@Otto Forsberg
That was EXTREMELY helpful. I’ve been trying to wrap my mind around a “strategy”. So you’re saying basically, “hey, if you want to invest, you’ve got to buy nothing but blue chips (Bordeaux, Bergundy, etc.) for $300-$900 per bottle” right? I’ve “studied up” on it a bit and my options seem to be do DIY, invest in a wine mutual find (expensive) or do a cellar plan with Berry Brothers or Cult Wines Ltd in London. I like the idea of DIY as it will be much more fun, plus the ego tickle of showing it off to my friends & family.
I know I can get blue chip wines easily enough but obviously I’m paying full retail if I just go online and grab a bottle of Lafite Rothschilds from Vinfolio, for example. But can a person pay full retail and still make money IF he’s willing to hold for 5 years? I know you can’t answer that absolutely certain, but your opinion would go a long way. Maybe you could summarize what YOU would do if someone said, “Here’s $20,000. I want to hire you to invest it for me in ONLY wine”
Otto, sincere thanks for your time and patience. I’m hooked on the whole concept, I REALLY want to have a good wine collection but I’m determined to do it in a way that keeps my costs reasonable, that’s all. That’s my “ultimate agenda” so to speak.
Well the way I’ve been doing it is amassing a cellar full of affordable wines and arranging tastings with them. I really don’t make any profit out of it, nor am I planning on doing any, but that way I can at least taste my own wines for free.
If you’d want to invest $20k, the best way to do it would be getting a few cases of wines that are already pricey and their production is very limited. Outside the 1er Cru Bdx, I’d say Bordeaux is too iffy and the prices are showing some signs of stagnation, perhaps even dipping. Furthermore, only the best vintages are the ones that actually result high prices - the prices rise a lot less in poor vintages. Good wines that would be great investment wines would be Keller’s G-Max, Bollinger’s VVF, the most respected Burgundies, rare Barolo and Barbaresco wines in the best vintages, some cult Napa Cabs and other similar kind of wines like Pingus or Vega-Sicilia Unico, Ganevat’s whites etc. After securing the wines, I’d preferably stash the wines in a cellar where their provenance would be guaranteed, just to get the best possible chances on high profits.
However, most of these wines are such wines that you have to be a wine hunter yourself. You just don’t go into wine shops and purchase a case of them. That’s why people are willing to pay big money for them and even more once the market for a particular vintage has run dry.
@Otto Forsberg - Thank you again for another heap of helpful context. It almost sounds like investing in wine for assurred appreciation is almost like beachfront property: For regular property CLOSE to the beach (good Bordeax in general) you MIGHT get some appreciation and the cost of admission is much lower, but to get top notch appreciation you’ve got to buy ON THE WATER (Chateau LafiTe @ $4,500 per bottle) … $500 of which is markup, shipping, etc. I’m starting to get it. I might go in the direction of using “Cult Wines” in London but Berry Brothers or Vinfolio … would they be a suitable choice do you think? BB in particular allows you to purchase and cellar right there with guaranteed provenance, as I’m sure vinFolio does as well. I’m considering trying 5K out on Cult Wines. They put a portfolio together for you, quite a big percentage is en primeur which I’m a bit skeptical of, but I’m willing to take a risk and see what happens with my 5k over 5 years.
No, that doesn’t sound like a great investment strategy at all. The very best one could hope for with such a strategy is to buy low retail and sell very highly appreciated wholesale assuming one blunt the right wines and held for 10 years or more. But I don’t like having the odds against me. Investing is hard enough.
Wine as a rule does not appreciate in value, its the exceptions that we always hear about (cult cabernets, 1st growth Bordeaux, barolo, Riesling etc.), but the vast majority of wine won’t gain in value without the strong after-market interest that comes with collectibles. That just doesn’t exist for most wine types/regions. I highly caution anyone against getting into wine as an ‘investment.’ Enjoy it, sell it if you tastes change, but don’t buy looking for $$ returns.
