Author Topic: Wine investing?  (Read 2415 times)

pigpen

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Wine investing?
« on: February 16, 2022, 01:39:32 PM »
Has anyone here tried investing in wine through Vinovest or Vint? I haven't done much research yet, but I've seen wine mentioned as an asset class that's not highly correlated with equities. Vinovest has fees of around 2.85%, so that's probably out.

Thoughts?

reeshau

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Re: Wine investing?
« Reply #1 on: February 16, 2022, 06:04:21 PM »
I can never figure out the EPB (earnings per bottle) for the coming year.  I also can't find any dividend-paying wines.  So, I don't.

It's not investing, because there is no economic value add.  It's collecting.

You might make money collecting, or you might end up with tubs full of beanie babies.  If you don't like the item, you probably don't belong collecting it.  Something you can consume, and maybe make some money off of, can be a good hobby.

Someone peddling collecting on a percentage-of-assets business is just like the people who made beanie bag tags protectors.  Looking for the sure way to make money off of others' speculation.  Like selling picks and shovels to the gold miners.

FLBiker

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Re: Wine investing?
« Reply #2 on: February 17, 2022, 07:46:11 AM »
+1

I'm not a collector.  Certainly people can make lots of money collecting (wine, baseball cards, gold, NFTs, etc.) but it fundamentally doesn't make sense to me so I stay out of it.

ScreamingHeadGuy

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Re: Wine investing?
« Reply #3 on: February 17, 2022, 07:53:24 AM »
I diversified out of wine into tulip bulbs.

Blender Bender

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Re: Wine investing?
« Reply #4 on: February 17, 2022, 08:37:28 AM »
Would not work for me. I would just drink it all myself.

terran

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Re: Wine investing?
« Reply #5 on: February 17, 2022, 09:12:04 AM »
It doesn't sound like a very liquid investment.

Dicey

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Re: Wine investing?
« Reply #6 on: February 17, 2022, 09:25:29 AM »
Hahaha.

PDXTabs

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Re: Wine investing?
« Reply #7 on: February 17, 2022, 09:49:10 AM »
It's not investing, because there is no economic value add.  It's collecting.

I'm neither a wine collector nor investor, but is this statement true? For wines that get better with age I think that the economic value that you are adding is the aging.

sonofsven

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Re: Wine investing?
« Reply #8 on: February 17, 2022, 09:51:17 AM »
Crypto-wine, you heard it here first.

Watchmaker

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Re: Wine investing?
« Reply #9 on: February 17, 2022, 09:58:37 AM »
It's not investing, because there is no economic value add.  It's collecting.

I'm neither a wine collector nor investor, but is this statement true? For wines that get better with age I think that the economic value that you are adding is the aging.

Yeah, though I'm not going to be investing through any of these companies, aging certain wines does have an expected return. I know someone who owns a cheese aging facility. He doesn't make cheese, he just ages it in the right conditions and sells it on. It's a good business. Same thing happens with wine.

reeshau

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Re: Wine investing?
« Reply #10 on: February 17, 2022, 10:47:11 PM »
It's not investing, because there is no economic value add.  It's collecting.

I'm neither a wine collector nor investor, but is this statement true? For wines that get better with age I think that the economic value that you are adding is the aging.

Yeah, though I'm not going to be investing through any of these companies, aging certain wines does have an expected return. I know someone who owns a cheese aging facility. He doesn't make cheese, he just ages it in the right conditions and sells it on. It's a good business. Same thing happens with wine.

I mean economic value in the sense that wine does not go out and earn money.  There is no return on it, other than selling it, in the end.  No income stream can come from it.  Just like gold, really--the only value is what you can sell it at, in the end.  And that value is still not rooted in the economic value--you cannot calculate future earnings; you can only hope someone else wants it more than you wanted it, when you bought it.  (i.e. the greater fool)

Owning a cheese aging facility makes aged cheese--you can sell product that it makes.  So, yes that's an investment.  So is a vineyard, if it's profitable.  Or a self-storage place for people to store their wine collections.
« Last Edit: February 17, 2022, 10:55:04 PM by reeshau »

PDXTabs

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Re: Wine investing?
« Reply #11 on: February 18, 2022, 01:01:07 PM »
Owning a cheese aging facility makes aged cheese--you can sell product that it makes.

So just to be clear, you believe that if I build a climate controlled building to age cheese and then I age cheese in it that it is providing economic value? But if I do the exact same thing with wine it is not?

EvenSteven

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Re: Wine investing?
« Reply #12 on: February 18, 2022, 01:46:04 PM »
It doesn't sound like a very liquid investment.

