Jewellery price growth outshines classic cars as luxury investment
AUTHOR: Courtney Goldsmith
Jewelry caught the eyes of investors over the past 12 months as price growth for pearls, diamonds and gemstones overtook that of classic cars.
The Knight Frank Luxury Investment Index (KFLII), which tracks the price growth of 10 luxury investment sectors, found classic cars, which have dominated the rankings for the past few years, reversed into sixth place with average prices rising just two per cent in the year to the second quarter of 2017.
Jewellery prices were sparkling on the other hand, rising four per cent in the period.
It was wine, however, that led the index as the top performer with price growth up 25 per cent thanks to strong growth in the key Bordeaux, Burgundy and northern Italian markets. Art came in second place with seven per cent growth, followed by a tie between jewellery, coins and watches, all up four per cent.
The overall index rose five per cent in value over the 12 months to the second quarter, outperforming safe-haven assets like gold and London property.
Over the past 10 years, jewellery has risen in value by 142 per cent. Pearls remained the top performer, up 282 per cent across the last decade, but their growth is starting to level out and more modern jewellery, especially pieces from the Belle Époque and Art Deco era, are starting to set the pace, rising 93 per cent across the last decade.
This year coloured gems had their moment with the world record being set for price per carat for a green gemstone when the 18.04-carat Rockefeller emerald sold for $5.5m at auction.
Andrew Shirley, who compiles KFLII, said:
The first quarterly Liv-ex liquidity rankings
Understanding liquidity is just as important to investors in fine wine as it is to investors in financial markets. In equity markets, liquid investments often trade at valuation premiums to illiquid investments. Similarly, the more liquid an investment in fine wine, the easier it is for an investor to build or exit a position quickly with less risk and lower cost.
As with other investments, a variety of different metrics can be used to measure liquidity. Liv-ex has decided to focus on one of the simplest – traded value – which provides a good indication of how much of an asset can be converted into cash within a given time period.
Liv-ex will be updating this ranking quarterly, to help track what is moving in the market.
The ranking is based on a 12-month moving average of trade values. For instance, the ranking of Lafite 2014 for Q3 2017 is based on an average of the total traded value of the wine between the end of September 2016 and the start of October 2017. Once the averages have been calculated, the wines are then ranked in descending order from largest to smallest.
Traded value is not a perfect measure of liquidity as it is biased towards wines with a high value per case, that might have otherwise been considered ‘illiquid’ if measured by another metric. However, as Liv-ex’s liquidity rank is merely gauging the amount regularly turned into cash on the Exchange, this bias to high value wines is mitigated.
It should also be noted the liquidity for any given wine captured in the ranking is descriptive not prescriptive. The nature of the wine market means that large deals occur sporadically, and at the right price most wines can be sold in volume with ease. This is another reason why an average is used, to smooth out any unusual monthly differences that might have occurred from large, infrequent transactions.
The composition of the ranking reflects the importance of certain wines within the secondary market. 42% of the table is comprised of First Growths, 14 of which are vintages of Lafite Rothschild. Not only that, but 11 of these vintages have moved up the Liquidity rank in past three months, reflecting a greater value of these wines traded within Q3.
Another recent trend has been the increasing liquidity of wines that have recently become physical from the 2014 vintage. Haut Brion 2014 has jumped 358 places in the last quarter. Nor has this been limited to Bordeaux wines alone. Sassicaia 2014, which gained 191 places.
Floyd Mayweather shows off wine and watches in £18.9m
Floyd 'Money' Mayweather is the richest star in the history of boxing, having reportedly become the first fighter to earn over £1bn in the hardest game.
After 21 years in the paid ranks, the 40-year-old is enjoying retirement following victory in his £350m mega-fight with Conor McGregor last month.
And Mayweather, who grew up amid poverty and drugs in Grand Rapids, Michigan, has been showing off his wine and watch collection in the Beverly Hills mansion he recently bought for £18.9million.
Read more: http://www.dailymail.co.uk/sport/boxing/article-4898234/Floyd-Mayweather-shows-Beverly-Hills-castle.html#ixzz4t7kptOUH
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The 40-year-old is normally based in Las Vegas, where he lives in his extraordinary 'Big Boy Mansion'. He also owns a massive property in Miami which cost a reported £5.69million.
Now, in the neighbourhood famous for the glitz and glamour of its A-list residents, Mayweather is enjoying a life of luxury in the 15,096 square-foot, six bedroom house next to the famous Beverly Hills Hotel.
'Money' showed off his extensive glass-faced wine cellar as well as his remarkable array of jewel-encrusted watches.
