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Wine beats Russell Stocks as Liquid Investment in Swiss Study
Taken and edited from article by Nikolaj Gammeltoft
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April 13 (Bloomberg.com - TV) - For the ultimate in liquid investments, try top-quality wine, which has outperformed one benchmark U.S. stock index for 13 years and withstood two recessions
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That's the conclusion of Philippe Masset and Jean-Philippe Weisskopf, two Switzerland-based economists who compared wine prices with the Russell 3000 Index between January 1996 and January 2009. The researchers studied more than 400,000 prices on regularly traded wines from the 13-year period, which covers two bull markets and two bear markets for stocks, to construct a general wine index and gauge of top vintages.
"My wine cellars have probably appreciated better than any other investment I have made personally", said Drew Nieporent, owner of Corton, Nobu and Tribeca Grill in New York. The third restaurant holds a 2009 Grand Award from Wine Spectator magazine. "Great wines are scarce" he said "You can't get them everywhere".
Demand for alternative investments such as wine and artwork has grown in recent decades as investors seek refuge from inflation, and look for asset classes in which to store wealth beyond traditional methods such as stocks, bonds and gold, according to Peter Boockvar, an equity strategist at Miller Tabak & Co. in New York.
Masset and Weisskopf took prices from 144 auctions with a combined value of $237 million to construct the index. They used vintages from 1981 to 2005.
"Our findings show that the inclusion of wine in a portfolio and, especially, more prestigious wines, increases the portfolio's returns while reducing its risk, particularly during the financial crisis, wrote Masset, a professor at the Lausanne Hotel School, and Weisskopf, a researcher at the University of Fribourg, in their study, "Raise Your Glass: Wine Investment and the Financial Crisis."
The general wine index beat the Russell 3000 over the period, largely because it held value over the most recent market downturn - and did so with lower volatility than equities. Since mid-2008, the wine measure fell 17 percent, while the stocks gauge declined 47 percent.
The index of highest-quality wines, "first growth wines of top vintages only," in particular from 2005 onward, "hugely outperforms" the other two indexes, the authors said. The elite gauge has a more than fivefold return, while the regular wine index has more than doubled. The Russell 3000 gained about 50 percent.
Drinking More
The increase in prices coincided with an increase in consumption of the beverage. Americans drank a record 304 million cases in 2009 following a 3.2 percent average annual rise since 1996, according to the last year's edition of The Global Drinks Market: Impact databank Review & Forecast. (There are 9 litres of wine in a case) Global consumption has grown 0.6 percent a year on average to 2.65 billion cases during the same period.
The Fine Wine index rose 11.7 percent during the first three months of 2010 and jumped 27.6 percent from a year earlier as of March 31.
More Than $400
Top wine vintages have been the best performers since 1996 with wines costing more than $200 a bottle - and particularly collectible bottles above $400 - as much as quadrupling their value. That compares with a 170 percent increase in the price of wines selling below $100 and 120 percent return for those between $100 and $199.
According to data compiled by investment research firm Birinyi Associates Inc. between 1994 and 2008 wine has done better than assets such as gold, stocks and real estate and has outperformed credit, equity and commodities.
Not all wines appreciate equally and while lesser quality wines may increase in value, they will rarely show the same performance as choice Bordeaux like Château Petrus, Lafite Rothschild, Château Margaux , Château Latour and Haut-Brion. These are the choice Châteaux and have continually shown high returns year on year with some vintages showing an 800% increase over a 10 year period.
April 14th 2010 - Telegraph.co.uk
Bordeaux's forthcoming 2009 vintage is hotly anticipated, its wines compared to such great years as 2005, 1961 and 1947.
While it is too early to talk of a 'best-ever' vintage, the wines are certainly of exceptional quality: they are voluptuous, rich and highly concentrated with excellent colour and tannins; they will be attractive in youth, yet have the potential to be long-lived. The region's early summer was warm and dry, and the flowering of the vines passed off well. August was hot (but not too hot) and very dry with no hail and barely any storms; the grapes survived to the end of the month in excellent shape.
There was some rain at the beginning of September, which relieved hydric stress, and the rest of the month was sunny - crucial for later ripening cabernet - apart from a welcome few more days' rain which swelled the grapes, reducing potential alcohol and tannins. The weather continued to be excellent during October.
Overall, conditions were so good throughout that one of our suppliers commented that had he been God for the year, he would not have changed any of the weather conditions.
Telegraph Wine is hosting a Bordeaux 2009 en primeur tasting to give you the opportunity to sample the wines from this exciting vintage in a relaxed, convivial atmosphere.
April 23rd - Decanter.com
Bordeaux's top 2009's could reach prices as high as €1000 per bottle by the end of summer, experts are predicting.
Setting prices for the first growths and other major properties is an arcane business, but most observers are certain they will go high, inflated by many successive 'tranches' or releases of stock from the chateaux.
Jean-Guillaume Prats at Chateau Cos d'Estournel said that the gap in price between the First Growths and the rest 'will be enormous.'
'The price of the firsts [to consumers] will be at a very high level, easily reaching €1000 over the summer,' he said.
Robert Parker, who publishes his scores on Monday, is of the same opinion, 'expect 2009 Lafite at €1000 by September,' he writes on his bulletin board.
'The idea that they would have an ex-chateau price of €1000 seems crazy. But the First Growths are not orbiting around the sun, they are in another galaxy entirely.
April 25th - News Of The World
LONDON - Manchester United manager Sir Alex Ferguson aims to launch a new career as a wine importer when he retires from his current job. "He wants to start by setting up a small business sourcing exciting high-end wines, mainly in France and importing them here," News of The World quoted a friend of Fergie, as saying.
"It won't be cases of £3.99 plonk. He's an expert and we are talking wine for the connoisseur."
