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Alright so I've been thinking about this for awhile and would like to hear what some of you monkeymen (and women...I guess) think about it. The price of a particular libation usually increases as it ages (obvious, I know but stay with me). How feasible would it be to buy a variety of physical, actual bottles of alcohol for speculative purposes? I've done some searches but have only found some lukewarm articles and comments on the issue so I was hoping to start a bit of a discussion about how one could go about doing this.(Posting links to better sources would be appreciated.) I'm not talking about a vice fund or anything like that. I mean physically buying bottles of XYZ and holding them for however long in the hopes that they appreciate in value. I know its been done but I'm hoping for some direction or comments about methods, etc.

PS Don't make liquidity jokes...its too easy.

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Comments (29)

  • alexpasch's picture

    I want to open a fund that invests in ferraris and mansions. I see classic ferraris selling for a lot, and real estate, despite the recent bursting bubble, has a good long-term track record. I think some art and furniture also appreciates over time, so I'll buy that too and put it in the houses. I will add wine to my list, per your post. I promise to be a good steward of the aforementioned assets ;)

    Consultant to a Fortune 50 Company

  • In reply to olafenizer
    happypantsmcgee's picture

    olafenizer:
    http://www.cnbc.com/id/15840232?play=1&video=16153...

    Yes! Exactly but I want to buy the bottle earlier in the process, hold it, then unload it.

    Sidenote: It would be fun to punch the dude with that insurance policy in the nose

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to alexpasch
    happypantsmcgee's picture

    alexpasch:
    I want to open a fund that invests in ferraris and mansions. I see classic ferraris selling for a lot, and real estate, despite the recent bursting bubble, has a good long-term track record. I think some art and furniture also appreciates over time, so I'll buy that too and put it in the houses. I will add wine to my list, per your post. I promise to be a good steward of the aforementioned assets ;)

    Yes, Yes alex I get it. My question was more so how you would go about valuing stuff like that early on. I don't know its probably stupid (though it is being done to a certain extent already). Plus if it implodes, it would be mad easy to drown your sorrows.

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to Midas Mulligan Magoo
    happypantsmcgee's picture

    Midas Mulligan Magoo:
    you lost my focus forever when you combined "Charlie Sheen" with "100 women in hedge funds"

    Damn, it was supposed to be Charlie Sheen in 100 women

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to happypantsmcgee
    alexpasch's picture

    happypantsmcgee:
    alexpasch:
    I want to open a fund that invests in ferraris and mansions. I see classic ferraris selling for a lot, and real estate, despite the recent bursting bubble, has a good long-term track record. I think some art and furniture also appreciates over time, so I'll buy that too and put it in the houses. I will add wine to my list, per your post. I promise to be a good steward of the aforementioned assets ;)

    Yes, Yes alex I get it. My question was more so how you would go about valuing stuff like that early on. I don't know its probably stupid (though it is being done to a certain extent already). Plus if it implodes, it would be mad easy to drown your sorrows.

    You'd have to be an expert in valuing wines and speculating on them. You'd also have to have a place to store them, insurance, etc. Also, you are offering securities by creating a fund, so you would need a proper private placement (and all legal fees that entails), etc. The markets involved are also quite small, so you'd likely corner your own inventory, and if you have to redeem, would face liquidity problems (no pun intended). Institutions are loathe to invest in stuff like this, because it screams of fiduciary mismanagement (even when it isn't), so good luck raising capital from them. High net worth individuals invest in this stuff, but why would they pay you to do it when they can just do it themselves (or pay professional consultants every once in a while).

    Basically, even if you did have a "$2.5M nose", it would be quite difficult; and without one, essentially impossible.

    Consultant to a Fortune 50 Company

  • TNA's picture

    I know of a PE shop that invests in horse farms and wine. They are out there, but the niche is very small.

    Interesting idea though. Definitely not an efficient market with opportunity for mis-pricing.

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  • mr_bigglesworth's picture

    First of all, there are Bordeaux futures, so if the vintage turns out to be an especially good one, you can flip it as soon as they're delivered. Of course the issue is, unless you're selling it directly to another collector, your wine dealer (or auctioneer) is going to take a decent spread.
    Another option is to buy and hold. Issue with this is unless you're a well known collector, a purchaser can't really verify that you've stored it in a dark, vibration-free location at the correct temp.
    Single Malts have risen in price substantially the past few years. Same issues as collecting wine.
    Everything has been going up in price because the Chinese are buying so much of it. My advice is don't buy it to invest, and buy what you like to drink. Bordeaux first growths are now overpriced, there are definitely some very good third growths out there, reasonably priced (still not cheap). Also many California/Pac. NW wines are very good.

