Investing in fine tobacco

[BrightonCorgi]

1 hour ago, joeypots said:

You got to remember that a little guy  selling contraband on line is competing with large vendors and collectors. So when one sees prices that have appreciated it could very well be that you are looking at cigars with a known provenance being sold buy people who have a good reputation in the business. If you are looking at prices from big auctions like those in London, don't for get that there are auction premiums to be paid, probably at around 20%.  So, if you have five or ten boxes of COROs and you hold them for five years you might get some profit, but you won't make what the big guys make.  

I'd bet you could get it down to 10% or even less seller commission in the beginning when Habanos can be auctioned in US.  If the auction house does not take pictures and is not spending much effort in collection, storage, or promotion beyond a Lot number; 10% is reasonable.  It will all be about the auction houses establishing itself with strong collection and that warrants a seller discount IMO.   Smaller houses can definitely work on the selling commission.

[Philc2001]

Are you the type that puts money under the mattress? Or maybe gold coins in an old army boot? 

Look, aging cigars at home as a business is not practical for most people. There are too many things that can go wrong, and you can't really insure against a disaster that wipes out your precious stash. As for global returns, I am 100% certain you can make more money investing in the US stock market than you can aging cigars at home. I know I have, and your investing money enjoys the benefits of compounding returns. 

IMPO - buying gars at retail to age at home in the hopes of making a few bucks is not worth the time, cost or investment. There are much better ways to make money. Not saying you can't make some money in the process, but to make decent money you need volume, and you need to age for significantly long periods; 5-10 years and more. Assume an average of 5% rate of appreciation - non-compounded (some will appreciate more). By the time it's all said and done, assuming you chose the right vitolas to age, kept good records, and maintained them properly, you might as well be in the business that Rob is in.

But if you decide to do it anyway, then all the power to you man! Good luck. Nothing wrong with enterprising. 

[TomF]

Last decade I spent a considerable amount of money buying high end vintage guitars. I thought I'd be able to sell them at a profit and make some money. Do you know how hard it is to sell a high end vintage guitar?

Oh wait...you said cigars...OK..well, never mind...but the same principals apply.

[rhcolbert]

44 minutes ago, TomF said:

Last decade I spent a considerable amount of money buying high end vintage guitars. I thought I'd be able to sell them at a profit and make some money. Do you know how hard it is to sell a high end vintage guitar?

Oh wait...you said cigars...OK..well, never mind...but the same principals apply.

I tried to dabble in it with watches. Blew up gloriously, but got to wear some nice pieces for a year!

[TomF]

1 hour ago, rhcolbert said:

I tried to dabble in it with watches. Blew up gloriously, but got to wear some nice pieces for a year!

I still play my 1951 000-18. I will never sell this one.

OK...back on topic...

[Bords]

@TomF...curious what pieces you still have, electric or acoustic? Vintage electrics are a tough hussle with a lot of shadiness happening. I have a 52 LP that, when played through my 68 Princeton reverb, can and will make a grown man cry.


Sent from my iPhone using Tapatalk

[TomF]

54 minutes ago, Bords said:

@TomF...curious what pieces you still have, electric or acoustic? Vintage electrics are a tough hussle with a lot of shadiness happening. I have a 52 LP that, when played through my 68 Princeton reverb, can and will make a grown man cry.


Sent from my iPhone using Tapatalk

I don't have any vintage electrics. I have the '51 Martin 000-18 and a '68 D12-35. I've also got a 1929 roundneck Dobro which is cherry, and a 1926 Martin A-Type mandolin, a couple of mid-1990's Martin dreadnoughts which I'd like to sell, 3 other post-2010 Martins and a National Style 0. I do also have a newer Telecaster which I'm holding on to and a Ric 360-12 which I'd love to sell to someone with tiny hands.

[PaulPower]

Bringing this back up, does Bond Roberts change the calculus?


Sent from my iPhone using Tapatalk

[Habana Mike]

1 hour ago, PaulPower said:

Bringing this back up, does Bond Roberts change the calculus?


Sent from my iPhone using Tapatalk

Seems to have opened the market a bit outside of potentially dodgy FB groups and higher end auctions.

[SmokyFontaine]

It was touched on earlier, but the concept of value is too often skewed when you're selling items within your hobby. To us, within the niche of Cuban cigar smokers, a 5yr box is worth a fair bit more. As long as you try to sell within the niche, they'll tend to value more in line with how you want to price it. But still, it's worth as much as a buyer is willing to spend.

A little too often the kind of person that thinks that all you need is a commodity and you'll sell it and get rich operates a little too much like the South Park Underpants Gnomes. 

