2009 Futo Allocation

The 2009 Futo allocation is announced.  The deadline for buying your allocation is February 21st.  The wine got 96 points from Wine Advocate (WA), and is sold by allocation for $225.  By the time you pay local sales tax and shipping, expect your cost to be around $250.  If you sell, expect to by clipped for 20% auction house fees, so a final price of $300 is what you will need to break even.  You will also need to pay to have the wine shipped to the auction house.

Does this make sense?  For the 2004 vintage, (RP 96, first vintage) the lowest ask on wine-searcher is $300.  The 2007 Futo (RP 98) is also a $300+ wine.  All the other Futo vintages scored either 95 or 95+, and it appears that all can presently be bought for under $250.  It is worth noting, that the cheaper vintages (2005, 2006, and 2008) all appear to be in low supply at the sub-$250 level; there are many more offers above $300.  Buying the 2009 Futo to flip immediately does not make much sense.  I would expect to come close to breaking even.

However, a speculator might be willing to take a small loss on the 2009 vintage to ensure an allocation for the potentially better scoring (WA 95-98) 2010 vintage.  Alternatively, the 2009 Futo can be held for a few years.  Futo is very close to greatness.  If it can pull off a couple of 100 point vintages in the future, it could very well push all older vintages up to the next price level.  Futo has never earned less than 95 points from the WA, and annual production is only around 1000 cases.  My recommendation is to buy.

2009 Quilceda Creek Allocation

The 2009 Quilceda Creek Cabernet Sauvignon is available January 9^th for $135/bottle.  Parker gave this wine (99-100) from the barrel.  Buy your entire allocation. 

The 2009 Quilceda Creek Cabernet Sauvignon is expected to cost more on the secondary market.  All Quilceda Creek Cabernet Sauvignon from 2002-2009 received either 99 or 100 points.  The cheapest wine-searcher price for the 99 point wines (2008, 2006, and 2004) is $180 for 2008 and 2006, and $200 for the 2004.  The 100 pointers from 2005 and 2007 cannot be obtained for less than $220.  Patient buyers of the 100 point 2002 and 2003 vintages can close the deal for about $250. If you are buying 2009s to drink, buy them now.

If you are buying to flip, consider that you will pay for shipping – both to you and then to the auction house, plus sales tax and auction premium.  A $135 bottle will break even if sold for $185 (including buyer’s premium).  This is still worth it, if the sale will allow you to stay on the list.  If you can afford to hold the wine for about 5 years, so much the better.

2009 Sine Qua Non Allocation

September 2 is the deadline for reserving your 2009 Sine Qua Non allocation.  This year’s offerings are 6 x 2009 Syrah “The Thrill of …” (RP 96-98) and 6 x 2009 Grenache “Upside Down” (RP 94-96).  Grenache fans will appreciate the increased Grenache offering, which is often about half the Syrah availability.

If you are buying these to drink, the release price of $145 compares favorably with the $250+ typical auction price.

If you are buying these to flip, Parker’s sub 100 point ratings will keep these wines from getting much higher than $250 in the near term.  Auction house fees of 22%, together with shipping fees, plus state tax fees will drive all the profit from re-sale.  A profitless re-sale of Sine Qua Non is perfectly acceptable for speculators who want to remain on the allocation list, saving their dry powder for either a better vintage, or an Eleven Confessions offering.  Bottom line: buy your entire allocation.

1994 Bordeaux First Growths - a Time to Sell

If you're still waiting for these to come around, they won't.  The 1994 Bordeaux first growths peaked from 2000-2004.  Look at the 2011 auction prices and cash in.

1994 Mouton ......$350-$400
1994 Lafite..........$1008-1321
1994 Haut Brion..$300-$400
1994 Latour.........$350-$600
1994 Margaux......$300-$500

Price ranges are for the first half of 2011.  Recent prices (April, May, and June auctions) show all these wines are at or above $400/bottle.  The 5-year price charts on wine-prices.com show all of the 1994 Bordeaux first growths going vertical now, after spending the last decade at or under $200/bottle.

In 2004, I sampled all the 1994 Bordeaux first growths, and I was impressed.  Many tasted quite good, and all could be had for $125/bottle or less.  I bought about 10, from different chateaux, and waited.  As the years went by, I pulled them out proudly for guests and family.  One was austere, another was bitter, a third was closed, and a fourth was past its peak.  Seven years later, I get it; these wines are not closed.  They are amber, austere, and fruitless.  They peaked, and another decade in the cellar is not worth the wait.  At these prices, they're not worth keeping.

2007 Sloan Allocation

Anyone still on the list for Sloan may want to consider taking their 2007 allocation. Like many Napa 2007s, Sloan earned 100 points from RP. With local tax and shipping, expect to be on the hook for about $360/bottle. If you want to sell, consider that the typical auction house fee of about 20% means that the market needs to value 2007 Sloan at $450 for a speculator to break even.

Typical vintages of Sloan get 96-98 points from Parker, and price on the secondary market is highly sensitive to very small variations in Parker's rating. The 2003-2005 vintages got 96 points, and their resale value is in the $225-$300 range. The 98-point wines from 2001 and 2006 seldom trade under $350, and $400 is a typical retail price for the 2006. The only other 100-point from Sloan, the 2002 is a $500 bottle (sometimes higher, rarely lower).

Finally, recognize that large variations in auction price can be the result of selling a couple of odd bottles vs an original wooden case (six bottles in the case of Sloan). The wine market volatility of the past couple of years hurt small speculators disproportionately. As I described here, with the example of 1982 Mouton, sellers of an owc get plenty of protection in a falling market; plan accordingly.

2005 Bordeaux First Growths

Wine investors speculating in the 2005 Bordeaux first growths should consider the 2005 Mouton Rothschild.

First, the range of scores for these wines is not big. Parker scored them all in the range of 96-98+, so the price differences are not representative of relative quality.

The following chart shows today's pricing of the 2005 First Growths compared to their prices as futures in the summer of '06:

Wine..............Futures Price/Current Price ..... % Change

Mouton.................... $575/$570....................... -0.08%

Latour...................... $765/$980....................... +28%

Haut Brion............... $626/$660........................ +5%

Margaux.................. $712/$830........................ +16%

Lafite........................ $604/$1200..................... +99%

Over a long enough time span, inflation, diminishing supply, and a long window of maturity should be expected to drive all the 2005 first growth Bordeaux to higher prices. However, buyers of Latour, Lafite, and Margaux appear to be premature, and I would expect these wines to be at risk for a correction.

While Haut Brion may also appear to be poised for growth, anyone willing to pay $660 for a Haut Brion should have a close look at the 1990, or the 2000, both of which trade for around $600 at auction, and have a much lower supply, because we've been drinking them up.

The 2005 Mouton, in contrast, has not budged in price in the last three years. Older vintages (like the 2000 - $840) actually cost more, which is what a speculator would expect. It may be the first of the 2005 first growths to move higher from present levels.

M Etain Price Revealed

The Scarecrow winery has priced M. Etain at $125/bottle. The un-rated wine is from the 2008 vintage, and is available in 2-bottle cases (maximum 2 cases).

From a collector's perspective, anything Scarecrow puts out is highly desirable. But does M. Etain make sense for a wine investor?

Consider that the Grand Cuvee, Scarecrow, received a (92-94) score from Robert Parker, which is his lowest score for any Scarecrow wine. What would we predict the second wine to score? It's anyone's guess, but further consider that the year 2008 had big problems for the Napa Valley, including a devastating spring frost, and a summer drought. The bottom line is that it was very difficult for anyone to make a great wine, and M. Etain is unlikely to offer wine investors a significant profit.