Whiskey : Investment vehicle

[yountvillewjs]

For those of you at this much longer than I, you've surely seen the increase in prices. I certainly watched this with wine, and eventually it seems to fade or settle back to equilibrium -- but not before some things get insane.

http://www.minyanville.com/dailyfeed/2011/12/28/whisky-could-be-the-next/

[sailor22]

Before you realize any profit from your investment you need to sell it. Unless it's sold through a licensed auction house that's against the law. Everyone has their own comfort level regarding that.

If EBay decides to no longer allow sales, and that could happen at any time and without warning, or there are a few more high profile arrests like the recent one of in Virginia of a collector selling his wine collection on craig's list, then the value of the dusties and limited release Bourbons that some have been hoarding will plummet because there won't be a viable market place. Just something to consider before you bet the retirement nest egg on the Bourbon bubble.

[yountvillewjs]

I posted this as a discussion topic for the group, curious to see what the general thoughts of the collective were. I've seen the rise and fall of investment-grade wine funds -- they never seem to work out for the investors, but do seem to take a certain few houses/producers to a new price level (SW Pappy perhaps) and cache.

I've never sold a bottle of wine let alone a bottle of bourbon. My bunker just reached a new personal milestone -- 12 bottles, or one empty wine box. But I do agree that without the benefit of something like a winebid.com or eBay, getting out of a spirit based investment could be difficult and cost prohibitive.

Before you realize any profit from your investment you need to sell it. Unless it's sold through a licensed auction house that's against the law. Everyone has their own comfort level regarding that.

If EBay decides to no longer allow sales, and that could happen at any time and without warning, or there are a few more high profile arrests like the recent one of in Virginia of a collector selling his wine collection on craig's list, then the value of the dusties and limited release Bourbons that some have been hoarding will plummet because there won't be a viable market place. Just something to consider before you bet the retirement nest egg on the Bourbon bubble.

[spinningrecords]

Aren't there better ways to generate income?

Let's drink the whiskey.

[sailor22]

Aren't there better ways to generate income?

Let's drink the whiskey.

I'll toast to that!

[Enoch]

Investing in collectables is always very risky.

I collect Hard Rock Cafe lapel pins and have close to 1500. When Rank Corporation bought the company from Peter Morton and Isaac Tigret and then the Seminoles purchased it from Rank, they both flooded the market and now they are worth a fraction. (Aside from the fact the HRC is not nearly as cool or fun or good as it was under the original owners.)

I switched to Bourbon and now have almost 600 bottles but at least I can drink it. You can't drink pins.

MHO

[Hershmeister]

Buy what you like. If it happens to go up in value, you'll have bought it cheap!

[dridge11]

I agree with Enoch and have the same feeling about wine, if the value goes up, great. If it goes down, at least I can drink it. You can't enjoy "funds" or "stocks" as much. However, if you have an genuine interest in the commodity you're investing in, then it brings me to Hershmeister's point. "Do I want to sell it? Because if I ever want to try this product again, this is what it will cost me now."

I have a bottle of 2000 Mouton Rothschild that I picked up for $350, now it trades close to $1000. That's a great return and I have the means to sell it. But I want to drink that bottle and my cost to ever drink it again is now much higher if I let this one go.

If you truly do it as an investment, you'd have to purchase them with the full intentions of never drinking them to avoid temptation if the value increases. If they remain flat or go down, you have plenty of juice to drown your sorrows.

[SMOWK]

If EBay decides to no longer allow sales, and that could happen at any time and without warning, or there are a few more high profile arrests like the recent one of in Virginia of a collector selling his wine collection on craig's list, then the value of the dusties and limited release Bourbons that some have been hoarding will plummet because there won't be a viable market place. Just something to consider before you bet the retirement nest egg on the Bourbon bubble.

[marco246]

I drink all the whiskey I buy. It is not an investment, no matter how much is bunkered. I invest in the stock market and have a few hundred shares of Beam, Inc. I don't mix the two, although it helps that I like Knob Creek and Maker's Mark.

[Rockefeller]

I strongly believe that whiskey as a whole is a poor investment. While it might generate decent returns in some cases, we have to be cognizant of two things:

1) There are in fact better alternatives out there and whiskey should not be your first thought when diversifying

2) No one seems to bring up the significant risk/cost of bunkering. Broken bottles, theft, house fires, etc. Under normal circumstances when holding inventory or other fine collectables like art, people buy insurance - I don't know anyone that insures their bunker (which would be an additional cost).

[bcrossan]

I think that the opposite will happen if eBay cracks down on sellers. The price will go up. If you can't buy it, all of the sudden it becomes worth a lot more. Hence, SW....

Ebay stopping would just make the Bonhams auctions that much bigger too

[bcrossan]

I strongly believe that whiskey as a whole is a poor investment. While it might generate decent returns in some cases, we have to be cognizant of two things:

1) There are in fact better alternatives out there and whiskey should not be your first thought when diversifying

2) No one seems to bring up the significant risk/cost of bunkering. Broken bottles, theft, house fires, etc. Under normal circumstances when holding inventory or other fine collectables like art, people buy insurance - I don't know anyone that insures their bunker (which would be an additional cost).

