Monthly Archives: August 2022

It's about time that you think of the best wines as liquid yet hard assets.  Extraordinary times call for extraordinary insights.  2022 has been a tough year for investors.  Bonds and stocks have sold off in tandem.  Real estate is also starting to wobble.  Have you got wine in your portfolio?

Last weekend (August 6 & 7), the Financial Times published an article on the front page highlighting that fine wine is passing the test as hedge against inflation.  If you wonder how fine wine has performed over the past 20 years, here’s a chart by Liv-ex showing two indices: one is a basket of the top 100 wines, the other is a basket of the top 1000 wines.  Both have performed positively.

A separate study of an index of fine wine over the last 30 years has shown that wine has delivered a 10% compounded annual return.  For comparison, here’s a chart showing how the purchasing power of US dollar has held up since 2000, according data from BLS and St. Louis Fed.

What is the rising price

Winemakers, by default, are in love with their land, and, by extension, everything that grows on it.  We mean everything, even weeds, which is a byproduct and feature of the soil the biodynamic farming movement has come to embrace.  But we can think of only one winemaker who loves his trees so much that he names every wine he makes after trees.  Yes, we are talking about Jacques Thienpont, the legendary winemaker of Le Pin (“Pine”), L’If (“Yew”), and L’Hêtre (“Beech”).

You may have heard of Le Pin, one of the most coveted (ahem, expensive) wines from Bordeaux, and any wine-producing region in the world, for that matter.  Le Pin is proof that sometimes the most unassuming properties have an unbelievable amount of untapped potential (for a producer in a similar setup today, check out Le Pin's neighbor, Château La Violette).  Who could have possibly imagined that a little known Pomerol estate with a dilapidated farmhouse, a tiny plot of vines among which a single pine tree grew