In a serious discussion of the price of gold (“frothy”), talk turns to collectible wines. Jeffrey Rubin, director of research at stock market research and money management firm Birinyi Associates, notes his own collecting experience:
“I thought of it almost as part of a second asset class, another asset class, understanding the risks, the liquidity and storage costs. I built up a pretty significant database tracking some of these wines over a long period of time. Some of the wines now-a-days are so expensive and it (the predicted price increase) is priced into it already…I find now that the wines will not appreciate as much because they are already starting at such an obscenely high price.”
My brother, who manages stocks for a living, points out that people who buy assets after a long run-up — when the assets are at historically high levels — almost always lose money. That goes for gold and, presumably, wine.
On the other hand, people who buy wine to drink are finding lots of bargains.