"Smoking out the winners," Financial Times' How to Spend it, Dec 9

[Peter11216]

Not surprisingly the FT magazine had to have an investment angle in their recent piece on vintage cigars. Unfortunately, I couldn't find a link to the article itself. If someone can post it that would be cool.

I'm interested to know if anyone buys boxes planning to sell them later, i.e. as a speculative investment. Is anyone a "clever cigar lover" in the sense of the article? Also, would like to know what people think of the assertions in the poll. (Where I quote from the article.)

According to the article (citing Mitchell Orchant ), a cabinet of Flor de Caño Short Churchills sold for £129 in 1991, the same cab would now sell for £6000; UK Regional Edition Por Larranga Magnificos almost tripled in 4 years from £375 in 2007, to £1000 today. "The original 40th Anniversary Cohiba Behike humidor, complete with 40 cigars, was released in 2006 and sold, in Havana, for 15,000 Euros. It is now available in The Lanesborough's Garden Room for a cool £2,000 per cigar (£80,000 per humidor)." Have people had these cigars?

Thanks,

Pete

[Colt45]

I know we have some serious collectors here, but I never think of cigars in that way - as investments or comodities.

I guess for me it's really about personal enjoyment. I'm also very wary with regards to provenance, including storage.

I'm currently in the middle of reading a book about rare wines that is somewhat analogous - buyer beware....

P.S. Regarding linking or pasting the article, they ask not to do so:

"Copyright The Financial Times Limited 2011. You may share using our article tools.

Please don't cut articles from FT.com and redistribute by email or post to the web."

[Wil]

I would invest in property instead

[MrGlass]

I buy cigars to smoke them. I buy what I want to try, and share with others (though this is mostly one of my brothers) when/if they feel so inclined. I enjoy cigars in this fashion. To me, buying them as an investment would take the fun out of it. Plus, I would have to have boxes of cigars sitting around aging that I couldn't touch, and when your stash is as minuscule as mine this would be far from easy. Before I knew it, my investment would be up in smoke.

Nick.

[carnivalhobo]

I know a man who has done this very successfully with Burgundy, and i think the potential is there for cigars. However i think the prospect of "monetizing" older rarer sticks is more often realized by trading them for newer releases or rarities as their value increases.

[Figaro]

"The original 40th Anniversary Cohiba Behike humidor, complete with 40 cigars, was released in 2006 and sold, in Havana, for 15,000 Euros. It is now available in The Lanesborough's Garden Room for a cool £2,000 per cigar (£80,000 per humidor)." Have people had these cigars?

Like for Art, wine, collectibles and etc there is definitely money to be made in cigars, especially with rare ones. I had one of the Cohiba 40th (purchased it last year and resold it a few months later in doubling the investment). I knew I would not smoke the cigar so I sold them. It was the only instance where I sold cigars. I always buy to smoke otherwise. I am not an expert at any of this but I believe there is a lot of fuss, hype and monopolies in the industry.

That being said and unless it's a business, buy cigars you love and will enjoy. Age them and follow their evolution. Life is short.

[Ken Gargett]

I know a man who has done this very successfully with Burgundy, and i think the potential is there for cigars. However i think the prospect of "monetizing" older rarer sticks is more often realized by trading them for newer releases or rarities as their value increases.

fascinating you say burgundy. most investors go for the bordeaux well before burgs, with the exception of say drc. but there is so much less of it made, harder to find the market.

[Scarhead]

Pete,

Thank you for posting this topic because it directed me to ft.com where I searched and found many brilliant articles about cigars. I cannot find this article on ft.com.

Cheers

[HydroRaven]

Pete,

Thank you for posting this topic because it directed me to ft.com where I searched and found many brilliant articles about cigars. I cannot find this article on ft.com.

Cheers

Same here with me. I'm interested in reading that article, but can't seem to find it. I'm pretty sure FT is OK with people posting links to their articles on forums

[mazolaman]

I think the first two statements are true, as this already occurs.

But I think the people on here are cigar lovers, not cold investors, so the audience will vote from that point of view.

As for the £2000/ stick....I'm afraid those are for fools.

