All posts tagged: Brexit

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 …

Brexit in a glass

One week on… what happened? Through an exercise in good taste, wine may help us to understand Brexit related attitudes: An Isomap reduction of Brexit related wine-tasting vocabulary shows power orbited by seductiveness, pit, cut, hole and loose. This display is framed laterally by a taste for what is expensive and complex. Away from power it gets sickly, disjointed, sour. Note in passing that the right looks exciting and energetic to some. Complexity settles and sinks, the top is overwhelmed. (If you’re new to this series, the introduction may be useful.) When viewed through a PCA lens, power lies closer to austerity. In both pictures, there’s some bitterness over access. Whatever the reasons May be, there appears to be a seductive connection between  intrusive  and  borderline. Flavours of coffee and alcohol conjoin to cover an unpleasant situation. We form natural associations between words and these associations crop up in wine-tasting notes and in politics. Good taste is a transferable skill. I suspect these word-maps become increasingly easy to understand as you work your way through a borderline English white or an edgy continental red. Cheers!   MK@WineQuant  

Wine investing and trading IV: Market sentiment and activity

In the penultimate blogpost of this series on wine investing and trading, I shall discuss two metrics which we have developed here at WineQuant to characterise market sentiment. The first metric is called the WQ Spread. It takes into account the monthly highs, lows and average trading values for a particular wine. It is designed to summarize the state of market sentiment. Market sentiment is healthy when the WQ Spread is stable over a sustained period of time. The way we see it, market stability means solid trading activity. On the other hand, volatility in the WQ Spread signifies negative sentiment. In this case, we would expect little or only sporadic activity. Let’s look at examples of these two scenarios, using Lynch-Bages 2010 and Haut-Brion 2010 as our pin-ups. An example of the WQ spread over time is shown below. This is Lynch-Bages 2010 between October 2012 and January 2016. Looking at the development of the WQ Spread over time, we see that market sentiment for Lynch-Bages 2010 has been positive and stable except for a blip in June …