Question for members: Investment Grade Cigars.


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I am just going to pass on this one to you guys. I have only posted an excerpt. 

Variations of this question are received every week (and from all over the world).

Putting aside the fact that cigars as commodities makes many feel uncomfortable,

Hypothetically, if this was a school investment competition and I sponsored you 5 boxes of cigars from 2018 to be sold in December 2024.  

The person with the highest ROI  (return on investment as opposed to the highest $ return) would receive a box per month gratis for a year. 

 

Which 5 boxes would you choose (from anywhere in the world: standard, regional, LE...it doesn't matter).  Only one box of each permitted. 

 

Rob can you advise 3-5 investment grade cigars that I can bank on to achieve a return of 35%+ over a 5 year time frame? 

That is the bottom end return that I would be looking for so I am seeking "gilt edged"  2018/2019 releases.  Would you have a 2018 top 5 lit in this category? Would most premium Cubans achieve this?

 

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Lol.  I can't even consider this since my only intention is to smoke them myself or gift them.  I think there are better options for investments.

Forgetting the money side for the moment.  My tastes have changed dramatically over the past 20 years.  I have personal stock that may be valued by others but has no value to me.  I would rather

I don't buy for investment, I buy what I like to smoke (or what I think I'll like). That said, I've watched the market evolve over the last several years on a few buy/sell/trade groups, and I'll mirro

Cigars with known intermittent production runs are any easy call. Buy Sir Winnies now and then sell when they aren't in stock anywhere. MdO #4 might also be a good call, current pricing at the store here is pretty low. If you bought them now at the listed $150 you could make 20% within 6 months.

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10 minutes ago, JIK said:

I would break the cardinal rule: “don’t get high off your own supply” far too quickly to consider cigars as an investment. 

I know a couple of wine and watch guys who would argue the point ;)

 

I have one mate in asia who has who has a been doing this for a long time. He has a selection midas touch when it comes to jumping in heavy. Being close to PCC he picks up their stock only. 

100 plus boxes of RA Celestiales finos, 80 plus boxes of PL Robusto, Bolivar Distinguidos jars X 20, Sir Davids x 10 (not from me) etc etc.  

He loves aged Hoyo. Only smokes aged Hoyo (Dieux, Gourmet, and DC being 90% of his smoking).

He offloads his investment stock and purchases his preferred smoking cigars whenever they come up in aged format (private dealers/auctions etal).  He often sells his investment stock to the same dealers. 

 

 

 

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Fundadores and Sir Winstons at CUC price sold at USD in 5 years would be a nice ROI.  The only cigar that has seen a tremendous increase is the Behike.  I swear those were around in 2013 and 2014 for $250-350.

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I’ll give it a go...

 

Romeo Y Julieta Tacos Limted Edition 2018

Bolivar Soberano Edicion Limitada 2018

Cohiba Behike 52

Cohiba Talisman Limited Edition

Hoyo de Monterrey Epicure No. 2 Reserva Consecha

 

Honorable Mention - H Upmann Propios Limted Edition 2018

 

 

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7 minutes ago, El Presidente said:

that was the brief. 

Yes I got that, was just restating.

Just heading to Cuba and picking up 5 boxes of Fundadores will net you an easy $450-$500 USD profit. So in essence, free trip to Cuba.

5 boxes of Talisman would net you $1,000 USD profit.

As the Bolivar EL seem to be incredibly popular, that would be a great choice. Though I have no idea of their CUC price....?

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  • Cohiba Esplendido.
  • Cohiba Lancero.
  • BHK 52/54/56
  • H Upmann Sir Winston.

 

If you watch the various private forums and sales on FB. Cohiba is king.  Double banders seem to more of a thing during their release. I don't see too much excitement over the past releases. Especially if over time, these buyers tune in to the talk of older EL's not aging well. And that talk is constant.  Cigars are "hot" similar to sports cards when there are prime "rookie cards" to be had.  At least amongst the new smokers.  Those more in tune with the world of vintage wine and spirits are more aware of the long game being played. In that you lay down what people have always wanted and will continue to want. And if you're lucky. Habanos will discontinue and in demand product in the secondary markets that you've gone deep on. ;) 

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I would think it would be somewhat difficult to achieve this with standard production stock. However, if you were sticking to standard production your best bet is likely going to be with siglo vi, esplendidos, sir Winstons, and fundadores. For some reason I don’t think the behike line would fit the bill even though they are in the upper echelon- I may be off point though. 

As far as ELs go, I think you would have to stick with Cohiba. I don’t remember many others making significant gains in value in 5 years.

Inwould shy away from most REs - even though some of these certainly would have fit the bill in the past - 2007 ED Conde 109 definitely surpassed 35% and I could see the Sir David’s doing the same. 

The real money makers in my opinions are the jars, books, reservas, grand reseras, and the other one-offs. Those that got their hands on the original behikes before they issued the current line could make a fortune now. However, with all these the old saying goes: “it takes money to make money.”

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1 hour ago, El Presidente said:

He offloads his investment stock and purchases his preferred smoking cigars whenever they come up in aged format (private dealers/auctions etal).

