As an impatient market looks outside Bordeaux for inspiration, undervalued first growths offer real opportunity for investors
There is a tale of an old Zen master who lived in a small village. One day, a boy from the village buys a horse, and the populace is thrilled for him. The old Zen master says “we’ll see.” A week later, the boy falls from his horse and breaks his arm, to which the populace reacts with sadness and dismay. The old Zen master says “we’ll see.” A week after that, a war breaks out, and the boy is exempted due to his broken arm, much to the joy of the village. The old Zen master says “we’ll see…”
By now of course you get the point: it can often be wiser to take the long term view, even when the majority reacts immediately, whether positively or negatively. As the fine wine market begins to pick up following from the recent correction, much of the market is looking towards Tuscany, Burgundy and other regions which have fared well in the last few years, despite the historical dominance of Bordeaux over hundreds of years. While it would be a mistake to ignore these regions, Bordeaux retains an 80% share of the market, and will always be the cornerstone of wine investment, both now and in the future.
Not only has Bordeaux always been the top name in wine producing regions of the world, current market conditions have revealed some exceptional value to be found for investors willing to look closely. As an example, La Mission Haut Brion 2005, which traded for nearly £6000 at its peak in 2008, is now available for as little as £4000. Additionally, as vintage after vintage fails to meet the superlative quality of 2009 and 2010, these vintages are rapidly approaching their drinking windows, which has always been the point at which prices begin to rise. As the market stretches out looking for the next big thing, the smart buys could be lurking right under their well-trained noses.