Perhaps, but when you consume something that holds a tangible value, you are paying that price. Whether you need the money or not is not of consequence to this discussion.
A good example is a wine dinner coming up soon where I don’t have the right wine to bring in my cellar, so I go out and pay current price for a bottle to bring. Did it cost me more for the dinner than the guy who bought a similar bottle 20 years ago on release for 1/10th the price? I would say yes and no. But it’s certainly not cut and dried.
This is really interesting so long as the person with the possessions has sufficient cash to be able to afford the tax. Poor and middle class folks would basically be stripped of any meaningful assets since the wealthy would value them more highly.
Except you did actually pay current price and the guy who bought it 20 years ago paid 1/20th what you did, and inflation says the value of the dollar has only inflated by 62% over the past 20 years.
It’s not cut and dried if we want to talk ourselves in to purchasing the wine, but in terms of real dollars it absolutely is cut and dried.
Either way, in Alan’s place I would never sell (most) of the wines he has just to realize the cash.
This is similar to the idea that your house is an “investment”. If you live in the house you love, it doesn’t matter if housing prices in your neighborhood skyrocket. You can sell and take the cash, the best you could do is spend every cent just to try and stay in your neighborhood. Worse, you could move to Bordeaux or the Willamette Valley with some money in your pocket and then spend your time wishing you still lived in 90s Burgundy…
It’s just opportunity cost. If you drink something you could sell for x, your opportunity cost is x, regardless of what your actual cost basis was.
From a financial perspective the only real argument you could make is that you aren’t paying capital gains if you drink the wine rather than selling it.
If your goal is drinking specific wines, then more currency is a waste of time. I will go put 30 $100 bills in my Grassl and let you know how the experience is. Opportunity cost is only for when you don’t actually care what you’re drinking.
Completely agree. I buy wines because I like wine. I pay attention to what I pay for them and keep to my budgets. I am sure Alan has done the same. If people sell the wines that go up in price (presumably the wines where they chose right), we end up drinking our mediocre wines but not our fabulous wine. Not a fun way to have a hobby.
It’s always a consideration. There’s hundreds of posts on this constantly. People are like “x wine has gone up so much in price I don’t want to open it.”
It’s a consideration if you purchased the wine the day before or 20 years ago, because it’s a consumable. As soon as it’s consumed the value is reduced to zero or near zero.
This isn’t to say that you shouldn’t drink the wines, just that there is still a cost in doing so.
What I can’t reconcile is saying things are overpriced and not worth the money, and also drinking them.
If I bought a bottle of La Tache for $100 or for $5000 and someone offers me $6000 for it, if I don’t take the money than I’m saying the value to me of opening the bottle is at least $6000. Therefore you can’t say it’s not worth the money if you’re essentially showing that it is worth the money by drinking it in lieu of taking the $6000.
For me, I’m still keeping most of the wine in my cellar, but if I think things aren’t worth drinking in lieu of selling, then I’ll sell them, like Arnoux Lachaux and bizot. Given Alan is selling some A-L Reignots in cc, I’m assuming he feels the same way.
I don’t think you have anything to reconcile with Allen. The wines were not over priced, to him, when he bought them. Current vintages are overpriced. And whether what someone will pay me for a bottle I bought 20 years ago is more than how much I would pay for it now is of no consideration at all, to me, because I didn’t pay that.
To say, someone would pay me $5000 for a bottle of 1990 Rousseau Chambertin, so if I drink it it I have lost $5000 is meaningless to me because 1990s wines are not able to be replaced. Global warming has changed Burgundy, not to say for better or worse but the wines are different. So would I pay $5000, no. But would I sell for $5000, no. And no hypocrisy in my opinion because I don’t have to debate what I want to do with a wine that own and bought for $110 that no one can swap me another bottle, that is not 1990 Rousseau, and have it be the same.
Again, opportunity cost is only if you can satisfy yourself with some other asset. Which I could not do, IMO.
Again-if the only way I can drink the bottle I want by selling the inflated bottle and then immediately buying it back, the exercise of opportunity cost is somewhat circular.
Bollinger GA
Bollinger R.D.
d’Yquem
Huet cuvee Constance
Maybach materium
Jamet
Beaucastel VV
Cristal rose
Grange Des Peres
Diamond Creek
Haut Brion blanc
Guigal ex-voto
LdH gran Reserva red & white & rose
Castillo Ygay especial red & white
Vega sicilia
If you’re not talking about Jayer or like 45 RC then you can almost certainly replace the wines.
I think most people think about opportunity cost on a regular basis. Would I rather drink this bottle or pay for a trip to France? Or would I rather sell or trade this wine for a different wine I’d like more? Wine is a consumable, but it’s also an asset, which in many cases appreciates. In many cases people’s cellars may be a substantial portion of their overall net worth. I think not thinking about opportunity costs seems thoroughly inadvisable.
Nice list, though the major increase in Diamond Creek they last few years has me questioning whether it is worth it. If I’m buying en premier, I can get twice the Pichons, Ducru, Montrose, etc. for the same cost as a single Diamond Creek. It pains me, since I love DC so much.
Sorry, I should have been clearer. You can only replace the bottles with the same bottles, which will cost you what you sold the bottles for in the first place. Your original investment will have been just great enough to cover what you want to spend the money on, but since I know my storage the whole sell to buy is an un-necessary risk.
I would rather just drink the wines I bought 20 years ago and understand that they are probably the last I will have. (Unless I happen to visit NYC at an opportune time)
I can’t argue with your logic. It’s also an estate I personally think you can’t drink before the bottle hits the age of majority. I’m in my 40’s and feel it’s pointless to buy new bottles but man they deliver.
I’m in the same boat, in my early 40s and only looking at back vintages now. Diamond Creek always will hold a special place for me since it was my introduction into what high end Napa wines can be.
I agree. Only in my late 20s but the price increase on DC has me out. Just holding the ones I have to age. DC was also my introduction to high end Napa.
I had a magnum of Chave which I had planned to drink at a major anniversary. The price was so high that I sold it, and will use the money to invite fifteen of my closest friends to my favorite restaurant, bring several bottles of wine and still have a little change left over.
I doubt there is any wine that will give me anything close to what that evening will bring.
