MARKET ANALYSIS

We introduce Whi-Whi, the Whisky Collecting Monkey

21. April 2016 | 5.2K Views
Please note that this article is based on the old Whiskystats database.
Some numbers and figures may not match what you find in the Whiskystats 2.0 database.

Did you ever asked yourself what a monkey would experience if he started collecting whisky? If your answer is yes, we finally have you covered. If your answer is no, you may be still interested in what we found out! 

Whi-Whi is a collector, not a hunter, and he of course loves whisky. In fact, he loves whisky so much that five years ago, he bought several whisky bottles worth 10.000 Euros back then. Unfortunately, Whi-Whi can not remember where he left those bottles. In addition to his forgetfulness, Whi-Whi is also a very lazy monkey. Before he starts looking for those bottles, he wants to know if it is worth the affort. So Whi-Whi would like to know what his missing collection could be worth. Since Whi-Whi is a monkey, and monkeys are intelligent, Whi-Whi found his way to Whiskystats.net and asked us for help. And you bet we did come up with a method to help Whi-Whi!
 
The Monkey´s Behaviour
 
Whi-Whi can not remember which particular bottles he bought. What he knows is that he does not prefer any specific distillery or whisky region. To be precise, he did not care about japanese whisky so much back then, so he is sure that his ominous collection only includes scotch single malt bottlings. Beside of that and his initial budget of 10.000 Euros, he wasn’t able to give us any more information.
 
The Whiskystats Approach
 
To help Whi-Whi out, we want to estimate the potential worth of his collection. Since we have no other information than the initial value of the collection (and that it doesn’t contain any japanese whisky), this is equal to estimating the worth of a randomly composed whisky collection. To do so, we did exactly that. We randomly chose a collection of bottles worth 10.000 Euros back in January 2011 and used our whisky database to determine the worth of that collection in January 2016. And we did that not only once or twice but one thousand times. Our estimation for the worth of Whi-Whi´s collection is nothing but the average value of these 1.000 randomly composed collections.
 
Technical Details
 
For the above approach we only considered bottles for which we find price observations prior to January 2011 and after January 2016. At the time of doing this computations, 1.496 bottles in our whisky database met this criteria. Justified by the problem setting, we also excluded japanese whiskies from this analysis. The buy- and sell-prices for these 1.496 bottles are the linearly interpolated (averaged) monthly prices at January 2011 and January 2016, respectively.
 
The Results
 
For each of the 1.000 collections we randomly added bottles until the initial (January 2011) value exceeded 10.000 Euros (then we removed the last bottle to stay below this threshold). For these 1.000 collections, the average initial value was 9.800 Euros. With the collections set up, the only thing left to do was to look up the respective prices from January 2016. The average collection value in January 2016 was 20.180 Euros. This equals an average 106% increase in value. To give Whi-Whi also some hint of certainty about this results, we are interested in how much the average price-change varied. The minimum is at +48%, the maximum at +216% change-in-value over the five-year period. Half of the 1.000 collections change-in-values were between +93% and +106%. These results are conveniently summarized by the following boxplot.
The Whiskystats Age Statement Analysis The blue box shows where 50% of the 1.000 collection value-changes realized. The bold thick line indicates the average (see this wikipedia post on boxplots for more details).
 
Whi-Whi´s Conclusion
 
Based on our results, Whi-Whi can be 90% sure that his collection is worth more than 18.000 Euros today. Even better, under the assumption that Whi-Whi properly stored his bottles, our best guess for the value of his collection is 20.180 Euros. Since Whi-Whi was eager to drink the whisky anyway, he happily went off looking for his lost treasure…
 
Most of you may have noticed that we hereby did nothing less than estimated the average increase in value of collectable scotch whisky over the last five years. The results show that on average, a whisky collection (with initial value of around 10.000 Euros) more than doubled its value over the last five years. To be more precise, even if we assume a 15% sellers fee the average annual value-increase of such a collection was almost 14%.

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