Friday, November 14, 2008

Even fine wine declines 

I had no idea that there was a fine wine index. Mostly it's a list of 100 very good French wines, over 90% Bordeaux.
It represents the price movement of 100 of the most sought-after fine wines for which there is a strong secondary market and is calculated monthly. The majority of the index consists of Bordeaux wines � a reflection of the overall market � although wines from Burgundy, the Rhone, Champagne and Italy are also included.
Now, it turns out, you can even go long or short on the fine wine market via inTrade. (It so far has only one trade.) Liv-Ex comments:
Liv-ex�s cooperation with Intrade to create a cash settled futures market in fine wine is a ground breaking development. At a time of heightened uncertainty in the market it will give all participants including producers, merchants, wine funds and collectors an opportunity to hedge their exposure to the underlying market. It will also allow investors to benefit from changes in fine wine prices without having to take delivery of the goods, pay storage charges or worry about provenance.
That is, you can bet on the wine market without actually having to store the stuff. Alas, after a good run, fine wine prices are falling as are the prices of almost all commodities.

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