Wine Investment Friday

This newsletter is designed to bridge the gap between trade and the investor. Each week we will help investors better understand the nuances of why some cases appreciate and some standstill. We will unpick the characteristics that construct financial potential to help your money work smarter. 


This week we are analysing a case of:

Latour, 2009

Explaining what creates a great investment wine and how it interacts with the market. Ultimately showing you the role this case could play in your portfolio. 


Beneath the Label: 

In 2012 Latour opted out of the En Primeur system, choosing to release their wines when they are ready instead of during the hectic E.P season.  

Critic Score: 100 Points – R. Parker / 99 points – N. Martin
“An elixir of momentous proportions…a thundering concoction”. While the note is superlative, the points make this the highest scored modern Latour. 

Region Rating: Paulliac, 99E
The highest vintage score ever for the region. 

Drinking Window: 2022+
Parkers assessment suggests this is a wine to last centuries.

Production Volume: 16,000 / 20,000 cases
These volumes are toward the large end for the region. 

Summary:
The interesting factor here is that 2009 is 11% cheaper than 2010. Despite scoring higher across the two main critics and with a stronger vintage score and reputation which would indicate relative value.
The longevity of the wine will ensure active trading and demand for decades.
A tremendous offering where the wine appears to genuinely live up to the hype around the vintage.


“Pulled out all the stops to produce one of the most monumental Latour’s ever made”
Parker


Money Matters:

Brand Power: 86/100, rank 23rd in JF Tobias Brand Power Metric
Latour has benefitted enormously from leaving the En Primeur system. There are many in the wine world that believe the En Primeur system is outdated and causing overpricing, so a for a first growth to make a stand was very well received. 

Liquidity: 99%
This wine is traded extremely frequently with an extremely global audience. Exit timelines are very short.

Inter-Trade Price Volatility: 2.4%
The high frequency of trades means price transparency is very high and the pricing is very efficient. A stable wine with predictable price movement.

Price History:

Summary:
This wine is the equivalent of a blue-chip stock. Highly stable and underpinned by absolute quality.
The wine holds high propensity for gains with very low downside risk. The 1982 iteration, sits at £22,500 per 12. While the stability of pricing around “off” vintages shows a real demand for the brand that forms a safety net.
Any price moves will come slowly thanks to the price transparency. This is a wine to hold for a long period and provide a platform for other portfolio items to chase returns. 


Position for Profit: 

The Long Term Play. 

This an item that fits into the core of a portfolio. To be forgotten about and revisited in 10 to 15 years time. It will supply long term compound growth and is as close to an index tracker as can be found in the wine world. 

The current state of the Bordeaux market means top wines such as this are at a momentary low ebb. If you believe in the underlying characteristics of the wine market and wine as an investment. This momentary depression in prices makes for an extremely attractive buying moment. In the words of Mr Buffet – “Be fearful when others are greedy and be greedy when others are fearful”. 

The Author

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Jake Leighton