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Monday, 29 April 2013

Sanderson Forbes Ltd – another vanished wine investment company?

A google search on Sanderson Forbes Fine Wines leads to the domain for sale 

Wine investment company Sanderson Forbes Ltd looks to have disappeared. It is not known whether the company bought the wines that clients ordered or, if they did, where they were stored.

Sanderson Forbes was set up on 27.4.2010 and filed accounts as a dormant company to 28.2.2011. The next set of accounts is overdue and should have been filed on 30.11.2012.  The company's registered office is Kemp House, 152-160 City Road, London EC1V 2NX, which is a virtual office. Its trading address is Sanderson Forbes House, East Lodge Lane, East Lodge Village, London EN2 8AS.  

However, the company's domain name is now up for sale and the phone number is no longer recognised. The last tweets from the company posted on 13th February 2013 announced that they were 'experiencing some issues with our telecommunications and website'. 

Currently the sole director is 23 year-old David Linus Hornsey-Pennell who was born on 28.7.1989. He was appointed as a director on 28th June 2012. His linked-in CV describes him as Head of Operations for Sanderson Forbes with previous experience as a broker for six months at Boltons Investments Ltd. 

David Linus Hornsey-Pennell's entry on Linked-in   

Hornsey-Pennell describes himself as an entrepreneur and is a director of a number of other companies: Integral Alternative Medicines Ltd, Beryll Farthing Ltd, Street Limo Ltd, Shp Carbon Trading Ltd, Hpst Ltd, Kunst Haus Ltd. Shp Carbon Trading Ltd, Hpst Ltd and Kunst Haus Ltd have all be founded this year. David Linus Hornsey-Pennell has addresses at Gunterstone Road, London W14 and Streathbourne Road, SW17.

I would be very grateful if David Linus Hornsey-Pennell would get in touch to give an update on the company and hopefully provide some reassurance for investors who have bought wine through Sanderson Forbes Ltd.   



Last tweets from Sanderson Forbes (13th February 2013) – 'We are experiencing some issues with our telecommunications and website. We are working to solve these issues.'


Update: 30th April 2013
Statement from Linus Hornsey-Pennell, sole director of Sanderson Forbes Ltd:
'thank you for preparing the floor. Yes Sanderson Forbes is being prepared for liquidation but over the term of operation the company was successful and clients are not at risk of losing any allocations that were purchased. All clients of Sanderson Forbes have been aware of the situation and can contact myself at any time on 0203 195 3858 should there be any concerns.

Clients will be aware that we store with EHD London who are a trustworthy company and above all operate with clients interests at heart. The strategy is such that all clients have an account within their own name further mitigating any risk of fraud or collapse. My role since taking over as director has been to assure clients that they may continue operating within the market as a client of mine or optionally seek representation elsewhere with an experienced company, either way the client has been given full control at every stage of my directorship and a clearer understanding of the parameters of, what can be a great investment market.

The address and number of the facility is:

EHD London No.1 Bond Limited
Unit A, Vickers Drive North off Avro Way
Brooklands Industrial Park
Weybridge,
Surrey
KT13 0YU

Telephone: 01932 334300

thanks,

Linus Hornsey-Pennell'

I welcome the statement from Linus Hornsey-Pennell and trust that everything is in order as stated. It would be useful to know when he expects the company to enter liquidation.  

58 comments:

  1. Hi Jim, I saw this article in the Observer today in which Peter Shakeshaft of Vin-x is advising investors to get out of gold and into wine.

    I think this raises two points. Firstly, is he not breaking the law by giving investment advice on regulated products, as his firm is not regulated?

    And second, in their own charter, the Wine Investment Association (which he set up) state that one of the conditions of membership is that under no circumstances can any member encourage any investor to sell a regulated investment product to get into wine.

    It is my opinion that in this article Peter Shakeshaft is breaking the law. Do you agree?

    http://www.moneyobserver.com/news/13-04-29/gold-uncertainty-could-open-door-other-alternative-investment-classes

    ReplyDelete
    Replies
    1. Anon. Thanks. A couple of quotes to clarify:

      'Unregulated Market
      The gold bullion, investment gold, and precious metal markets are unregulated markets. They are not covered by the Financial Services Authority, and there is no requirement for registration under the FSA, or the London Bullion Market Association.'

