The latest articles from WineInvestment.org. Wine investment news and information. http://www.wineinvestment.org WineInvestment.org http://blogs.law.harvard.edu/tech/rss en-gb Mon, 23 Nov 2009 18:35:11 +0000 Mon, 23 Nov 2009 18:35:11 +0000 FeedForAll v2.0 (2.0.2.9) http://www.feedforall.com http://www.wineinvestment.org/wi.jpg http://www.wineinvestment.org The latest articles from WineInvestment.org. Wine investment news and information. 88 31 Wine Investment Performance Since 2000  - 23rd November 2009
By Thomas Gearing (C.O.O) - Cult Wines Ltd - http://www.cultwinesltd.com

Details taken from the Guardians article: How Alternative Investments Have Performed Since 2000
http://www.guardian.co.uk/money/2009/nov/21/alternative-investments-performance-2000

Up until a few years ago the Fine Wine market was a virtual unknown to most investors except those collectors who used wines’ increasing value to fund further purchases. In the last 10 years those who had previously put their money into stocks, bonds, gold and oil have turned to wine. In the period of ‘31 December 1999 and 31 October 2009 there was a 138% return’ on the Fine Wine Investables index and this has lead journalists to label Fine Wine as ‘the best investment of the decade’.

Chateau Lafite Rothschild 1982 has been the best performer over the last decade returning 876%, and experts predict the Chateau along with Mouton Rothschild and Latour to ‘(lead) the pack over the next year or so’ as the most profitable wines to invest in.

With the 2008 vintages of Lafite and Mouton scoring 98-100 pts and 96 pts respectively on the Robert Parker scale, there is a lot of evidence to suggest that these wines will indeed return the greatest yields for investors. Especially considering that the 96 point scoring Lafite 2005 is trading at well over £8000 and the similarly scored Mouton 2005 is trading at over £5000, investors should jump at the chance to get hold of the 2008 vintages for around £5000 and £3000 respectively.

The recent explosion in prices has been put down to ‘new-money buyers from China and the rest of Asia’ and it is believed that this will soon spread to all of China’s major cities ‘putting enormous supply pressure on certain Bordeaux chateaux’.]]> http://www.wineinvestment.org/23-11-09_Wine_Investment_Performance_Since_2000.html AD44F2DF-0890-4501-90AC-CEB23269F59A Mon, 23 Nov 2009 18:35:11 +0000 Wine Investment Boost  - 26th October 2009
By Thomas Gearing (C.O.O) - Cult Wines Ltd - http://www.cultwinesltd.com

Recent investor news has been dominated by the fine wine market, with the Liv-ex 100 up by 4.6% in August alone and portfolios� increasing by around 10-13% since the beginning of the year it is no surprise that investors are moving their money into this resurgent market.

When compared to the FTSE�s real return of -3.5%, the large gains that can be made currently in the Fine Wine market have made it very attractive to those looking to diversify their portfolios.

The Fine Wine market has rebounded quickly following the late 2008 dip in prices brought on by the global recession. Prices are back to pre-crisis levels and with increasing demand from Asia and the dissipation of the availability of key brand wines, prices could increase sharply in the coming months.

Furthermore the speculative fervour and excitement that continues to grow around the 2009 Vintage, new investors are being attracted to the market keen to take advantage from returning confidence.]]> http://www.wineinvestment.org/26-10-09_Wine_Investment_Boost.html AD44F2DF-0890-4501-90AC-CEB23269F59A Mon, 26 Oct 2009 14:54:26 +0000 Wine Investment Beats Recession  - 29th July 2009
By William Cohen - http://www.wineinvestment.org

A combination of a superb futures season for 2009 has meant that the fine wine investment is mentioned everywhere from TV to your free newspapers left on empty tube seats. Is this the reality of the market? In a word, Yes!

In April of this year we had the option to buy 2008 futures of Bordeaux. Producers put their heads together and cleverly put prices down by 30% to begin with, meaning that like an auction excitement grew quickly and buying increased dramatically. Over a two week period from Lafite Rothschild 2008 being released, the price grew from �1500 to �3600 in the UK. This is an example of the best kind of return you can get from the market and why expert brokers are sometimes worth listening to.

If you were a high net worth investor who puts 10-30k into various platforms of investment, and had luckily bought multiple amounts of Lafite 2008, you would have doubled your money and left room spare for long term growth probably worth hundreds of percentage points.]]> http://www.wineinvestment.org/29-07-09_Wine_Investment_Beats_Recession.html AD44F2DF-0890-4501-90AC-CEB23269F59A Wed, 29 Jul 2009 20:51:19 +0000 Wine Investment?  - 25th March 2009
By William Cohen - http://www.wineinvestment.org

The latest market reports released in February 2009 shows that the market has increased in buying power by 128% while the prices have lowered for the very best Bordeaux wines. Given that fine wine is a medium to long term investment, it seems that now is the best time for any investor to become involved in this market.

