Liquid Assets
According to Acker’s data, Italy's wine value increased the most, 7.03%, and California had a decrease of 2.04%. Poor California. They can’t get anything right.
Capital Thinking • Issue #1081 • View online
It is said that in an inflationary environment, own hard assets. Own commodities.
What was evident as the millennials matured is that none of them desired to own assets. They wanted to rent everything.
From 2000-2019, owning hard assets was seen as backward.
If You Want To Beat Inflation, Buy Wine
Part of that was the fact it was harder for them to build wealth in places like NY and California but the other thing that happened was the rise of software that enabled people who owned assets to rent them out. Uber and Airbnb are evidence of that phenomenon.
Yesterday, I got an email from a wine auction house. They keep track of different indices and have a “wine index'“. That index never seems to go lower but I digress.
This data is fun to look at.
In the first quarter of this year, the Biden Economy has seen the S+P Commodity Index increase by 29.05%. No surprise there.
Hard assets!
Meanwhile, the NASDAQ decreased by 9.1%. If you own stocks, you won’t be surprised by that number either.
Every day you wake up you are poorer in the Joe Biden economy. If it’s not stocks going lower, it’s the value of your dollar getting eaten up by inflation.
Meanwhile, the Acker Liquid 30 is up 6.24%! The Liquid 30 is the thirty most traded wines in Acker auctions, so it’s a bit subjective, to say the least.
When you go to their website they don’t even list what makes up the Liquid 30.Side note, 6.24% sounds good but annual inflation is running much higher than that, 16.8%, so it’s still a loser.
Just an FYI, it’s expensive to build a wine cellar to hold wine and it is obviously not cheap to acquire investment-grade wine. The cellar also incurs monthly electrical costs to keep it cool.
You also have to have access to wine lists and getting on them is super difficult. That’s why this is more of a parlor game than real finance.
If you do decide to get in the game, accounting professor Roman Weil at Chicago Booth has done exhaustive statistical research on wine.
He’s found that only Chateau D’ Yquem is the one that consistently holds value and is always rated higher than other wines in its region by a good statistical margin.
It was Thomas Jefferson’s favorite wine and notice, it’s a white dessert wine.
Jeffrey Carter