Read more: http://www.dailymail.co.uk/sport/boxing/article-4898234/Floyd-Mayweather-shows-Beverly-Hills-castle.html#ixzz4t7ksmyOZ
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Smallest harvest in France since 1945 – 10 things to bear in mind
The 2017 harvest in Bordeaux is forcast to be the smallest since 1945. In the post below, Bordeaux grower, winemaker and writer Gavin Quinney (@GavinQuinney) offers wine lovers 10 things to bear in mind when considering the figures.
When Bordeaux sneezes, France catches a cold. As the white harvest begins at leading chateaux this week, and before a red grape has even been picked, here’s an update to the one statistic that the 2017 vintage will be remembered for: it’s a shockingly small crop, which in Bordeaux is down to that sharp frost in late April.
France saw a small harvest in 2016, in part down to frost and hail in other parts of the country, but the overall output was saved by Bordeaux having its biggest crop since 2006, with 577 million litres being produced. There was no frost or hail of any consequence here in 2016 and the all-important flowering was sensational. I’ve rarely seen so many healthy bunches and the 10% increase on the 10-year average of 529 million litres was no surprise. And the quality, thanks to a bone dry summer, was undoubtedly there too.
2017 is a different story though. It’s another smallish vintage across France – and across Europe too, notably in Italy – but the likelihood of a much reduced crop in Bordeaux, which covers 25% of all Appellation Contrôlée vineyards in France, has a significant impact on the figures. It’s early to say but if we guess at a Bordeaux yield of around 320 million litres, that’s 40% down on the 10-year average and 45% down on last year. (It could, I think, be worse than that.)
The officials at France Agrimer have recently updated their forecast of national volumes and have been widely quoted by Agence France Presse. “The French agriculture ministry said output was expected to total 37.2m hectolitres – 18% less than 2016 and 17% below the average over the past five years. The 2016 harvest was one of the poorest (sic) in 30 years. This year’s harvest will be “the smallest since 1945” – and so on.
Mix together a feeble crop, dodgy weather and the increasingly weak sterling and we’ve got a perfect storm brewing. “Cost of European wine is set to soar after extreme weather decimates crops, with French officials warning it could be the worst harvest since WWII” was the headline in the Daily Mail on Monday 28 August. “Bad harvest will hit wine lovers in pocket” was the shorter option for The Times.
DRC: First Growth Ratio—Refusing to Revert
The price of wines from the Domaine de la Romanée-Conti are showing no signs of slowing down. Unlike the top wines of Bordeaux, the Burgundian icon didn’t suffer at the end of the Asia-led boom for fine wine from summer 2011 onwards; instead prices continued to move upwards—rapidly. Although the First Growths have been on the move for the last year, DRC has continued to outpace them.
The chart below shows the 10-year relationship between the average prices of the wines in the Liv-ex Fine Wine 50 (the Bordeaux First Growths) and the Domaine Romanée-Conti Index (composed of DRC’s six brands)—dividing one by the other to create a ratio.
Across markets, over the long term, prices tend to revert to the historical mean. Yet the last time this happened here was over four years ago in June 2013. This led Liv-ex to consider in February 2016 that DRC prices looked overstretched. At the time Liv-ex anticipated an imminent correction, which proved to be briefly correct as the ratio fell slightly in Q1 of 2016. This turned out to be only a minor blip; subsequently the DRC: First Growth ratio has reached a high of 7.16: 1 at the end of July 2017, having risen for the last 16 months. This recent high is 2.1 standard deviations above the mean for the 10-year period, which stands at 4.75:1.
SAUTERNES 50 TAKING TURN FOR THE SWEETER?
SOURCE: THE DRINKS BUSINESS
AUTHOR: RUPERT MILLER
As noted by Liv-ex, the Sauternes 50 used to outperform the broader Bordeaux 500 index until 2009 when the latter took off and the former ran flat for a while and then suffered several years of decline from 2011 to 2016.
More recently, however, its fortunes have taken a turn for the better and so far this year it has risen 7% – which is better than the 5% seen by the Bordeaux 500 as a whole.
Of all the sub-indices on the Bordeaux 500, only the Second Wine 50 has performed better.
Of all the sub-indices on the Bordeaux 500, only the Second Wine 50 has performed better
There has been some good activity on older vintages of Yquem of late Liv-ex reports and Yquem and Rieussec were high up in the list of best-performing labels of the year so far.
Coutet however is the best-performing Sauternes in the Sauternes 50 while Climens is the worst – and it is the worst-performing label of the entire Bordeaux 500 at this point in the year.
THIEVES USE PARIS CATACOMBS TO STEAL WINE
Source: The Drinks BUSINESS