
Burgundy wine investors have beaten the stock market - known
https://www.economist.com/graphic-detail/2019/08/24/burgundy-wine-investors-have-beaten-the-stockmarket
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Arbalest
Anything with low volumes isn't fair to compare, you can pretty much always
pick something that "beats" the "market"

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pinky1417
And even with high volumes, you can always pick something retrospectively that
beats the market. It's not useful to look back and say, for example, if you
put money into X stock at Y time you'd beat the market. You can't go back in
time so it's not useful.

What is useful is to figure out what, today, may predict outperformance
tomorrow. In choosing fund managers, it's not enough to choose managers who've
outperformed in the past - that's not in itself predictive of the future (same
is true for home prices as we learned in 2008, individual stocks, etc.). But
other characteristics might be predictive, like choosing fund managers who
follow a true "value" approach to stock-picking: finding companies with a
competitive advantage and buying them below their intrinsic value being one
approach to value.

See Warren Buffett's 1984 article "The Superinvestors of Graham and
Doddsville" for the best example I know of distinguishing chance price rises
from predictable rises: [https://www8.gsb.columbia.edu/articles/columbia-
business/sup...](https://www8.gsb.columbia.edu/articles/columbia-
business/superinvestors)

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CogitoCogito
> It's not useful to look back and say, for example, if you put money into X
> stock at Y time you'd beat the market. You can't go back in time so it's not
> useful.

It's not only not useful, it's totally obvious some things will always beat
the market. "Beating the market" is really just "beating the average". If
there's nothing that beats the average, then it means that all stocks do
exactly the same thing...

But yes like you said finding things that beat the market in hindsight
certainly isn't very useful unless you can learn some specific strategy (e.g.
insider information) that was used and employ it yourself (if you choose).

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levosmetalo
Stock market means average. Every "investment" that is slightly over average
stock market returns for some time beats the stock market in that timeframe.

Now, doing that consistently over and over again is something to strive to,
but not many other investment in the same risk category do it.

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mrfredward
Office pools buying lottery tickets can beat the stock market...once in a
while.

If you aren't doing anything economically useful...don't expect returns
greater than inflation in the really long run.

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soVeryTired
> If you aren't doing anything economically useful...don't expect returns
> greater than inflation in the really long run.

I think the British aristocracy would like a word with you.

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dandelany
Collector's items are like companies... Many of them beat the market for many
years, until, one day, they don't!

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mitchtbaum
Therefore?

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Scoundreller
Sell before the music stops!

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forgingahead
So has Bitcoin -- so what? This is a useless article, written for content
filler rather than any sort of useful, long term educational information.

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chosenbreed37
> This is a useless article, written for content filler rather than any sort
> of useful, long term educational information.

I guess it was either this or blank page. The latter is less likely to grab
your attention. Maybe "fillers" have some use after all :-)

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dejv
Big problem with wine collections is transfering stock into money. Selling big
stashes is not going to be easy and cheap.

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audiometry
And also paying for storage while holding it.

And also, what is total notional value of all burgundy in the world? 1bn?
That’s nothing in scale with other markets.

Dumb article.

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dejv
Oh yeah storage is huge part of what determine final price: for investment
grade wines you need to proof that you store it in proper place with reputable
vendor. those places are not cheap and will eat into your margin.

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neonate
[http://archive.is/bAqJU](http://archive.is/bAqJU)

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outside1234
So did beanie babys... ... until they crashed.

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Scoundreller
Nobody drinks their beanie babies.

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Scoundreller
Yabbut, I can buy $1m in stocks for $9.95, and that includes storage costs and
insurance against fire/quakes/storms. And sell it tomorrow for $9.95.

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acchow
What brokerage are you using? That sounds incredibly expensive for stock
trading.

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lozaning
I suppose if I was buying a million dollars worth of stock I might actually
care about getting front runned (front ranned?) on RobinHood and would
consider paying a higher fee if it would mitigate that.