It's a still a grape idea, though.

pigpen

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Re: Wine investing?
« Reply #13 on: February 18, 2022, 02:08:19 PM »
Owning a cheese aging facility makes aged cheese--you can sell product that it makes.

So just to be clear, you believe that if I build a climate controlled building to age cheese and then I age cheese in it that it is providing economic value? But if I do the exact same thing with wine it is not?

I was kind of wondering the same thing. I'm not saying that wine investing is (or isn't) a great idea (that's why I asked the question -- to try to learn something) but I think the beanie baby and tulip comparisons aren't especially good ones. As PDXTabs pointed out, there is value added by storing wine and selling it at a future date, and wine has use value as well. There's also a very established (and analyzed) market for it.

It was irrational, or at least super-misguided, to buy a new Wanker Bear for $10 six months after Beanie Babies became a thing and expect it to be worth $5,000 a year later based on nothing other than a brand-new market's supposed demand for it (fueled, to boot, by eBay and the Internet, which were new as well) It's not irrational to buy wine from an established winemaker with lots of data available on past sales, both retail and on secondary markets, and expect that the chances for a specific return are below average, average, or above average.


JAYSLOL

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Re: Wine investing?
« Reply #14 on: February 18, 2022, 06:56:20 PM »
Owning a cheese aging facility makes aged cheese--you can sell product that it makes.

So just to be clear, you believe that if I build a climate controlled building to age cheese and then I age cheese in it that it is providing economic value? But if I do the exact same thing with wine it is not?

But does the guy that ages cheese actually purchase the cheese to hold and then sell, or does he sell that service for a fee to cheese manufacturers, or companies that buy it to sell it themselves who want it aged first?  Because I yeah I donít like the business model of buying cheese, then aging it then trying to sell it for more.  Would make better business sense to just sell the service to buyers and sellers.  Thereís also a pretty big difference between aging cheese 3 months than aging wine for years/decades

Watchmaker

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Re: Wine investing?
« Reply #15 on: February 18, 2022, 08:12:53 PM »
Owning a cheese aging facility makes aged cheese--you can sell product that it makes.

So just to be clear, you believe that if I build a climate controlled building to age cheese and then I age cheese in it that it is providing economic value? But if I do the exact same thing with wine it is not?

But does the guy that ages cheese actually purchase the cheese to hold and then sell, or does he sell that service for a fee to cheese manufacturers, or companies that buy it to sell it themselves who want it aged first?  Because I yeah I donít like the business model of buying cheese, then aging it then trying to sell it for more.  Would make better business sense to just sell the service to buyers and sellers.  Thereís also a pretty big difference between aging cheese 3 months than aging wine for years/decades

He buys the cheese, and ages some for up to 12 years (cheddar). It's not particularly common to have this middleman in the US--usually the cheese producer does their own aging. In Europe it's much more common to have a separate affineur who handles the aging, or sometimes cheesemongers will do their own aging. The affineur style setup can make sense for smaller, family farm cheesemakers as he can effectively bundle their production into a higher value offering.

I don't know much about wine aging, but I think there are businesses out there aging wine (whether they are independent, or shops, or restaurants, or wineries I'm not certain). I stand by the idea that aging certain wines does have an expected return, exactly as cheese does.
« Last Edit: February 18, 2022, 08:17:47 PM by Watchmaker »

pigpen

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Re: Wine investing?
« Reply #16 on: February 19, 2022, 05:32:15 AM »
Owning a cheese aging facility makes aged cheese--you can sell product that it makes.

So just to be clear, you believe that if I build a climate controlled building to age cheese and then I age cheese in it that it is providing economic value? But if I do the exact same thing with wine it is not?

But does the guy that ages cheese actually purchase the cheese to hold and then sell, or does he sell that service for a fee to cheese manufacturers, or companies that buy it to sell it themselves who want it aged first?  Because I yeah I donít like the business model of buying cheese, then aging it then trying to sell it for more.  Would make better business sense to just sell the service to buyers and sellers.  Thereís also a pretty big difference between aging cheese 3 months than aging wine for years/decades

The question of whether aging wine or cheese is providing additional value is different than the question of whether buying wine/cheese to age it is a good business model. The answer to the first question seems like a clear yes (provided it's done with the correct wine/cheese and done properly). The answer to the second question is debatable, but at least in the case of PDXTab's friend, since PDXTab describes it as a "good business," the answer is yes also.


