Focus on: Cos d’Estournel 2009

by Wine Owners

Posted on 2019-02-12


Cos d’Estournel 2009

Robert Parker: 100

Lisa Perrotti-Brown: 100

Neal Martin: 91

Jancis Robinson: 16.5,17,17.5


Price: £2,400 per 12


The crux of the matter here appears to be the U.S. of A. versus the U. of K. Big Bob wades in with the magic three digits (100 points) whilst Mr. Martin offers a much more modest 91 points. Our very own Mr. Martin’s words on this wine are not fit to publish. L. P-B. doffs her cap to her superior with another magic number whilst Jancis sways in a middle sort of division, yet she correctly describes it as famously controversial. So, it’s fair to say: the jury is out!

The early intelligence (thanks go to Bordeaux Index) and the biggest story from their last week’s ten years on tasting is that Cos was the big disappointment (Chateau Margaux was the star performer). Looking at the chart below there appears to be a huge amount more potential downside than upside, the ’09 being more expensive than anything in its peer group and what is the score?? Everyone seems to like the ’16, especially Mr. Martin, not best known and normally associated with magic numbers but attributing it to this vintage with gusto! Likewise, the ’10, not perfection but very highly rated. Both trading at close to £1,700 per 12- without the controversy.



The 2009 price has substantially underperformed the Wine Owners Bordeaux Index, perhaps because it has always split the camps:



Tasting notes:

RP: One of the greatest young wines I have ever tasted, the monumental 2009 Cos d’Estournel has lived up to its pre-bottling potential. The wine hits the palate with extraordinary purity, balance and intensity as well as perfect equilibrium, and a seamless integration of tannin, acidity, wood and alcohol. An iconic wine as well as a remarkable achievement, it is the greatest Cos d’Estournel ever produced.

LP-B: Wow—the full-bodied palate bursts with powerful, hedonic black fruit preserves and spices, completely coating the mouth with decadent fruits that are perfectly framed by very firm yet very ripe, grainy tannins and bold freshness, finishing with a veritable firework display of floral, spice and red fruit notes. Just stunning.

NM: It is glossy, dare I say almost “slutty”. The palate is medium-bodied with grippy tannins on the entry. There is good weight and volume to this wine, the Merlot more expressive than elsewhere with a lovely rich, decadent, weighty finish that is a hedonistic treat, but chooses not to translate the terroir of this great property. I prefer the 2010!

JR (a selection gleaned from 3 different notes): A youthful wine still dominated by tannins. First-growth structure. Bone dry. Classic-issimo. Went downhill in the glass however. Exotic but overdone. Alcohol intrudes. Awkward tasting experience. The tannins stick out. This continues to be a difficult wine. Famously controversial wine, one of the latest picked. Hugely ripe on the nose with a streak of very astringent dryness on the end. Scrubbing brush effect. A very extreme wine that strikes me as pretty brutal at the moment. Doesn't follow through; just stops on the palate rather than delivering any lingering finish. But it may all come together eventually...?

Recommendation: Sell ’09 and switch into the far less controversial vintages ’00, ’05, ’10 or ’16.


Relative value chart with other highly rated vintages of Cos d’Estournel:


Research Note: 2010 Lafite

by Wine Owners

Posted on 2019-02-11


If you’re looking to buy some Lafite, the 2010 vintage looks like reasonable value, given we are talking the brand that is Lafite. It achieves the highest WO score of 98 (extraordinarily high given our rather ‘mean’ methodology) and it comes from the vintage that is establishing itself as the pinnacle of the modern era, perhaps to be challenged by ’16 but that hasn’t been confirmed as yet.



If we brought the price down to the level we can actually offer at (£7,225 net per 12 as opposed to the chart price of £7,475), the Relative Value Score rises to above 6 – cheap for Lafite!



Focus on: Sassicaia

by Wine Owners

Posted on 2019-02-11


Sassicaia 2006, 94 points £2,050 per 12

Sassicaia 2009, 96 points £1,590 per 12

Sassicaia 2010, 94 WO points £1,430 per 12

Sassicaia 2015, 97 points £1,750 per 12

Sassicaia 2016, 100 points (WA) £2,700 now, released yesterday at £1,270!

