Nah, it hasn’t happened yet.

But there is an edging towards it.

Today a whole range of high level Australian and New Zealand wines are coming to market in screwcap format. Mollydooker is a good example of how they are approaching it: the top cuvees (Carnival of Love, and Enchanted Garden) have corks and the lesser cuvees (such as Two Left Feet) have screwcaps. The wineries know that wine collectors are still not ready yet to buy their top, investable wines stoppered with a screwcap.

Most people state that screwtops and synthetic corks are just as good (if not better) than real corks, where the threat of TCA can affect up to 10% of bottles (in the most alarmists polls). However, in terms of long term cellaring, and aging the jury is out – it just has not been done yet. Twenty years is a long time to wait to determine that you made a mistake, when you know exactly how real corks perform.

For a good review of the background of screwcaps check out the overview in AZOM.

In Bordeaux there are tentative moves as the early-adopter wine producers try out the public’s reaction with, typically, their second labels. Decanter recently identified that Pichon-Longueville is about to try it, and Wine & Spirit in a vaguer reference fingered Margaux as ready to fly the trial balloon.
Currently the top auction houses specifically identify the wines, that have screwcaps, in their catalogues. This is clearly due to the fact that they do not want buyers to receive their wines and then be disappointed to find that they have screwcaps.

The wine investment world is clearly not ready for screwcaps yet. However, if you are buying wine for pleasure, don’t let a screwcap put you off – some great wines come with screwcaps. It can even be seen as a sign of a more innovative wine producer.

So it is time to build my cellar. For the past 15 years I have moved houses pulling along a 800 bottle wine storage unit with me. It has become a family joke. Which room will it be in this time? So far it has been in someone else’s basement, the main living room and a library room. It has performed brilliantly, and as a result my wine is in pristine state. So far so good.

However, with the launch of this website, a growing wine collection, and a desire to settle in my present house for a while. It is now time to build.

There are four choices:

1. A pre-fabricated walk-in wine cellar. These rooms are sent to you as a comprehensive kit, which you then construct, typically in your basement.
2. Build the cellar yourself
3. Hire a good generalist contractor, who you then work closely with to build your wine cellar typically as part of a broader home upgrade
4. Hire a specialist wine cellar consultant who can build you a custom cellar.

There are pros and cons of the choices.

1. In theory, this is a mobile option. There is a slim possibility if you move of taking the room apart, moving, and then reconstructing. It would be a lot of work and most people sell them as part of the house. It is also the only option where you can be certain of the budget. It is reasonable too; a 1,800 bottle cellar will cost around $5,000.
2. You have to be good at both research and good-sized home maintenance projects to pull this off. It is the least expensive of the build options. You have to have the time to put into it, if you don’t want a half built wine cellar in your basement for three years.
3. A good compromise, if you want to keep costs down and be fairly sure of ending with a unit which doesn’t leak! The key is the contractor and your relationship with them.
4. If you are well-off, and have a beautiful and large home, this is a great option. The specialists have built many cellars before, and the good ones will work closely with you to build your dream cave.

So what are my key goals / requirements.

- I want to learn in some depth about the construction of wine cellars
- I need a cellar which will hold around 1800 bottles
- It will be part of my finishing the basement project
- I want to ensure that if I was inspected by an auction house it would pass provenance muster
- I don’t want a large, show-piece cellar – the size of my house, my personality and my budget don’t allow it.
- I want to keep the budget reasonable and fixed as I can
- It must be complete in 2007
So with these in mind, I’m initially settling on #3 – Using a good general contractor. My next step is to start to interview a few. If I don’t find anyone who I feel can pull this off, I may re-appraise my approach.

This blog will follow my Operation Wine Cellar progress over the next year.

Trying to work out if it is legal to have wine shipped to you continues to be a lesson in frustration. Cheapfunwines.com got themselves in trouble when they tried to do a high level simplistic overview in their story: The Right States for Shipping Wine. It is really not their fault as the law continues to be ever-changing and very hard to interpret.

The best links to get up to date information are:

ShipCompliantBlog – which is a service provided by Six88 Solutions, a company providing (mainly outsource) tools to the wine industry. Their blog allows you to review recent changes.

The Wine Institute – continues to have some of the best up-to-date information. Check out this link – Interactive Shipping Map - for the best up to date visual representation of whether wine can be shipped to you.

Free The Grapes – continues to be the best way of exerting pressure on our politicians to move more speedily to fix this situation.

Due to the financing of these organizations, they all tend to focus more on winery-to-consumer shipping rather than retailer-to-consumer shipping which is more important to most Winevestors.

