That's really true of many small assets. I collect historical collectibles and my purchases a decade ago have done extremely well just based on a lazy "buy at a price you can't so no to, then hold" strategy. On a basis of probably $2.5k I've had the average asset appreciate a ballpark-guess ~100%, which outperforms the DJIA over a similar timeframe.
Is that the right valuation? Yes. Is it liquid in the sense that I could get cash for it tomorrow? Nope. What are the storage costs? On the scale I'm working at - a lot of manual labor and some home shelf space.
It's not a scalable strategy. Could I park a couple grand, maybe tens of grands into it per year? Yes. Could I park millions into it? No way, that would have a noticeable impact on my purchasing markets.
Of course - in the Plutonomy strategy [1] [2] [3], it's wealthy buyers who really determine the value of assets. And they like good wine.
This is true. The one thing about wine compared to other collectibles is wine is perishable. It really is much more like speculating on agricultural commodities like corn or pork bellies than buying other collectables like antiques or artwork.
The super rich (and the not so super rich like myself) do like good wine. The problem with wine is once you know and appreciate good wine it is hard not to spend to what you can afford. I guess I am lucky in that I can find at least a few wines I like under $20.
Is that the right valuation? Yes. Is it liquid in the sense that I could get cash for it tomorrow? Nope. What are the storage costs? On the scale I'm working at - a lot of manual labor and some home shelf space.
It's not a scalable strategy. Could I park a couple grand, maybe tens of grands into it per year? Yes. Could I park millions into it? No way, that would have a noticeable impact on my purchasing markets.
Of course - in the Plutonomy strategy [1] [2] [3], it's wealthy buyers who really determine the value of assets. And they like good wine.
[1] http://delong.typepad.com/plutonomy-1.pdf
[2] http://delong.typepad.com/plutonomy-2.pdf
[3] http://delong.typepad.com/plutonomy-3.pdf