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Reading around here and there, I'm getting very scared about my £25,000 sitting in the bank.

I'm worried about hyperinflation and the entire banking system collapsing.

I'm worried about stock markets falling, rumours that gold has peaked and that the whole economy is going to crash on a scale beyond anything the general public is remotely aware of at the moment.

So where do I put my money?

I'm going for blue chip wines, specifically first growth Bordeaux.

I'm going to buy two cases of Chateau Margaux 2005 at £6,700 per case and two cases of the 2000 vintage at £6,500 a case.

Although the 2005 vintage has fallen back from a ridiculous high of almost £10,000 a case, it is seen as the better of the two vintages and the 2000's price has been solid in growth, although it has seen a dip since hitting heady heights in 2007:

2000 vintage (case of 12 x 75cl):

4 years ago: £2800

3 years ago: £3780

2 years ago: £7200

1 year ago: £7750

Present: £6700

2005 Vintage (case of 12 x 75cl):

en primeur (when released) c £2500

1 year ago: £9500

Present: £6742

The 2000 vintage has long been seen as a magnificent vintage in Bordeaux, possibly better than 1982 and 1990, certainly the best since 1990.

The 2005 is singular, with many declaring it to be the greatest vintage ever - everything that could go right did. It is already universally accepted as being at least on a par with the legendary 1961 and 1945 vintages.

There are a number of reasons why I am ready to invest:

1) Historic growth: The 2005 and 2000 vintages prices are now almost identical, which is where they should be given the relative merits of each vintage. I think the prices have found their level after the incredible interest in the 2005 (which drove buyers towards the cheaper 2000), and they won't be dropping much more. Over the past fifty years, blue chip wines from great vintages have grown year on year by 15%. A bottle of 1982 Mouton Rothschild would have cost £20 in 1983 - a bottle in mint condition today will cost around £1000 retail. Pick any wine from vintages such as 1961 and compare en primeur (release) prices with today and the growth is 15% compound.

Even if the price slumps again in the next year, at least it won't be pure capital loss (which will probably happen if I invest in property today). If, as it looks, we are in for bad times for the foreseeable future economically, I would be happy to just forget the wine for 10-15 years and let it grow, and take any loss in the next year as the price for peace of mind. The super rich around the world will always want a glass of wine with their dinner.

2) There is always demand for first growth wines. The very greatest half dozen wines from Bordeaux are always in demand, but the demand increases as the years go by and the wines become more interesting as they age.

3) World supply decreases as demand grows. Every time a bottle is opened, there's one less in the world, thus increasing the value of your investment. And bottles are opened all the time, every day, by the curious, the trade and the wine press.

4) Bordeaux has seen three mediocre vintages since the 2005. A splurge of great vintages would affect prices for the 2000 and 2005 - that hasn't happened, another couple of less than great vintages would be even better. Bordeaux is wobbling on the cusp of climate change - as a region it makes such fabulous wines because it is right on the limits of what is possible given its micro-climate. If things heat up as they have been the wines will lose their famous character in vintages to come, making the 2000s and 2005s even more desirable. Sammy Wilson could learn a thing or two by talking to the Bordelais.

5) Even if all else collapses and I end up living in a tent, at least I can get P1ssed on some extremely fine claret!

So I'm going to buy from a good broker (Fine and Rare, Farr, Bibendum etc), make sure I've got the paperwork saying the wine is mine, and then I'm going to lock it away in dedicated cellars (Octavian) and forget about it.

Edited by rconti479

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Good luck i don't know too much about wine, but if i were you i'd do a bit more research round t'internet, i read a headline in the mainstream media this last week, that the prices of some of the top wines were being hit by the credit crunch.

Can't remember exactly were but i tend to read the beeb, times online, reuters and bloomberg so it's likely to be on one of those.

Me personally i was after platinum but found it rather tricky to get hold of.

Edited by slurms mackenzie

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Reading around here and there, I'm getting very scared about my £25,000 sitting in the bank.

