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Our ongoing observations about whether the boom has peaked


BigBoldBully

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I have read the thread. I also read the Whisky Advocate pieces by Chuck (no shortage) Cowdery and Fred (yes shortage) Minnick. I have no idear whether the bubble is growing or is leaking or is close to popping.

Maybe bourbon (well, the wider category of "American style whiskey") will go the way of premium vodka. Ten years ago, new brands were regularly popping up all over with special stories (made in ice caves by elves), novel bottles (skulls, frosted, skinny, hexagonal), etc. THEN, when vodka sales flattened, "flavored" vodkas became the rage (why make a Cosmopolitan when you can pay twice as much for a cranberry infused vodka????). I drew the line at pineapple (I can make it better with vodka and pineapple and avoid the chemical taste).

THEN, I read in, I think, WA, that scotch prices on traditional brands have sort of peaked (except for limited releases) and that scotch companies are now offering "new" mid-shelfers with fancy names in order to attract "new" customers. Does this sound like the Orphans? Same holding company, different spirit.

Best as I can tell, right now in bourbon we have sort of a combo of "new" brands with special stories, supposedly limited release, and also "flavored" competing with each other.

Perhaps Murphy's Law applies to bourbon like it does/did to computing power (one can only hope), and the shake-out that occurred in vodka over that ten years will take less time in bourbon. That means some of those "special" or "orphan" or "Limited" or "Experimental" releases will languish on the shelves just long enough for the producers to move on to another marketing strategy.

If my surmise is correct, I'm ready. I already have a short list of craft distillers whose young products and honest attempts to produce them have impressed me. I hope some of them survive the shake-out, and I do my best to spread the word so that they have a better chance of doing so. In vodka, a telling sign was Smirnoff starting to sell, widely, a 100 proof vodka. I don't think they'd have done that unless their potential consumers were looking elsewhere for satisfaction. In bourbon, even Beam is promoting a BIB and bumped the proof on its rye from 80 to 90. (Can a return of 100 proof Overholt be in the planning stages?)

Finally (yeah, I know you wanted me to wind it up), compared to real wine and craft beer, bourbon has been a bargain for years. So, now, OGD BIB is bumped to WOW!! $22 a 750? I get 12 or so drinks out of a 750. That's less than $2.00 a drink. Find me a $2 beer or a $2 glass of wine. AND, I like OGD better. I can live with a marginal increase in price - it is still a bargain for me.

Yeah, I'm accommodating to the changes in the bourbon market, but I do have a fear: If the bubble bursts in the next five years, my liver is in mortal danger.

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In addition to the comments raised, I think the cultural picture has to be considered.

In a balanced non-bubble situation, people's expenditure on other goods would be increasing such that their whiskey expenditure would be the same small portion of their outlays as it was historically.

I bought my first $425 bottle today. Three generations of my family probably have never spent the same amount as a car payment on a bottle of whiskey. That's new. That has changed.

...and it can just as quickly change again. Any disruption to the nation could cause a sudden and sharp change in values. Whiskey is a luxury and a decadence. Especially expensive whiskey. Should we have another depression or something even on half that scale, people lining up to pay $300 for a bottle of Pappy 23 goes away in the blink of an eye. Total conceptual framework reset. At that point, you bet your butt BTAC will again sit on the shelves. That's an example.

It can happen fast, with a shock, or it can happen slowly, like people's concept of whiskey spending has expanded out of pace with inflation. Our grandparents would mostly shake their heads looking at the prices that get paid for limiteds today. Even the ones who bought the vintage Very Very Old Fitzs back in the day would call people idiots for throwing the cash they're throwing at secondary market prices for them today.

The culture had to change for it to be acceptable to build bunkers of (sometimes)expensive, premium whiskey in our own homes. It had to get more decadent. It could just as easily become less decadent, and more critical of those who do what we're doing today.

Have you ever noticed in an old movie when you see the home bar of a rich person? It's got about five bottles of what are now bottom shelf booze. Hipster college kids have 50 bottles now, some over $100 ea.

