Oh no! That's rough. Any advice you've extrapolated from these experiences that you can leave our readers with?
So for the physical assets, how you can actually make money is by understanding where profit comes from. For a stock, it's simple. You buy a stock, it rises in value and that's how you profit. But when you're investing in alternative assets, like art or wine for example, where does the profit come from? From a macroeconomic point of view, the profit comes when your money makes the supply chain more efficient.
Let me give you an example. Let's say that there is a winery and they have produced a batch of wine barrels. Now all the wine, it is money, is stuck in those wine barrels, which now have to sit in a warehouse on which they have to pay rent for the next four to six years and wait for the wine to mature, which means that their money is stuck for six years. It's very capital inefficient. Now as an investor, if we can buy those wine barrels at that moment, we buy it off their hands. They get the capital, they now have the money for the next lot of produce and an investor can bear the cost of keeping the barrel in a warehouse and pay the rent for the next couple of years. That's when the price of the wine is rising a lot because it's maturing at that time. So the addition of capital made the supply chain more efficient, and that's how profit is generated.