In Cubans we trust: five cigars to invest in right now

[El Presidente]

A light article.....but a segment of the market (for better or worse) that is booming. 

http://life.spectator.co.uk/2016/09/in-cubans-we-trust-five-cigars-to-invest-in-right-now/

 

This is not my game but I will ask two questions. 

1. If you were a cigar investor, the 5 cigars since 2010 that you would invest in for a financial return?

2. The best returns you have seen (initial sale price) to final sale price in a box of cigars. Let's use the cut off release date as 1998. You need to know the initial sale price. 

I raise this as a member asked me what the initial sale prices were from the LFTH earlier this week. I have no idea. I can go and find out but I am time poor at the moment. and my team is flat strap.  However that is not the aim of this exercise. 

Are Cuban (or non Cuban) cigars a legitimate investment vehicle? 

Over to you 

[Fugu]

Without much consideration, spontaneously, I always wonder reg. Party D4-Reserva - Ridiculous price development. Almost 5-x of release price within a decade.

Edit: The same holding for the Cohiba 1966. Almost double prices in the second market, while you were still able to get them at retail with a little searching....

[cigaraholic]

I'm not a cigar investor, but I've invested a small fortune in cigars. Because I've been at it so long the idea of paying a fortune for cigars does not sit well with my stomach.....or wallet.

Cuban cigars are a good investment, sometimes a great one. I'm a little shocked at the price I see for RACF's....just to name one I stockpiled...for smoking. So if there's a cigar that everybody's raving about and sells out quickly that might be a good choice.

But if your looking at it as just an investment I would say go for the really expensive ones...the Ch Petrus or DRC of cigars.....that's where you'll make the big money.

[PapaDisco]

49 minutes ago, cigaraholic said:

But if your looking at it as just an investment I would say go for the really expensive ones...the Ch Petrus or DRC of cigars.....that's where you'll make the big money.

I suspect that this may be true, although the magic would be in finding a 'not-really-expensive' one that appreciates at the top of the range.

The aged, regular production boxes that you can get (mainstream stuff like R&J Churchills, Hoyo Churchills or even the new-to-market-but-old-rolled Anejados) hover around a 2X at about 10 years, so that's 7% annual appreciation or so.  Not a terrible return in the current market environment, but kind of lagging for an illiquid investment.  Now that's just comparing the price you can buy such a box out of the PCC Aged program compared to the current price of a current production equivalent.  If you knew the purchase price 10 years ago (which is likely less than today's price) then the 7% annual appreciation would be greater.

It will be interesting to see how the yields compute on the Reserva stuff and other $1,000 boxes.

[PaulPower]

I feel the first of their list RyJ WC GR is a poor choice; many people don't think WC deserves a GR


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[David88]

Personally cigars are for my own enjoyment and relaxation time. I wouldn't buy cigars as an investment, it would be a shame to miss out on great smokes! Particularly as cigars with a high potential future value would likely require a higher initial investment than regular production cigars  

If someone were to ask me what to buy as an investment, I would just say any LE, particularly any cohiba LE as they will likely command a higher future price based purely upon the label. 

[Puros Y Vino]

I don't buy for the investment side of things but I am well aware of the rising value of cigars in my collection.  I know that should I need to sell a vintage box, I'd make more than I paid for it. 

As for my five picks for investment cigars.  Here's my take and where applicable the initial price vs current (AFIAK) all in USD.

• La Escepcion Selectos Finos $375 - $700+
• Cohiba 1966 $325 - $600
• ERDM Infantes $59 - $250
• BHK (all) Seemed to have doubled in price.  Especially with tobacco woes stunting production for almost what: two years?
• Hamlet Custom rolls. Yes, not official releases but for those who have them, I've seen Salamones go as high as $50/stick.  I'd say people can get 3 - 5 X what they paid per stick for them. Probably more for any long and skinnies as he is not crazy about rolling them.

Honourable Mentions: (Pre 2010)

• LGC Deliciosos Jar (2009 Cuba RE) $275 - $1000+
• RACF (AP RE 2009) $245 - $350+
• BGM $55(?) - $300
• Montecristo Sublimes (Initial $?) - $400

[helix]

Be very hard to authenticate the Hamlet Custom rolls . I have some from the 2014 FOH trip but you would have to take my word for it . 

[shlomo]

Didnt a cab of BCE  just sell for 900? Initial price was around 275.

Damn.

[subport]

3 hours ago, PaulPower said:

I feel the first of their list RyJ WC GR is a poor choice; many people don't think WC deserves a GR


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I prefer rg 46 and under but actually the wide churchill is a good cigar. 

