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“Are you both well-versed in wine?”
Dokyung posed the question while looking at Ko Eunha and the CEO sitting across from him. Ko Eunha shook her head.
“I don’t know much either. I just drink it when it’s available.”
Dokyung smiled at the CEO’s answer and continued, “As you said, it might feel like something you just drink when it’s there, but wine is produced under quite stringent conditions and environments.”
Ko Eunha quietly observed Dokyung as he spoke.
When she had met with Taesan Securities and Seonjin Securities earlier, they had sent employees who seemed quite senior in rank. In contrast, Yuseong had sent a young-looking manager, so honestly, she hadn’t expected much.
However, as she watched Dokyung recommend an investment option different from what the other companies had suggested, Ko Eunha began to feel intrigued.
“There are very few grape varieties suitable for making wine. And after starting to cultivate those varieties, only once a year, the harvested grapes must be fermented immediately.”
Dokyung continued his explanation, gesturing at the laptop screen.
“These stringent conditions are just the preparatory stage before making good wine. Wine crafted by experts then undergoes appropriate aging before being released to the world for public evaluation.”
Dokyung looked at Ko Eunha as he said this. The more he studied about wine, the more he thought it resembled the process that had created the icon known as Ko Eunha.
“Every year, new wines are made from the same grape varieties in the same wineries, but if a wine from a previous year received better reviews, the public will seek out that year’s wine again.”
“Does the price increase?”
Ko Eunha, who had been listening quietly, asked Dokyung, perhaps as an expression of interest.
“Yes. Naturally, as there’s demand, the price of wine produced in previous years increases. If that wine was made from grapes harvested in 2022, it becomes the 2022 vintage.”
“…Then if the newly released ones are of better quality, the previous ones will be forgotten, won’t they?”
The CEO looked at Ko Eunha with a surprised expression at her words, and she seemed to have a somewhat gloomy look.
Seeing Ko Eunha trying to find only negative aspects in his words, Dokyung shook his head.
“No, that’s not the case.”
“But what you said about vintages……”
“In the wine world, there’s a culture called ‘Vin de Garde’.”
Dokyung flipped to the next screen on his laptop. After all, her question was one he had also pondered.
“Most wines go bad within 2-3 years. But the Vin de Garde I mentioned earlier refers to wines that improve with age in our language.”
The screen showed a photo of hundreds of wine bottles lined up in storage, and Ko Eunha and the CEO began to focus on the image.
“To simplify, even the best vintage wine isn’t necessarily the most delicious wine.”
“……”
“You’ve probably heard news about 30-year-old wines being auctioned for hundreds of millions or billions of won.”
The CEO and Ko Eunha nodded. They remembered seeing such news in passing.
They had wondered how delicious a wine must be to command such a price.
“There are wines that, while delicious to drink this year, become even more delicious when aged for 3-5 years, or up to 20 years in some cases. That’s what Vin de Garde is.”
“I see. That’s interesting.”
The CEO commented, seemingly intrigued by Dokyung’s explanation, and Dokyung nodded as he continued.
“Wine investments are structured in this way. For example, as I mentioned earlier, if you buy a 2022 vintage wine and age it for over 20 years, a wine you purchase for 1 million won this year could be worth tens or even hundreds of millions of won in 20 years.”
“That’s fascinating. When you first mentioned wine investment, I wondered what you were talking about. So the price increases every year?”
“Yes, a wine aged for 3 years will naturally be more expensive than when it was bought in 2022, and after 5 or 10 years, it will be even more valuable.”
The CEO, who had been exchanging questions and answers with Dokyung, nodded as if he had discovered an interesting new world.
“So if we entrust our investment to Yuseong Investment Securities, do you invest by buying and aging wines in advance?”
“Unfortunately, that approach isn’t feasible domestically. Of course, we could invest through specialized wine brokers, but there are too many legal restrictions.”
“Then, buying already aged wines……”
“No, I explained this world to you merely to illustrate the concept. The wine investment method I’d like to introduce is……”
Dokyung flipped to the next screen and spoke.
“Wine futures investment.”
“Futures? You mean gifts?”
“No, I mean futures as in trading before the physical product is available.”
Based on what the wine shop manager had told him, Dokyung had researched and discovered the existence of wine futures trading systems.
There were futures trading markets for energy, raw materials, and grains, such as crude oil, gold, silver, and copper.
“In the stock market, futures markets trade based on calculated future values. For example, if you think oil prices will rise in three months, you’d invest in crude oil futures right now.”
“Ah, so it’s pre-investment rather than physical goods.”
“Yes, that’s right. There’s a similar approach in the wine market as well.”
Dokyung took a breath before continuing.
“I mentioned earlier that buying a 2022 vintage wine when it’s released would be the cheapest, as it could become more expensive after 20 years of aging. But that’s not true. It’s cheapest to buy before it’s released.”
In a way, this was obvious. The cheapest wine is the one you buy before it’s even bottled, while it’s still aging in oak barrels.
“Wine is an alcohol that increases in value as it ages. Particularly, wines from the Bordeaux region of France, which typically come to mind when thinking of wine, are known to taste better after 5 to 10 years of aging.”
