When I started this blog my two first posts were on the nature of the whisky world today and the ‘investment’ mind set many people have towards whisky. It seems more and more people speak of whisky as if it is a tried and true, sound investment plan when in reality it is the exact opposite. Im sorry but holding on to that ‘limited edition’ bottle of 10 year old Tamdhu for 30 years won’t bring a big return neither will the vast majority of these faux limited edition bottles. So why then are we seeing so many people talking about ‘investment’ whiskies? The simple answer is people just follow trends and what other people do. Hopping on the bandwagon, so to speak. A few brand ambassadors or an ex Director of Rare Whiskies starts spouting out about ‘investment’ grade whisky and everyone’s in a frenzy trying to secure their retirement with bottles of whisky. But as basic economics tells us, now is not the time to buy. Im sorry again folks but that time has passed. Now is the time to sell.
Buy low, sell high. That’s been the mantra of investment gurus since the dawn of the stock market yet why do so many people refuse to live by the old adage? Well as one market economist put it once its because of irrational exuberance. People assume that just because things are going good now that prices must invariably always be going up. So in short if someone paid $1000 dollars for a rare bottle of whisky today they assume the price can only go in one direction and that is up. But as with any market boom a bust is sure to come and all those people buying high today will no doubt sell low out of fear.
Today’s whisky scene is a seller’s market. We are in the height of a whisky boom and I call it a boom and not a renaissance because today companies are more concerned with selling as much as they can rather than as best a product as they can. It seems that online whisky auction houses are springing up every week. Never has there been such ease to sell off those old bottles of booze as today. So what does this all mean?
Is buying whisky today pointless? No not at all. Im just on my soapbox trying to let people know whisky is something to be enjoyed and you should really take a liking to it before you decide to start buying up tons of bottles or even expensive bottles. Im not against collecting either, in fact I’m a bit of collector as well. What I’m warning of is this notion of ‘investing’ in whisky. After reading a post on Oliver Klimek’s DRAMMING blog about David Robertson (ex Director of Rare Whiskies mentioned earlier) starting a new whisky investment fund I decided to do this write up. If people are willing to throw away $10 million on investment whisky then surely people with a lot less might be foolish enough to follow suit. No investment is ever 100% sure and the risks are even greater with trendy items. Collect to enjoy and appreciate not to become rich because it is very unlikely you will and even more likely you will sell off your collection at much lower price than invested in. Sláinte!
— End of rant –