All posts tagged: Haut-Brion 2010

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 …

Wine investing and trading III: Supply

There are several factors which determine trading activity within the fine-wine market. The main factors include inventory level and market sentiment. The inventory level is a measure of the number of bottles of a particular fine wine available on the market while the market sentiment is a measure of how receptive the wine is at the demand side. At a more fundamental level, supply and demand governs the mechanics of the market. However, real supply and real demand are unobservables and this in itself raises an empirical challenge. To this end, WineQuant have developed a quantity called the WQ Inventory Value as an estimate for supply using trading data available from Liv-Ex. This WQ Inventory value is calculated based on two variables: the number of bottles of a particular wine available in one particular number and its monthly averaged traded price. In this blogpost, I shall present the WQ Inventory Value for two wines, Haut-Brion 2010 and Lynch-Bages 2010 between October 2012 and January 2016. There are two main reasons as to why these wines were chosen. Firstly, Haut-Brian …