From the BBC at Christmas, to the Financial Times in recent weeks, our market has been praised for being an investor�s refuge. The simple yet confident structure creates new stronger portfolios every day and makes other known investments look extremely weak in comparison.

Best buys are not obvious. You have cheap access to Lafite 2003 (100 points) and others, but the nest buys are things like Cote Rotie 2003 (100 points) � a wine from Rhone which is one of the only investment wines from that area and is made in 1500 cases a year. It will never go bad and carries a pretty penny at auction. Belgium investors are heavily into Burgundy as an example and will buy these types like wild fire.]]> http://www.wineinvestment.org/25-03-09_Wine_Investment.html AD44F2DF-0890-4501-90AC-CEB23269F59A Wed, 25 Mar 2008 18:16:19 +0000 Choices In The Market  - 19th December 2008
By William Cohen - http://www.wineinvestment.org

The month of November shows stability in the fine wine market, since the large drop in prices in September and October. Compared to last year, trade has increased by 56% with US and European becoming more active buyers as sterling weakens. Although fine wine prices continue to slide, buyers remain outnumbered by sellers. Wine has been purchased wines at advantageous prices, in some cases the lowest seen since early 2007.

The economic downturn has been reflected in the value of the Fine Wine Index shows a 20% below its all-time peak had reached last summer. Unfortunately investors have seen the value of their stocks sink to an 18-month low following the stock market and bank crisis. Although until October wine had remained untouched by the economic crisis. Some classy vintages have lost as much as 25% of their value in one month alone.

That stocks that have been hit hard include Lafite Rothschild 2004, which decreased by 28% per cent from �2,775 per case to �2k, and Chateau Montrose 2003, which dropped 23% from �1,625 to �1,250. A case of 2000 vintage from Chateau Ausone - ranked Premier Grand Cru Classe - fell in price from �15,575 to �12,200, a loss in value of �3,375.

Financial advisers have recommended that fine wine is one of the best options for making money during the credit crunch, but experts suggest that the market will feel the effect of the recession. The high-end wines have suffered the brunt of the fall, because in the past they have been the easiest to sell and made the biggest profits. People are very cautious during the economic crisis and thought of having their money invested in wine may not be the best option for many.

Wines have also been affected by the drop in sales through restaurants. Many places have been reluctant to reduce the cost of a bottle despite the economic downturn. The drop in prices in October has been the steepest however experts are confident that the market will recover. Therefore in the long-term fine wine investment is recommended and will be profitable. Anyone who bought fine wine at the start of 2005 would have seen its value double by spring 2007, then a further 25% rise by summer 2008. Buyers would now benefit from the low prices, which have made good wines affordable!

Clos des Papes 2007
Fonseca 1966
Pichon Baron 1986
Ducru Beaucaillou 1986
Fonseca 1977
Carruades de Lafite 2003
Ausone 2003
Cheval Blanc 2005
Margaux 2005
Sassicaia 2001]]> http://www.wineinvestment.org/19-12-08_Choices_In_The_Market.html AD44F2DF-0890-4501-90AC-CEB23269F59A Fri, 19 Dec 2008 21:17:16 +0000 Lafite's Mystique Lures Wine Bidders to Spend $1.82 Million  - 19th December 2008
By William Cohen - http://www.wineinvestment.org

Due to the economic meltdown, many bidders thought financial jitters would mean softer prices. However a top-quality, single- owner collection, mostly consisted of first-growth Bordeaux reds and Burgund Domaine de la Romanee Conti, all were purchased on release. Most were in original wooden cases and perfectly stored, which command a premium.

One of the eye-opening auction trends of the past two years has been the rise of the Lafite brand, especially in Asia. Prices of older vintages are double the price of those in Bordeaux first. Nobody saw this coming when a particular demographic attacks a specific type of wine, i.e. Lafite''.

At a recent auction in New York, people battled against each other for the first case of 1982 Lafite, taking it for over $50k ($5ka bottle), a world record, beating case lots of auction darling 1982 Chateau Petrus. The six other cases of '82 Lafite went for $33k to $40k. Two years ago, it traded for approximately $10k a case.

