Chateau Mouton Rothschild - 1982-2010 QPR

Which vintage of Chateau Mouton Rothschild offers the best quality to price ratio (QPR)?  I looked at the modern vintages first:  2010 received 97 points from Wine Advocate (WA) and is available for future delivery at $700 (Premier Cru).  2009 is WA 99 and can be bought today for $900 (Gary's Wine Marketplace).  It seemed that the market values modern great vintages of Mouton at $100 per WA point above 90.  To if the pattern persisted with older vintages, I made a table of the top 8 vintages back to 1982:

Vintage	Points	Price	Cost/Point over 90
2010	97	$700	$100
2009	99	$900	$100
2005	96	$500	$83
2003	95	$400	$80
2000	96	$1150	$192
1996	94	$400	$100
1986	100	$750	$75
1982	100	$1000	$100

For my money, the 1986 is the wine to buy.  In absolute terms, it is cheaper than the 2000 and the 2009, both of which have lower scores.  In relative terms, its cost per point is lower than any of the recent great vintages.

The 1986 Mouton Rothschild was not always a $750 wine.  It traded at around $1000/bottle both in 2007 and 2011, so there is precedent for higher prices.  I would expect prices on the older vintages to rise when the current group of 2009s and 2010s have been sold.

2011 Sine Qua Non Dark Blossom Allocation

Sine Qua Non's August 2013 allocation is for six Syrah and three Grenache, all named "Dark Blossom".  Buy your entire allocation.

Antonio Galloni gave the Syrah (95-97) points from barrel, and the Grenache (94-96).  Prices have ticked up slightly to $160/bottle.  Don't forget to include shipping and local taxes when calculating your final price.  If you pay 8% local wine tax (California's rate is 8.2%), then your cost is $173.  Shipping will probably cost you about $10/bottle, so your final price to drink these is about $180-$185.

If you want to sell some to pay for the one you drink, then you are probably in for an uphill battle.  If the Wine Advocate confirms the Galloni ratings, then private party sales are probably your best bet - and it may take several years to get your money back.  For example, Sine Qua Non's 2008 Syrah, B-20 got 95 points from the Advocate, and can be purchased today for $220 (wine-searcher).  If you sell through a traditional auction house which takes 20% of all sales, a final price of $222 returns your $185.  A final price of $235 would also cover your cost to ship the wine to the auction house.  A wine-commune pre-arrival offering of Dark Blossom at $285 went unsold.

If the 2011 Sine Qua Non Dark Blossom gets a better Advocate review, like 99 or 100, then higher prices would be expected.  A final auction price of $252 will return $210 to the seller.  Make it $260, if you want to pay for your cost to ship the wine to the auctioneer.  Prices like this are supported by past offerings, such as the 2005 Atlantis series, in which the 100 point Syrah is $260-$300 on the secondary market.

Even if the 2011 Dark Blossom offerings turn out to be "only" 95-96 points, it is still worth it for a wine speculator to buy these and stay on the allocation list.  Sine Qua Non has a strong track record and is a good bet to release more 100 point wines in the future.

Note:  This post was updated on 9/5/2013 to correct errors in the release price.

Screaming Eagle Second Flight Prices

Screaming Eagle Second Flight wine is finding its way onto the secondary market, and the prices are becoming clear.  The bid/ask spread appears to be $400/$500 for any given bottle of the 2006-2009 vertical.  The Screaming Eagle winery introduced Second Flight in September, and offered the 8-bottle packs for $250/bottle (price includes tax and shipping to New York; your mileage may vary).  The highest "bid" for Second Flight appears in the WineCommune.com pricefile at $400; other bids were generally North of $350.  As of this writing, 128 bottles have been sold on WineCommune, with an average price of $376/bottle.

Wine-searcher.com revealed the cheapest "ask", currently $499/bottle from Wally's in CA.  Other asks are currently not higher than $675.

Second Flight has not yet been rated by any professional wine critic, so there remains at least one obvious opportunity for price movement.   