I'm worried about hyperinflation and the entire banking system collapsing.

I'm worried about stock markets falling, rumours that gold has peaked and that the whole economy is going to crash on a scale beyond anything the general public is remotely aware of at the moment.

So where do I put my money?

I'm going for blue chip wines, specifically first growth Bordeaux.

This is a luxury. I just don't see how the price of this will not fall in a recession.

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This is a luxury. I just don't see how the price of this will not fall in a recession.

The market for these wines is the rich and well to do.

I am not talking about the vast majority of 2nd - 5th growths, whose price will be affected (especially en primeur, no matter how good the vintage in 2009 and 2010), or the flashy "garage" wines which are so trendy today but don't have a proven track record.

Only:

Chateau Margaux

Chateau Mouton Rothschild

Chateau Latour

Chateau Lafite Rothschild

Chateau Haut Brion

...and outside of those wines:

Chateau Petrus

Domaine de la Romanee Conti (Burgundy)

Supply is finite and falling, worldwide demand will increase over time and the prices will soar. I'm looking at a ten year investment, minimum.

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My problem is that I'll come in drunk one night and crack open a bottle, drink half and fall asleep

lol!

Nah - you store it with a company like Octavian (relative of yours? ;)), who have temperature controlled cellars.

They charge something like £8 per case per year for storage, which includes insurance, and the likes of Christies and Sothebys recognise them as being crucial for provinence. If the wine is stored with them it will achieve top marks at auction, if it's stored under your stairs it will be detrimental to the final sale price.

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Wouldn't wine be one of the easiest things in the world to forge...

just print up a label...stick it on a bottle... £6k thank you very much..

Likely it will never be drunk so never found out..

How do they stop this from happening?

lol!

Nah - you store it with a company like Octavian (relative of yours? ;)), who have temperature controlled cellars.

They charge something like £8 per case per year for storage, which includes insurance, and the likes of Christies and Sothebys recognise them as being crucial for provinence. If the wine is stored with them it will achieve top marks at auction, if it's stored under your stairs it will be detrimental to the final sale price.

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My problem is that I'll come in drunk one night and crack open a bottle, drink half and fall asleep

is the right answer....handshake.gif

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Wouldn't wine be one of the easiest things in the world to forge...

just print up a label...stick it on a bottle... £6k thank you very much..

Likely it will never be drunk so never found out..

How do they stop this from happening?

Bottles from the likes of Chateau Margaux are now security tagged, and a paper chain is created as and when the wine is bought/sold.

For instance:

Ch. Margaux sells 100 cases of its 2005 vintage to Berry Bros and Rudd

Berry Bros. and Rudd sell 4 cases to Fine and Rare Wines

Fine and Rare Wines sell those 4 cases to Bordeaux Index

I buy two cases from Bordeaux Index.

The wine has been tagged and it's provenence confirmed at each transaction through three extremely reputable brokerages after leaving the chateau.

The wine passes in to my ownership, and I take insurance out on it to have it placed in Octavian for storage. Any issues down the line, I can refer to the impeccable provenance and claim the market value via my insurance.

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My problem is that I'll come in drunk one night and crack open a bottle, drink half and fall asleep

Bernard: Old wine is good wine.

Manny: Yes, but… expensive wine is good wine, also.

Bernard: Yes. But the older the wine is, the gooder it is.

Manny: Ah. But by the same token, the more expensive the wine, then the gooder it is also.

Bernard: Look at the colours.

Manny: Yeah.

Bernard: All… all the colours. Well, yellow.

Manny: This is like… a farmyard of… of wine.

Bernard: It’s like looking into the eye of a duck.

Manny: And sucking all the fluid… from its beak.

Bernard: …touché. And because you win, you get to go to the cellar.

