Hi i’m konstantin baum master of wine And i know it sounds almost too good to Be true but yes you can make money from Investing in wine but it’s obviously not As easy as it sounds so today i’m going To tell you everything you need to know About wine investment so Let’s go [Music] Full disclosure i’m not a certified one Investment expert and i don’t think There is such a thing but i know the Market pretty well as i’ve worked for One of the leading one investment Institutions for years the term one Investment describes the acquisition of Wine for financial gain you don’t buy The wine to drink and enjoy it you buy It in order to sell it at a profit it Has been common practice among wine Collectors to buy two cases of a wine They liked and then sell one at a later Stage in order to finance their next Purchase over the last decades one Investment has become a bigger and Bigger thing but it also has a long History the region most associated with Wine investment is probably bordeaux Where one was sold for centuries on Primer months or even years before it’s Been bottled in the hope that the wine Will appreciate in value wine Investments by collectors became more And more popular in the 1960s and 1970s
And the auction houses christie’s and Sotheby’s established their wine Departments in 1966 and 1970. auctions Are to this day still very popular and Really useful for determining where the Market is going i was at the osbis de Bone option a few months ago and all of The burgundies on sale were 50 Up on the previous year and the most Expensive barrel sold for 800 000 euros [Applause] 800 000 euros for 300 bottles of wine Needless to say it wasn’t me who Purchased that barrel the ascent of Robert parker in his 100 point rating System encouraged wine investment in the 1980s as he provided an independent and Easy to understand way of assessing Quality in the early 2000s wine Investment really boomed especially Driven by the chinese market that was Growing rapidly and the establishment of Hong kong as a tax-free trading hub for Fine wine live-x the company i was Working for was established during that Period as the first online fine wine Exchange similar to the stock exchange Other companies like far vintners and The uno group really focused on the fine Wine investment sector while established Wine merchants like barry brothers and Rut for example created their own fine Wine departments today the estimated Value of the fine wine market is above 4
Billion us dollars which is actually Tiny if you compare it to the 94 Trillion us dollar stock market but Anyways let’s talk about the factors That actually influence the price of a Wine so first of all the global economic Conditions do have an impact on the fine Wine market as well but maybe less so Than in other investment markets and That is mainly because the market is Really driven by the rich and as we all Know the rich just keep getting richer Second vintage quality does have an Impact on the quality of the wine and Therefore wines from a great vintage Trade at a premium third critical Opinion robert parker was by far the Most important wine critic and his Influence was significant you can see Here what happened to the price of the 2008 la lafitte on livex when robert Parker released his 98 to 100 potential Perfect score the prices jumped like Crazy parker has retired and sold his Publication and there are many more Critics today than there were in the Past i would however argue that no one Has the influence on the market that Robert parker had the most important Factor however is the brand the ability Of the winery to produce high quality Wines on a consistent basis is key for It to become an investment grade wine Producer this even means that wines from
Famous chateaus that come from poor Vintages and were rated poorly can trade Much higher than wines that are not so Famous the 2007 le petit mouton the Second wine of mutton rosh side Currently retails for 329 dollars per Bottle excluding taxes even though it Only got 88 points from robert parker While this nice but completely unknown Ayaniko got 89 paka points and sells for 12 euros you really have to focus on the Creme de la creme in order to make a Profit the best wines from bordeaux Burgundy champagne the roan piedmont Tuscany napa and some other wines Oftentimes people make the point that Investment grade wines are rare but this Is not always the case usually their Production is limited but chateau margot For example produces 160 thousand Bottles shuttle two or two hundred Thousand bottles and mutton three Hundred thousand bottles of their first Wine this is a lot of wine production Volumes are not that important when it Comes to investment grade wines it is Important however that no matter how big The supply of a wine is it needs to be Outstripped by the demand the principles Of wine investment are simple some ones Have a very high demand but a naturally Restricted supply as these wines age They get better and better so the demand For a 1982 bordeaux is higher than for
The same wine from the 2020 vintage at The same time the supply decreases as More and more of the wine is being Consumed and the market regulates this Decrease in supply and the increase in Demand by increasing the price and boom A 12-pack of lafitte 1982 was first Released to the market for 450 pounds And last traded for 46 000 pounds an Increase of 100 times this is like Having purchased amazon shares in the Early 2000s there is an index that shows The performance of fine wine the live x 100 and if you compare it to other major Indices like the dow jones and the ftse 100 fine wine comes out on top at least If you look at the last year but it was Outperformed by the s p 500. so should We all start buying fine wine for Investment purposes Not really wine investment also comes With quite a few risks the first big Problem is provernos in order to make Sure that you’re able to sell your fine Wine at a premium you need to make sure That your drc is not a crd and there Were quite a few counterfeit scandals in The recent past the biggest and most Well-known one involved a fellow named Rudy cornyawan rudy was sentenced to 10 Years in federal prison for fraud as he Manufactured counterfeit wines he Refilled empty expensive bottles of Wines or re-labeled old cheap bottles of
Wines and then sold them at a very high Price he got away with this for a long Time as it’s quite difficult to tell a Counterfeit bottle of wine from a real One it is therefore crucial that you Work with reputable merchants and keep The receipts in order to be able to Track the wines back to the source Another important factor is storage Where you rarely take receipt of a Printed out share of a company fine wine Exists and needs to be stored properly If you don’t have a great seller you Need to pay for storage at a Professional facility and this will add Up over the years a poorly stored bottle Of wine with stained labels and low Levels will not produce the same returns As a bottle in perfect condition you Should also keep the original wooden Case as wines trade at a premium if they Are in their original packaging the cost Of buying and selling fine wine is much Higher if you compare it to other assets If you want to sell your tesla shares You just go on your online trading Platform and after a few clicks the Trade has gone through if you want to Sell your wine collection it gets really Complicated and it usually costs you Much more money than if you would sell a Few shares however if you make the right Course and invest in the right wines you Can make a lot of money i have to say
That investing in wine is much more fun To me than investing in stocks but i Have invested more money into stocks Than into wine the good thing about wine Investment as they always say is that You can at least drink it but you cannot Survive on wine alone believe me i have Tried so you should make sure that wine Only represents a share of your Portfolio so thank you for watching i Hope you enjoyed this video if you liked It then please like it down here Subscribe to my channel if you haven’t Done so already my question of the day Is what do you think about wine Investment are you doing it are you not Doing it comment down below i hope i see You guys again soon until then stay Thirsty [Music] Good [Music] Foreign