Tales from the Trail

Dear Sendero,

Hello.

It’s been awhile.

In explanation, I could toss out old saws such as “I’ve been busy” - and I have.

But the reality is I have had nothing of any importance to add to the constant yet ephemeral buzzing of the hive.

For example, what observation, witty or insightful, might I have about the Trump presidency that a million other bees wouldn’t have already buzzed?

Likewise what can I add to the conversation about the slow moving avalanche of revelations that powerful men have used their lofty positions to get a leg over those drawn into their web of power?

Well, I do have one anecdote on that topic.

In my younger years I occasionally hung out with the head of a movie studio. He told me that the flock of wannabe starlets trying to break into the business was so persistent that, before heading out for the evening, he and his friends would select some random criteria for who they would sleep with that night. Only women wearing polka dot underwear, that sort of thing.

So, it can be no surprise that the illuminati, even a hideous specimen such as Harvey Weinstein or a bloated squid like Al Franken, individuals who had they pursued any other profession would be hard pressed to get a date, availed themselves of the opportunities as they presented themselves.

We all know power corrupts. Celebritydom is a rarified form of power as it allows it’s wielders the ability to reward aspirants with the fame and fortune they so dearly desire. Or, should they fail to please, to drop them in the dreaded dark career hole of no return.

Anyone venturing into the rarefied air of stardom needs to do so with both eyes open.

But I digress.

In today’s Sendero, I'll share some recent tales from the trails here in the Argentine outback. I don’t know if anything I have to write will be worth reading, or prove helpful in navigating your own trail, but maybe we’ll have a few laughs along the way.

As I write I’m listening to Pearl Jam’s high energy live version of Neil Young’s classic Rocking in the Free World which features a guest appearance by...Neil Young.

Isolation

Last week my wife and I joined Agustin Lanus, a leading specialist in high and extreme altitude wines and our partner in SUNAL Wines, for the grueling nine-hour round-trip drive on dirt roads to our remote vineyards in Luracatao, Argentina.

The vineyards are located at an altitude of 2,711 meters (about 9000 feet), making them the third highest vineyards in the world.

For the first part of the trip the roads could be described as “bad” and even “dangerous”. Small crosses and iconery marking where a fatal accident had occurred in the past are common sights.

However, for the last hour and a half the descriptives escalate to “insane”, “holy crap!”, “watch out!!” and “utter madness”.

That’s because the “road” is barely wider than the width of the tires. And rather than being carved into the mountains, much of it is plastered onto the sides of cliffs with hand-stacked rocks.

As the road winds ever higher it transits a unrelenting procession of steep inclines followed by blind corners and steep declines, making its akin to a roller coaster ride where you can only guess at what thrill will soon follow.

Except in this case, when you lose sight of the road at the top of an incline, failing to turn the wheel in the right direction brings into play the very possible outcome of plummeting to your death.

The photo here will give you some sense of the thing.

(For an even better idea, there’s some video of the road on our website, www.AgustinLanusWines.com).

Why take the risk?

Simply, the road leads to one of the most interesting wine terroirs in the world, a remote valley blessed with a microclimate that allows us to grow vines at over 2,700 meters high .

By comparison, the highest vineyard in North America is in Colorado at 1,950 meters, and in Europe the highest is in Italy, at 1,250 meters.

The end of the valley where Luracatao is located is literally as far west as you can go in Argentina, dead-ending in the Chilean Andes.

In days past, a massive estancia dominated the valley, producing horses, mules and cattle for the Chilean mines just across the border.

As the story was told to me by the owners of the estancia, every few weeks a group of stalwart gauchos would lead a herd over the mountains to the Chilean market, a treacherous journey of a couple of weeks. Once there, the gauchos would rest up for a few days before saddling up and returning home to repeat the process all over again.

Today, the estancia is not really commercially viable and the population of this part of the valley is greatly reduced, with only two sparsely populated pueblos which are, in almost all aspects, stuck in a time warp.

All of the houses are made up of adobe, and most are without electricity. The houses that do have electricity have it thanks to small solar panels provided by the government. The water they use flows directly from the mountain.

