Aged Habanos Investment Return Study

[BarryNY]

1 hour ago, PartagasIV said:

Give Jim Simons a call at Renaissance

LOL.............billionaire from Long Island....

[NSXCIGAR]

20 hours ago, jfire said:

BTO 2013 coded CoRos sell for 600.00 a box now and sales were had for 285.00 a box U.S. during that year....

Cohiba Linea Clasica almost always doubles in value around the 5-year mark. Almost an unspoken law of CCs. I used that as the basis for my calculations as those are the best-performing regular production cigars short-to-medium term and the most "reliable" consistent cigar to invest in. Special production investing is much more involved and variable. For the average guy looking to invest without too much hassle the Cohiba Robustos are probably the best example and as I've shown one can only expect to achieve a profit of 3-5% per year before inflation takes another bite, so it's virtually pointless to invest in regular production in the short-to-medium term IMO. You're just as well off investing in high-yield savings accounts at 1.2-1.4%.

Again, what little money there is to be made in CCs is in special production, and one must be fairly savvy to buy wisely. Many of us here are capable but just not someone who isn't really up on what's coming out of Cuba regularly and distributor info, etc. I guess one could just buy Gran Reservas and do well as those have proven over many years now to pretty much be guaranteed winners. 

[polarbear]

Great work

In a real world scenario its hard to get a good grasp of the ROI on cigars
Stocks you see for sale here often carry a bit of a pedigree with them due to the fact any buyer knows:
A- they were graded and hand picked to start with
B- they're guaranteed to have been stored correctly since date of purchase
C- any stock that is lost or damaged in transit will be covered by Rob

Private sales or auctions are more of a crap shoot and may not carry the same return
Unless you're buying flagship Marcas in rare formats or releases (LEs, REs) I often feel the best you can hope for is a return on your original investment

In Australia the numbers are a little different as the annual 12.5% tobacco tax hike all but assures the replacement value of any cigar goes up but if you tried to sell them privately at current replacement value I doubt you'd get any takers as many people would prefer to either purchase from here (if they're paying full local price) or take their chances ordering from an OS vendor and possibly saving 60% on local retail

[Notsocleaver]

I think there some issues of scale here to consider. @TheGipper doesn't mention the minimum investment for his strategies, but I bet its a fair bit more than the $400 I need for a box of coros. If I'm wrong, let me know and send me a prospectus. Storing a retirement fund's worth of cigars would be expensive, and liquidating it quickly would be difficult, at that scale its no contest.

For me, I tend to divert all of my 'hobby money' into cigars, and then sell cigars to fund other hobbies when the desire emerges. In contrast to just about every other recreation pursuit I have, cigars at least don't loose money the second they leave the store. CUNTINT has about a 37% mark-up between singles and boxes, so its not hard to resell a small amount of singles or fivers from recent purchases while making a profit yet still providing the best deal available. I couldn't do that for $10,000 worth of cigars, but freeing up $1,000 wouldn't be hard.

[hoffmr3]

On 7/24/2017 at 10:40 PM, El Hoze said:

...One of the things I always say about buying a bond vs stocks is bonds have maturities. You don't (necessarily) need to sell them to the next highest bidder to realize a gain. Just buy them for less than they'll eventually be worth. The reason I mention this is I believe the hardest piece to factor in here is always the back end (ie selling them).

I like this line of thinking.

Would an original Basquiat have appreciated over 300,000 percent.... if it had to be set on fire in order to maximize its utility?

[El Hoze]

3 hours ago, Notsocleaver said:

I think there some issues of scale here to consider.

Great point. If you're trying to make a real investment, I am not sure of what it might look like to liquidate a large amount of cigars, even over time. Even if I was a small pension fund looking to invest a million dollars. I could be wrong, I am not super dialed in. Further, if I have a larger some of money I might use it to my advantage. The original poster here was talking sharpe ratios vs equities. Different game than flipping boxes of cigars. Even for an individual, I would not want to figure out how to sell 50K worth of cigars. 

Someone even mentioned Jim Simons. Jim smokes cigarettes all day long, I know him reasonably well. He doesn't have time for cigars and has way too much money to make money investing in them that's why he plays in more liquid markets.

[luckme10]

Guess I shouldn't quit my day job yet.