Provenance means different things to the buyer and seller of IGW. This is the first of two posts covering the provenance issues of wine.

Some buyers will go to extraordinary lengths to buy wines with a good provenance. They are prepared to pay a 25% to 150% premium for wines with a guaranteed provenance. Catering to this fetish will lead to money in your pocket. In the recent ‘Cellar II’ by A,M&C in NY, the auction house were able to charge a buyers’ premium of 19.5% due to the great provenance of the wine on sale.

The following are levels of provenance, in order of preference:

1. Stored at the chateau/vineyard for the current life of the wine. (75% to 150% premium)
2. Stored in bond, since purchase in-primeur. with documentation of purchase and storage at a professional facility for the current life of the wine (25% to 75% premium)
3. Stored in your environment-controlled home facility since purchase en-primeur with documentation of purchase, and an audit of your home facility. This is proven by photographs or a testimonial letter from a wine industry professional. (10% to 50% premium)
4. Stored in your environment-controlled home facility since purchase en-primeur without any documentation. (0% to 25% premium)
5. Bought at auction with proof of purchase and a defendable provenance prior to the purchase and then stored in your environment-controlled home facility (0% to 10% premium)
6. Bought on the secondary market with little proof of previous provenance, but well stored since purchase. (0% premium)
7. Bought on the secondary market with little proof of previous provenance and is in poor condition. There is no excuse for this last status – you shouldn’t have bought this wine! You will have trouble selling this wine at anywhere approaching a good price and should probably take the risk and drink it yourself. (-50% to -25% premium)

Any Winevestor should be aiming between 2 and 5.

A great new book for Winevestors is ‘Keys to the Cellar’ by Peter D. Meltzer. Meltzer has been writing about wine collecting and auctions in the Wine Spectator for the last twenty years. He uses this experience to guide readers through wine collecting and its many eccentricities. This aspect of wine is rarely written about and is a key part of a passion for wine.

Meltzer is well connected and he writes about being part of a wealthy, generous group of wine collectors who share their wine with a small group of wine fanatics, which includes Meltzer. This combined with Meltzer’s Passport to New York Restaurants, Wine Spectator’s Collecting section, and his stewardship of the Wine Spectator Auction Index gives him great credentials for writing this book.

The books chapters which are largely self explanatory are:

• A Cellar to Fit your Lifestyle
• Relating to your Retailer
• Buying and Selling at Auction
• Wine on the Web
• Storing and Enjoying your Wine
• Collecting: A Brief Background
• Beyond Wine: The Accessories

The first chapter is one of the more interesting, where Meltzer identifies four cellar types for different wine collectors, one of which is the Wine Investment cellar. Buy the book to find out the details, but his cellar is largely in line with the guidelines on this website. We would take issue with two small details. He asserts that ‘there are far better investment instruments than wine’. Wine should be part of the asset allocation of any wine collector, with the understanding that it will diversify the portfolio – there is no one, ‘best’, investment. Also he states ‘Be prepared to drink your wine if the market tumbles’. As any investment that is probably the time to hang onto your wine, and is a buying opportunity. However, these are small snips at a well researched and entertaining book.

As an addition to the small number of books dealing with the subjects of buying and selling wines, we will add this book to the Reviews section (Reviews->Books).

Wine collectors always hope that they are ‘hyper-tasters’. In the 1990s Linda Bartoshuk of Yale University published research about the characteristics of a super-taster and her research shows that about a quarter of us are. Jancis Robinson writing in the San Francisco Chronicle about HyperTasters talks about her initiation into the determination of whether she is a hypert-taster or not. You will inevitably want to take the test after reading the article.

One of the best wine books I’ve read recently is ‘A Hedonist in the Cellar’ by Jay McInerney. The wines he writes about are typically not IGW, but are the ‘hard-to-find’ bottles on up and coming producers, or innovative new offerings. Also in the San Francisco Chronicle there is an interesting interview with the author.

(Note the links in this post require a subscription to the Wine Spectator website)

For a long time now the Collecting section of the Wine Spectator (WS) has been the both positionally and metaphorically at the back of the magazine. It has been a quiet column which has focused on people and famous auctions. Not any more. In recent issues the Collecting section has been both expanded and is using big bold graphics.

There are two main reasons for this. Peter Meltzer the long time editor and writer of this section has just written a book ‘Keys to the Cellar: Strategies and Secrets of Wine Collecting’.

This is a book focused on issues relevant to a Winevestor and we’ll be reviewing it in a future post.

The other reason for the focus is that the auction market is on fire at the moment. WS did a big focus in their Nov 30 edition where it was a cover story. In it they reported that in the last 3 years their auction index has increased 54%. That’s not a bad return compared to just about anything.