      'WIA
      ‘the Member will not advise, suggest or otherwise encourage a Customer or potential Customer to dispose of any regulated product in order to purchase wine as an investment’


      Delete
  2. Market Regulation
    Responsibility for the regulation of the major participants in the London bullion market lies with the Financial Services Authority (FSA) under the Financial Services and Markets Act 2000. Under this Act, all UK-based banks, together with other investment firms, are subject to a range of requirements including capital adequacy, liquidity and systems and controls.

    http://www.lbma.org.uk/pages/index.cfm?page_id=21

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    Replies
    1. Thanks anon. A crucial question therefore was Peter Shakeshaft referring to the regulated gold market or the unregulated. Also does the law on giving advice extend to articles in papers, magazines, websites etc and were any of the readers of Money Observer customers or potential customers of Vin-x?

      Delete
  3. Firstly, the only unregulated parts of the gold market are spot, forwards and deposits. The “investment business” in gold is regulated.

    Shakeshaft is clearly addressing investors in this article and specifically investors in gold. He is telling them that gold is wobbling now and will do so in the future, so sell the gold you have invested in and get into wine. That’s breaking the law.

    The article written by Shakeshaft clearly will induce a certain amount of investors to sell their gold position as it is in a very well-read publication and to get business for Vin-x by converting gold investors to wine is the whole point of the article from Shakeshaft’s point of view.

    So the question is, what qualifications does he have - and by extension his firm, Vin-x, as this is the company he represents in this article – to be an authority on an investment market he does not even work in. It is like taking medical advice from the ice cream man just because he wears a white coat!

    I think that his article could be dangerous for investors out there who may have gold positions and sell as a result of his opinion of and his advice on a market he does not work in and is not allowed by law to advise on.

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    Replies
    1. Anon.

      'Shakeshaft is clearly addressing investors in this article and specifically investors in gold. He is telling them that gold is wobbling now and will do so in the future, so sell the gold you have invested in and get into wine. That’s breaking the law.'

      Could you explain please what law is being broken here bearing in mind that this is an article in a publication and not a direct sales pitch by Vin-X? Thanks.

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    2. This comment has been removed by the author.

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    3. Edited comment from anon:

      'Peter Shakeshaft is within the law, although very grey the area maybe.... but judging by his attitude and that of the WIA..... its truly laughable

      The sheer arrogance of it all...... I just do not know how they can afford all the Google pay per click advertising... the marketing and the companies that represent them legally without either running at a loss or passing it onto the client so how competitive is the pricing of the wines they sell???'

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    4. Anon. As well as Peter Shakeshaft not breaking the law, I think we should also acknowledge that the article does not tell people to sell all their gold and put it into wine. Some investors, however, might be persuaded to sell some of their positions in gold to allow them to invest in wine, which despite its nature may not always be as liquid an investment as one might imagine. I'm thinking here particularly of older vintages, especially where provenance may not be clear.

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  4. Jim Its Peter

    Thanks for attempting to explain the Act but just to elaborate on your response to the 'anonymous' poster.

    1. Jim you are quite right. Media does have an exemption under the Act. Otherwise of course every financial journalist in the land would be guilty of investment advice !

    2. My piece is general commentary on the economic climate that currently prevails. I stand by everything written. For the record it was checked on a number of occasions by a number of professionals prior to release for accuracy.

    3. The factual information is already in the public domain.

    4. In my opinion It does not contravene the WIA code of Conduct for the reasons above. How can WIA rules rank higher than the Act ?

    5. You are incorrect as it is only the Gold 'futures' market that is regulated. The 'Spot' price is just that! An indicative price of trade. Physical Gold is unregulated. I only mention this to further enhance to the casual reader your lack of regulatory expertise.

    Above all as a qualified Corporate Financier I think I know more than most what would constitute giving investment advice.

    'Anonymous' needs to focus on writing about wine and not comment on things he lacks knowledge in.

    Peter

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  5. Hi

    You are wrong, as much as I dislike Peter Shakeshaft and the WIA anyone knows that unregulated is the physical bullion side......

    as the FSMA 2000 deals with future positions, and anything where delivery takes place at a future time.so I am sure he was talking about the spot market only, basing his results on what has already happened and quoting other companies predictions who are regulated... that is within the law and boundaries, even if you dislike it

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  6. Thank you Peter.

    'In my opinion It does not contravene the WIA code of Conduct for the reasons above. How can WIA rules rank higher than the Act ?'

    Except that you have chosen to sign up to the WIA code and perception is important even if the entire tenor of your article referred the unregulated aspects of gold.

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  7. Jim

    I reply to Your comment of 18.03.

    The WIA code is a rule and not perception. It is in the Code to ensure members do NOT engage in a 'regulated activity'. In layman's terms if a member was to say to a client directly to Sell Lloyds Bank (or a Gold future)(i.e A regulated product) and buy Wine, that would constitute a breach as it is giving unauthorised investment advice which is illegal under FSMA! The WIA Code is, in my opinion, pretty clear in that regard.

