Mistress Inflation: The Hermes Crossbody Bag is in Play

By: Todd M. Schoenberger, @TMSchoenberger, @JonesFallsPub

Ah, the holiday season.  The time of year for some of you to make your list, while being extra careful who checks it twice.

For those who find that loving feeling with someone other than the spouse, it’s time to pay up.  No, I’m not talking about divorce, alimony, child support, etc., etc., etc.; I’m talking about the gift for the mistress.

Oh no.  Or is it, oh yes.

Regardless of your morals, religious commitments and yadda, yadda, yadda, the mistress is expecting a present worthy of, you know, epic appreciation.  So, if you even have the resources to take on a mistress, well you’d better pony up if you want to keep her smiling.

And, I’m talking diamonds and luxury items—not a new Dyson.

It wasn’t always this way for the secret lover, though.  The Great Recession a few years ago meant great disappointment in terms of gift-giving for the lady on the side.  Men generally stayed away from having a torrid love affair, and opted to be the wholesome man everyone thinks they are, rather than getting trapped into paying thousands of dollars on gifts from Hermes, Bulgari or Prada.

But times, they are a changing.  The GDP report released Thursday morning shows the economy grew at a very healthy 3.5 percent, and the guy who recently won the Presidential Election is likely to bring the roaring 80’s back to the USA.  Reagan 2.0 will lead to the ultimate proxy for a healthy economic environment: Spending on a mistress.

Men are going all out this holiday season for their lovers, as many feel more confident in their personal economic situation.  Like one Wall Streeter who, obviously, spoke on the condition of anonymity said to me: “My girlfriend isn’t stupid.  She watches FOX Business.  She knows what the market has done since the Election and is expecting a luxurious gift and a Vespa.  Good thing my wife only watches The Today Show.”

Unfortunately for some of you out there, AshleyMadison.com is no more.  The company completely rebranded itself from a service promoting infidelity into an innovative, open-minded dating service company, named Ruby Life.  Open-minded still seems to be stepping over a line, but that’s a topic to tackle at another time.

Ashley Madison did leave us with some excellent metrics, however, before shuttering.  In a 2014 survey, the company was able to obtain some excellent subscriber data on mistress spending during the holidays.  And, the numbers are definitely an “eye” opener.

According to the former company, the mistress always receives the “best” gifts.  Men generally spend under $100 on wives, but well over $300 on mistresses.  And these same men are 47 percent more likely to buy their mistress diamonds and luxury items than their brides.

Brutal!

And what’s worse for the wife is men are 35 percent more likely to buy their spouse items of necessity: tech products, cleaning supplies, an ice scraper for the car; whereas, the top mistress gifts are expensive jewelry, sexy lingerie, fashion accessories (can you say Hermes Crossbody Bag), technology and vacations/getaways.

No wonder AshleyMadison.com would experience a huge spike in new registrations following the holiday season!  I suppose the wives wanted to flip the role and receive luxury items next season.  Makes you wonder which company will fill the gap and step in to fulfill this much-desired service.

So being a former Wall Streeter (no, that is not my quote above but it wasn’t hard to get a former colleague to spill the beans!), let’s talk about making money.  If anybody has the chutzpah, I’d suggest launching a hedge fund investing in “lover stocks.”  Here’s a couple to consider.

Hermes International (EPA: RMS) has the hots for profits.  The stock has hearts a flutter with a pop of 24 percent in 2016, and the company’s leather-goods and saddlery revenue rose 15 percent over the summer, beating the 12 percent consensus.  The company, as most luxury retailers, did experience a slowdown worldwide this year, but this drop presents a perfect opportunity for the future: Rapid growth.

And with the success of the stock in 2016, many investors are looking at Hermes as a long-term play as discretionary incomes rebound, thus enabling purchases of high margins items such as silk scarves and ties.

Next up has to be Tiffany (NYSE: TIF).  The stock is up a toe-curling 27 percent in the prior six months and is expected to continue its upward trajectory leading into 2017.  Tiffany’s third-quarter earnings release showed sales increased 1 percent, however, on the bottom line, net income rose 4.5 percent to $0.76 a share.  Seeing the luxury market growing is another bullish signal for companies like Tiffany.

It should also be noted how 90 percent of sneaky men prefer to pay for their mistresses’ presents in cash to avoid the incriminating paper trail.  So, cash is king (and private) for some of these luxury retailers, like Hermes and Tiffany.

There you have a couple of investment ideas to tie you up and consider for your infidelity investment portfolio.  Happy holidays and seasons greetings to you, your wife, your mistress, and probably your soon-to-be divorce attorney!

