Cigars as Investments

[CigarDarr111]

Anyone that has any qualms with buying and selling cigars needs to remember along with the brotherhood that we know as FOH comes a need to buy quality cigars and someone to buy them from.. one mans worry is another man livelihood.

[tmac77]

They're probably not available at the original price if people are paying more for it. If they sell for x, and you can't afford x, sorry have a nice day.

my whole point in the first place. Most BOTL's are not in it for the money but for the sheer enjoyment and camaraderie. The biggest culprit in the escalation of pricing for LE's Humidors etc are some of the retailers and non BOTL's who are just in it for the purpose of stockpiling the aforementioned boxes and waiting for the price to appreciate. When in Havana I see some retailers buying Mastercases of LE's and jars to be shipped back to their stores. Not to mention those that used to get them out the back door. No single person will move the market price but as a whole they do. I have quite a few boxes of LE's, jars, and a few humidors but I have no intention of selling them in the near or distant future. I simply smoke them as I please.

[joeypots]

I've sold some cigars at a profit. Some early Els I never cared for and lots of aged (5 years) regular production. I have cigars that no one would buy so I'm in the red but it's a hobby and I'm having fun. If I had only known...BCE 50 cab, Partagas lonsdale cab, RA 898, Party Corona Cab, ERDM PC cab...

I don't think I'd have trouble selling a 10 year old box of CORO, for example, but I doubt there would be enough profit to call the box a good investment unless I tripled my money.

[canadianbeaver]

Wow Tom, I did not know that is what you were talking about. Thank you for that info.

Just as a piece of info, a fellow member is looking for a box of 520's. The current average price online is $320-350 US.

I looked at my e-mails to find out what I paid in 2012. $139 pounds. = $207 US.

[polarbear]

User USA is the prime example for buying cigars as investments. Kudos to him.

Actually I'd say he's more of a collector.

I've spoken to him about it and the reason he will often buyou multiple boxes of high end stuff is to use it as trade bait for other htf stocks

[warren516]

I have some boxes of LGC Tianos that I've thought of parting with at a premium but haven't done it. I did let one go to a BOTL for cost last summer.....

[Fosgate]

I just look at it like this. If I had a bearer bond sitting in a desk drawer that I had to carefully maintain the atmospheric conditions and it constantly had to fight the urge to light it on fire in the hopes someday it will be worth something. Everyone I know would tell me I'm an idiot and my family would have me committed.

[PuroDan]

I buy Habanos to smoke. If I die with more than ten Cubans in my humi I have failed. Mongral smoking all day long.

[stunod]

I don't buy to sell, but I will trade . All my sticks are for me smoke. I will trade to get hard to find cigars and them smoke them.

[XYRNTX]

thought I was the only one collecting shoes....Nike outlet near the house yet to spend over $40 on a pair....cheers

[jat]

Am I the only one who gets this depressed, sinking feeling when thinking about selling cigars?

Nope, I'm with you on that. In reading the posts I was reminded of those few rare occasions when somebody from the forum had to liquidate their collection due to divorce etc and while that's a rough thing, selling those boxes must have made the situation even worse IMO. Yes I know they weren't bought for the purposes of investment, but selling !!!!

I think there are 3 types of people.

- those that buy and hold ( I can understand those people )

- those that buy and consume (like me)

- those that buy to sell (where's your soul man, where's you SOUL!!)

note to be taken seriously.

[jat]

Actually I'd say he's more of a collector.

I've spoken to him about it and the reason he will often buyou multiple boxes of high end stuff is to use it as trade bait for other htf stocks

Not making a habit out of quoting PB, but I have to agree again.

Reading through USA's posts and he's a committed collector. His drivers are about possession, chasing a target and acquisition, like most collectors. I'm sure he'd sell bits and pieces if that would lead to something even greater in his view, but i don't get the sense that he'll sell everything for more coin. Have you seen the pictures of his office and wine cellar, the man doesn't need anymore coin!!!

[canadianbeaver]

I have talking about this with Matthew this morning. He is a CEO/accountant guy who loves smoking cigars and is my mentor for all things financial. I asked him about this topic and he came up with some interesting ideas.

