Does the 20% p.a. strike one as a credible return on an investment-grade wine? Why or why not?

Question

Can someone please clarify why?

Answer 1

Turns out wine has actually not been a bad investment in recent years (in absolute terms...relative to stock market it has seriously underperformed).

However, 20% is crazy.

https://www.wineinvestment.com/wine-investment/market-performance/

The two main reasons 20% is a crazy return? 1) The asset does not generate recurring revenue (and has no potential to, unlike land or a company) 2) Scarcity only increases slowly over time

Answer 2

I would agree that it is not credible.

The only reason to justify 20% would be if there is unexpected demand increase (say a certain label, varietal, vintage, or combination thereof drastically increases in popularity for some reason) or if there was some risk involved. Neither are likely.

If everyone could predict the price rising 20% YoY, the initial purchase price would be much higher.

Answer 3

As quick answer, of course, is great "something a bit more than $200, we can assume $250" (you can say here $240, $23... (read entire answer)

As quick answer, of course, is great "something a bit more than $200, we can assume $250" (you can say here $240, $230 or anything higher than 200 but lower than 300, use common... (read entire answer)

Answer 4

You are right, don't be ever afraid of asking the data that you need. I suggest to deline your strategy at the begin... (read entire answer)

You are right, don't be ever afraid of asking the data that you need. I suggest to deline your strategy at the beginning of the case stating the data that you need: the intervi... (read entire answer)

Answer 5

Hello Sujay, Average consumption is indicated at point 3 2 bottles per week to drink, plus 2 per month to gi... (read entire answer)

Hello Sujay, Average consumption is indicated at point 3 2 bottles per week to drink, plus 2 per month to give away as gifts Amount available to spend is indicated... (read entire answer)