Whisky Valuations

We post valuations of the stock you own based on a blend of data from our own trading platform, along with prevalent sale prices in the wider whisky industry. However, in the current market with an excess of sellers, many prices being offered fall well below our valuations, and some clients are concerned that the values shown on their account do not match what they can immediately sell for with one click.
 

The first reason we do not use such “mark-to-market” valuations is a matter of volume. Traditional stock exchanges which have high volumes of trading on every security they offer can mark the valuation of a security as being whatever price it was last sold at. However, in a market like ours, with over 300 whiskies, each of which will experience less than one trade per day, such a system will lead to erratic jumps in reported value.

 

The other reason is that our whisky valuations also serve as a guide to pricing for industry buyers as well as clients. When a buyer decides to submit a bid for client-owned whisky, they will typically use our valuations as a marker to determine their bid pricing. If we lowered our valuations to reflect only the trading going on in the platform, then the value of Bulk Trade Bids being placed would also drop commensurately, and clients who do not wish to sell at the low prices currently available in the market would be robbed of opportunities to realise the full value of their whisky. In essence, our decision reflects a long-term view of the whisky industry, rather than the day-to-day view adopted in the stock markets.

 

Recent activity in Bulk Trade Bids has been encouraging, and reflects the fact that the industry is willing to pay well above our valuations when they bid. We’ve observed a consistent trend showing that bids submitted above our valuations are typically successful, while those below are often unsuccessful. This gives us confidence that our valuations are a fair reflection of the wider market, but it is clear that we have work to do to better explain what they represent.

Learn more about whisky performance as a long-term asset class. View our article on Whisky vs Other Asset Classes: 8-Year Holding Performance