Lessons from my spirit animal, Martin Daraz

This past Monday I think I found soulmate and his name is Martin Daraz. Among the many hilarious stories and incredible facts he shared with us, the one that stood out the most to me was the price of the most expensive bottle of whiskey -- $25,000 which, naturally, he seemed to regard as ridiculous. The aforementioned bottle is a 50-year old single malt by Glenlivet and is called the Vintage 1964, a reference to when the liquor was first distilled and put into the barrel.

The company ensured that only 100 bottles would be available worldwide, starting in October (only five of which are for the US market), at a retail price from $25,000 apiece. Now this seems like an absurd way to an entire quarters worth of tuition on ONE bottle of whiskey (though some quarters it may have actually been a better use of money, but I digress). However, Glenlivet has ensured consumers that the price is worth it as they are also getting a bottle made of handblown glass with a stopper made out of pure sterling silver plated in rose gold and containing quartz. But that’s not all. The bottle is housed in a thoroughly handcrafted wooden cabinet complete with a special hidden key. I suppose if I paid that much for a bottle of wine, I would probably guard it more than my children.

This is a picture of the bottle and all its accoutrements

For paying this much, I wonder what event is actually significant enough to actually decide to open up and drink some. This seems kind of like a Last Supper or death row final meal kind of drink for me.

Surprisingly, this is not even the highest priced whiskey on the market. There is a 50 year old malt whiskey from Glenfiddich, which is available on their website and retails for £22,850 (or $33,700). There are only 50 of these bottles in existence and they often are available on auction.

So this begs the question of why? Why on earth does a 15 year old Solera whiskey from Glenfiddich retail for a mere $42 while others are over $20,000? The answer, Martin explained, is in the fact that the by the time a 21-year bottle of whiskey has aged, 30% to 40% of what was in barrels is gone due to natural evaporation. In other words, a lot of what a distillery actually started with does not even make it into a bottle. Given these production aspects, Daraz explained that the rarity of these whiskey batches command a higher sticker price. Sotheby’s had a MacAllan auction in 2012 which sold a bottle of scotch for $460,000 with a portion of total proceeds going to charity. Martin also says it’s a safer investment than gold as the amount of money spent investing in whiskey will have outsized returns relative to any investment in a major stock market index. Given the expectation that top super malt prices will continue to grow substantially, it is no surprise that many people would think to invest in or collect whiskey in the same way they invest in or collect fine art.

Personally, I still find this highly irrational and perhaps not the wisest or most prudent investment given the expected drop in whiskey drinkers from a generational standpoint. But who knows? Maybe my consideration of this asset class will have changed by the time that I make my first million..