Bordeaux Wine Enthusiasts

marcs wrote: ↑Sun Jan 02, 2022 5:06 pm The transaction costs in selling your wine are very significant compared to stocks or bonds though. It seems perfectly possible for stocks to go down 5% and wine to go up 10% in the short run but the net loss from selling your wine would be greater than the loss from selling stocks (for example if the transaction cost of selling the wine was 20% vs basically zero for stocks).

Then in the long run only a small subset of wines have ever beaten stocks in terms of appreciation.

I also believe that wine prices are correlated with the stock market to some degree, even though people tend to claim strong diversification

There are no transaction costs at the top end of the market. And that should be your focus if you are buying for investment. There are ancillary costs to investing in wine, insurance, storage, sales tax etc, but selling isn’t one of them.

If you look at the hammer prices at auction recently, they are pretty close to retail. And at top end of the market, they are crying out for product. In fact, in the last auction of my wine, which took place in 2019, before the run up in prices, and the even greater shortage of wine, I received 8% of the buyers commission, paid zero percent to sell and they even picked up insurance and transport. There are risks and things may change, but if as I said, you are buying for investment, you are NOT paying 20%.

Yeah, I’m sure it’s a different world for people with untouched OWCs of the very top wines (which I don’t have). It takes a lot of $$$ to buy that way and if you buy for drinking vs investment your cellar is unlikely to be dominated by those.

With that said, the buyers commission should be seen as a transaction cost for the seller as well - whatever the buyers commission is reduces the share of the full market (all-in bid) price you get. But if you are getting people to give you back a solid chunk of the buyers commission in an environment of skyrocketing prices, that’s certainly attractive!

Is there still a wine shortage? All through the second half of 2021 there seemed to be massive multi-day HDH and Acker auctions like multiple times per month, thousands of bottles per auction.

Yes there is a wine shortage. Demand is greater than ever before, and Covid boredom has only added to it.
Why is buyer’s commission part of the transaction cost? You net what you net. As I said, for some reason auction prices are not much lower than retail. So you calculate based on sales minus purchase and expenses. The only thing I would add is that capital gains for wine is higher than for stocks.

Buying for investment is a very different exercise to buying for your cellar. And it is not just cases of Bordeaux, although that is not a bad place to start. You look for arbitrage opportunities and bet on that. If you are not already 10-15% ahead, you probably should not buy. And given market heat, those are getting harder to find.

Guys
There are significant costs in holding and selling wine irrespective of what the price point is.
I moved from Australia to Singapore in 2009 and the local Aussie auctioneers said that they were saved from insolvency by earning well over $100k commission just on my wine. Secondly the storage costs were about $500 a month and I’d held some of them for 30 years or more.

An interesting fact is that in both Australia and SE Asia, a lot of wine investment schemes went bust as the holding and selling costs were too high and they did not have much knowledge of the fine wine market. Typically they overpaid for wines that were often yesterday’s glamour wines.

If I had my time over again I would have much preferred to invest in many other asset classes like real estate, stocks, commodities or even art. I never bought wine with the intention of selling by the way.

Cheers
Mark

2 days down, with no wine buying or alcohol consumption!

Blanquito wrote: ↑Mon Jan 03, 2022 2:49 pm 2 days down, with no wine buying or alcohol consumption!

You da man blanquito!

Day 2:
Bought a few bits and pieces, older wines.
Magnum Beaucastel 1983, Burgess 1973 and Giscours 1962.

Managed 37 hours before I bit.

I just found myself looking through wine auctions this afternoon. Got about halfway through, remembered I'm on a buying freeze and it's a bad idea to tempt myself. (It helped that there were no Bordeaux wines that looked that great anyways, so I can't take too much self control credit here..)

Three days down, 10% of the way to the January goal.

I didn’t buy any wine today either, 3 days in!

3 days done on my side too, and it won't be a problem to do day no 4! I feel better and stronger! And then, i have two questions:

1. The 2022 BWE wine buying freeze is going on until when?

2. What are you doing with the money you're saving at the moment? Because if you're saving it to buy wine later, it doesn't mean anything at all the "temporary" wine buying freeze. So you give it to charity? Other?

Good questions, Nic!

I was going to try for a 31 day freeze and see how it goes from there, but I really should try to take the whole year off from buying. My savings, at first, will go to pay down wine-buying debt!

Blanquito wrote: ↑Tue Jan 04, 2022 7:13 pm Good questions, Nic!

I was going to try for a 31 day freeze and see how it goes from there, but I really should try to take the whole year off from buying. My savings, at first, will go to pay down wine-buying debt!

I'd like to make it 3 months without buying wine.

Don't really have a budget for wine. Was never able to adhere to one. As long as we have enough for the rest of our needs and desires, the buying limits have been more about the number of bottles, space to store them, and opportunities to drink them. Of course Stefan is living proof and inspiration that the opportunities far outstrip my estimates.

I have a vague and malleable "no bottle of wine is worth more than $x" in mind which limits me somewhat, and I love a good deal as much as anyone. But for the most part, it's about numbers of bottles rather than dollars.