I know people who insure their whisky. Don't think it is all that expensive to add that to a homeowner's policy

[DeanSheen]

Hmm, insuring my whiskey. That's an interesting point.

When I daydream about the few items I possess that have increased in value I always do it with the barter system in mind. I think "well in ten years maybe I can trade 1 of these for 3 of those".

[spinningrecords]

I think that the opposite will happen if eBay cracks down on sellers. The price will go up. If you can't buy it, all of the sudden it becomes worth a lot more. Hence, SW....

[clingman71]

Hmm, insuring my whiskey. That's an interesting point.".

Whiskey insurance? I've always thought of whiskey AS insurance, insurance of future sanity.

[Enoch]

The last time I re-insured my house the inspector saw my whiskey collection but suggested I not mention it as it is classified as a flammable and flammables above a certain amount (reasonable household quantities) would incur a risk surcharge and could even disqualify us for insurance. I suspect a rider for whiskey would be very expensive.

[mrt]

Aren't there better ways to generate income?

Let's drink the whiskey.

That's great! Cheers!

[cowdery]

All things considered, anyone who buys American whiskey as an investment is an idiot. Greek government bonds would be a better choice.

Scotch is a somewhat different matter, although the obstacles to re-selling are so great in the USA that even that is dubious. Going through a licensed auction house adds cost, so getting a ROI that exceeds a more conventional investment, like a mutual fund, would be difficult.

I'm talking about people who are strictly buying for investment. If collecting, and drinking, whiskey is a fun pastime for you, and you occasionally profit from it, that's a different matter. Most of the value is in the enjoyment of the pastime and the whiskey itself, but viewed strictly as an investment it makes zero sense.

[pepcycle]

I have this old Weller 19 that's taking up space. I bought it for $38 and was wondering if anyone was interested.

(Don't PM me or e-mail me or anything else. I'm just making a point)

@Cowdery

I don't need a whiskey collection to judge my mental incompetence. Its self-evident from my trust in government, banks and real estate.

[wadewood]

I have this old Weller 19 that's taking up space. I bought it for $38 and was wondering if anyone was interested.

(Don't PM me or e-mail me or anything else. I'm just making a point)

@Cowdery

I don't need a whiskey collection to judge my mental incompetence. Its self-evident from my trust in government, banks and real estate.

[Bourbon Boiler]

I guess I collect the BT Experimentals, but it's done as a hobby that I don't expect to ever profit from. I do consider that if I ever needed a few hundred bucks I could get it from those bottles, but I'm not actively trying to determine their worth.

If trading beverages is fun for you and you think you can make a few bucks while you're at it, great. Anyone who gets into it with a strict profit motive is kidding themselves.

[MarkEdwards]

I guess I collect the BT Experimentals, but it's done as a hobby that I don't expect to ever profit from. I do consider that if I ever needed a few hundred bucks I could get it from those bottles, but I'm not actively trying to determine their worth.

If trading beverages is fun for you and you think you can make a few bucks while you're at it, great. Anyone who gets into it with a strict profit motive is kidding themselves.

[dsaw]

How about bourbon as an accidental investment? I'm new to the forum, but have been drinking bourbon for awhile. I was introduced to Rip Van Winkle about 8-9 yrs ago. At the time, I was living in Chicago. I liked the 13 yr. Rye enough, that for the one and only time in my life, I purchased a full case of it from Sam's (Not related to Walmart, I think it's now Binny's). I got the same 10% discount they gave for full wine cases, so what the heck. I think I paid about $25-26 per bottle for it. I stumbled across the forum a few days ago trying to research opening a micro-distillery in Indiana (I've homebrewed beers for quite awhile, I like bourbon, I'm a Chem. E., I own property in S. IN with a limestone fed spring, ....why not). As Rip Van Winkle became hard to come by, I just stopped buying it. I haven't followed it at all, and didn't realize it had become so valuable. I'm kind of regretting my brother-in-law and I drinking a good chunk of my stash, but I still have 7 bottles left. It's an old D lot that I haven't seen mentioned in any of the recent posts, probably because it's so old.

I didn't buy it as an investment in any way shape or form. I bought it because I liked it. I have a good job, so I'm not dying for money. That said, I have other interests besides bourbon. I have 5 small kids, so hey honey, I'd like to buy another gun doesn't fly regardless of my income. However, if I sold some, that money could be reinvested in other toys, er, investments. I didn't realize until a few days ago that you could sell "bottles" on E-bay. I might post one just to see what it goes for. I appreciate good bourbon; but at this stage of my life, I limit myself to less then $40/bottle bourbons, and that cuts out most of the high-end stuff. My house bourbon is still Old Forester.

[silverfish]

I didn't realize until a few days ago that you could sell "bottles" on E-bay. I might post one just to see what it goes for.

Selling alcohol without a license is against the law in the US.

USPS, FedEX, UPS, DHL and most other shippers have a

Dnagerous Goods or Hazardous Materials policy which you

might wanna look into before trying to sell your "collectible

container" on ebay.