“Is that Vin de Garde?”
When Ko Eunha, who had been listening quietly, asked this, Dokyung smiled and nodded.
“In France, they hold an annual wine futures trading event called ‘En Primeur’. It’s partly for promotion, but it’s also an event designed to facilitate actual investments.”
If futures trading became active through such events, the organizers could naturally leverage it for marketing.
“It’s beneficial for everyone involved: wine producers can secure next year’s production costs in advance, and investors can purchase at prices lower than future market prices.”
Dokyung continued his explanation as he moved to the next screen.
“Every April in Bordeaux, there’s an event where people taste wines that haven’t been bottled yet. It’s an event to taste wines still aging in oak barrels.”
“Do investors taste them?”
“Yes, potential futures buyers and wine experts go to taste sample wines. After that, the En Primeur event I mentioned earlier takes place. Since it’s an opportunity to buy wine cheaply before it’s bottled, there’s a back-and-forth negotiation between buyers and producers.”
Ko Eunha and the CEO focused intently on Dokyung’s words.
“It’s not just France. Major wine-producing regions like Napa Valley in the US and Chile all engage in these futures trades. Chilean wines, in particular, are popular for their relatively affordable prices.”
“I’ve tried Chilean wine before. It offers good value for money.”
“Exactly. It’s a futures trading format where if a case of 12 bottles would cost 300,000 won when released to the market, you can purchase it in advance for 250,000 won a year or two earlier.”
“The return on investment……”
“You could see a 25% return after two years.”
The CEO’s mouth gaped open at Dokyung’s words. Seeing this reaction, Dokyung continued.
“However, that’s just highlighting the advantages. There are drawbacks as well.”
The screen displayed the disadvantages of wine futures trading that Dokyung had summarized.
“First, like stock futures trading, it’s a high-risk product. If the pre-purchased wine’s taste deteriorates over time, or if external factors like a fire at the winery affect the product’s price, the investment could result in a loss.”
Naturally, buying something in advance rather than the physical product carried associated risks.
“Second, everything depends on the tasters’ instincts. The evaluation is entirely up to those people, so when the wine is eventually released to the market, public opinion might differ.”
“I see.”
“Third, this is an uncommon investment method in our country.”
At Dokyung’s words, the CEO opened his mouth with a puzzled expression.
“But you’ve brought this to us because Yuseong Investment Securities can facilitate such investments, right?”
“Yes, we’ve negotiated with domestic wine futures investment brokers, and we can manage to ensure your money is safely invested in wine futures. However, if you’re not interested in wine, I wouldn’t particularly recommend it from an investment perspective.”
Ko Eunha furrowed her brow at Dokyung’s words.
The more she observed him, the more interesting he seemed. He had come to attract her as a client, yet he was advising against investment.
“If you’re interested in wine and willing to study it, I could say it might be a better investment than real estate or art. But if not, I can only say it’s no different from speculation.”
“……”
“The more an investor knows about their investment product, the lower the risk and the higher the probability of reaching the expected return. Yuseong Investment Securities will do our best to support this, but if you only listen to what we say, there will inevitably be an information asymmetry.”
Ultimately, information asymmetry meant it was easier for one side to deceive the other.
Of course, asset managers are agents who help clients invest while considering such aspects, but Dokyung believed that one should properly understand the products they’re investing in.
He thought she might consider him presumptuous, but he felt he needed to tell Ko Eunha about these aspects, even if it meant failing to secure her as a client.
“Investing in what you know lowers the risk and leads to results that meet your expected returns. If you wish to study the product, I’m here to help.”
Dokyung closed his laptop and looked at Ko Eunha.
“Someone I know well once told me this: everyone has their own way of escaping pain. Focusing on the unchanging nature of real estate or art might be that person’s way of escaping pain.”
At these words, Ko Eunha looked at Dokyung with a hardened expression, while the CEO quietly nodded.
“But I believe there are things in this world like wine. Just as the most delicious wine now can become even more delicious after 20 years of aging, a person shining brightest now might shine even brighter 20 years later.”
“……”
“Yuseong Investment Securities will be by your side to help you live the most radiant life possible 20 years from now.”
His words carried multiple meanings.
It could mean helping her increase her wealth to live a more prosperous life in 20 years, or it could imply that Ko Eunha’s current self might become an even more attractive person as time passes.
“Nothing remains unchanged. But rather than fearing change, I think that embracing it, discovering new things, and enjoying change is what investment – and life – is all about. That concludes my presentation. Thank you for listening for so long.”
At Dokyung’s closing remarks, the CEO rose from his seat with a smile, while Ko Eunha remained seated quietly.
“This has been a truly enlightening session. Thanks to you, we’ve learned about a new world and also……”
The CEO trailed off, looking at Ko Eunha.
“We’ll contact you once a decision is made.”
“Of course. I didn’t mention this during the briefing, but Yuseong Investment Securities also has real estate experts. If you’re interested in real estate investment, we can manage it properly through our connections.”
“Is that so? That sounds good too. In any case, thank you for your hard work.”
“Thank you for your time.”
Dokyung bowed to Ko Eunha, who seemed lost in thought, and left the room.