The Wine Spectator has a lot of good information on auctions which include:

- Auction Highlights - Peter Meltzers informative auction reports
- Auction Index Search - A query tool allowing you to see recent auction prices on specific wines

This is helpful, but there are some obvious ways that this information could be displayed in ways more useful to a Winevestor. For instance their auction index which is occasionally published numerically but is not available as an updated graph on their site. Also WS has all of that auction information but they do not show it as historical rates of return. Oh well, maybe another site will start to focus on this!

Can it sound any more boring? In fact for the Winevestor who is focused on how to make money out of a passion it is great reading.

A group of wine loving University Economic Professors have got together to create the American Association of Wine Economists whose purpose is to create a bi-yearly academic journal. The professors are all from top flight universities from around the world and it is clear that the global focus is a key goal. With this background the format is as you would expect – a peer reviewed, journal of academic papers, with a high density of formulas, tables and footnotes.

You can find them online at www.wine-economics.org, and membership (including the journal) is $39/year.

However the topics and the writing is excellent, and they clearly couldn’t help themselves, as at the back they depart from the academic format and there are book and film reviews (albeit better informed and with better analysis than the normal review!).

In the first edition (May 2006) the papers are on:

- Interstate Wine Shipments and e-Commerce
- Measurement and Inference in Wine Tasting
- Analysis of Wine Tasting
- What Determines Wine Prices: Objective vs. Sensory Characteristics
- Early Sales of Bordeaux Grands Crus
- Assessing the Effect of Information on the Reservation Price for Champagne
- Book Review: Judgement of Paris: California vs. France and the Historic 1976 Paris Tasting That Revolutionized Wine
- Film Review: Sideways

For the Winevestor, all were interesting background, but 1 and 5 were topics which directly apply.

The first paper is a beautifully written opinion piece on why the current inter-state shipping laws are bad certainly for the end consumer and possibly for the wholesalers and distributors as well. It is written by Nobel Laureate Daniel McFadden and comes from the consumer viewpoint. The fifth paper is an analysis of the pricing of En Primeur wines. The two main topics are do En Primeur wine prices correlate to quality (not much) and how different pricing strategies and timing of information could be restructured to everyone’s advantage. It is amusing that the one firm conclusion is that buying the five First Growths En Primeur is a good investment.

The Sideways review described an innovative way to spend an evening. Have friends over and watch the movie. As the movie progresses pour the wines described (he identifies the wines in the movie). Sounds perfect! What a great finale, drink that 1961 Cheval Blanc, you were wondering what to do with.

Few things are more controversial in the wine world than ratings. However the public generally loves them. Its pretty obvious why. If you do not have the time or the budget to drink 10,000 wines a year (like Parker) you want an 'expert' to do that work for you, and then to guide you, when you are buying the 100 wines you may drink in the year. The big question is which expert to trust.

This site is set up so that you can rate the raters (Winefluencers) and then also a slew of other wine services. It is a chance for you to use the same scoring system, that everyone in the wine world is used to. The scores are then aggregated, and you can see the 'Wine Investor score'. This way for all wine services you will gain from the insight of the other users of the site.

So if you want to play with this and leave your own score, go to Reviews->Winefluencers, select say Robert Parker, hit the 'Write a Review' link and then write your thoughts on the esteemed Advocate. Make sure to click on the 'Your Rating' button to leave your numerical score.

Happy rating....

As you can guess we are a small, merry band at WineInvestor.com. Let’s do some introductions -

ChiefWinevestor: Raef Lee. The original idea for this site came about when I wanted to find, purchase, store and sell my excess wines and found very little out there to tell me how to do it. I will say now that I am not an expert on wine, or even in the topics on this site as I’m not in the wine industry. I’m a manager in a financial investment company, who has a back ground in technology and who loves wine. This site was the way that I could bring my skills / passions together as a different outlet from my everyday work. I see my role as trying to ensure that the best ideas and information that come through this site are highlighted and displayed in a way that everyone benefits. I’m a big believer in the Wisdom of Crowds – average people combining their knowledge are more intelligent than a single expert.

TechWinevestor: Skip Shuda. Skip is a serial entrepreneur and has made it into a career, by working with other entrepreneurs to help them to boot strap their operations. You can find him and his services at www.teamandadream.com. To allow me to focus on the wine and the wine issues, Skip, by leveraging his entrepreneurial network, has managed all of the technical aspects of the site.

There will be other shout-outs in the future, as we also rely on a cadre of business and wine advisors who have signed up to help me with site and keep it interesting.