Bond Roberts Q2 2020 Market Report

[TheGipper]

In the spirit of this old thread, I'm continuing my work of keeping track of Bond Roberts auctions as a measure of rate of return on vintage/aged Habanos.

 

Be aware the annualized rate of returns I'm reporting here will depend heavily on purchase price, of course.  Most of the baseline purchase prices I'm calculating are based on a combination of my own purchase history, records of vendor pricing over the last 15+ years, and where neither is available, a best estimate of purchase price.

Regional Editions present a particular problem for baseline pricing.  There is a bipolar tendency for RE prices to be reasonable if you can acquire in-person as opposed to mail order.  Because the purpose of this project is to measure rate of return as a comparative to typical investment returns (stock market, real estate, etc), I am using a higher baseline for Regionals, as that is the most likely typical prices one would have to pay to acquire investment-level quantities.

Report content to follow.

 

[TheGipper]

Tables based on all Q2 2020 Bond Roberts auctions with winning bids (i.e. met any reserve price).

Q2 dates are April 1 to June 30, 2020.  First closed auction was April 30.

Overall Returns	Annualized	Lot Count
All Auctions Equal-Weight	11.81%	402
All Auctions Dollar-Weight  [see Note 1]	13.39%	402
Note 1: Dollar weighted returns are a better measure of portfolio performance by dollar invested.  Equal weight represent return per lot (box), and are suggestive of a lower bound for returns on low-priced boxes.   Category Returns (Equal Weight) Annualized Lot Count Regular Production 14.08% 170 Special Production (Non-EL) 13.74% 22 Discontinued 12.10% 44 Regional Editions  [see Note 2] 9.97% 101 Edicion Limitadas 11.91% 65 Note 2: Regional Edition returns are lower due to cost-to-acquire assumptions included in our baseline pricing database.  Returns will be higher for boxes acquired at in-country typical prices. Marcas Annualized Lot Count Bolivar 13.59% 32 Cohiba 15.32% 37 Cohiba (Regular Production, ex Behike) 13.21% 21 Cohiba (Behike Only) 18.01% 6 Diplomaticos 13.16% 18 El Rey del Mundo 12.92% 14 H. Upmann 14.41% 29 Hoyo de Monterrey 12.39% 28 La Gloria Cubana 23.13% 8 Montecristo 12.65% 44 Por Larranaga 12.37% 20 Punch 8.94% 24 Quai d'Orsay 13.29% 4 Rafael Gonzalez 8.17% 11 Ramon Allones 10.52% 26 Romeo y Julieta 7.77% 13 Saint Luis Rey 7.45% 9 San Cristobal de la Habana 16.94% 4 Sancho Panza 8.64% 4 Trinidad 12.54% 11 Vegas Robaina 10.90% 7   Production Year Annualized Lot Count Pre-2000 7.27% 11 2000 4.69% 1 2001 7.12% 2 2002 10.28% 4 2003 8.79% 8 2004 8.23% 6 2005 8.64% 7 2006 12.50% 8 2007 8.62% 20 2008 9.20% 30 2009 9.43% 19 2010 11.65% 29 2011 12.06% 24 2012 13.88% 19 2013 10.40% 44 2014 15.06% 34 2015 14.81% 41 2016 15.79% 75 2017 14.19% 14

[TheGipper]

	Top 10 By Realized Price
Lot #	Description	Box Code	Price	Bids	AR
1634	Cohiba Siglo VI Gran Reserva 2009 (15)	N/A	$12,005.00	31	21.45%
1461	Partagas Serie E. No. 1 Coleccion Habanos 2015 (20)	ULA MAY 15	$2,715.00	26	15.39%
1678	Partagas Lusitanias Gran Reserva Cosecha 2007 (15)	ULA DIC 13	$2,266.00	9	5.71%
1470	Cohiba Behike BHK 54 (10)	LBT ABR 10	$2,005.00	13	19.62%
1669	H. Upmann Sir Winston (25)	AXC JUN 03	$1,997.00	27	12.51%
1969	Cohiba Esplendidos (25)	MEL JUN 08	$1,842.00	75	13.08%
1732	Hoyo de Monterrey Double Coronas (25)	LOB AGO 04	$1,805.00	31	13.88%
1747	Partagas Lusitanias Gran Reserva Cosecha 2007 (15)	ULA DIC 13	$1,805.00	35	1.77%
1853	H. Upmann Sir Winston (25)	RUC OCT 02	$1,800.00	63	10.36%
1679	Cohiba 1966 EL 2011 (10)	TAU JUL 11	$1,706.00	18	17.19%
	Top 10 By Annualized Return
Lot	Description	Box Code	Price	Bids	AR
1858	La Gloria Cubana Medaille d'Or No. 4 (25)	ETP OCT 16	$306.00	16	36.18%
1620	La Gloria Cubana Medaille d'Or No. 4 (25)	ETP JUN 16	$330.00	42	35.86%
1467	San Cristobal El Principe (25)	TOS MAY 16	$285.00	22	32.61%
1709	La Gloria Cubana Medaille d'Or No. 2 (25)	MUR JUL 13	$1,250.00	1	31.72%
1847	Partagas Serie D No. 4 (25)	PUR MAY 16	$455.00	17	31.25%
1468	Bolivar Belicosos Finos DB (25)	ETP MAY 16	$465.00	28	30.91%
1487	Montecristo No. 2 (25)	PTR DIC 16	$510.00	26	30.75%
1962	H. Upmann Royal Robustos LCDH (10)	MEG JUN 16	$280.00	21	30.20%
1535	Cohiba Robustos Supremos EL 2014 (10)	PMS DIC 14	$1,338.00	34	29.80%
1945	Vegas Robaina Don Alejandro (25)	BMP JUL 16	$660.00	21	29.70%

[TheGipper]

A key takeaway for me is in the Category Returns table:

Category Returns (Equal Weight)	Annualized	Lot Count
Regular Production	14.08%	170
Special Production (Non-EL)	13.74%	22
Discontinued	12.10%	44
Regional Editions  [see Note 2]	9.97%	101
Edicion Limitadas	11.91%	65

 

This surprised me.  Non-discontinued regular production boxes beat every other category for annualized return.  So you don't have to go buy the fancy double-bander, lacquered humidor releases to maximize returns!

