Price Dynamics by Auction House

By Joseph L. Breeden How important is where you buy and sell to the price of the wine? Rarely can we compare the same wine sold at two houses in a similar time frame. Rather, to assess the importance of auction house, we included auction house as a predictive factor in our price model for fine wine. This has the affect of first normalizing the price of the wine for all the other factors in our model: age, vintage, rating, etc. Thereby we can make a kind of adjusted basket of fruit to basket of ...

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Wine Ratings and Auction Prices

By Joseph L. Breeden Wine ratings such as those by Wine Spectator and Wine Advocate are intended to describe the flavor of a wine. Rated in the blind by experts, they serve as a guide to buyers on the quality of the wine when it reaches maturity. A natural question is, do ratings reflect price? It seems reasonable to assume that a high rating may drive up the price of a wine. Statistically we can only determine if a relationship exists, not whether ratings drive price. That said, our analysis...

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Burgundy: Back to Basics

By Sisi Liang     Thanksgiving food (or drink?) for thought: What you appreciate appreciates—intriguing idea to apply to fine wine investing. We can get so caught up in the math, the science, and the data in analyzing anything these days—so much so that we might have moved 20 steps away from the basics, and forgot what actually makes sense. This happens quite frequently in the investing world, even when it comes to fine wine. I recently had the great pleasure to watch a...

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Shipwreck of the Chinese Stock Market May Lead to Sunken Treasure in the Fine Wine Market

By Sisi Liang and Joseph L. Breeden   The Chinese stock market has recently shipwrecked. And a lot of people around the world are in the same boat (or adjacent boats) feeling the pain. The Shanghai Composite rose by 44% in five months since January 2015, peaked in May and then dropped 21% in the next two months. It has sent a ripple through the rest of the world, causing a multitude of problems. But in crises can come opportunities. From what we see in our wine analytics, we might have a...

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Bloomsday Burgundy

By Sisi Liang,   "Feel better. Burgundy. Good pick me up. Who distilled first? Some chap in the blues. Dutch courage."      – James Joyce, Ulysses   As a diehard fan of James Joyce's epic Ulysses, I have decided that it's only fitting to dedicate this post to the book on this special day—Bloomsday—and the Burgundy wine, which is featured in the book. In Ulysses, Joyce's hero Leopold Bloom wanders around the City of Dublin over a course of ~20 hou...

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