    My point is that my piece is a written article which falls clearly OUTSIDE FSMA. As you Jim pointed out previously is an exempted activity.

    Articles commenting on the market, Gold, individual stocks, mortgages, and bonds are written about many times each and every day in blogs, in the press and even read out on TV by unregulated professional commentators.

    Therefore It is irelevent therefore whether or not I am commenting on Gold futures or Gold as a commodity! If my belief is that Gold today is volitile, thats my opinion and thats OK. If I believe you should buy Fine wine today thats OK too because that is merely my opinion.

    So 'perception' Come on !!! Understand the legal argument first and you will see that this whole thread is complete nonsense !

    I leave you with the fact that this thread is linked to (possibly) another wine company failure. I hope the irony of that is not lost on your readers when ALL you,Joseph and the WIA are trying to do is stop one more person not having title to the wine they bought !

    So yet more stupidity written about me because I have tried my utmost to highlight fraud and create a workable code !

    ReplyDelete
  8. Peter. Thanks.

    'The WIA code is a rule and not perception.'

    You seem to have missed the point I was attempting to make. I'm well aware of the difference between a 'rule' and 'perception'.

    I would have much preferred that this post generated some comment about the apparent disappearance of Sanderson Forbes Ltd. Most of all I would have welcomed a comment from David Linus Hornsey-Pennell as to whether his company purchased the wine that his clients bought. However, rightly or wrongly, I do not filter comments on the grounds of relevance.

    'a workable code' – until the WIA ceases to allow its members to pester complete strangers with cold calls promoting the merits of wine investment the WIA will have neither a 'workable' or 'saleable' code.




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  9. I am not missing the point at all it is YOU.

    You wrote :-

    Except that you have chosen to sign up to the WIA code and perception is important even if the entire tenor of your article referred the unregulated aspects of gold.


    The points I made in response completely make your statement wrong FULL STOP ! There is no 'perception' to even debate here, it is simply WRONG ! And if you cannot even concede that what on earth are you doing commenting on the piece in the first place.

    In regard to Sanderson Forbes Limited I could'nt agree more and sincerely hope that Hornsey Pennell contacts you.

    'A workable code' Without wishing to comment on behalf of the WIA. Your work and helpfullness in this area is noted and appreciated.

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  10. Unless they say something startling new, comments on the merits of gold versus wine and the WIA are now closed.

    Rather this is the opportunity for David Linus Hornsey-Pennell to reassure his clients that the wines they have ordered and paid for have been bought and that they have clear title to them.

    Mr Hornsey-Pennell the floor is yours!

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  11. Jim,

    thank you for preparing the floor. Yes Sanderson Forbes is being prepared for liquidation but over the term of operation the company was successful and clients are not at risk of losing any allocations that were purchased. All clients of Sanderson Forbes have been aware of the situation and can contact myself at any time on 0203 195 3858 should there be any concerns.

    Clients will be aware that we store with EHD London who are a trustworthy company and above all operate with clients interests at heart. The strategy is such that all clients have an account within their own name further mitigating any risk of fraud or collapse. My role since taking over as director has been to assure clients that they may continue operating within the market as a client of mine or optionally seek representation elsewhere with an experienced company, either way the client has been given full control at every stage of my directorship and a clearer understanding of the parameters of, what can be a great investment market.

    The address and number of the facility is:

    EHD London No.1 Bond Limited
    Unit A, Vickers Drive North off Avro Way
    Brooklands Industrial Park
    Weybridge,
    Surrey
    KT13 0YU

    Telephone: 01932 334300

    thanks,

    Linus Hornsey-Pennell

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    Replies
    1. Many thanks for this. When do you expect the company to enter liquidation please?

      Delete
  12. Wine Merchant9 May 2013 at 20:54

    I am more concerned about the following statement made by Mr Shakeshaft,

    'Wine could prove a wise investment because, unlike other commodities such as gold, it is not as affected by tough economic conditions as it's not directly linked to fluctuations in the stock market."

    This is absolute nonsense, wine is correlated to the stock market, to suggest otherwise is extremely mis-leading. A GCSE economics student could would know that. Wine investment is extremely risky with an illiquid market controlled by 3 large merchants.

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    Replies
    1. You are entirely right. The fine wine market seems to follow the stock market but with a bit of a lag

      I also seem to remember a chart of Chinese money supply transposed against fine wine prices over the last few years. The similarity in ups and downs was amazing

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    2. During ther Depression of the 1930s Bordeaux wasn't exactly buoyant. Furthermore while the contents of a bottle of wine should be liquid, it is by no means certain that wines can be sold quickly.