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Just bought:

2 cases Ch Margaux 2005 @ £6500 per case

1 case Ch Margaux 2000 @ £7000 per case

2 cases other 2005's @ £2250

Total: £22,250

I have now moved the money out of my Bank of Ireland account in to something tangible - a huge relief.

I intend to sit back and see in 3-5 years how things are looking.

I'll update every now and again about how my investment is doing...for better or worse.

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I took £25,000 - all my cash - out of Bank of Ireland today and bought wine.

I'm going to forget about it for five years now, but I feel good about having something tangible.

I work in wine as well, so I'm pretty comfortable with my investment.

I feel good about moving it a) out of the bank and b ) out of sterling.

Edited by rconti479

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I took £25,000 - all my cash - out of Bank of Ireland today and bought wine.

I'm going to forget about it for five years now, but I feel good about having something tangible.

I work in wine as well, so I'm pretty comfortable with my investment.

I feel good about moving it a) out of the bank and b ) out of sterling.

:o That's a pretty ballsy move - good luck - I hope you have them locked up safely! My money is for a home and i'm buying in sterling, so i'm happy enough. As for bank security, if the strongest banks end up failing, then I think we'll all have other things to worry about.

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How long does wine keep? I'm speaking as someone that has never drunk a wine older than 24 months -_-

The wine I have bought will be fine in 50 years, and should still be magnificent in 100 years.

The 1900 Chateau Margaux is still drinking well.

These wines are very much the exception - Michael Broadbent from Christies had a fabulous glass of Margaux in 1987 - from the 1787 vintage.

Over the past 50 years blue chip wines (and I can't stress enough there are very few) have grown at a rate of about 15% pa.

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:o That's a pretty ballsy move - good luck - I hope you have them locked up safely! My money is for a home and i'm buying in sterling, so i'm happy enough. As for bank security, if the strongest banks end up failing, then I think we'll all have other things to worry about.

I've bought from an extremely reputable broker, I've taken out insurance, and the wines are being stored in one of the finest purpose built facilities in the world. When the time comes to sell, they will tick all the boxes, with provenance leading right back to the Chateau and perfect storage. These things are absolutely critical when investing in wine.

My total investment was for five cases - 60 bottles of grape juice...!

Of course I would love to see growth on my investment over 3-5 years, but even if it treads water for a while I will be content. I know in the long run I've made a good move, and I've a few bob elsewhere to tie me over (at least until hyperinflation wipes it out ;)

I think it's each of us to our own - I know wine. I might mess this up in the short term, but in the medium term I'll be fine.

The best of luck to you as well!

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I think luxuries like this will be hit, just like classic cars, train sets, artwork, maybe it has an edge on those because it is edible. Do you know what happened to those things during the Great Depression? It would be interesting to find out.

Are they stored locally? What happens if an angry mob riots the location and drinks all your wine, and the insurance company has collapsed?

Anyway I would much rather society invested in things like this rather than speculate on a pile of bricks that is somebody's home. So wish you well.

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I think luxuries like this will be hit, just like classic cars, train sets, artwork, maybe it has an edge on those because it is edible. Do you know what happened to those things during the Great Depression? It would be interesting to find out.

They've taken a pretty big hit already, as shown in the OP, but the crucial thing, which you have touched upon, is the fact that worldwide stocks will diminish over time.

For instance, only 12,000 cases (144,000 bottles) of Chateau Margaux 2005 were made. Every day, bottles are being opened at professional tastings, in restaurants and by curious amateurs. Also, thousands of cases will make their way to the far east, where provenance is unacceptable by western standards. Good brokers in Europe refuse point blank to buy Far Eastern stock.

So as time goes by, availability diminishes, but the product becomes more desirable as it improves in quality with age. These features are pretty much unique, I think.

Are they stored locally? What happens if an angry mob riots the location and drinks all your wine, and the insurance company has collapsed?

