Clubhouse
LIQUID ASSETS
PLAYER WATCH China’s number one Liang Wen-chong warmed up for the UBS Hong Kong Open with a gutsy one-stroke victory at the Hero Indian Open last month. The highlight of his week was undoubtedly his brilliant first round of 60 (12-under-par), the lowest round ever recorded on the Asian Tour. Played over the short but narrow par-72 Delhi Golf Club, Liang’s amazing scorecard looked like this:
Wine Investment -Miracle or Myth? As the bids for the prized bottles approached the previous record, the excited buzz in the room turned to a hushed, nervous silence. Hands that had previously been raised with proud Gallic defiance and courage were firmly clenched in reluctant, defeated laps, some pinned there by the piercing glower of fuming spouses who could never understand why their husbands were so obsessed with accumulating more wine than they could ever possibly consume. Then the brokers manning the phones stood up and took over the show. The crowd was treated to a superb match of phone tennis as the combatants slugged it out for the trophy:
OUT: 3, 4, 2, 4, 4, 4, 4, 2, 5 = 32 IN: 4, 3, 3, 4, 2, 3, 2, 4, 3 = 28
With numbers like that, the Zhongshan-born Liang has raised local expectations that he can become the first Asian golfer to win the Hong Kong Open since Korea’s Kang Wooksoon in 1998.
EQUIPMENT WATCH
1600 Euro, 1700, 1750, 1800, 1850, 1900, 1910, 1920, 1930, 1940, 1941, 1942, 1943...and finally, 1944 Euro. Sold.
NUMBERS GAME Number of Hong Kong Opens won by Major Champions: 12 Number of Hong Kong Opens won by Asian golfers: 16 Total prize purse in 1959, the first year of the HKO: £2,000 Total prize purse in 2001, the first year the HKO became a European Tour event: US$700,000 Total prize purse in 2008: US$2.5 million Stroke average of the par-four ninth, ranked the most difficult hole at the 2007 HKO: 4.36 Stroke average of the par-five thirteenth, ranked the easiest hole at the 2007 HKO: 4.55
the truth of the matter is that I didn’t actually know it was going on. I “wasWell lying on the beach in Australia and saw a report on the tournament in the
newspaper. I thought, ‘hey, they are playing the Hong Kong Open—why I am not there.’ I made sure I was there the next year. ” - The legendary Peter Thomson explaining why he didn’t attend the first Hong Kong Open in 1959. Thomson, now 79, made up for his absence that year by winning three of the next eight championships at Fanling (1960, 1965 and 1967).
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HK GOLFER・NOV/DEC 2008
WWW.HKGA.COM
In late September, against a backdrop of global financial markets staggering ever closer to calamity, six bottles of Chateau Lafite 1982 were listed at a prominent Paris auction. Lehman Brothers had just disappeared after 158 years of successful operations, taking with it the investment parameters we had all come to trust inherently. The foundations of our understanding of the global financial markets and their players were being shaken to the core. Fear had replaced greed as the primary instinct. Notwithstanding this, only a few days earlier a London auction of a variety of Hirst pickled animal carcasses had elicited prices normally reserved for the services of David Beckham (or the price of an Icelandic bank or two). This despite predictions that the brooding gloom would depress interest in the art market. Not yet apparently. Thus it was with much anticipation and interest that the 6 bottles were paraded before the crowded room and the online bidders. They were exChateau, so provenance was impeccable. Wines of lesser pedigree are often ubiquitously described as “from the collection of a gentleman collector”, a term used quite liberally in auction parlance where provenance is known but not necessarily verified. WWW.HKGA.COM
A new record! Crisis?! What crisis? The stunned room erupted into rapturous applause. (I have always been baffled why auction purchases elicit applause. Is it really an outpouring of appreciation and goodwill as some have explained to me? If there are any psychologists out there, please elaborate.) The excited chatter afterwards revealed that “deux amateurs Chinois” had provided the bidding spectacle. Some scoffed and called it a rash burst of testosterone driven folly. Others winced as they remorsefully contemplated that the baton of wealth creation had moved all too demonstratively from West to East. Jubilant brokers of wine funds , extrapolating that the sale would re-price all investment wines, were frantically relaying the news back to their clients, offering compliments on their purchasing wisdom and exhorting them to commit funds to the 2007 offerings that had so far been ignored. So, what are we to surmise from this? Should we conclude that every asset class is in brutal decline but that art and wine are not? I doubt it, despite all the evidence to the contrary. Art is its own peculiar theatre where investors seem to hope that the creator dies before becoming too prolific. Frankly, I find it all too strange and a bit silly. Regarding wine, the audience is much larger and the supply/demand dynamics easier to understand. However, whilst wine prices can defy gravity for a while, I do not believe they can sustain their spectacular performance. I am also particularly sceptical of the process used to price portfolios because the market is neither transparent nor particularly efficient. Why am I of this opinion? Mainly due to the fact that at the same time as records were being set in Paris, my own business had two bottles of impeccably cellared 1982 Lafite being auctioned in Hong Kong with reserve prices of US$1300 USD (920 euro at the time). These received no bids at all, despite lots of curious enquiries. The same auction saw the following trade at an average of 30% under retail: Montrose 1996 and 2003, Poyferre 2000, Haut Brion 1988/1995/1998, Latour 2001, Margaux 1989/1992/2004, Glaetzer Amon Ra 2005, Greenock Creek Alices 2000/01/02/04/06, Mollydooker Carnival of Love 2005, Penfolds Grange 2003, Kaesler old Bastard 2005, D’arenberg Dead Arm 1999/00/01, Silver Oak 1997, Screaming Eagle 1999, Sassiacai 2000. HK GOLFER・NOV/DEC 2008
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Professional golf tournaments are an equipment junkie’s dream. Not only do golfing anoraks get to see their favourite players battle it out in the heat of competition but, far more importantly, they get to check out the pros’ latest gear. Although you yourself might not fit this particular description, there’s sure to be a fair few models of famous brands that you haven’t yet seen, including the new 909 series of drivers from Titleist. Available in Hong Kong within the next month, the 909 range comprises three models: 909DComp, 909D2 and 909D3. Featuring a classic pear-shaped profile with a graphite crown married into the titanium head, the range is expected to appeal to a broad spectrum of players thanks to their wide range of launch options. Although the D3, with it’s smaller 440cc head and low spinning launch characteristics, is billed as the most workable of the three, expect to see the majority of Titleist pros at Fanling opt for the D2 model, which has already been used to great success by PGA Tour Chez Reavie who won the RBC Canadian Open with one in the bag. To accompany the driver range, a series of 909 fairway woods and hybrid clubs will also be available. Drivers from HK$5,100. Special Edition models (D2 and D3) $7,500. Visit www.titleist.com for more information.