[TheMonk]

In regards to the article, I really don't think the RyJ Wide Churchill GR will be that much of a hit, unless the blend really stands out (which it most likely won't). HSA made a mistake when they chose the Churchill for the 2012 Reserva, and now they had to choose a different vitola for the GR, but any vitola they chose would be a second choice, IMO, and choosing one that's only been around for 6 years was a mistake. Granted, I think it was their one and only mistake in terms of vitola selection for the Reserva and GR program so far, but alas still a mistake.

OTOH, I do feel that Cuban cigars can be (and are) a legitimate investment vehicle. While I personally don't buy cigars with that purpose, and have never sold a box of cigars in my life, I am somewhat aware of their market value, and its reassuring to know that they hold and even increase in value, providing they're properly stored.

As for recent production cigars to invest in, of the top of my head I'd say La Escepcion Selectos Finos, Cohiba Esplendidos, any Cohiba LE or Cohiba BHK, the Upmann Mag 56 LE, the Upmann Sir Winston and the RA 898 Germany RE.

[Lotusguy]

Most Cuban cigars are a good investment - even the regular production will increase in value with the constant price hikes and the premium for age.

The problem is that I keep smoking my "investment"

[Ryan]

Jars go well.

I bought my Partagas P1 jar in Cuba in 2011 for $220 or thereabouts. I saw them still available in Spain 3 years ago for 250 euro. They are selling now for $1,000-$1,300

LGC Deliciosos went on sale in 2010/2011 in Cuba for $226, they are now $1,200-$1,400.

La Escepcion Selectos Finos jar. They were about 400 euros 3 years ago, now 1,000 - 1,200 euros.

Festival gift boxes sell well if timed right. There was a box of 2 Cohiba Majestuosos given out at this year's gala dinner, I've seen that sell for $675.

Gran Reservas, I've seen the Siglo VI Gran Reserva for sale at £250 GBP per cigar. The Monte No. 2 GR was 472.50 euro in Spain and still available 2 years ago with a bit of looking (I know a lot of fakes came out of Spain, but I've seen them available in person in very trustworthy shops there). I've seen them sell well over 1,000 euro now.

Some of the Spanish regionals sell well. The Por Larranaga Legendario, only 2,500 boxes of 10 made (compared to 20,000 for the VR Maestros and 12,000 for the RA Grandes) These were 116 euro per box in 2012, now I see them sell at around 350 euro.

The Bushidos have doubled in price already for those lucky enough to get them at the price here.

As others have said, the Cuban regionals go well. The Infantes from $59 - $250 in about 2 years. The Diplomatico Excelencia from $86 - $250 just about as soon as people can get them off the plane. Those cigars require a trip to Cuba to get those prices though, along with a bit of luck/effort in getting them. I picked up a box of 2006 Quai d'Orsay Gran Coronas in the Melia Habana 3 years ago for 143 cucs, these sell for around $500 now.

The same goes for quite a few "cigar deals", it requires travel. For example, Spanish retailers cannot raise the prices of their cigars, no matter if they're vintage or discontinued. There are still boxes of ERDM Grandes de Espana in Spain for 190 euro, these regularly sell for upwards of $600. Partagas Coronas are 100 euro for a box of 25 in Spain, again if one can find them.

So

Jars,

Regionals, rare or discontinued from countries with fixed prices and restrictions on distance selling. (Cuba, Spain, Italy etc.)

Gran Reservas.

 

Edit.

Some of the humidors that come of of Havana shops at festival-time do well. Not all, it takes a bit of "trusting your gut". In 2013 the Habana Libre (which does a lot of these things, not all successful) put out a piano shaped humidor in an edition of 70, all signed by Chucho Valdes to commemorate his 70th birthday, containing 18 Piramides Extra and 20 Monte 2 with an extra band on them. Nice enough thing. The price was 1,250 cucs, within 12 months they were selling for $6,000.

[cigcars]

** I would bring BACK the following five Habanos to invest in:  

       * Punch Black Prince

       * Por Larranaga En Cedro Lonsdale

       * El Rey Del Mundo Tainos

       * DUNHILL!!!  

       * Ramon Allones 898 Varnished Cabinet Seleccion

[PigFish]

I am not going to guess, it is not my gig... I do have some opinions however.

How about a balanced portfolio?

While I dislike most things about REs and LEs some of these are going to be hits. Which ones I won't hazard a guess. Yet there are timeless Cuban cigars. While I don't really like Cohiba robustos, ones with 10 year of age will certainly always have a market. People will likely continue to 'pursue' aged cigars and with that, there will be a perpetual market for cigars that some people don't have, in that they are newer to the custom, or they are too impatience to age themselves.

