I am the worlds worst investor, what ever I do the market does the opposite.
So expect a further plunge.
Index - Buy - Hold - Rebalance
The people who are bidding on these special wines are not significantly affected by the stock market dip.
Please check back in one month from now and let us know how that worked out for you… And don’t fib 
It’s possible that both of you are right. Brady’s approach could well leave him under that of an active investor in one month. But Brady doesn’t have a time horizon of one month, he’s a long-term investor. And over the long term he’s going to smoke the overwhelming majority of active retail investors. And a fair number of active mutual funds.
It leaves him more time to find auction deals in a soft economy while you active investors run the rabbit wheel with your portfolios. ![[wink.gif]](/uploads/db3686/original/2X/0/04707e6a7bbb03e0153e349d8a9270d30e1e9525.gif "wink"){kind=small}
Everything I was interested in at HDH’s first day auction went at high or over high estimate. And I certainly wouldn’t call what happened this week a stock market “collapse”.
Everyone has a plan until they get punched in the mouth- Mike Tyson
Every passive investor has a buy and hold approach, until they suffer a 25% drawdown in one month.
I hope every single person on this board is successful with their investment approach, I really do. But what I’m seeing out there, and what my firm is seeing out there, suggests it’s best to err on the side of caution. And a buy/hold approach and ‘buy the dip’ mentality works great, until it doesnt.
While my portfolio has dropped a good 12% last week, I am sure I will not see an equal drop in prices for wine. Like ever.
I think history shows that active investors are far more likely to sell in a panic. That’s how the buy and hold approach came into existence.
I don’t doubt that being an active investors works for you, but there are very, very few that it works for - far fewer than take that approach.
What does ‘erring on the side of caution’ mean in this case?
DRC was strong both yesterday and this morning. 1999, 2005 and 2009 Rousseau Chambertin’s just hammered above recent market highs. 6 bottles of 2002 Clos de Tart might be a new record.
Burgundy under card was very strong yesterday.
Live bids driving pricing higher.
Burgundy supply has been anemic since December 2019, especially 2010 and older. Tariffs exacerbating the issue.
Next weeks La Paulee auction should be a good test.
I am old enough to have had a draft card during Viet Nam War. Only auctions I can remember causing auction pricing to collapse were during the financial collapse of 2008. I remember Acker cancelling an auction midstream during a live auction because of lack of bids. I also remember financial markets seizing and supposedly strong public companies (including mine) worried about making payrolls. It will take more than a 20% pullback in the S & P to see a Burgundy wine collapse. Not saying it cannot happen, but other things will need to happen.
Well, my clients pay me for that advice, but I will say:
- expect a relief rally as the markets are extremely oversold short term (five standard deviations from normal levels). Use that opportunity to reassess your beta exposure
- consider using tight stops on high flying positions.
- it’s okay to trim positions that have unrealized gains- there’s a full 14 months until the tax is due, and there will be chances to offset gains with losses
- the mega cap tech names that have grown to the sky will revert back, it’s already started. Take profits from this round and have dry powder for the start of the next nine inning ballgame. Because this particular game is late late innings.
- consider hedges if you don’t already own them. For example, use any short term sell off in gold to start building exposure there.
- the selling isn’t over so prepare now
That’s all I got, as I just got to Napa so I’m going into a 72 hour wine buzz, gitty up…
Wow it’s like the old EF Hutton commercials…
I don’t think the stock market and wine prices are correlated enough that a rapid decline in the former will lead to reduced prices in the latter within a short period of time. But a prolonged economic malaise, or recession, will undoubtedly lead to lower prices for luxury goods, wine included.
Right now, I don’t see fear or panic, despite the drop in the market. Rather, the drop seems like a reasonable attempt at reflecting lost corporate earnings that might result from reduced consumer spending in the event that the virus continues to spread. It will be interesting to see what happens when cases start to pop up in major US metropolitan areas. Is that priced in already? My bet is that when you start getting a lot of sick people in nyc, LA and San Fran (and couple that by a strong performance by a democratic candidate that’s seen as anti-business), and the markets could have pretty far to fall. At that point, I’m pretty sure I can find better things to spend money on than wine.
A
This approach has served me well for decades, including the tech crash and the financial crisis, both worse than your 25% scenario. Passive investing is remarkably low-stress, and rebalancing forces buying low and selling high. It also greatly reduces taxes and broker / fund fees. Thanks for your advice though.
As a fairly routine type passive index retirement saver, what worries me is that the big indexes have become dominated by the “mega cap tech names” so are not as diversified as perhaps they should be. I can rebalance between equities and bonds but rebalancing the index itself would force me to be a more active investor than I want to be.
Re wine, I think this absolutely will affect wine prices below the top billionaire bait Burgundies. Wine prices have seen a big run up in the last year or two and are ripe for correction. In the short run there will be an asset price effect, in the medium to long run there are a lot of baby boomers out there with big cellars they won’t drink and their kids don’t really want.
No doubt that you’re a professional and good at what you do but again this advice is irrelevant to 99.999% of retail investors who would either not even know where to begin to implement the strategies or would implement them poorly. Enjoy Napa.
I put in some low bids but didn’t win anything.
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”