      Delete
  13. Wine Merchant9 May 2013 at 21:04

    Is Shakeshafts qualification as as 'qualified Corporate Financier' which he constantly goes on about, the online CF designation which costs about 900 quid and takes 2 days to self accredit?

    http://www.icaew.com/en/qualifications-and-programmes/cfqualification/experience-route

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  14. Dear Jim

    You blog is becoming boring and by talking about Peter Shakeshaft is only giving him room for more Hot Air

    There are more pressing issues at hand and lets talk about the dismal 2012 wines and how the French with 2009 and 2010 pricing have destroyed the hand that fed them...

    It is the middlemen who helped create the boom in wine and they should be paid. The Vineyards are now trying to cut out the middlemen and by so doing we are not getting the volatility or price movements we used to get prior to the 2009 en primeur prices which killed the marker

    What next???


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  15. As a client of Sanderson Forbes I have tried on several occasions to make sense from the emails I received recently from Linus Hornsey Pennell. These in response to my enquiries regarding the wines purchased by me in the last 2 yrs. I have been in contact with EDH bonded warehouse where part of my portfolio is kept. They however are unable to give me any information about Sanderson Forbes because of a conflict of interest. I am exasperated and left cynical about the whole wine investment market

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  16. Jim, I am on Albany Portfolio Management's mailing list and yesterday I received the below email from them. In it they appear to be guaranteeing a return of 50% on the Lafite 2012 by the time it goes in the bottle.

    Are they allowed to do this? I have cut and pasted the email word for word below. I have not forwarded you the original as it would have my name on it and I wish to remain anonymous. If you ask them if they sent it though they will confirm it. The email is as follows.

    Dear
    Investing in en primeur (in barrel) is, at its most basic level, very straightforward: the historic reason that it was a sure-fire way to turn a quick buck was that the Chateaux - rather accommodatingly - released prices at a hefty discount. This was their 'thank you' to buyers kind enough to lend the estates their hard earned money for two years and wait patiently for delivery.

    And what a 'thank you' it was! The simple rule was that the price would reach parity with the cheapest comparable back vintage at bottling. Hence the old adage that the landed gentry drank for free by buying more than they needed en primeur, and then flogged half of it for a profit at bottling.

    But that all changed from 2010 when the Chateaux hiked the prices of their admittedly glorious 2009 and 2010 offerings to unprecedented levels, but failed to readjust back down to sensible levels for the iffy 2011.

    You may have read that good sense prevailed this year for the 2012 releases, and that prices were substantially lower than last year. That's true, but don't be fooled...

    Prices for the previous 3 years were so inflated that even with this year's price drop there is little or no discount to back vintages!

    The chart above shows the price differential to the current best value back vintage of similar quality to 2012; vintage 2007.

    Remember the old rule: the 2012 en primeur wines will almost inevitably reach parity with the 2007 at bottling (Spring 2015).

    So in plain English, notwithstanding wars, famines and natural disasters, you are pretty much guaranteed a 50% or so profit when Lafite goes to bottle, but precious little for the other First Growths.

    Do we expect the others to grow in value? Sure; we steadfastly believe that the wine market is back in a Bull Run, so the wines will increase in value as the market does. But so will Lafite, and that's the only one with a decent enough differential to warrant investment today.

    We are strongly recommending Lafite 2012 (but nothing else from the vintage!) for investment
    Cases available at £4,000

    Please email me if you are interested in a case or two. Subject to availability. Price is for 12x75cl, and will be delivered to bond OWC in Spring 2015. Excludes mgmt fee.

    Note: Latour is absent from the chart above as they no longer offer their wines en primeur.

    All the best!
    James Fletcher
    General Manager
    +44 (0)20 7148 0411
    james@albanyportfoliomanagement.co.uk

    ReplyDelete
    Replies
    1. Anon.Thanks for this. As buying individual cases of wine for investment is not regulated then an 'almost' promise of 50% increase is not illegal. Whether it is wise is another matter. If Albany Portfolio Management was running a wine fund such a claim would not be permitted.

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    2. Apart from the fact that Albany Portfolio Management's statement that Lafite 2012 is the only one to buy is absolute tosh. Lafite has dropped in value already on Liv-ex by several hundred pounds since release, whereas Mouton Rothschild 2012 has risen in value by 7.5% since release. And what about Pomerol? It seems to me that because Lafite is the most expensive, this is the one Albany Portfolio Management are recommending, as they will earn more commission. Especially as they are charging 4k a case when the market value is a little over £3,600. That's a nice, healthy undeclared margin for APM's coffers!

