Your insight has repeatedly been extremely enlightening - whether it's planning a trip to Napa, figuring out a buying strategy or fighting over baseball with JCock or Old Man Board-O, it's been great. So thank you.
And here's another one.
My collection has climbed to about 200 bottles over the last couple years (damn, I just realized I could have bought a boat with what I have spent) but now I am interested in checking out buying for profit long-term. I am only 28 so I have some time and wouldn't mind playing around with it to see if I can supplement my income eventually (hoping that the contruction law market returns and I have a primary income at all!).
I am guessing I am going to get killed from some of you for even posing this question so I apologize to those of you who are offended.
Last week I got a great deal on a couple magnums of Fontodi Flaccionella and jumped on them. My question is how much wines like this, as well as other high profile wines, will appreciate over the next 5, 10, 20 years if at all. I am not interested in buying $300-$1000 bottles. That said, where is there wise investing to be had in the $50 to $200 range?
I'm sure some of you have experience with this and I would love to hear your input.
Thanks
PS- I am also interested in colelcting for future trades.
I have nothing against collecting for profit, but I wouldn't actually set out to do it.
Think about it. You want to try to profit on something that is sensitive to heat and light, and packed in a breakable container.
Buy Apple instead.
-------------------- "One may dislike carrots, spinach, beetroot, or the skin on hot milk. But not wine. It is like hating the air that one breathes, since each is equally indispensable."
Marcel Ayme`
Posts: 6930 | Location: The Left Coast | Registered: Dec 01, 2001
It's up to you of course, but consider the risks and expenses associated with collecting wine for a profit.
You might wish to consider continuing to buy for your own tastes, while keeping the concept of selling the wines at a profit in the back of your mind. In other words, only buy wines that you would enjoy drinking if no one else wanted them or if they didn't go up in price. Track the values of your purchases, and don't be shy about selling some if they have increased in value.
Originally posted by Rothko: It's up to you of course, but consider the risks and expenses associated with collecting wine for a profit.
You might wish to consider continuing to buy for your own tastes, while keeping the concept of selling the wines at a profit in the back of your mind. In other words, only buy wines that you would enjoy drinking if no one else wanted them or if they didn't go up in price. Track the values of your purchases, and don't be shy about selling some if they have increased in value.
Rothko,
That's pretty much the plan. For instance, I am just not a huge Bordeaux fan (yet). I prefer New World (which I have no interest in buying to flip down the road at all), Spanish and Italian wine. I would be more prone to taking this approach with the Italians that I enjoy, leaving open the opportunity to sell or trade for something interesting eventually.
I guess my inquiry is what, in particular, would be a good approach to do this (ie buying a little extra Sassiscaia, Flaccionello, Solaia or something else).
If you are going to collect for profit(or at least some of the time), that is fine by me. But be careful as you may not reap the rewards that you seek. Most of the profitable bottles, or the bottles that really increase in price, are not necessarily the highest rated bottles but ones with history and pedigree. As such, 1st growth bordeaux, top burgundies, Yquem, and select wines from other countries will increase in value in excellent years. I wouldn't even bother with Flaccianello. What, in 10 years, maybe you can double the price you paid for it, if you sell. At that rate of return, there are many other commodities you could invest in with much better rate of return for your investment. I hear gold is good.
*********************** "I have drunk not to the clouding of my reason, but just so much that I can still surely distinguish the syllables with my tongue." Athenaeus
Posts: 3376 | Location: montreal | Registered: Feb 21, 2004
I personally have always kept Rothko's philosophy in mind when collecting. I think one of the great values in wine collecting is that it isn't like any other retail purchase. If you buy a car, clothes, jewelry, etc....you'll never get your money back (at least most of it). Here, if you're buying smartly, you can often get your money back, if not more, and sometimes substantially more. I have found this to be very useful as my palate has changed, and with wines I used to like that I no longer care for, or things I overbought in.
I would also say that right now is not a good time to be buying for profit. I think the wine market is in the midst of a big correction. We've seen some big declines (everywhere outside of Hong Kong) over this past year, and along with the DOW, seem to be seeing a slight uptick again, but doubt it will last. Consumer confidence being what it is....I just don't see great prosperity in the wine market...
So much wine.....so little time!!!