Selling your own aged stock in return for stock aged by somebody else I call craziness. Unless, of course, he keeps his own "investment cigars" in the attic.... :D
 

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1 hour ago, TBird55 said:

PLPC inexpensive to purchase, with 5 years down. 35% ROI should be easy to obtain. With the lower cost, you would have a larger pool of buyers, making it easier to move the cigars. 

Yeah, that’s what I was thinking too—something well known to be great at 5 years and very different from when it’s young. 

Some of the high end regular production cigars would be a good bet too, but then again you never know if we’ll have more SWs and Siglo VIs than we know what to do with when it’s time to sell the investment cigars, so higher risk, higher reward. PLPCs are a safe bet though.

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14 minutes ago, Fugu said:

Selling your own aged stock in return for stock aged by somebody else I call craziness. Unless, of course, he keeps his own "investment cigars" in the attic.... :D
 

It made no sense to me until he pointed out that 8 out of 10 boxes of what vintage cigars he could attain (in what he liked) came from Europe and often taxed.  He has only been into cigars since 2007 from memory. He fell in love with HDM DC Hoyo's from the 70's 80's. He has been aging his own Hoyo's since the late 2000's. 

Buying cheap PCC releases (all relative) helps offset the premium. 

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2 hours ago, pgwdaddy said:

I’ll give it a go...

 

Romeo Y Julieta Tacos Limted Edition 2018

Bolivar Soberano Edicion Limitada 2018

Cohiba Behike 52

Cohiba Talisman Limited Edition

Hoyo de Monterrey Epicure No. 2 Reserva Consecha

 

Honorable Mention - H Upmann Propios Limted Edition 2018

Non-Cohiba ELs generally don't perform that well in the secondary market. I know of few, if any, that have more than doubled in price. Also Hoyo as a brand is probably the worst performing of all the ELs. And the Talisman is performing very poorly compared to past Cohiba ELs. A year after release they are readily available with no price increase--a very bad sign. Robusto Supremos were around a 30-50% premium at the same point. My guess would be these were simply produced in much larger numbers than past Cohiba ELs, something that could also contribute to it being less well-received than its predecessors. I would personally avoid Talisman as an investment. 

Original release BHK is just over a 100% increase now after 9 years, and that was an original release. 1966 is at no less than 300% after only 7 years and demand is very high. Big difference.

If you're really concerned about ROI I would stick to Reservas. If you know what you're doing, a dabble into Cohiba special releases and some very specific ERs. The right humidors can also do well, but again, you have to know what you're doing. 

Also, don't forget there are significant expenses involved in storing these cigars properly, auction fees and transportation of the boxes to any auction house. We're not talking about hundreds of thousands of dollars here with cigars in most cases. $100 can take a huge bite out of one's margins. 

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I’d go with any Reserva/Gran Reserva release. Also, jars. Selected ER, like the PL Coronas from Germany. In fact, most German RE have seen a healthy increase.

Basically, if it has a limited and verifiable production number, the odds are very good.

If it has to be regular production, I’d go with Cohiba and stuff that is at high risk of being discontinued - Churchill, Lonsdale, Corona.

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I don't buy for investment, I buy what I like to smoke (or what I think I'll like). That said, I've watched the market evolve over the last several years on a few buy/sell/trade groups, and I'll mirror Claus - RE's for investment can be a crapshoot but there are good guidelines to reduce risk if you wanted to:

- German and UK RE's often try to reintroduce/pay homage to famous cigars of the past.  These are often great investments - PL Magnificos, RA 898s, Bolivar Especiales No.2, PL Lonsdales, LFDC Short Robustos, HF 225....they all have appreciated substantially, and the natural scarcity of many REs helps for sure. To be honest the only one that I can think of that didn't appreciate much that surprised me was the German RA Belicoso with the "Blend from the 50's"....sometimes that happens. I liked it, so I don't care that the price didn't continue rising ;)

- Reintroduce a long-lost brand, that cigar will sell and appreciate.  La Escepcion Selectos Finos RE Italia, aforementioned La Flor de Cano Short Robusto RE UK - they appreciated quite well. 
Conversely.....
Follow-on releases to long-lost brands do not appreciate in the same manner.  La Escepcion Don Jose, LFDC Gran Cano/Grandiosos/Casanova......did not appreciate much at all. 

- Certain RE sizes Appreciate.  Long Skinnies (Selectos Finos, Especiales No. 2's), 109s (Diplomaticos Bushidos, Punch Clasicos, Edmundo Dantes 109s, Bolivar 5th Avenida), Romeos (JL Distinguidos, Bolivar Distinguidos).  Other sizes...don't appreciate - Britanicas Extra aside from RACF (RG 88, Bolivar Britanicas, Bolivar Lusiadas, RA Perfectos), Montescos, most Petit Edmundos/Robustos.  Why don't they appreciate?  Boring, insipid sizes with the latter ones, but I don't quite know why Britanicas don't fare well, aside from construction or blend issues.

 

So....what would I buy for investment if I was asked to do so in the last year? 

