Fine wine prospects: collectors invest in taste, investors collect in long-run.

• Author: Bohi, Heidi
• Position: INVESTMENTS

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As a struggling dental student in San Francisco in the 1970s, one of Dr. Bob Warren's favorite inexpensive ways to spend a weekend day was to swing by the Napa Valley Dell, grab some salami and bread, then spend the day sampling wines at Sonoma and Napa wineries. When he had extra cash, he bought bottles of some of his favorites--he still has a couple of those in his Anchorage wine cellar today--and when his former classmate started renting a wine locker from an importer, Warren graduated to buying cases of wine. By the time he arrived in Alaska about 30 years ago, he was having cases shipped for his own personal consumption.

As his "wine-o" friends say, "he would rather pull corks than teeth." Today, Warren, in addition to being a well-known dentist, is regarded as one of the most knowledgeable wine collectors and enthusiasts in the state. He's responsible for increasing the local interest in his favorite hobby, educating the community and working with local wine distributors and restaurant owners to grow the demand and help foster the supply. In addition to handpicking his own favorites, Warren also buys wine cellars from estates and from those who are no longer interested in the hobby.

INVESTOR OR COLLECTOR

There are two major reasons why people invest in fine wines: As an investment in future drinking, which involves buying young wines at the initial release price which, when mature, are considerably more expensive to buy. Or, strictly as a financial investment--buying wines with the sole intention of reselling them later for a profit. "Investor" and "collector" are often used interchangeably when it comes to discussing the increasing trend in individuals stocking up on their favorite bottles of wine, often by the case, with the hopes of them increasing in value. In fact, there is a distinct difference between a collector and an investor, says Stefan Blicker, owner of Nicker Pierce Wagner (BPWine) Wine Merchants in the heart of Napa Valley.

Collectors buy wine they love and drink, and they are usually less aggressive about finding the absolute lowest price. While some collectors have been known to dabble in pure investing, that is typically not the case: most people are collectors and drink their purchases with gusto. Individual investors, on the other hand, are in it almost exclusively for the money and do not care if the wine is good, or if they like it, as their wine purchases are not to be consumed, but to...