Disclosure: The author does not own the stocks mentioned in the article and has never been a member of AshleyMadison.com.

Spoiler Alert: Santa Claus prefers Wine over Cookies

By: Todd M. Schoenberger, @TMSchoenberger, @JonesFallsPub

Yeah, the holidays.  The wonderful time of the year when we force ourselves to have conversations with family and artificially act like we care.  Other than hearing the occasional entertaining tale about a cousin having an affair with his nanny, most stories are a dud.

But, thank God we have booze to get through it!

Alcohol aficionados like to point out the celebratory mood of many as being the reason for a pop in consumption as we close out the year; and that may very well be.  But one thing is for certain: Regardless of the reasons, people love to drink during the holidays, and wine seems to be the beverage of choice.

The wine industry has never been stronger as revenues are soaring.  Sales of vino in the United States reached an all-time high of $38 billion last year—a 1.3 percent increase from 2014, according to J. Gordon at Wines and Vines.  And despite the ancillary economic headwinds, such as fluctuating stock markets, global growth slowdowns, and immediate shifts in appetites and trends, the wine industry will likely post another 1- to 2-percentage point gain in growth in 2016.

The only lost metric for the industry is the ‘on premise’ statistic, which shows sales of wine in restaurants and bars remaining relatively flat.  Dollar sales were up 0.1 percent, but volume was down 4.1 percent, according to Guest Metrics.  Regardless, this lone piece of data simply proves consumers would rather purchase bottles at the store and drink while relaxing or entertaining at home.

Or, they prefer to order online.

The fastest growing metric for the wine industry is the Direct to Consumer Shipping.  According to ShipCompliant, revenues hit $2 billion, which is an increase of 8.1 percent from 2014, with 4.2 million cases shipped.  Still, though, this part of the industry is at its infancy stage and only represents 1 to 1.5 percent of total wine sales in the United States.  The average bottle price is $38, and wineries can now ship directly to 43 states.

With all of this fantastic data, one has to wonder how to invest and profit in an industry that brings so much joy to others.

Naturally, there are several publicly traded companies to help quench that thirst for wine investing.  Stocks like Andrew Peller (ADW.A), Constellation Brands (NYSE: STZ), and Willamette Valley Vineyards (NASDAQ: WVVI) are popular choices, but the big winner is The Wine Investment Fund.  The hybrid hedge fund, based in London, has discovered a way to—as it says—invest in some of the finest wines in the world in order to maximize returns.

The Fund has solidly performed.  Starting in March of 2004, the fund has posted a gain of 148 percent since inception and has published a 2016 year-to-date return of 15.68 percent, through October.  If investors are nervous about actually investing in wines themselves, or simply don’t feel they have the expertise to make a sound buy, The Wine Investment Fund allows investors to simply make a capital distribution in exchange for exposure to some of the best wines in the world.

And, why not.  After all, some so-called favorable wine investments are more fun to drink than to wait and see if they increase in value.  The WIF figures that certain fine wines, of limited supply, do not increase in value in a linear fashion, but in short bursts over time.  As that wine stock is reduced, the value is increased.  The firm calls it the Price Step Theory.

Investing in this type of a fund also makes sense when you begin researching prices of expensive wines.  Take a look at this list of the world’s most expensive wines, as per CommodityHQ.com:

• Henri Jayer Richebourg Grand Cru: This wine comes from Cote de Nuits in France where the average bottle goes for $15,185. These bottles have even sold for as much as $47,059.74.
• Domaine de la Romanee-Conti Romanee-Conti Grand Cru: Hailing from the same French region, these bottles have an average price of $12,972 with a max of $188,336.
• Henri Jayer Cros Parantoux: Another French creation, the average bottle price for this wine falls at $8,665 with the max price topping out at $23,011.
• Domaine Leflaive Montrachet Grand Cru: And, yet, another wine from France that fetches $5,505 for the average bottle, with its price maxing out at $9,554.
• Egon Muller-Scharzhof Scharzhofberger Riesling Trockenbeerenauslese: If you hadn’t guessed from the name, this wine hails from Germany and averages $6,826 per bottle with a nice max price of $15,105.

So there you have it folks.  The holidays are great for many, but even better for wine lovers.  And, as Santa likes to say: “Pour more wine and drink your beer, Christmas comes but once a year.”

Disclosure: The author does not own any positions in the stocks mentioned in the article or The Wine Investment Fund, but will most likely partake in the consumption statistics.