Plenty of anecdotes of wines escalating rapidly in price, but less is talked of the majority that when storage costs, interest, insurance etc. are taken into account, wouldn’t make any money.
Plenty of charlatans in the wine investment business, looking to base future growth projections on selected past performance, the sort of thing Financial services companies have been banned from doing (and rightly so).
Even investment grade wine is substantially more thinly traded than, say, equity index funds. And the transaction costs are astronomical in comparison to same. In addition to the aforementioned electricity, there’s the cost of the storage unit. Tax. Shipping, INSURANCE, because if this is an investment, wouldn’t you want to protect it? And, depending on where you are selling, buyer’s premium. That’s all not even factoring in the comment of buying retail, selling wholesale.
Wine is much more speculative as well. Sure, blue chip wines have continued to appreciate. But will they? What if there’s another financial crisis, that coincides with when you are hoping to sell? That thinly traded market evaporates. Worse yet, what if you found yourself in a place where you HAD to sell into that thinly traded market, at the bottom?
And finally there’s opportunity cost. Both of the Capital you’re looking to deploy, and your time.
there are a lot of things that I think are worth saying here but here are (shortened versions) of my top few:
first, do you know you like aged wines? if you are normally drinking $7 flip flop cabs, there is a decent chance that a mature (20+ years old) bordeaux or a burgundy is gonna be a totally new experience for you. you should make sure you LIKE wines that are meant to age (and their counterparts that ARE aged) before you invest 2 grand in a cooler and several thousand in wine to fill it. try village-level burgundies, mosel rieslings, decade old bordeaux, brunello di montalcino, before investing in a cellar. theres a chance the switch from big fruit to big earth and tannin may not be your style. thats cool, we still love that you’re drinking wine.
second, a lot of people who are making money off wine collections right now are doing so because they had lucky timing. this is one of the few times in history that it has actually been possible to REALLY do so, and the ones who have are ones who bought before a giant price boom in the dot-com bubble (and its associated spread of easy information from the www) and watched as the market went crazy. the others who have either found a producer early and watched their career take off or liked a region like piedmont before people started trusting Italian wine again. in general prices go up now to cover cost of storage (maybe) and rarity, either at release or as people drink other bottles.
Wine is highly variable. generally, we think of left bank bordeaux as aging well, but thats not always the case. some producers are meant for drinking young, and some vintages even good producers should be consumed younger. some regions we think of as not producing ageable wines have pockets where the wines seem to last forever. sometimes, everyone predicts a wine will improve for a long time, and they’re wrong. sometimes we all think it should be drank early and someone finds a 50 year old bottle in their cellar thats still perfect.
in general i guess my point is this: from a consumer standpoint wine is much better if you think of it as a consumable product than as a money maker. sometimes you get lucky and you make some money. but the people who are really lucky are the ones who open a bottle at the perfect time and drink it with good food and people that they enjoy sharing it with. thats what its made for!
also, to specifically answer a couple of your questions, there are some pretty good producers of wine cellars and fridges. wait till black friday though and you can get a great deal. I got my 120 bottle Allavino (normally about $1100) for 700 and free shipping. be prepared to not be able to fit as many bottles in a cooler as advertised, they base it on Bordeaux-sized bottles, which are typically the most compact, but pinot bottles and similar tend to take up more cooler space.
websites that i have used and had good experience with: Envoyer, Chambers St Wines, JJ Buckley, LastBottleWines, SommSelect, garagiste solokin. (note: several of these send at least daily offers that can sometimes be great deals, sometimes be flops). with sites like WTSO, you have to be willing to take some chances and do some research to find great deals. cellartracker.com and vivino are good places to do research on specific bottles.
as your learning, i would suggest a couple of things before investing in a large wine fridge: find a local shop with an owner who is knowledgable about wine that you trust. even most medium sized towns will have something like this at this point. talk to them about what you like and dont and have them ease you into the spendier bottles to expand your palate. consider joining a wine club like sommselects or viticole. one that is run by someone who knows what their doing and isn’t just selling you cheap wine with a different label. this is a really good read and rundown Wine Folly Club | Wine Folly
lastly, know that there is nothing wrong with enjoying one bottle of wine over another. we can get kind of uppity about our wine around here, but i think in general most of us deep down just like to see people enjoying wine, finding wines they like and learning more about it. dont let anyone look down on you for a bottle you choose to buy or not, like or not, sell or not, and drink or not. wine is a huge world, but its a fun one.