DavidG wrote: ↑Wed Jan 05, 2022 4:46 pm I'd like to make it 3 months without buying wine.

Don't really have a budget for wine. Was never able to adhere to one. As long as we have enough for the rest of our needs and desires, the buying limits have been more about the number of bottles, space to store them, and opportunities to drink them. Of course Stefan is living proof and inspiration that the opportunities far outstrip my estimates.

I have a vague and malleable "no bottle of wine is worth more than $x" in mind which limits me somewhat, and I love a good deal as much as anyone. But for the most part, it's about numbers of bottles rather than dollars.

Me too.

In general, my goal is to start reducing my inventory over the medium term (annually), not because I'm going broke buying wine, but because I have so much (and much of it is either ready to drink or not built for long aging). Why keep buying when I have more than I can reasonably drink in the next 20+ years?

But it is so hard to break the habit*, especially for great deals. If I can go the next 3 months (a reasonable goal, it seems) without buying wine, that would go a long way in making sure I have less wine by the end of 2022 than at its start.

So let's shoot for 3 months!

*I've found not drinking easier than not buying over the last 4+ days...

That's true Patrick, but as Nic suggests we have to resist the post-freeze urge to splurge. It's real and it's hard to resist when that first great buying opportunity comes along right after the freeze.

But we have to start with the freeze. One day at a time...

This thread sounds like we've become a support forum for dieting!

That's exactly what this thread is: an abstinence support group!

The moratorium(s) are good and I encourage you to press on. Maybe a bit of motivation will keep you on the sidelines. I find the auction and secondary market is much friendlier so keep up the good work. Hold your breath when the Amex bills hit and resist. Maybe now I’ll win a bid

Awesome, Gene - even a wine buying freeze can be enabling!

7 days down… zero purchases and zero alcoholic drinks of any kind.

Condolences, Patrick.

Claudius2 wrote: ↑Mon Jan 03, 2022 1:56 pm
If I had my time over again I would have much preferred to invest in many other asset classes like real estate, stocks, commodities or even art. I never bought wine with the intention of selling by the way.

Cheers
Mark

What I find in many kinds of commodity/non cashflow 'investing' is that the winners end up gloating, and promoting, the schemes after a multi decade run, and the outsiders seem to think that is the a priori success rate, rather than the results of a survivor look back bias. It doesn't really matter whether its bitcoin, Beanie babies, Bordeaux, Brent crude etc.

Aside from that, Claudius2 I noticed another small wave of OZ quasi fine wine have shown up in our market. These all look like items that could not get absorbed by OZ local markets after the Chinese effectively stopped purchasing, so a couple vintages off the run, but export oriented producers, that are not overly worried about torching their brand stateside (with the requisite discounts it takes to move non invest product like this years later). I actually purchased a 2020 Halladay book so I can at least get some color on these names! I expect this market anomaly to continue a couple more years as between currency moves, and lack of critics support, reclaiming the share producers had 20 years ago will take time, and promotions.

stefan wrote: ↑Sat Jan 08, 2022 5:28 pm Condolences, Patrick.

I know!

But the “wake” on February 1st will be a night to remember.

Blanquito wrote: ↑Sat Jan 08, 2022 5:11 pm 7 days down… zero purchases and zero alcoholic drinks of any kind.

I will never understand why some are doing a dry January, or 28 days without alcohol in February. I don't know what people get from that commitment...

What next?
March without sex,
April without fast food or pizza,
May without guns,
June without fish,
July without bikini tops,
August without barbecue,
September without kids,
October without Bordeaux futures,
November without turkey or other birds,
December remember how non sense you've been ridiculous during the year to private yourself from something you like each month!

It is hard to choose between May and July.

Nic, come on, don’t you listen to your doctor? Your wife? Your friends? Or is your mind too big to listen to anyone but yourself?

You may be joking or half joking, but it’s just silly. Alcohol is a poison, a break can be wonderfully refreshing especially as you get older.

Blanquito wrote: ↑Sun Jan 09, 2022 1:38 am Nic, come on, don’t you listen to your doctor? Your wife? Your friends? Or is your mind too big to listen to anyone but yourself?

You may be joking or half joking, but it’s just silly. Alcohol is a poison, a break can be wonderfully refreshing especially as you get older.

I am listening to my doctor. He tells me my sugar level is too high. Need to cut back my sugar level, immediately or I will be diabetic. Have committed to cutting alcohol consumption in half. Have more than enough for 7 plus years without buying another bottle.

Not buying any more wine. Obviously have more than enough, without a partner to share it with.

I am in the ice age of freezes. Seller management is more of a priority now, don't want any bottles going over the hill.

Blanquito wrote: ↑Sun Jan 09, 2022 1:38 am Nic, come on, don’t you listen to your doctor? Your wife? Your friends? Or is your mind too big to listen to anyone but yourself?

You may be joking or half joking, but it’s just silly. Alcohol is a poison, a break can be wonderfully refreshing especially as you get older.

