0:02 hi i'm konstantin baum master of wine
0:03 and i know it sounds almost too good to
0:06 be true but yes you can make money from
0:08 investing in wine but it's obviously not
0:10 as easy as it sounds so today i'm going
0:12 to tell you everything you need to know
0:15 about wine investment so
0:16 let's go [Music]
0:22 full disclosure i'm not a certified one
0:23 investment expert and i don't think
0:25 there is such a thing but i know the
0:27 market pretty well as i've worked for
0:28 one of the leading one investment
0:31 institutions for years the term one
0:32 investment describes the acquisition of
0:34 wine for financial gain you don't buy
0:36 the wine to drink and enjoy it you buy
0:39 it in order to sell it at a profit it
0:40 has been common practice among wine
0:43 collectors to buy two cases of a wine
0:45 they liked and then sell one at a later
0:47 stage in order to finance their next
0:49 purchase over the last decades one
0:50 investment has become a bigger and
0:52 bigger thing but it also has a long
0:54 history the region most associated with
0:56 wine investment is probably bordeaux
0:58 where one was sold for centuries on
1:01 primer months or even years before it's
1:03 been bottled in the hope that the wine
1:05 will appreciate in value wine
1:07 investments by collectors became more
1:10 and more popular in the 1960s and 1970s
1:12 and the auction houses christie's and
1:13 sotheby's established their wine
1:18 departments in 1966 and 1970. auctions
1:20 are to this day still very popular and
1:22 really useful for determining where the
1:25 market is going i was at the osbis de
1:27 bone option a few months ago and all of
1:29 the burgundies on sale were 50
1:32 up on the previous year and the most
1:41 [Applause]
1:45 800 000 euros for 300 bottles of wine
1:46 needless to say it wasn't me who
1:48 purchased that barrel the ascent of
1:50 robert parker in his 100 point rating
1:52 system encouraged wine investment in the
1:56 1980s as he provided an independent and
1:58 easy to understand way of assessing
2:00 quality in the early 2000s wine
2:03 investment really boomed especially
2:05 driven by the chinese market that was
2:07 growing rapidly and the establishment of
2:10 hong kong as a tax-free trading hub for
2:12 fine wine live-x the company i was
2:13 working for was established during that
2:16 period as the first online fine wine
2:18 exchange similar to the stock exchange
2:20 other companies like far vintners and
2:23 the uno group really focused on the fine
2:26 wine investment sector while established
2:27 wine merchants like barry brothers and
2:29 rut for example created their own fine
2:31 wine departments today the estimated
2:34 value of the fine wine market is above 4
2:36 billion us dollars which is actually
2:38 tiny if you compare it to the 94
2:41 trillion us dollar stock market but
2:43 anyways let's talk about the factors
2:45 that actually influence the price of a
2:47 wine so first of all the global economic
2:49 conditions do have an impact on the fine
2:51 wine market as well but maybe less so
2:53 than in other investment markets and
2:55 that is mainly because the market is
2:58 really driven by the rich and as we all
3:00 know the rich just keep getting richer
3:02 second vintage quality does have an
3:04 impact on the quality of the wine and
3:06 therefore wines from a great vintage
3:08 trade at a premium third critical
3:10 opinion robert parker was by far the
3:12 most important wine critic and his
3:14 influence was significant you can see
3:16 here what happened to the price of the
3:18 2008 la lafitte on livex when robert
3:21 parker released his 98 to 100 potential
3:24 perfect score the prices jumped like
3:26 crazy parker has retired and sold his
3:27 publication and there are many more
3:29 critics today than there were in the
3:32 past i would however argue that no one
3:34 has the influence on the market that
3:35 robert parker had the most important
3:37 factor however is the brand the ability
3:39 of the winery to produce high quality
3:42 wines on a consistent basis is key for
3:44 it to become an investment grade wine
3:47 producer this even means that wines from
3:49 famous chateaus that come from poor
3:52 vintages and were rated poorly can trade
3:54 much higher than wines that are not so
3:56 famous the 2007 le petit mouton the
3:58 second wine of mutton rosh side
4:01 currently retails for 329 dollars per
4:03 bottle excluding taxes even though it
4:06 only got 88 points from robert parker
4:08 while this nice but completely unknown
4:11 ayaniko got 89 paka points and sells for
4:14 12 euros you really have to focus on the