[Peter11216]

The article is in my print edition delivered with the Friday newspaper, December 9th. Perhaps they don't make the articles available on the internet for sometime after the print comes out. I'm not sure. Was a little frustrating since I thought it was an interesting article to discuss.

Pete,

Thank you for posting this topic because it directed me to ft.com where I searched and found many brilliant articles about cigars. I cannot find this article on ft.com.

Cheers

Edited December 15, 2011 by Colt45
Link to source deleted.

[Colt45]

Already mentioned above:

" Copyright The Financial Times Limited 2011. You may share using our article tools.

Please don't cut articles from FT.com and redistribute by email or post to the web."

[IcedCanuck]

I buy 'em to smoke not resell. Sometimes it may take a few years (or more) to get them to the age I'd like to smoke them at but in the end they will all go up in smoke.

[GP012]

Already mentioned above:

" Copyright The Financial Times Limited 2011. You may share using our article tools.

Please don't cut articles from FT.com and redistribute by email or post to the web."

Isn't that geared more towards preventing the copy & pasting of actual article text - often times without the source - instead of just sharing a link to the article?

If FT wants to restrict access to an article hosted on their own servers, then I'd assume they'd do so through membership/registration, similar to the majority of printed media's online presence.

Edit: I found what I assume to be the link referenced above actually links to a scan of the article, not an online article on FT.com just yet. Disregard what I said above in this particular case.

[Colt45]

Isn't that geared more towards preventing the copy & pasting of actual article text - often times without the source - instead of just sharing a link to the article?

Greg, I don't know what their intent is. They have a share function, for facebook, etc. Aside from that, the pdfs were from a source website.

[jedipastor]

I certainly don't buy cigar in speculation. However, when considering an LE (non-Cuban) purchase I do often think "Well, if I don't like it I'll certainly be able to get my money back in resale/trade" because that's been my experience. But in terms of true investment value, I can't see how you could make money successfully on RE/LE Cuban purchases because there are so many of them and they're so inconsistent. You could buy 3 boxes of each major RE, but you'd be left with 6 boxes that doubled in value and 21 that you might not be able to recoup your original investment on at all.

The examples in the article of certain cigars that have skyrocketed in value are, of course, the exceptional examples. I really don't think a "clever smoker" could have foreseen those, with the exception of perhaps the original Behikes (and in that case you'd have needed a ton of capital).

This guy seems to indicate that it's easy to know which cigars are going to be highly sought after, so just buy a few extra boxes of those to sell later. Yea, sure.

[carnivalhobo]

I certainly don't buy cigar in speculation. However, when considering an LE (non-Cuban) purchase I do often think "Well, if I don't like it I'll certainly be able to get my money back in resale/trade" because that's been my experience. But in terms of true investment value, I can't see how you could make money successfully on RE/LE Cuban purchases because there are so many of them and they're so inconsistent. You could buy 3 boxes of each major RE, but you'd be left with 6 boxes that doubled in value and 21 that you might not be able to recoup your original investment on at all.

The examples in the article of certain cigars that have skyrocketed in value are, of course, the exceptional examples. I really don't think a "clever smoker" could have foreseen those, with the exception of perhaps the original Behikes (and in that case you'd have needed a ton of capital).

This guy seems to indicate that it's easy to know which cigars are going to be highly sought after, so just buy a few extra boxes of those to sell later. Yea, sure.

To play devil's advocate... After seeing reviews here I'd say that the RA Allones Extras are going to appreciate more than the Trini Short Rob T's. There is enough time to try out some of the LE stock, and then stockpile, or go off the reviews of smart people with good palates you trust. Its not as if you have to decide the day they are released.

[dB69]

...As for the £2000/ stick....I'm afraid those are for fools.

You are reading my thoughts.

I like to smoke cigars. If I manage to make an aged box I will definitely not sell it to anybody. I can always offer a cigar aged by myself to a friend, but that's a different story.

[Puros Y Vino]

I think the first two statements are true, as this already occurs.

But I think the people on here are cigar lovers, not cold investors, so the audience will vote from that point of view.

As for the £2000/ stick....I'm afraid those are for fools.

