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The theme of this week's newsletter is how to understand value within a label.

Let me first caveat this by saying that there is no one size fits all method here. As with all wine investing, or wine as a whole - there are variables specific to region, sub-region, age, producer across any number of axes.

However, there are rules of thumb that you can follow.

An industry standard method is to look at price per critic point. This number of critic points out of 100, or 20 that a wine receives by the price of the given vintage.

If the 2005 got 100 points and is worth £100 then you are paying £1 per critic point.

If the 2009 got 95 points and is worth £90, then you are paying about 95p per critic point.

If the label average is 98p per critic point, then you could infer that the 2009 is relatively undervalued, and the 2005 overvalued.

It is important not to take this as a quick fix investment method. For starters, as WineFi 🍷's Data Tsar Aaran Daniel would probably tell you, it's worth removing outliers.

To use an extreme example - if the 2004 got 70 points, then it is (according to that critic) a much worse wine. It is likely that secondary market demand will be lower, and it is very unlikely to age as well as the higher scoring vintages. So even if it only costs 50p now - there's a much lower chance of appreciation.

You can see this visualised below.

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According to this chart, the best value wines are those for which the average critic score is much higher than the price per point.

This is not accounting for critic score inflation, 'legendary vintages' commanding cult status, or anything else.

It also is unlikely to be a linear relationship - the extra point between a 99 and 100 may mean more than the difference between an 89 and a 90.

What we have found at WineFi is that there typically seems to have been a middle ground. Value is baked in at release for the 100 pointers of the world, and the low scorers are less likely to age well, or have secondary market demand. Look for wines in the sweet spot, wines that have scored fairly well, where similar scoring vintages command a higher price. Hence the title.

This is of course assuming that you've done the work on the label level. As seen in Aaran's recent post. A good value vintage of L'if is still unlikely to net you any returns.

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