Wintergreen78

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Re: Wine investing?
« Reply #17 on: February 19, 2022, 08:09:29 AM »
Owning a cheese aging facility makes aged cheese--you can sell product that it makes.

So just to be clear, you believe that if I build a climate controlled building to age cheese and then I age cheese in it that it is providing economic value? But if I do the exact same thing with wine it is not?

But does the guy that ages cheese actually purchase the cheese to hold and then sell, or does he sell that service for a fee to cheese manufacturers, or companies that buy it to sell it themselves who want it aged first?  Because I yeah I donít like the business model of buying cheese, then aging it then trying to sell it for more.  Would make better business sense to just sell the service to buyers and sellers.  Thereís also a pretty big difference between aging cheese 3 months than aging wine for years/decades

The question of whether aging wine or cheese is providing additional value is different than the question of whether buying wine/cheese to age it is a good business model. The answer to the first question seems like a clear yes (provided it's done with the correct wine/cheese and done properly). The answer to the second question is debatable, but at least in the case of PDXTab's friend, since PDXTab describes it as a "good business," the answer is yes also.

Iíd caveat that: it may be a good business for someone who knows the wine or cheese market, can purchase stock at good rates, has proper storage/aging facilities, has a method for marketing their product once it is aged, etc.

Have these companies that are looking for investors talked about their business models, costs, marketing strategies, etc?

Iím open to the idea that this might be a worthwhile business, but Iím really skeptical of someone who isnít already in the wine or cheese business being successful at it.

sonofsven

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Re: Wine investing?
« Reply #18 on: February 19, 2022, 08:56:43 AM »
I do have a friend who makes money buying and selling wine, which by it's nature requires good storage practice. I have no idea how much, but he has been a savvy professional buyer as well as having his own "cellar".
Previous to this he made good money buying, holding, and selling sports cards
Very similar strategy actually.

JAYSLOL

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Re: Wine investing?
« Reply #19 on: February 19, 2022, 09:40:16 AM »
Owning a cheese aging facility makes aged cheese--you can sell product that it makes.

So just to be clear, you believe that if I build a climate controlled building to age cheese and then I age cheese in it that it is providing economic value? But if I do the exact same thing with wine it is not?

But does the guy that ages cheese actually purchase the cheese to hold and then sell, or does he sell that service for a fee to cheese manufacturers, or companies that buy it to sell it themselves who want it aged first?  Because I yeah I donít like the business model of buying cheese, then aging it then trying to sell it for more.  Would make better business sense to just sell the service to buyers and sellers.  Thereís also a pretty big difference between aging cheese 3 months than aging wine for years/decades

The question of whether aging wine or cheese is providing additional value is different than the question of whether buying wine/cheese to age it is a good business model. The answer to the first question seems like a clear yes (provided it's done with the correct wine/cheese and done properly). The answer to the second question is debatable, but at least in the case of PDXTab's friend, since PDXTab describes it as a "good business," the answer is yes also.

Iíd caveat that: it may be a good business for someone who knows the wine or cheese market, can purchase stock at good rates, has proper storage/aging facilities, has a method for marketing their product once it is aged, etc.

Have these companies that are looking for investors talked about their business models, costs, marketing strategies, etc?

Iím open to the idea that this might be a worthwhile business, but Iím really skeptical of someone who isnít already in the wine or cheese business being successful at it.

Yeah, this.  Investing in equity in a company that buys and sells product with good margins and also adds value to it is really different from a company that wants other people to take all the risk of buying stock while it speculates in price and may or may not actually be adding value.  Since I donít know how to tell the difference between those two companies because Iím not in the wine/wine making industry, I would stay the heck away. 

JAYSLOL

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Re: Wine investing?
« Reply #20 on: February 19, 2022, 09:45:13 AM »
You know what companies are in the business of storage, but have way less overhead, way less risk and are really easy to tell if they are going to be profitable?  Self Storage companies.  They donít have to be out of pocket for the goods they store, they donít have to speculate that the goods they store will be worth more in the future, all they have to do is rake in the money every month from a thousand different customers.  Unless I knew a shit ton about the wine industry and could predict the future, Iíd rather invest in a good self storage company. 

reeshau

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Re: Wine investing?
« Reply #21 on: February 19, 2022, 12:48:46 PM »
Owning a cheese aging facility makes aged cheese--you can sell product that it makes.

So just to be clear, you believe that if I build a climate controlled building to age cheese and then I age cheese in it that it is providing economic value? But if I do the exact same thing with wine it is not?

