Chas. Winn Wine investment Broker

Has any one been approached by these guys out of the UK? They claim to make you a lot of $$$ by appreciation of wines. They are a little sketchy on what they buy; but, talk alot about 1st growth Bordeaux. Sounds like a scam to me. Any comments??

Original Post

In the UK there are wine indexes that buy wine and are financial instruments measured against current auction prices (you own a piece of a DRC which has appreciated so your piece is worth more). The indexes are large and robust enough that there are actually derivative plays where you can buy or sell the "index" etc...

It's interesting from a quant prospective as a couple of the indicators in 2007-2009 were very good fits as leading indicators for the FTSE. 

Just like a gold fund, the risk (outside of general macro market risk) is that they don't actually own the wine they say they do. It's also a non-eternal asset, some of the wine if they don't sell will begin to depreciate as they go over the hill. 

robsutherland posted:

... some of the wine if they don't sell will begin to depreciate as they go over the hill. 

Probably true for mid level and lower wines, but what about the most coveted wines -- First Growth bordeaux, Grand Cru burgundy from prestigious houses, tete de cuvee champagne, etc...?  Those prices correlate more with the stock market than with the drinkability of what's in the bottle.  With some wines there seems to be a biphasic nature to the curve.  The price goes down when the peak drinking window has passed, but then goes up again when the wine becomes so old and rare that the quality of what's in the bottle no longer matters.

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