Regional Edition returns suffered purely on the cost-to-acquire higher purchase prices.  It's still worth buying REs while traveling to those locales, as the returns would be much higher than 10% when paying the in-country prices.

 

 

[El Presidente]

Very nice work 

Bond Roberts is coming up to three months since launch.  It has been a great start  and congratulations to both Andy and Ben who are instrumental to its ongoing success. 

In terms of the numbers, it was apparent early on that regular production is a star performer.  You just need to put an extra box away here and there. The performance of 10 counts has been excellent. Pick your regionals. Some perform far far better than others. Same goes for specialties. 

Bond Roberts will be producing a regular report for BR members. 

We may not have to 

[Wookie]

30 minutes ago, TheGipper said:

In the spirit of this old thread, I'm continuing my work of keeping track of Bond Roberts auctions as a measure of rate of return on vintage/aged Habanos.

 

Be aware the annualized rate of returns I'm reporting here will depend heavily on purchase price, of course.  Most of the baseline purchase prices I'm calculating are based on a combination of my own purchase history, records of vendor pricing over the last 15+ years, and where neither is available, a best estimate of purchase price.

Regional Editions present a particular problem for baseline pricing.  There is a bipolar tendency for RE prices to be reasonable if you can acquire in-person as opposed to mail order.  Because the purpose of this project is to measure rate of return as a comparative to typical investment returns (stock market, real estate, etc), I am using a higher baseline for Regionals, as that is the most likely typical prices one would have to pay to acquire investment-level quantities.

Report content to follow.

 

Awesome work! I'm wearing contacts and can't see well on my iPad....are these returns gross numbers or net of seller premiums? 

[TheGipper]

Just now, Wookie said:

Awesome work! I'm wearing contacts and can't see well on my iPad....are these returns gross numbers or net of seller premiums? 

Good question.  No seller premiums have been deducted from the realized prices.

[Notsocleaver]

I'm gonna have a hard time opening up those boxes of ETP '16 MdO#4 now.

[El Presidente]

19 minutes ago, TheGipper said:

Good question.  No seller premiums have been deducted from the realized prices.

That makes it a little tough. Platinum sellers pay 0%. Gold 5%. Most of our regular sellers are 0% sellers fee as they are Platinum. it is not hard to achieve as the requirement is $2500 a quarter (3 months)  bought/sold combined. Gold is $1500 (combined).  10% seller fees apply to the odd box seller but once you reach $1500 you jump up to Gold etc. 

[Riverstyx]

Is it just me or have boxes become more expensive since that CA article?

[El Presidente]

1 minute ago, Riverstyx said:

Is it just me or have boxes become more expensive since that CA article?

just you 

HSA price rises May are filtering through. USD dropping. Supply cut by approximately 1/3rd. 

[Riverstyx]

4 minutes ago, El Presidente said:

just you 

HSA price rises May are filtering through. USD dropping. Supply cut by approximately 1/3rd. 

I meant aged on BR...I think you mentioned more traffic.  Has that resulted in more (potentially higher) bidding?

[El Presidente]

6 minutes ago, Riverstyx said:

I meant aged on BR...I think you mentioned more traffic.  Has that resulted in more (potentially higher) bidding?

I have found bidding levels to be more affected by the type/variety of stock that is listed. We had a great list up over the past week. 

There were two bargains last week. That aged box of Connie A went for a song as did a box of SP Beli. 

I keep an eye out for aged Punch listings as they appear to be great value (Punch Punch/Petit Punch/DC). 

[Notsocleaver]

Are you figuring Annual Rate of Return based off of the box code? If so, you are probably assuming up to an extra year or so of holding since most initial box purchases are at least 6-9 months old and many over a year.

[Londonguy]

Thanks Gipper. Amazing work! That beats the S&P 500.  Now, how do I take the money in my IRA and "invest" in more cigars?

The development of an index would be helpful.  Like what is available for wine. https://www.wineinvestment.com/wine-investment/liv-ex/

Any suggestions for such a cigar index?

[TheGipper]

37 minutes ago, Notsocleaver said:

Are you figuring Annual Rate of Return based off of the box code? If so, you are probably assuming up to an extra year or so of holding since most initial box purchases are at least 6-9 months old and many over a year.

Purchase dates are set at box code date + six months.  It's a rough rule of thumb, but allows for the annualized returns to represent lower bounds of overall returns.

Any boxes that you may get that are more than six months old when they land will only enhance your theoretical returns. ?

[Yellot00tr]

Feel like there have been so many low cost regionals being auctioned, which drags down the overall numbers. Curious how many LFDC regionals or other similar lower cost REs were sold that would have brought down that entire market segment. Haven’t seen many of the earlier Mexico Conde 54 or 109s. Those would drag up the segment’s numbers significantly, as would more boxes of the LE Italias or other harder to find REs. 
 

Legendarios and Norteños dragged down the RE numbers as well. Those ROI numbers are crap.

[Hoepssa]

 

Great read!

[jpm2024]

This is FANTASTIC, thank you. Now I can justify "investing" more...