I have been thinking about prices for fine wine as I have been watching the roller coaster with the global stock markets. I think that there may be some sort of price correction, particularly with young wines. How many $100 Napa Cabernets or Super Tuscans do we need? However, I am not sure that prices for very fine, very rare, and very expensive wines will be affected. How much 1982 Haut-Brion is left in the world and how many people want some?

I was in Hong Kong last week for a friend’s birthday and I had a chance to speak to a number of tycoons and bankers with large investments around the world, and they thought that blue chip wines would maintain their price levels, even increase. “It’s just like very expensive real estate or art,” said one. ‘There just isn’t enough in the world and there’s a lot of money chasing after it.”

What do you think?
Original Post
Hi James,
I was just having a conversation with a friend of mine who is in the short sell stock business (I don't know what any of that means). The conversation turned to the dollar and how it was weak against other currencies, especially the euro, and also that traveling back and forth to Europe was getting really expensive. I asked him if the dollar would ever again balance against the euro. His opinion: the number one economic problem right now in the states was the housing market. Feds can either 1. raise interest rates, which would make the dollar stronger against the euro, and make travel less expensive (and in my opinion, wine cheaper) or 2. protect the housing market and do what ever it takes to keep the housing market from crashing. His take on all of it: the feds will protect the housing market and let the dollar stay weak against the euro. Few Americans will notice that the euro is getting stronger, but most Americans will notice that the housing market sucks.
To answer your overall question, I think that wine prices will stay high in the states because the feds would rather boost the housing market than boost the dollar against the euro...fewer people are watching.
@
quote:
Originally posted by James Suckling:
I have been thinking about prices for fine wine as I have been watching the roller coaster with the global stock markets. I think that there may be some sort of price correction, particularly with young wines. How many $100 Napa Cabernets or Super Tuscans do we need? However, I am not sure that prices for very fine, very rare, and very expensive wines will be affected. How much 1982 Haut-Brion is left in the world and how many people want some?

I was in Hong Kong last week for a friend’s birthday and I had a chance to speak to a number of tycoons and bankers with large investments around the world, and they thought that blue chip wines would maintain their price levels, even increase. “It’s just like very expensive real estate or art,” said one. ‘There just isn’t enough in the world and there’s a lot of money chasing after it.”

What do you think?


Everything depends on how big and how bad the corrections might be and how much wine is held purely for investment purposes by people not immune from a major crash - so that, if the dominoes start to fall and the smoke and mirrors fail, they will be liquidated to pay the creditors and other bills.
If it’s really bad I am sure I can recall even top old vintage 1st Growths falling in the 70s and that was before the huge increase of wine held widely as assets rather than to drink.
If we are talking about 47 Cheval Blanc or Lafleur then such rare wines will be immune since they are probably held by people who would have an enormous cushion before they would need to contemplate letting their trophies go - if prices don't fall because they are proved to be fakes first.
quote:
Originally posted by WEc:
Until the liquidity of assets become an issue, I don't see how.


You obviously do not own any mortgage backed securities. Two or three hedge funds have already failed due to radical spread changes and illiquidity in that sector. All of the Fed's injections last week consisted of buying mortgage backed securities that essentially had no buyers at any price. The market is questioning the pricing and risk of that entire sector. Last week's market gyrations were caused by liquidity and credit issues (not a crisis yet).
quote:
Originally posted by James Suckling:
I have been thinking about prices for fine wine as I have been watching the roller coaster with the global stock markets. I think that there may be some sort of price correction, particularly with young wines. How many $100 Napa Cabernets or Super Tuscans do we need? However, I am not sure that prices for very fine, very rare, and very expensive wines will be affected. How much 1982 Haut-Brion is left in the world and how many people want some?

I was in Hong Kong last week for a friend’s birthday and I had a chance to speak to a number of tycoons and bankers with large investments around the world, and they thought that blue chip wines would maintain their price levels, even increase. “It’s just like very expensive real estate or art,” said one. ‘There just isn’t enough in the world and there’s a lot of money chasing after it.”

