I've been trading stocks for the last 18 years and have been trading wine over the last 4 in the UK. I basically surfed the pandemic boom so now I have a much smaller portfolio than I had in 2021 at the height - I had 15% of my savings into wine. IMHO based on the last 4 years the major factors in making actual money in wine are (in this order): popularity, liquidity, scarcity, arbitraging opportunities, interest rates (opportunity cost), tax benefits, vintage, storage and brokerage costs. That said, you should be able to trade wine from any region but certainly Western Europe wines are much easier to deal with. When Thomas said 10 years to sit and wait, interest rates need greater considedration. We've left a period of 14 years of 0% rates and now we're in a completely different scenario where the base rates across the developed world may not go below say 3% for the long term. So risk-return, wine doesn't seem like it'll be as great of an option as they had been in 2008-2022.
Banker of 20 years here. Unless you have bought your wines at a very reasonable price and you have bought in large quantities and it is a spectacular vintage from a highly esteemed producer, it's very difficult to obtain a reasonable profit, let alone a positive return on your initial investment. There are too many variables with wine. Especially with these top wineries increasing production and improving on the quality of their wines year on year, IMHO it will not be worth consumers or speculators in the near or distant future to buy old vintages at auction or on the secondary market, for a premium, considering a lack of assured quality and high transactional commissions, when they can get better quality and in abundance from buying wine futures or current release vintages. I would only buy wines for two reasons. For the passion of enjoying to consume it yourself or in very exceptional circumstances that you have had the opportunity of purchasing a highly sought after, very limited release offering at a very good price. Otherwise it's a false investment trap for fools that will have you a slave to your collection until the day you sell it or die and have it inherited by your ungrateful heirs. You should never invest in anything that is a perishable consumable that can be made in large quantities or manipulated by multinational coporations who hold their own interests above their consumers. I refer to the increasing amount of luxury brands like LVMH, Chanel, Ferragamo etc and insurance companies like AXA who have been heavily invested in the wine industry, increasing volume of production for profit and diluting the prestige associated with certain brands. I would say 80% of Bordeaux is overrated, over valued and overpriced. 99.9% of Burgundy is ridiculously overpriced. Supply and demand is artificially hyped by marketing. Many top producers are averaging over 20k cases per annum. If investors aren't drinking them and are indeed hoarding them, there's an over abundant supply of Lafite out there. Perhaps a million pristine bottles. Not like it's a properly rare 1945 Mouton. The best advice to any investment is to educate yourself first. Find value within your budget. Buy wines from quality producers that you trust and support. The best wine investment is in your own palate. Then after having drunk many good bottles through trial and error you should have the confidence and courage to be able to convince others of your wise choices.
It rocks to see someone so down-to-earth and demistifying wine snobism! Investment and wine are my two passions. One day I'll figure out how to bring them together in my everyday life. Cheers!
While I've never considered investing in wine to make a profit, this was still an interesting topic with a great guest. Like you, my wine investments are for myself - mostly vintage ports 🍷
I love that he calls that a myth. Particularly because that means once more that there are some wines without outlandish prices that are still world class.
Definitely, there are great wines for very affordable prices. We just need to know the places to look for them. And interestingly Bordeaux is amongst those regions, once outside the bigger names - great value and amazing quality. 🍷
My “journey” actually started with the ideal of investing but i agree that the glory days are probably over but i find a good mix of being a collector mixed in with some investment is a perfect mix. It’s a great topic though. Great podcast. I probably would have chewed his ear off for hours with so many questions. Don’t know how you kept this one under an hour.
Well, there definitely are labels from Priorat that are great for collecting, 100%. We naturally cannot name every single wine or region. And unfortunately, high quality wine does not always mean that it will increase in price significantly over the next years. 🥺
I’m laying down age worthy wines that I know will be way out of my price range in 10- +20 years. A bit like a pension. I may be eating cold baked beans in retirement but drinking well. Plus my girls will have some amazing wines for major life events. As for making money from wine, not interested. That’s what the S&P is for. Drink it and enjoy 🎉
I have always said the same thing, and I collect wines for my future self. I know that majority of those wines will be out of my price range, so buy them now! 🙏🏻
Very interesting topic. The best days are probably gone, because everything is so tightly controlled now you're unlikely to find any cracks to slip through. The competition is too fierce and the tools they apply too good to happily stumble upon anything amazing. Either you have the money, the knowhow and the network to play these margins or you don't. Likewise, either you have the money to bypass that process and get these labels to drink, or you don't. PS: I can't believe you turned off the camera. How dare you 😅
I think the best days for wine lovers to enjoy some of the world’s most amazing wines might have passed, but as for the investment - apparently we are still there! 🙏🏻
@@NoSediment Sure, you can make money on anything provided you're big and competent enough, but I thought the scope here was supposed to be relevant to amateurs on some level. If I was wrong I apologize.
Does the old adage of "buy two cases, sell one, drink one for free" still stand? 10-15 years maybe, for a select few, but I think it's starting to saturate.
