Yesterday's massive US stock market drop has been attributed to a trader error, in which "billion" was substituted for "million". That may make us feel better in the short term, but look to the Asian markets to predict the next move in the wine market.
Investment grade wines, especially first growth Bordeaux, have experienced a dramatic turnaraound since the crash of 2008-2009. A closer look at the Bordeaux market reveals that this recovery comes from Asian demand.
But Asia is now undergoing a massive stock market correction, with the Hong Kong stock market down 11% over the last three weeks. Couple this bad news with the well-known fact that the Chinese real estate bubble has yet to burst ....
... and we have the perfect storm brewing for investment grade wines.
For wine speculators, I recommend waiting for the correction before establishing any new positions in the following: Lafite, Latour, Margaux, Mouton, Ausone, Haut Brion, La Mission Haut Brion, Cheval Blanc, Petrus, or anything DRC. Look for these prices to fall as the Asian markets correct.
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