I can’t thank you all enough for your great advice. I have committed some “play money” to Cult Wines LTD. It’s literally nothing more than an experiment. If it doesn’t pan out in 5 years, nothing ventured nothing gained. Otherwise, thanks for the leads in lieu of WTSO. From what I can see, I’m paying $7 for $7 Flip Flop Cab, but if I’m willing to pay $12, (via sites like LastBottleWines, etc.) I can often get $30-$50 wines.
have you ever used wine-searcher before? its a good way to get a quick price check on some of the daily offer sites and see what other places around the country are offering the same bottle for.
Someone had commented to me that I might not like the more “ageable” wines, such as Grand Cru Bordeaux’ etc. It’s funny, I’ve been experimenting with WTSO and tried 3 so far. A Chatneuf de Pape, (Domaine Giraud Chateauneuf du Pape Tradition 2014) which reminded me of a super dry, smooth Pino Noir. Very nice. Then a Super Tuscan. (Tenuta di Ceppaiano ‘Violetta’ 2007) I found the super tuscan, literally, to be the best wine that I’ve ever tried to date. (I’m as green as they come so don’t read much into that! haha). Then a Bordeaux. (Château de Macard Réserve Bordeaux Supérieur 2014) I found the bordeaux very hard to drink. I haven’t learned the adjectives yet but I found it “strong” … overpowering. I thought that if this is how Bordeaux generally tastes, I’ll stick with the CdP’s and ST’s.
Before trying these, I didn’t realize quite how amazing “near zero” residual sugar was. Even though I consider my “cheap wines” (flip flop cabernet) pretty dry, they’re sugar water compared to these. I found the absence allowed so many subtle flavors to come through.
None of my business except that you asked some questions here but … I’m not getting the point of dashing into a large cellar and and investment plan when you are just starting to even explore wines. From my time here reading the comments of so many knowledgeable berserkers, I’ve sure seen that it takes time to learn and lots of time to taste. Everyone is kindly pointing out that investments in wine are iffy to say the least – and if you take the time to read the Rudy thread and the Premier Cru thread, you’ll see how very risky it can be. You might want to check those out.
Absolutely don’t plan on putting much into investment wines now after reading all your threads. I apologize for not making that clear. I just have them but now after putting in the research… Just to learn about wines and what separates a decent ones from a $5 one.
Love that you’re trying different stuff and making a note of what appeals / what doesn’t. Being able to put descriptions against a wine can be an uncomfortable thing to do. I remember when I first started, being embarrassed to write, as I was unconfident in both my ability to pick out key elements, and then put that into words. If you want to progress this, I’ve got a couple of suggestions:
Essential Winetasting (Michael Schuster) is a great book for talking through the mechanics of wine tasting without being stuffy or pretentious, even including some ‘worked examples’ you could try at home / with friends. There are other similar books out there.
A multi-choice cribsheet. Ric Einstein, a red wine loving Aussie (also known as TORB - the other red bigot) produced a very good one, and I’ve attached a copy as his site has now been retired. The idea is you print a copy off for every 2 wines you are tasting (there are 2 on each page). Start by simply circling the elements you think best describe the wine, with maybe a word or two in addition if you want to emphasise soemthing, or something you experienced isn’t listed. Then in time, use the circled selection as the skeleton to weave words around e.g. Dense Purple colour, with strong yet balanced Black fruit to the fore, supported by crisp acid and velvety tannins. etc. etc.
