The Attic Update Vol. 17 - Market Cycles, Domain Names, and Tonka Trucks
Beyond Alternative Assets
Thanks for reading The Attic Update, a weekly look at the exciting world of collecting and investing in alternative assets.
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Featured Article -
Are markets completely random - or do they follow some sort of pattern? Nobody knows what will happen next, but some of the smartest people on the planet have studied the history of markets and have drawn a few conclusions along the way. Learn from the legends, understand the 4 Stages of a Market Cycle.
The Latest -
Here’s the ‘Attic Top 10’ - The most relevant stories in collecting and investing in alternative assets over the past week. Not only to keep you informed but to provoke deeper thought, curiosity, and investigation.
1 - Fractional Ownership - Rally moving into the digital real estate game with domain names. For the first time on a fractional ownership platform (that I’m aware of), shares of an internet domain name will be offered to average, every day, non-accredited investors and collectors. The domain is “Directions.com,” and the valuation is $140,000. The domain was one of the first 25,000 internet domains registered in 1995. Personally, this is probably my favorite new Rally offering since the 1961 Jaguar E-Type, which seems like 10 years ago. Want to know why Rally is leaving their fractional ownership competition in the dust? Read here.
2 - Memorabilia & Collectibles - I found this to be a surprising combination, but Architectural Digest magazine recently featured an article titled, “LEGO Sets Are Better Investments Than Stocks, Bonds, or Even Gold.” The article discusses a study by the Higher School of Economics in Moscow arguing that LEGO sets appreciated 11% per year from 1987 - 2015. A few notes, these are unopened LEGO sets, with sets tied to holidays, movies, and well-known buildings outpacing more traditional sets. Also, the limited edition performed best, as expected. The most valuable sets of all time? Taj Mahal, Millennium Falcon, and Imperial Star Destroyer. See the Top 20 LEGO sets here.
3 - Sports Cards - If you’re a sports card enthusiast, you can’t escape Fanatics. The company has been on an epic roll - grabbing multi-year licensing deals, raising mountains of cash, and spending hundreds of millions acquiring competition. Long story short, Fanatics gives zero F’s at the moment. And they just bought Topps. Yes, that Topps, the company founded in 1938 that almost single-handedly creating what we now know as the sports card industry. Fanatics spent $500 million on Topps, and it feels like the Fanatics crew is just getting warmed up. Here’s my take on the most “Epic” year of Topps cards ever… the 1987 wood-grained beauties.
4 - Rare Books - A very rare copy of the Lord of the Rings trilogy was stolen recently. It was lifted from a locked cabinet in a hospice charity shop that was set to auction off the rare books to raise money for holiday charitable work. Valued at nearly $20,000, the charity went public with the story of the book theft. 10 days past, and the books mysteriously re-appeared on a shelf in the hospice, undamaged. It seems the thiefs had a change of heart, and returned the valuable books. A rare happy conclusion to a rare book heist story.
5 - Crypto & NFTs - What’s behind the crypto slide and the Bitcoin dip? One argument is the fight against inflation will raise interest rates, making risky assets like crypto less attractive. Another argument is we are in a normal ebb and flow with greater gains soon to come. What do the numbers say? Bitcoin is down 16% in the last month, 10% in the last week, and up just 5% over the last year. One thing I keep thinking about is the 4 year Bitcoin cycle that seems to pin itself on the “halving.” No idea what the Bitcoin halving is? Check this out for a primer.
6 - Watches - Pre-owned watch seller, WatchBox, talks about plans for their recently raised $165 million funding round. One of the first “to-do’s” on the list is to open additional store locations, adding a second middle east location. This time heading to Riyadh, the capital of Saudi Arabia. WatchBox currently holds about $150 million in watch inventory, and in two years projects inventory to grow over $200 million. When customers struggle to buy their favorite Rolex brand new, WatchBox knows managing inventory will be the key to success in the $18 billion pre-owned watch market. What’s my favorite Rolex buy right now? It’s the Hulk - the submariner beast that’s really tough to find lately.
7 - Wine & Whiskey - I just read a chilling article in the New York Times titled, “That $1,000 Bourbon You Bought May Be a Phony.” The title should give chills down the spine of any wine and whiskey collector. We all think about it from time to time, but we don’t really want to consider the fact that the expensive bottle of whiskey on your shelf might possibly be fake. The New York Times article goes into detail about the boom in prices and how it’s attracting swindlers and scammers. “Bourbon in 2021 is, in other words, a counterfeiter’s dream, shaped by enormous demand, limited supply, and a steady inflow of new and naive fans all too willing to part with their money…” Be careful out there, folks!