Posts: 6789 | Location: San Francisco | Registered: Jun 20, 2002
Go the strip club route! you can give the strippers stage names based on their looks/abilities:
*The classy one can be Ms. Lafite *The one too big to be dancing can be Ms. Latour *The one with stripping skills that arn't up to the standards of the club can be Ms. Mouton *The one that flies in from L.A. every weekend can be Ms. Brion *The one that always gives you your money worth and never disappoints can be Ms. Margaux
IF you are considering buying wine with future profit potential, approach it like Art. After establishing some knowledge over time first, buy what YOU appreciate and what you want. If it gives you a great return....Great. If not, at least you won't mind drinking your asset. Bordeaux is expensive but it has a track record. Italian MAY become a 'good investment' over the next several years, but don't hold your breath. This would be considered a fairly risky endeavor. Historically, few Italians pay back big returns. Enjoy them.
Auction market for wine not so good right now? Urrr...that and most anything else. Everything has its cycle. Nothing wrong with keeping future value in mind when buying anything with this capability. Just don't go far out on a limb with this one. Buy smart, stay smart. But for the most part, buy with the intent to enjoy it.
Originally posted by KSC02: IF you are considering buying wine with future profit potential, approach it like Art. After establishing some knowledge over time first, buy what YOU appreciate and what you want. If it gives you a great return....Great. If not, at least you won't mind drinking your asset. Bordeaux is expensive but it has a track record. Italian MAY become a 'good investment' over the next several years, but don't hold your breath. This would be considered a fairly risky endeavor. Historically, few Italians pay back big returns. Enjoy them.
Auction market for wine not so good right now? Urrr...that and most anything else. Everything has its cycle. Nothing wrong with keeping future value in mind when buying anything with this capability. Just don't go far out on a limb with this one. Buy smart, stay smart. But for the most part, buy with the intent to enjoy it.
What auctions are you guys hitting,
I can't buy any steals!!
Posts: 3579 | Location: NYC | Registered: Feb 16, 2007
I agree with you, g-man. Deals are not bountiful. HDH last weekend was mostly hitting top estimates and more!
I've found the occasional one-off good deal here and there. However, I look a lot and they are few and far between. Since the end of last year when things were most dismal, the wine prices have been slowing inching up.
Nobody knows how those wines will fare. The wines like the first growths have a few hundred years of collectors. Sassaccaia is really new. In fashion one year, out the next. Personally, I wouldn't buy it for "investment". If you get a good deal and you can flip it, that's a better approach. But if you hope for long term increases of 20 pct a year or so, I think that's really a bad plan.
Wine became fashionable in the US over maybe 25 - 30 years. It could just as easily fall out of fashion. There is no reason to think that current trends of increased consumption every year will continue indefinitely. Fifteen years ago maybe things were different, but now when everyone you know has a wine blog and every newspaper has a wine club and it's in your face everywhere you turn, I don't think it's the trend of the future that you can get into on the ground floor.
As an investment, strip clubs are always solid. They never go out of style and the talent is renewed each year. The biggest thing you need to be concerned with are the boyfriends, husbands, or stalkers of the girls. And if the girls are turning tricks in the back and you don't have some friendly cops around, you can get into trouble and even can be shut down. And maybe you have a few guys show up who tell you they're going to be your partners. But if you can deal with that, the returns are pretty good.
Posts: 799 | Location: NY | Registered: Dec 09, 2007
Got two words for you if you really want to do this. Bordeaux & Burgundy.
If you stick to the first growth and the absolute top tier Burgundies and buy them on futures, you would make money period. The variable is how much your return would be and what's the optimal holding period for maximum return. Do keep in mind to calculate storage cost, relative cost of goods, inflation.....etc.
If you want to make this really easy, make sure you buy Lafite and Carruades de Lafite EVERY vintage during first tranches. Just hope the appetite for anything Lafite continues in HK/China.
Give me a call in the office if you want to talk further in more detail.
I'm not buying for my profit, just so I can afford to drink in the future. Of course, the argument is illusory when I compute how much I paid for the wine cellar, racking, cooling unit, etcc.....
I echo the chorus here: stick to the very best Bordeaux and Burgundy.
Others mentioned storage cost, risks, inflation.
There are two other items that I want to bring to the discussion:
- The cost of keeping your money tied up. (i.e., you can just keep those $100K or $1M and invest it some place else bonds/stocks/house etc)
- The fact that when you sell, you will most likely pay a 20% commission to the seller.
This is a good question and one that I have pondered quite a bit. In my own experience, I have about 90% of my wine for enjoyment and the other 10% for potential sales (to sustain the purchases).
Finally, you have a great factor in your favor. You are 28! But that applies to all investments, including (and most important) investing in yourself.
Posts: 24 | Location: Irvine, CA | Registered: Nov 02, 2008
