I’ve spoken to five people today who want to learn more about investing in wine. This in itself is not unusual; it’s part of my job. What’s interesting is (a) the sort of people that are asking and (b) the sort of things I’m saying. We’ll do point (a) first.
Many people invest in wine. You could say that I have done it, as have most of my colleagues. The vast majority of my customers have bought a case of something with its future value in mind. History suggests that if you buy a case of Lynch-Bages on release and sell it ten years later then you’ll make a few quid, and it’s much more fun to own a few thousand quids’ worth of wine than it is to have a similar sum in the bank.
After a steady year there is now some real enthusiasm in the fine wine market. More than just confidence. There is some excitement. A lot of this revolves around the forthcoming release of the 2009s. The hype is already out and it’s still February. 2000 but better. 2005 but better. And things are already moving on the back of it. 2000 Ch. Lafite-Rothschild has moved from £14,000 to £16,000 in a month. 2005 Lafite looks like it might move up fairly quickly soon (£8,000 per case today looks cheap when compared to the 00). If 2009 Lafite comes out at £5,000 per case (the 2000 opened at £2,000 or so, the 2005 at £3,750) I reckon I could have a crack at selling ALL OF IT.
So back to the point (a). It is entirely usual to speak to a chap with a few grand to spare who wants to have a bit of a punt. It’s part of the quotidian. But recently the enquiries, or at least the ones I’ve had, have been from what you might call more serious players. Guys who might just have a bit more than a few grand, guys that might just have half a bar or two (I’m down with the city talk, see…). These guys are a little more scary.
During the last boom in the fine wine trade I got a little carried away. My ambition became this: one day, I’m going to find someone, or a group of people, with the cash, conviction and courage to corner something. To really do it and not mess about. Not just one wine, one vintage, but an entire vintage, the whole market… Like I say, I got a bit carried away. But think about this:
I reckon Ch. Lafite produce about 18,000 cases of wine each year, give or take. If the 2009 is released at five grand a case then that means a grand total of ninety million quid. I stress that this is hypothetical: you couldn’t buy the whole lot (but it would be fun trying), and I may be way out on the price. But my point is this: ninety million quid is not a great deal of money these days. There are city boys (and I mean boys) playing with this sort of sum on a daily basis. I know a few people who could come up with this personally. No doubt there are still some creative bankers who could conjure up this sort of sum with an equation.
Point (b): what I’ve been saying. I learn a lot from listening to myself. The above has its appeal, and sounds like fun. It also sounds like greed. So what I’m saying is all over the place. Buy some top Bordeaux from the right vintage, sit on it for a few years, and you’ll probably make a few quid. And with everything else just built on debt or equations then this may make sense.
The reality is that both fear and greed, which drive investment markets, are what have got us here, are part of evolution. Am I hyping 2009 Bordeaux? No: I have a feeling that 2009 will not be my style of vintage for drinking (shite vintages, top domaines: that’s me) but what I think matters not. Am I hyping wine investment? No. I’d like it all to be cheap so that I can drink it.
As I get older I realise that all cliches are true. It’s a funny old world, and it will all come out in the wash. Enough of this: I’m going to open a 2007 Lietz Kabinett and watch Aston Villa vs Crystal Palace on the telly.