- 50 cab PL Coronas RE Alemania                 (German Reintroduction)
- La Gloria Cubana Orgullosos RE Suiza        (109)
- Punch Sir David RE Hong Kong                   (Sentimental release)
- Sancho Panza Gran Quiote RE Belux          (Romeo)
- Cohiba Talisman LE                                      (Cohiba LE.....I know they appreciate....)

 

 

 

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Cigars as an investment is a fools game. Can you get a decent ROI by doing it? Sure. Is it a bigger pain in the arse than its worth? Most certainly.

If you need to make 35% over 5 years than act like a grown up and just buy the investment company of america...save yourself some boveda packs and the rising cost associated with shipping the goods once sold. 

Sometimes the best solution is the simplest. 

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Do not forget about the possibility of using currency fluctuations. For example, in 2018, the ruble against the dollar fell by 17-20% due to the fall in oil prices and sanctions. Russian importer bought cigars for a stronger ruble. As far as I know, for the year the cigar prices in rubles did not rise in 2018 more than 5% - it is always a delay in the growth of prices with currency fluctuations. Retail prices in General did not increase during 2018. This is a good scheme for anyone who has a dollar or other currency that has not devalued due to energy prices. You can convert USD into currencies of "raw countries" and buy cigars from a local importer for the national currency.

Therefore, my proposal No.1-Ramon Allones Hermitage 2017 Exclusivo Rusia. This cigar went on mass sale in 2018 and is still in the warehouses of the importer.

Once you sell regional outside the country for which it is made, its price may be higher than 100%, do not forget that You have already earned on the difference in exchange rates when converting and buying for rubles - it is at least 15%.  The next five years, the cost will only grow, because the opportunity to buy will be less and less.  Also RA ER 2017 Exclusivo Rusia have a good potencial for aging and after five years it will be very tasty.

Next in yield may be Edicion Limitada. For one or two years, the main circulation of these cigars is sold out, in two years you will be able to buy them only with a high margin, it can be up to 100% or more. Usually Limitada reaches the peak of its taste in 2-3 years. After 5 years, you sell a cigar with a good margin and in excellent taste form.

I choose cigar for investment No. 2 Partagas Serie # 1 Edicion Limitada 2017. This cigar seems to be the cigar of the year in Russia. It also has good aging potential and will definitely become a taste bomb in 5 years. This cigar went on mass sale in 2018 and is still in the warehouses of the importer.

The following investment proposal is also limited edition - LCDH or the status of Habanos cigars Specialist. Trust the opinion of FOH members and I choose a cigar for investment No.3 Trinidad La Trova LCDH release. It is also very important that its potential for aging is noted, so in 5 years it will only improve its taste. In addition, the first releases of LCDH usually have taste advantages over the next years and it will give an opportunity to get a good margin. I think the profit will be above 35%. If you find La Trova made 2017 release - it will be a good buy for investment.

4 and 5 place I will give two of the top-10 cigars of the year according to El Presidente, taking into account my preferences. These will be cigars that will peak their palatability in 5 years and the buyer will gladly pay the price with a margin of 35%+ just to get cigars "Buy and smoke now" instead of painfully waiting 5 years. Cigars made 2018 for investment No.4 Partagas Serie P.2 and No.5 Ramon Allones Specially Selected

P.S. I give a universal advice: almost any medium-strong or strong cigars make a taste profit after aging for 5 years. It can be Partagas, RA, Bolivar and others. Any ER give a high profit outside the country for which they are made. Any EL give a high profit after 5 years due to limited release. Very often, the first releases of LCDH have unique advantages over later releases - this will also give you a profit.

Do not forget also that HSA raises prices by an average of 5% every year, which for 5 years will be 25% minimum, and taking into account the growth of consumption of Asian cigar markets by 30% per year, I'm afraid the HSA price increase will be higher...

I find it difficult to specify a ROI because sales of cigars in various countries and via the Internet occur in different ways, pricing is difficult to predict as other luxury goods. Sometimes I receive without additional payment from the Internet-stores a 2-3 year aged box at a price of this year box...

I have one business idea for FOH - the creation of a cigar exchange or auction based on FOH "Online Humidor System". The idea of investing in cigars is good, but we will always face problems of authenticity guarantees when we want to sell an opened box. Now Lockers can share the boxes between themselves only by prior arrangement. The opportunity to sell the box on the stock exchange with the shipment to any buyer will be interesting and profitable for Lockers and FOH at the same time...

 

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I'll recommend a re-read of this (short) study I did about a year and a half ago, detailed in this thread:

Bottom line was ROI was pretty common across all categories, which surprised me.

The average annualized ROI on various categories:
12.01%    Annualized Ret (all)
11.92%    Annualized Ret (Regular Production)
11.64%    Annualized Ret (Special Production)
12.85%    Annualized Ret (Discontinued)

11.87%    Annualized Ret (Cohiba Regular Production)

10.80%    Annualized Ret (Cohiba Special Production)

Bottom line for me is that it's pretty easily to handily beat these returns in the equity markets, so I'll just keep buying what I want to smoke, not what I think other folks want to smoke!

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