Pu’erh is one of the trickiest teas to buy and a very different landscape than other teas. One reason is the instability of the market, partially because pu’erh is treated as a commodity for investment and is mainly due to the the thought that pu’erh will improve over time. Another is the psychology behind the consumption of pu’erh. Pu’erh drinkers think about their tea in a much different way than drinkers of other teas. lacking the immediacy that naturally accompanies other teas (especially greener teas). In 2007, the pu’erh market busted largely because of over speculation of tea that really wasn’t very good to begin with. People were aggressively buying at a rate that outpaced consumption and the market eventually corrected itself. This article will discuss a few thoughts on pu’erh buying and an alternate buying strategy.

Tenet 3D, Hitting Hard, & How Much Will You Spend on Pu’erh

Tenet 3D, named by TwoDog (also covered in this post by Marshaln) is one way of purchasing tea. The basic idea is finding a tea that you enjoy and buying it in *as much as I can afford* quantities. It’s a sound idea and is predicated on buying very good quality tea that will increase in value in the future. This second part is sometimes overlooked, but is very important.

There area couple dangers with this approach. One is cheaping out and prioritizing the buying of quantity over the quality of the tea. This usually ends up with purchasing alot of something that is alright, but probably unexceptional. Perhaps most importantly, buying errantly in this manner can result in teas that will nearly always be attainable for low prices (i.e. youngish plantation tea). Buying in this manner is especially appealing when comparing the relative cost of cheap tea to better stuff

However… For a tea drinker, it is extremely easy to buy a year’s worth of pu’erh or five years or even a lifetimes! It is far better to buy spend more per tea and buy better tea, even if it means lower qualities and doesn’t necessarily qualify as hitting hard! In the end, there is a danger even in hunting for deals or value buys in cheap tea.

It’s important to either know or be able to approximate your own drinking habits. For some, a 357g cake of pu’erh might be a month’s worth of tea. For others maybe it’s two weeks or maybe two months. This allows you to approximate how much tea is appropriate to buy and what hitting it hard actually means for you. We all consume at different speeds and one person’s tong is another’s cake.

A second danger is buying something that ages into nothing. This can occur by either messing up storage (see the caveats section) or buying base material that ends up not being what the drinker actually wants. People’s taste can change and/or the tea’s base material might end up aging poorly. This risk is amplified when buying young pu’erh, especially for people that don’t have experience aging tea.

Note: As absurd as it might sounds, a fair and reasonable strategy for an average drinker with a daily coffee-sized budget could be to buy a $100-150/beeng a month, as opposed to three $50/beengs. If you’re spending $150 anyways, why not buy the better tea, rather than target value and have tea just lying around? Another alternative could be to live off of daily-drinking inexpensive beengs and save up for super-special $400-500 teas.

Diversification

Asset allocation is an investment strategy that avoids active management and tries to manage risk and reward by shifting the overall portfolio, based off a number factors. These factors usually include the investors risk tolerance, age, goals, and time-frame. It is often effective over long periods of time because it invests in large portions of the stock market (usually index funds) rather than individual stocks (making it naturally diverse) and tries to minimize investment fees.

Asset allocation is no guarantee (nothing in the market is), but over time it has proven to be an effective way of managing a portfolio. One risk for instance, is the whole stock market going down or crashing. In that scenario you will lose money regardless of how you invested!

Many concepts are not necessarily directly applicable to pu’erh investing. However there are some principles, specifically diversification, for those that aren’t totally confident or don’t want to deal with the inherent risks of Tenet 3Ding.

Diversify! Build A Stamp Collection

What is a pu’erh stamp collection? It is essentially a a variety of beengs/tuos/bricks bought in relatively small quantities. For some people, a standard-sized 357 gram cake might be only a little tea and this strategy doesn’t buy nearly enough. For most 357 grams is quite alot. Buying 357g of high-mountain oolong or any other tea would certainly be considered alot!

Building a stamp-collection is a great way to minimize the risks of buying pu’erh. Don’t overcommit and buy tea that fits your budget. The tea can be a few different styles of cakes from a few different vendors from different years. Over time and with increased experience you’ll have a much better feel for tea and what constitutes a good or bad purchase.

Note #1: Stamp collecting is pretty close to Tenet 1, walk before you run!

Note #2: Another advantage to buying a few cakes of everything is getting more reference points both for your teas as well as your own storage.

Note #3: A tong wasn’t necessarily designed for a single person’s consumption. If you really like a tea and want to load up in quantity maybe a better quantity is 3-4 cakes?

Note #4: The good news is stamp collecting is probably fairly similar to how alot of us buy pu’erh anyways!

A Few Caveats

There are definitely still some risks here, many of them inherent with the aging of pu’erh. Maybe your cat knocked over your water bowl onto your cakes. This is a joke to some, but can most definitely be a real concern. A single mistake and can ruin alot of time and money.

Perhaps the most important caveat is your storage. Set it and forget it, isn’t a very good strategy for most of the western world. Perhaps your climate prevents you from having reasonable storage conditions. In that case it really doesn’t matter what your base material is. If you plan on buying pu’erh in quantity to age, then you need to have a storage plan and ideally sooner rather than later!