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What is going on? I understand and admit that internet wine auctions have not captured the imaginations of the Asian wine buying public as much as I might expect but they are now an integral part of the global wine trade. They provide much needed liquidity and transparency and will increasingly dominate the premium marketplace as time moves forward. Perhaps more importantly, they provide discerning buyers with outstanding opportunities to purchase exceptional wines at prices well below retail, and often well below auction prices in Europe and USA. European wine brokers insist that wines located in Asia (and the USA) should trade at a deep discount to European cellared wine due to the provenance factor. That is all well and good but the same logic would lead one to conclude that Asian buyers should thus get a discount if they buy for consumption in Asia as their wine will devalue massively once it is shipped. Or, putting it another way, Asian buyers should never contemplate moving the wine to Asia. This all seems ridiculous when it is the Asian investor/consumer who is being touted as one of the main drivers behind wine price increases. It also flies in the face of the intense battle between all the major auction houses which are now clamouring for position in Hong Kong. There are significant holdings of super premium wines that are being lovingly and professionally cellared in Asia. Are we really to believe that they are worth less than half the
value of their European equivalents because their owners have moved them closer to home? All too hard? I agree. The inconsistencies and irregularities are typical of illiquid, esoteric asset classes. Can we really have a sensible discussion on portfolio valuation based on the sale of 6 bottles in Paris or the lack of a sale of 2 bottles in Hong Kong? Wine investment? Sure, why not. The numbers so far seem to indicate some select few wines will always rise in value, but this should be seen as the exception rather than the rule. Be wary of the valuations you are advised of and make sure you have a clear exit strategy. It may not be wise to value your investment on a handful of wines that trade in a small secondary market and thereby convince yourself that this represents the realisable value of the wines. Nor should you value your wines based on restaurant or retail outlet price lists! Big positions in illiquid assets aren’t always the easiest things to unwind should an investor need to liquidate. Just ask Lehman Brothers. The best thing about investment in wine is that you can always pop the cork and enjoy it for the reason it was made to provide pure pleasure. Cheers.—Robert Rees Robert is founder of Wine Exchange Asia, a wine auction website serving customers in Singapore and Hong Kong. For more information regarding auction timings, promotions and other details please visit www.wineexchangeasia.com
HONG KONG OPEN PAST WINNERS
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1959
Lu Liang Huan
TPE
1976
Ho Ming Chung
TPE
1993
Brian Watts
USA
1960
Peter Thomson
AUS
1977
Hsieh Min Nan
TPE
1994
David Frost
RSA
1961
Kel Nagle
AUS
1978
Hsieh Yung Yo
TPE
1995
Gary Webb
USA
1962
Len Woodward
AUS
1979
Greg Norman
AUS
1996
Rodrigo Cuello
PHI
1963
Hsieh Yung Yo
TPE
1980
Kuo Chi Hsiung
TPE
1997
Frank Nobilo
NZL
1964
Hsieh Yung Yo
TPE
1981
Chen Tze Ming
TPE
1998
Kang Wook Soon
KOR
1965
Peter Thomson
AUS
1982
Kurt Cox
USA
1999
Patrik Sjoland
1966
Frank Phillips
AUS
1983
Greg Norman
AUS
2000 Simon Dyson
1967
Peter Thomson
AUS
1984
Bill Brask
USA
2001
Jose Maria Olazabal ESP
1968
Randall Vines
AUS
1985
Mark Aebli
USA
2002
Fredrik Jacobson
SWE
Padraig Harrington
IRL
SWE ENG
1969
Teruo Sugihara
JPN
1986
Seichi Kanai
JPN
2003
1970
Isao Katsumata JPN
1987
Ian Woosnam
WAL
2004 Miguel Angel Jimenez ESP
1971
Orville Moody
RSA
1988
Hsieh Chin Sheng
TPE
2005 Colin Montgomerie
SCO
1972
Walter Godfrey
NZL
1989
Brian Claar
USA
2006 Jose Manuel Lara
ESP
1973
Frank Phillips
AUS
1990
Ken Green
USA
2007
1974
Lu Liang Huan
TPE
1991
Bernhard Langer
GER
1975
Hsieh Yung Yo
TPE
1992
Tom Watson
USA
HK GOLFER・NOV/DEC 2008
Miguel Angel Jimenez ESP Denotes a Major winner
WWW.HKGA.COM
WWW.HKGA.COM
HK GOLFER・NOV/DEC 2008
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