Poll: How much will 2016 Lafite cost in 6 months?

The current WS low for 2016 Lafite is about $715. How much will a bottle cost in September?

I’m interested – mostly from an academic perspective – of what this disastrous mess is going to do to the wine market, and also in peoples’ perceptions of where the wine market is headed. So here’s a simple poll, with a wine that I’m not in the market for but should be a good proxy for opinions (because it’s high enough production and commoditized enough to respond to market forces).

There will be some to profit i bet.

The first 5 votes are evenly distributed across the 5 options. Lesson: no one has any f’ing clue.

Missing the $600-700 option
Has hit auction at $630 already
UK price low is $550

Given UK prices are already <$600, I answered $500-600.

All the people who can afford it now will be able to afford it then.

Ain’t no rich people heading toward Cru Bourgeois.

Unemployment could be 20-30% and it won’t affect Lafite or Louis Vitton.

I don’t agree with this. 2008 Bdx and Burgs were dirt cheap (comparatively). Billionaires may keep buying (and that may prop up small-production Burgs). But affluent folks will keep some powder dry. I can “afford” Lafite in a literal sense, but I’m very likely going to be spending less money on wine (probably far less money on wine) until I see how the economy/legal market/wine market shakes out.

Agreed, and Lafite has so much money they might not release any wine until the recovery. They aren’t exactly farmers, it’s the small producers that will lower prices and still might not find buyers. Sad all around.

I’m not even aware if 16 Lafite is on the market to take home today. If it is then folks who stretched to buy might have to sell at a loss, but the factory is in no position to significantly lower prices.

How many bottles have you already purchased?

This is like the tree-in-the-forest scenario: If half-a-billion is whacked off the multibillionaire’s worth, can they feel it?

The price will fall because with 20-30% of the workforce being laid off or furloughed conspicuous consumption will be a bit out of vogue at least for the super rich with scruples.

I would expect the 2017s to cheapen a lot over coming months.

The challenge here, too, is that you have to respond to the poll in order to see the results, but that forces people like me who don’t really have any feel for the issue to give a poll response, thus making the whole thing less useful.

I expect you’ll be able to find distressed sales that drive the answer to the lower end of the range you suggest. I also expect that the generally-availble-at-auction hammer price will be above that. I voted on that interpretation.

fred

There’s a View Results button…

Is there an option for $600-$700?

I’m a lawyer—not a mathematician.

That’s funny, that’s my running joke as well when people asked me why I left architecture for law.

I don’t know about Lafite (the Bordeaux supply demand situation is a whole extra layer of complexity) but my guess is most fine wine is going to get hit hard and we haven’t seen it yet (per my anecdotal observation), so I am not excited about buying today. Beyond the stock market being down 30% and incomes (even for high earners) likely to be down this year, restaurants are (a) in some cases going to need to be forced sellers of wine to stay afloat, and (b) are almost certainly not going to be buying anything new. The restaurant bid completely disappearing from the market has to have a huge impact on new release and even auction wines.

I think there will be some very attractive wine prices to come, but also, it’s unclear if it’s going to make sense to plow money into wine when financial assets are going to be substantially cheaper. Certainly in 2008-2009, I’m pretty sure with rare exception you were better off buying stocks and selling them to buy wine a few years later. That said, I can see this recession being even worse for the wine market (and thus, it being worth it to dive into buying wine over the next six months) given the total lack of any restaurant bid, and likely, restaurants force selling wine into the market and needing to do so quickly.

There’s a lot more people who make $250k-$1MM than billionaires … and in bull markets those upper middle class folks are big time buyers of luxury goods, but much less so in bear markets or periods of volatility. Yes, a significant majority of people who could afford a Ferrari in December 2019 can still afford a Ferrari in terms of dollars in their bank account, but I guarantee you Ferrari would rather see a bull market to sell cars.

That is my thinking as well. The market for DRC may be largely unaffected by this downturn, but the market for $50-500 per bottle wines likely will be meaningfully.

Hinges a lot on how much a dollar is worth in 6 months…