There is no guarantee that lifestyles will grow to greater decadence, just because they have done for the last 80 years or so. In fact there are many indicators pointing precisely to the opposite.

What will really cause the bubble to burst is when people decide they don't want to prioritize American whiskey anymore. When they are "turned off".

Increasing prices, decreasing quality, increased shelf complexity from too many brands flooding the market, external societal problems that take precedence, something else that pops up to be more of a turn-on, all of these could turn the public off of American whiskey in a NY minute.

It appears that the US public has never been this turned on to it. But history shows the public is fickle, and has never stuck with something forever. Especially as it gets more and more expensive and inconvenient.

As the Boss sang it "nobody knows, honey where love goes, but baby...when it's gone, it's gone, gone."

It's happened here before, in a period even when the whiskey was so good that we now pay dearly just to get a taste of the era.

Edited by The Black Tot
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Still inflating, although I think the speed has slowed up a bit. My evidence:

1. OWA and W12 availability was rarely an issue when I started just a few years ago; in fact being out of stock was the exception rather than the rule.

2. OFBB has gone up at a staggering pace, in 4 years it has gone up $5 a year, when it started at $35. And on the secondary, the current (2014) was going for $80-90. Craziness IMHO.

3. Select other offerings on the secondary are continuing to increase in price (a shared spreadsheet gives you a glimpse at historical prices).

I don't think of ECBP as a measure, since I think that was released when the bubble was escalating (and if we're all brutally honest - it was released WAY underpriced for what it was; so I think the current pricing is probably about what it should be). I also think it will burst in the next couple of years. The market hasn't slow down and taken a deep breath, and with interest rates where they are - when it does, there won't be a lot of options other than to let it play out. Companies are stockpiling cash in record numbers rather than investing, as they expect a slowdown. I think that will be part of the trigger. While the folks spending insane amounts on BTAC and PVW likely will still have the disposable income to do so, I think you'll see overall spending in whiskey decline and interests wane (and potentially a lot of folks looking for a chair when the music stops; hoping to find someone to give them insane amounts for a bottle they bought years ago - with the intention of drinking - but who wouldn't want to fund several months of their whiskey budget for ONE bottle?)

I'm not buying as much as I was before, although that is mostly from a lack of space :lol: And I don't have that many bottles because I was stocking up/hoarding them (I don't have more than 4 of any label, and 75% of my collection are unique labels). I have that many because I see sh!t I want to try, and buy a bottle. And I don't drink often enough :lol:

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Seriously good thread. I think one thing TBT mentions that's worthy of contemplating is the way people spend their money today. Our household income is just above essentially poverty and I'll still drop $60 on barrel proofers occasionally. Whiskey loving older relatives I have that make nearly $100k as a family laugh with incredulity when they hear about > $50 bourbon. Languishing middle class incomes and extremely expensive whiskey don't seem that sustainable.

Oh, and you gotta tell us what the $400 bottle was.

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Oh, and you gotta tell us what the $400 bottle was.

Haha, almost thought I was going to get away with that. Original PA Michter's Sour Mash Whiskey.

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I am new to SB but I have been to many Atlanta-area shops over the last few months and it is pretty crazy how different it is even in that time. There are four shops near me that I visit and it has gotten to the point where I can't reliably find BT on the shelves and ER10 has been nowhere to be found for over a month now. I can find EC12 and Blanton's (some) on the shelves but no OW12, OWA, or pretty much anything else. Basically anything 10 years or older is rare. Every proprietor I speak with has a list for all BTAC, Pappy, and pretty much any other aged bourbon out there and they say it is gone after only one or two calls from that list.

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I haven't seen any BTAC or Pappy for over 4 years around here. Eagle Rare is over $35 and regular BT is almost $30. Heck, even OGD BiB is now over $20.

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I haven't seen any BTAC or Pappy for over 4 years around here. Eagle Rare is over $35 and regular BT is almost $30. Heck, even OGD BiB is now over $20.

