Latour and Sassicaia

25.04.2015
Over the next few weeks we will see plenty to keep us interested in respect of the 2016 vintage, indeed many of the critics have already sat in judgement. We will no longer have the pleasure of the diametrically-opposed views of Robert Parker and Jancis Robinson to gargle over, but in typically regal style Neal Martin, heir apparent to the Parker mantle, is keeping everyone waiting. Rumour has it this week we will be honoured with the Wine Advocate scores.

At Amphora Portfolio Management we spent a few minutes scrutinising the scores already released, on the basis that some common ground might reveal itself, but such is the nature of the collective critical beast that it can usually find little to agree with itself about. That said there appears to be relative unanimity that the First Growths on the Left Bank and Petrus and Le Pin on the Right have somewhat excelled themselves, sufficient no doubt to see the producers rubbing their hands at the prospect of some chunky release prices.

As we highlighted last week, at the current time we think this augurs well for certain back vintages, and one in particular is winking furiously at us this week: Latour 2008.

Latour 2008 sits in the unfortunate position of preceding the “double top” in 2009 and 2010, but enjoys a 95+ from Parker in 2011 and 96 from another of his protegees, Lisa Perotti-Brown, in 2012. What is interesting to ourselves at Amphora though is the fact that, against a rising market, it has declined year to date by a couple of % to £4,400. Not only that, but it is highly favoured by our proprietary algorithm.

This algorithmic confirmation is very important, because you could argue that this year’s under-performance merely reflects a really good second half of 2016:

A look further back to the 5 year view, though, suggests that H2 2016, in turn, simply reflected earlier travails:

You may find some commentators suggesting that Latour 2008 is a “buy” because it has reached over £9,000 in the past:

This is very loose analysis indeed, I’m afraid, because not only is past performance no guarantee of future performance, as the regulator of all investment products* never tires of reminding us, but we would argue that the lofty heights of 2011 reflected a significant speculative element, rather than natural underlying demand. You simply cannot say that the market was happy to pay this elevated price because there is insufficient data, particularly from a volume perspective, to support that assertion.

What we do argue, however, is that relative to other Latours readily available in the market place, the 2008 vintage is inexpensive at current levels, and so we are happy to recommend acquisition. In truth, Latour tends to score decently in most vintages. Comparable to the 2008 are the 2006, 2004 and 2001 “off vintages”, but the overall vintage scores in those earlier years are 87 and 88s, whereas the 2008 sits at 91. Hardly stellar, perhaps, but certainly superior, and as we have suggested in the past, 2008 is a vintage often overlooked by the market place because it is better than “off”, but not quite “on”, except in Pomerol, and therefore open to misinterpretation.

Sassicaia 2010 has also trended down a tad this year, even though many Amphora clients have enjoyed the ride up from the £1,100 mark. Without again reaching the heights of perfection since the remarkable 1985 vintage, Sassicaia has had a highly creditable decade or so, scoring mid 90s and occasionally, as in 2006, 2008, 2009 and 2010, reaching 96. Its vintage scores also tend to be upper/mid 90s.

Sassicaia produces about 15,000 cases per annum, roughly the same as Montrose or Leoville Las Cases. It is predominantly Cabernet Sauvignon too, so it has the same aging profile as a Left Bank Bordeaux. What should interest the investor, though, is the price range.

The costliest Sassicaias are clearly the 2006 and the 2004, (which only scores 93 points). Credit is being accorded to age. This is obviously very encouraging for buyers of more recent vintages. The most direct comparable to the 2006 is the 2009. Both wines score 96 points, and in each case is the Bolgheri vintage score 97. The weighted average score for all the critics sees the 2009 outscore the 2006 by 95 to 93. Yet the market place is according the 2006 a premium over the 2009 of fully 35%.

Similarly the 2013 vintage. At 97 points this is the best scorer since the aforementioned 1985, yet it is available for purchase at £1,300. Those investors with a longer term view will be interested to learn that you have to pay around £2,000 A BOTTLE for the 1985 these days.

In general terms it is fair to say that Bordeaux wines have led the way in recent months, but when the market is prepared to cough up bargains like these Super Tuscans we believe investors should be prepared to take advantage.

Buy Sassicaia 2009 and 2013, and don’t forget the Latour 2008!

 

·  Please remember that fine wine investment per se is not regulated. The only area which is covered by regulation is storage because the bonded warehouse system is regulated by HMRC.