As there are almost no cars and few motorcycles, people walk miles or ride their horses to town to shop. There is no cell service, and the only phone service comes from a handful of communal phones that work off of a satellite dish.

Seclantas, the nearest town of any size, is home to less than 1,000 people and takes about two hours on bad roads to reach. To get to a decent medical facility requires a four and a half hour drive.

Given the altitude, the area is outside of the range of the average helicopter. Therefore, if you were to find yourself in an emergency you are on your own and, if it is a serious emergency, you are pretty much out of luck. Especially if that emergency happened at night: the roads are so bad that trying to drive them at night would be suicidal.

On one recent trip to our vineyards we met two individuals who had each lost a young child within the last six months, one to a snake bite and one to what sounded like a quick moving infection.

While I could never live in such a remote community, the people we work with in the valley, all of whom are involved in agriculture in one way or another, seem content enough with their lives.

It’s not an easy life, to be sure, but I guess if you were a Luddite who dreams of a world absent of modernity, this would be it.

For us, it’s a magical place, an virtually unknown valley located about 1,000 feet higher than Aspen, Colorado. Yet, thanks to the temperate microclimate, we are able to grow grapes there for our SUNAL Extreme Altitude Malbec.

And what grapes! When crushed, the juice has a consistency just shy of red paint, chock-full of all the rich flavors and intensity you want in the making of world class Malbec.

Worth the risk? We think so. Then again, if after zigging instead of zagging we find ourselves airborne with a few moments of time to reflect, we might come to a different conclusion.

Mistela

On the trip home we swung by Seclantas for a late lunch. In rural Argentina, dining out invariably means eating at a Comedor, a family-run operation that sells traditional food at inexpensive prices.

Like most, the comedor we stopped in at Seclantas specializes in hearty native stews made of beef, pork or goat in a sauce involving some combination of corn, barley, red peppers, onions, carrots… topped off with a tablespoon of a semi-spicy oil made of dried peppers. The cost of a bowl of one of the stews runs about 80 cents.

Knowing we’re in the wine business, as we were finishing our meals the owner of the comedor kindly offered us complimentary glasses of his homemade Mistela wine. While sipping the cloyingly sweet wine under his close scrutiny, he began describing his secret recipe.

It goes something like this:

First, he presses late harvest grapes - almost raisins at that point.

Then he adds pure ethanol - the very same medicinal alcohol available on the shelves of drugstores everywhere. In the US it is sold as rubbing alcohol. Adding the ethanol kills the yeast, stops the fermentation and preserves the natural sugars.

He then transfers the juice into “plastic”, he explained as if discussing the finest of french oak barrels, before finishing it off by leaving the mixture directly exposed to the sun and elements (and, one would imagine, all manner of insect life) for a full ten days.

We had been politely sipping the wine as he shared his secret formula, but simultaneously had started to feel a strange sensation… a distinctly unpleasant warmth and light-headedness in the brain. No doubt from the high concentration of ethanol.

When he departed to get our bill, we dumped the toxic brew in the street. .

In the Argentine outback, and I am sure in rural areas the world over, the phrase caveat emperor has a tangible meaning largely forgotten by those living in modernity. Places where overlapping multitudes of 3 letter word agencies purport to probe, test and evaluate everything one is served to eat or drink.

That is very much not the case here.

Off to the Fair

I recall attending a local fair of artisanal winemakers - again, with mistela the most common of the wines on offer. There were probably 30 stands, each staffed with the proud winemakers ready to tout their special family recipes and back their words up with samples.

It was only after we hit the first couple of stands did we realize that each only had one or two glasses for tasting purposes, with no facilities or particular desire to wash the glasses between tastings. As there were dozens of people doing tastings, in no time at all the glasses were well past unsanitary.

This unconcern about such things comes, I believe, from the Argentina tradition of sipping herbal tea from mate gourds. The custom originates from the Guarani indians in the area that now includes Paraguay, but it is as common as sipping coffee from paper cups back in the U.S.