Where are you located? I am just north of NYC and those Eagle Rare and BT prices are about standard here. Actually, I've seen some places charge $46.00 for Eagle Rare.

I actually see tons of Pappy and BTAC by me, just sitting on shelves collecting dust as the prices are astronomical. These stores that charge this insane mark up aren't strapped for cash so they figure they can just leave it at that price and sooner or later, some fool with buy it.

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Where are you located? I am just north of NYC and those Eagle Rare and BT prices are about standard here. Actually, I've seen some places charge $46.00 for Eagle Rare.

I actually see tons of Pappy and BTAC by me, just sitting on shelves collecting dust as the prices are astronomical. These stores that charge this insane mark up aren't strapped for cash so they figure they can just leave it at that price and sooner or later, some fool with buy it.

Near Syracuse, about 30 mins east. I remember getting ER for $25 last year. BT was about the same price in some places.

At least EC12 is still $25 (for now...)

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Many interesting opinions and some enlightening comments so far.

I do hope that as time goes on we will use the thread increasingly to report significant changes in local prices and availability (in fact this seems to have started happening already)–modest little bits of concrete evidence that over time will allow a picture to emerge of what is happening apart from our theories of why it is happening or our forecasts of what is coming next. (Not that the theories or forecasts are in any way unwelcome or unenjoyable.)

Edited by BigBoldBully
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Finally (yeah, I know you wanted me to wind it up), compared to real wine and craft beer, bourbon has been a bargain for years. So, now, OGD BIB is bumped to WOW!! $22 a 750? I get 12 or so drinks out of a 750. That's less than $2.00 a drink. Find me a $2 beer or a $2 glass of wine. AND, I like OGD better. I can live with a marginal increase in price - it is still a bargain for me.

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Gotta respond to the beer comparison, since for many years I was primarily into micro/craft brews, and I frequently find myself comparing the value of one type of beverage to another. To me, $12 a six-pack is still a lot to pay, even considering the greater transportation and shelf life issues associated with beer, unless the beer in question is really exceptional. If my math is correct, a 100 proof 750ml bottle of spirits is the etoh equivalent of 21.16 5% beers or 10.58 10% beers. Or, for a specific example, a bottle of OGDBIB=2.45 6-packs of New Glarus Dancing Man ($7/6-pack), which in the beer world is widely viewed as an excellent specimen. That comes out to $17.15 for the equivalent # of standardized servings. Sure, there are lots of examples of overpriced beers these days, but there also many other excellent beers around me for around the price of the Dancing Man. So unless my math is off beer now seems IMO to represent a better value than OGD at least in my area unless the OGD is bought for less than about $17 (it was $13.49 until recently).
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BBB - re: beer vs. bourbon cost analysis -- Yup, dollar for dollar . . . BUT, Everclear is still the best bargain out there if I'm only looking at cost of alcohol.:grin: (Homemade limoncello??? Got a lifetime supply I'm willing to share.:shocked:)

Locally (in WashDC), a six-pack of Devils Backbone Vienna Lager (which I ALWAYS keep on hand) is $9.99 when not on sale, about a $1 cheaper when it is; its price is typical of craft beers available at my local Whole Foods and the liquor stores I frequent. So, I get twelve drinks of DBVL for $20 without bargain hunting. Comparably, @ 2 oz. per neat drink (which I'm pretty careful to adhere to), I get 12.5 or so drinks from a 750 of OGD BIB. It's a wash, pricewise, with the beer since OGD BIB locally is $22 a 750 (or about $1.74 per drink, and that $22 is on the high end - on sale it's $19 lately) but I like it better than beer, anyway, so that up to 25 cent margin favoring OGD is a bonus (although that DBVL is something!!!!). Looking at OGD 114 at $23 per 750 and using 1.5 oz. to account for the slightly higher proof to which I usually add a small ice cube about fifteen minutes before I drink it, . . .

Of course, this is only important if one cares about the price of what one typically drinks.