That's a fair point. They will be stored in Wiltshire at Octavian under perfect conditions:

http://www.octavianvaults.co.uk/index.html

It's critical that I don't buy the wine and then store it under my stairs - I live in Northern Ireland, but there are no storage facilities here even close to Octavian's standard. Unfortunately it's a risk I have to take. If an angry mob comes along and overpowers any security including the police, I think we're all in big trouble and my investment could be the least of my worries.

Anyway I would much rather society invested in things like this rather than speculate on a pile of bricks that is somebody's home. So wish you well.

Very kind of you to say so. :)

I'm very happy, even if prices dip over the next three years because I have something tangible, I'm confident it will eventually come good, I don't have any debt (ie mortgage) tagged on to my investment and as a wine "expert" I'm just so excited to own such thrilling wines - that makes me sure that one day others who love wine and have money will feel envious, and envy will hopefully turn in to a return on my investment.

I note today that I have made £380 on my investment since yesterday. He he!

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Reading around here and there, I'm getting very scared about my £25,000 sitting in the bank.

I'm worried about hyperinflation and the entire banking system collapsing.

I'm worried about stock markets falling, rumours that gold has peaked and that the whole economy is going to crash on a scale beyond anything the general public is remotely aware of at the moment.

So where do I put my money?

I'm going for blue chip wines, specifically first growth Bordeaux.

I'm going to buy two cases of Chateau Margaux 2005 at £6,700 per case and two cases of the 2000 vintage at £6,500 a case.

Although the 2005 vintage has fallen back from a ridiculous high of almost £10,000 a case, it is seen as the better of the two vintages and the 2000's price has been solid in growth, although it has seen a dip since hitting heady heights in 2007:

2000 vintage (case of 12 x 75cl):

4 years ago: £2800

3 years ago: £3780

2 years ago: £7200

1 year ago: £7750

Present: £6700

2005 Vintage (case of 12 x 75cl):

en primeur (when released) c £2500

1 year ago: £9500

Present: £6742

The 2000 vintage has long been seen as a magnificent vintage in Bordeaux, possibly better than 1982 and 1990, certainly the best since 1990.

The 2005 is singular, with many declaring it to be the greatest vintage ever - everything that could go right did. It is already universally accepted as being at least on a par with the legendary 1961 and 1945 vintages.

There are a number of reasons why I am ready to invest:

1) Historic growth: The 2005 and 2000 vintages prices are now almost identical, which is where they should be given the relative merits of each vintage. I think the prices have found their level after the incredible interest in the 2005 (which drove buyers towards the cheaper 2000), and they won't be dropping much more. Over the past fifty years, blue chip wines from great vintages have grown year on year by 15%. A bottle of 1982 Mouton Rothschild would have cost £20 in 1983 - a bottle in mint condition today will cost around £1000 retail. Pick any wine from vintages such as 1961 and compare en primeur (release) prices with today and the growth is 15% compound.

Even if the price slumps again in the next year, at least it won't be pure capital loss (which will probably happen if I invest in property today). If, as it looks, we are in for bad times for the foreseeable future economically, I would be happy to just forget the wine for 10-15 years and let it grow, and take any loss in the next year as the price for peace of mind. The super rich around the world will always want a glass of wine with their dinner.

2) There is always demand for first growth wines. The very greatest half dozen wines from Bordeaux are always in demand, but the demand increases as the years go by and the wines become more interesting as they age.

3) World supply decreases as demand grows. Every time a bottle is opened, there's one less in the world, thus increasing the value of your investment. And bottles are opened all the time, every day, by the curious, the trade and the wine press.

4) Bordeaux has seen three mediocre vintages since the 2005. A splurge of great vintages would affect prices for the 2000 and 2005 - that hasn't happened, another couple of less than great vintages would be even better. Bordeaux is wobbling on the cusp of climate change - as a region it makes such fabulous wines because it is right on the limits of what is possible given its micro-climate. If things heat up as they have been the wines will lose their famous character in vintages to come, making the 2000s and 2005s even more desirable. Sammy Wilson could learn a thing or two by talking to the Bordelais.

