Thanksgiving '10

While we turn to Thanksgiving in the U.S. this week, we find a global economy still looking to find its footing and to restore growth and provide full employment. The battle between strong export economies and the latest version of quantitative easing, or QE2, remains front and center as Fed Chairman Ben Bernanke continues to defend this latest program to jump-start the U.S. economy. (”Bernanke Takes Aim at China,” WSJ 11/19/10) We also continue to be heavily involved with our NATO allies in Afghanistan. The target date for turning security control over to the Afghan forces has moved from mid-2011 to 2014. (WSJ 11/20/10) Our fate does not look much better than the countries that came before us to do battle with the Afghan clans. I have been reading Obama’s Wars by Bob Woodward and remain convinced that our real challenge is Pakistan. As he did previously with Bush at War, Woodward provides valuable insights into the back and forth between the commander-in-chief, his closest aides and our military leaders as they formulate battle plans and monitor their execution. Our battles with radical Islam, I’m afraid, will remain with us for many more Thanksgivings.

On a more positive note, the private equity industry seems to be emerging from its slump and deals are once again are being brought to market. The low interest rate environment is clearly leading to increased multiples in the U.S., while outside of the U.S. multiples remain much lower than they were prior to the Great Recession. This should allow many of the private equity-backed firms based in the U.S. and U.K. to continue their global expansion as they create significant value for their sponsors and management teams. I recommend you read Bill Gross’ aptly titled article, “Run Turkey Run,” on what QE2 means from an investment standpoint.

I have not written lately about wine, but I will continue my Thanksgiving tradition of several years and recommend some wine pairings for your Thanksgiving dinner. Mary Claire and I will be traveling to Cambridge, Massachusetts, to join our family for Thanksgiving. Our daughter-in-law Stephanie and our son Jordan will be hosting us.

In both ‘08 and ‘09 I recommended Kistler Vineyards’ Chardonnay and Pinot Noir releases. I just received my fall shipment in New York City and once again recommend these gorgeous, outstanding wines. The current releases are from ‘08 and you can find them at your better wine retailers. You can also go to www.kistlervineyards.com and join their mailing list, which I would strongly recommend.

Another favorite that I have recommended previously is Peter Michael. Their Chardonnay releases and Bordeaux-style blends, Les Pavots, are outstanding and would be excellent complements to your turkey dinner. www.petermichaelwinery.com

If you are adventuresome and looking to try something different, I would recommend the following three Italian wines. All of them are excellent and provide real value as they are priced between $25 and $40 at retail and can be found at your best wine shops in New York and the Bay Area.

Le Macchiole Bolgheri Rosso 2007 (RP 90)
This is a blend of 50% Merlot, 30% Cabernet, 15% Syrah and 5% Sangiovese. Their Paleo, which is a Cabernet Franc, is one of my all-time favorites, but retails for a significantly higher price.

Ruffino Modus Toscana 2006 (RP 87)
This is a blend of 50% Sangiovese, 25% Merlot and 25% Cabernet. It has excellent balance and represents significant value for all of you value investors!

Ca’Marcanda Promis Angelo Gaja 2007 (RP 90)
This wine is from Angelo Gaja’s Ca’Marcanda estate on the Tuscan coast. In my estimation he remains one of the top 5 winemakers in the world. The Promis is a blend of 55% Merlot, 35% Syrah and 10% Sangiovese. Both the ‘06 & ‘07 vintages from Tuscany are outstanding.

Happy Thanksgiving 2010!