An interesting article caught my eye today – “The Top-Performing Alternative Investments: Truffles and Tea.”
Needless to say, I couldn’t pass that one up. During this time of economic meltdown, I’m always on the lookout for interesting and feasible investment opportunities. It’s not uncommon for me to brew up a pot of tea, review some investment news, and try to dispel my generalized anxiety about my finanical future as well as that of this country and the world. I just never thought of tea in that regard. I’ve been content to let its healing properties soothe my nerves and soul.
The idea of purchasing rare Puerh teas, such as Da Hong Pao, to “buy and hold,” as the investing strategy suggests, appeals to me on many levels. China has become an increasingly important giant in the world economy. Their culture of tea has spanned thousands of years and certainly won’t be going away any time soon, especially in their ever-increasing luxury market. Buy and Hold is a strategy that has its place in one’s investment portfolio. It’s one I’ve used for general investments and this type of tea is clearly custom made for such purposes, assuming it’s stored correctly. Perhaps the only real drawback for me would be the impulse to pinch a section off periodically to sample. But at $30,000 for seven tenths of an ounce, I can probably resist the temptation.
I’m curious if any of our readers have purchased tea strictly for investment purposes. I’d love to hear your thoughts.
Michelle –
I think this is a very interesting aspect of tea that most people don’t even think about. Tea is one of those commodities that, historically, has had many price fluctuations due to supply and demand issues that you would expect from any highly sought after substance. It often started out as a prized possession of elite classes in most countries that imported it, just as it had in China. Prices would skyrocket for a while until, eventually, landing back down to earth.
I think this would be a fun way to invest, as long as you approached it from the perspective of caveat emptor. You would need to really do your homework and establish a trustworthy and reliable source. When prices increase to this magnitude, it usually attracts many unsavory individuals looking to make a quick buck who flood the market with poor quality fakes. This is what happened a number of years ago in China that significantly contributed to the puerh bubble bursting.
I think a safer bet would be to build your knowledge base about puerh, and the different factories that produce high quality products, and buy some new bricks or beengs, at reasonable prices, to hold on to for a few years. This way, even if you are wrong in your assumptions of which ones you think will increase in value, you still have some great tea that you can enjoy yourself and share with friends and family.
The lack of a reputable re-sale market is the largest obstacle to this. There are VERY few retailers from whom most connoisseurs would buy a particularly expensive tea from. I’d venture to say that few, if any, would buy from a a private citizen who supposedly had this stored in their basement for the last 20 years. :)
That said, with the increased demand for top quality and organic loose teas and the dramatic fluctuations in supply due to weather and social unrest, I’m hearing tea buyers talk more and more like commodities brokers as they build relationships with gardens and hedge their bets against future supply shocks.
I’m with Sandy… apparently there are a ton of folks in Yunnan sitting on extraordinarily de-valued puerh teas since the boom ended. Also, storage and aftermaturing is crucial to a tea continuing to increase in value, and unlike corked wine it is subject to examination after aging.
Seems it’s safer to be a “collector” rather than an investor, because you’d be buying teas for low prices when new. It’s hard to say which will prove valuable, but it matters a lot less when they’re cheap.