While I think it is a poor reflection of the smoking community, there is almost always a sucker for an aged box of cigars! So aging cigars like the Cohiba robusto, the D-4, the RyJ Churchill, Sir Winstons and other timeless (and popular) cigars will likely always be a good investment. If they go discontinued, they get even more value.

Me, I will simply buy cigars that I like, if I buy cigars at all. I have never lost money on cigars that I own, except on the ones that I have smoked!!! Smoking them is a guarantee of loss, but that is why I buy them! So mates, my mindset is totally different than this... I expect to lose my money. I expect to smoke them!

Good topic Rob!

Cheers! -Ray

[Fugu]

1 hour ago, Morgan said:

Just select the most desired cigars and you can't go wrong

Just select the most desired cigars you like most and you can't go wrong

[Bohn007]

8 hours ago, Fugu said:

Without much consideration, spontaneously, I always wonder reg. Party D4-Reserva - Ridiculous price development. Almost 5-x of release price within a decade.

Edit: The same holding for the Cohiba 1966. Almost double prices in the second market, while you were still able to get them at retail with a little searching....

I have almost three boxes of the 1966 but going to smoke them. Can't imagine selling them unless I had to. 

[Colt45]

Gave the article an initial skim - when it was implied that the stalwart BCG is a double corona, I figured I need not read in depth 

I understand RA's line of question, and understand there are collectors / speculators in all walks of life for all kinds of products - I hold them no grudge. I understand, as Val Kilmer said, my hypocrisy knows no bounds.

I understand and fully appreciate what goes into the making of a good cigar. But for me, cigars are not precious. A gathering of good friends who happen to enjoy cigars + a baggie full of various cigars = a level cigar playing field regardless of brand or country of origin. The cigars might just matter a bit less.....

[westg]

For me any double coronas you can pick up of decent quality in a 50 cab...

[ChefBoyRG54]

You could have 30 to 35% returns on cohiba robusto in the past year or so alone.

[Notsocleaver]

Yeah, I think the simple answer is CoRo. Easy enough to acquire, reliable and considerable appreciation in value with age. A lot of those super-premium boxes can harder to find buyers for

[Fugu]

40 minutes ago, westg said:

For me any double coronas you can pick up of decent quality in a 50 cab...

Are you sure, West? I mean, a DC in 50s is already a considerable investment from the start, the market is rather small, and from what I've seen DCs usually don't appreciate much over time, relatively spoken. Or do I have a wrong impression here, no sé?

[PaulPower]

I am interested in hearing from someone who has actually successfully invested in cigars. What challenges and rewards have you seen?


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[Jeremy Festa]

I am now about 10 years into cigars. 

So, I am still fairly candela in comparison to others.

From my personal experience hits have been Trini Rob T's, RACF, La Escepcion SF. 

Being in Oz, I pay mad tax. So my opinion and experience on ROI varies to others (most) who buy duty/tax free.

I believe this is the only way to make a margin, if that's what you are into. 

What I am into, much to Ray's dismay, is, aged, discontinued, jars, 50 cabs, the odd regional. 

And it just so happens that they are where the money is, from the start and into the future. I still smoke freshies too, but, I am a sucker at heart. 

But the entire industry is a sucker.

People like bright shiny and sparkly stuff. We taste with our eyes, so a perfecto such as the RACF or the packaging and defunct vitola of the bushido, or a jar you can walk by on your shelf at home and smile. That is where the ROI is. 

If you are talking medium to long term, then sure, go for some classics, with a cult following, and have patience. 

But at the price we pay down under, and the source being down the road from me, with a knowledge base of FoH or conversation on the deck. My risks are almost negligible.

And waiting 5, 10, 15 or 20 years on something I could buy at a small mark up is an easy decision. 

I could fall off my skateboard tomoza and die.

Before I even get a chance to smoke a Punch RS No 11?

No way Ray. 

 

[Jeremy Festa]

59 minutes ago, westg said:

For me any double coronas you can pick up of decent quality in a 50 cab...

Yes

19 minutes ago, Fugu said:

Are you sure, West? I mean, a DC in 50s is already a considerable investment from the start, the market is rather small, and from what I've seen DCs usually don't appreciate much over time, relatively spoken. Or do I have a wrong impression here, no sé?

100% mate. 

I picked up a 50 cab of SLR Churchills, off Rob, not so long ago. NB:- they are discontinued, and, a 50 cab. So double tick. 

Now, that box is the size of my head. Which in no uncertain terms is, awesome. 

So, a 50 cab of DC's would be bigger than West's head. Which is truly amazing.