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Bottled profits
'Boutique' wines prove good buy for savvy investors

by Gregory J. Wilcox • Daily News Staff Writer
Oak Park resident Bill Kissane treats fine wine like some people do blue-chip stocks: He buy and holds.

Like 3- to 6-liter bottles of French and California reds.

"Three-liter (bottles) I think are a good investment but you can also have them for a dinner party of six to eight people," said Kissane, an engineer at Litton Industries Inc., on a recent weekend day as he inspected some giant investment-grade bottles at the Duke of Bourbon in Canoga Park and chatted with Bob Long, owner of Long Vineyards in the Napa Valley.

INVESTOR'S VINTAGE Many 1982s have appreciated more than 1,000 percent since their initial futures price.
Chateau	Initial Futures Price	1985	1998
Cheval-Blanc	$40	$69	$468
Ducru-Beaucaillou	$19	$43	$143
Haut-Brion	$38	$68	$240
Lafite Rothschild	$41	$75	$336
Latour	$41	$68	$416
Leoville Las Cases	$20	$42	$220
Lynch-Bages	$13	$25	$126
Margaux	$38	$68	$368
Mouton Rothschild	$38	$82	$450
Petrus	$63	$269	$1,363
Pichon- Longueville-Lalande	$14	$38	$240
SOURCE: Wine Spectator

The Nov. 30 cover of Wine Spectator provides a striking illustration of why some investors are adding cabernet and bordeaux to their financial portfolios. The magazine features two bottles of 1982 Chateau Petrus, a first-growth bordeaux, with a retail price of $60 on release and $1,360 today.

David Breitstein, owner of the Duke of Bourbon, said some wines have achieved "gem quality" status, especially those from small "boutique" wineries that may just produce 300 to 500 cases a year.

"It's so boutique that most people can't get their hands on them. They are like IP0s," he said of the wines.

Experts offer the following tips for building a wine portfolio.

• Be prepared to invest some capital in caring for your investment. This is critical, experts say, because if the wine is not stored properly it can go bad and collectors can pick up telltale hints without popping the cork.
  
  You can build your own temperature- and humidity-controlled cellar or rent space in a professional wine storage facility. Shops like the Duke of Bourbon can help with the arrangements.
  
  
• In general focus on reds, said winemaker Long.
  
  "It's going to be bordeaux and a handful of California wines. But it will be primarily bordeaux, because their value has been established over time," he said.
  
  
• Thomas Matthews, a senior editor at Wine Spectator, said that a good way to start investing is buying "futures," or wines that have yet to be released at the retail level. That's typically the lowest price the wine will sell at. For example, that $1,360 Petrus had an initial futures price of $63 a bottle, or $756 a case.
  
  
• Buy wines from vintages, or years that get high ratings from critics. That way you can be assured your investment has at least some protection. Breitstein notes that the 1995 vintage is approaching the quality of 1982, when the $1,360 Chateau Petrus was produced.
  
  
• Be prepared to buy at least a case of wine and preferably more. Matthews notes that buyers at auctions almost always pay more for cases in their original packaging than they will for smaller quantities.
  
  
• Spread your money around. "If you buy more than 10 cases of any wine you are really gambling," he said.
  
  
• Single bottles and mixed lots can be harder to sell than cases.
  
  
• Do your research by reading wine publications to find out what's hot and develop a relationship with a wine shop, which will help you in your quest for some of the rarer wines.

Consider the experience of Don Cowie, a regular customer of the Duke of Bourbon. In 1990, he paid $79.95 for three bottles of Chateau Latour from that vintage. Today, collectors will gladly pony up about $500 a bottle for the wine.

Cowie, a physical therapist, has drunk two of his treasures and is saving the third for his son Darrin's wedding next year.

"Everything I buy is to drink and share with friends," he said.

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