Second Flight - Screaming Eagle Introduces a Second Wine

Screaming Eagle has introduced a blend of Merlot and Cabernet Franc dubbed "Second Flight".  The 8 - bottle offering consists of 2 - bottles each vintage  '06, '07, '08, and '09.  The 8 - bottle lot is offered only to those  individuals lucky enough to be on the Screaming Eagle allocation list.  Interestingly, the offer does not describe these wines as being made from the fruit of either young vines, nor is this wine that was rejected for blending in the grand cuvee.  Rather, the winery states "For the last eight years, we’ve been making a different wine based on our top Merlot and Cabernet Franc lots."  If true, then Second Flight might be every bit as good as Screaming Eagle itself.  Bear in mind that the estate was sold in the spring of 2006, and the addition of additional labels might have been part of the buyer's plan.

The offer is priced at a hefty $1800, expect to pay $2000 when shipping and local sales taxes are included.  Final cost is $250/bottle.  Recognize that an auction house would need to sell this to someone else for slightly north of $300 (including 20% buyer's premium), for a speculator to break even.

Buy your entire allocation.  The Second Flight has no track record and only the Screaming Eagle brand to recommend it.  In this soft wine market, very few allocations make sense for wine investors or wine speculators, but Second Flight is one to buy.  Skeptics are invited to consider two other CA cult wines to have second offerings in recent years.  Scarecrow's M. Etain debuted at $125 before tax and shipping.  Most speculators would take a small loss re-selling that wine ($170 is currently the lowest retail price on wine-searcher).  Scarecrow admits that M. Etain is wine that didn't make it into the final blend.  However Sine Qua Non's Next of Kyn went from a $220 allocation price to a $575+ resale price.  Sine Qua Non was very clear in pointing out that Next of Kyn is a new wine made entirely from the Cumulus vineyard, and not the second offering of any of its existing labels.  There are no guarantees that any wine can be re-sold for a profit, but I would gladly take my chances with Second Flight.

2008 Sine Qua Non Estate Allocation

The 2008 Sine Qua Non (SQN) Estate allocations have been announced.  They are 3 x Syrah “The Duel” (WA 96-98) and 3 x Grenache “The Duel” (WA 95-98) all sold together for $1320.  Plus, there is a white wine “The Monkey” (WA 92-94), which is a Rhone-style blend of Roussanne, Viognier, and Chardonnay.  Allocations of “The Monkey” range from three to six bottles at $100 each. 

Buy “The Duel”; it’s a no-brainer for both the speculator and the consumer.  Past years of Eleven Confessions Syrah and Grenache sell for $450 and up, and 2008 SQN “The Duel” should be no different.  A speculator could reasonably expect to sell four of these at auction, paying the 20% auction house commission, and let the profits pay for the last two.  As for SQN “The Monkey”, buy it only if you want to drink it.

Followers of the ratings will notice that the barrel sample scores for the 2008 SQN “The Duel” are a couple of points lower than past years.  Don’t worry, it’s the same great wine, just a different critic.  The WA reviewer for the 2008 SQN is Antonio Galloni, not Robert Parker.  Galloni is taking over responsibility the Wine Advocate reviews for California and Washington.  Buy the 2008 SQN Estate bottlings with confidence.

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.

Scarecrow Introduces M. Ètain

In an email to allocation members, Scarecrow announced a new wine called M. Ètain for 2008. Is this a luxury cuvee, or a second wine? Probably the latter. The email describes:

“The portion of juice that wasn’t included in the final Scarecrow blend was so undeniably superb that we were inspired to bottle it...M. Étain 2008, a stunning Cabernet Sauvignon which charmingly displays a perfect balance between power and elegance.”

The email goes on to say that M. Ètain won’t necessarily be offered every year. To me, it sounds like a second wine, with limited availability.

Should you buy it?

Scarecrow is coming from a big success with its 2007 offering, but consider that 2008 was a difficult year for Napa. The 2008 Scarecrow has a Parker score of (92-94), the lowest of any Scarecrow, and the 2008 M. Ètain is still unrated -and unpriced. This year’s 2008 M. Ètain offering might be fun for collectors and consumers, but it is unlikely to be worthwhile for speculators. I expect the best juice went into the 2008 Scarecrow.

