Whisky Tasting Record - August/2011

Yamazaki, 1984, Mizunara & Sherry Cask, 48%.

Ripened fruits (plums and apricot) with a touch of cinnamon. Deep and fairly matured with a balance of sweetness and sourness but a bit heavy on tannin (Good).

Blackadder, (Glenlossie), 20 Y.O., 1988/2009, Cask #1356, 52.4%.

Malty, syrupy and vanilla; like chewing a muesli bar. Standard before dinner drink (Good).

Blackadder, (Balmenach), 17 Y.O., 1990/2007, Cask #2505, 57.4%.

Outstanding aromas with clean, confortable grassy freshness and a hint of floral note. Fairly sweet on the palate along with melon and banana flavours (Recommended).

Blackadder, (Royal Lochnagar), 27 Y.O., 1981/2008, Cask #53, 57.4%.

Has the soul of classic highland malt and the smell of barley malt. In accompany was almond syrup, mix citrus fruits and hint of spices (Good).

Blackadder, (Glenlivet), 33 Y.O., 1977/2011, Cask #13149, 53%.

Very distinctive floral notes including Scotland’s indigenous heather flower. Structure is beautiful with honey dew and a touch of sour cherry. Floral tone dominated throughout the tasting with some lemon cheese cake at the end (Recommended).

Blackadder, (Laphroaig), 13 Y.O., 1998/2011, Cask #700237, 56.4%.

Typical Laphroaig with extra smoky leather, medicinal and burnt flower. A bit of soapiness at the very end, fairly balanced and was not over powered by the peat (Good).

SMWS 29.91, (Laphroaig), 12 Y.O., 1998/2011, 63.8%.

Very heavy burnt hair cream and polish oil, felt like walking into a barber shop. Backed up back sherry wood and its tannin, dry but not rough (Good).

The Macphail’s Collection, (Glenrothes), 39 Y.O., 1969/2008, 43%.

Sweet caramel and dry berry fruits mixing with citrus fruits, embraced by oak woodiness. Focused with fairy long aftertaste (Recommended).

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The Macphail’s Collection, (Glenrothes), 30 Y.O., 43%.

Classic Glenrothes style with floral and fruity sweetness. Easy and smooth with some cocoa bitterness in aftertaste, long and simple (Good).

Blackadder, (Glenrothes), 22 Y.O., 1988/2010, Cask #5373, 52.5%

Round, oily and full in texture with mandarin and lemon candy notes. Fairly sweet and concentrated, and a hint of smoke and peat? (Good).

Fine Wine Investment (Part 2/2 - Bordeaux Super Seconds and the market)

By the end of August 2011, the soaring super second prices have gained an average of 23% since the end of 2010. More, the market favorite third growth Chateau Palmer, fourth growth Chateau Beychevelle (known to the Chinese as “the Dragon boat”) and fifth growth supernova Chateau Pontet Canet have all provided good amount of returns. However, this is not a short term investment supporting evidence but vice versa instead. Chateau Palmer is probably one of the a few 1855 Grand Crus who still gained value in the most recent week; recorded +15.8% of its 2009 vintage.

Noted earlier in my facebook on the 9^th August (right after the slash of the stock market), the alignment of Liv-ex 100 index with three major US stock indices have suggested that the market is unstable and the short term risk of fine wine investment has increased dramatically. The alignment chart also indicated some correlation between the two indices (refer to my facebook). Also stated on 13^th September (in Chinese), I believe another 20-30% fall (based on macro economics/world economy and short term overly valued prices) would provide a better entering point for the investors. Ended 11^th September, Liv-ex 100 has dropped 6.35% during the past month; given a total of 11.53% lost since the year highest in June.

“Everyone needs some SWAG” (published in Investment Week) by Joe Roseman, former economist at Moore Capital Management suggested that investors should add or at least consider adding these physical assets into their portfolio (SWAG = silver, wine, art and gold). The argument was that these physical assets have outperformed all other equities in the past decade, whilst having eight advantageous/distinctive characters such as no incumbent debt associated with the assets, scarcity and longevity. I agree the argument on the basis of portfolio diversification reduces idiosyncratic risk however, diversification can not reduce the systematic risk. The easiest way to explain it is that no one itself has the win win  situation.

