While the wider economy tanked in 2008, then struggled thru 2009, Michael Wigley’s investment fund earned 32.6%. In the same period Wigley made backers cash, the Dow Industrial Average lost ten percent and the average home price dropped 4.1%, according to the nation’s organisation of Realtors.
Wigley doesn’t run a Madoff-style Ponzi scheme. He buys and sells wine. Is wine a good investment? “Yes is the short answer,” exclaims Wigley. Wigley runs Bacchus Partners, LLC, the 1st and only wine investment fund in the U.S. He calls wine, “a difficult asset sector that is information based like art and other collectibles.” But Wigley thinks he is taken something complex and made it straightforward, by developing a system to grade each wine. Developed over twenty-five years, the system investigates twenty-five different variables to forecast the possibility of any bottle of wine climbing in value, maintaining its price or decreasing. Therefore for instance, Wigley’s grading system gives a bottle of 1982 Castle Lafite-Rothschild an A+. Wigley claims it’s now in its drinking window and he envisions it has twenty to 30 years life left in it. When it first became available Wigley acquired a bottle of 1982 Lafite for $29.77 a bottle.
At the end of Jan 2010 he invested in more at $3,000 a bottle. He is saying it’s still a sound investment as the 50-year average for fine wine appreciation is 15% a year. That suggests if that $3,000 bottle of Lafite is still drinking well in thirty years it may sell for $198,635. It is a shockingly massive sum, and other wine fans say it’s not very likely to cost that much.
But think about this : those bottles Wigley purchased in 1983 have appreciated at 18.6% yearly. As he looks for the following 1982 Lafite, Wigley’s rating system considers the quality, quantity and distribution of the wine. “A wine can be great but if no one’s ever had it, it is not a good investment,” he is saying. He points towards Kitchak Basements ‘ 2005 Adagio, it won the Double Gold Medal at the 2008 San Francisco Global Wine Competition. Though it was made in small quantities. So although it is a great wine, Wigley wouldn’t call it a sound investment because just a few folks have attempted it and it’s tough to get.
Still he announces, “I’ll pick up some cases for the fund on the hope it gains value.”.











