Wine beats oil and gold. But not intrinsically.

Yet another wine-as-investment piece, this one from today's Telegraph:

"According to the Bordeaux Index, a monthly report on the state of the fine wine market, bottles of white and red outperformed gold and oil.

Wine prices jumped 5 per cent, year-on-year, bettering rises in the price of oil, which was up three per cent, and gold – up to two per cent.

The rise has been attributed to an increased interest in China for fine wines over the past 12 months.(link)"

At some point the ancient whiff of tulip mania becomes a modern stench. But wine merely lasts longer (allegedly) and has the mystique that makes marketing men very, very excited - "Monsieur is showing his sophistication with this purchase".

In the knowledge that many auction prices cannot be based on the estimates of buyers' palates one must conclude that vanity, the greater fool theory or simply blind choice drive prices. How else might the £147,020 bottle of 1869 Chateau Lafite-Rothschild cited by the newspaper be explained?

Surely not by relative value - for the quality of a wine has long been determined by factors other than its price.