None of this, of course, should distract from the original question of whether the boom has peaked. You and I are anecdotal evidence that we may be on the crest, if not the downside, of the boom - both of us got here after going through a craft beer phase (although mine lasted from circa 1972 to date - I'm a really slow learner:drinking:). Where are WE going next? Vodka? Don't think so. Other whiskeys? Already there. And, I don't think we are outliers - lots of people here moved from craft beers into bourbon. And, as the international companies tout bourbon (and other American whiskeys) overseas, it may take awhile longer for world consumers to move on to something else than it would if we were only looking at domestic consumers. How long? I dunno - that's why I referenced Murphy's law; it may be sooner than we think. One can only hope.

Edited by Harry in WashDC
clarify the 25 cents is an upper limit
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Everclear is still the best bargain out there if I'm only looking at cost of alcohol.:grin: (Homemade limoncello??? Got a lifetime supply I'm willing to share.:shocked:)

you make your limoncello from everclear too?:toast:

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Harry, your point about the Vienna lager is well taken. I have come to think of most "lower proof" beers as a splurge, since they are often a lot more expensive per serving. You drink two of them compared to one strong beer--and this value consciousness is part of what led me, and probably many others, to bourbon. But I wonder how many of the late-comers are like this. I doubt many. They will leave to chase the next "in" thing. (I have thought for years that would be mezcal. We'll see.) Regardless of the trend followers, if/when desirable bourbon becomes more expensive than alternatives of equal quality or interest, I and others like me will scale way back in our purchases.

Maybe you are right that our own paths tend to signal that the boom is already peaking. My path to bourbon was actually more indirect. I went from craft beer (starting in the mid 90's) to rum, to tequila, to mezcal, to scotch, to bourbon. I had tried bourbon back in college but first impressions were mostly negative, but later I made a mental note to give it another chance once I'd gotten through seemingly more promising terrain. It was with dismay that I learned bourbon was becoming much more popular when I finally turned my attention back to it. All this time I thought I was just marching to the beat of my own drummer, and partly I was, but a big initial motivator was how tired I had become of the overheating beer market--and that may be a common denominator.

Perhaps if many others weigh in on the reasons they got into bourbon, and what it would take for them to (at least mostly) get out of it, that would provide another significant source of information in figuring out where we are in the cycle.

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Nice summary, BBB. And, thanks for starting the thread. I think you are on to something re: figuring out where we are in the cycle. Like TBT, et al, I've thought about this some but haven't focused. I'm intrigued about where the bourbon mania may go on the consumers' side. Getting hints will tell me what to bunker.:cool:

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Perhaps if many others weigh in on the reasons they got into bourbon, and what it would take for them to (at least mostly) get out of it, that would provide another significant source of information in figuring out where we are in the cycle.

I didn't start drinking alcohol until I was 35. Just never bothered to start. I had my vices in other directions. It did me the favor of saving my liver for the better stuff later in life. I took to alcohol famously and quickly found a focus in sipping rums (many of which now have been revealed to me as sugared and ethically shameful - I have seen the light).

I started dabbling with bourbon because I was driving through Kentucky a fair bit and I had stopped in to Willett and BT for tours, and I decided I wanted to figure the category out. I started buying clumsily and randomly all over the shelf (more misses than hits), and I started reading around on the net. I joined SB.com.

PHC7 pretty much blew my doors off, and it just went supernova after that. I'm a pretty OCD kind of guy, and once on a mission, I'm pretty hard to stop. The more I learned about the state of the industry and the boom, the more I realized how much harder I had to hustle d/t starting late and with the door to Aladdin's cave closing. Hundreds of bottles later (bought, tasted, compared, and the favorites stocked up - not finished!, haha), I have hustled pretty seriously hard, and spent a great deal.

So you could say I got into it hard because I learned a little late in life that it was awesome, and that we were in the midst of a groundswell of demand for it which meant I had better hurry.

I hurried.