I always believe that cash is a very important part of investment portfolio, especially in time like now when the world market is extremely unstable. Angry U.S. unemployee walk on the street, at least 90 multi-million companies and firms from Wen Zhou (China) have gone bankrupted due to informal credit loans and unsolved Greek debt crisis... and the list goes on. My suggestion is to have 50-70% of all investment allocation in cash (I personally raised it to 90% two months ago) depending on personal risk adversity. In conclusion, fine wine investment is for the long term genuine investors instead of short term speculators. Fine wine investor should have strong sense of longevity, otherwise, short selling options in the equity market is probably more suitable for you.


(original data from Liv-ex.com, Yahoo Finance - for personal use only)

Fine Wine Investment (Part 1/2 - The Bordeaux First Growths)

The 2010 En Premier prices have been starting to release from the end of April and the market was as hot as it can be. All the hot items were sold out within an hour or two; merchants have been trying to wire-in their connections just to get hold of any extra cases possible (11/April - Liv-ex 100 = 359; Liv-ex 50 = 439). After almost two months of incubation with a final kick of Vinexpo 2011 in Bordeaux, the first growths and the top notches finally released their rocket high prices. Ch. Lafite-Rothschild with their first trench at €600 but only a hand full of people can enjoy the price along with tones of Ch. Rieussac (not to despite that it is a very good Sauternes). Most of the merchants would be happy to spend €1,080 for a bottle of Ch. Lafite-Rothschild, €600 for Ch. Margaux or Ch. Mouton-Rothschild and €780 for Ch. Latour; and that’s of course, if you have the allocations.

Not far from their releases, statistics indicated that some of the top 2010 Bordeaux prices have slide 15% by the end of July 19^th. A case of 12 bottle Lafite would have cost almost €14,000 at year higest and is now costing €12,700 (3^rd Oct; beware of Liv-ex 2.5% transaction fee); some French necogiants are now even offering less than €900 a bottle in package term. Other most sort after Chateaus such as Ch. Lynch-Bages and Ch. Pontet Canet have dropped 11.5% and 17% respectively (11/June - Liv-ex 100: 364.69; Liv-ex 50: 445.40)

At the same time, the physical assets side of the Fine wine investment isn’t doing that well also. Claret Chip, the toppest rated Bordeaux first growths only, dropped over 13% from year highest; Live-ex 50 and 100 down approximately 10% from year highest. It was argued that because Lafite is being heavily weighted and its drop would greatly traumatize these indices; but no one seems to care the issue when these indices were shooting through the roof. The worst was that Emperor Parker downgraded 2008 Bordeaux vintage by 1.18 on average (Most Impacted: Chateau Margaux down from 95-97 to 94, Latour from 96-98 to 95+, Petrus from 98-100 to 97, Le Pin from 94-96 to 92 and Leoville-Las Cases from 95-97+ to 93+) and noticed that the 2008 vintages have just been added to the major indices recently. Of course, the people who bought the 08 from En Premier would not worry about the current price fluctuation due to their bravery in 2009. For an example (and also the most extreme one), they have bought Lafite at €4,000 per case of 12 bottles (at 2009) when even the 2011 year lowest was trading at around €10,000 a case, why would anyone of them worry? (Chateau Mouton-Rothschild showed similar price trend with an average of 26% lost since the beginning of the year 2011). Further, the 98 vintage declined by approximately 10%, 2004 in significant amount, 2003 and 2005 by around 8% each; not to mentioned, the Christie’s Poor performance in HK auction where Lafite took an average of 13~15% punch.

Needless to say, Ch. Lafite-Rothschild is overly heat in the recent decade and is now the time to be rationally adjusted by the market. I do believe (in investment term)that it is still either the King or Queen of all wines; but in the short term, the bubble created by the Chinese needs to be busted, Carruades de Lafite also. As for the Lafite fans, the 2003 vintage or a under €10,000 case 2008 would probably be the best shield to doge the bullet. For the first growth in general, the 2003 would probably be the best selection "relative" to the other most recent decade vintages. 2006 is also a good option but the general WA score is at 95.6, which will have its own difficulties to price adjustment in the future; however, the market will do its own justice.

(original sources from Liv-ex.com - for personal use only)