The process is simple. You pack the herbs into your gourd, pour in hot water and sip the resulting brew out through a straw, usually made of silver or at least silver plated. After draining the mate, you add more hot water and pass it to your neighbor who takes their turn. More water is added and the gourd moves onto the next person. Often you will see four or five people happily sharing a mate.

And for the record, it is considered bad manners to wipe the communal straw before taking your turn.

While germaphobes will shudder at the thought of sharing a mate, it has always struck me as a wonderful tradition. In addition to being a somewhat intimate bonding exercise, it is also a great way to immunize the population against commonplace bacteria and viruses.

Be Your Own Doctor

One of the more surprising aspects of life here is that you can walk into any drugstore and walk out with pretty much any drug you desire, no prescription needed. The only exceptions are opioids and sleeping potions. For those you need a note from a psychiatrist, just to make sure you aren’t planning on hurting yourself.

This liberty to self-diagnose and then buy the medicine you think most efficacious in speeding along your recovery has interesting consequences.

For starters, it takes a lot of pressure off of the local medical services. In the US, gaining access to pretty much any serious drug requires a prescription. Which, of course, means paying for an expensive doctor’s visit. That process is compounded these days by the difficulty of securing an appointment on short-notice.

Secondly, it socializes medical knowledge. During certain times of the year down here, an intestinal bug goes around. Most people won’t get it, but when you do you’ll know it. Without treatment it persists and then turns from mere discomfort to a fever and worsens from there. It is not life-threatening, just persistent and pretty debilitating.

To discern the correct drug to take to kill the bug off, all you have to do is ask around. Everyone here knows the right drug to take, and how long to take it. Of course, so do the pharmacists, but for common ailments they are superfluous because long experience has embedded that knowledge in the community.

Underscoring just how laissez faire the drug business is down here, friends of ours recently went to a pharmacy looking for relief for an employee suffering from a pretty serious malaise. Upon hearing the symptoms, the pharmacist offered them lozenges for the sore throat, and ampules of medicine along with syringes to fight the underlying infection.

Not shy about such things, my friend listened to the instructions and bought the drugs and syringes and headed home to administer them. Not sure I would go there personally, but in a fix, I guess I would.

People back in the US and elsewhere can’t imagine a world where government agencies don’t regulate every aspect of their lives - especially when it comes to food and drugs. But you’ll have to trust me on this, in the absence of the nanny state agencies, humanity does just fine.

For starters, if a drug didn’t work, or had dire consequences, that information would immediately be communicated through the community. Of course, such a system is by nature imperfect, but I think failures with catastrophic consequences are relatively few and far between.

And to be clear, this town has a perfectly adequate hospital and some excellent doctors, so for those of us raised to grab for a doctor with the same readiness as one reaches for an umbrella in a rainstorm, proper medical help is readily at hand. And at prices that are a fraction of those in the US.

As for the rest, living here I fully embrace the notion of self-responsibility, and that actions have consequences.

I don’t worry even a little bit about the more informal approach to regulations - primarily because most of what we eat or drink is fresh and produced locally by people who would be quickly ostracized and maybe even chased out of the community if they put out a flawed product.

Even so, as I have no illusions that some higher governmental body is looking out for me, when confronted by something that doesn’t seem quite right, I approach it with caution. Including, from this point forward, homemade mistela.

A Parting Thought

It’s clear that certain factions in the US are determined to destroy Trump’s presidency, damn the consequences.

The sharp point of these efforts seems to be the ongoing FBI investigation into the Trump campaign’s purported connections with the Russian government. I won’t dwell on the matter, because I try to minimize the time I spend reading or thinking about the latest nonsense back in the U.S.

However, I would like to make a quick comment on the “big” news that former advisor Michael Flynn has rolled over and will apparently testify against one or more people in the Trump campaign.

Let me ask you a question. Can a prosecutor offer to pay a witness to testify? You know, hey, if you step up in the stand and say he did it, we’ll give you $10,000.

The correct answer is, no. That is against the law, for obvious reasons.

So, let me ask you another question. Can a prosecutor threaten to send someone to jail if they don’t testify against someone? Or, if that doesn’t work, threaten to prosecute and jail their family members?

