I’m not familiar with wine, but couple of days ago there was a burgund-release in my country.
I was not able to grab hold on any of the Romanee-Conti / DRC unfortunately, as I know they are very good wine and investment long term.
However I found myself three wines, and I’m asking you geniuos people in this forum what you think about buying them and store them for some years and maybe sell them later - hopefully with some profit.
I have used wine searcher and it seems like the wines are decent in profit gain.
The wines:
• Dom. Bouchard Pere Et Fils Chevalier-Montrachet Grand Cru La Cabotte Magnum 2020 - cost $1251
Based on Burgundy being released in the open like that, I’m guessing you are Norwegian?
What you need to consider on your investment is storage costs. You can’t just put them in a closet and expect any return to your investment. Provenance is everything with high end wines.
So unless you have access to a temperature controlled wine storage (home fridges don’t count here), I would just dump them out as quickly as you can, because without proven storage, the value of those wines likely will go down, not up.
I don’t think your return on either of those wines will be very good. There isn’t anything wrong with them, but they aren’t the producers who tend to see rapid increases in the secondary market after release, and they’ve been around for a long time. I would think that in order to sell those you would have to offer a significant discount to the retail price, and while the prices you paid are fine its not like you got them for so far below market that they were hard to resist - you basically paid en primeur.
How come? I’m new to wine and wanted to join this forum for my questions and upcoming questions to learn more about wine, and to learn from experienced people. I don’t see the issue with this, as everyone starts somewhere.
Thats correct.
Wow, I did not know that. I was thinking about buying a fridge for my wines, or maybe Make my own cellar. I have a room outside connected to my appartment whitch is dark but temperatures will go up and down according to season. Around 20C in summer and 4-10C in winter.
Sounds something that might just fine for aging your own wines for 5-10 years, but definitely something that will only bring the value of any premium wine down.
If you want your wines to not just keep their value, but increase in value as well, you should have a proper wine cellar that is either temperature-and-humidity controlled or manages to retain steady temperature and high enough humidity naturally.
Usually this translates to offsite wine cellars / warehouses. And these usually cost some money, so to keep the cost per bottle low enough, you should have enough bottles to begin with. Not just a few cases - the offsite costs will cancel out any increases in price quite fast if the economics of scale are not on your side.
So premium wines might be profitable to wine collectors who have enough wines and knowledge. But to begin wine collecting from an investment POV? That’s the best way to end up with some badly kept, very expensive wines very few are willing to buy even at the original purchase price.
I hate to throw more cold water on you but I agree with prior posters. A reputable store or auction house needs to know you, your purchase story, and especially your storage conditions. You will sell for 20% under market which means you need 25% appreciation just to break even. Single bottles and small consignments are not as important. Also, as noted, you have picked wines that do not necessarily accelerate in value a huge amount. Study is necessary before you jump in.
I agree with a lot of the advice on here and have nothing to add since I am not very familiar with Burgundy and that marketplace.
However, I disagree with the notion that his asking a question about investing in wines is somehow taboo. One, I think being interested in the investing side can get people into drinking wine, which people mentioned: knowing what you’re investing in. Two, plenty of WBs would jump on a great deal even if it was something they would never drink and they know they could profit from it down the road.
I am going to repeat what was said higher up. If you want to invest, invest in stocks or a stock market fund. Some very few wines appreciate more than the market, but very few indeed.
I don’t know if it’s easier or harder than other things (you could argue, on one hand, it’s a less competed space so it’s easier but, on the other hand, the friction is high so it’s hard to realize gains).
My suggestion, no matter the market, is understand the space before investing. Most people don’t know anything about equity markets or bond markets either but they invest in them. Why? Mostly because the economics are somewhat easy to understand, they are ubiquitous, etc. but I would argue the most compelling reason to buy equities or bonds is they have an inherent risk premium. Does wine have an embedded risk premium? If you can convince yourself it does, and it’s large enough to realize it net of costs, then it can be a totally reasonable investment. Now, you should compare that to other assets, your risk tolerance, liquidity preferences, etc before deciding to put your money in wine vs another asset.
What I read in the OPs post was lack of understanding. That’s ok - this is a great place to gain understanding. Many people here have a lot of money tied up in wine - a lot of whom have done that with great thought and for various reasons. I believe the OP will learn a lot on this forum - lesson 1: don’t buy into the hype. In fact, if you heard the hype, it’s likely too late.
****none of what I write here should be construed as investment advice ****
While I’m one of the stronger proponents on here of considering wine an asset; you need to understand what you’re buying and why.
While I don’t necessarily agree regarding it being too late once things are well known, as drc has appreciated in value 2x since 2020 and clearly it’s well known, I think this may be true for wines that have skyrocketed like bizot and Arnoux Lachaux. Perhaps you can look for the next wine in this class.
I weigh wine as an asset in my portfolio just like equity and real estate, but also have a reasonably good understanding of the market/. Just randomly buying bottles seems foolhardy, ESPECIALLY white burgundy.
I also separate investing (the act of collecting risk premium; what essentially people are doing in their 401k) from tactical buying and selling (aka trading, aka alpha, etc). The latter is definitely not for the faint of heart and requires a lot of understanding (and luck). If you are trying to guess the next big name in Burgundy, I’d say you are trading or alpha seeking vs buying a portfolio of blue chip wines with the plan of selling them in 10+ years.
Practically, I think many of us here, who are active in the market, are effectively doing a bit of both. From my experience, those trying to make alpha plays are doing it more for sport than return, but there are some doing it for return.