Flipping wines

Victor_Hong · February 7, 2012, 3:20am

I just glanced at Commerce Corner, which feels more backed up than LaGuardia during a snowstorm…when O’Hare has closed.

Humberto_Dorta · February 7, 2012, 3:37am

K John Joseph:

Humberto Dorta:

Huh, were looking in different sites John because on WC Cayuse sells every week for $100-120 across the board except for the frog which ususally gets around $200.

Brian, I forgot Schrader, that does well everywhere Ive looked.

Humberto, that price is based on my 2007 Aramadas, which I did not sell. They were “99 pointers” and going at some auctions, and very frequently at retail, for $199-225. The price gradually fell as the market was flooded. I think a common mistake for people holding flip-worthy wines is the “wait and see.” That might work for a 10-15 year hold, but a mid-year holdout is a death sentence. You either flip them the second you can before the market is flooded, the second a wine wins a huge award or score, or way down the road as you pray that your investment return beats rate of inflation (is it from France? No? Is it Sassicaia? No? You’re fucked.)

The same is true for Kostas. You can’t buy them and then sit for 5 years and hope for a return. You have to sell them ASAP, or right when the top 100 list comes out and people are trying to pick up wines from the list. (Disclaimer…I haven’t sold any of mine, but have facilitated a few sales from my mother’s stash of KBs through a broker).

Cali cabs are going to suck it up with RP gone. If you have 2007s with 100 point scores…wait 5 years and cash in on your wet dream of profits as you eliminate from your cellar the last of a dying breed: The RP 100 - Napa Cult. $$$$$.

Or, you know, drink it. (disclaimer…I didn’t drink my 07 Scarecrows…but made about $800 on my 3 pack, which I then used to fund my Cayuse and Bordeaux desires…worth it.)

Agreed. Fwiw I’ve never flipped a wine but certainly have traded up. I scour WC for deals several times a week

Tom_Reddick · February 7, 2012, 3:55am

Yes- for about 20 burgundies, provided one gets first release allocations. Otherwise, no- that ship sailed last summer.

Steve_Brickley · February 7, 2012, 4:14am

Maximum federal tax rate on the gain on collectibles held greater than one year is 28%, unless you are a dealer.The State takes more in a taxable state. Just so you dodgers know.

Rick_Gregory · February 7, 2012, 4:20am

Oh I don’t know, flipping isn’t totally dead (this screenshot came up when I hit View New Posts)

SteveC · February 7, 2012, 4:25am

If we lose money, can one takes the loss?

Please, pretty please?!?

Steve_Brickley · February 7, 2012, 4:56am

Complex area of taxation and the shortened version is here. In general, you net collectible gains and losses for the calendar year. If the result is a net collectible loss, then the excess loss is carried forward and retains its character as a “collectible loss.” In essence, the collectible losses are sponges that absorb collectible gains. This may make it worthwhile for folks who like to declare such transactions to do it each year in the loss years - allowing a wave of wine loss to move to that big DRC gain in the future. Soak 'em up. (caveat: not a regular practice area for me. Seek your own tax wine geek advice before blessing your return.)

Steve_Brickley · February 7, 2012, 5:14am

Watch out for the sales tax authorities. They like wine too. An “occasional sale” rule might give you a pass. Enough to make you want to drink. Not that you needed any prompting.

Nathan_Smyth · February 7, 2012, 1:05pm

Thanks for clearing up the tax angle.

GregT · February 8, 2012, 3:59am

Cali cabs are going to suck it up with RP gone. If you have 2007s with 100 point scores…wait 5 years and cash in on your wet dream of profits as you eliminate from your cellar the last of a dying breed: The RP 100 - Napa Cult. $$$$$.

That might be true. This isn’t a slam to AG, but there are plenty of people on this board and elsewhere who have more understanding of those wines than he does, and more history with them, and who are not likely to be moved by his “discovery” of a new star winery. RP brought a lot of authority when he was one of only a few critics who mattered. Today, everyone has a blog and AG has no particular credibility as far as CA goes. Thus, I don’t see any new “cult” wines in the future, nor any huge RP scores, so flipping is one of those 90s things that we’ll talk about like we talk about the 70s bell bottoms.

mike_pobega · February 8, 2012, 12:53pm

Cali Cabs: agree.

I have heard a winemaker or two bemoan the fact of this drop-out of Parker. I am sure this fella AG is a fine gent, but it is what it is. What may be on the side of those who bring us the wine is a hopeful economic recovery, one that will do well for thier sales going forward, but as stated, the day of the $175 startup can not be as hopeful; prices need to be in line with those around and I can tell you that I have had $75 wines that make me wonder how there can be anything better. Surely different, but better? Same old nugget, I know but that’s what I feel. Wines like Screaming Eagle, Schrader and the like will always have thier fans and the secondary market should hold strong. Hundred pointers won’t dissapear, but you won’t see 3 or 4 every season anymore. Steven Tanzer remains true to his palate and one that I will continue paying attention to. As SteveC above stated, he lost his shirt, but then again, those wines really were never investment pieces, and he himself states he purchased to consume and the plan changed; that would not have been the case of a handful of other wines----still.

Brian_G_r_a_f_s_t_r_o_m · February 8, 2012, 2:28pm

The SE secondary market must still be alive and well. I counted 6 separate SE postings in Commerce Corner (FS), and none of them quoted a price — all were “PM offers” instead. And we all know “PM offers” means “I’m expecting to make money on this deal … now, let’s see how much!”

Bill_Tex_Landreth · February 8, 2012, 2:33pm

I certainly would be interested to see wha these are trading for now.