      Delete
  17. Mr Shakeshaft,

    Thank you for your robust and dismissive reply to my view.

    I have been a wine merchant for 22 years, before specialist wine investment companies set up, wine merchant prices were the benchmark for fine wine investment, simply because merchants sell the wine people drink. Ultimately for wine investment, not to be one big pyramid scheme which leaves some unsuspecting mooch owning wine they can never sell; someone has to buy it and drink it.

    In 20 years wine prices have mirrored market events, exponential smoothing and formulas of indices such as Liv-Ex (which we are members) is not really indicative of real world drinking prices. It is what it is, a formula, which provides useful guidelines. In many respects we quite enjoy the advent of specialist firms, generally because the owners are un-sophisticated wine buyers usually from failed city firms looking to jump on the next bandwagon. We generally sell wine to investment companies like yours at around 20% above what we would to the trade.

    The point you are missing Mr Shakeshaft is your I feel your comments are mis-leading and encourage non high net worth’s to invest their savings in wine. I have a real problem with this because we get the phone calls from investors when they are trying to sell their wine.

    Have you considered the logistical cost of selling 20-30 -40 million of wine? Or even 300k, of course you have you're also a logistics expert.

    I am not complaining, we love Liv-Ex, it allows us to sell wine for more than its worth, we love the fact that market entrants like you pay more for the wine than you should because you don't understand it. I just don’t like widows and orphan’s being cold called and sold to, based on potentially mis-leading information.

    The reason why wine prices correlate to markets is simple, it is because it is tied to Forex, which is absolutely correlated to the stock market. When sterling dropped against the dollar, wine prices dropped.

    Hyperbole and rhetoric will not make someone pay more for their claret when they come to drink it, than its worth. You're a city man Mr Shakeshaft, you know the sardine’s story. It comes to and end at some point.

    My very simple point in relation to your qualifications was directly linked to your comments that you are qualified to advise people to sell gold and buy wine because you are a 'qualified Corporate Financier' you also state this on your public CV. Please answer the question, is this the qualification you are referring to, or do you hold other qualifications which allow you to be able to give this kind of investment advice?

    Finally I have no financial qualifications, I am a wine merchant and I love wine, my comments are solely based on my experience of 22 years of seeing prices drop, when the stock market does, prices rise when the stock market does and making super profits when the bankers do well and get their bonuses. Our sales are better than ever, prices are low, profit is lower than it was 5 years ago, higher than 10.

    I think your statements and you, are absolutely at the heart of wine investment stories, you chose to get on your soapbox, this is the result. I am happily anonymous and will continue to be so.


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  18. Good grief anon, you've clearly got far too much time on your hands.

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  19. Anon. It would be helpful to have some proof of your most comment before posting it please.

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  20. I have more than enough spare time to write and comment a few words about a subject I care about.

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  21. To wine merchant, Hear, Hear! Shakeshaft is a windbag and deserves everything he gets.

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  22. Clearly You are a wine merchant and I have a lot of respect for the work merchants do. Equally I am an investment specialist. I employ Chartists, Economists along with Wine specialists and together we ascertain what we believe will happen to the wine market as an asset class.

    As a wine merchant you are quite right, you are not in a position to comment whether I am giving investment advice or not ! However reread my previous post and you will understand clearly my position and I reserve my right to free speech and comment on the market in general.
    Interestingly last Friday Credit Suisse issued a 12 month 'worst' outlook for Gold in their Commodities Poll. It seems they are also of the same view as we here at Vin-X. The distinction though is that I would not 'tell' a client who holds Gold to flip their investment into wine. We do NOT do that.

    Indeed some of our clients are called by Diamond traders who attempt to cajole clients into selling the wine portfollio's for nearly worthless diamonds.

    But above all that you make some valuable and interesting points in regard to the market of Fine Wine and you seem to agree there is a need for some sort of self regulation. Vin-X does not sell to 'widows and orphans' and it is something I am passionate about eradicating from the industry too. Jim Budd has met with the WIA and the NFIB to tighten further the formers rules in that regard.

    Clearly wine investment will not go away, nor in my opinion should it. Traditional wine merchants may not like it but that is reality. How we as an industry develop good practice is within our grasp though and I respectfully ask you to work with the WIA in doing so for if you have time to blog your comments then certainly they would be better served helping the industry.

    Clearly there is a debate to be had and we are all trying to be constructive for non of us wish for clients to lose money by unscrupulous practices. If we never see another wine company fail owing £000's to clients then fantastic but you and I both know that is indeed not the case so please help us Police the industry from the inside.