What do you think?


I've been saying that the blue chip wines, the rarest of the lot, the top echelon of Bordeaux particularly, is exactly like buying fine art. Actually, it's even rarer than fine art. You don't sit around the table and consume rare and expensive paintings with family and friends - unless fine art meets with disaster it hangs on walls for centuries. Rare and precious bottles of Bordeaux only last for 100 years at best, and even at that a majority of any given year is consumed well before its prime. I use to happily purchase Bordeaux futures until the 2005 future prices increased beyond my means. Looking back, I wish I would have bought cases of the 2003 Latour - at $495 CND per bottle it seems so reasonable for a rare and original work of art. The last great "vintage of the century" that was priced within reach.
I understand the point of equating great wine, particularly old and increasingly rare great wine, with great art like paintings but also feel that there is a difference of kind as well as degree between the two.
With great art the artist is usually dead so there won't be any more of his 'productions' and each painting or sculpture is unique whereas with great wine there is always the next vintage of the century a heartbeat away - and the promise of better and better winemaking as in the past few decades.

In addition some of these great wines e.g. Bordeaux 1st growths like Lafite, Latour and Margaux are made every year in tens of thousands of bottles and some great long-lasting and expensive champagnes in very much greater volumes than that.
And while great wine can last a long time it is also vulnerable to individual failure through cork taint, cork failure, transportation and storage problems and faulty winemaking so that until the cork is pulled you don't know what you have got - at least as a drink as opposed to a 'trophy' independent of its potability.

With great art what you see is what you’ve got unless of course it is a fake which is a problem that can afflict both wine and art.
And 'fashion' can affect the relative values of both too.
And I agree that most things point to the prices of high status wines holding up and even continuing to rise. Unless there is a major economic downturn.

Yes there is a lot of money sloshing about in the world and a lot of big new spenders in new markets too but there is also an enormous amount of it borrowed and a lot of natural and man-made events than can upset the balance.
And wine has been increasingly bought purely as an investment – an appreciating asset.
IMO if there is a major economic downturn it seems at least possible that, more than in the past, even great [but probably not super-rare] wine will be seen on the market in unusually large quantities at a time when confidence and demand of any sort [perhaps in things like wine in particular] might be low.
<-- Whips out his cristal ball.

In the year 2050 when All the current generation of tasters retire/pass on. We'll have more and more frauds. We'll have 47 Chevals by the truck load because by that time, I'd really doubt anybody would be able to taste a legit bottle. Hopefully at that moment, wine drinkers will realize, I'm paying alot of money for something I can't verify as real. However, the prices will never go down. I remember reading somewhere that the maitre d' of one of the fine restaurants in russia was saying something along the lines of, we sell 2-3 bottles of the 61 petrus every night, and it makes you wonder where we source our wines from. But alas people who buy this don't know the difference anyway.

Re: ASV
I'd really hope the feds don't lower the interest rates to bail out housing. As Bernanke said, the feds main job is to stave off inflation and not to bail out people with bad judgment. What we don't need is even more inflation with gas and food already floating pretty high.
James, I think there are a number of factors at play here that are influencing wine prices. The cheap/plummeting dollar and increasing worldwide demand for luxury goods (especially in Asia & Eastern Europe) are certainly propping up the Napa prices. An economic recession will deflate some of that demand fairly quickly.

There's also the issue of status. In speaking with some of the winery owners in Napa, they aren't shy about defending their wine's prices by comparing them to local competitors and French First Growths. There's this distinct feeling among them that if you price too cheaply (on a relative basis) it implies negative connotations about the wine. Of course, none of this works if the buyers balk at the price, but that hasn't happened yet. (It seems to be part of a growing trend towards super-luxury goods and the feeling by some that no price is too high for exclusivity. Denim would be a good example.)