Wine Market Forecast and 2009 Bordeaux Futures

Top vintage Bordeaux futures are often recognized as having delivered handsome returns, and investors may be particularly tempted by the 2009 futures when they consider the other great vintages released into recessions: 1990 (futures offered during the recession of 1991), 1996 (futures offered during the currency crises of 1997), and 2000 (futures offered during the recession of 2001).

Buyers of 1990, 1996, and 2000 Bordeaux futures did very well (around 300-400% for the first growths), but their outsized returns were powered by the internet bubble of the late ‘90s and then credit bubble of the early 2000s. Other great Bordeaux vintages, such as the 2005 have not done as well, with the ’05 first growth futures collectively delivering 5% average annual returns to date. Should 2009 Bordeaux futures follow the historical precedent of the other recession offerings, such as the 2000? Or will it be more in line with the bubble prices of the 2005s?

Investing in 2009 Bordeaux futures is not without substantial downside risk; bubble money is still chasing these wines. See the full story of how the un-popped Asian real estate bubble is inflating Bordeaux prices here.

At $1000-$1500/bottle, the 2009 first growths cannot be justified, when there is mature wine selling for less. Wine investors would be better off buying OWCs of 1982 Mouton, or 1989 Haut Brion, which trade at similar levels to the ’09 futures. Today’s situation is very different from July 2001. At that time, 2000 first growth futures were offered at $250/bottle, while the 1982 first growths traded between $400 and $500. The 60% premium for the ‘82s made sense; older vintages should cost more. Today, they don’t. Wine investors should expect either a price drop in the 2009s, or a big price jump in the mature vintages.

I wouldn’t rule out both.

2008 Harlan Allocation

The 2008 Harlan Allocation is out: $500 for the 2008 Harlan, and $150 for the 2007 Harlan the Maiden. Wine investors should probably skip this one.

Higher release prices among the cult California Cabs have forced wine speculators to make difficult choices in recent years. The 2008 Harlan hasn't been rated by Parker yet, but we still have enough information to make an informed decision. 2008 was a difficult year for Napa Valley; the worst spring frost in 35 years was followed by drought and summer heat spikes. Odds are that even the top Napa estates will have a hard time reaching 100 points. And at $500/bottle, you're going to need 100 points to make money on the 2008 Harlan.

Parker has given four Harlan vintages perfect scores: 1994, 1997, 2001, and 2002. These wines all trade for over $750 at auction. The problem is that typical vintages do not sell for these prices. In 2003, 2004, and 2005, Harlan made great wine. Scores from Parker ranged from 95 to 98, but the auction prices for the 2003-2005 Harlans range from $350 to $475.

Bear in mind that after the auction house charges you 20% commission, your 2008 Harlan needs to sell for $600 - just to break even. There's also local sales tax and shipping to consider. Without 100 points from a top critic, it will be very difficult for a speculator to make money flipping the 2008 Harlan.

The 2007 Harlan the Maiden looks like a safer bet. Its Parker score is in line with other vintages of the Maiden, and it is priced fairly -if personal consumption is your goal. As with the 2008, the auction house fees, shipping and local sales tax will destroy any chance of profit.

Bottom line: If you want to sell these wines right away, it's going to be tough to make money. But if you just want to buy something to stay on the allocation list, choose the Maiden.

2003 Bordeaux Revisited

Have you ever wished you could go back in time and buy first growth Bordeaux at the release price? You may just get your wish with the 2003 Haut Brion.

At auction, the 2003 Haut Brion will cost you around $280/bottle including buyer's premium. Of course, at any given auction, prices may be higher. Patience may be required to buy at the average price, especially if you are buying a lot of 12 in an original wooden case. Retail prices can be highly variable, but a wine-searcher check shows three California retail sources with prices at $280 or under.