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usmannk
Are you implying robinhood is front-running trades? That's an extraordinary
claim indeed. And even if they _were_ , it would not impact you in this
particular case.

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spullara
Not sure if this is frontrunning exactly but I think the point is that they
make money by marketing your trades.

[https://seekingalpha.com/article/4205379-robinhood-making-
mi...](https://seekingalpha.com/article/4205379-robinhood-making-millions-
selling-millennial-customers-high-frequency-traders)

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benj111
That's not front running at all.

In fact it's the perceived lack of front running risk by the buyers and
sellers that make Robin Hood more valuable to Market Makers.

A big institutional shareholder may very well know more than the Market Maker
at the other end of the trade, that's a risk for them if the market moves
against them. Robin Hood investors are far less likely to have that kind of
information so there isn't the same risk that market makers will get shafted.

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semi-extrinsic
> In fact it's the perceived lack of front running risk by the buyers and
> sellers that make Robin Hood more valuable to Market Makers.

Basically, you get a discount trading on Robin Hood, because the people taking
the other side of the bet know that you're probably not making a smart move.

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benj111
Last time i explained the concept I was even less polite and got downvoted :)
but yes

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ukoki
> Collectors who have drunk most of their Pinot already may need another glass
> after seeing the result

Don't get high on your own supply

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mruts
On a risk adjusted basis? I seriously doubt it.

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tuesdayrain
Seems like a lot of people here are using the term "beat the market" to mean
"had higher nominal returns than the market" which is not a very useful metric
without taking risk into account.

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bumby
I wonder if wine experiences the same price volatility as stocks. I can
speculate reasons why they wouldn't and would thus still provide better risk-
adjusted returns but I really don't know.

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mruts
Maybe they wouldn’t be expressed as annualized volatility and only expressed
as long tail risk: blight, climate change, etc.

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psadri
Note to self - buy luxury goods stocks after the next stock market crash.

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ThrustVectoring
Manufacturers of luxury goods won't be mispriced in a way you can exploit,
even after a stock market crash.

Instead, what you want to buy is hobbyist and other niche goods, assuming you
have cash through a recession. As people cut back their budget, there tends to
be a glut of highly discretionary stuff in the resale market. Like, my
brother-in-law got absolutely fantastic prices on model airplane kits in the
aftermath of 2008.

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benj111
"Manufacturers of luxury goods won't be mispriced in a way you can exploit,
even after a stock market crash"

Why not? I would expect luxury goods manufacturers to suffer during a
recession, and I would expect the stock price to follow suit.

I don't think it's a mispricing as it's reflecting to reality on the ground,
nevertheless I would expect them to bounce back after the recession. So it
does seem to be an opportunity you can exploit.

Your second paragraph seems to have shifted to a completely different asset
class. No doubt there was fantastic prices on model aircraft kits, but you
need to know the market, and it isn't apparent to me whether the model
aircraft kit market will behave the same the next time. Plus it's more risky.
If I buy a stock, I don't have to worry about it being fake, getting damaged,
I can sell trivially at the touch of a button.

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goatinaboat
_I would expect luxury goods manufacturers to suffer during a recession_

Well, you can look at say Rolex to see what happens. They suffered yes but
they didn’t cut (list) prices because that would undermine their status.
Instead they launched Tudor as the budget-Rolex brand and that seems to have
worked OK (for the company anyway). Luxury goods manufacturers often have long
histories and are able to look further ahead than a single economic cycle.

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benj111
List prices aren't stock prices the gg(?)p was talking about buying luxury
goods _stocks_ , not luxury goods themselves.

Plus the 2nd hand market would be more relevant to what you're suggesting.

Edit: Spelling

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bumby
Speak of economics and wine, one of the clearest examples of non-rational
economics behavior was detailed by Richard Thaler regarding an economist wine
collector.

[https://www.aeaweb.org/articles?id=10.1257/jep.5.1.193](https://www.aeaweb.org/articles?id=10.1257/jep.5.1.193)