What would it take me to get out of it? I'll never be out of drinking American whiskey, but I will drift in and out of buying it. I built a big bunker to retreat to and sip on slowly. I got my share of higher aged whiskeys because I like that oak bomb thing and I know that's what's going to get tougher and more expensive for the next while. I don't have a room full of National Distillers dusties or a closet full of BTAC, but I've tasted it and I own my faves, and what I've got will make me happy for years to come. I grit my teeth and paid through the nose for some of it, knowing that it was going to be more expensive 6 months from now, or else completely unavailable. It was. I made a few goofball mistakes, but also made some good calls, and had more than my share of dumb luck.

The stuff I have left to buy isn't under any production pressure. Stuff like regular Whistlepig. I like it, and it isn't rare, dusty, or an endangered species. I know the marketing is ass and the price could/should be better, but it just resonates very well with me. I resisted it for quite a while, but it's won me over.

So I'm just putting a few low pressure finishing touches on my bunker now. Mopping up. Filling out some of the commonly available (but nonetheless excellent) flavors. Preparing to put the storm shutters on and let the young 'uns try to fight each other and forage around in the snow of a wintery market. I'm ready to not buy for a few years save for the odd special release that I don't have to wrestle too much for like PHC. I'll buy some of these limiteds just to drop in on my store managers, whom I've grown to like. I'll participate enthusiastically in barrel picks when invited, and pick up the odd store select. My sense of contentment has comfortably outgrown my whiskey nervosa.

I'm admittedly also a little hawkish about things. I want more BTAC/etc like most of the rest of us, but I'm not paying $300 for bottles that get made every year. I'll start buying them again when the proverbial blood is in the streets. Some people think that will never happen again, but history tells us other things about discretionary spending booms. I can wait. I can wait years.

So I guess I AM mostly out of it. I did the heavy lifting over the last year. In January I returned from a road trip with a car so full of bourbon that I was worried my tires would rub against the wheel wells. Now I can just dabble around for fun, and when I need a special bottle on demand, I'll unlock the bunker.

Which isn't to suggest I'm going anywhere - I love this site and the great people I've met here! I'll probably still be here for bubble 2.0 !!!

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So I guess I AM mostly out of it. I did the heavy lifting over the last year ... Now I can just dabble around for fun, and when I need a special bottle on demand, I'll unlock the bunker.

TBT's experience parallels my own to a great extent. I especially agree with the statement quoted above.

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many others have made far better observations than i will but i think many people on this forum have the palate and the bunker to weather this current crisis. and from many of the current posts, it sounds like more and more people here are doing exactly that. passing on many, if not most "limited" releases. working harder to find the daily pours they want and stocking up when the price is right.

i think we still have a few more years of this craziness. people hoarding anything remotely resembling "rare or limited" without any knowledge of the product. labels riding the coat tails or previously great releases (the oregon black maple hill comes to mind - at $90-100 no less). while all of this is selling out currently, that won't happen forever, and when it does more and more whiskey will be sitting around, aging and waiting to be sold.

for now, i am very grateful f to this community for helping find the value in many many great bottles that are reasonably easily available

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I wish I could say I had bunkered my favorites by now. I buy a few bottles per month and finish them rather quickly. Having a mortgage and associated expenses has killed any chance of me hoarding anything, much less whiskey. I am way behind the curve here.

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I did some inquiries on Google Trends and while there is definitely an uptrend, it is fairly steady. The peaks are in Decembers (gift shopping, I guess):

post-12398-1448982214233_thumb.jpg

For Pappy:

post-12398-14489822142707_thumb.jpg

For "bourbon shortage"

post-12398-14489822143072_thumb.jpg

And for good measure here is a comparison of scotch and bourbon:

post-12398-14489822143296_thumb.jpg

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i think we still have a few more years of this craziness. people hoarding anything remotely resembling "rare or limited" without any knowledge of the product. labels riding the coat tails or previously great releases (the oregon black maple hill comes to mind - at $90-100 no less).

Thank goodness for Jefferson. Keeps them away from what I like to drink. :grin:

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This entire thread has me kinda scratching my head since the beginning. On the one hand, these "hipsters" are being derided for "getting in and moving on", while folks here are explaining/justifying how they have, would or will do the same thing...I don't see a difference.

