Buying wine with a stock picker's strategy

Now is the time to be looking for good buys on fall wines — the big, full-bodied reds or Italian and French favorites that will grace holiday tables or make for fine pairings with meals.

While the wine press has been lamenting the fact about a shortage of grapes inCalifornia, which means rising prices, there are other ways to beat the market makers when it comes to selecting good product. I’ve been a value investor all my life when it comes my retirement plans, and the same strategy can be applied to wine. Buy low and drink whenever you want — at a savings.

One of the key principles for buying stocks is dollar-cost averaging. If you know a stock is good and it is going to outperform the market, there’s no reason why you wouldn’t buy it at $100 a share. And if that stock does hit a bump in the road due to unforeseen market ebbs and flows, and it plunges to $80 a share, what do you do? You buy more. In stock parlance, you have saved $20 to premium on a great stock. When the market takes off, you have built in a tidy profit as that stock reaches its $100 top.

Selecting wines is no different for the savvy, interested wine novice. Let’s face it, 80 percent of the wines I buy are in the $10 to $25 range. But every once in a while there is the curiosity and thrill of expanding the circle and trying something new, expensive and satisfying. Of course, the wine has to be worth the price. Just buying an expensive wine because it costs more than Ripple is a bad strategy, because there are some real duds out there. Wine Novice readers should demand quality at an acceptable price point.

So how do we do that?

Start by what you like. If you’ve tasted a great wine, either at home or at a friend’s house, but felt the price was a bit out of your range, jot it down. Find out what the wine is selling for in a “community” of stores. You can do this by going to www.cellartracker.com. Next, if the wine is carried in a local wine store, track it there to see if it goes on sale. Better still, ask your local wine dealer if he can match the best “community” price. In most instances, however, you might have to purchase two or more bottles of wine, since the local retailer is sacrificing profit to take care of a loyal customer.

The other alternative is to set a wine-buying budget, like I do, patiently wait for sales and go on a wine-buying binge when the time is right.

Recently, I headed north across the border to a state liquor store I had been tracking for several months. It was offering a sale on two exceptional wines, a 2006 “R” Rockblock Reserve Syrah by Domaine Serene fromWalla Walla Valley,Ore., and a 2008 Fess Parker Syrah fromSanta Barbara County,Calif.The Rockblock is a luscious 91-pointer that sells for $35 a bottle; the Fess Parker is an 88-90 pointer that sells for $23 a bottle. The sale prices were $32.99 and $9.99, respectively.

Now some people may think that a $2 savings on the Rockblock isn’t much, yet when combined with a $13 savings on the Fess Parker, that’s a whopping $15 for two excellent wines.

I had a budget of $125, so I purchased two bottles of the Rockblock at a cost of $66 and four bottles of Fess Parker for $40. The total came to $106 for six bottles. My savings from the original cost amounted to $56. When you apply the dollar-cost averaging strategy, I paid just $17.66 a bottle for two outstanding wines — well within my basic philosophy of paying between $10 and $25 for a bottle of wine.

I left the Hollis, N.H., store with $19 in my pocket and very satisfied that I had gotten a lot of value for my money.

The patient buyer can do the same thing. Don’t be afraid to go into your local store and write down the cost of certain higher cost bottles of wine that you might like to buy. Then wait for a sale. Even if your special selection isn’t selling at a reduced cost, you can combine it with wines that are on sale to lower your overall costs. You might do this around a holiday or special occasion when there is a need for extra wine.

Remember: Buying wine is fun but it’s even better when you don’t have to pay full price.

Follow Jim Campanini on Twitter @suneditor