Will stock market collapse equal lower prices at wine auctions?

Discuss!

The absolute best deals I have got on wines have been during economic downturns. And not always at auction, when people need money in a real hurry you can get some great deals if you have cash in hand

Duh!

Doubt it. The market tumbled because of the coronavirus. With the housing market crash or dot com crash it was because of unsustainable economic euphoria. As soon as there’s any hint of a vaccine or something, it will recover.

That assumes of course, that this is a “normal” kind of virus. The rumors and speculation about its origins sure aren’t helping, nor is the fact that they’re reporting lockdowns of entire towns in China and forcible quarantines of people. That only make people wonder if there isn’t something that’s not being revealed.

No experience with live/online wine auctions.

Still looking for sales, however, from my mailing list vintners (all domestic). Sweet spot is $20-$40. Fully loaded price: tax, shipping, list price, etc. Did not even see much tempting during January, which is usually pre-inventory month.

I can be patient. One never knows…

Yes, there will be deals to be had.

And no, this isn’t a run of the mill sell off that will show a V-shaped snapback. This virus is the pin that found the bubble. Lots of people/asset classes/ institutions have been swimming naked, and the tide is going out… Buckle Up…

Shouldn’t that be “swimming naked, and the tide is now going out!” ???

Whoops, yes you’re correct.

Mental note- don’t post after several glasses of wine… fixed

I reduced/cancelled some bids.

Great documentary here showing lots of videos of what’s happening in Wuhan, China at the moment.

Dead bodies in hospital waiting room, doctors screaming to be released from their duties, apartment buildings doors being padlocked or even welded shut (I kid you not), people yelling from their apartments that their relatives are dying and need treatment and a quote from the supreme court (or similar) that the government needs to stop withholding information. Bedlam!

Just thank your lucky stars that you’re not in Wuhan now!

China-made Bordeaux may see few auction bids.

There was a somewhat rambling post on one of the wine Facebook groups that burgundy prices are collapsing on the liv-ex market. I am curious if anyone who has access to liv-ex can share some examples, if true.

Fine wine prices always soften when the financial markets take a bath. It is typically lagged in that it takes a while to see. It also is generally less that what many expect or want but it is certainly there. The very limited supply of some very high end wines means those prices after do not fall like one would think. If I was watching look at Bordeaux prices where at least the volumes are larger than certainly tiny burgs etc.

IMHO, this virus, and the panic surrounding it, are going to collapse the global economy. So to answer your question, yes, wine prices are going to drop significantly.

Let’s take the area where I live, Orlando. Theme park capital of the world. What happens when people either cannot travel, or are afraid to travel? A good friend of mine had a trip booked for later this year; Nairobi, Milan and Amsterdam. For his family of three, he spent $8,500 on plane tickets. He just canceled them yesterday, and ate a $2,400 cancelation fee. Not so much because they are afraid of the actual virus, but because they are afraid of getting quarantined.

In my work life, I am a wholesaler in the run and cycle industry. I have multiple manufacturers who were late to re-open their factories after the Chinese New Year, and even more who are still not open today. It has not caused an issue yet, but when those pipelines of products run dry, I have nothing to sell. And my retailers have nothing to sell. And at that point, neither the wholesalers, me or my retailers are making any money.

People have gotten used to the V-shaped recovery since 2008, but this is going to last at least a couple more months. Hopefully the end flu season will be the end of coronavirus season. The market will recover but I’m guessing it will take months. Rates will go back to zero so people will be be forced into risk assets to get any kind of return.

The last similar pandemic was flu in 1968. It had a low mortality rate, but it killed about a million people worldwide. Hong Kong was hit very hard. I was a teenager then and have no memory, but it’s interesting to read about it.

This is when savings kicks in.

Pray tell what the original version was if it’s worth a chuckle.

[rofl.gif] Yeah, cause Americans are so good at saving for a rainy day.

Current HDH auction (today tomorrow) looking fairly typical on hammer prices. eg DRC right down the middle.

Perhaps DRC is an alternative asset class. ¯_(ツ)_/¯

I know at least one person who canceled HDH bids. He didn’t realize you could cancel until I told him. I suspect others made bids before this week’s decline, and are just letting them ride.

Next month’s burg auction will be more interesting.