Unfortunately, I cannot read the article (even from the Tor browser, they want me to pay)…
So, I don’t know exactly what wines we’re talking about, over what time period, etc.
Since the start of the decade, investing in Bordeaux doesn’t seem like a good idea at all.
But, prior to that, it made a lot of sense, if you had the capital and could “sit on” the wine for years.
Well, a quarter of high-net-worth individuals have about 2% of their holdings in wine. Not an exact quote. The authors include their phone numbers and addresses if you want to discuss the details of the 45 page report with them.
We as a whole probably have more than 2% of our worth in our cellars. Some are plonk, some are corked, some are too young, some too old. Our tastes have changed and we don’t like what we have. Same old story.
You are probably already aware of this, but if you donate wine to a charity (e.g. for a charitable auction) you should be able to deduct the the fair market value of the wine as a charitable donation. As always, anyone doing this should check with their accountant first, and should make sure everything is well documented in the not unlikely event our friends at the IRS come asking questions.
Go to www.google.com/news and type in the headline: “Investing in Wine? Sip, Don’t Gulp” and click to the article from the search result. That should allow you to read the story without a login.
The link I put in above originally worked for me without a subscription, but when I went back the second time it didn’t. I think Alicia has the trick – WSJ will sometimes let you read things if you go there from Google.
Thanks for posting the link that lets us get through.
I have skimmed the article.
Unless I am mistaken, it does NOT say is how the wines were purchased in the first place.
In other words, I think it is entirely possible to place a market value on aged first growths. But it is also very important to factor in en primeur purchasing. As we all know, some of the finest wines are released in several “tranches”. It is therefore tricky to talk about futures sales.
So, what is the purchase price that served as a basis for this article?
Was that comment directed at me?
If so, I think you are barking up the wrong tree.
While I do question the basis of the article, I am taking a pretty objective approach to the issue.
The problem is that a less than scientific analysis seems to have been made which, if true, discrédits the findings.
Where you’ve got me figured wrong is that I am perfectly willing to believe that the profits of yesteryear are no longer there, or anywhere near to the same extent. But haven’t we all seen times when the price increases have been phenomenal?
I think what we have is a bunch of university people taking a look at the wine trade from outside, without a proper understanding of how it functions.
And rather than averaging out in their (questionable way) the figures over a century, it would have been more pertinent to deal with more recent times: the 70s, 80s, 90s…
Hmmm…this discussion is somwwhat useless without beeing much more detailed. Of course, wine can be a great investment. I you are able to buy Roumier Musigny or DRC etc… at release prices you have got easily a 500% profit upon delivery. If you are on the Screaming Eagle mailing list it’s unlikely your profit will be lower than 250% even in lesser vintages. From that point of view I think you hardly find better investments than wine.
On the other hand, quantities here are quite limited and you won’t be able to run an investment fund based just on these gems because it wil be hard to invest a great amount of money here simply because of the short supply.
If you need to invest big money and you go the Bordeaux subscription route you will hardly get an overall profit of 5-10% per year on a 5 year basis.
So, without beeing much more detailed on the facts this is a useless discussion.
What the hell is “scientific” about the concept of “Buy low, sell high”?
When it comes to markets, the only mildly non-trivial aspects of their functioning would involve topics like “How to induce mass hysteria in a herd of sheep” and “How to successfully bribe a government official while simultaneously minimizing the probability that the bribery will result in a prison sentence for you yourself”.
Please take a look at the article and I think you’ll see that this “study” is presented exactly like something done by a university reasearcher.
One does wonder who in the world financed it, why it was done in the first place, and if anyone had a hidden agenda…
I am particularly put off by the black and white appraisals of “good” and “bad” vintages by people who don’t seem to know what they’re talking about.
Your were upset by my use of the word scientific. In fact, it was to denounce something parading as scientific when it is pseudo-scientific!
