Bordeaux 2005 Prices

[Don Giovanni]

Bordeaux 2005 Prices irrational exuberance

Ok now try this thought on ...... Now it was asked how many bottles are being bought for speculation? If as I suspect wine hedge funds are in this game plus the regulars then you might actually see a correction when the first market disturbance occurs, a collapse in the dollar, a small war, another oil spike, an act of despicable unpredictable chaos with the weather...then you will have a market correction.... how about another great year vintage... What goes up this fast and stays up ......if I was long I would sell into this market..that is unless I was going to drink the wines...but how many are really going to drink the wine...?

This is the point how many ? Maybe it will all get bought up and drunk....then if you are ITB this is a very good time to be in it due to irrational exuberance...sound familiar...the day Alan Greenspan ever talks about wine I would run for cover if I was long. Right now is what I saw in the stock market...then the real estate market....reading on the Dutch bulb market..the Hunt's silver market.... people "the prices will fluctuate" this is a given and the next move will be down...It may take a year or two but this will happen. the QPR is out of whack with the correlating and astounding vintages of past.

Maybe it will be the producer that bottles his 2004's and gets caught selling them as 2005's...it could be that simple. My bet is down not up... my 2 cents...

[DTBarton]

A few issues back in The Wine Advocate, Parker gave what seemed to me to be sage advice. He receommended not buying heavily in '05 futures (especially expensive ones) because the hype surrounding the vintage would keep prices high and lead to bargains down the road on perfectly good '03s and '04s. Similar to the bargains available on good 98s and 99s after the 2000 vintage hype took off.

[JohnL]

The truth is, no one knows how much wine is bought for speculation. Also what exactly is "speculation?"

There are people who buy say two cases of wine with the intent to drink one and sell the other off to help finance their cellar.

I suppose there are some who buy wine with the only intent to sell it off at a higher price at some point in the future.

How many and what are they buying? Who knows (really who cares?)

The hedge fund thing is interesting--there seems to be a few here and there but if wine was such a viable investment area then the major houses would have gotten involved long ago.

If someone wants a wine from a particular vintage (for whatever purpose) and that wine is produced in a limited quantity then it is advisable that that person pay the going price. One can gamble that the same wine will be available at a lower (than its futures price) upon release. it may. It may not be.

One may also gamble that subsequent vintages may be better or the same in quality and that this will create better value for these vintages due to supply. On the other hand subsequent vintages may be worse impacting prices the other direction.