[rconti479]

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.

This post has been edited by rconti479: 21 February 2009 - 12:14 PM

[slurms mackenzie]

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.

This post has been edited by slurms mackenzie: 21 February 2009 - 03:12 PM

[Belfast Boy]

rconti479, on Feb 21 2009, 12:07 PM, said:

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.

[rconti479]

Belfast Boy, on Feb 21 2009, 03:25 PM, said:

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.

[Vespasian]

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

[rconti479]

Vespasian, on Feb 21 2009, 06:02 PM, said:

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.

[bootfair]

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?

rconti479, on Feb 21 2009, 06:36 PM, said:

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.

[subby]

Vespasian, on Feb 21 2009, 06:02 PM, said:

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....

[rconti479]

bootfair, on Feb 22 2009, 05:22 AM, said:

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.

[LazyPeon]

Vespasian, on Feb 21 2009, 06:02 PM, said:

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.

[rconti479]

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.

[billyslad]

Cheers good health

[Little Professor]

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

[rconti479]

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.

This post has been edited by rconti479: 03 March 2009 - 07:14 PM

[shipbuilder]

rconti479, on Mar 3 2009, 07:13 PM, said:

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.

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.