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Investing In Wine
15th October 2010
By Thomas Gearing (Director) - Cult Wines Ltd - http://www.cultwinesltd.com
The following analysis looks at the back vintage market of the First Growth’s and Petrus. At a time when a lot of attention is on En Primeur and the Second Wines, we take a closer look at what offers good investment potential in the physical market.
All prices quoted are subject to.
The following is an overview of the physical vintages of Petrus that
we would consider purchasing and their POP values.
The lower the POP value, the more growth potential the wine has. The two vintages which we would recommend for investment would be 1995 and 2001. They both share a similar POP scoring at the top, but both have an RPJ rating of 95pts+. This is often stated by many as a pre-requisite for investing in wine, and although we don’t think it’s necessarily the most important factor – when buying a case of Petrus buying one that scored 95pts+ will only benefit its long term future value. Both these two vintages are approaching their optimal drinking age – 1995 (2007-2016) and 2001 (2007-2027). Out of those two vintages in particular we would lean towards 2001. The reason being, Jancis Robinson tasted this wine most recently (04.2010) and upgraded her score from 16.5pts to 19pts. Robert Parker hasn’t scored this wine since 2004 in which he gave 95 pts – but the indications would be that this vintage of Petrus has matured quite considerably in the last 5 years and potentially there is a situation in which RPJ may well improve his score similarly to Jancis Robinson.
wine. The growth Lafite has shown in the last 18 months has been
spectacular. However, because of this prices are now very high
for physical vintages and it seems difficult to pinpoint any
undervalued stock. There seems no doubt that any vintage of
Lafite will show steady growth, but for the biggest rewards I
would recommend looking at vintages of Lafite from ‘lesser’
years as they offer the best value for money and are popular
with the Asian Market.
Haut Brion has been
the weakest performer of the first growths in the last 2 years.
From the end of December 2008 to end July 2010, on average Haut
Brion vintages rose in price by around 24%, compared to around
34% for Margaux, 41% for Latour, 48% for Mouton and 115% for
Lafite. Since the quality of Haut Brion is unquestioned, it
seems only a matter of time before the gap in performance is
closed. There have been suggestions that the brand loyal Asian
market find Haut Brion difficult to pronounce and in many Hong
Kong retailers it will be found on the bottom shelf. But when
the first growths look ‘full’ in price, there does seem to be
value for money in buying Haut Brion. I would recommend the 1990
and 1998 which are both entering a period of optimum drinking—at
which point the supply demand imbalance is exacerbated.
Margaux & Latour
For a steady period
we have focused on the 1996s— especially Latour @ £7,500 (99pts)
and Margaux @ £5,935 (99 pts)—which look undervalued
relative to younger vintages. On the theme of wines that have
scored 99 pts – Margaux 2003 currently trades at £5,350,
it’s a great vintage and a superb wine and with Chateau Margaux
firmly on the charm offensive in China (Thibault Pontallier, the
son of Chateau Margaux managing director Paul Pontallier is
currently in Asia as a Brand Ambassador) – there is a lot of
growth potential. Latour 2004 looks a solid purchase at £3,950
considering it scored 95pts and the similarly scored 2006
vintage currently trades at £4,500. Latour 2003 @ 100 pts could
well be a wine to purchase as it approaches its drinking window
(2010), supply could become scarce over the next few years
pushing its price up and returning solid growth to investors.
The 1982 and 1986
vintages are the standout Mouton vintages in our eyes. Supply of
Mouton 1986 looks strained in today’s market in the face of
strong demand from home and far away markets. Scored at 100pts
there is no doubting the quality and with prices @ £8,850, there
is at least 50% growth in this stock over the next few years.
Mouton 1982 (100pts) @ £14,000 as supply decreases could well
show a return of 50%+ over the next few years. It’s a phenomenal
wine, arguably Mouton’s finest. The 1998 vintage also shows good
potential having scored 96 pts and trading at a seemingly low
price of £3,600.
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