My coffee affliction started after we had our first child, Renzo (now 3.8 years old), and I visited with a friend to experience his newly arrived espresso machine from Italy. I was always a green tea guy until I had his meticulously concocted 18 grams of freshly roasted Vivace pulled through the machine at exactly 199 degrees Fahrenheit to produce exactly 22 grams of ristretto espresso. After six trips to Italy and two years in Seattle, I thought that I knew what espresso should taste like, but at that moment I tasted something completely foreign. Until then, espresso for me was just a more concentrated and more bitter coffee. On that day, I fell in love with â€śliquid goldâ€ťâ€”a creamy yet oily emulsion not found at even LAâ€™s best Italian restaurants or cafes. I quickly asked for another and took notes on all the science involved with pulling the perfect shot. I was hooked.
Immediately thereafter, I began staying up late nights learning all that I could about espresso and espresso gear, and then shopping for espresso machines and grinders. After going through two machines, I finally invested in a stainless steel double boiler that I imported from Italy and plumbed into our water line. My wife, Mia, has been more than supportive of my new habit. First, sheâ€™s Italian (/American). Second, she loves to sleep in. With my machine automatically heating up at 5 a.m., she knew that I would jump out of bed and race down the stairs in order to enjoy my coffee indulgence before Renzo (and now also Massimo of 1.5 years) started moving. My coffee fascination has become a win-win proposition for the whole family!
Crafting the Right Balance
Of course, it didnâ€™t stop there. After sampling beans from micro-roasters all over the country, I soon began roasting my own beans for ultimate control. First, I learned the nuances of roasting different single-origins. I discovered that I liked my Sumatran beans just before â€śsecond crackâ€ť in a â€śFull City+â€ť roast. Then I learned that if I stopped my Ethiopian beans just after â€śfirst crack,â€ť my â€śCity+â€ť roast would bring out the beanâ€™s uniquely fruity, berry-infused acidity. Then I learned about roasting â€śMonsooned Malabar,â€ť an Indian bean that, if roasted correctly, can be as creamy and chocolaty as hot cacao with fresh crĂ¨me. And then I started blending them all together in different combinations of complementary single-origin beans and roasting characteristics. Once I started blending my coffees for friends, I realized that my passion for creating the perfect cup is not too far off from that of structuring the perfect investment portfolio.
Where is all this going, you ask? Well, once a portfolio manager, always a portfolio manager. Whether I am meticulously blending and balancing exotic beans from the far reaches of the globe or structuring investment portfolios with a tailored mix of stocks, bonds and alternative investments, the joy is the same. SB Capitalâ€™s investment strategy has always taken a â€ścore satelliteâ€ť approach. In the â€ścore portfolio,â€ť we blend globally diversified stocks and bonds with less macro-economically influenced â€śsatellite investments.â€ť Asset classes and satellite investments complement each other, making for a smoother, more special brew. Indeed, adding student housing, peer-to-peer lending and perhaps a portfolio of secondary venture interests to a core portfolio of stocks and bonds is kind of like adding lightly roasted Yemeni and a medium roasted Kona to a darker Javanese core. For me, it is part puzzle, part art. And just when one thinks the combination is perfect, a complementary addition is newly discovered to be worthy of adding to the mix. And itâ€™s not just me. I may be the only one here roasting green coffee beans, but it is with both care and gusto that the entire SB Capital team approaches portfolio management and diversification.