4:15 creme de la creme in order to make a
4:17 profit the best wines from bordeaux
4:20 burgundy champagne the roan piedmont
4:23 tuscany napa and some other wines
4:24 oftentimes people make the point that
4:26 investment grade wines are rare but this
4:29 is not always the case usually their
4:31 production is limited but chateau margot
4:33 for example produces 160 thousand
4:35 bottles shuttle two or two hundred
4:37 thousand bottles and mutton three
4:39 hundred thousand bottles of their first
4:42 wine this is a lot of wine production
4:44 volumes are not that important when it
4:46 comes to investment grade wines it is
4:48 important however that no matter how big
4:51 the supply of a wine is it needs to be
4:53 outstripped by the demand the principles
4:55 of wine investment are simple some ones
4:57 have a very high demand but a naturally
5:00 restricted supply as these wines age
5:02 they get better and better so the demand
5:05 for a 1982 bordeaux is higher than for
5:08 the same wine from the 2020 vintage at
5:10 the same time the supply decreases as
5:11 more and more of the wine is being
5:14 consumed and the market regulates this
5:16 decrease in supply and the increase in
5:20 demand by increasing the price and boom
5:22 a 12-pack of lafitte 1982 was first
5:26 released to the market for 450 pounds
5:29 and last traded for 46 000 pounds an
5:32 increase of 100 times this is like
5:34 having purchased amazon shares in the
5:36 early 2000s there is an index that shows
5:38 the performance of fine wine the live x
5:40 100 and if you compare it to other major
5:43 indices like the dow jones and the ftse
5:46 100 fine wine comes out on top at least
5:48 if you look at the last year but it was
5:51 outperformed by the s p 500. so should
5:52 we all start buying fine wine for
5:54 investment purposes
5:57 not really wine investment also comes
5:58 with quite a few risks the first big
6:00 problem is provernos in order to make
6:02 sure that you're able to sell your fine
6:04 wine at a premium you need to make sure
6:08 that your drc is not a crd and there
6:09 were quite a few counterfeit scandals in
6:12 the recent past the biggest and most
6:14 well-known one involved a fellow named
6:16 rudy cornyawan rudy was sentenced to 10
6:18 years in federal prison for fraud as he
6:20 manufactured counterfeit wines he
6:23 refilled empty expensive bottles of
6:25 wines or re-labeled old cheap bottles of
6:28 wines and then sold them at a very high
6:30 price he got away with this for a long
6:32 time as it's quite difficult to tell a
6:34 counterfeit bottle of wine from a real
6:36 one it is therefore crucial that you
6:37 work with reputable merchants and keep
6:40 the receipts in order to be able to
6:42 track the wines back to the source
6:44 another important factor is storage
6:45 where you rarely take receipt of a
6:48 printed out share of a company fine wine
6:50 exists and needs to be stored properly
6:52 if you don't have a great seller you
6:54 need to pay for storage at a
6:56 professional facility and this will add
6:58 up over the years a poorly stored bottle
7:01 of wine with stained labels and low
7:03 levels will not produce the same returns
7:05 as a bottle in perfect condition you
7:07 should also keep the original wooden
7:10 case as wines trade at a premium if they
7:13 are in their original packaging the cost
7:14 of buying and selling fine wine is much
7:16 higher if you compare it to other assets
7:18 if you want to sell your tesla shares
7:20 you just go on your online trading
7:22 platform and after a few clicks the
7:24 trade has gone through if you want to
7:26 sell your wine collection it gets really
7:28 complicated and it usually costs you
7:30 much more money than if you would sell a
7:32 few shares however if you make the right
7:34 course and invest in the right wines you
7:36 can make a lot of money i have to say
7:38 that investing in wine is much more fun
7:41 to me than investing in stocks but i
7:43 have invested more money into stocks
7:44 than into wine the good thing about wine
7:46 investment as they always say is that
7:48 you can at least drink it but you cannot
7:51 survive on wine alone believe me i have
7:53 tried so you should make sure that wine
7:55 only represents a share of your
7:57 portfolio so thank you for watching i
7:58 hope you enjoyed this video if you liked
8:00 it then please like it down here
8:02 subscribe to my channel if you haven't
8:04 done so already my question of the day
8:05 is what do you think about wine
8:07 investment are you doing it are you not
8:10 doing it comment down below i hope i see
8:13 you guys again soon until then stay thirsty
8:34 good [Music]
