you with uh comments and uh and my thoughts. Thank you for joining me again. I'll see you again next week. This podcast is intended forformational purposes only and does not constitute personalized investment advice. Investing involves risk, including the possible loss of principle and past performance is not indicative of future results. The views and opinions expressed are those of the host and any guests and may not necessarily reflect those of Horowits and Company, Inc., an investment adviser registered with the US Securities and Exchange Commission. Registration with the SEC does not imply a certain level of training or skill. Advisory services are only offered to a client or prospective clients where Horowits a company is properly registered or is excluded from registration requirements. 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