The collectibles that change hands at auctions are a different story. Those wines are trophies similar to artwork and I'd venture that the majority of it is for display and not consumption. The speculators are also a big part of that market and I'm guessing that there's some price manipulation happening too, since a very small number of transactions set benchmark prices that are quoted far and wide. When the next recession hits and a few large collections suddenly hit the market simultaneously (and they will), we'll find out what they're really worth. That's assuming all the fakes (the higher the prices, the more you'll see) don't ruin the party first. (Recall the old adage about trees not growing to the sky.)
One last thought regarding the "tycoons and bankers" and their perception that prices can't drop, those are the exact same words that were spoken at the cyclical tops for dot-bomb stocks, real estate, art, tulips, etc. Things always look rosiest at the peak.

Remind them that the history of fine wines is not just one of rising prices (in fact, I believe the returns have been shown to be similar to T-Bills over the long haul). When one replies that "it's different this time", you'll know we're near the peak...
I doubt release prices on the 1st tier (French and Napa) will fall significantly in the near future; but I do know that when the dot-com bubble burst around Y2K, I picked up a lot of steals on the secondary market around the Seattle area. Maybe history will repeat? Smile
Although the mortgage and real estate industry is realing, this is hardly a major dip in the stock market - the Dow is still up for the year. Wine prices will not be affected as the only people deeply affected are folks in the mortgage industry and those consumers over extended on using their second mortgage as credit beyond their means.
quote:
Originally posted by GreenDrazi:
Although the mortgage and real estate industry is realing, this is hardly a major dip in the stock market - the Dow is still up for the year. Wine prices will not be affected as the only people deeply affected are folks in the mortgage industry and those consumers over extended on using their second mortgage as credit beyond their means.


I disagree. Risk is being repriced across the board, which is a much broader issue and will affect all asset classes in addition to debt pricing and availability.

That said, there is a difference in real estate between hot markets and premier properties. A lot of the hot markets have declined in value. The best of the best properties are hotter than ever. Most of the prospects for these properties pay cash.

Premier wine is also scarce and I don't see it going anywhere but up. The best of the best will still be in high demand. I agree with mneeley490. I think the next lower tier or two will be the problem. I would worry if I was a "name" Napa Cabernet producer selling a lot of 87 point wines for $125+.
quote:
Originally posted by Markiemark:
quote:
Originally posted by GreenDrazi:
Although the mortgage and real estate industry is realing, this is hardly a major dip in the stock market - the Dow is still up for the year. Wine prices will not be affected as the only people deeply affected are folks in the mortgage industry and those consumers over extended on using their second mortgage as credit beyond their means.


I disagree. Risk is being repriced across the board, which is a much broader issue and will affect all asset classes in addition to debt pricing and availability.

That said, there is a difference in real estate between hot markets and premier properties. A lot of the hot markets have declined in value. The best of the best properties are hotter than ever. Most of the prospects for these properties pay cash.

Premier wine is also scarce and I don't see it going anywhere but up. The best of the best will still be in high demand. I think the next lower tier or two will be the problem. I would worry if I was a "name" Napa Cabernet producer selling a lot of 87 point wines for $125+.


Agreed. Well said.

This could be a tough market for c*ltwines.com Cool
quote:
Originally posted by dannyk8232:
quote:
Originally posted by Markiemark:
quote:
Originally posted by GreenDrazi:
Although the mortgage and real estate industry is realing, this is hardly a major dip in the stock market - the Dow is still up for the year. Wine prices will not be affected as the only people deeply affected are folks in the mortgage industry and those consumers over extended on using their second mortgage as credit beyond their means.


I disagree. Risk is being repriced across the board, which is a much broader issue and will affect all asset classes in addition to debt pricing and availability.

That said, there is a difference in real estate between hot markets and premier properties. A lot of the hot markets have declined in value. The best of the best properties are hotter than ever. Most of the prospects for these properties pay cash.

Premier wine is also scarce and I don't see it going anywhere but up. The best of the best will still be in high demand. I think the next lower tier or two will be the problem. I would worry if I was a "name" Napa Cabernet producer selling a lot of 87 point wines for $125+.