The answer is, yes.

Which explains why Michael Flynn, in a press release revealing his reasons for turning state’s evidence, mentioned he was doing it for the “sake of his family”.

Specifically, according to an article in the Chicago Tribune.

“At some point, prosecutors warned Flynn that they were prepared to bring charges against him and his son, according to two people briefed on the discussions. Michael G. Flynn Jr. had served as chief of staff of Flynn's consulting firm and was involved in some of the projects under scrutiny.”

Leading, in time, to…

“He [Flynn] scored what several experts called a highly favorable plea agreement that spares him of many of the criminal charges he could have faced and, for now, leaves his son untouched.”

So, to be clear, rewarding someone monetarily to testify, bad. Threatening to jail family members, good.

In researching the topic of overt government coercion of possible witnesses, I came across an interesting article on the topic that’s well worth the read. Because it turns out that the US government can, in fact, offer witnesses financial bribes as well.

Here’s just one of many instances cited in the article.

“In a New York Times report on March 8, 1995 it was noted that the Federal Bureau of Investigation (FBI) was paying $1,056,200 to Emad Salem for his testimony in the terrorism trial of Sheik Omar Abdel Rahman and others charged with plotting to bomb the United Nations, the FBI office in New York, and two tunnels under the Hudson River. Rahman was convicted”.

Click here for the full article.

In the final analysis, governments the world over can torture the rules in anyway they want in order to achieve their current objectives. Or, simply toss out old rules and create new ones on the spot.

On the other hand, it appears that the institutional bias against Trump is starting to bubble to the surface. This is an excerpt from The Hill…

Mueller’s probe doesn't end with a bang, but with a whimper By Ned Ryun, Opinion Contributor— 12/06/17

“… The former deputy of counterintelligence at the FBI, Strzok helped to push the fake Fusion GPS dossier inside the bureau, interviewed Clinton's key assistant, Huma Abedin, as well as other senior Clinton aides about Clinton’s server and the wealth of top-secret materials that were shared on the server, which almost certainly was hacked by foreign powers. Strzok also was one of the two agents who interviewed Gen. Flynn, and he was the agent who changed the language in James Comey's statements on Clinton's email server, adjusting the phrases so that no legal repercussions might be felt by Clinton in that investigation…”

“…With all of these new revelations, we now face real questions as to what does the law actually mean in this country. We cannot forget that Huma Abedin may have committed the same crime as the one Flynn pleaded guilty to — lying to the FBI — yet, somehow, the FBI chose not to prosecute Abedin or perhaps others, like former Clinton adviser and legal counsel Cheryl Mills. So, is justice truly blind and evenhanded in America today?...”

Will Trump manage to get to the end of his term? It seems his agenda is picking up some momentum, in particular because the opposition keeps tripping over their own two left feet.

But with the FBI seemingly determined to build a case against him, it’s too early to place a bet one way or another.

A (Very) Quick Word on Investment Markets

First, a big congratulations to those of you who got in on Bitcoin early. I had my chances back when it was around $250, but never took the time to really understand it. Or, more to point, buy in.

While you are not asking my advice, I’ll share with you the same advice I gave to a dot.com millionaire near the height of that bubble: “Don’t forget to sell. Maybe not all, but enough so you’ll never have to worry about money again”.

For the record, he didn’t sell… which explains why the last time I saw him he was sweeping the floor of a store, working for minimum wage. True story.

You may think it can’t happen to you, but that would be ignoring the long history of investment bubbles. It is a history of winners (those who sold) and those who lost (those who clung on to the bitter end).

As for stock markets, I continue to focus on deep value stocks - a current favorite being Molson Coors Brewing. However, every time I get a return in excess of 10% on most stocks, I am a seller.

I won’t get rich that way, but at this point hitting singles and doubles and keeping a lot of cash to buy great stocks when the correction inevitably comes - perhaps if the FBI ultimately manages to trip up Trump? - seems like the right thing to do.

And with that, I will wish you nothing but sunny skies and happy trails.

Until next time…

David

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