Wine Collecting: Ya gotta know when to hold 'em, and know when to fold 'em

“You know how to buy stocks, but do you know how to sell them?” So opened the article about how investors often "collect stocks" instead of selling them at their peak. The author made sense, until he said “Your stocks are not like your wine portfolio, which rewards years of quiet neglect.” Dusty_bottles The voice inside my head I wailed "Bulloney" (yes, Fatherhood has done wonders for my language.) I don’t doubt the author’s insights into investor psychology, only his contention that wines reward years of quiet neglect. Any wine collector with more than 25 bottles suffers from the same foibles of human psychology that plague the investor and the large wine collector alike... Wine_cellar_2 A wine collector’s brain tends to work something like this. “Each bottle of age-worthy wine contains 750 milliliters of future pleasure that increases with time, and the more bottles I collect the bigger my pleasure pyramid grows.” Collectors tend to be smart people. And competitive people. And people who feel a large wine collection testifies to their taste and accomplishments. But they also tend to be people who dismiss that nagging voice that says “My pleasure pyramid is too large, I don’t have enough time.” Of course, not many Americans face this, um, “problem”. The average period of time between a wine’s purchase and its consumption is less than 12 hours. We like our wines young and winemakers across the globe are making wines that are more enjoyable at a young age (can we all say micro-oxygenation?) That said, age-worthy wine can still be found. And the wise collector establishes some simple practices to assure they don’t end up with a cellar full of dead wines for their heirs to unload. The Input/Output Problem After years of stocking their cellar according to ratings from Marvin and Parker, or more ideally, according to their own experienced palate, the collection has grown beyond their ability to consume. Literally, the input exceeds the output. Surprisingly, this is not a problem exclusive to those with huge collections - even those with three or four cases under the bed should create a simple calendar showing each wine’s prime drinking period. A good Excel user might enjoy making this into an evening project – all that’s needed is the range of predicted drinkability for each wine in the collection, the number of bottles of each wine, and a visual calendar to show the number of bottles predicted to be “ready” in any given month. The rest of us can rely on any number of good cellar management programs, many of which are now available free of charge on the internet (more on this later). The Under/Over Problem This refers to the fact that even the experts sometimes misjudge how long a wine can age, or when it will peak. Now most experts will get close to predicting the peak most of the time. But an aging wine is a living thing that sometimes goes through several years of unexpected (and scary) dullness. So the wise collector samples a bottle every six to twelve months. For example, a case of wine predicted to peak 5 years from now should be sampled in three years, and if it seems to be aging faster than predicted move the remaining bottles up in the schedule, if it’s aging as expected. Either way, schedule another sample in six or twelve months. This is the primary reason I recommend buying multiple bottles of wines you intend to collect, with 6-12 providing a better hedge against missing a wine’s peak pleasure period. And, of course, if you are buying wine as an investment, never buy less than a case. I think it's a good idea to buy several extra bottles so you and the auction house can sample before your sale - even well-known investment wines need to prove they were stored properly. The Mortality Problem Oldmanwithaglassofwine_1 Nobody likes to think about it but our time on this planet is limited, and most of us don’t begin collecting wine until too many precious years have slipped through our fingers. So by the time we have the interest and wherewithal we proceed with the fervor of a ten year-old baseball card collector. So perhaps it's not surprising that so many estate sales contain wines that won't peak for another decade. Even sadder are the estate sales containing wine that peaked a decade ago. Enough said? Contact me if you have any questions about your own portfolio. Cheers! Dave the Wine Merchant Today's Quote: Maya: “Seriously, the ’61 Cheval Blanc is peaking… it might be too late already. What are you waiting for?” Miles: "I don’t know. A special occasion, with the right person.” Maya: “The day you open a ’61 Cheval Blanc, that’s the special occasion” From the movie Sideways
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