College Football’s Army of Volunteers take Control

By: Todd M. Schoenberger, @TMSchoenberger, @JonesFallsPub

Historians will look back at 2016 as the year of the people.  Political junkies will prefer to describe how absolute power had shifted from the Democrats to the Republicans this year, but our changing ways are much more emblematic than something this simple.

People have decided to take the necessary steps to regain control.  Control of their lives, control of their futures.  Those with power took one too many bites from the proverbial apple and pushed the public a few too many times.

And you would be naïve to think the ‘power to the people’ shift ended with the Election.  It’s likely just beginning.

The most recent example of this is the activity taking place at the college (amateur) football level.  Several marquee athletes—those with extremely bright futures in the professional football league—are voluntarily deciding to skip their team’s upcoming postseason bowl game and have chosen to focus on their primary goal: Increasing their position in the April 2017 NFL draft.

For those not in the know and boycott ESPN because you believe it poisons today’s athletic youth with those goofy X-games, a player’s rookie contract value is determined by the pick they are selected in the draft.  For instance, a player selected fifth overall will likely receive more money than the guy picked tenth.  Therefore, it makes perfect sense to concentrate on making oneself better by focusing on fitness and skills rather than participating in what is really considered a meaningless game.

But don’t tell this to those with a vested interest in getting (i.e., forcing) its army of volunteers to play in a league that severely restricts its players from earning and receiving money regardless of the hundreds of millions of dollars spread amongst its participating teams.  College football is not the minor leagues for the NFL; it is its own industry and it’s an economic juggernaut.

According to Forbes Magazine, all—not many—but all teams in the Power Five conferences (ACC, Big Ten, Big 12, Pac-12, SEC) produce tens of millions in profits every year.  The University of Alabama football program, which is highly considered the favorite to win its fifth National Championship in the last eight years, receives nearly $82 million in revenue with expenses of $37 million.  Apple doesn’t even boast this kind of profitability.

Think that’s impressive, the University of Texas Longhorns received nearly $104 million last year with only $26 million in expenses—and they won’t even be playing in a bowl game this season.  Incredible.

With all this money being splashed around, the casual college football observer may be of the belief that some of these players are sporting the finest clothes and backpacks while trekking over to PolSci 101 class.

No chance.  None of this cash makes its way down to the player level.

To be fair, though, the players on these teams do receive economic benefits in the form of free (or partial) paid tuition, free books, free room and board, and free team meals.  And, anybody raising a child fully understands how out-of-control college expenses can be.  But the end goal, as many of these parents will attest, is for the child to graduate and obtain a job with a higher-than-average wage.

Please tell me if there is a better paying job than that of being a professional athlete.

So when the student-athlete opts out of his extracurricular activity and decides to give all of his attention to increasing his stock value by removing the distractions of the team, then why are people up in arms about it?  The answer as it always is with anything, is money.  It’s always about the money.

Oklahoma University star defensive lineman, Charles Walker, didn’t even wait until the end of the season to say so long to his team to prepare for the 2017 draft.  With two games remaining on the schedule, the player went to his coach, Bob Stoops, and said he was leaving the team.  But rather than wishing his player the best of luck and thanking him for his sacrifices to the University, the coach responded with a vicious parting shot.

“Quitting on your teammates is hard to take as a coach,” said Coach Stoops to The Oklahoman.

Really?

Funny because I wonder what the players from the University of Houston thought when their coach, Tom Herman suddenly bolted for the same position at the University of Texas, before the season ended.  The Houston Cougars still had a bowl game to play, which they lost 34-10 to San Diego State in the Las Vegas Bowl.  Yet, Herman said ‘thanks for the memories’ to the young Cougars and inked a contract that will pay him $5 million a year.

And, yet, we have some of Herman’s own colleagues villainizing its free labor participants for choosing to do the exact same thing!  University of Miami football coach, Mark Richt, addressed the ongoing conversation about skipping bowls for the NFL draft by saying it’s “sad.”

“I think it’s sad, personally.  Everybody is counting on each other.”

I agree.  Everybody is counting on each other.  But it does seem in such a rich and vibrant industry, known as NCAA football, a select few take care of their own.  And when the power begins to shift, change tends to occur.  If the idea of skipping games and vacating teams becomes a stable trend, don’t be shocked to see the NCAA begin to reverse course and begin some sort of profit-sharing program for players.

I don’t know what the answer is or should be, but it seems like common sense to permit a student-athlete to put themselves in the best position possible to obtain their dream as a professional.  If that means a share in the money made, which balances the power between the parties, then I bet the league will become even more valuable—and entertaining—then it already is.