If you bought a box of cigars in 2012 for $200 and in 2015 they are selling for $350, you would sell them for that day's market value. You might do that if you would prefer a box of something else.

He thinks flipping a box of cigars is only to take advantage of an unsophisticated buyer, because the market does not change that fast.

He thinks cigars are are a solid investment in case you suddenly need money because you can always get money back but hopefully that should not happen because you had to have a lot of money to buy them in the first place.

Last, he thinks that bringing a cigar into a new country or to a new currency is the the way to change a cigar's value. And that's the way it is. But just smoke the damn things and enjoy them.

[leftimatic]

Am I the only one who gets this depressed, sinking feeling when thinking about selling cigars?

If I had to sell my cigars it means the market crashed and I am about to lose everything.

You know,I would just keep the cigars.

Cigars will get you through times with no money better than money will get you though times with no cigars.

[mk05]

Investing in something that:

- takes up significant space

- needs specific and consistent storage conditions

- with susceptibility to degradation

- difficult to insure

- has no declarable equitable value (you can't borrow against them)

Risky stuff in my opinion, unless the release is super limited and certain to be uber desirable. Most people suck at picking a winner.

Let's face it - it's nice to be able to flip a box for twice or thrice what you paid for it....

That's why you roll your eyes at those who think all cigars are good and do not like any opinions otgerwise - especially LEs.

Protect your investments!

[Habana Mike]

So who said that.....

image.jpg

Thinking about this the Doctor is probably off by 5-10x

[mi000ke]

Wow Tom, I did not know that is what you were talking about. Thank you for that info.

Just as a piece of info, a fellow member is looking for a box of 520's. The current average price online is $320-350 US.

I looked at my e-mails to find out what I paid in 2012. $139 pounds. = $207 US.

Well, that represents about a 15% return/year, so that's not bad. But I'd still rather smoke them then invest in them.

[Lotusguy]

Well, that represents about a 15% return/year, so that's not bad. But I'd still rather smoke them then invest in them.

They are still available at just over $210 so not everything appreciates....

[jazzboypro]

While collecting / flipping is not really for me, I guess I don't care what one does with their cigars. The one thing that does come to mind though, is that if one does not have iron clad proof of provenance, I would never consider buying.

I was just thinking about this, no matter the cigars, i suppose their condition must have a big influence on their value. As a buyer, i would need to assess the quality of the merchandise. Unless you see thousands of cigars like our host does, i think it would be difficult to prove quality and provenance of said cigars. I would be tempted to buy but not sure i would.

[polarbear]

If I had to sell my cigars it means the market crashed and I am about to lose everything.

You know,I would just keep the cigars.

Cigars will get you through times with no money better than money will get you though times with no cigars.

I've always said the day I start to liquidate my cigar collection is the day after 2 big kiwi fellas break my legs for not paying my mortgage.

I've even written a "I'll never make you sell your cigars" line into my girlfriends vows if/when we tie the knot

[mi000ke]

I have talking about this with Matthew this morning. He is a CEO/accountant guy who loves smoking cigars and is my mentor for all things financial. I asked him about this topic and he came up with some interesting ideas.

If you bought a box of cigars in 2012 for $200 and in 2015 they are selling for $350, you would sell them for that day's market value. You might do that if you would prefer a box of something else.

He thinks flipping a box of cigars is only to take advantage of an unsophisticated buyer, because the market does not change that fast.

He thinks cigars are are a solid investment in case you suddenly need money because you can always get money back but hopefully that should not happen because you had to have a lot of money to buy them in the first place.

Last, he thinks that bringing a cigar into a new country or to a new currency is the the way to change a cigar's value. And that's the way it is. But just smoke the damn things and enjoy them.

The reason you would do it as an INVESTMENT is that you bought at one market value hoping to sell (not smioke or trade) the cigars at a higher market value in the future. And not just any higher market value, but one that represented a high enough return on your intial investment that it was better to have invested in cigars than, say, gold, the stock market, real estate, modern art, or whatever, taking their relative risk in to account (greater risk should provide a higher expected return). And it wold not make any difference if you smoked or not - this is an investment. Now the example you used would have represented a 12% compounded rate of return over those three years. And that's not a bad investment, although it is slightly under the return you would have gotten by investing in the Dow Jones average. The only upside is that if you do smoke and your invesment strategy poops the bed, you can always consume your investment. Can't do that with art.

