Your thoughts on a "Cigar bubble"

[Capt. Corona]

1 hour ago, Cairo said:

Veblen's goods--new term for me--I looked it up--thanks for a really interesting post--they never taught about that in B school.  ?

Haha...I did the same!  An edyoubakashen is a powerful thing. ?

[Capt. Corona]

Quote

many authorized dealers sell a good quantity of them out the back door

Already experienced this first hand on the island (premiums being asked on top of yul pricing) for some hard to find boxes.

Certainly no offense meant to the Asian brothers and sisters but that market drives a large sum of the pricing, IMO.  There is a lot of new money there that is allowed to demand what it wants.

[Winoheel]

Couldn't agree more.  I've overheard wine connoisseurs (the ones who "invest" in stuff like Rothschild, Y'Quem, Chateau du Merde, etc) talk about getting their prized bottles holding them for a while to show off, etc and then flipping them for a profit.  They pretty much admit, there's a good chance the actual contents aren't really drinkable as there is too much uncertainty with flipped bottles and storage conditions.  I myself have cigars from the 1920's and onwards. None will be spared the flame AFIAC. They are meant to be enjoyed and personally for me, as accents on milestones or whenever I feel like it.   
My eyes tend to be locked on CC only sites, whether they be FOH, FB or others and from what I see, the mania for > double banders continues to rise.  People head to the Island multiple times and bring stock home to flip.  I can only imagine what the Novedosos are going to go for once they hit LCDH shelves in good quantities.  Already the Punch La Isla's are a hot commodity.  HSA keeps appealing to the collector class of cigar smoker who wants a cigar for the prestige it brings.  While many of us here just want to go deep on regular production stuff before it gets the axe.  I enjoy EL's and RE's too, but I hate that tobacco for those programs result in the lowered production or cessation of other cigars.  I know Cuba has had some crop issues thanks to various tropical storms over the past 5+ years and the EL/RE offerings can make for great margins vs regular stock.  But I believe this thinking will hurt them overall.  I don't think I will turn to NC's as a result given how much inventory I have and the rate I smoke it at, but it will influence those who are starting out or don't go deep on stock.

For any French wine drinkers out there (me included) use Pegau Chateauneuf du Pape as an example. On release the price was $39/blt 10 years ago and today $59-$69. Not withstanding the”Great Recession” pricing continued to increase 3-5% including vintage implications. During this time competitors starting expanding their line BUT within the existing vineyard! To keep up Pegau took the best located/oldest vines within their CdP vineyard and created a second wine, Cuvée da Capo (approx $300/blt) plus others! Prior to these new releases all the wine went into the Reservee, $39 10 years ago. This example translates across the entire wine industry. Oh, one more thing China has had an enormous impact on pricing through the auction market!


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[topdiesel]

Once the FOH Auction site opens itself to sales from beyond the lockers, the true value and sustainability of secondary market cigars will be easier to track and more reliable pricing will be available.  You will be the gatekeeper to accurate and important secondary market data.  

Or perhaps the keymaster

[El Presidente]

4 hours ago, Capt. Corona said:

Already experienced this first hand on the island (premiums being asked on top of yul pricing) for some hard to find boxes.

Certainly no offense meant to the Asian brothers and sisters but that market drives a large sum of the pricing, IMO.  There is a lot of new money there that is allowed to demand what it wants.

In terms of the wider Asian market cigar spend, we haven't seen anything yet. 

While that market is certainly a significant influence, it is no more so than US diplomatic policy (creating a voodoo product) and Cuban economic policy (factory workers on 20 a month). 

Perfect Storm. 

 

 

 

 

[Meklown]

Where a bubble is concerned, I just don't see it.

I only smoke CCs as this is where my preference lies. For me, no NC can match the taste, smoothness, complexity of a properly rolled CC. This is why I think CC is the superior product to basically any other cigar. I am also sure I'm not the only one who has this view.

So from my point of view, it is a little bit crazy how top NC brands still have prices above and beyond what CCs (even Cohiba) charge. If the prices of NCs can be supported at that range, so can CCs (or even higher, as they are the superior product in my view).

[Tstew75]

The American secondary market will likely never burst...people crave forbidden fruit. I do sometimes wonder what would happen to US pricing if CCs were legalized & the greedy US government could tax them. I have a feeling many collectors hope CCs stay on the black list forever...

[Cairo]

30 minutes ago, Tstew75 said:

The American secondary market will likely never burst...people crave forbidden fruit. I do sometimes wonder what would happen to US pricing if CCs were legalized & the greedy US government could tax them. I have a feeling many collectors hope CCs stay on the black list forever...

The greedy states would pile on--legalization would be a total disaster, no doubt.

[Capt. Corona]

4 hours ago, Tstew75 said:

The American secondary market will likely never burst...people crave forbidden fruit. I do sometimes wonder what would happen to US pricing if CCs were legalized & the greedy US government could tax them. I have a feeling many collectors hope CCs stay on the black list forever...

Let's just hope this never happens in our time of life on earth. ?

[SenorPerfecto]

The easier availability of stock from FOH Auctions (and those who flip after winning) probably drives down prices on the secondary market; that, and the fact that people only have so much capital to spend on cigars (I know I do) and once it is gone, it must be replenished. That takes time.

 

Also, in the US, wages for the non super-rich have been very flat the last few years. That doesn't have a nil effect.

[Notsocleaver]

The idea that people are buying from FOH Auctions and flipping for a profit boggles my mind. That's a pretty big bubble.

[earthson]

On 10/1/2019 at 1:52 AM, nKostyan said:

You have not mentioned another important advantage of Cuban tobacco - the ability to preserve the taste and strength for decades.

Without the possibility of aging and long-term storage, there was no market for rarities and vintages, there would be no prospects for investing in order to profit from resale after storage.

 

Aha!  This is the crux of the biscuit, so to speak and ties in with the question of whether the "new blends" will age as well as the old.  If cigars being produced now - for any price and any reason (RE, LCDH, etc) - do not age well and become bland and lifeless, the secondary market will surely be affected as a bunch of would-be investors are left holding the bag once word gets out.

I buy to smoke, so I'm living a relatively simple life of the ratio of price/desire.

On 10/1/2019 at 7:46 AM, bundwallah said:

Chateau du Merde

Hahahahahaha!  This isn't a real wine house, is it?

[Puros Y Vino]

31 minutes ago, earthson said:

Hahahahahaha!  This isn't a real wine house, is it?

LOL. No.  But there is a Le Vin De Merde. Dying to get a bottle. 

[earthson]

10 hours ago, bundwallah said:

LOL. No.  But there is a Le Vin De Merde. Dying to get a bottle. 

Geez - so there is.  I reckon you can get a similar experience from any of the local middle Tennessee wineries.  They do make some good wines... with imported grapes!

[bbguardsp]

On 9/30/2019 at 11:49 PM, El Presidente said:

All this at a time when their arch enemy Habanos S.A continues to kick own goals with an inability to consistently supply premium product such as Behike and VI. 

 

On 10/1/2019 at 2:38 AM, El Presidente said:

In the end they are a business producing less cigars today than 3 years ago but making a higher revenue. In their eyes they are doing the right thing.  Unfortunately there is a price to pay and they are finding that out.

Curious if late 18-19 increase in quality you have mentioned is mostly theresult of the lower production you mentioned in the Monte 1 review?  Do you feel cuba has the ability to ramp up the supply of premium product if they wanted and maintain said quality but the revenue model is just too good for them consider at this point in time?  I hope we can have it both ways one day.