A private wine club owner said �A single bottle of '82 in a retail shop is $10k. It would be displayed like a treasure, people do business while drinking, so if you treat to such a great, expensive bottle of wine, you will be taken more seriously''.
 
Many people have said Lafite is popular because the name is easier to pronounce, an Asian representative pointed out that Lafite was the first wine to be identified in China as �great''. Its not just Asia who buys Lafite. It's a favorite in the U.K. and Europe, too.

A recent wine investment fund (who picked up an imperial of 2000 and cases of '96 and '86 magnums) suggested, �most prices are holding because provenance is the name of the game''.
 
Lafite has always been Bordeaux's most famous property and its wine the most elegant, with more finesse than power. The 1980s bottles, �82 and 86� are the stars, with layers of flavour and luscious ripe fruit unlike the 1970 bottles �75, and 76� which are seen to be dinner disappointments. It is noted that the �85 is succulence and finesse, the 88 is tight and structured and the 89 is developed, with a mineral-tinged and smooth taste�. Out of the 10 vintages from the 90s, the deep, concentrated 95 and 96 is powerful, intense and higher- priced 96.]]> http://www.wineinvestment.org/19-12-08_Lafites_Mystique_Lures_Wine_Bidders_To_Spend_$1.82_Million.html B0224FB1-05AA-4D7D-A41C-ACC396F20EBB Fri, 19 Dec 2008 21:03:44 +0000 Credit crunch squeezes wines - 1st December 2008
By James Barter-May - http://www.wineinvestment.org

Due to the credit crunch property and stock market prices have fallen considerably. Also this week the international art market appeared to crumble and now sales of wine, are finally feeling the full effect of the credit crunch, with the biggest fall in prices for seven years, down 12.4 per cent in October, according to the Wine index. Although for some time wine sales was supposed to be a safe haven for investors.

Every modern vintage came under pressure last month, but the most expensive Bordeaux first growths from 2005 have seen the biggest fall, with prices collapsing 25 per cent from the peak of the market in August.
The relative large price drop is a mirrored pattern during the recession of the early 1990s. After the Asian crises of 1997 and 1998, wine prices corrected by 25 to 30 per cent.

In the past, prices have decreased gradually over a period of a year. However this time they have crashed by 16 per cent in four months, with two thirds of that fall in October. The volume of wine sales recorded in October has dropped considerably from the previous month�s record levels.
 
Unlike in the housing market, those with cash to spend have been buying bargains at the heavily reduced prices. It is noted that Champagne has had an extremely good month, as the rush for bubbles defied the gloomy economic outlook.

The sales in restaurants i.e. the average bottle spend have fallen by 40 or 50 per cent over the past six months. It is noted that sales in supermarkets have risen to about 25 per cent as customers choose to seek bargains and drink them at home.

For those wondering what their cellar is worth now, there are some sips of comfort and happiness. The Fine Wine industry is like any market, it is governed by laws of supply and demand, and there is a finite supply of the best vintages. For example �Only 20,000 cases of Mouton Rothschild first growth are produced each year and obviously there are more than 20,000 people in the world who would like to own one.�

However, with many investors having had their fingers burnt, perhaps now it is time recommend to investors stop trading wine like mortgage-backed securities and instead get out the corkscrew. ]]> http://www.wineinvestment.org/01-12-08_Credit_crunch_squeezes_wines.html 985A3C73-A0EB-4692-8937-909112BE1844 Mon, 1 Dec 2008 03:07:21 +0000 Now is the time to buy cheap Bordeaux 2005 - 30th November 2008
By Oliver Charles Gearing - http://www.cultwinesltd.com

The prices on Bordeaux 2005s are being reduced around the world. The buyers are trading down in response to the financial crisis. However merchants are advising owners to hold onto their stock as prices are not going to fall any further.

As suggested by a merchant, there has definitely been a pause with the 2005 first growths. In September and October months �we saw bottle sales far more than case sales�. A chairman of a retailer commented that �Prices have not yet had time to adjust to the market conditions, and we anticipate prices will go down�.

In Bordeaux, the prices on the 2005 vintage of all classified growths have slid by up to 20%. First growth Ch�teau Latour 2005 and fifth growth Ch�teau Batailley 2005, for example, have both seen recent reductions of 12%. Although older vintages particularly the 2000s are still looking robust and are increasing. This suggest bargains for buyers and potential investors, as merchants avoid holding onto inventory.

A n�gociant advised that �Everyone in the wine industry is trying to get rid of stock�. The prices are coming down because things are being bought to order. It is noted that the buyer's market is more choosey and buyers are looking for the best price whether it is in Bordeaux or the rest of the world.