I am now editing this blog originally written on the 25th January as yesterday saw the release of Sassicaia ’16. Monica Larner of the Wine Advocate heaped the magical three digit score and a boat load of praise meaning it sold out in seconds (she does hold sway!). I would have enjoyed being a fly on the wall of Armit’s office yesterday as the phones must have been red (pun intended) hot! If, like she says it will, the ’16 turns out to be just as good and valuable as the ’85 vintage, 31 years from now, that would yield a most respectable 8% CAGR (compound average growth rate). One should take note, however, that the price of the ’85 more than doubled in the last three years so buyer’s beware! I repeat my recommendations from before.

Original post:

When we began researching Sassicaia for this post we began by thinking it would turn out be a good and solid egg. We were right. Other than the stratospheric and legendary 100 point ’85, now c.£30,000 per 12, up from £12,000 three long years ago, Sassicaia is a really steady holding. It’s a wine that gets drunk readily, is approachable at a younger age than most investment grade wines and doesn’t tend to get dumped in a downturn.

The 2015 is another exception to this generalisation, not least because last November it claimed the coveted Wine Spectator’s ‘Wine of the Year’ 2018, causing the price to do this:




It is interesting to note that the Wine Advocate’s upgrade from 91-93 to 97 points in February 2018 had no lasting impact on price – do they not influence this corner of the market, we wonder?





In an efficient market, there’s a great short to mid-term switch play here, selling '15 and buying the cheaper and older ’09 or ’10 vintage where supply is shrinking faster. This is the wine market though, and trades like these not always play out. Judging from the price of the ’06, there is sufficient upside to these two vintages to suggest a purchase, especially if conservative is your thing!

The younger 2013 also looks cheap (but much more plentiful):




Buy: 2009, 2010, 2013

Trading sell: 2015


Focus on: Pichon Lalande 2010

by Wine Owners

Posted on 2019-02-05


Pichon Lalande 2010

WO Score: 94

Price: £1,300 per 12

Probably our most popular and current investment theme, derived from the outperformance generated by Burgundy in the last few years, is scarcity. This recommendation has not been generated as a result of scarcity, it comes from the old-fashioned premise that good old-fashioned merchants used to be famed for – this is bloody good stuff, it’s under-priced and it’s going up - trust us!



Looking at the chart below the relative value doesn’t appear out of kilter relative to its peer group but that is using a WO generated averaged score (of current ratings) of 94 points. Based on various tastings since the Wine Advocate et al rated this wine, members of the team here have consistently and with conviction rated this wine above its peer group and above its current critic scores. To be fair Mr. Parker, back in February ’13, allowed himself some room for improvement with a 95+. The WO team would apply the plus sign very happily.



For the sake of argument if we were to award the Pichon Lalande a score of 97 and run that number through the relative value equation, the score would be a far more enticing 30, almost as cheap as Leoville Barton – and Pichon Lalande is never as cheap as Leoville Barton!

On top of this, 2010 is becoming widely accepted as the greatest vintage of the modern era. The five first growths from 2010 currently average £7,500 per 12 and Pichon Lalande ‘82, possibly the greatest vintage the estate has produced until this one, is £7,800 per 12, so there seems plenty of room for upside!



2017 - the year in wine that was

by Wine Owners

Posted on 2017-12-21


Broadening interest

2017 was a fascinating year for the wine market: a year of solid growth, consolidation and even a flash of speculation!

It was also a year of broader consumer interest reignited.

Knight Frank’s global Wealth Report includes analysis of the fine wine market provided by Wine Owners. Wine was by far the best-performing collectible asset of 2016, up 24%. As a result, lots of positive press in 2017 brought plenty of new interest into the market.

Health

After the sharp price increases of 2016, when the Bordeaux market leapt as it rebounded off its 2014 lows following a couple of years of ticking up, 2017 was always going to be a less dramatic year for the classified and blue chip Bordeaux market.