Of course Patrick, I'm joking. i'm not having wine or other alcohol everyday. But i surely will never engage into no alcohol for any period. Wine is surely my best poison.

Regarding who i listen to, it is tough at the moment: i don't have a doctor (still on the waiting list to have a familly doctor), i don't have a wife (being not married), let say that covid since 2 years, is "barely" breaking my relationship with my friends. And i surely don't listen to myself, considering that would be desastrous. I guess i'm inspired by the life of Charlie, our cat.

Imagine going for a whole year without guns, sex or pizza?

Abstaining from drinking in January is proving much easier than abstaining from buying.

Last week I bought bottles of Confuron-Gindre Bourgogne Rouge (5) Nuits Saint Georges (3) & Vosne-Romanee villages (4), all 2017s, plus 2016 Hubert Lamy St-Aubin Derrière Chez Edouard (6).

Do I get a slap on the wrist?

Arv
It is actually pretty sad watching lots of good Aussie wine getting dumped in the USA and Europe.
While Australian wine consumption rose 6% last year the collapse of China - and for petty political reasons - has left tons of good wine having to be disposed of at fire sale prices.

If you are interested in any wines in particular feel free to ask me - always happy to advise if I know the wine.

As for China I am refusing to buy Chinese products and told Wendy I won’t travel there again. Sick of bullies and liars.

Cheers
Mark

Mark do you know which wines are being dumped in Europe. Maybe the U.K. will benefit now we have a trade agreement with Oz.

Didn't Danny once say that two days a week without alcohol should be enough to clean up your liver? I assume that means moderation in the other five days of the week, not binging like a drunken sailor on shore leave.
I listen to Danny

I still haven’t purchased anything although it was difficult turning down Cedric Bouchard and Ulysse Collin offers. I’m on a freeze because I have absolutely no room left and I’m getting shipments from purchases last year that are piling up outside the cellar door. I’m also limiting wine to the weekends, belly too big!

Comte Flaneur wrote: ↑Sun Jan 09, 2022 12:34 pm Imagine going for a whole year without guns, sex or pizza?

Abstaining from drinking in January is proving much easier than abstaining from buying.

Last week I bought bottles of Confuron-Gindre Bourgogne Rouge (5) Nuits Saint Georges (3) & Vosne-Romanee villages (4), all 2017s, plus 2016 Hubert Lamy St-Aubin Derrière Chez Edouard (6).

Do I get a slap on the wrist?

Uh-oh Ian, you are tempting us here in the no-buy zone. You may have to be banished to the "what have you bought lately" thread...

jal wrote: ↑Sun Jan 09, 2022 1:58 pm Didn't Danny once say that two days a week without alcohol should be enough to clean up your liver? I assume that means moderation in the other five days of the week, not binging like a drunken sailor on shore leave.
I listen to Danny

Everyone's metabolism is different.

A month without alcohol can help but if you're drinking enough the other 11 months to cause fatty liver, some of that may linger rather than reverse even after a month off. If any scarring (cirrhosis) starts to occur, that's likely to be permanent.

Two nights off a week also helps to reduce risk of liver damage.

How do the regimens compare? Oversimplifying, 2/7 = 29%, while 1/12 = 8%. How much you drink the rest of the time is important too. If you drink enough to cause damage, it's harder to recover from 11 months than 5 days of excess (assuming equal levels of excess). Going dry for a whole month often facilitates weight loss as well, which is an additional positive. But if you put it all back on by December and your weight is yo-yoing, that's not as healthy as maintaining a stable weight.

Hmm. It may be that drinking two glasses of wine a day is better for longevity than abstaining. For example,

https://abc7news.com/alcohol-helps-you- ... e/3114291/

gives a link to one creditable source.

Are there studies that show that, if you do not have liver problems, abstaining for a month a year or abstaining for two days a week, and drinking two glasses of wine the rest of time, is better than drinking two glasses of wine every day?

stefan wrote: ↑Sun Jan 09, 2022 5:42 pm Hmm. It may be that drinking two glasses of wine a day is better for longevity than abstaining.

Probably not this much, though:

UpToDate
Resveratrol (3,5,4'-trihydroxystilbene) is a substance produced by plants in response to stress and is found in grape skin and red wine. Resveratrol extends the life of nonmammalian organisms and was demonstrated to improve the metabolic profile and lifespan of mice fed high-fat diets [19]. The resveratrol concentration of red wine is 1.5 to 3 mg per liter. A 70 kg person would need to consume over 1000 liters of red wine per day to achieve the resveratrol concentrations in this study.

so, two glasses is not enough?

Racer Chris wrote: ↑Sun Jan 09, 2022 8:52 pm so, two glasses is not enough?

About a thousand cases a day should get you up to those reservatrol levels.

But there have been many correlational studies that show a relationship between daily moderate wine consumption ( a glass or two a day) and lower mortality, especially from heart disease. This may just be because wine is relaxing. But I suspect these studies are hopelessly confounded by the huge pre-existing differences between moderate wine drinkers and others