Hear from an investor...you don’t have to like whisky to invest in it
Which whisky casks have you invested in?
I invested in a nine year old Royal Brackla, which I had never heard of before, but it’s of only two in the UK with a Royal Warrant (granted in 1833). They have very high standards and the whisky smells incredible. They were also one of the first distilleries to make whisky for King William IV.
What are the main things you look for when investing in casks?
It depends, if it is purely for investment purposes I would look at data, facts and the performance history. For me it is a fun investment, but it depends on how much you are investing. If you invest millions then it would be a pure investment. But if you are only looking to diversify and play around with what you have with HK$100,000-200,000, then you can buy something that you enjoy and you can taste one day.
Are there any brands that you would recommend investing in?
It depends on the availability, I would invest in some of the well known brands such as Glenrothes, Dalmore, Glen Grant and more well known distilleries, but it’s not always obtainable. In saying this, I didn’t know about Royal Brackla before I bought it, so it is all about doing the research, so some of the smaller unknown brands could be a good investment too. I am lucky since I also have access to our well known experts in the UK who can suggest and advise on casks with investment potentials.
Is it your belief that whisky will continue to go up or do you think there will be fluctuations like most other alternative asset classes?
Of course there is no absolute guarantee in this world. But, because Scotch whisky is so limited, you have to wait a long time for it to mature. You cannot mass produce it, so there is only a certain amount of supply and a huge demand. Imagine 25 or 30 years ago, no one predicted that there would be such demand for single malt in the world. Twenty somethings, women and health conscious individuals are all learning to drink whisky. More and more people from Singapore, Taiwan, USA, India and China are getting into the whisky fad and it’s quite the trendy drink these days. Even if they start to make more whisky, you still need bourbon and sherry casks. Unless they ramp up massive production of bourbon and sherry, there is a limited amount of casks since they only make a certain amount of sherry each year. So, to be able to make whisky inside an ex-sherry or bourbon cask is not that easy.
In terms of other alternative assets would you say whisky is your favourite?
At the moment it’s my favourite since it doesn’t fluctuate as much as the other asset classes such as real estate and stocks. Even crypto currency goes up and down thousands of points a day, so if you are a trader you have to diligently monitor it throughout the day. With whisky it is relatively low maintenance since you can buy it and leave it for a few years. In five to ten years time, you will have a lot of money. Young investors for example are also ideal since you can start early and leave for one to two decades.
Do you have to like whisky to invest in it?
No you don’t. You don’t need to like a stock or a hedge fund before you buy. It’s all about the sales record, asset potential and forecasts. At least with whisky it will always be a physical asset and the cask will be owned by you. With traditional financial investments, stocks or even real estate, if it goes down and you remortgage it - the value disappears. I would say that if you have money, do it now, don’t wait, because the longer you wait the higher it will be. At some point the entry level will be too high to get in. For example, Japanese whisky is already quite high and in my opinion, there isn’t a whole lot higher that it can go. Whereas with Scotch whisky, there is room at the moment and people are already jumping on the opportunity as it continues to go up making this a good time to get involved.
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