The fall 2006 release price for the 2003 Haut Brion (not the summer 2004 futures price) was around $325/bottle, according to both eRobertParker.com and Vinfolio's WinePrices.com. While the 2003 Mouton and 2003 Margaux are also showing price weakness, only the Haut Brion is actually trading below its release price.

Release and current prices of all 2003 first growth Bordeaux follow:

Wine..........Release/Current

Lafite.........$400/ $1100
Mouton.... $275/$312
Margaux... $375/$538
Latour.......$400/$766

Haut Brion $325/$280

While all investment grade wines may in the middle of a price correction, the 2003 Haut Brion may already be near its bottom.

Next of Kyn - a Wine for Collectors, not Speculators

The newest cult offering from Manfred Kankl, NEXT of KYN, was recently offered at $1100 for 3 bottles plus a magnum. The debut vintage was reviewed at 94-96 by Robert Parker, while the wine was still in the barrel. Here’s why I passed.

The cost is $220/bottle and $440/magnum before tax, shipping, and the inevitable auction house fees when you re-sell. Tax varies by state, but I’ll guess 7%, or $77 for our purposes. Shipping to your house and then to the auction house will cost $30, if you wait until it is cool enough for ground transportation to be safe. So the cost to get the wine to the auction house for sale is $241. Auction house fees run 12% to 21%, plus 1% insurance. So, the minimum reasonable break-even price for flipping NEXT of KYN is 13% higher than $241, or $272/bottle.

Now let’s look at the competition:

2006 Sine Qua Non Raven Series Syrah (RP 96) retails for $200
2007 Sine Qua Non Labels Syrah (RP 95-98) retails for $225
(prices on wine-searcher as of August 4, 2010)

The same winemaker has higher scoring wines for much cheaper. If you really want NEXT of KYN, just wait a year and buy it at retail. At least you won’t get stuck with the magnum.

Sine Qua Non The Pontiff

Getting an allocation from an exclusive winery, such as Sine Qua Non (SQN), can be worth the wait, but do you have to buy everything they offer?

As a wine speculator, what you do want from SQN is Syrah and Grenache from the Eleven Confessions vineyard. If you are offered something else, do you take it? In the case of the 2008 The Pontiff (rose), my suggestion is to skip it, or sell it. Unlike their Syrah and Grenache, the SQN white and rose wines are just not buy-and-hold material.

The question remains, are allocations of the more desirable wines larger for the customers that buy all the other stuff? Fortunately, with Sine Qua Non at least, speculators don't need to worry too much about it. Even in this economy, Manfred Krankl's latest rose can be flipped without too much of a loss (current price $100, release price, $79). You'll lose money on shipping, but you'll break even on the bottle.

William Fevre Chablis

William Fevre Chablis is a good value for drinking at current prices. If you are tempted to speculate, go for Les Clos.

The 2004-2005 Fevre Chablis tend to be available for around $40/bottle for a premier cru, and $60/bottle for a Grand Cru, and $80/bottle for Les Clos. Patient speculators can find these wines at auction for $10-$20 lower than these prices.

I like Fevre Chablis for three reasons:
1. It tastes like a wine that costs 50% more.
2. The wines are well made. I have never had a Fevre tainted by premature oxidation.
3. Prices of the 2002, 2004, and 2005 Fevre Les Clos actually rose by about $25/bottle during the 2007-2010 time period, a time when most non-blue chip wines fell or barely maintained their value.

Is Chablis worthy of investment? Mostly not, although owners of Raveneau did well with the '02 vintage Grands Crus. Fevre's Les Clos could similarly beat the odds and make the jump to $120+ over the next few years.

Expect Discounts on Blue Chip Wines

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.

http://www.decanter.com/news/293682.html

http://www.lovethatwine.co.uk/blog/bordeaux-gets-boost-asian-demand

http://www.winespectator.com/webfeature/show/id/42409

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 ....

http://www.nytimes.com/2010/03/05/business/global/05yuan.html

http://www.cnbc.com/id/35056774/Jim_Chanos_China_s_Real_Estate_Bubble_Is_Unprecedented

http://money.cnn.com/2010/04/15/news/economy/china_bubble/

... 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.