I'm not meaning to sound standoffish, but as an enthusiast you either like to drink, discuss, explore, learn, and experience Bourbonia, or you don't. This treating it likes it's some sort of "phase" that one is going through, frankly sounds rather superficial.

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I am way behind the curve here.

Firstly, there isn't just one "curve" to be behind. Everyone sets their own goals for what type of target lifestyle they can reasonably achieve. Everyone sets their own curve.

I've got some great bottles, but I can't play in the Rittenhouse 25yr and the Willett 20+ yr gang. I'm not behind their curve - I've decided that's not going to be my curve.

Limiteds are an extreme example of the law of diminishing returns. To make your bourbon a little bit better than the best low and mid shelfers you've got to put in a LOT more time and money.

If you're drinking the OWAs, the OGD114s, the EC12s, the Sazerac ryes, the HHBIBs, the 4Rs, the ETLs when they can be found, the RittBIBs, and others like them, you're not really behind much of any real curve at all. And all of those are in reach and readily available with a little timing and maybe 3-deep bunkering on a few of the $30-40 bottles (ETL, I'm looking at you).

If I were starting right now, I'd run out and buy a bottle or two of all of these awesome drinkers (all of which are my primary drinkers anyway!), and I'd wait for the limiteds to come back down to earth. That's kind of what I'm doing now anyway. I still get caught by the odd impulse buy on the limiteds. But I've made other sacrifices (I rent an apartment instead of owning a home, for example), so in that sense I'm behind YOUR housing curve, for example - if that was the curve I was after.

Are SOME of the limiteds better than the above? Sure they are. But when you invoke the word VALUE, it's gotten to the point where it's almost a question of how much you want to allow yourself to get screwed for that bit of extra flavor. I respect anyone who focuses on the mid or lower shelf for any reason (and I'm one of them for 90% of my drinking sessions), be it value or necessity. Something's got to be pretty damned special to make me part with more than $100 these days. It's happening less and less with each passing month. Most people who have drank these limiteds will tell you that.

Last year about this time I would have fallen over myself to get a 15yr IW Harper and a Blade and Bow. This year I'm scoffing at them, boycotting d/t a lack of sufficient proof. They don't care about me as a customer because for every me there are 100 new guys out there who will slug it out to buy one. But the new crowd seems to be different. They seem to be more rabid about the acquisition and show little to no appreciation for the consumption experience, unless it is the CONSPICUOUS consumption experience, which is another thing entirely. I was never a "collector" - I always and still intend to drink every bottle I have purchased. But there seem to be more and more collectors and traders now, virtually clutching at their blue books. THOSE are the guys who push the bubble to bursting, and their push is accelerating at a pretty disturbing and easily visible rate. These guys are fast becoming "the curve", and it's a curve you don't want to be caught up with, anyway.

Whiskey is but one facet of a lifestyle. The only curves you can get behind are the ones you set for yourself. When one becomes untenable, draw a new and more comfortable curve. You're holding the pen.

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This entire thread has me kinda scratching my head since the beginning. On the one hand, these "hipsters" are being derided for "getting in and moving on", while folks here are explaining/justifying how they have, would or will do the same thing...I don't see a difference.

I'm not meaning to sound standoffish, but as an enthusiast you either like to drink, discuss, explore, learn, and experience Bourbonia, or you don't. This treating it likes it's some sort of "phase" that one is going through, frankly sounds rather superficial.

Everyone goes through phases of development in a hobby, specialty, or interest. Some people transition to other hobbies once they reach a certain level, wishing to master something else. They don't lose what they have gained from their education in the previous hobby. It's not superficial, it's choosing a new area of interest when one hits what they consider to be the plateau that satisifies them.

I can only speak for myself - I'll always be drinking American whiskey, but as I said above, what will change is how active I am in the marketplace, based on where the value is at. When too many people start fighting for too few resources, I'm going to pull back for a bit. I'll be back buying when the value gets better again.

Edited by The Black Tot
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