The Emperor and his clothes.
Lady Penelope: ‘Parker, take off my bra!’
Parker: ‘Yes, m’lady.’
Lady Penelope: ‘Parker, take off my panties.’
Parker: ‘Yes, m’lady.’
Lady Penelope: ‘Parker, take off my stockings.’
Parker: ‘Yes, m’lady.’
Lady Penelope: ‘And don’t ever let me catch you wearing my underwear again.’
Investors of a certain age will be familiar with the old joke. But the question is: does it have any resonance after the recent 2006 retrospective?
On Parker
As we all know, since the 1982 vintage, the most influential critic in the fine wine market has been Robert McDowell Parker Jr.– the ‘Sage of Baltimore’.
People rage at this to varying degrees. Those who regard fine wine investments as the scourge of society, for example, dismiss him as a charlatan. Those who can’t bear the idea of one person being so influential produce a variety of excuses to look the other way. And those whose tastes are more aligned with James Suckling or Jancis Robinson perhaps, to name but two others, deny all evidence that his views carry any more weight than anyone else’s.
Unfortunately, the evidence proves otherwise. As we have established on countless occasions, pricing in the fine wine investments market is remarkably coherent. For those who think it follows the ‘greater fool’ theory or someone sticking a finger in the air, think again.
Wine investment analysis
Here at Amphora Portfolio Management, we spend a lot of time analysing pricing in the market place, as APM clients know, we operate a rather sophisticated fine wine investments algorithm which gives us as clear a view as is available anywhere of relative value.
This algorithm comprises several variables that wines are priced against. Our back-testing of the impact of these variables reveals that Robert Parker’s opinion carries four times the weight of all other critical opinion.
Recently, he re-tasted the 2005 vintage on its 10th anniversary, and undeniably his revisions led to significant price changes of the wines concerned. What upset many people, though, was that his upgrades were principally confined to the Right Bank.
One of the reasons for the excitement and anticipation in the wine investment world ahead of this particular ‘retrospective’ was that for almost every other critic, 2006 was an exceptional year. Parker had originally turned his nose up though, on the basis that it was overhyped, and ‘too risky’ to judge in the shorter term, due to the excessive tannins (the highest ever recorded in Bordeaux). Yet in recent blind-tastings and other isolated occasions, his opinion appeared to have shifted towards the centre. Perhaps it wasn’t so bad after all.
Towards the end of last year, one or two wines made an early bolt, including Mouton and Mission Haut Brion – both Left Bank wines. The market became all aflame with excitement, but Parker had another surprise up his sleeve. The perfection was actually confined to St Emilion!
Is it all over?
Since these earth-shattering disclosures were made public, there has been increasing dissent about their validity. Has his palate gone? Is he getting too old? As he’s aged, his ability to detect certain flavours has been impaired. Well, we all know you can’t taste anything acidic after you’re 60.
The market is the market, however, and the evidence shows that the Liv-ex 50 has retreated a bit over the last couple of weeks. Is it too much of a coincidence to suggest that this betrays a bit of disappointment at the failure to be upgraded for those very Left Bank wines that comprise the Liv-ex 50?
In our view, it’s a bit too early to put the old man to bed. He has withdrawn from en primeur tastings, and who can blame him? At his time of life, he should be enjoying wines at the peak of their performance. He will continue to pass on the baton, we believe, but for the time being it is too early to talk about this particular emperor having no clothes.
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