8 - Markets & Investing - The CNN Money Fear and Greed Index is almost exactly split between fear and greed, ringing in at a 52 out of 100. I know some people hate the Fear and Greed Index, and call it worthless. But at the extremes, I think it can be interesting, if not useful. If you really dig into the seven indicators that make up the index, you can come away a little bit wiser, with a tiny bit more understanding that fear and greed is constantly at work in markets. So take a deep dive, and Go Beyond the Fear and Greed Index.
9 - Collector Cars - The latest episode of Jay Leno’s Garage features a 1909 White Model M. If you’re not familiar with a 1909 White Model M, it’s a 40 horsepower steam car. Jay goes start to finish, showing the proper way to fire up an actual steam generator engine. Check out the full episode, and read more about Jay’s lifelong passion of collecting incredible cars.
10 - Art - I had to do a double-take on this headline that streamed across my screen this week. The headline ran, ‘Market for NFTs Surged to $41 Billion in 2021, Catching Up to the Size of the Global Fine Art Market.’ The report says the conventional fine art market saw sales of $50 billion in 2020, while NFT sales surged to $41 billion in 2021. I’m not the smartest knife in the drawer, but I’m going to go-ahead and jump to my own conclusions and call B.S. on this report right here and now. Give me some time to dig a little deeper into this story, so I can gather more info. I’ll start with the full report in the article, which was sponsored by, you guessed it, blockchain data company, “Chainalysis.”
Quote from the Legends -
When ‘60 Minutes’ profiled the Lamborghini Countach in 1987, they traveled to Italy to meet with the company founder, Ferruccio Lamborghini. As they drove the Countach through the narrow streets of Italy, the reporter asked if it would be safter to test drive the car on a test track. Ferruccio responded,
“The company does not have a test track; our cars are built for the road.”
Watch the entire ‘60 Minutes’ interview - and read more about the biggest feud in automotive history.
Featured Pod -
If you love coin collecting, there are dozens of great podcasts out there to dive deep into all things coin. Recently, I found a new podcast called Coin Empire.
With only a few episodes under their belt, the show has focused on basic intro coin collecting topics such as the difference between investing and collecting in coins, and basic terms for beginners.
The lastest episode discusses coin grading basics, and weather it pays to get your best coins graded. Check them out below. Want more coin talk? Check out these coin collecting articles on valuable wheat pennies, Roosevelt dimes, buffalo nickels, and half dollar coins.
Tweet of the Week -
The Tweet of the Week is brought to you by one of my favorite parody accounts, @ParikPatelCFA. The tweet below shows 2021 returns for some of the biggest hedge funds in the world.
They are not that great. In fact, they are shockingly bad. When I say “shockingly,” I’m saying these are the smartest minds in the universe, dedicated to exploiting every single fraction of a cent move in every asset on the planet earth. And most of them didn’t outperform the S&P 500 last year, which returned 29%.
In the words of another great Twitter follow, Howard Lindzon, “investing is hard.”
What makes these hedge fund masters-of-the-universe, market gurus, tick? Here’s a few articles that might give a little insight into the minds of the Wall Street bigshots.
Bridgewater and the Man Behind the Money
Inside Renaissance Technologies Medallion Fund
Featured Video -
Recently, we profiled Vintage Tonka Trucks, and what makes them great. One unexpected result was finding dozens of YouTube channels dedicated to the restoration of old, rusted out Tonka’s. The videos are amazing quality, strangly soothing and almost hypnotic. I couldn’t stop watching - one after the other.
Maybe it was because I was having flashbacks to when I was 4 years old, running around with a few of the same Tonka models in the videos. Maybe it’s the extreme craftsmanship and careful attention to detail, bringing these toys back to life once again.
Try a few Tonka restoration videos, and let me know if you’re able to pull your eyes from the screen without watching a dozen or more.
Question for You -
What alternative assets would you like more discussion about next week? There’s only 9,000 alternative assets out there to choose from, let’s hear your favorites. Timberland? Cell tower leasing? How about rare and valuable prehistoric arrowheads??
Leave your comments, I’d love to hear them -
Thanks for reading, and have a great week!