The blurb from one wine investment fund argues that the fine wine market benefits from inelastic supply. That is, irrespective of the price it fetches, once a particular vintage is made no more can be produced. Moreover, the number of available bottles falls every time a cork is popped.
It is no coincidence that fine wine started to recover at the beginning of the year, alongside the Chinese stock market. The marginal buyer is shifting from London and both coasts of America, where demand is flat, to Hong Kong, now the hub for the booming Asian wine trade, particularly in China. While there will always be price anomalies allowing investors to make money in wine, this bull-run is your classic demand story. Choose the shape you expect the economic recovery to take; then pick your poison.
> Read the full article at FT.com
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