Not that I'm in that demographic but.....there's plenty of "fools" that purchase cars that go for >$500K, own islands, buy wines in the >$1K/bottle price point. Those "prices" are what the market will bear. Now back to the topic on hand. I buy cigars to enjoy them now and in the future. If I happen to have something that has grown in worth I might be tempted to part with it at a profit. Otherwise, I'm only going to hold cigars that i actually enjoy smoking. Though I do have one exception. I am not going to smoke any of the LGC Deliciosos from the Cuba RE jar. That's a pretty rare and unique item. After what 11 years?; Cuba finally decides to make a Cuban RE?

I used to read/collect comic books. I was mainly into it because I loved reading comics. If I had an inkling that something was potential investment material then I'd buy a few copies. Over time I found that the real "collectible" and valuable stuff wasn't so much the new limited edition comics with fancy covers but the older, lower print run popular tiles that were half destroyed by kids or thrown out by mothers in the 1960's & 70's.

Enjoy your smokes, if some happen to become rare/valuable then do with them as you please.

[dB69]

Not that I'm in that demographic but.....there's plenty of "fools" that purchase cars that go for >$500K, own islands, buy wines in the >$1K/bottle price point. Those "prices" are what the market will bear. Now back to the topic on hand. I buy cigars to enjoy them now and in the future. If I happen to have something that has grown in worth I might be tempted to part with it at a profit. Otherwise, I'm only going to hold cigars that i actually enjoy smoking. Though I do have one exception. I am not going to smoke any of the LGC Deliciosos from the Cuba RE jar. That's a pretty rare and unique item. After what 11 years?; Cuba finally decides to make a Cuban RE?

I used to read/collect comic books. I was mainly into it because I loved reading comics. If I had an inkling that something was potential investment material then I'd buy a few copies. Over time I found that the real "collectible" and valuable stuff wasn't so much the new limited edition comics with fancy covers but the older, lower print run popular tiles that were half destroyed by kids or thrown out by mothers in the 1960's & 70's.

Enjoy your smokes, if some happen to become rare/valuable then do with them as you please.

Bundwallah, you have some point there.

Ok, let me correct my answer a little:

If I bought a £2000 cigar, I would consider myself as a fool.

On the other hand, if I bought a regularly priced box today and had it aged myself and the price of that particular box would be £50000 after ten years and I still had it, I would consider myself as a fool if I wouldn't sell it. (If the value of money would not have deteriorated dramatically..)

[Scarhead]

Bundwallah, you have some point there.

Ok, let me correct my answer a little:

If I bought a £2000 cigar, I would consider myself as a fool.

On the other hand, if I bought a regularly priced box today and had it aged myself and the price of that particular box would be £50000 after ten years and I still had it, I would consider myself as a fool if I wouldn't sell it. (If the value of money would not have deteriorated dramatically..)

I agree with this. I also buy cigars, watches and other things for the personal enjoyment I get from them. I look at it this way: intrinsic value is separate from the enjoyment that I receive from any given item. In other words, if I like my Rolex GMT and the value increases twice of what I paid for it I will still like it. If the price plummeted to £5 I would still like it for what it is. The same goes for my cigars. If in 10 years time a box of my regular Padron Londres, for example, would bear £1,000 on the market (don't know why it would, but just an example) and I was not getting the enjoyment from them that I was 10 years ago I would be a fool not to sell them. But if I were still enjoying them, and didn't need the money, then I wouldn't sell them. I value an item two ways. First, it is worth only what others are willing to pay for it. Second, it is worth the enjoyment one gets from the product. If one enjoys a cigar and is willing to spend two times what someone else had paid for it, then that is the value to them.

[Peter11216]

Thanks for the response. I notice that at least a dozen people agree with the first statement that a "clever" smoker can "smoke for free," but no one took time to elaborate on why they think that is true, or could be true except CarnivalHobo.

Another thing from the article, this time coming from Eddie Sahakian of a Davidoff store in London, is the claim that it is still possible for a novice to get into cigar investing, because "It's a very niche market and in relative terms, hardly anyone knows about it," says Sahakian. "That's a good thing. It's not like wine where virtually everyone has an opinion . . . most people don't evven know there are such things as vintage cigars. There is plenty of value still to be had."

