Wines for Investment

[wineforlife]

Peace

[rossmckay]

who on earth would ever say it was immoral or greedy to sell something you bought and now no longer what it? You need to stay way from that other forum.

I sell wine with the intention of getting as much of my money back as possible. It's a rarity for me to sell for more than I paid, especially when commissions are taken into account. It might be different for you of course. I suppose there's people that do make some money but it seems like it's a marginal business model at best.

I've been looking at some icon bottles to bring back from Europe but honestly, while there's a lot of fat in the difference between Australian retail and Europe retail, there's often not much in the difference between Euro retail and Australian auction. Often the auction purchase price is very similar to Euro purchase price. I've seen some storage sites where people advertise their wines for sale but if they can sell those wines for that price, good luck to them. There's considerably more money in selling other people's wine than there is in selling your own wine from what I can see.

And good luck to you should you decide to take the plunge. A lot of research is necessary.

[wineforlife]

Thanks Ross for the reply. I don't like buying wines at the auction. I never bought and probably never will. You just don't know what kind of condition the wines have been kept. Now I use Polystyrene box in my underground cellar and some in wine fridge. I had so many wines that were heat affected or in a poor condition because some wine shops don't really look after them and many were getting sun tanned in the wine shops and some shops have no air conditioning in summer. Which wine merchant has the best price for the Bordeaux en primur in general?

[phillisc]

Michael, I really don't know what you want from your post...or indeed what to make of it.

Your other thread "help me rank what 2012 Barossa shiraz to buy" gives me the distinct impression that there is heaps of money to be made in buying and selling wine.
Something tells me there isn't, otherwise all of us here would be on to it and quite a few of us could give up our day jobs.
Great if we all read in 5-10 years time that you are enjoying some great tasting experiences from all the 2012 shiraz that you purchased.
However, won't be all that interested if you made 5 or 10 grand.
Sure most of us here at some stage have sold wine at auction, but it is to "shift" bottles of a style that perhaps are no longer enjoyed, or that some here went long on a particular make in a particular vintage and took a punt of making a few bucks. Cue 2010 St Henri here ( as an example) but a 70 dollar purchase to return big dough...I'm guessing 7-10 years minimum for a decent return.
Or that the original purchase of a small number of wines, when brought 20-30 or more years ago has gone up so much...its gets to a point can't really afford to drink it and could spend the money on a great many more bottles.

However, having been on this forum for a little while, I am bemused when the intention of a post is speculative...driven by the intention to make money and not much else really.

Unless you are flogging early O'Sheas, 60's HOG, 50's Granges, 71 Grange, '55 Michael (these are just some examples, all of which need to have impeccable provenance and to be perfect in appearance) or international stuff in outstanding vintages, you might as well leave your money in the bank, buy a rental property or play the share market.

Unless you are buying 100s of dozens a year and are prepared to sit on this stock for 2-3 decades, the days of getting in quick , making a killing and getting out even faster are over.

Yes I sold HOG and 707 in the 90s for 8 to 10 times more than what I paid for them...after commissions and after only 5 years from original purchase.
To do that in 2014, you either need to be in good health as you will be very old come selling time, or you need a fool to pay in today's money $4 grand for a Hill of Grace...aint going to happen.


Yes I try to be considerate of a person's morals and values and yes have upset a heap of people along the way...but really of the wines you mention, by all means buy a few bottles...look after them and then open a few and importantly enjoy the experiences.
Yes make a few bucks if you wish, nothing immoral about that, or anything else in life that you wish to sell, but enjoy the drink instead.

Good luck with your quest.

Cheers
Craig.

[wineforlife]

Hi Craig, I don't know why you would think that I gave you an impression of intention to make money and not much else. For someone who never made money in wine other than selling 5 grange? For someone drunk wine for 20 years?, for someone been collecting wine for 13 years but never sold anything apart from 5 grange?, I will somewhat take that is a compliment.
Again we are off topic, but I do that all the time too. It might be the age.
We all know making big money is not really possible for wine unless buy best of the best like 1st growth in a good year where parker gave perfect 100 point and top notch burgundies and cellar for next 5 generations, long after I am gone.
I should have make the topic a little bit more clearer. What wines are good for cellaring, because in the future if I did hate that bottle, I could always sell it at the auction at a FAIR price. I believe It is good to collect in my opinion, something that is worthy rather than something that isn't worth much in the future. The problem for me is getting my hands off my cellar. Just started to collect some Bordeaux after drinking every single bordeaux in my cellar. Recently got branaire ducru 2010, Talbot 2009, gruaud larose 2010, clos de l oratoire 2010, 2009 Chateau Pichon Longueville Comtesse de Lalande ( could not afford the first wine), Chateau Corvin 2009 and few bits and bobs of cru bourgeois. Thanking of getting some chateau leoville barton, leoville las cases, lynch bages, pontet canet in the future and pape clement, la lagune. Again we will see if I can get my hands off them before the future auction in many years to come. More suggestions will be greatly appriciated! Cheers!