5) Even if all else collapses and I end up living in a tent, at least I can get P1ssed on some extremely fine claret!

So I'm going to buy from a good broker (Fine and Rare, Farr, Bibendum etc), make sure I've got the paperwork saying the wine is mine, and then I'm going to lock it away in dedicated cellars (Octavian) and forget about it.

In October 2008 I bought:

12 x 75cl Margaux 2005

12 x 75cl Latour 2005

12 x 75cl Lafite 2005

12 x 75cl Mission Haut Brion 2005

12 x 75cl Le Pin 1996

I am happy with holding these wines for 10+ years and I bought for the same reasons that the OP mentioned.

One thing has always confused me though.

I bought the wines in Sterling but the world market for investment grade wines trades in USD/HKD/CHF and Euros as well as GBP. The market seems to be 'made' in London.

So what would you expect to happen to these wine prices if Sterling tanks - say to parity with the dollar?

Any thoughts??

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In October 2008 I bought:

12 x 75cl Margaux 2005

12 x 75cl Latour 2005

12 x 75cl Lafite 2005

12 x 75cl Mission Haut Brion 2005

12 x 75cl Le Pin 1996

I am happy with holding these wines for 10+ years and I bought for the same reasons that the OP mentioned.

One thing has always confused me though.

I bought the wines in Sterling but the world market for investment grade wines trades in USD/HKD/CHF and Euros as well as GBP. The market seems to be 'made' in London.

So what would you expect to happen to these wine prices if Sterling tanks - say to parity with the dollar?

Any thoughts??

This question has been annoying me for over a month now!

Perhaps someone who is savvy when it comes to currency could help out...

For argument's sake, say the case of wine cost £10,000 GBP...

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This question has been annoying me for over a month now!

Perhaps someone who is savvy when it comes to currency could help out...

For argument's sake, say the case of wine cost £10,000 GBP...

Looks like we are on our own with this question. We seem tot be the only two of all the forum members who've stuck some dosh in investment grade wines. ;)

Since I posted the question I have noticed that sterling seems to be the determining currency. The wines are obviously released en primeur in Euros but what then seems to happen is that sterling then becomes the 'base' currency. (How apt!)

For example, my 2005s have recently dropped in price in sterling - but they've also dropped by the same amount in CHF. I'm not too woried about this short term fall as my investment horizon is the same as yours - 10 years++

Auction results are important for the older vintages and the other thing I've noticed is that French and US merchants seem to be very uncompetitive. The UK merchants/brokers seem to reflect the 'true' market value best especially if you use Live-ex as the benchmark.

I'm hoping that the new wine funds that ave been launched this year (Lutzer et al.) will soak up some stocks and the prices will rise.

I think 2005 was still a great buy despite the eye-watering prices. The subsequent vintages are disappointing and 2008 seems to be poor as well.

I buy through FRW and they haven't been able to explain/answer my question.

Just wonder what your merchant says if you ask them?

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Looks like we are on our own with this question. We seem tot be the only two of all the forum members who've stuck some dosh in investment grade wines. ;)

Since I posted the question I have noticed that sterling seems to be the determining currency. The wines are obviously released en primeur in Euros but what then seems to happen is that sterling then becomes the 'base' currency. (How apt!)

For example, my 2005s have recently dropped in price in sterling - but they've also dropped by the same amount in CHF. I'm not too woried about this short term fall as my investment horizon is the same as yours - 10 years++

Auction results are important for the older vintages and the other thing I've noticed is that French and US merchants seem to be very uncompetitive. The UK merchants/brokers seem to reflect the 'true' market value best especially if you use Live-ex as the benchmark.

I'm hoping that the new wine funds that ave been launched this year (Lutzer et al.) will soak up some stocks and the prices will rise.

I think 2005 was still a great buy despite the eye-watering prices. The subsequent vintages are disappointing and 2008 seems to be poor as well.