It was encouraging to see a successful 2016 en primeur campaign that saw generally modest increases over 2015 in Euros, even if increases were more substantial for UK buyers due to the weakened currency. Overall gains in 2017 were low single-digit for First Growths (after the 30% readjustment seen in the previous year). Other Classified growths and Right Banks rose an average of 7%.

Such moderation was less evident in the primary or secondary Burgundy market, the latter up 14.5%. What happens next is anyone’s guess, but the top of the market is holding onto 5-year gains of 100%, thanks in part to enduring Asian interest.

Hard luck stories

Burgundy was really hard hit by frosts in 2016. It’s a super vintage, but with many producer cellars that are 2/3rds empty. Only Vosne-Romanée and parts of Morey-St.-Denis and Gevrey-Chambertin escaped the April ‘gel’. Pretty much everywhere else was heavily hit. The night-time freeze hit the Grand Crus and vineyards high up, the morning sun burned the buds of other premier crus and villages plots.

That big reduction in volume does add something to the intensity of the reds most noticeably. They are balanced, intensely redcurrant or blackcurrant in character, saline and fresh, with a vein of blood orange pulsing through them. The whites are fine but don’t quite have the extraordinary rich, bright core of the 2014s, although in their favour the whites show more site specific character at this very early stage.

In 2017 Burgundy narrowly missed a second successive year of April misery, with an abundant vintage of good quality. Instead, Bordeaux was badly affected by freezing night-time temperatures in the last week of April, after a warm spring had encouraged early growth. Some areas on the Right Bank, Graves and parts of the Medoc away from the warming waters of the Gironde were devastated. Chateaux de Fieuzel in Pessac isn’t making any wine in 2017.

What that will do to en primeur pricing next year remains to be seen, but widespread rises are on the cards, probably even those properties who emerged unscathed.

Notable winning regions

Champagne extended its run with top back vintages (where relative scarcity starts to play) racing ahead, up 13% in 2017. The world’s appetite for Champagne remains insatiable.

It was gratifying to see Northern Italy in rude health, with interest for Barolo Crus broadening significantly and prices of the best producers very sharply up this year on the back of a string of good vintages culminating in the highly sought after 2013s.

Speculation

Talking of that flash of speculation, Margaux 2015 announced in November that Margaux would release their 2015 as a special edition in honour of Paul Pontallier, the managing director of the estate who died in March 2016.

We saw the first release from the chateau, offered in individual single wooden cases, at a significant premium to the release price.

Based on the Chateau’s announcement, we saw speculative trading in the wine between EP club members rise and rise, with bids climbing from under £6,000 to £12,000, representing more than a 130% increase compared to the release price to UK consumers of £4,650.

The limited edition black bottles with a variation on the classic Margaux label in gold invited comparison with the 2000 Mouton Rothschild, which attracts a significant market following based on collectability, despite not being in the top flight of Mouton vintages or even one of the best wines of the vintage.

Looking ahead to 2018

If you're interested to learn more about the health of the fine wine market and are interested in our predictions for 2018, you can now download our Fine Wine Predictions 2018 report, a must-read for collectors, wine lovers looking for value, and investors searching for opportunities.


DOWNLOAD PREDICTIONS 2018 REPORT


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We wish you all a very enjoyable festive season, and much vinous pleasure as you open great wine bottles to celebrate and see in 2018.

Best wishes for health and happiness from the Wine Owners team!




Transparency and its effect on market pricing

by Wine Owners

Posted on 2016-12-14


Two pieces of news caught my attention in December.

The first was Martin Brown, CEO of Wine-Searcher, speaking at a conference in California, noting that increased pricing transparency had not caused market prices of wine to fall.

He wasn’t referring to just fine wine or collectible wine, but rather the effect of his price comparison site on retail prices and the wine market as a whole. I’m paraphrasing, and you can read the whole of the discussion on their blog.