[Polymer]

Well I think you've already answered your question....

Wines which go for a good amount on auction tend to be either VERY popular (a lot of demand) or hard to get (low supply). With very popular the wines have to be reasonably good and the supply can't be silly amounts (think Yellow Tail). With hard to get wines they need to be somewhat well known. Some small boutique wines that you think are great and aren't that easy to find may not have any demand for them and so they don't get a great price at auction.

I personally buy what I like to drink (or what I think friends will like to drink)...regardless of what I think it will go for at auction..in fact, if the wines I like to drink are going for almost nothing at auction, even better...

[wineforlife]

Hey Polymer, I was exactly same as you for last 20 years of drinking, but now I want to collect some of the best imported wines as I am huge fan of old world wines. Expensive but bottle by bottle I want to make some nice collections. Mostly probably end up drunk, but if I need to sell it, might well be expensive wine at the auction rather than some of wines that decrease in value and sells for almost nothing. Daily wine and cellaring great wine for me is in separate section. Well it might be in same section for many of you with wealth, but not definately not me.

[Polymer]

Hey Polymer, I was exactly same as you for last 20 years of drinking, but now I want to collect some of the best imported wines as I am huge fan of old world wines. Expensive but bottle by bottle I want to make some nice collections. Mostly probably end up drunk, but if I need to sell it, might well be expensive wine at the auction rather than some of wines that decrease in value and sells for almost nothing. Daily wine and cellaring great wine for me is in separate section. Well it might be in same section for many of you with wealth, but not definately not me.

Well sounds like you already have an idea of what to buy...what is retaining or increasing in value now will probably be the same in the future but who knows...

Personally if I was really concerned about the value of old world wines I'd probably start off by not buying it in AU....Either be buying it overseas and bringing it in myself or getting to know some of the importers..and if I was really serious about it I'd be setting up a company in the UK...

[wineforlife]

I am a tight arse:) Unless wine is very cheaply priced I would not buy in sixer or dozen. Besides there are millions of different wines out there in the world. I want to try many different wines as possible. I like buy wines in 2's or 3. I have no idea on buying it overseas and bring it. Transportation and tax will be huge. Are we talking really big volume of wines? Do you know some importers that do very sharp price? Which merchant in australia do best price bordeaux en primeur? Looks like we got alot to talk about next week. Looking forward meeting you. Cheers

[eurodrinker]

Hi , I'm new to this forum but thought I would ask if anyone has heard of Cult Wines Australia they are offering En Primeur and First Growths for investment but i'm not sure of their reputation.
I have done some web based research and can see that they have been around in the UK for quite a few years but have recently opened here in Oz.
Their prices do seem very reasonable but sometimes things can be to good to be true.
They have offered me a 2010 Montrose for $2900 which seems quite cheap and maybe too cheap but the story seems to be compelling due to Parker re - scoring the wine to 100
Any feedback would be appreciated as i'm keen to start a modest Wine Investment portfolio . the company can be found at www.au.wineinvestment.com

[Hacker]

I might be wrong but I reckon you are spamming this internet site. This is no way to start a 'modest' wine investment portfolio. Wine is for drinking, sharing and enjoyment. Period.

[Sa Mule]

There is a great place in most capital cities for those who would like to make money investing in wine.
The best returns too - they have various names but casino will be somewhere in the title - buy chips instead of bottles.
However, I have benefited from many 'wine investors' by buying their wares at near or below cost at auction (thank you!)
A fool and their money....

[Chris1980]

Hi, does anyone here know what Langton's charge buyers, if anything at all, as a buyers premium? I can't find anything on their site. I've built my collection (/hoarding) up via Dan Murphy's and other retailers but I would like to start using Langtons to pick up some of the good vintages at a decent price.

Also I have 6 x 1996 707's that I am thinking about selling, what is the best way to sell these, is it thru Langtons, ebay or some other method? Any assistance from collectors, traders or investors would be appreciated.

Thanks!

[eurodrinker]

haha I like your comment about casino's, by day I work as a Forex Trader and that is pure gambling but we badge it as investing so we nicely get away with it without anyone knowing
I'm not sure about Cult Wines yet as after doing research today it seems that unless you want to pay the tax and shipping wine is held in the UK which i'm not to keen on so i'm also taking a look at MW wines due to local stock and storage. But if you say its a mugs game then I will tread carefully.

[VINH NGUYEN]

Hi, does anyone here know what Langton's charge buyers, if anything at all, as a buyers premium? I can't find anything on their site. I've built my collection (/hoarding) up via Dan Murphy's and other retailers but I would like to start using Langtons to pick up some of the good vintages at a decent price.