Jones Falls Editor Todd Schoenberger – Media Reel

Todd M. Schoenberger Media Reel – Fox News, Fox Business Network

The Week Ahead: December 19 to December 23, 2016

12/19/16: The count down begins in a special “Holiday Edition” Week Ahead!

The NFL attempts to Squeeze Water out of Bricks

By: Todd M. Schoenberger

The 8:00 hour for ESPN’s award-winning morning radio show, Mike and Mike, is primetime.  More listeners tune-in for that hour than any other during the four-hour banter about sports, which is typically interrupted by questioning guests during provocative corporate-sponsored interviews.  If you like to listen to people debate sports, and don’t mind the occasional clashing commentary about your team, then the show is a must tune-in.

As you can expect this time of year, the NFL is Topic A on sports talk radio.  Shows like Mike and Mike will spend countless hours examining potential matchups and analyzing prior games.  They’ll dissect and scrutinize every metric just to fill-in time prior to the next game, and repeat the cycle the following week.  But once in a while, NFL stories take a turn and cause us to wonder why any of us really give a damn anymore.

For seventeen solid minutes of Mike and Mike’s 8:00 broadcast today, the story was about Thursday night’s game between the Minnesota Vikings and Dallas Cowboys.  Close to the end of the game, Minnesota’s quarterback, Sam Bradford, was hit in the head during a failed two-point attempt.  A penalty should have been assessed against Dallas, giving the Vikings a second chance at tying the score.  Rather, no flag was thrown and Dallas prevailed 17-15, and likely pushed Minnesota out of serious contention for the playoffs.

Whether or not a penalty should have been assessed isn’t relevant to this writer.  But what is, would be the discussion about why the NFL continues to permit mediocre officiating during games in its multi-billion-dollar industry.  And, just like that, NFL fans have the answer.

It’s about money.

If you think watching an NFL game is difficult with the constant interruptions of penalties, video reviews and commercials, being in the stadium is even worse.  Unless you’re being entertained by stunning cheerleaders or Frisbee-catching dogs, sitting in the stands during these so-called “breaks in the action” is torture.  It seems sticking hot pins in your eyes would be more fun.

At least when a fan watches the game on television from the comfort of their own sofa and use of personal facilities, the frustrated viewer can still take part in reviewing commercials.  Grant it, most of the commercials these days aren’t the ones our fathers used to watch.  It seems the ‘great taste, less filling’ Miller Lite ads have been replaced with spots for Viagra and Cialis, which is clearly a wonderful topic to write about next time.

For now, though, could the sub-par officiating be purposely manufactured by the league that owns the undisputed championship in all of sports, the Superbowl?  The answer is an absolute yes.

NFL owners love the missed calls and week-long debates about incompetent referees.  For every time a call has to be “reviewed,” the network televising the game breaks for a commercial.  And every commercial increases the value of future television contracts.

The league is currently in a $3.1 billion annual contract amongst the broadcast networks (ESPN, home of the Mike and Mike show, is responsible for $1.9 billion of this deal).  CBS has a separate contract to broadcast Thursday night games, which is valued at $275 million.  And DirectTV started a new eight-year deal this season, valued at $1.5 billion a year.

All of this money is divided equally among the 32 NFL teams, and the league’s owners can only expect the numbers to continue to rise.  The NFL doesn’t care, anymore, about the fans in the stands.  They just want you tuning-in, and continue to gripe about how certain officials prevented your team from winning the Lombardi Trophy.

To illustrate this, the league is about to go on a hiring spree.  It plans to add 17 full-time officials to the payroll.  Referees are currently considered part-time, and most have other occupations outside of football.  But in this case, the owners want the public to think they are concerned about the integrity of the game by keeping refs employed year-round.

I suppose off-season continuing education will help officials make the proper call during games?  Yeah, that’s not going to happen.

The best part about this latest and greatest NFL plan will add an extra referee to officiate games, increasing the size of crews from seven to eight.  Now we have one more flag-happy fella to help networks jump to a commercial.

If you think that’s bad, the idea (which is under serious consideration to be implemented in the 2017 season) of reviewing missed penalties should make the fans rethink their sporting passion.  If the rule was implemented now, the missed call in the Minnesota/Dallas game would have gone to a review.  Think about it: Considering every play has some sort of penalty—whether called or missed—could result in a review.

And, you guessed it, another network switch to commercials for your viewing pleasure.

Fans will end up watching four hours of commercials with limited cut-ins to football action.  I know I can’t wait to be re-introduced to a Bob Uecker Miller Lite commercial where he says in the middle of a great taste, less filling debate: We’ll be right back after this break in the action.