Step 1: Get the underpants

Step 2: .......

Step 3: Profit!

[Habana Mike]

Never been in it as an investment though when somebody finds they need to liquidate some stock for various reasons (looking at you DEPARTMENT OF HOME AFFAIRS NOTICE No. 2019/14) one finds a profit can be made in the right channels.

I for one have come out much better with cigars than equities over time.

[NSXCIGAR]

On 2/24/2017 at 7:55 AM, BrightonCorgi said:

The fortunes will be made at auction for those living in the US.  I know someone with 1000+ boxes patiently waiting...  

[El Presidente]

If I remember correctly, the last box of SC Mercaderes we sold was just short of $300 and you couldn't give them away. Looking forward to seeing where todays BR auction ends.

[BrightonCorgi]

6 hours ago, NSXCIGAR said:

His wife knows what to do the boxes should it take longer than his life...

[Edward7]

10% total return in 5 years is what...around 1.92% compounded return over that period. 

At least it’s more fun than rolling CD’s at last year’s rates. 
 

it would be worth selling current boxes at a premium if you could get your hands on anything you could offload immediately at a profit - things such as retail Cuba priced behikes and other limited release cigars. 

[Habana Mike]

37 minutes ago, Edward7 said:

10% total return in 5 years is what...around 1.92% compounded return over that period. 

At least it’s more fun than rolling CD’s at last year’s rates. 
 

it would be worth selling current boxes at a premium if you could get your hands on anything you could offload immediately at a profit - things such as retail Cuba priced behikes and other limited release cigars. 

Yeah, then you'd be a flipper. Happens.

[Edward7]

5 minutes ago, Habana Mike said:

Yeah, then you'd be a flipper. Happens.

For the mathematicians, what's the rate of return/compounded return on a $700 purchase selling for $1900 less than 5 years later. Or a $280 purchase going for $1000 with less than 6 years? 

Asking for a friend...

I haven’t ever flipped because I don’t speculate on cigars, but is there a generally negative attitude towards flippers? 

[Habana Mike]

1 minute ago, Edward7 said:

I haven’t ever flipped because I don’t speculate on cigars, but is there a generally negative attitude towards flippers? 

There is a bit of a stigma in the community for people that snap up hard to find, custom or other cigars and then immediately sell them for a significantly exaggerated markup.

[ElPuro]

1 hour ago, Habana Mike said:

There is a bit of a stigma in the community for people that snap up hard to find, custom or other cigars and then immediately sell them for a significantly exaggerated markup.

I'm not a flipper,  but I am troubled by this stigma. Not sure how this differs from anything else in business. If there's a willing seller and a willing buyer, who loses?

[Habana Mike]

1 minute ago, ElPuro said:

I'm not a flipper,  but I am troubled by this stigma. Not sure how this differs from anything else in business. If there's a willing seller and a willing buyer, who loses?

Those that could have acquired the item at a current market and reasonable price. Agree though, all's fair in love and business.....

[gcman68]

I haven't sold any of my aged cigars other than to friends at replacement cost but I would say that BR has caused me to really hesitate opening up a few right now. In particular 2014 Sig VI and a CoRo I think might be ready at or about now. 

[Homer]

You should invest all your money to Gurkha cigars. They the best.

[medzikone]

I don't understand this hatred for people who resells cigars. I was wondering if I could invest in 20-30 boxes. HSA increases prices every year now. Why don't sell the same box with 5% in next years?

[SmokyFontaine]

Personally I feel like if you're a flipper, and buying in quantities that limit supply of direct customers, that kinda sucks. Doing that is actually against the ToS of many retail sites (although seldom enforced). Overlooking the obvious, that if you're flipping them to sell in the US, you're breaking the law, to me if you're trying to make cigar selling a trade or a side business, you should be purchasing through a distributor, not a retailer. You should go try to setup terms of sale with PCC, or an LCDH dealer. I'm sure it happens all the time, but especially with the current supply issues, it seems like 24:24 goes faster than it has in the 18mos I've been a member, and if a chunk of that is some dick who is purchasing 10 boxes to start their tobacco empire, that would really not be in line with how I view FOH (which admittedly is irrelevant to how it's used). Part of me wishes FOH would limit numbers of boxes on 24:24. Something like 2 boxes of the same cigar max per day. 

Anyway, that's my rant. If you want to be a vendor, go through the appropriate channels and purchase upstream.  

[El Presidente]

3 hours ago, SmokyFontaine said:

Part of me wishes FOH would limit numbers of boxes on 24:24. Something like 2 boxes of the same cigar max per day. 

 

I will ensure that is done from tomorrow