I am participating in the HDH auction and I am seeing people bidding for lots that is equivalent to or higher than what I find on WS. What’s up with that?
Irrational actions, caught up in the moment, like the provenance more than wine-searcher results… overseas buyers or even domestic where coming from one place is easier than lots of different retailers etc.
So many possible reasons it’s hard to speculate further I’d say… I’ve ended up over retail a couple times, and it was from the basic error of not checking!
A couple of things. Some buyers especially foreign ones, will pay a premium for one stop shopping, and not worry too much if they pay a few extra dollars.
Also for older wines, for condition and provenance, , you need to be able to trust your vendor, and HDH has an excellent reputation for vetting. They see a lot more older wines than the average retailer, and that experience is invaluable.
People could also be buying in case qty. Many times with older wines a store may have 1 bottle. Like Mark said you are much more sure of provenance also. HDH does an excellent job.
Many of the wines I purchase at auction (older Burgundy) cannot be found at retail or wine searcher finds one bottle in some small shop in London. Making it impossible to get
YMMV,
George
I got outbid on every single lot (some by a lot) and I felt my bids should have been competitive. During one 10 minute stretch I watch today, I saw a single bidder win lots that totaled well over $100,000. Hard to compete when people are dropping that kind of coin.
TBH on the stuff I was bidding on (mostly recent vintage backfilling) stuff wasn’t as strong as I thought it would be given the current trade worries. Actually still saw lots of bargains vs retail if you didn’t mind taking full cases. Put in some not aggressive last minute absentee bids that ended up tying the winner. Those old madeiras went nuts though, mostly two bidders fighting it out.
I’m 5 for 5 on this auction.
Got 5 outbid out of 5 lol!
I dont know if you participated, but the recently completed HA auction had some downright steals.
This HDH auction is ferocious on the lots I was looking at. Some of the same stuff was offered a couple months ago via HDH auction and went for lows… so I thought I would participate this time around, and the same stuff has been at the highs. I probably won’t even try to bid on my remaining watched lots…
Unless you’re consciously willing to pay more, for reasons like Mark and George suggest, I find the best way to participate in an online auction is simply to come up with a price and walk away. Since it’s never a matter of life or death, it is no great loss if I’m outbid. And I want that price to be substantially less than what I can find it for elsewhere. That means losing the item more often than not.
But people get caught up in the moment. It’s worse if you attend live auctions. Then one day you’re at home with some weird shit and you’re scratching your head wondering why it seemed so important one day. So I never go to those any more.
I didnt enjoy their system crashing when I was in the middle of bidding.
My best auction strategy is to determine my top price and enter it in the last minute of bidding. If I win, I win. If I lose I can’t up my bid.
Bidders are not always stupid. Some may overbid for a reason
There are now many “alternative” funds who invest in wines. Assume you are one of them and own 100 cases of say Latour 1989. the market price is say 700 $ a bottle.
Your books evaluates your 100 cases (1200 bottles) at 840000 $.
A 6 bottles lot comes for sale at auction. You bid it to say 770 $ a bottle. That’s clearly stupid if the market price is 700$. Right!.. or right?
Well, in this case, you overpay 420$ for the 6 bottles… but you can then value your 100 cases at 924000 $ in your accounts, an increase in value of 84000 $, i.e 200 times more.
Of course, you need to be careful as the price could go down at next auction… so you don’t push it too much.
And you have colleagues. friends and competitors … who also can help on investment grade wines.
So, do not be surprised if auction prices can exceed market price. It may be a small investor getting carried away… or it can be what one would call “marketmakers” in an unregulated market (remember Rudy?.. it took a lot of efforts and a billionaire to get him out…).
Just a speculation…
So I’m curious what people were seeing that went above retail. I don’t think you can count “retail” anything older than say 2010 except maybe in super blue chip bdx. I saw plenty of 2016 bdx and recent burg go well under retails.
Did you factor in the 20% fee?
Yes. For example 16 ducru for 1600 (so 160 per bottle), pichon Baron for 120, 16 clerget clos vougeot for 140, 16 fourrier gc for 80. Hdh taxes aren’t low but if you normally buy in NY it’s not much difference.
From memory, shipping rates at HDH were high.
They quoted me $93 to ship six bottles to Oregon via UPS Ground. It was only after I picked my jaw up off the floor that they offered to ship to a “storage partner” in town for $20.
That valuation process sounds like one more reason to avoid investing in wine funds.
I guess it depends. There were many lots that were won that wasnt cheap. Like '08 Dom Perignon that was $180 per bottle.