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An Enjoyable Hobby That Appreciates Too? (5) – Risk
Continuing from the last post, I asked, “You said you’ve got about 3000 clients — have any of them ever lost money?”
R said, “Nope!”
Wow, that’s a pretty straightforward answer. 😂
He went on, “We’re one of the longest-running custodians in the Scottish whisky niche, with 14 years under our belt. We cover most of the distilleries in Scotland, and each distillery we work with values its reputation above all else. Most of them have histories over 200 years. We only do business with such distilleries. Plus, now that we have our own storage facility, it’s even safer.”
I said, “Recently there was news about a very old, well-known custodian company collapsing (you probably heard about it earlier than me). They reportedly went insolvent, and like other failed whisky platforms, they sold the same cask to multiple investors — classic fraud. So how do I know you’re not doing the same?”
R replied, “You can always choose self-custody. After you pick your whisky, we buy it for you and provide all invoices and paperwork. Then, per your instructions, we ship it to wherever you want. From there, storage, insurance, regular inspections — you arrange all that yourself. That means hiring different companies for each part of the custody chain. But most people prefer the convenience of our full-service custody — it’s up to you.”
I pressed on, “My followers always ask the tough question: people can run away with your money. How do I know you won’t?”
He said, “Let me give you a quick lesson for a newbie: legally, as long as you have three things — your cask certificate, the purchase invoice, and proof of payment — your ownership is indisputable in court. So whether we run away or not, it doesn’t matter. Plus, running off with tens of thousands of casks? Not realistic. 😂”
He added, “We have thousands of clients — family offices, funds, hedge funds, individuals — from the US, Europe, Asia to Dubai. We have new contracts and exits that happen on a daily basis. So I can say confidently, I have never seen any of my clients lose money.”
Not satisfied, I asked, “Is there really no scenario where losses could happen?”
He said, “There is, of course. The biggest factor is demand. Take India, the world’s largest whisky consumer. They import over 100 million bottles yearly. Globally, one in every two bottles of whisky sold is bought by India. They buy more Scotch than American and Japanese whisky combined. But if suddenly for some reason they stop drinking whisky, prices would definitely be affected. But here’s the thing: you know India’s import tariff on Scotch used to be over 150%, right? A few years ago, my colleagues even went to a hearing in the Indian parliament. After years of talks, India recently cut the tariff from over 150% to about 70% — just check the news. So we expect India’s consumption to double or even triple, reaching 300+ million bottles annually. Plus, other Southeast Asian countries have been growing fast in whisky consumption, so I don’t see demand dropping sharply. Actually, I think supply may not keep up with demand, making aged whisky even scarcer and prices grow faster.”
I thought, okay, that’s pretty optimistic.
“So how does anyone participate?” I asked.
Till next time — the grand finale for Whisky!