Have patience, it’s an important investing skill to learn Never invest too heavily in one investment; diversify always Do your own research; beware of crowd type investments Be skeptic of those offering you great opportunities and ideas If you change your mind, get out. Some of the best trades are the ones you take losses.
As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Irvin Goldman.
Irvin Goldman is the Chief Executive Officer of Acker Merrall & Condit, (Acker), the largest wine auction house in the world and the premier destination for fine and rare wines and spirits for collectors, connoisseurs, and enthusiasts at every level. Irv is responsible for the strategic direction, vision, and growth of Acker’s retail store and global auction house, while leading the company’s ongoing expansion efforts into new markets. Since joining Acker in 2017, Goldman has implemented an aggressive global growth strategy that has led Acker to become the number one auction house it is today.
Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
When I went to graduate school, finance and Wall Street was going through a tremendous growth phase.
I started my career going through Salomon Brothers sales and trading program. I spent four years at
Salomon and then went to First Boston where I spent 13 years where I was Managing Director, Head of Interest Rate & Derivative Trading as well as Head of US Proprietary Trading. During those years, First Boston went public as Credit Suisse acquired it and the company was named Credit Suisse First Boston. I left in 2001 and then spent a few years in a family office before becoming President & CEO of a premier
Broker dealer. After helping rebuild the broker dealer, I joined JP Morgan Chase Chief Investment Office as Head of Strategy for the banks’ 350 Billion portfolio. I left finance in 2012 and was a partner in a tech venture capital firm for four years and managed my personal investments. A unique opportunity presented itself to me and I joined Acker Merrall & Condit, the world’s largest fine and rare auction house, as CEO/and minority owner in 2017.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
I had spent about three years looking for companies to buy and help grow. I spent 6 months of diligence looking at three enticing companies and a lot of money, only to get outbid each time by a private equity firm. It was really difficult and frustrating, so I decided to take a few months break. Then out of nowhere, a serious wine collector called me and said he was approached by an owner of a wine auction house about investment and strategic help and suggested I look into the opportunity. I met the owner, spent the time assessing the business and ultimately went in as CEO and minority owner. I knew absolutely nothing about wine previous to joining the company. The lesson learned is you just never know where and when an opportunity is going to come and that persistence always leads to positive things, even if it’s in very unexpected ways.
Are you working on any exciting new projects now? How do you think that will help people?
Late last year, we launched Acker Wine Markets, a data-backed and insight-driven digital platform that provides invaluable information to wine collectors and investors on the fine wine market. The new tool stands as the most comprehensive wine indexing tool and investment database currently available to collectors and investors, bringing nearly twenty years of wine auction data to assist in shaping one’s overall investment portfolio. There is no other platform in the industry like it, and this indispensable information will guide wine collectors on their wine investment journey. Whether well-versed in wine collecting, or satisfying the curiosities of a burgeoning collector, Acker Wine Markets allows all wine lovers to immerse themselves into the world of fine and rare wine and stay on top of trends. We are currently very excited about the prospects for applying distributed ledger technology to the wine business. I think
DLT has the opportunity to help the wine industry in terms of efficiency, data integrity, and authentication.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
There is not really one specific person, but many throughout my career. I think it’s always important to establish meaningful relationships with colleagues and network heavily in whatever field you endeavor. There is a lot of reciprocity of help that exists throughout your career.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing 500 dollars every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?
In the example above where someone is investing every month in the SP index, I would not waiver because of volatility. My experience has shown that over the long term, consistently investing an amount over various environments and maintaining that strategy during bull and bear periods is the way to go. Of course, this is a long term strategy with a 20-year horizon.
Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?
For the average investor I believe a diversified portfolio achieved through index funds is still the way to go. It’s very hard to compete with experts on individual stock and sector selections. I believe people should be invested in portfolio’s that represent all sectors of the economy. If one had done that, they would have over performed in tech and healthcare, and underperformed in hospitality, airlines etc. Having the diversification would allow investors to benefit as the underperformers pick up during a recovery, and they can still benefit in sectors of the economy like technology, which will continue to perform.
Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?
I am a big believer in distributed ledger technology and the opportunities it presents not only with regard to financial service infrastructure but in efficiency throughout the economy. I believe this sector, related to
Blockchain infrastructure are some of the more compelling long term opportunities. Right now it’s new so there is a lot of risk, but as this technology gains wider acceptance it will represent a tremendous area of opportunity for mainstream investors.
Are there alternative investments that you think more people should look more deeply at?
Wine is an alternative asset that many sophisticated investors use for risk adjusted returns in their portfolio. Wine has seen incredible returns in investments over time, and has consistently outperformed the S&P for the past 30 years, including downturns, and outperformed Gold since the early 1990s. To give some context, Acker’s Fine and Rare Index, returned 5.42% in the second quarter of 2021, bringing the index’s performance in the first half of 2021 to 15.20% (outperforming the S&P 500’s, the MSCI World Index’s, and the Hang Seng’s). Wine regions such as Champagne have risen an impressive 21.65%, while Italy climbed 11.68%, demonstrating that despite a tumultuous time, wine has demonstrated its strength as an asset in comparison to other asset classes.
As the macro economic environment is presently dominated by the current rise in inflation numbers and inflation expectations, wine also offers a solid asset in inflationary times. The current debate is whether inflation is transitory or more long-term. If the inflation numbers continue, the potential for the Federal Reserve to accelerate its forecast on the timing of monetary tightening becomes more likely, and potential volatility in financial markets may be in store. As a real asset with a perpetually favorable demand supply imbalance, wine will perform exceptionally well during a long-term inflationary period and act as a great hedge and store of value.
If a person in their thirties and forties came to you today and said that they have 10,000 dollars that they want to put away today for a long term investment what would you advise them to do with it?
Buy an index fund that invests in a globally diversified portfolio of the broad sector of the economy. Someone in there 30’s investing in the long term should have the majority of their assets in equities in a diversified way.
Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?
- Have patience, it’s an important investing skill to learn
- Never invest too heavily in one investment; diversify always
- Do your own research; beware of crowd type investments
- Be skeptic of those offering you great opportunities and ideas
- If you change your mind, get out. Some of the best trades are the ones you take losses.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Life is no straight and easy corridor along which we travel free an unhampered, but a maze of passages, through which we seek our way, lost and confused, now and again checked in a blind alley.
But always, if we have faith, a door will open for us, not perhaps one that we ourselves would have ever thought of, but one that will ultimately prove good for us”
It is a quote about faith and perseverance in all aspects of life. It is relevant for both children and adults and I find it to be a universally true life quote.
Thank you for the interview. We wish you only continued success!