WE on BDX Futures

Post Reply
User avatar
AKR
Posts: 5234
Joined: Thu Mar 19, 2015 4:33 am
Contact:

WE on BDX Futures

Post by AKR »

http://www.winemag.com/2016/08/08/borde ... f-futures/

I've met (and imbibed with) Joe a number of times and he's a great guy. I agree with him on these market views.
User avatar
DavidG
Posts: 8280
Joined: Sat Nov 22, 2008 1:12 pm
Location: Maryland
Contact:

Re: WE on BDX Futures

Post by DavidG »

I never paid much attention to Wine Enthusiast, but I agree in general with this article. It's no longer a guaranteed financial win to buy en primeur.

It does depend, however, on which wines you buy and what time frame you're looking at.

For the time period discussed in the article, 2005 forward, my "returns," based on CT values, have been positive for the years I bought either en primeur or as futures. Not so for those I bought after they were available on store shelves. No first growths. And CT over-estimates what you would realize if you sold the wines. Then you have to pay taxes on any profits if you do actually sell. But being too lazy to do any more than just look at the CT valuations, this is what the Bordeaux in my cellar have done (total gain or loss, not annualized): 4 winning and 2 losing vintages since 2005.

2005 +11%
2006 +58%
2007 no wines
2008 +13%
2009 +18%
2010 -21%
2011 no wines
2012 -4%
2013 and on: no longer buying young Bordeaux

The 2 negative years I bought on release. The 4 positive years I bought en primeur or as futures at least a year ahead of release, prior to the final Parker in-bottle scores. The calculus is no doubt different since Parker is no longer reviewing young Bordeaux.

Many of the better wines start to increase in value once they start to mature around 10-15 years out, so maybe my 2010s and 2012s will turn positive. The duds, not so much. You often can't tell the hits from the duds, though, until years after release. In any case, the point of buying them was to drink them, not to sell them.

If the comparison is futures prices vs several years after release when the wines are dumb, I bet you'll see many more wines at lower prices in the latter group. Unless you happen to be chasing a darling of the vintage, it probably makes sense to wait for that dip rather than buying en primeur.
Post Reply

Who is online

Users browsing this forum: Bing [Bot], Google [Bot] and 8 guests