INVITATION (apologies for duplicated mails!)
We are pleased to invite you to our next Investment Talk, organized by the Spängler IQAM Research Center. The Center is a joint initiative of TU Vienna (Vienna University of Technology) and WU Vienna University of Economics and Business supported by Spängler IQAM Invest and provides a platform for exchange in the field of asset management between academics, practitioners and the public. Both the topic and the speaker for our next event are particularly interesting. We will be discussing the risk and return characteristics of five long-established Bordeaux wines, with price histories that go back more than 100 years. Our speaker is Professor Elroy Dimson, who is well-known for his important contributions in the field of asset management, such as his work on estimating betas or his work on risk premia in the stock markets.
INVESTMENT TALK
Date: Wednesday, March 19, 2014 - 4 pm
Speaker: PROF. ELROY DIMSON
Topic: "THE PRICE OF WINE"
ABSTRACT: We examine the impact of aging on wine prices and the performance of wine as a long-term investment using a unique historical database for five long-established Bordeaux wines that we construct from auction and dealer prices. We estimate the life-cycle price patterns with a regression model that avoids multicollinearity between age, vintage year, and time by replacing vintage effects with annual data on production yields and weather quality. In line with the predictions of an illustrative model, we observe the highest appreciation rates for young high-quality wines that are still maturing. Our results also suggest that owners of famous wines receive non-pecuniary benefits-especially for old bottles-even though this "psychic" dividend is probably small relative to financial returns. Using an arithmetic repeat-sales regression, we estimate an annualized real financial return to wine investments (net of insurance and storage costs) of 4.1% between 1900 and 2012. Wine returns are lower than equity returns but positively correlated with them, yet wine does outperform government bonds, art, and stamps. We note that the historical returns on wine documented here may have exceeded ex ante expectations.
ABOUT ELROY DIMSON: Elroy Dimson co-directs the Centre for Endowment Asset Management at Cambridge Judge Business School, chairs the Strategy Council for the Norwegian Government Pension Fund, chairs the Policy Committee for FTSE Group, and is Emeritus Professor of Finance at London Business School. His publications include Triumph of the Optimists, Endowment Asset Management, and the Global Investment Returns Yearbook. He has been an Associate Editor of Journal of Finance, Review of Finance and other journals. A co-designer of the FTSE 100 index, Elroy chairs FTSE's advisory board and serves on the Financial Analysts Journal board. He is on the investment committees of Guy's & St Thomas' Charity and the Foundation for Social Entrepreneurs. He is past president of the European Finance Association, and Honorary Fellow of the CFA Society of the UK (FSIP) and of the Institute of Actuaries. He recently received the CFA Institute's James Vertin award, the Moskowitz prize, and the Bernstein Fabozzi/Jacobs Levy award.
REGISTRATION IS REQUIRED. We kindly ask to register before March 10th at office@si-researchcenter.at
LOCATION: WU, Building LC (Library & Learning Center), Festsaal 1 (http://gis.wu.ac.at/index.html?roomShow=LC.0.100) Welthandelsplatz 1, 1020 Vienna
Contact and further information: WU, Institute for Finance, Banking and Insurance att. Martina Schlichting Welthandelsplatz 1, Building D4, 4th Floor 1020 Vienna Phone: +43 1 31336 6315 Mail: office@si-researchcenter.at, Web: www.si-researchcenter.at