DRC is bumping into the ceiling

Took a quick gander at the Acker live auction this AM. Vast majority of DRC selling at low estimate, some at minimum reserve. Sounds like a couple of Hong Kong, mainland China bidders scooping up the wines. Has the DRC balloon finally hit the stratosphere in pricing? Clearly sounds like the heady days of short term profiteering are over for now. I hope some of those ubiquitous wine investment funds go the way of crypto for awhile and we see some sanity back in the wine world. Probably just wishful thinking. I expect lots of comments telling me this is just a temporary pause in the market… pileon

this is what i was saying in another thread though - as part of the wider downturn, you’d be insane to not expect it to impact wine prices. I’m not remotely surprised to hear that its going on the cheaper end compared to what it did 6 months ago for example.

It’ll pick bacdk up, dont worry about that, you’d have to lose complete faith in an asset class for it not to. But right now, over the next 6 months - 1 year, I’d expect wine prices to come down a bit.

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It’s not that simple. Reserve or low estimate are variable figures. What matters is looking at the hammer prices over time to see if a market is increasing or declining. All this could mean is that they have increased the reserve and low estimates beyond the market. The market could be flat or even still increasing albeit at a lower rate. But that’s not surprising given the economic pressures all around right now. Every advancing market has to pause to digest gains. And seeing the massive gains in the past year+ that’s understandable and even expected. Doesn’t mean a bubble is going to burst.

Everything is getting re-priced lower right now. There hasn’t been a lot of distressed selling yet but seems more than likely that it comes. For now, things are gonna sit for a while as sellers are still continuing to ask what they were asking two months ago and smart money isn’t biting.

The estimate ranges themselves changed probably too late in the boom cycle. So the prices are probably plateauing but it looks like a dip or even lack of demand because the estimate ranges shifted.

Also who in their right mind would buy DRC from Acker?

agree that one needs to compare hammer prices and not estimates. Not surprising that prices will fall or stabilize w the stock market down 20+ per cent.

Funny contrast to the other thread where almost all the posts were claiming that trophy wine prices only ever go in two directions - up, or up even more.

for me over the long term this is true - but its basically just a statement on inflation. I think through some adjusted purchasing power, they will still go up, but its clear that you can have blips, or even extended popping of the bubble. I dont personally believe, but may well be wrong, that wine is going to turn into tulips 2.0

I"m pretty sure the Live-Ex DRC index still has something like a 12% CAGR from before the '08 crash. Coupled to inflation, you might very well see real negative growth but I owuld think for long term holders/investors it’s not an issue.

DRC has always been overpriced and overrated. Folks are just coming to their senses, would my guess.

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Sounds like musings from someone who has had a taste or two at best. As someone who has had many bottles, it has always been highly priced but no more overrated than any other high end Burg i.e. always finicky.

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Last week I had the 1972 La Tache and described it as “blazing.” No other estate that I have tasted comes close. So while I consider the pricing as obscene, the wines themselves are utterly unique, and very definitely not overrated.

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I think DRC is capable of the ethereal with sufficient age*, but I don’t think it’s as consistent as some other top Domaines. Which isn’t to say it’s “overrated”, since that depends on what one is looking for. We differ on Leroy, for example, which I love and you find underwhelming (but which to me is just consistently better).

*Which is the way it’s made - it’s not a wine made to be drunk young.

Look at DRC RC 2015: Quite quickly went to 25k after release, stayed there for a while, then back down to 17/18k (when covid hit), before rising to almost 50k last year, now back down to 40k. Like with all high-end wines the general direction (up over time) is clear but there will always be a lot of volatility and times/years where prices come down.

used to do dinners w Mitch Hersh—where is he—and he’d often bring 72 La Tâche. I think it cost $350 or so then. Super wine.

…yes lots of vol especially when the liquidity is so low. The wines of DRC are some of the most traded on the secondary market and still I wouldn’t be confident drawing a precise view on only a few traded bottles.

Look at the trades:
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What do you make of 7 bottles in 2022? How are you thinking about all of the idiosyncratic aspects of auctions that aren’t captured precisely in the hammer? I wouldn’t draw much other than prices are at highs.

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Looks like things picked up later in the auction.

Three of the Top Lots in Acker’s May Hong Kong Auction:
Lot 389: 3 bottles 1990 DRC Romanee Conti
Lot 391: 3 bottles 2000 Domaine Leroy Musigny
Lot 44, 45, 48, 49: 2 magnums 2009, 3 magnums 2010, 1 Jero each 2012 & 2013 Comte Liger-Belair Vosne Romanee Aux Brulees
DELAWARE – JUNE 24, 2022 – The wine market continued to prove its resiliency as interest remained strong for the world’s finest and rarest wines at Acker’s two-day June Delaware auction. The sale, which took place on Wednesday June 22nd and Thursday June 23rd, realized $8.6 million in sales and set 171 New World Records overall. Burgundy remained on top, largely due to two significant consignments including An Exceptional Collection of Burgundy Featuring Rousseau, Liger-Belair, and Roumier, and the sale’s largest collection, Big Time Bankable Burgundy of a Lifelong Burgundy Lover. Domaine du Comte Liger-Belair continued to set the market on fire with an impressive fifteen New World Records over the two days.
The Top Ten Lots were once again dominated by Burgundy, specifically, Leroy and DRC. Leroy took the number one and number three positions with three bottles of 2000 Musigny selling for $99,600 and two bottles of 2001 Musigny bringing in $68,475. The second and fourth spots went to DRC with six bottles of 1999 La Tache fetching $74,700 and three bottles of 1990 Romanee Conti earning $62,250. Dujac tied DRC at number four, setting a New World Record for one jeroboam of 1985 Clos St. Denis also at $62,250. There was another tie for the sixth spot, with ten bottles of 2010 Rousseau Chambertin and six bottles of 1999 DRC Richebourg both bringing in $47,310. DRC continued with three magnums of 2010 Richebourg and a 12 bottle assortment of 1978, with heavy conditions, in the eighth position garnering $39,840 each. Leroy brought the Top Ten home with one bottle of 2006 Musigny and nine bottles of 2004 Vosne Romanee each selling for $34,840.

I’m glad I got my bottle at the equivalent of $3,200usd!

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Alex, can you run some multi-linear regression in this model to account for levels of bidder inebriation?

That’s only available to pro subscribers of my sub stack on highly suspect wine analytics.

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