Agreed. Well said.

This could be a tough market for c*ltwines.com Cool


agreed as well. It's obvious that the recent problems in with real estate has spilt over into the banks, ratings agencies and anyone else who bought the risky CDOs.
asv hit the nail on the head. US interest rates will probably stop rising, but recent articles that I have read say that the european interests rates will continue to rise and further devalue the dollar. Also keep in mind that if the US increases the interest rates (strengthens the dollar) this will probably hurt the economy...something nobody wants to do before an upcoming election year. It will be a while before the dollar is strong against the euro. To make my point I bought two bottles of 2000 Bordeaux todaySmile Both 90 rated for $35 and $40...
I was reading in a WS article that the new generation on the whole is more interested in wine than the previous generation. I can attest for this considering that my parents are far more frugal with their wine than I am. Also, when I was in college, lots of wannabe nouveau riche were happily throwing down hudreds of dollars for "bottle service" at clubs to show off their "wealth". I don't imagine a lot of that was happening among college students in the 60's and 70's.

Since supply of fine wine is pretty much inelastic, I predict slow but sure price increases for the next 20 years or so while my generation grows up, gets jobs and starts reading wine spectator and playing golf.
Over the course of the last 20 years, stocks have risen, fallen, and risen again. So has real estate. Economists call these "corrections". But in this same time, name me ONE instance where California Cabernet prices have fallen? It has never happened. The best we can hope for is that the level of increase slows. But wine prices simply do not "correct". They might "hold". But never trend downward. $200 has become the new $125. Makes buying my Kosta Browne allocations a no brainer.
I think we have two or three questions here.

Will the current sub-prime meltdown and flight to safety affect wine prices?

No, I agree with the explanations given that Fed moves to help bail out the lenders will weaken the dollar and risks inflation.

Does that mean that prices will not fall?

Again, no. They have fallen steeply in the past, notably in the early 70's. All it takes is a change in psychology, helped by an economic shock. Currently, everyone expects prices to rise, so they buy perhaps more than they need to stay ahead of price increases or to speculate. If that perception is reversed, buyers will hold off until they think prices have hit bottom. It's different than the stock market with collectable wine being limited in supply, but there is always more wine. Higher prices help wine makers improve vineyards and vinification. Even collectors will realize that newer wines are coming out that are better than their collectables, and at a far lower price.

If prices fall, or I should say when prices fall, will they stay down?

No. I agree with Peer Gynt that we have decades to go with demand increasing faster than supply for the top tier wines. Meanwhile, the everyday wines at a moderate price will continue to improve.
James,

As an investor in all three (stocks, real estate, fine wines) all three can be very rewarding. For real estate, you ofter hear said the three most important things about investing as "Location, location, location". For fine wines, you might equate that to "Vintage, vintage, vintage". I am currently buying 2005 Bordeauxs, Poms, St. Ems, Margaux, St. J's, and the like. I think of these wines as one might of a AA rated corporate bond; a. very safe, b. virtually guaranteed return, and c. matures in 30 years!!
quote:
Originally posted by JimmyV:
Over the course of the last 20 years, stocks have risen, fallen, and risen again. So has real estate. Economists call these "corrections". But in this same time, name me ONE instance where California Cabernet prices have fallen? It has never happened. The best we can hope for is that the level of increase slows. But wine prices simply do not "correct". They might "hold". But never trend downward. $200 has become the new $125. Makes buying my Kosta Browne allocations a no brainer.