  • Im with Busey's picture

    How about trying to speculate for the next Four Lokos? I'll work for 40k with unlimited research funding.

  • In reply to Im with Busey
    happypantsmcgee's picture

    Im with Busey:
    How about trying to speculate for the next Four Lokos? I'll work for 40k with unlimited research funding.

    Yea...when you research a potential Real Estate investment, do you live there? Didn't think so. Weak attempt at humor...Plus, could you imagine if someone had to decide whether or not to invest in Four Loko based on taste? Probably wouldn't have heard of it if they had.

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to happypantsmcgee
    Im with Busey's picture

    happypantsmcgee:
    Im with Busey:
    How about trying to speculate for the next Four Lokos? I'll work for 40k with unlimited research funding.

    Yea...when you research a potential Real Estate investment, do you live there? Didn't think so. Weak attempt at humor...Plus, could you imagine if someone had to decide whether or not to invest in Four Loko based on taste? Probably wouldn't have heard of it if they had.

    I apologize for offending you.

  • In reply to Im with Busey
    happypantsmcgee's picture

    Im with Busey:
    happypantsmcgee:
    Im with Busey:
    How about trying to speculate for the next Four Lokos? I'll work for 40k with unlimited research funding.

    Yea...when you research a potential Real Estate investment, do you live there? Didn't think so. Weak attempt at humor...Plus, could you imagine if someone had to decide whether or not to invest in Four Loko based on taste? Probably wouldn't have heard of it if they had.

    I apologize for offending you.

    Don't let it happen again..just kidding. SB for humility

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to happypantsmcgee
    Im with Busey's picture

    happypantsmcgee:
    Im with Busey:
    happypantsmcgee:
    Im with Busey:
    How about trying to speculate for the next Four Lokos? I'll work for 40k with unlimited research funding.

    Yea...when you research a potential Real Estate investment, do you live there? Didn't think so. Weak attempt at humor...Plus, could you imagine if someone had to decide whether or not to invest in Four Loko based on taste? Probably wouldn't have heard of it if they had.

    I apologize for offending you.

    Don't let it happen again..just kidding. SB for humility

    I was so close to taking the plunge into just becoming an outright troll, but you just reminded me that their can be non-douchers on this site.

  • loki276's picture

    imagine if it had fell during the report

  • In reply to loki276
    happypantsmcgee's picture

    loki276:
    imagine if it had fell during the report

    Google translator couldn't help me with this...

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to happypantsmcgee
    Matt the Tiger's picture

    happypantsmcgee:
    loki276:
    imagine if it had fell during the report

    Google translator couldn't help me with this...

    LOL i think he was talking about the bottle during the CNBC report

  • In reply to TNA
    Matt the Tiger's picture

    ANT:
    I know of a PE shop that invests in horse farms and wine. They are out there, but the niche is very small.

    Interesting idea though. Definitely not an efficient market with opportunity for mis-pricing.

    probably due to the ability to evaluate CF to some extent. Is it like a smaller family money fund?

  • Saccard's picture

    just buy some Bordeaux and auction it off in China.

    there is at least one system where people can invest in a group of artists and earn returns on their artwork. it gives artists the initial investment they need to get off the ground and gives investors the opportunity to find a diamond in the rough without as much risk.

  • In reply to Matt the Tiger
    loki276's picture

    Matt the Tiger:
    happypantsmcgee:
    loki276:
    imagine if it had fell during the report

    Google translator couldn't help me with this...

    LOL i think he was talking about the bottle during the CNBC report

    yeah I was

    also

    Has anyone really been far even as decided to use even go want to do look more like?

  • In reply to loki276
    ShreddiesBrah's picture

    loki276:
    Matt the Tiger:
    happypantsmcgee:
    loki276:
    imagine if it had fell during the report

    Google translator couldn't help me with this...

    LOL i think he was talking about the bottle during the CNBC report

    yeah I was

    also

    Has anyone really been far even as decided to use even go want to do look more like?


    You've got to be kidding me. I've been further even more decided to use even go need to do look more as anyone can. Can you really be far even as decided half as much to use go wish for that? My guess is that when one really been far even as decided once to use even go want, it is then that he has really been far even as decided to use even go want to do look more like. It's just common sense.
  • someotherguy's picture

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  • In reply to ShreddiesBrah
    dagro's picture

    =========================================
    "... then, lobbest thou thy Holy Hand Grenade of Antioch towards thy foe, who, being naughty in My sight, shall snuff it."