So You Want To Invest In Whisky....?

Lately there have been quite a few online posts, and even worse news articles/news segments on investing in whisky.  

Now normally I'm a huge fan when anything whisky related is on the TV or in the news, although I'm often irritated by how much they get wrong.  The inaccuracies, the exaggerations, and even more how oh so often myths become taken for fact.

But these news articles pissed me off to a surprising degree, to a degree that I was seeing red.  I'm a whisky collector and a whisky investor, yes I'm small time, there's no denying that, but I put my money where my mouth is.

And the thing that had me furious about these "news articles and updates" was that quite a few people, just getting into whisky, will see these sorts of articles and think that since they want to invest in whisky that this will be the way to go about it.

What do these "news articles and segments" say, you might be asking yourself.  Well there were statements that older Speyside whiskies were not as good as older Islay whiskies, that you should run out and buy casks from the distilleries, that certain bottles would more then quadruple in price, from 200 pounds to 40000 pounds.

Now most of the online whisky community just laughed these off, the experienced guys, knew that these posts and articles were full of garbage, but I heard quite a few people commenting "wow I didn't know that" "That's interesting" or "I should think about investing in whisky".

So I'm hoping to remove some of these myths, put out some truth.  This isn't from a professional, this is just from a guy who really loves whisky.

First off if you want to make money, you have to spend money.  No your $50 bottle of Jack Daniels will never be worth thousands of dollars, no matter how much you love your Jack Daniels.

Second look for small batches, but nothing silly small.  When a limited release is limited to twenty to forty thousand bottles, that's not limited.  Limited is anywhere from several hundred to say ten thousand bottles, worldwide.  You don't want something where only 4 or 5 bottles were produced, yes that's rare, but whiskies that generally go up in value, well enough people have to have tried it and gone "that's AWESOME!  I want more"  If no one gets to try it, then there's not going to be any serious demand for the bottle.

Third understand that the value of your bottle is not going to skyrocket overnight, or even a few years. Rare whiskies, extremely valuable whiskies such as the Port Ellen First release, or even The Black Bowmore, took 10, 15 years to shoot up in value.  If you're investing in whisky, you're looking at LONG TERM investments.  Anyone telling you that your whisky is going to double or triple in a year or two is full of garbage.

Fourth spend at your level.  If you can't afford a $500 dollar bottle, and by afford I mean to drink it, then don't buy it.  Not every investment will go the way you hope.  If you're not happy to drink the bottle at $500, then don't buy it at $500 thinking it'll be worth $5000.  ALWAYS be willing to drink the bottle happily at the price you paid for it.

Fifth and this goes in with the fourth guideline, have a theme.  Now some people just started laughing but here's what I mean when I say have a theme.  Don't buy whisky from a distillery that you can't stand for an investment.  I love the dead distilleries, so I collect them.  The criteria is that it HAS to be cask strength (personal preference) and it has to score very well by the Malt Maniacs.  I personally will not use Jim Murray's Whisky Bible here.  If the bottle has no reviews up, then I HAVE to have tasted it so I know that I'll enjoy it if my investment goes bust.  I love Talisker, always have and barring something crazy and unforeseen, always will.  So I collect Talisker.  Will it go up in value, likely to a small degree, but nothing crazy, but I'm very happy to drink my bottles at the prices I paid.

Sixth, educate yourself.  Figure out what whiskies you love, which ones tend to perform well long term, and which ones you can afford, and start small, just a bottle or two and then see how that whisky goes.  Is it slowly going up in value, by $5, $10, $20?  Or is it going down in value?  Also realize that you have to figure out in advance who's going to buy the whisky.  If it's a $100000 bottle, well the segment of the population who can purchase something like that is very small, so more likely then not, you're not going to see a good return on that investment.  If it's a $400 bottle, there's room for it to grow and more of the population can afford to purchase it.

And last, if an offer seems too good to be true, it usually is.  If someone is offering to see you a Black Bowmore for $5000 and you're going "Holy crap it's worth like 15000 pounds!  I've got to buy it" I'd be very leery.  There are lots of whisky fakes out there and if it sounds too good to be true, I start some serious investigations. 

Last, but not least, Have FUN!  Whisky is about enjoying the good times, so don't let it turn into something deathly serious!