The second was the news that Stanley Gibbons, the stamp specialist and now owner of a group encompassing antiques specialist Malletts and auctioneer Drewetts, has seen it share price tank over the last year (see chart).

Let’s begin with Stanley Gibbons and the stamp market.

STANLEY GIBBONS GROUP PLC ORD 1P


The share price tanked in part because of how it reported revenues from the sale of ‘plans’ in investment grade stamps.

Like fine wine, stamps are a collectible. Unlike fine wine, there is a great deal less price transparency in the stamp market.

As a consequence, Stanley Gibbons used to offer collectible stamp buyers a buy back scheme, whereby the company itself guaranteed the purchaser 75% of their original investment back if the value of the stamps purchased through their Capital Protected Growth Plan fell over a 5-10 year period.

Since the repurchase scheme booked stamps onto their balance sheet at a discounted rate to their own retail catalogue rather than at cost, its auditor has estimated the potential balance sheet liability (and asset write-downs) to be £64M.

Collectible markets are relatively illiquid, in large part because the things that people collect are rarely fungible*.

But just because a market isn’t fungible or liquid doesn’t mean it can’t benefit from price and market transparency. Not to mention direct market access.

The nature of a trading collectible market, as the Stanley Gibbons example highlights, is that very rare examples are quite hard to estimate, whilst more liquid collectibles will tend to sell within or just below the lowest cluster of available market offers for sale.

Onto Martin Brown’s speech on price transparency

Wine-Searcher has done a great job of price comparison and substantially improving price transparency, so that no matter where in the world you are, it’s easy to get a price for and find the wine you want.

The key point is that price transparency has not driven down retail wine pricing, contrary to economic theory, but it has substantially reduced price outliers, both high and low.

Actionable data

Wine Owners works with Wine-Searcher, receiving tens of millions of price point as the building blocks of our Market Level price – the price at which it’s likely a wine will find ready buyers (or the approximate point of market liquidity). That data is combined with traded wine prices and for the rarest wines in the world we’ll be cross-referencing with auction data from the biggest Houses.

Blue chip fine wine behaves like collectible markets, not like CPG markets. Production and therefore supply is limited. Where there is no demand prices fall or stagnate, but where there is a ready market of buyers, prices rise. Just as you’d expect.

In fact, price discovery is the underpinning of all successful and proper-functioning trading markets.

Reliable, actionable pricing data supports buy and sell decisions. It informs counter parties. It breeds confidence, and confidence boosts sentiment.

Direct market access

Combine market transparency based on realistic selling prices with direct market access that allows all market participants to buy and sell on a peer-to-peer basis, and the effect is entirely beneficial. Consumers get the opportunity to sell through their wines across the entire spectrum from interesting drinking bottles to desirable blue chips. Buyers can buy the wines they love to drink or to accumulate as a store of value from fellow wine lovers and collectors with little added market friction due to modest commissions. Counter parties’ confidence to trade is assisted by price transparency and all the settlement and logistics support we offer through the platform.

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* The word fungible is used in relation to a category of asset that is indivisible from each other. Pure gold and shocks and shares are indivisible. One of each is the exactly the same as the next. Collectibles are not fungible. In wine the things that make a difference are storage, fill levels, the condition of labels, capsules, and where the wine has been (wine that’s made the journey from Bordeaux to London to Hong Kong and back again doesn’t give buyers the same quality of juice as Bordeaux to Octavian for example).



What does Brexit mean for the wine lover and collector?

by Wine Owners

Posted on 2016-10-24


Market context and performance since June 24th

Serving as a general fine wine market tracker, the WO 150 gained 6% in the year to June (6.5% in the previous 12 months) but is now up 19.8% YTD.


Focusing on the all-important Bordeaux market, the world’s single largest region of fine wine production, the WO First Growth Index was up 8.7% year to date on 24th June, but is now up 23%.

As regards Bordeaux Firsts, this performance is on the back of 4 years of decline, following the bursting of a Chinese-inspired bubble in late 2011. The market in these blue chip Bordeaux bottomed in Q3 of 2015, and has soared since. Chateau Latour, released at £11,400 per case of 12 bottles, is now back within £100 per bottle of that release price.