Also I have 6 x 1996 707's that I am thinking about selling, what is the best way to sell these, is it thru Langtons, ebay or some other method? Any assistance from collectors, traders or investors would be appreciated.

Thanks!

Buyer's commission is 16.5%

[wineforlife]

I love it when it get heated hot in the forum.
A fool and their money will buy chips instead of bottles roflmao. Hahaha I work in the sovereign room at the stars. Most of them if not all of them have lost alot of money in the past than their winning. But they are super wealthy it does not bother them too much. They have strict rule of how much money to take to casino each day. Perhaps you could give us insight on winning at the casino? A fool will go to Casino and gamble to invest money!
Eurodrinker, there always are always people trying to stir the pot or shall I say two faced individuals. Dont let that discourage you to post comments in the future.
Yeah wine is for drinking but most of people sell at the auction if you they dont like the wine or want to lotate the stock. So?
Man, I had a good laugh.
Langtons seems to be best option if you want to sell in australia.
I forgot, me too got some first growth from auction at very very sharp price. I think that is what wine investors will do, not saying I am, because I will drink those for my birthday.

[Sa Mule]

Wineforlife, sorry mate perhaps I was being too subtle / sarcastic?
Casinos and wine investments are in the same league IMO, that is all.
Both offer similarly reliable ROI.
Best of luck

[wineforlife]

Hi Sa Mule,

I should be the one saying sorry mate.. I really need to learn to shut my big mouth. ( my wife will be the first one to agree haha)
I lost fair bit of fortune in my younger days at the casino. I don't gamble any more luckly. Watching rich people gambling is enough for me. (Only gamble a little on world cup every 4 years. That did not go well either)
But seriously buying first growth, infact any decent classed growth wont loose too much in value.

Eurodrinker, if you want to drink and invest on wine, I would go for bordeaux en primeur in good vintages like 2000, 2005, 2009, 2010. If you got the budget, grab all the first growth, some classed growth. (So many good ones and some are not even classed growth) if you got the budget get petrus and le pin, cheval blanc and ausone. Pm me if you want more details. Drink some or drink all, if you don't like it, you have always alternative option of selling it at a good price. Drank Beychevelle 2000 recently, magnificent wine, will be singing for another decade easy.

[Chris1980]

I think investing in wine can be as risky or as safe as you want it to be, same as investing in the stock market. If you stick to the blue chips wines and vintages or blue chip stocks over time you should make money (don't quote me though, I'm not a qualified financial planner!!!). If however you want to invest in some up and coming wine/vintage or a mining stock still in the exploration phase then that is risky - high risk/high returns - buyer beware. The great thing I like about putting some of my left over cash each month into wine is that down the track I can decide if I want to drink it or sell it for a profit should the price be right. I've got options, unlike my share portfolio which unfortunately I can't drink!! I have wanted to tip my portfolio down the sink before though... Actually I do own some Treasury Wine Estate shares which have done well for me in recent time thanks to takeover interest, might be time to sell and stick those profits into some blue chip wines - might look at wineforlife's suggestions...

[Sa Mule]

1. Wine equalisation tax (WET)
2. High storage costs
3. High cost of valuation for margin lending
4. Potential to drink the profits (at the higher end of the market one bottle may do it!)
5. Insurance

Just a few reasons why wine investing is fraught with risk

Hobby investors and are usually concerned only with the purchase and sale prices in order to calculate profits - if you are serious about investing you might need to look a little harder at fixed and variable costs.
Once this is done it becomes (largely) a fools game.
You are peeing into the wind - you might get lucky!

Most comments on this forum are based on purchasing wine for enjoyment, and maybe offloading a bottle or two for a 'profit'
Fair enough, but this is really using the term 'investing' in the loosest sense, and is misguided IMHO.

[Chris1980]

Thanks Sa Mule. I ever buy shares, wine or art, if it starts going up in value I call it an investment. If however the price goes down I say it's my hobby! helps me sleep at night... I had no idea you could do margin lending with wine, I've done it with shares before (pre GFC so i got burnt, more like charcoaled, during the GFC), but now when I do buy shares I prefer to pay upfront. Again, helps me sleep at night! I am curious about margin lending on wine so I will google it now just for my own knowledge. I am expecting to find Cash Converters on the search list!

[Sa Mule]

Financiers will let you borrow against a certain value of any asset in general.
How much, and at what rate is dictated, largely by the stability of the intrinsic value of the asset.
Of course, you may be asked to top up the facility if the value drops!
If you are running a business, or investment portfolio, this allows one to free up capital to increase investment (& hopefully growth / profit).
Whether you do this for your 10 dozen Romanee-Conti DRC, is up to you, but certainly possible.
I wouldn't recommend getting this valuation done at cash converters though!!
Cheers

[sjw_11]

Wow how did I miss this thread.... epic.