Ferguson and wife Cathy have already decided that when the 68-year-old retires from football, they will spend half the year at their home in Cheshire, and half in France.
"In the long-term he has always dreamed of owning his own vineyard and has totally immersed himself in the culture," the pal added.
He regularly splashes out 5,000 pounds on a case of his favourite burgundy and also follows the advice of respected wine critic Robert Parker. "If a wine scores high with him, my neighbour in Wilmslow is on the phone and we look to source some," Ferguson has said.
28th April - Decanter.com
Robert Parker's ringing endorsement of Bordeaux 2009 shows the vintage has brought together American and European palates as never before.
In his assessment of the vintage, published last night, the influential American critic says 2009 'may turn out to be the finest vintage I have tasted in 32 years of covering Bordeaux'.
It will prove 'far superior' to most vintages of the last 10 years - 'and not far off the quality of the 2005 and 2000'.
Eighteen wines are given scores of 98-100 - near-perfect in Parker's complex scoring system in which he returns to wines and clarifies his scores after bottling.
There is remarkable consistency on both sides of the Atlantic in terms of the top scorers. Parker has a reputation for favouring right-bank wines, especially the bigger styles, often disagreeing vehemently with his peers in Europe.
In 2003 Parker and Jancis Robinson were involved in heated exchanges over Chateau Pavie - the former found it delicious, the latter undrinkable.
A similar spat looked possible over Cos d'Estournel 2009 - a wine which every critic agreed was highly unusual in terms of style and power.
Decanter gave it 18.5 points, Parker a possible 100, and Robinson a very low 16.5+.
But overall this year critics are in agreement.
Spurrier said, 'traditionally, European critics have found it difficult to give full marks. This year I gave 20 out of 20 for the first time, for Margaux. We've pushed the boat out.'
Right bank wines such as Ausone, Pomerol's Lafleur and L'Eglise Clinet are favourites, both Decanter and Parker marking them very highly. Angelus too had top marks from Parker, and 18.5 from Decanter.
St-Estèphe property Chateau Montrose separated the critics, with Jancis Robinson's score (16.5+), at odds with Parker (96-100) and Wine Spectator (97-100). Decanter gave it 19.
The real surprise is Clos l'Eglise, which Parker awarded a potentially perfect score of 96-100. Other critics, both UK and US, were less impressed. Wine Spectator awarded it 93-96, whilst Jancis Robinson scored it at 16.5. Decanter score: 17.5.
Elsewhere Parker stays loyal to his old favourites. Valandraud, one of the controversial 'garage wines' of the early part of the decade, gets a high 96-98 (Decanter 18.5). Pape Clement, whose wines are made by Michel Rolland, traditionally a Parker favourite, gets 95-97+, a score echoed by James Lawther's 18.5 for Decanter.
For Spurrier, the most significant thing about 2009 is the fact that it has redrawn the boundaries of what is possible for Bordeaux.
'Any attempt to say that Bordeaux can't handle extra-ripe grapes is nonsense. This proves that Bordeaux can deal perfectly with an untypical vintage.'
Spurrier also stressed that any perceived problems with higher-than-normal alcohol have also been defused - 'it was just not a problem.'
Parker agrees. Reports of excessive alcohol are 'absurd', he says in his introduction, making the point that the Medocs might have been higher than normal, but once the blends were done, everything 'fell between 13% and 14% alcohol.'
Robert Parker.com - 28th April
"First, and most importantly, for some Médocs and Graves, 2009 may turn out to be the finest vintage I have tasted in 32 years of covering Bordeaux. From top to bottom, 2009 is not as consistent as 2005, but the peaks of quality in 2009 may turn out to be historic."
(Robert Parker)
Parker's 30 top-scoring red wines are listed below.
NB. Any score over 90 denotes a superb wine, 95 is exceptional and 98-100 is out of this world
1. Château L'Eglise Clinet, Pomerol Score: 98-100
2. Château Haut-Brion Pessac-Léognan Score: 98-100
3. Hosanna, Pomerol Score: 98-100
4. Château Lafite Rothschild Pauillac Score: 98-100
5. Château Latour Pauillac Score: 98-100
6. Château Margaux Score: 98-100
7. Château La Mission-Haut-Brion Pessac-Léognan Score: 98-100
8. Château Cos-D'Estournel St.-Estèphe Score: 98-100
9. Château Cheval Blanc, St. Emilion Score: 98-100
10. Clinet Pomerol, Score: 97-100
11. Trotanoy Pomerol Score: 97-100
12. Château Pontet-Canet Pauillac Score: 97-100
13. Château Léoville Poyferre St.-Julien Score: 97-100
14. Château Léoville Las Cases St.-Julien Score: 96-100
15. Haut Bailly Pessac-Léognan Score: 96-98
16. Château Ducru-Beaucaillou St.-Julien Score: 96-98
17. Château L'Evangile Pomerol Score: 96-100
18. Château La Fleur Petrus, Pomerol Score: 96-98
19. Gracia St Emilion Score: 96-98
20. Château Smith-Haut-Lafitte Blanc, Pessac Léognan Score: 96-98
21. Château Montrose St.-Estèphe Score: 96-100
22. Château Mouton-Rothschild Pauillac Score: 96-98
23. Château Pavie, St. Emilion Score: 96-100
24. Château Pétrus, Pomerol Score: 96-100
25. Château Pichon-Longueville-Lalande Pauillac Score: 96-98
26. Vieux Ch. Certan, Pomerol Score: 96-99
27. Château Angélus, St. Emilion Score: 96-100
28. Château Ausone, St. Emilion Score: 95-97
29. Bellevue Mondotte, St Emilion Score: 95-100
30. La Conseillante, Pomerol & Clos Fourtet Score 95-98
