All posts filed under: Essay

On Brexit and the international fine wine trade

Alan Livsey, an Oxonian on the FT’s Lex team has aptly started his wine-commentary piece on the FT as follows: “Fine wine does not take well to shaking – sloshing the sediments around the bottle only muddles the product inside”. There has been plenty of sloshing going around, as Livsey has noted in the same piece. There are tales of booms and busts, sticky prices and the likes. This is especially true when it comes to Bordeaux en primeur – a system that is very near the point of breaking, only to be saved from its brink of doom by a very good vintage. Even so, there are plenty of criticisms on early bottling, unfinished products and so on, which makes you wonder when will the barrage ever stop. But with cheap and abundant shell suppliers, I doubt the barrage will ever end. I am not here to discuss the limitations of the Bordeaux fine-wine market and its en primeur system. I am here to talk about Brexit and its implications on the UK fine-wine scene and the dynamics …

Wine Words to Data

It’s not always easy to find the wine market data you need. And even when you know where the data you need is, it can be expensive to get it. (If you’re ever stuck getting the data you require, let us know and we’ll help!) The secondary market for wine is fascinating! But there’s more to a wine than its price. Let’s take a step closer to the source. How about the fine line between sublime tasting note and, how can we put it delicately…  bullshit? That’s an area worth investigating. Luckily there is more free wine tasting data than you could usefully process. To tackle the wine word challenge, we’ve strengthened the WineQuant team with a NLP specialist. (All will be revealed in due course.) In the mean time, here are some introductory thoughts. Wise Words?* Conveying sensory impressions in words is difficult. Émile Peynaud (1912-2004), a Bordelais legend among oenologists and wine-writers remarked that “we tasters feel to some extent betrayed by language.” How can writers convey information about colour, sound and taste …

Data & Wine

We are delighted to welcome WineQuant associate Iqbal Hossain to the blog. Iqbal has eight years of experience in wine-data and IT, so read carefully! What is the difference between a Data and an IT professional in the Wine Trade? Eight years ago the answer to this question would have been none. For a long time they were expected to carry out the same roles and responsibilities in this industry. If someone was hired in a data role, they were by default assumed to be good with setting up printers, installing software and dealing with the blue screen of death, along with all of the other responsibilities that IT support has in an organisation. However, things have started to change. These days investment in wine requires a lot more data-driven intelligence and decision making. This is how some of the traders globally have started to think, but there are a lot more who still prefer the traditional way of trading and are as yet uninfluenced by technology. For some, resisting change is a natural instinct. For the majority of the wine trade …

Wine with Wiener

In the spirit of “everything is a remix“,  Blind Willie McTell (“I jump ’em from other writers, but I arrange them my own way”), the florilegium and, of course, wine, which we believe is the best example of the uniquely human capacity to mix and arrange nature to good taste: here are some thoughts on wine value, wine critics and the “façon” of wine. The following essay on wine’s value is adapted from Norbert Wiener’s The Human Use of Human Beings, the work of a visionary mathematical genius, which is once again strikingly relevant as notions of “Artificial Intelligence“, “Cognitive Computing“, etc., enter the imaginations of Davos-goers,  our newspapers and the stories we tell ourselves and each other: it’s the programme of Cybernetics reloaded, old wine in new bottles. Let’s squeeze it for what it’s worth. Information about a wine’s quality is fickle, for the amount of information communicated is related to the non-additive quantity known as entropy (we could say that entropy increases as the wine ages, styles change and fakes dilute the market) and differs from it by its …

In vino veritas

Ever since I moved back to Brunei in April 2015, I have made several trips to Hong Kong. I like Hong Kong very much – it is a vibrant city, filled with culinary delights at every corner. More importantly, I get to see and meet up with old friends I have there, some of whom I have been in close contact since we left a Quaker boarding school a long time ago. One such person is Herman Lam, General Manager of a wine merchant business which he founded back in 2013. We would catch up over very nice wines and delicious food. Hong Kong is a fantastic place to drink wines – especially premium ones. This is mainly due to zero duty and sales tax on wines passed by a former Chief Executive who always donned a fancy bowtie and was very fond of his clarets and cigars. The range of wines one can get and find in the local wine scene keeps expanding and improving. I’ve never failed to be captivated. One gem which I came …

Value & Risk in Fine Wine – Introduction

Image Link As 2015 fades into memory, WineQuant presents some thoughts on value and risk in the fine wine market, which may prove useful in 2016.  Value & Risk in Fine Wine, Post 1: The call for new tools In the fixed income, equity and commodity markets, practitioners use a range of standard visualization tools to think about financial quantities. In fixed income markets, the shape of yield curves indicates the time value of money. In equity markets, implied volatility surfaces provide snapshots of future price expectations and in commodity markets, forward curves indicate the relationship between cost of carry and current / future demand for an asset. Patterns of thinking develop around the standard tools used. Discussions about relative value, risk and uncertainty inevitably reference the common tool-set of the professional market participant. An advantage of a commonly held tool-set is that the salient characteristics of complex financial dynamics can be understood and communicated at a high level. A disadvantage of a common tool-set is that (unsophisticated) participants may rely on the received wisdom without a …