    Yours

    Peter

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  23. Letting Peter Shakeshaft police any sort of investment industry would be like asking Timmy Mallett to to run the economy. Why doesn't he just pipe down? He's clearly unqualified to talk about either wine or investment: He knows nothing about either subject, so why does he pretend he does?

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  24. Anon. Once again I can't post your latest comment without some backing for your news please.

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  25. Mr Shakeshaft,

    Thank you for your respectful and considered reply.

    Do you cold, cold call? as in telephone book? or do you buy profiled lists from a reputable source

    Do you sell investments to non-high net worths or non-sophisticated investors.

    Do you front load commission?

    Do you charge a disclosed sales commission?

    Do you disclose the % of sales commission paid to your salesteam?

    Just for fun, how much would you pay for Margaux 2005 today and how much do you think it will be worth in 10 years, in sterling in bond to the trade.

    I am looking forward to reading your accounts, based on your costs and GM on wine, your sales need to be in excess of 10m to stay afloat, buy every bottle of wine without front loading commission.

    I commend your efforts to get the WIA up and running, I think if you resigned along with the other founding members, appointed a chartered accountant, a couple of masters of wine and a couple of ex FSA or city compliance officers and a wise old owl, maybe even our dear maverick friend Mr Budd, I feel a lot more people will join and it would be far more credible.

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    Replies
    1. Thanks anon. You make an intriguing suggestion for a new board for the WIA, although I'm not convinced that it is a position for 'our dear maverick friend'.

      Delete
  26. Comment by anon (Peter Shakeshaft) that was deleted in error while using an iPad:

    Anonymous has left a new comment on your post "Sanderson Forbes Ltd – another vanished wine inves...":

    Wine Merchant

    Thanks for your constructive comments.

    As members of the WIA we are obliged to adhere to their rules in regard to outbound calls however as you quite rightly noticed our PPC budget is extensive.

    In regard to up front payment, firstly Vin-X clearly state on its client invoices the payment terms and breakdown. Invoices are prepared in a similar way to a contract note. Personally I do not agree with payment being taken at the back end of a contract as such practice is unsustainable to company's and often highlight my concern in that practice.

    I am not prepared to (understandably I hope) give away our business model but suffice to say that Vin-X has undergone and passed the Mazaars audit (as part of the WIA aplication process) You should join and see how stringent that is !

    Lastly in regard to the WIA. Jim Budd knows for some time that my wish is that once the WIA is self sustainable then I would like to stand down as a director. (Jim would you be so kind as to confirm that point) I have always maintained that the WIA is bigger than any one individual. I am thankful that those involved brought differing skill sets and experiences to aid the creation of the WIA. I am heartened by the fact that our Chairman (A Master of Wine) is a man of unquestionable integrity who has listened, has researched and been thorough in understanding the complexity of self regulation. I am pleased too that it has independent people to sit on the Independent adjudication Panel so the directors do not have the power to sit in judgement of their peers.

    You must agree that we have waited too long for some entity to come along and regulate our industry. In the end we had to do it ourselves.

    My personal thoughts are that the more Company's join, the quicker the WIA can pay for an independent board.


    Wine Investor why don't you join? You must sell investment grade wine to your clients?

    BTW On a personal note I prefer Jim on the outside of the WIA as he can do much more good observing, highlighting and critique the industry without the burden of corporate responsibility.

    Peter

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    1. Edited response from anon: In this typically self promoting and spurious reply, Peter Shakeshaft has not answered a single question about his business practices posed to him by the previous poster.

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  27. Dear Mr Shakeshaft,

    Thank you for answering my question so perfectly.

    You have absolutely and unequivocally answered the only question I really wanted an answer to. Thank you for confirming that the only way your business survives is to front load your clients to cover your overheads and marketing campaign and self promotion.

    It is utter nonsense to suggest that by front-loading your prices you somehow protect your investors. If you fail, your investors will end up with wine they paid too much for. If you survive your investors will own wine they paid too much for.

    The only way to run a proper investment company is to sell at the lowest market price and deliver the wine into the customers own account, somewhere like Vinotheque, then they are free to sell their wine to whoever and your survival is irrelevant. If you have done a good job for them, like any other broker then they will come to you to market the wine when they are ready to sell. If you sell through contract notes then I am sure the contract could have a clause they must sell through you or you are given a license for 5 years.

    I really hope you do not buy back the front loaded wine from your clients, to show them a quick turn and lead them into a bigger deal. Perhaps one of your sales team would care to comment on 'Teeming and Lading' practices? I am sure you don't do such a thing, confirmation however is welcome.