In London, the Fine Wine Index plummeted 12.4% in October, with 2005 first growths badly affected. The Ch�teau Lafite-Rothschild 2005 fell 24% during the month. However figures for November indicate the index is stabilizing again and prices appear to be stabilising.

A sales director said �the 2005 first growth prices fell 20-25% in October, with n�gociants cashing in on the surge in their value since their release.
The reason why the 2005s are taking a pounding is that it's the only vintage with any stock�.

'There's a bit less trading going on and people just seem to be a little bit less worried,' he said.

However it is suggested that we've got to the point where prices won't drop much more. It is not recommended to anybody to sell their 2005s as the prices ill start to creap up.]]> http://www.wineinvestment.org/30-11-08_Now_is_the_time_to_buy_cheap_Bordeaux_2005.html CD12052A-D706-40B4-A6C5-0E05AC9669DD Sun, 30 Nov 2008 15:21:34 +0000 Sommeliers look at their best options - 29th November 2008
By Oliver Charles Gearing - http://www.cultwinesltd.com

As the number of wine funds grows, who better to advise on purchases than those who know wine best. Below are the comments made by some of the well known and leading sommeliers.

Domaine Roulot Meursault Les Luchets, 1996 - A mineral-driven, with an oak background is delicious, pure and so clean. �This winemaker doesn�t get enough respect�.

Ch�teau de Beaucastel Chateauneuf-du-Pape, 1999 - It�s not as alcohol-driven as a California cabernet; it�s more balanced, but still remains powerful and rich. A one that is worth keeping an eye on.

Antica Terra Willamette Valley Pinot Noir, 2006. Produced in Oregon seen as a top-tier wine in three or four year�s time. A sommelier describes this wine as a �pedigree of the winemaker�.

Emrich-Sch�nleber Riesling Mineral, 2007. A sommelier describes the wine as �Riesling is an undervalued variety and with this wine the quality is way higher than the price �.

To date, wine companies have focused exclusively on first-growth Bordeaux, from known brands and best possible vintages. For example one fund is packed with products of storied chateaux, including Latour, Lafite-Rothschild, and Margaux, from years such as 1982, 1989-90, 1995-96, 2000 and 2005. The $22m under management equates to roughly 1,700 cases, stored in special warehouse. It includes one of the priciest cases of 2005 Petrus valued at 35,000k.

Such funds are capitalizing is burgeoning Chinese, Indian and Russian money, as the countries� financial elites acquire a taste for the fine wine.

This is not to say that fine wine is always up on a high. As with any asset, it is dependent on supply and demand. If the emerging market sees their wealth melt away thanks to a global slowdown � the demand for pricey vintages could decrease as well.

It is fair to say with many investments, it is a question of access. Products of the great chateaux are parceled out, often to professional wine brokers with long-standing relationships. While individual investors have little clout, wine funds offer proper connections to obtain the fine wine in the first place.

When the time to sell comes, it is the professionals who usually find buyers at the right price. For a private investor the market is little, like swimming with sharks.

The personal pleasures of wine collecting fights against the tactile benefits of owning and holding the precious bottles. Unfortunately, wine funds keep a military control of their stock, since the supply chain from chateau to final storage facility has to be �pristine and well-documented�. Wine funds continue to gain traction. As this economic downturn has worsened, the traditional �alternative� assets such as commodities and real estate have been sinking together with the Dow.]]> http://www.wineinvestment.org/29-11-08_Sommeliers_look_at_their_best_options.html 38F439F7-E048-4254-8F1A-7E9086AFA329 Sat, 29 Nov 2008 13:09:07 +0000 The romantic wine industry provides strong returns  - 28th November 2008
By James Barter-May - http://www.wineinvestment.org

As the world stock market meltdowns, investment of fine wines such as �99 Haut-Brion� and �2000 Mouton-Rothschild� could not be at a better time. The vintages are housed in climate-controlled warehouses. As the day goes by, the wines get tastier and pricier. An investment in fines wines listed, has proven to quadruple over an eight year period.

Over the time fine wine return was about 15 per cent a year, outperforming besting stocks, bonds and real estate. During the recession, such as the 1970s, fine wine outperformed other asset classes.
Investment in fine wine market does not closely correlate with the financial market. Fine Wine Index, tracks the secondary market for 100 top wines, which equates to 42.2 per cent return.]]> http://www.wineinvestment.org/28-11-08_The_romantic_wine_industry_provides_strong_returns.html 0745E6DA-0420-447B-9457-980615D567F2 Fri, 28 Nov 2008 14:46:18 +0000