France and Italy adjust prices for vintage quality. CA is too arrogant to do so.
Arrogance is apparently a stronger factor than market forces. Recall, however, that this topic centers on external market influences and not vintage quality. I can't think of a single circumstance where wine prices have been influenced downward by a down turning market. Be they American or European wines. Kudos to some European producers for recognizing off vintages. But economic markets seem to be invisible to wine producers all over the world. The secondary market? Well, that's another story.
quote:
Originally posted by Peer Gynt:
I was reading in a WS article that the new generation on the whole is more interested in wine than the previous generation. I can attest for this considering that my parents are far more frugal with their wine than I am. Also, when I was in college, lots of wannabe nouveau riche were happily throwing down hudreds of dollars for "bottle service" at clubs to show off their "wealth". I don't imagine a lot of that was happening among college students in the 60's and 70's.



I doubt many college students were going to strip joints and 'making it rain' in the 60's and 70's (see: Pacman Jones). I guess what Im trying to say is for every new wine drinker trying to flash wealth nowadays there will be one potential wine drinker doing something else (and equally stupid) instead.
Also, there is a clear difference between investors in securities and wine. People are too emotionally attached to money; therefore when the market has a correction, drop, blip, etc., people panic easily and sell and drive prices further down. The individual investor almost always does the exact opposite of what they should do. When prices increase, they buy. When prices realign, they want to sell. Wine is less liquid...no, I don't mean that literally, and people tend to stick to their plan of buying and holding more effectively. It is easier for people to keep their wine in their permanently affixed cellar and simply call their broker and whine and want to sell. It is then up to their broker to tell them to keep their shirt on and wait.
quote:
Originally posted by Peer Gynt:
I was reading in a WS article that the new generation on the whole is more interested in wine than the previous generation. I can attest for this considering that my parents are far more frugal with their wine than I am. Also, when I was in college, lots of wannabe nouveau riche were happily throwing down hudreds of dollars for "bottle service" at clubs to show off their "wealth". I don't imagine a lot of that was happening among college students in the 60's and 70's.


In the 60's and 70's terms like "volatile acid" and "weedy, with a smoky finish" were quite commonplace, but had a meaning much different than today.
quote:
Originally posted by vinole:
quote:
Originally posted by Peer Gynt:
I was reading in a WS article that the new generation on the whole is more interested in wine than the previous generation. I can attest for this considering that my parents are far more frugal with their wine than I am. Also, when I was in college, lots of wannabe nouveau riche were happily throwing down hudreds of dollars for "bottle service" at clubs to show off their "wealth". I don't imagine a lot of that was happening among college students in the 60's and 70's.


In the 60's and 70's terms like "volatile acid" and "weedy, with a smoky finish" were quite commonplace, but had a meaning much different than today.


Big Grin
quote:
Originally posted by dannyk8232:
Also, there is a clear difference between investors in securities and wine. People are too emotionally attached to money; therefore when the market has a correction, drop, blip, etc., people panic easily and sell and drive prices further down. The individual investor almost always does the exact opposite of what they should do. When prices increase, they buy. When prices realign, they want to sell. Wine is less liquid...no, I don't mean that literally, and people tend to stick to their plan of buying and holding more effectively. It is easier for people to keep their wine in their permanently affixed cellar and simply call their broker and whine and want to sell. It is then up to their broker to tell them to keep their shirt on and wait.

That may well be true for those with permanently affixed cellars and wine they bought to drink where the 'emotional' attachment may actually outweigh other pressures.
But what about the apparently large and growing number of people, directly and through wine funds who have bought wine purely as an investment, with no plan or desire to drink it and often with borrowed money - like property other than the place they live?
These stocks often remain in bonded warehouses and other off-site arrangements and can be disposed of just as easily as stocks and shares with a call to a broker.
IMO a serious downturn in the world economy with a major credit squeeze might well flush some of these high priced wine stocks on to the market in enough quantity to provoke a significant [though temporary] downturn in prices of even top wines that still exist in high volumes.
And Bordeaux 2006 where the vintage quality has been substantially ignored in en primeur prices for the first time since 1997 may yet end up like that vintage with the later considerable and continuing discount in prices which did not require a global economic downturn to cause that to happen.
I can certainly remember even Bordeaux 1st Growths of top mature vintages being substantially discounted at auction in the mid 70s as the world economy struggled with the first oil price shock and stock markets had tumbled
And that was long before wine had become so widely ‘investment orientated’ or personal debt had reached a fraction of today’s level.
It's interesting that the overwhelming consensus here is that wine is a "can't miss" investment. I heard exactly the same sentiment regarding real estate up until earlier this year. (The analogy between wine and bonds was also interesting, but the last time I checked bonds pay regular interest payments and don't have the carrying costs that wine does.)

