This Liquid Asset Should Never Be Watered Down

Anthony Haddad's picture

Tuesday, August 11, 2009 - 12:17pm

by Anthony Haddad

William Grant & Sons Distillers, in business for more than 120 years, recently released a limited-edition variety of its Glenfiddich single-malt scotch. The amber whisky has been quietly aging under the Glenfiddich Distillery's Warehouse 8 in Dufftown, Scotland, for a half-century. At $16,000, it is one of the most expensive bottles of spirits in the world, though rare wine routinely sells for more at auction. Only 500 bottles will be sold of the rare scotch.

The price tag notwithstanding, the newest -- or, rather, the oldest -- Glenfiddich is exciting collectors, investors and other scotch enthusiasts.

Some are eager to sample the 50-year-old Speyside single malt, which comes from one of the world's premier brands. Others look at it as a store of value. In some cases -- no pun intended -- it has paid off.

A Macallan 60-year that sold for $11,250 in 1991 is now worth $38,000. That's a compound annual growth rate of 7%, better than the S&P 500 has performed in the same period. That's not a bad run for what amounts to a vanishing asset. Two percent of whisky evaporates from a wooden cask each year.

While some scotch -- like some stocks -- may rise tremendously in value, some never do. The upside, I suppose, is that you could always just drink the stuff. Which brings me to the most serious risk factor associated with this liquid asset: Storage. This scotch -- elegantly presented in hand-blown bottle in a special leather case -- should be secreted away in a vault or a wine cellar, not just stuck in the back of the liquor cabinet.

Anthony Haddad does not personally hold positions in any securities mentioned in this article.
StreetAuthority LLC does not hold positions in any securities mentioned in this article.