I for sure thought there would FINALLY be at least a lull in demand for high end wine this week. With the Fox Cellar auction this weekend at Hart Davis occurring at the same time as the most tumultuous week in Wall Street history (save maybe Black Friday), I was certain that people would be thinking twice about their cash flows. Well...with 100% sell through at over auction estimates, I was DEAD WRONG.

It's funny....I've seen reports on high end homes in the Hamptons coming up for sale each week and sitting on the market for months. Granted, Real Estate in general is this way. People are cautious all over the world, as other markets are seeing the ripple effect of Wall Street, and are taking blows from their own bad investment/market situations. Yet, IMHO, with the bad times still in the forseeable future, what is it about fine wine that seems to be unstoppable? Or...is the bubble just not quite ready to burst yet?

Thoughts?

Drab, That sale was the "Fox" collection and every affluent wine collectors could rely on the provenance of those wines, and most all of them were still in OWC.

I think the wine market for expensive Bordeaux wines is still okay. Where a problem may arise is with all of these new wine projects attempting to introduce wines at $300/$500 per bottle! Also, with all of the increases in price for the established producers like Phelps Insignia, Caymus SS, and Pahlmeyer, as far as I'm concerned, they have priced themselves out of my interest. It seems those producing 10,000/20,000 cases are trying to price like they were producing 2,000 cases and hope no one will mind paying them for their extra profit---

There are many producers in the $40/$75 area, mostly family producers, that continue to make an excellent wines. Those are the ones I'll support.-----Paying $150 per bottle for a mass produced wine with a fancy label and heavy bottle is beyond me.

As the rest of the world economies start to slow down, I think there will be an impact to fine wine buying. It sounds like the auction season has just begun for the season so perhaps the impact will not be felt until the later auctions. For example, I placed several bids below the bottom estimates at Zachy's Early Fall Auction (the first of the season), and 4 out of 5 wines were sold in the middle of the estimates. I believe the prices were probably slightly more than the release prices. If you are a US buyer, those prices are relatively cheap to what you can purchase for current vintages.

I would be interested to know if anyone has any empirical data to show the relationship of an economic recession and wine buying. Of course, there are wine buyers from emerging economies (China, India, and Russia) today that did not exist 15-20 years ago.

Maybe some people feel that if they are going to take up drinking to ease the pain, it might as well be fine wine!

I reviewed the online results for bordeaux at the Morrell's auction this weekend. Most lots were at or below the low estimate and many lots were unsold.

quote:

Originally posted by dr.darkrichandbold:
I for sure thought there would FINALLY be at least a lull in demand for high end wine this week. With the Fox Cellar auction this weekend at Hart Davis occurring at the same time as the most tumultuous week in Wall Street history (save maybe Black Friday), I was certain that people would be thinking twice about their cash flows. Well...with 100% sell through at over auction estimates, I was DEAD WRONG.

It's funny....I've seen reports on high end homes in the Hamptons coming up for sale each week and sitting on the market for months. Granted, Real Estate in general is this way. People are cautious all over the world, as other markets are seeing the ripple effect of Wall Street, and are taking blows from their own bad investment/market situations. Yet, IMHO, with the bad times still in the forseeable future, what is it about fine wine that seems to be unstoppable? Or...is the bubble just not quite ready to burst yet?

Thoughts?

I was honestly shocked, with even the ports going within estimated range =)

Have you heard of DENIAL ?

Plus, I believe some people believe they have now dodged the bullet, and life will be back to normal soon.

quote:

Have you heard of DENIAL ?

Or, maybe we're seriously seeing world demand being far more than supply. If supply has been relatively the same for centuries, and demand has progressively increased (even exploded in the past 5 years), I would potentially imagine a point at which there are some dramatically insane prices (if this trend keeps up). For the average family making $50,000-100,000 per year, a 20-30% hit is a major blow to income and lifestyle. For someone making $10 million per year that sees a hit of 30% or even 50% they can still afford to live a ridiculously lavish lifestyle. And, we have a lot more on each end of the spectrum, with fewer in the middle.

Someone on ebob who follows the art auctions was mentioning that one buyer paid $50 million for a recent piece of art at auction a month ago. And, they surmised that an auction like the Fox Collection at HDH could potentially be manipulated by as simple as 5-10 incredibly rich, but serious buyers. And, as such may not have any realevence to current market trends? Not that this was the case, but I thought it was an interesting point.

Those wines at auction represent the very tippy top of the wine pyramid and while people broadly are stressed by the recent financial turmoil there are people who are making tons of money too. These folks still have a ton of cash for fine wines. A little further down the pyramid is where the slaughter will take place.

While the HDH sold out and had some high prices attached, the Skinner Auction in Boston on Sept 19th may have provided a bit more realism. If you had money, you could buy things at more moderate price from decent collectors. Some examples.

Ch Margaux '82 1 cs $7500
Ch Mouton Rothschild '82 1 cs $9000
Ch Lafite '89 1 cs $4250
Ch Latour '89 1 cs $3250
Ch Pichon Longueville Lalande '89 1 cs $1500
Ch Montrose 2000 1 cs $1100

The prices were also low on the Champagne
1990 Crital Brut 1 cs $4500
1990 Dom Perignon 2 btls $350
1989 Krug 1 btls $175

Most of the prices were either below low estimate or close to low estimate. Rare was the one that hit the estimate and few exceeded it. Though one of the lots a three bottle lot of 1911 DRC Romanee conti came in at $50k, well above the high estimate.

quote:

Originally posted by TheEngineer:
While the HDH sold out and had some high prices attached, the Skinner Auction in Boston on Sept 19th may have provided a bit more realism. If you had money, you could buy things at more moderate price from decent collectors. Some examples.

Ch Margaux '82 1 cs $7500
Ch Mouton Rothschild '82 1 cs $9000
Ch Lafite '89 1 cs $4250
Ch Latour '89 1 cs $3250
Ch Pichon Longueville Lalande '89 1 cs $1500
Ch Montrose 2000 1 cs $1100

The prices were also low on the Champagne
1990 Crital Brut 1 cs $4500
1990 Dom Perignon 2 btls $350
1989 Krug 1 btls $175

Most of the prices were either below low estimate or close to low estimate. Rare was the one that hit the estimate and few exceeded it. Though one of the lots a three bottle lot of 1911 DRC Romanee conti came in at $50k, well above the high estimate.

The Lafite 82', pride of teh collection in mint hammered at 55k$ for 7 cases or 785$ / bottle including buyers.

Skinner auction wasn't that much cheaper =)

So with this supply supposedly withdrawn from the market, where do fine wine prices go from here? Perhaps the ones who can afford it have been satiated and will reduce demand. Not likely.

One more reason to go to more tastings at your local or not so local wine shop to distinguish the value of lesser known but greater value wines.

quote:

Originally posted by dr.darkrichandbold:

quote:

Have you heard of DENIAL ?

Someone on ebob who follows the art auctions was mentioning that one buyer paid $50 million for a recent piece of art at auction a month ago. And, they surmised that an auction like the Fox Collection at HDH could potentially be manipulated by as simple as 5-10 incredibly rich, but serious buyers. And, as such may not have any realevence to current market trends? Not that this was the case, but I thought it was an interesting point.

Actually, I tend to believe that your posting is very logical and, potentially, highly likely. The wine market is quite small in comparison to other 'collectibles' and, I would imagine, quite sensitive to market destabilization from just a few buyers.