I really don't know what to make of this statement. But I am definitely interested in hearing from more people on why a smart cigar buyer can "smoke for free."

To play devil's advocate... After seeing reviews here I'd say that the RA Allones Extras are going to appreciate more than the Trini Short Rob T's. There is enough time to try out some of the LE stock, and then stockpile, or go off the reviews of smart people with good palates you trust. Its not as if you have to decide the day they are released.

[mazolaman]

Not that I'm in that demographic but.....there's plenty of "fools" that purchase cars that go for >$500K, own islands, buy wines in the >$1K/bottle price point. Those "prices" are what the market will bear. Now back to the topic on hand. I buy cigars to enjoy them now and in the future. If I happen to have something that has grown in worth I might be tempted to part with it at a profit. Otherwise, I'm only going to hold cigars that i actually enjoy smoking. Though I do have one exception. I am not going to smoke any of the LGC Deliciosos from the Cuba RE jar. That's a pretty rare and unique item. After what 11 years?; Cuba finally decides to make a Cuban RE?

I used to read/collect comic books. I was mainly into it because I loved reading comics. If I had an inkling that something was potential investment material then I'd buy a few copies. Over time I found that the real "collectible" and valuable stuff wasn't so much the new limited edition comics with fancy covers but the older, lower print run popular tiles that were half destroyed by kids or thrown out by mothers in the 1960's & 70's.

Enjoy your smokes, if some happen to become rare/valuable then do with them as you please.

I see your point, given current systems.

But I would still maintain that anyone paying 2k for a cigar is a fool, and I also find it immoral.But, I also find the RRP for a Behike unacceptable.

That is on topic, regarding the concept of profiting from aging cigars.

I guess the only other thought is that if you are buying to age for profit, there would be an amount of outlay for as good a humidifcation system and area as you can afford, and perhaps more "constant care".

If you already have this, it could be easy money.

I suppose given that the USA will no doubt be allowed CC soon enough, perhaps pre-emabrgo lifting cc will be worth more!Ironically enough.

[Puros Y Vino]

I see your point, given current systems.

But I would still maintain that anyone paying 2k for a cigar is a fool, and I also find it immoral.But, I also find the RRP for a Behike unacceptable.

That is on topic, regarding the concept of profiting from aging cigars.

I guess the only other thought is that if you are buying to age for profit, there would be an amount of outlay for as good a humidifcation system and area as you can afford, and perhaps more "constant care".

If you already have this, it could be easy money.

I suppose given that the USA will no doubt be allowed CC soon enough, perhaps pre-emabrgo lifting cc will be worth more!Ironically enough.

Mazola, there are plenty of fools out there with more money than sense. (see "bling" rappers spend their money on) I guess the key is to be the one profiting from the fools.

And if someone is going to "hold" cigars for investment purposes they better have top notch cigar storage. As for the "morality" of spending that much on a cigar or any seemingly overpriced item. What people do with their own money is their business. Everyone has their thresholds be it hard financial constraints or personal preferences and values. I think spending more than $15K on a car is foolish but if someone wants to get a Porsche who am I to stop them?

This notion of "smoke for free" isn't an instant payoff but a realization that if an avid cigar collector happens to have stock that has significant resale value then that eventual sale will most likely pay off a good portion of his/hers' cigar collection. People hold wine for the same reason. We are all "consumers". We skimp where we can and splurge when we want to. Whether it be cigars, wines or automobiles. Each of these things is finite. Some people like to amass things, others are into experiences. I have a friend whose DVD collection numbers into the thousands yet he has barely seen 20% of what he owns. While he will continue to build his collection he does not see the value in hopping on a plane and going somewhere outside of his cottage for a vacation. It's all a matter of personal perspective I'd say.

[mazolaman]

Yeah, that's fair enough, and I wouldn't disagree with any of that.

I guess it rankles when stuff becomes hideously more than it's original worth.

There's a great whisky shop on Old Compton street in Soho (London) where you can buy The Macallan from 1900, for £24000.00, I cannot get to grips with that, when some people not far from us have no clean water to drink.

Whereas, if I buy a cigar now for £15, and sell it in 10 years time for £115, I can live with that.