    If you resigned, we would join as would, I am sure many others. Masters of Wine are a good resource, but they cannot chair a board of forthright bombastic businessmen, however much integrity they have.









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    1. This comment has been removed by the author.

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    2. A comment from an anon which was deleted in error: Anon:'well said'

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  28. I think we are taking at cross purposes here Wine Merchant. Do you or do you not make a profit/ margin out of selling wine ? Yes or no ?

    We do and clearly state it on an invoice/ contract note for transparency.

    If you do not then you are a fool which I doubt if you have been running your own business for 20 years as you state.

    We do NOT charge on the back end of a transaction and the client has good title to the wine as set out on the Wine Investment Association's website which we have passed after being audited by Mazzars.

    Have you read the WIA's website ? If you had of done you would not have asked the question in the first place.

    Jim whe you stated "well said" what exactly were you refering too ?

    In regard to Masters of Wine not being good business people I think that is an afront and you should take it back for there are many excellent MW's who could teach a lot of us how to succeed in the wine trade.

    In regard to my position and the fact you would join if I left places you in a very silly position as firstly you have no idea what it has taken to get the WIA even to this point whilst you have done NOTHING for 20 years and secondly if you are basing your membership on one individual then frankly that is pathetic. As with every Association there are those within that have conflicting views to yourself but you deploy reasoned argument to get your point across. That is called democracy.

    Jim would you care to comment again such as "well said" or are you leaving such trite comment for ubsurd argument. Really

    Peter

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    1. Clarification: 'well said' was not my comment but a comment from an anon that was deleted in error. I have reposted the comment to make this clearer.

      I do, however, rather like the idea of a 'ubsurd argument'.

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  29. Mr Shakeshaft,

    Being insulting, obnoxious and dismissive doesn't address the very serious concerns the industry has about you. You claim to be absolutely transparent and that you have the highest standards in the industry yet you continue to evade answering such a simple question about your prices? I have read the WIA and your website, neither answer that question other than a reference to 15% upfront fees.

    Perhaps I can ask you a simple question in a way, which is easier for you to understand and answer;

    If you purchase a case of wine for 100, what do you sell it for?


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  30. So no reply from Mr Shakeshaft. Does this mean that vin-x charge 15% AND load an undeclared margin into their price when selling to a client? Oh dear, very naughty.

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    1. We will have to await his reply.

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  31. I am sure Mr Shakeshaft will claim it is confidential business information and something he cannot possibly divulge. A review of BI accounts shows COGS at around 88%. Surely a markup of more than 15% would have grave consequences for Vin-X investors. Perhaps as an investment expert Mr Shakeshaft would educate us on how paying more helps his investors.

    I would love to see Goldman claim that by selling shares for more than they are worth helps their investors because it means Goldman make more money and stay in business, therefore protecting their business. Rather than admit Wine Investment through cold calling and advertising is a flawed business model which will fail.

    Wine investment as a sideline for a large successful merchant is a realistic business model.

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  32. I would firstly like to state that I am NOT Peter Shakeshaft or anyone who works for/is associated with Vin-x.

    I must say though that it's slightly harsh to state that Bordeaux Index's 'cost of goods sold' is 88% - suggesting that their margin is 12% - and that a markup of 'at least' 15% is unjustifiable. Let's just say that the markup is a round 15%, is that clear profit for Vin-x or are there 'costs' involved to be considered after that? The Wiki definition of COGS is: "...Costs include all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of goods made by the business include material, labor, and allocated overhead...". I would hazard a guess that the books Jim's referring to for BI have taken into account plenty of 'costs' after their margin.

    So if BI just sell wine and then have no further responsibilities towards that case/client and have a 'margin of 12%', what is the issue with a company charging 15% and offering other services to the client. Do Vin-x offer free storage with the 15%?

    Don't get me wrong, I think that Mr Shakeshaft is a stubborn self-obsessed human, with an unpopular reputation which will continue to precede him moving forwad. I also don't like Vin-x's/WIA's stance on cold calling, which clearly has absolutely no place in wine or any other investment market. BUT, I think attacking their margin for the sake of it is clutching at straws slightly. The bottom line is that you've got Bordeaux Fine Wines discerningly charging markups around 50% for wine, with the evidence littered all over recent articles and comments on this very site - so if we're going to talk about 'excessive margins' let's turn the attention to the real crooks?!??

    I find it interesting that you bring up BI Jim, as they likely make a significant portion of the aforementioned margin by supplying a number of the spurious companies that get air time on this very site. Not that I'm singling them out or anything - we all know Farr and F+R etc will also supply anyone who wants to buy. I just think it's interesting!