The bottom line is that there are way too many speculators in the wine market today. Like dot-bombs, prices may get even more absurd before the inevitable correction...but it's coming. History is littered with similar examples and wine will be no exception.
quote:
Originally posted by Holger B:
It's interesting that the overwhelming consensus here is that wine is a "can't miss" investment. I heard exactly the same sentiment regarding real estate up until earlier this year. (The analogy between wine and bonds was also interesting, but the last time I checked bonds pay regular interest payments and don't have the carrying costs that wine does.)

The bottom line is that there are way too many speculators in the wine market today. Like dot-bombs, prices may get even more absurd before the inevitable correction...but it's coming. History is littered with similar examples and wine will be no exception.


Not going to happen - maybe in the future when futures of 1st growths hit $10k a bottle, but for now they are still relatively chump change in the scheme of things.
quote:
Not going to happen - maybe in the future when futures of 1st growths hit $10k a bottle, but for now they are still relatively chump change in the scheme of things.


Got an e-mail recently for the latest Petrus at $2k/bottle. How many of those buyers think it's worth spending $400/glass now and waiting x number of years to consume it versus how many think of it as an investment or trophy? If it's more of the later, we got a problem.
quote:
Originally posted by Holger B:
quote:
Not going to happen - maybe in the future when futures of 1st growths hit $10k a bottle, but for now they are still relatively chump change in the scheme of things.


Got an e-mail recently for the latest Petrus at $2k/bottle. How many of those buyers think it's worth spending $400/glass now and waiting x number of years to consume it versus how many think of it as an investment or trophy? If it's more of the later, we got a problem.

There were only 28,800 bottles of 2005 Petrus produced for the entire world! Only 2400 cases. (don't know what 2006 production is) No matter what tough economic times may lay ahead, items like this will not lose its value. It's Petrus afterall.
Only 28,800 bottles? Now I know that's not Yellowtail numbers, but I wouldn't call over 2000 cases an only. It is not really rare, just grossly over priced. There are plenty of world class wines made in far smaller amounts that sell for a fraction of the price. It is not rarity but prestige that allows them to charge what they do.
I don't know about stocks, but universally acknowledged quality, or things that are scarce and disappearing, will always command a high price, so top-end wines that all see as reliably good, and scare and disappearing eventually (i.e. top bordeaux, CA cult cabs) will not really come down in price ever, IMHO.

Ditto for property in Kowloon near the water, downtown Mumbai and Vancouver, Manhattan, etc., for the same reasons.

Which is why I continued to buy vintage ports on release, or as futures when I could, until I got too old to expect to live long enough to enjoy them at their peak (2003 was the last vintage I bought - I'm not THAT old! Razz)
quote:
Originally posted by bman:
I don't know about stocks, but universally acknowledged quality, or things that are scarce and disappearing, will always command a high price, so top-end wines that all see as reliably good, and scare and disappearing eventually (i.e. top bordeaux, CA cult cabs) will not really come down in price ever, IMHO.

Ditto for property in Kowloon near the water, downtown Mumbai and Vancouver, Manhattan, etc., for the same reasons.

