Tuesday, November 26, 2019

Puerh As An Investment

Everytime I check current puerh prices, I run through the same hamster wheel.  I get sticker shock, then I run up to my husband to gleefully tell him that puerh X is now risen to crazy price $Y and what a good investment it all was, also adding just too smugly you can't even buy most of our puerhs now. My husband never fails to get his hose of ice water to spray me. His dismissive reply of "Are you going to sell it? It's not an investment then." is promptly followed by my assertions of his extreme good fortune that he has full and free access to drink all kind of puerh he would not have were it not for my early hoarding. But he never blinks.  He would be singing an entirely different tune of utter gratitude had I been a scotch whisky hoarder.   😤

Friends, the minimum 15 year period to age a new born sheng is a long one and I'm surprised how quickly the years have passed. It's an entire economic cycle and we've had one of the biggest booms and busts known to humankind.  I have to subject myself to the obvious thought experiment what would have been the better investment alternative to hoarding my inadequately aging tea.

All investments attached to monetary value can be simply and objectively judged against standard stock market returns. Compared against two common ETFs for the S&P 500(SPY) and the tech heavy Nasdaq(QQQ), you can see that an initial 10K investment yielded 325% and 555% in the last 14 years.    I'll use the more common S&P 500 returns of 325% as a more reasonable measure, otherwise one could say why not use bitcoin or amazon stock as a comparison.
 Total returns with an initial $10K investment from dividendchannel.com
Purchasers of puerh today know even humble mass factory '05-6 beengs bought under $10 now easily exceed 3X-5X and some Menghais verge nearer 20X+. Ask yourself where can you buy a good full sized 357g 2005/6 sheng beeng for even $80? Exactly!

So would I rather?  If I honestly ask myself would I rather have plugged this money into the stock market with the SPY 330% return than have the collection I've amassed?   The answer is not really.  This is not because of the hoarder's defensive reaction but because of my financial situation.  If I had student debt, car debt, credit card debt or a miniature human sprung from my womb that came with decades of endless expenditures, the answer from a sheer financial prudence perspective must be yes.  But I am thankfully not in dire need of said funds and if I had the money again I would buy tea.  And the tea has brought great joy and moments of calm and contemplation during turbulent times, something I would not give up for money alone.

I have regrets of a different sort.  Puerh collectors know coin is only the entry token but the real investment is paid in blood, sweat and tears.   I don't begrudge spending tea money.  It's the excessive time and mental energy that I should have split more evenly into learning about financial investing alongside junking out about puerh.  For the hundreds of hours devoted to puerh, I still know relatively little about this infuriatingly inaccessible arena of tea.  Even 1/50 of the time invested studying fixed income markets would have had massive dividends over the last 14 years that would have made my tea expenses trivial.  I am making up for lost time and I can enjoy drinking my collection while I do so. I always take the view better late than never and I have been diligently studying preferred stocks, REITs, and closed-end municipal and infrastructure funds like it's the secret to home sheng storage.   Somebody should have just done a PSA and broadcasted the secret, "THE SECRET" if you live in a dry region is plastic wrap.


Unlike my puerh studies, my steady investment into melee and ranged combat has paid high yield dividends almost every week. Shameless plug for my Yakuza 0 video.

2 comments:

  1. I have been collecting tea for and scotch whisky many years and I have no regrets either. I would have frittered away the money with little to show for it otherwise and both have brought many good times alone and with family and friends. Starting when I did has allowed me to drink teas I would not even think of buying today. Same is true of my scotch... anyone price a 25 yo Macallan recently?

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  2. Dear Karl,

    You are wisely invested on both fronts. We were buying just a 12 yo Macallan the other day wondering if even such budget entries were going to skyrocket in the future. I told my husband it's better to hold whiskey than cash.

    H

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