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    1. Anon. I should make it clear that I did not 'bring' up BI it was a comment by another anonymous.

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  33. Sorry Anon 5th of June but overcharging to cover admin costs is the heart of the issue. The industry norm for wine broking is 10%, download BI's accounts, read them it is pretty clear and simple. Their admin costs are around 6m.

    15% is a massive margin for an investment company, most funds charge 1.5% per annum and a 10-15% performance fee. In the past this was 2 & 20%. Storage costs around £20 a case including unlimited insurance, that’s 0.4% on an average investment case!

    Until Shakeshaft discloses Vin-X's markup, then how do we know Shakeshaft is one of the good guys? They maybe exactly the same as the rest of the cold calling wine investment sales rooms. Shakeshaft can end this debate very easily, yet he fails to respond to this important question when he has so vocally dealt with every other issue.

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  34. To Anonymous 5 June 15.02

    Your response is interesting, but doesn't really include any specific examples relating to actual companies, merely sweeping generalisations!

    Here are some facts:
    Bordeaux Index Livetrade as of the time of my writing this comment:
    "Pavie 2003: We Buy @ £1,420/We Sell @ £1,750"
    That, as a matter of mathematical fact, is a difference (or markup, whichever you prefer) of 23.24%! It is reasonable to refer to this buying and selling system as one method of what you call 'broking'. This is nothing against Bordeaux Index, it is a similar model to that operated by a number of the biggest merchants - which is likely the reason WHY they are the biggest merchants!

    The Wine Investment Fund (TWIF) charge private investors a subscription fee of 5% AND an annual charge of 1.5% per annum AND 20% of returns at maturity.

    EVERY single Negociant in Bordeaux charges a flat 20% margin on wines upon EP release (of which a very small percent goes to the Courtier). Are THEY overcharging?

    Also, your "average investment case" is valued at £5,000! This is a highly debatable 'average'.

    This tirade is going to become extremely boring if you continue to angle an arguement towards margins, which appear to be the least of the questions Mr Shakeshaft should be answering to (unless of course the wine already has a hefty margin before the fee).

    May I take a moment to remind everyone that there is another aricle on this site where someone claiming to be an ex-employee of Bordeaux Fine Wines (not the first) posted yesterday on their 80% markups - which are clearly reflected in the company accounts. Kenneth Gunlach's behaviour makes Peter Shakeshaft look like Nelson Mandela by comparison.

    http://investdrinks-blog.blogspot.co.uk/2013/04/wwwduedilcom-useful-resource-eg-giving.html#comment-form

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  35. Anon 6th of June,

    Excellent reply and certainly moving the debate forwards, spread margins are clear and absolutely straightforward, however it is irrelevant to the Shakeshaft debate. Vin-X do not operate a spread, they offer managed wine portfolios with an up-front fee of 15%.

    My extremely simple addition to Wine Merchants initial question, was that Shakeshaft cannot claim he only charges a 15% margin to his clients if he charges 15% on top of a wine he has already marked up. He should disclose the mark up and the 15% to his investors if he is as transparent as he says he is.

    I really hope and want to believe that Vin-X only charge 15% over the price they pay for wine and look forward to Shakeshaft ending this debate today, with the right answer.

    If Vin-X have mistakenly omitted this information, they must immediately write to all of their investors informing them they were mislead and offer a full refund plus statutory interest.

    If sadly this is the case then no doubt it will result in Vin-X's expulsion from the WIA.

    Please Mr Shakeshaft end this today.

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  36. Hello , Can some one please tell me how I can find out about my investment with Sanderson Forbes, I am a pensioner, I was told off the guy that sold me the wine ANTHONY SAVVAS That I could make a 11% profit a year I have lost my life time savings to this scam can someone please help

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    1. Anon. I can only suggest that you contact James Temple at EHD bond to see whether your wine is stored in their bond. You should also file a complaint with ActionFraud.

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  37. This comment has been removed by the author.

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  38. Are we to draw the conclusion from Shakeshafts silence that they charge the 15% on top of the wine they have already marked up. I believe the WIA should investigate this and get to the bottom of it or at least make a statement on it. To my mind it must surely constitute a material mis-representation, or am I totally missing something?

    From the WIA code;

    The Aims of the Association
    1. To seek to safeguard the general public against fraud, malpractice and MISREPRESENTATION.

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  39. Does anyone have any further news concerning the fraud investigation being conducted at the moment regarding the conduct of Sanderson Forbes ?

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