Buying spirits as an investment
The stock market has always shown “volatility” (market-speak for “nobody has any idea where the hell it’s doing”). Thus a market for physical items as investments has grown in the past couple of years, especially since the September meltdown.
Early in October, the Wall Street Journal ran an article called “When stocks tank, some investors stampede to alpacas and turn to drink.” The first line is about a man named Andy Pick who bought $120,000 in champagne in hopes of sitting on it and making a profit. Most people with tangible assets pick out art, gold or silver, but a small minority like Pick want spirits.
In a sign of the times, Scottish distiller Laphroaig is marketing its 25-year-old Scotch-whiskey along with fellow highland distiller Ardmore’s 30-year-old whiskey as “alternative investment opportunities for those looking to revitalize their spirits portfolio.” After all, “With interest rates fluctuating and the stock market riskier than ever, Laphroaig and Ardmore are two uncompromising liquid assets worth exploring.”
On one hand, it’s impressive that Ardmore and Laphroaig are confident enough in their whiskeys to believe they’re destined to be collectibles. On the other, what does it say about a distiller that’s purposely making a product not to be sipped and enjoyed but stored away in a dark room for years?
Laphroaig says its bottle retails for $499 because it’s the first time it’s been sold in America and because it’s limited-edition. The problem is that Laphroaig 25-year-old is not limited edition in the United Kingdom, where it’s been sold for years. A quick Google search found a shop in Britain with Laphroaig 25-year-old bottles selling for as low as $225 with shipping to the states. (That’s based on today’s currency rates.) Just like that, your $400 investment is devalued 55 percent.
The marketing ploy is clever but distillers like Laphroaig and Ardmore should focus on making whiskey people want to drink. The market will decide what whiskey is collectible or not. To paraphrase W.C. Fields, I’d rather have risky stocks than whiskey stocks.