Can I say just a few points on this concept you "invest" in wine?
The problem is that wine is a product with no inherent value... it does not produce cash flows (like a business) and it is not a universal store of value (like gold) or a component of production (like commodities) or trade (like currencies) which would mean people will inherently seek it out.

It is more akin to art, collectables (jewellry or antiques worth more than the value of their components), old cars, etc. It is a luxury item. A status symbol. Values of such tend to fluctuate with some level of volatility, and are driven by fads that are hard to predict.

Even the fine wine index benchmark does not "always go up". En primeur prices go up and down. Demand and supply fluctuates. Consumer and investor tastes change over time.
If you were going to do it, then buying a basket of blue chip 1st growth Bordeaux has been the relatively most successful strategy, but choice of producer, vintage, etc would matter...

The other issue - and this particularly applies to anyone foolish enough to leverage up their wine purchase is that the investment is relatively illuquid (pardon the pun). And the time when you are most likely to need to realise the funds to help elsewhere is likely to be a point where the economy is doing poorly and hence free cash for people to buy luxury items such as these would ordinarily be lower....

I will let the actual data speak for itself:
I quote the producer of this index: "Declared the "fine wine industry's leading benchmark" by Reuters, the Liv-ex Fine Wine 100 Index represents the price movement of 100 of the most sought-after fine wines for which there is a strong secondary market. The index is calculated monthly."

[Mahmoud Ali]

I knew a Kiwi fellow who seemed to have struck the right balance. He wasn't in the trade but told me his policy was to buy two cases of the Bordeaux he fancied. Then, in about 10 years he'd sell one case and more often than not drink his second case for "free". Seemed like a sensible policy to me, using one's knowlege of vintage and chateau to help him drink more of it.

I suppose one could do the same with regard to some of Australia's more iconic wines that have a track record of appreciating in value over the medium term. It might be an interesting, if academic, exercise for wine enthisiasts on this forum, no?

Mahmoud.

[rossmckay]

I knew a Kiwi fellow who seemed to have struck the right balance. He wasn't in the trade but told me his policy was to buy two cases of the Bordeaux he fancied. Then, in about 10 years he'd sell one case and more often than not drink his second case for "free". Seemed like a sensible policy to me, using one's knowlege of vintage and chateau to help him drink more of it.

I suppose one could do the same with regard to some of Australia's more iconic wines that have a track record of appreciating in value over the medium term. It might be an interesting, if academic, exercise for wine enthisiasts on this forum, no?

Mahmoud.

Tyrells futires used to work with buy three, keep one for free which was a pretty good value in my book. Better if you can do it one for one albeit with a larger investment

[Chris1980]

I like the idea of buying more than you need of a great vintage and drinking some and if possible sell the rest for a profit. That is what I do in an unstructured way now.

Has anyone "invested" into Tyrrells wine club wine futures? If so has it been worthwhile, they say they have been doing it since 1986 so someone should know if in the past it has been worthwhile. I've only seen what they have on their site, but I think I'd rather put my money into blue chip wines - iconic Aus and French wines.

[rossmckay]

I like the idea of buying more than you need of a great vintage and drinking some and if possible sell the rest for a profit. That is what I do in an unstructured way now.

Has anyone "invested" into Tyrrells wine club wine futures? If so has it been worthwhile, they say they have been doing it since 1986 so someone should know if in the past it has been worthwhile. I've only seen what they have on their site, but I think I'd rather put my money into blue chip wines - iconic Aus and French wines.

See post above. I was doing it back in the day but stopped when financial circumstance changed and by the time I got back into it they had a different formula which was nowhere near as good. I had made my last Tyrells purchase and haven't bought a single bottle since.

[Chris1980]

Thanks Ross, it didn't sound appealing and I'm not a fan of Tyrells so I don't think i will be getting involved any time soon... Off now to choose a bottle of red to have with my steak!

[sjw_11]

I love the old adage of buy two cases, one to keep and one to sell.... The problem for me now is the price of first tier Bordeaux means that is a very expensive yearly outlay so unless I was 100% convinced the second case would pay for the first it's hard to justify when my primary objective is to drink tasty wine!

[rossmckay]

I love the old adage of buy two cases, one to keep and one to sell.... The problem for me now is the price of first tier Bordeaux means that is a very expensive yearly outlay so unless I was 100% convinced the second case would pay for the first it's hard to justify when my primary objective is to drink tasty wine!

That was the beauty of the Futures of course, having a guaranteed return. There's plenty of 2010 bordeaux going for less than the en prim price at the moment. Like you said before, no intrinsic value makes it a hobby not an investment.