In 2022, when Ruth Gottesman’s husband died, he left her an enormous portfolio of Berkshire Hathaway stock with instructions to “do whatever you think is right with it.”

📚 Gottesman, 93, decided what to do: She donated $1 billion to the Albert Einstein College of Medicine in the Bronx, where she once taught. The money will be used to make tuition free for all students in perpetuity. Half of the students there graduate with over $200,000 in debt.

“We have terrific medical students, but this will open it up for many other students whose economic status is such that they wouldn’t even think about going to medical school,” she said.

Get this: because the college is a nonprofit, it can sell all the Berkshire shares without tax liability.

🥃 Today, we'll discuss an alternative asset class: investing in bourbon, and more, in just 5 minutes to read.

— Matthew

Quote of the Day

"People often say there’s lots of uncertainty, but when was there ever certainty in the markets, the economy, or the future? I’m just trying to understand the present."

— Bill Miller

What Else We’re Into

📺 WATCH: Five quick insights you can use to think more clearly

🎧 LISTEN: Fooled by Randomness with Nassim Taleb

📖 READ: When and why Berkshire Hathaway could pay a dividend

Trivia

Liquid Gold: Investing in the Future of Bourbon

With the rapid growth in alternative investments over the past 10 years, Jeremy Kasler was surprised to find one asset that had flown under the radar. Bourbon.

Having launched several other successful businesses specializing in art, wine, and international property, Kasler quickly recognized the gap in the whiskey market as a compelling opportunity. There was a growing number of investors looking for a way to leverage the rapid growth of American bourbon and whiskey in their own portfolios, but no simple way in which to actually make an investment.

Kasler pounced on the challenge.

Enter CaskX, which Kasler founded in 2020. CaskX allows qualifying investors to secure bourbon and scotch holdings that protect wealth during economic uncertainty while delivering consistent growth. Kasler, the CEO, says the business doubled last year, and whiskey’s popularity growth mirrors that of scotch. 

“If you buy and hold a whiskey investment, regardless of market conditions, that whiskey is more valuable over time because it’s maturing and improving in flavor,” Kasler says. “It’s becoming more desirable and easier to drink. It’s one of the few commodities out there like that.”

CaskX, available only for accredited investors, requires a minimum $50,000-plus investment. In this conversation, Kasler explains whiskey’s staying power, why the market has grown rapidly, and why some investors call it “liquid gold.”

I read you were selling hot dogs at 19 in London. Tell us about that.

As a young man, I was entrepreneurial. At 16, I sold Christmas wrapping paper on the street. If it rained, we’d sell umbrellas. We sold socks, too. I started a wine investment business and met many people traveling worldwide. All of it informed what I do today. 

What are some of your fondest early memories with wine or whiskey?

I love wine. I love whiskey. And I love art. That should be a great precursor for a successful business: Everyone knows whether you’re selling something you enjoy. Even as a young man on a tight budget, I drank the best wine that I could. I always wanted to try the best-tasting wines. And, over time, I collected wines. I’d visit wine regions. It was a hobby of mine, and today, I have a wonderful collection of wine. On my last day on this planet, I wouldn’t be surprised if I’m having a glass of wine. 

Us too. Switching gears to whiskey: Why is the market growing so rapidly?

People are getting exposed to its wonderful flavors. We can reference the pandemic to a degree — people stayed at home, drank at home, and tried new things. People have been drinking higher-quality whiskey and wine. It’s hard to return to lower quality when you’ve come to appreciate it. In America, it’s not necessarily that more people are drinking more whiskey, but they’re drinking higher-quality whiskey. 

When did you realize your wine or whiskey outperformed your share portfolio?

You’re right. Look, almost every investment is defined by supply and demand. If you buy stocks, the price increases if more people want to buy than sell.

Meanwhile, there’s a whiskey boom happening. We’re seeing bourbon follow the path of scotch from 15 or 20 years ago. One bottle recently sold for $2 million. That’s ridiculous in some senses, but bourbon is following a similar trajectory. 

Since we introduced the ideas to the market, people realized, Oh, you can buy these barrels, and as the whiskey ages, the value increases. And you can make money. But until recently, there was no real way for people outside the whiskey industry to benefit. Since we’ve been educating people, it’s become a real thing. 

What is the average timetable for a sound whiskey investment with CaskX? Long-term?

Yes. Five or six years is generally a good ballpark, if not longer. There’s no management fee. We assist investors with their selling process, but generally, five years is an optimum timeline because there’s very little aged bourbon on the market. 

How do you find quality distilleries to work with, given how important they are in the entire process?

We look for a great track record, legacy, and longevity. And the people. They’re very important. In that sense, it’s like stock investing, where you want to familiarize yourself with the people running the business you might invest in. It’s all about the people — their abilities, sure, but also their character. Are they in the whiskey business to make as much money as possible or to make great whiskey?

What’s your biggest challenge? What keeps you up at night?

We have to educate the public that whiskey investment is a thing. It’s not just some crazy idea or risky investment. It’s something you can touch, take pride in, and own. So much of this job is educational. 

What’s your routine? As a successful entrepreneur, what habits keep you energized?

I get up around 4:30 a.m. I use the first hour of the day to clarify my thoughts and think about my priorities. Then, I’ll train, which gives me a big tick physically and mentally. We work hard and start around 7 a.m., but we end work fairly early, and I’ll go for a hike most afternoons. Stress happens. Not everything goes according to plan. So my wife and I hike outside, and the last thing we talk about is business. It helps me remain calm to make better decisions.

Is it fair to equate whiskey investment to gold or a Picasso painting — something you can physically touch?

Yeah, that’s fair. We don’t talk much about art because most clients aren’t art collectors. They’re whiskey drinkers, bourbon drinkers. But you're spot on: We think gold is the closest comparison to our investment offerings.

There are benefits to gold over whiskey. But we know that whiskey is improving daily and getting more valuable over time, regardless of wars or news events. The price isn’t driven by fear. Gold and whiskey have major differences, and many invest in both. 

How has the CaskX business grown?

I can’t believe how steady our growth has been. We opened this Los Angeles office in November 2020. Last year, we doubled what we did in 2022. I don’t know if we’ll double again, but we’re growing nicely as more people learn about what we’re doing. 

What other goals do you have for the business besides educating the public on whiskey and an attractive investment?

We want to expand globally. We want to expand to the UK. We’ll pitch bourbon investment to people in the UK, which has never been done. We’ll pitch Canada, South America, Asia, and Australia. I dream of having this office run globally, 24 hours a day. 

How are people allocating to whiskey? 1% of total assets? 5%? More?

It’s ad-hoc. But we generally say putting 10% of your investments in whiskey is appropriate. Some people invest less, some more. 

Where do financial advisors fit into the mix? Do you discuss whiskey investment opportunities with them?

We do. The financial advisors can invest with us and recommend whiskey investments to clients. We’re seeing more of that. 

Final thoughts?

I want to highlight our VIP tours. Yes, we offer an investment, but it’s more than that. You’ve invested in something you enjoy. With our VIP tours, you can visit the whiskey distilleries and talk with wonderful people. This isn’t always something people appreciate until they see it with their own eyes. 

The beauty of whiskey is the social aspect. It’s a physical thing. You can talk about it, tell stories over whiskey, and grow relationships. 

Dive deeper

For more on investing in the future of bourbon, check out CaskX today to skip the waitlist.

See you next time!

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