All posts tagged: featured

Drinker’s Digest: Intro & Decanter on 23/06

The internet of wine is vast: tasting notes, news, gossip, prices, analysis and buying advice. I feel that I can’t read as much of it as I’d like to. Like you I have habits and filters to cope with the quantity: bookmarks, favorites, online networks and communities. And so I am part of the tangled world-wide web of words. The internet of wine is rich, yet we are creatures of habit. It takes time to discover a source of knowledge, to feel and become familiar with its grooves. It’s easier to roam well-known territory, to tend my bookmarks, look out for trusted ‘likes’, like the one above. When I do venture out into unfamiliar undergrowth, the journeys are tangled and haphazard. Tabs accumulate with trails followed and abandoned. It would be easier with a map. I could scan its features in seconds and plan my route. I could focus my journeys and I’d be able to see more in less time. In previous posts we visualized tasting notes. We ran wine-reviews through algorithms that look for …

Chocolate and Fennel?

This is Models vs. Reality, Part 2. I looked at what our tool has to say about chocolate as a wine descriptor and I was a bit surprised by the result. Top 10 chocolate related descriptors in critic wine notes cocoa coffee pepper tar mocha licorice truffle fennel vanilla espresso I would never have made an association between chocolate and fennel. It turns out that only a few writers make this connection. You can verify this yourself. For example on jancisrobinson.com you find that there are only six tasting notes including fennel and chocolate. Out of these, five are written by Tamlyn Currin and one is by Richard Hemming. None of these notes are in our dataset, so it’s a good test to look at them in a bit more detail. Chocolate and fennel, really? Richard Hemming’s description of an Alvaro Palacios Priorat (65% Carignan) features “leather and fennel aromas” with “chocolate-covered cherry”. Tamlyn Currin describes a “delicious mouthful of sweet red pepper and dried herbs, liquorice and chocolate” followed by a long finish with “a thrill of fennel and aniseed” in a …

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, Post 4: Relative Price Lines

Our second tool consists of straight lines of best fit drawn through normalised prices of traded vintages. We call these lines Relative Price Lines (RPLs). As we shall see, vertical shifts of the RPLs over time indicate changes in the overall state of a wine’s market, while the steepening or flattening of a line over time represents changes in relative value across vintages. Lafite-Rothschild Let’s start with Lafite as a reference point. Our focus is on movement (size of the parallel shifts and the flattening/steepening). Following the 1996 RPL (red line at the bottom left), there is a large upward shift over the first five year period followed by a much smaller shift in overall price levels from 2001 to 2006. There is then an extreme shift from 2006 to 2011, from market trough to market peak (a development we observed from a different perspective through the Channel Spread). We then see a downward shift to 2015 price levels. Next, looking at the slope, we find that it is relatively stable at around 0.08-0.1, but the line steepens in 2015 …

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 …