What if you bought Fine Bordeaux (case) in 2005?
Alternatives · Wine. The hindsight answer, year by year, against the only benchmark that matters.
Could you have picked it? Play2.8× · S&P 500 same money: $5,763
$1,000 in Fine Bordeaux (case) at the start of 2005 would be worth about $2,800 today. A plain S&P 500 index fund over the same years would have made more — the boring option won.
The story
Fine Bordeaux, the top chateaux of the Medoc, Saint-Emilion and Pomerol, has long been the blue-chip of investment wine. Prices rose sharply in the mid-2000s on a string of acclaimed vintages, especially 2005 and later 2009 and 2010, scored highly by critics such as Robert Parker. The en primeur system, in which wine is sold as futures before it is bottled, encouraged speculation.
The real accelerant was China. Around 2010 and 2011, demand from newly wealthy Chinese buyers, especially for Chateau Lafite, pushed prices to records. Then the bubble deflated: Chinese demand cooled after the government launched an anti-corruption campaign that discouraged lavish gifts, and Bordeaux prices fell for several years. Later the market recovered somewhat, but Burgundy and Champagne captured more enthusiasm. Investors also pay for storage, insurance and dealer margins, and wine bought in a good year must still find a buyer with the same taste years later.
The lesson: Assets whose price depends on one group of buyers are vulnerable when that group's appetite changes, and wine is no exception to that rule.
$1,000 invested at the start of each year
| Bought in | Price then | Worth today | S&P 500 would be | Multiple |
|---|---|---|---|---|
| 2005 | $100 | $2,800 | $5,763 | 2.8× |
| 2007 | $200 | $1,400 | $4,789 | 1.4× |
| 2008 | $250 | $1,120 | $4,626 | 1.1× |
| 2010 | $280 | $1,000 | $6,071 | 1.0× |
| 2012 | $300 | $933 | $5,312 | 0.9× |
| 2015 | $250 | $1,120 | $3,301 | 1.1× |
| 2018 | $320 | $875 | $2,519 | 0.9× |
| 2020 | $300 | $933 | $2,092 | 0.9× |
green = beat the S&P 500 · red = lost money
Best entry point in our set: 2005, turning $1,000 into $2,800. The S&P 500 from that same year: $5,763.
Now try it without hindsight. The wheel decides the year and the asset class, you pick the position, ten seconds a pick, and we simulate to today. Fine Bordeaux (case) is one of 258 positions on the wheel — including the ones that went to zero.
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