I note he doesn’t list typical fruits. Whilst (I think) he did used to use them in his tasting notes, he did make a point of emphasising that the structural elements were just, if not more important, yet these were often ignored or barely considered by the ‘fruit salad’ style sine critics / commentators (see a clip of Jilly Goolden from the UK series Food and drink for the worst excesses in this).
Hope this helps if you want to build some confidence in expressing what/why you like / don’t like
normally that comment is less so “do you like wines that CAN AGE?” and moreso “do you like wines that HAVE AGED?”
its definitely true that there are differences in initial taste of a wine designed to age vs early consumption: complexity, tannin level, acid level, etc. but the big question when youre thinking about buying a 100 bottle plus cellar (typically for allowing wine to gain some age) is do you like wines that have age? complexity is sometimes a hard thing to pick up at first, but in general most young wines lead with fruit and go from there. but an aged wine is a totally different experience. a lot of them lead with something that is savory, or earthy, and hold onto some fruit underneath. the difference between the 2014 CdP you mentioned and its 20 year old counterpart is typically striking. some people who like young wines don’t like older wines and vis versa.
@Mattstolz
Thank you for the comments. That may explain why I did a double take when I tasted the 2006 Super Tuscan. I felt it was the “best wine I ever tasted”. Super dry, and I think what I noticed missing wasn’t so much the sugar but the fruit. I couldn’t identify a single flavor but there was just this layer after layer of subtle flavor that changed as the night went on. My education is slim to none yet but I knew I was drinking something good! – I’ll have to try an older Chatneuf…but gosh they’re expensive. Like $28 or so for “entry level” it seems!
Here is my confusion… Take a region like Bordeaux, famous for the ageability of some of its wines. Within that region, I always hear that only the finest, more expensive wines are worth aging. Ok.
I also understand that the main elements that construct a wine that ages well are tannins, high acid, and perhaps low sugar and/or alcohol levels.
So my question is, why is a $15 Bordeaux that has all the above elements NOT considered a wine that improves with age? I’m not talking about the purposes of investment or profit. I’m just referring to taste. Why am I told that this $15 high-acid strong tannin Bordeaux will not age beautifully in 20 years?
Hi Justin
An important question and one that can be hard to answer. Plenty of instances of professional testers (and winemakers) getting this wrong.
Balance is the easiest answer, but it’s just one consideration and a question of balance depends on the wine style and to a degree your own preferences.
A wine with firm tannins, spiky acidity and little depth of fruit mght well age well, but will the fruit survive the acid and tannins? Comparing Nebbiolo to other ageworthy wines, it would be easy to say that battle would be lost most times, yet with significant age the delicate complexity is something many of us cherish.
That $15 Bordeaux will probably age well, such that in 15-25 years it may well have survived, be drinkable, and often be surprisingly charming. We often underestimate the ageing ability of cheaper wines made in a traditional / rustic style. However, how complex is the fruit and has it lasted with enough intensity? Has it aged into a balanced position, where the tannins might provide a little light grip, the acidity refreshes but doesn’t overpower, and the fruit has a say, ideally with a complex blend still showing a some primary fruit, plus interesting tertiary complexity? If the original wine was a little rough / foursquare, can it throw that rusticity off before the fruit fades / decays?
For many it’s about the fruit ‘quality’ (a wonderfully ill-defined thing) that separates the wines. One that has depth and nuance ought to offer more in maturity than one that is simpler and lacks depth. Not always the case and it pays to wonder if the wine that is more complex in youth has been made that way to appeal from the start (aka the ‘show pony’).
I’m not sure how much this will help. Probably frustratingly vague, but I don’t see a magic formula.
I would recommend an article NZ wine writer Geoff Kelly wrote on the subject (easy to find his site with a web search), where he promotes the idea of dry extract being a key factor. I’m not entirely sure I agree with him, but I always find his writing considered/thoughful, so it’s worth a read.