The rest of the Bordeaux market had tested its lows the previous year, and so its performance year to June 2016 was a slightly higher 10.25%, reflecting the additional momentum gathered over the previous 18 months. Looking at all classified growths, the market is now up 22.5% YTD.


Whereas Bordeaux is a market driven by liquidity and large production volumes, scarcity-driven markets such as Burgundy, Piedmont and cult Californians, have enjoyed a long-term run stretching back 20+ years, and these wine markets have not suffered the roller coaster ride of Bordeaux.

The WO Northern Italy index is up 171% over the last 10 years, the WO Blue Chip Burgundy Index is up 311% over the same period, and the WO California index is up a whopping 427%.




What’s going to be the effect on new releases?

New releases are already more expensive to buy due to the pound buying less euros or dollars.

Brexit will cause new releases of two sought after vintages (Burgundy 2015 and Bordeaux 2016) to rise by 30%+, caused by producer increases of, say, around 10% compounded by the 20% effect of devaluation.

First in line: the impending 2015 Burgundies are due for UK release as futures in January 2017. With a compromised 2016 vintage assuring small production volumes, 2015s from some addresses will rocket to compensate for next years’ lower production.

Bordeaux will follow in April 2017.

Given the UK’s preeminent role in global fine wine trading, Brexit has turbo-charged market performance, and given the relatively recent recovery of Bordeaux markets a boost after a prolonged period of decline.

As the pound falls, assuming a rising fine wine market (key as it means there's strong global demand), the price of secondary market wines will rise since they are cheaper to buy for buyers holding currencies such as HKD or dollars.

This increases the value of collectors' current stock since the market is global. London is still one of the most important global trading hubs for fine wine, if not the most important.

Could price rises kill demand?

Because top burgundy from the best producers can double after first release it is unlikely to dampen initial demand – by much. And if it does there’s always the USA, Japan and other markets that’ll mop up the relatively small volumes.

Secondary market prices of older vintages may rise, pulled up by the higher new release prices. But as they rise, the number of potential secondary market buyers may decrease, causing these scarcity driven markets to become less liquid. As a result, it may take longer to sell your wines at these higher prices. The moral of the story is that scarcity driven markets are not for the impatient seller who needs cash tomorrow. These are better seen as long-term holds.

Bordeaux prices of the new vintage (2016) will also rise when they are released next year. Whether the UK Market chooses to buy or sits this one out remains to be seen.

However, the USA is more or less certain to be buying these futures aided by vintage character of ripe, powerful wines from a hot summer that will suit their palates.

As a consequence, enduring weakness of the pound will place further upward pressure on back vintages.

We predict that recent back vintages will increase sooner than is normally the case (1-2 years instead of the more common 5-7 years), as top Bordeaux producers are becoming principal stockholders in an attempt to capture more of the downstream value of their wines and increase the value of their balance sheet assets.

 


Fungibility and provenance of wine

by Wine Owners

Posted on 2013-05-03


boxes

Wine is a classic collectible asset.

Fine wine differs from stocks and shares in that it does not produce an income and it is not fungible. In this it shares common characteristics with other collectible classes such as art, stamps, coins, cigars and classic cars.

Fungible is another way of saying ‘interchangeable’. Cash is fungible; one £20 note having equivalence with any other note of the same value. Pure gold is also fungible, a gram being interchangeable with any other gram.

In contrast, diamonds are not perfectly fungible because varying cuts, colors, grades, and sizes make it difficult to find many diamonds that are exactly alike. Diamonds illustrate the point that fungibility is not the same as liquidity or scarcity. A global market can nonetheless exist and thrive irrespective of whether an asset class is perfectly fungible or not.

Neither is fine wine perfectly fungible, notwithstanding the contrary views of Joe Roseman, the investment economist who coined the phrase SWAG for Silver, Wine, Art and Gold. Similarly, typically over time, one case of a particular wine of the same vintage loses its ability to be treated as interchangeable with another, due to variables such as storage location (and implied quality of condition), tax status (held under bond or duty paid), back or strip labels (denoting its original export destination e.g. China) and packaging (e.g. original wooden case or a repack).