[Laxman]

Am I the only one who gets this depressed, sinking feeling when thinking about selling cigars?

nope. My stomach turns unless it is something I didn't care for, which is rare or I over bought. Early on I thought of cigars as an investment but now a days I just love smoking cc's and buy them for that. If down the road something happens and it would have to be drastic lol, I can always sell them

[CanuckSARTech]

Depending on the forum, you'll get the price policers who believe every good BOTL should always sell what they paid for them, not what the market dictates. Those same people don't seem interested in selling gold or stocks to us for what they paid either.

I have bought many multiple boxes of cigars but never with the intent of selling down the road at a profit. Even if I do unload a box it is 99% of the time a trade for some other box of equal value. Like yourself I find it hard to abide by those who profess to be BOTL's and yet try to flip and sell boxes of cigars for profit.

For me, it lies somewhere in the middle.

I agree that some quote the BOTL thing more than they should, with the "you bought them in '94 for $300, so you should sell them to me for that". Some use BOTL to be a cheap bastard to get around standard market appreciation.

That said, I also am not fans of those who buy solely for re-sale / investment, in a fashion that does influence and spike up the prices for the rest of us. Granted, many retailers obviously need to do things such as this, but I do believe there's a balance to play.

Similarly, while I generally don't resell specific cigars that I buy, I hear gripes all the time about people moaning about those doing so. Case in point - custom cigars from Cuba. I buy what I want, and what I want to age and store and eventually smoke myself, and/or have for trades or gifts. I don't resell. But some may buy up bundles and bundles of Monsdales in Cuba for $5 a pop, then resell them with online auctions / websites for $20 or $25. Hell, if someone will pay that, good on them. Not my cup of tea, but who are anyone to disparage people for doing that?? People use the BOTL thing in this context (though they've never met the person, do a trade with them, etc., etc.) to say that price is unfair to a "fellow BOTL", etc., etc.

About a year and a half ago, I resold about 6 or 7 boxes of stuff, including about 4 or 5 Bolivar Gold Medals, to try and make some quick payment arrangements to suit a Cuba trip (which didn't end up panning out, but more due to family and work reasons). But, I had to ask for help - I was told that normal annual appreciation for cigar stock is anywhere from 5% to 10%, depending on the popularity of the cigar, the availability, provenance, general esteem and reputation, etc., etc. I had no idea that's how it worked, but it seems more than fair.

I say, if you want to sell, sell. If you want to buy, buy. There's two parties (at least) to every transaction, and everyone needs to be in agreeance and be happy with ALL the terms, prior to the purchase. Don't agree to buy them, but then ***** and moan about the price afterwards, IMO.

[CanuckSARTech]

You want to compete with cigar merchants of Switzerland or UK? Good luck… Do you realize the number of boxes you must purchase now to expect a real profit in 10 or 15 years?

I'd say that's a no to that thought.

Back a number of years ago, I had the chance to buy 5 or 6 of the LGC RE Cuba jars. I chose to buy only one, at $260-something, as my wife would have killed me had I bought more. However, the price went to over $1000 almost within a little over a year, and currently is in the $1700-$1800 realm. I've always said that had I thought about it more then, I would have bought a dozen. And so, I've actually never even smoked one of my cigars out of that jar - I've had a number of those Deliciosos sticks through trades and box-passes and whatnot, but for whatever reason, it's the one item in all my stock that I've just simply not been able to bring myself to smoke.

With that past missed-chance in mind, I planned a bit ahead with the La Escepcions RE Itally a couple of years ago. Did a number of group buys on multiple boxes. My thought, and my discussions with one of the other members that helped me initiate that with that release, was that even if we don't like them, they'll be on par with the LGC RE Cuba jars, and we'll be able to command a hefty dollar at resale.

That said - I've not resold any of them, and I've been smoking through them slowly in the years since, as well as trades and gifted sticks. So - profit margin long gone. LOL.

[Habana Mike]

So Keith, let's work a trade for some of those Selectos Finos. I know they've only appreciated 50-100% in the last 3 years but since you're a great BOTL I'm sure you'll do me right