Which is why I continued to buy vintage ports on release, or as futures when I could, until I got too old to expect to live long enough to enjoy them at their peak (2003 was the last vintage I bought - I'm not THAT old! Razz)


IMO those who say the price of top wines [particularly those that are made in large quantities like 1st Growth Bordeaux and top flight champagne] are likely to fall if a major economic downturn occurs and those that say they won't, may simply be referring to different time frames.
Some may even be arguing on the basis that they do not believe a major economic downturn is possible in today’s world – the consequences would be so catastrophic Government ‘won’t allow it to happen’!
In the past it is a fact that mature vintages of top wines have been heavily discounted following major and enduring global downturns such as occurred in the early to mid 70s. I know this because I watched it happen and wished years later I had done something about it at the time but like so many one was caught up in the mood of the time.
Have those top wines from vintages like 45 and 61 recovered and gone on to many multiples of those discounted prices? Of course they have, just as inflation and increasing prosperity has affected most everything in the same way.
But they did go down in real terms for a while and could do so again for reasons already given.
In addition prime property locations and individual pieces of great art by dead artists cannot be created annually in the way that wine is at every great vintage. Nor can they ever be extended e.g. like the acreage of a 1st Growth Chateau. So there really is a difference of kind there as well as degree.
Even with these property icons, natural or man-made disasters [like rising sea levels, war, terrorism, disease, pollution] could destroy or devalue, possibly permanently, 'prime properties' just as fashion can affect great art. ‘Never’ is a100% exclusion.
IMO this thread has not been about the ‘super rare’ but the hugely inflated prices of a large number of high volume [hardly scarce and disappearing] wines currently held in stock - like relatively recent vintages of e.g. Lafite and Latour et al that have been increasingly bought, often like stocks and shares with borrowed money, for profit not consumption. As James Suckling suggested with his opening post ‘I think that there may be some sort of price correction, particularly with young wines’.
More and more of these are held by individuals [and investment funds] that are certainly vulnerable to a global downturn accompanied by a major credit squeeze.
If the dominoes start to fall so too will these inflated prices as profits are taken and sales are made in growing quantities when demand has been weakened and the mood changed. If the smoke and mirrors continue to work then prices of the best will probably stay high although the 1997 syndrome will not require such an extreme push and may yet manifest itself with the 2006 Bordeaux vintage.
quote:
I don't know about stocks, but universally acknowledged quality, or things that are scarce and disappearing, will always command a high price, so top-end wines that all see as reliably good, and scare and disappearing eventually (i.e. top bordeaux, CA cult cabs) will not really come down in price ever, IMHO.

Ditto for property in Kowloon near the water, downtown Mumbai and Vancouver, Manhattan, etc., for the same reasons.


You're obviously young if you don't think real estate goes in cycles, like every other asset class. Value is all relative and what happens in one market impacts the others. This causes prices to go to extremes in both directions. Wine prices are no different than stocks or art or real estate and they're all very interconnected. Eventually the price of wine also gets ahead of itself and then goes the other way for awhile too.

Wine is anything but "scarce and disappearing". Hundreds of thousands of top quality cases hit the market every year.
quote:
You're obviously young if you don't think real estate goes in cycles, like every other asset class


Thanks for the compliment Big Grin, but I know that property goes in cycles. My point is that there are exceptions even to that rule, which so far seem to include the three places I mention above, with of course the odd exception for a short period even in there.

And when I say that wine is scare and disappearing, I'm thinking of First Growths, cult cabs, and other limited wines that seem to sell at high prices regardless of the vintage. there may be exceptions to this rule too, but I'm not aware of too many of the above that have sold for much below their futures or release prices, of if they did, did so for long.

Now I'm gonna go tell my wife and teenagers that someone thinks I'm young!! Cool
Manhattan real estate goes thru dramatic cycles. I'm sure the other places you mentioned have or will too.

First Growths produce 10k+ cases per year. So do some of the cult (or near-cult) cabs. Hardly the definition of "scarce & disappearing".

The future always appears brightest at the top...
-Bordeaux ups the ante with 2006 futures.

-The global markets begin to decline on worries of overextended credit (aka: people spending beyond their means) and decline in the housing markets.

-Harlan increases it's price from $350/btl. for '04, to $450/btl. for '05 (on futures).

-The DOW loses 280 pts. today.....again.....

When does the maddness end? Ever, or NEVER?

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