Lecture on Whisky Investment by Lorey

Personal Anecdote

• In his 20s, Lorey celebrated with friends in bars.
• Took home two bottles of whisky, thought they were valuable.
• Friend pointed out they were not valuable (Johnnie Walker and Chivas).
• This incident led Lorey to gain interest in understanding and investing in different types of alcohol.

Increasing Interest in Whisky

• Lorey developed an interest in various types of alcohol including wines, Chinese liquor, and whisky.
• Whisky is highlighted as unique due to its easy preservation and potential for high investment returns.
• Good whisky can appreciate significantly in value, sometimes becoming auction items.
• Whisky has attracted global enthusiasts for investment and trading.

Economic Context and Investment Landscape

• Reference to Berkshire Hathaway's recent market action, holding cash instead of investing, reflecting the challenging investment climate.
• Lorey agrees with this prudent approach and is exploring alternative investments, particularly whisky.

Whisky as an Investment

• Whisky is easier to store compared to other alcohols, has high alcohol content, and a large market with low entry barriers.
• A notable book: "品味投資威士忌" by Tiga Chan – a whisky expert from Hong Kong.
  • Tiga Chan has esteemed qualifications in distillation and whisky culture.
  • The book discusses whisky appreciation and investment.

Case Study: The Hanyu Ichiro's Card Series

• Auction in Hong Kong (Nov 2020) featured Ichiro's Malt Card Series from Japan’s defunct Hanyu distillery.
• Sold for HKD 11,890,000 – the most expensive Japanese whisky auction.
• Highlight on the investment regret of missing out on a valuable whisky purchase.

Notable Whisky Brands and Products

• Whisky brands with high investment value: Hibiki, Hakushu, Yamazaki, Yoichi.
• Popularity and cessation of production have driven up prices, particularly of Japanese whisky.
• Examples of high-value appreciation in Japanese whisky brands over time.

Factors that Influence Whisky Investment

Key Attributes:

1. Raw Materials: Type of grain used (e.g., barley, wheat, rye, corn) influences investment value.

   • Single Malt: Most representative and valued for investment.
   • Blended Malt and Single Grain: Less favorable due to mixed or lower quality grains.
   • Blended Whisky: Common, low-value, e.g., Johnnie Walker and Chivas.
   • Higher alcohol concentration is generally more valuable.

2. Aging: Time spent in barrels, flavor over age.

   • Minimum 3 years for official whisky designation.

3. Casks (Barrels): The material and previous contents of the cask add flavor and value.

   • Bourbon casks add vanilla and almond flavors.
   • Peated casks give smoky flavors.
   • Sherry casks are highly valued for adding rich, complex flavors.

4. Distillery Reputation: Brand name significantly impacts the value.

   • OB (Official Bottler) vs. IB (Independent Bottler), OB generally more valuable.
   • Single Cask OB is highly prized.

5. Production Volume: Lower production volumes generally indicate higher potential investment value.

Conclusion

• Whisky investment is complex and nuanced, requiring knowledge of specific factors to identify valuable bottles.
• VIP membership offers further insights into advanced whisky investment strategies.
• Recommended reading: the book "品味投資威士忌" for deeper knowledge.