Cigar as an investment?

[ZinZan]

I do understand most of us are passionate about cigars and we do it for the love and the enjoyment of the cigars. A couple months ago Lisa & Smthy ran the vintage LFTH. Saw the prices nearly double for cigars with more than 5-10 years of age. Wine has become feasible alternative investment, how bout cigars?

[gigabyte056]

If you have the ability to store them in quality storage then yes.

Am sure that for some boxes you can get a very nice premium after 5+ years.

Storage space costs as well so that needs to factor in the price.

[aes8]

I think cigars do not make a good investment.

In any goods or service sold you will be forced to play by the rules of supply and demand.

With all the curent prohibitive smoking laws (and more being put in force), increased taxation, and an aging average consumer I think the demand end is trailing off.

With that being said, should the embargo end that would produce a short term game changing catlyst just given the sheer numbers.

The one reason the Vintage cigars in that LFTH were so pricy is because they were Vintage AND discontinuted AND GREAT cigars. There are plenty of Vintage dowl rods still sitting on vendors shelfs that they can't move, some 10 years later.

[Colt45]

I do know that PCC runs (or used to run) a vintage program, where they held back cigars to release five years later. A premium was charged for these

cigars - I'm not sure if this was the case for the vintage lfth or not.

From a buyer's perspective - one who is not a collector - I'm wary of provenance / how the cigars may have been kept over their lifetime, and in general,

have no desire to pay exorbitant prices regardless of the cigar.

On a side note, with so many great reviews of recent production cigars smoking well young, I sometimes wonder - why bother chasing aged cigars?

[Puros Y Vino]

The one reason the Vintage cigars in that LFTH were so pricy is because they were Vintage AND discontinuted AND GREAT cigars. There are plenty of Vintage dowl rods still sitting on vendors shelfs that they can't move, some 10 years later.

So true, however all those "dowl rods" are only going to make the good stuff rise in value even more. I've read too often here and on other forums about late 90's early 2K Cuban stock being of dubious quality as a result of the demand to supply the "cigar boom". As older, less appealing stock becomes known the good stock will see a rise in demand, thereby driving up prices.

[Scdalak]

If you are looking to make money on anything in life, Passion first...... Profit later.....

[cigcars]

One of the issues of European Cigar-Cult Journal magazine (that I had recommended as great cigar-related reading material on another forum post) had an article about the aging value(?) of NC's. I saw all these photos of Paul Garmirian, Graycliff Professionale, and other dog rocket questionables, etc. I'm thinking, "Really??" I mean I've had ALL of the above for years in my humidors and the reason they were in my humi's all that time was because I didn't give a **** about them once I was able to obtain my beloved Cubans. NOW you're telling me they may have some value? Well - they're gone now...given to my smoke-hungry relatives and friends

[PigFish]

The real money to be made in cigars is at the wholesale, retail level.

Proof... Rob's life!!! -LOL

Never met a guy who smokes more, drinks more, fishes more, vacations more and still has enough left over to keep his wife from divorcing him!!! It is not envy mates... It is downright jealousy speaking!!! -Piggy

[Ghabanos]

The real money to be made in cigars is at the wholesale, retail level.

Proof... Rob's life!!! -LOL

Never met a guy who smokes more, drinks more, fishes more, vacations more and still has enough left over to keep his wife from divorcing him!!! It is not envy mates... It is downright jealousy speaking!!! -Piggy

Well said

[sg1234]

Just look at the discussions relating to counterfeit vintage/hard-to-find smokes on some of the other cigar forums out there. The sheer number of people getting duped in the last year alone is reason enough for me to avoid the collecting game. I would be devastated if I paid a handsome premium on some cigars only to find out their authenticity is dubious at best.

When dealing with a trustworthy vendor such as our gracious hosts, that's not an issue. Even then, I would rather purchase the young cigars at a lower price and age them myself.

The bottom line is that cigars are meant to be smoked, no matter what Habanos SA marketing tells me. To each his own.

[dicko]

Don't mix work and play IMO!

[gigabyte056]

Don't mix work and play IMO!

Damn and I always wanted to be a pimp...

[dicko]

Damn and I always wanted to be a pimp...

[Omskakas]

You'd need a good trusted storage for cigars and a market to sell them after aging.

What if...

What if you buy cigars from Czar. Store them in online locker. And sell them after 5-10 years. Even better, give Czar a cut so they'll sell them for you.

Don't tell Rob about this idea.

[bc8436]

I just end up smoking them all. Guess I'm a poor investor.

[thechenman]

Generally speaking, I would say the cigars make a poor investment. Honestly speaking...the vast majority of wine is a poor investment as well. Yes...so are comic books and baseball cards. Buy cigars, age them if you must, but by all means smoke your cigars. The return you get from the pleasure of a fine Habano by yourself or with firends will be your best ROI (return on investment).

[Nocoins]

I think Chenman has it right. If what you want out of aging cigars is to have more enjoyable cigars than you have now, then your ROI is probably going to be fine. There is a litany of things I would rather invest in if the object is to make money. I doubt cigars have much more potential as an investment than other collectibles do. Besides, the real money in collectibles seems to made by those who had the luck or fortune to acquire such things before a market exploded around them.

[sblevit]

Looking at the auction prices in London, it seems that cigars could be a rather good investment. But you really have to pick the right cigars and perhaps get a little lucky. Discountinued cigars and the better vintage LEs and reservas seem to carry the highest premiums. A box of pre-1995 PSD4s recently sold for nearly $2000. But, as you probably know, pre-1995 cigars utilized a different leaf and it's likely quite rare to find such a box today. Assuming that box originally sold for around $130 and factoring storage costs, you're looking at around a 14% IRR, which is not bad on its own. But I doubt one would do that well sticking away a box of 2010 PSD4s today for 15 yrs. But even if you're able to achieve an 8% IRR, that doesn't seem like such a bad investment in today's low-return environment. It beats US Treasuries by more than 2x!