Non-fungibility creates market pricing variability. To illustrate the point from another collectible segment, cigars stored at Dunhill in Mayfair are thought to carry a premium at auction houses; such is the excellent reputation of their humidor.

The growing globalisation of the fine wine market over the last decade, with the opening up of the Far East and Russian markets, and the future potential influence of Brazil, India and other emerging regions, has shone a spotlight on the importance of wine provenance – being the term used to describe history and current condition.

The question of how good is a wine’s provenance arises directly from the fact that wine is not fungible. The top estates (typified by the Bordeaux First Growths) are gradually adopting technological innovations that could help in future. Everyone agrees that provenance can only become increasingly important.

Where the wine is stored, how long it’s been kept there undisturbed, where it’s been and the distance it’s had to travel; are all more pertinent questions than ever before.

A new system of building and tracking provenance is surely needed, where older stocks can be traced back, through transfer of title, movements, location changes and inspections.

Traceability and reliability of source will increasingly justify higher prices for the best stock, and lead to a disparity of value or market liquidity between two bottles or cases of the same wine.

There is already a widening gap between older wines sourced direct from the producer compared with secondary market stocks in those cases where history cannot be proved. It is well worth the investment in time to seek out secondary market stock with good provenance, in order to assure your fine wine purchases can serve as an effective store of value. Greater market transparency is surely the key to giving private buyers the confidence and information they need.


Drinking dates and large formats

by Wine Owners

Posted on 2013-03-25


Wine Owners provides drinking advice across a large part of its growing database of 82,000 fine wines, based on 75cl bottles.

These drinking ranges are likely to be rather accurate, since we painstakingly average start and end dates from fine wine reviewers to arrive at the estimates. It goes without saying that prime drinking will depend on many factors, such as long-term storage conditions, time of year shipped and periods when palettes may have been subjected to intense heat, for example dockside between reefer and cooled ship's container. Those drinking dates can be largely disregarded when it comes to large formats. This Easter reminded me how dramatic the differences can be, when I judged a family dinner at my brother's new house to be the perfect occasion to open a double magnum of Mas de Daumas Gassac 1996.

Bought just a year ago on the secondary market, this 3 litre double magnum was apparently well kept, coming out of good storage in its original wooden box and with a high fill level. I acquired it on a whim for GBP 80, knowing full well that the standard bottle size of this vintage could well be fading fast, following Cellartracker! notes and Chris Kissack from The Wine Doctor.

In the event, once the wax seal was broken and a delicate cork extracted, the wine was delightful; darkly coloured with a rusty-bricked rim. Sweet cedar and savoury scents gave way to a palate of earthy blackberry, lifted with bright notes of fresh currents providing the requisite balance and energy on the way to a soft delicate finish.  Hard to resist before the meal, but showing enough power and substance to complement the roast duck.

The moral of this story: take drinking advice for large formats with a large pinch of salt.  Buying bigger bottles on the secondary from other collectors can be a rewarding experience full of nice surprises. Sure there are disappointments along the path of discovery and fine wine appreciation, and you can't exactly ask for your money back from another collector. But that misses the point; buy what you can afford and savour the victories!


Wine Owners thanks early adopters for new release

by Wine Owners

Posted on 2013-03-25


Thank you everyone who's been using our fine wine asset management and trading exchange since November 2012 when it first released.

As a result of all our fantastic feedback, we've just released a brilliant new version,  providing quick  answers to questions such as:

  • how much have I spent to date;
  • what’s a wine honestly worth if I wanted to sell it tomorrow; how have my wines performed;
  • what should I drink now or drink up;
  • what do I have too much of and what should I think of selling next to make room for what I’d like to buy next?

With this new release, Wine Owners provides answers to all those fundamental questions and a lot more besides, and is available now via complimentary subscription here.


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