But does the guy that ages cheese actually purchase the cheese to hold and then sell, or does he sell that service for a fee to cheese manufacturers, or companies that buy it to sell it themselves who want it aged first?  Because I yeah I donít like the business model of buying cheese, then aging it then trying to sell it for more.  Would make better business sense to just sell the service to buyers and sellers.  Thereís also a pretty big difference between aging cheese 3 months than aging wine for years/decades

The question of whether aging wine or cheese is providing additional value is different than the question of whether buying wine/cheese to age it is a good business model. The answer to the first question seems like a clear yes (provided it's done with the correct wine/cheese and done properly). The answer to the second question is debatable, but at least in the case of PDXTab's friend, since PDXTab describes it as a "good business," the answer is yes also.

Iíd caveat that: it may be a good business for someone who knows the wine or cheese market, can purchase stock at good rates, has proper storage/aging facilities, has a method for marketing their product once it is aged, etc.

Have these companies that are looking for investors talked about their business models, costs, marketing strategies, etc?

Iím open to the idea that this might be a worthwhile business, but Iím really skeptical of someone who isnít already in the wine or cheese business being successful at it.

Yeah, this.  Investing in equity in a company that buys and sells product with good margins and also adds value to it is really different from a company that wants other people to take all the risk of buying stock while it speculates in price and may or may not actually be adding value.  Since I donít know how to tell the difference between those two companies because Iím not in the wine/wine making industry, I would stay the heck away.

Right; doing something with the dedication of a lifetime profession, with scale, professional contacts, expert employees, and capital, is one thing.

Taking a flyer as "dumb money" in a business you don't understand or have passion for...is not as good.
« Last Edit: February 19, 2022, 12:50:52 PM by reeshau »

Stimpy

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Re: Wine investing?
« Reply #22 on: February 22, 2022, 12:53:30 PM »
Interesting concept, though the value is questionable (as the conversation indicates).  But just looking at the invest as itself....

There are two red flags that stick out to me.   The ROI over 10 years, when the company only started 2019 (Both vino and vint) and 10%+ returns.    Just a little suspicious of any investment that promises 10%+ a year, especially when you don't know if the company is going to be able to handle the investment correctly, given it's short life span. 

Digging into some reviews, it comes off as a meh investment, especially given some fees shown through vino which, in my opinion, has the better model.  Shares of a bottle of wine/spirits or any collectable honestly seems sketchy to me and I would steer clear of anything like that.

IF you choose to invest in this, in my opinion, it's a high risk given the age of the company and the promises given.

PDXTabs

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Re: Wine investing?
« Reply #23 on: February 22, 2022, 01:11:42 PM »
The question of whether aging wine or cheese is providing additional value is different than the question of whether buying wine/cheese to age it is a good business model. The answer to the first question seems like a clear yes (provided it's done with the correct wine/cheese and done properly). The answer to the second question is debatable, but at least in the case of PDXTab's friend, since PDXTab describes it as a "good business," the answer is yes also.

It was sonofseven not myself that knows someone who does this. For the record I wouldn't get involved in this type of business unless I had a real passion for it. It seems like a lot of capital tied up for something that may or may not pay off. I'm mostly passionate about ETFs and long walks in the sun.

Watchmaker

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Re: Wine investing?
« Reply #24 on: February 22, 2022, 01:36:39 PM »
The question of whether aging wine or cheese is providing additional value is different than the question of whether buying wine/cheese to age it is a good business model. The answer to the first question seems like a clear yes (provided it's done with the correct wine/cheese and done properly). The answer to the second question is debatable, but at least in the case of PDXTab's friend, since PDXTab describes it as a "good business," the answer is yes also.

It was sonofseven not myself that knows someone who does this. For the record I wouldn't get involved in this type of business unless I had a real passion for it. It seems like a lot of capital tied up for something that may or may not pay off. I'm mostly passionate about ETFs and long walks in the sun.

Not to be overly pedantic, but the "good business" quote pigpen references came from me and was about cheese aging. Sonofseven has a friend who "makes good money" buying and selling wine. Anyway, that clarification doesn't impact anyone's points.

I could see that with the right skills and experience, buying wine to resell later could be profitable. To me that makes it a viable job, but not a viable passive investment. If you don't have any expertise, you're either gambling or relying on Vinovest (or whoever) to provide that expertise. Maybe they do have some expertise, but they are incentivized to get as much WUM (wine under management) as possible, and don't carry any of the risk of investments going badly, so it sounds like a bad deal to me.
 

pigpen

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Re: Wine investing?
« Reply #25 on: February 23, 2022, 09:32:47 AM »
Sorry about the misattribution of quotes. Thanks for the feedback, everyone.