I buy through FRW and they haven't been able to explain/answer my question.

Just wonder what your merchant says if you ask them?

I'm still a bit lost with regard to the currency issue to be honest.

Parker's scores for 2008 have come through and the general consenus is that they are ridiculously high - he made Lafite jump from £2000 per case to £3500 in a day - mental! Anyone who buys the 08s at that price is certifiable - still it will prop the 2005s up nicely against any further drops...I think big Bob is still upset that he messed up the 05's at first and he's been trying to steal a march on other journos ever since. He's looking a bit foolish, which I think will be no bad thing in the long run.

There's a healthy gap opening up between the 2005's and the next great vintage, whenever it happens. I'm very happy - my only slight regret being that I didn't buy Lafite instead of Margaux, but I'm willing to bet that the Far Eastern market will have become more sophisticated and open in the next ten years and that Margaux will be perfectly placed as the better wine once their obsessive fixation with Lafite wears thin.

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I'm still a bit lost with regard to the currency issue to be honest.

Parker's scores for 2008 have come through and the general consenus is that they are ridiculously high - he made Lafite jump from £2000 per case to £3500 in a day - mental! Anyone who buys the 08s at that price is certifiable - still it will prop the 2005s up nicely against any further drops...I think big Bob is still upset that he messed up the 05's at first and he's been trying to steal a march on other journos ever since. He's looking a bit foolish, which I think will be no bad thing in the long run.

There's a healthy gap opening up between the 2005's and the next great vintage, whenever it happens. I'm very happy - my only slight regret being that I didn't buy Lafite instead of Margaux, but I'm willing to bet that the Far Eastern market will have become more sophisticated and open in the next ten years and that Margaux will be perfectly placed as the better wine once their obsessive fixation with Lafite wears thin.

Yes, I agree with you about the Far East markets. I am in KL and there's still a lot of cash looking for a home in Asia; hopefully more of it will go into investment wines. There are a couple of major auctions coming up in Hong Kong so we'll see what happens then.

Isn't Parker due to re-taste the 2005s soon? he normally re-tastes 2 or 3 years after his original review, I think.

That will be interesting - especially after his scores for the 2008s. A couple more mediocre years should position the 2005s (and 2000s) nicely. I might put a bit more into the market but I'll be looking at some 2000s and earlier vintages closer to being ready for drinking - preferably in some Macau casino and served with Coca-Cola over ice.

;)

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Yes, I agree with you about the Far East markets. I am in KL and there's still a lot of cash looking for a home in Asia; hopefully more of it will go into investment wines. There are a couple of major auctions coming up in Hong Kong so we'll see what happens then.

Isn't Parker due to re-taste the 2005s soon? he normally re-tastes 2 or 3 years after his original review, I think.

That will be interesting - especially after his scores for the 2008s. A couple more mediocre years should position the 2005s (and 2000s) nicely. I might put a bit more into the market but I'll be looking at some 2000s and earlier vintages closer to being ready for drinking - preferably in some Macau casino and served with Coca-Cola over ice.

;)

lol - I've heard the Petrus and Coke story so many times now!

I'm expecting Parker to firm up his scores for the 2005's, but you never know...

Jancis Robinson pulled back her scores and noticed niggly little quirks with the wines in February this year - of course they are at a very awkward stage.

However, the word is that Parker (and Jancis) put the wines in to a bubble and scored them against their peers from 2005, rather than by comparison with other vintages. Hopefully when they really start to sing the 100/100 and 20/20 scores will come thick and fast - at least Parker left himself enough room to lift the wines up another notch or two.

I bought some 2000 Margaux - 20/20 from Jancis, 100/100 from Bob, 5/5 from Broadbent etc etc etc.

Hopefully the next few years will pump up the price -as you say, it will be coming in to its drinking window.

By the by - I really don't understand why there has been such a lack of discussion about wine as an investment at this time. I haven't seen anything in the press either.

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