The world of alternate assets
Watches, wine, and more!
The surge of NFTs has served as a reminder that humans can often assign value to strange things. With that in mind, let’s look at some unique alternate investments/expenses that are probably not talked about enough.
The quality of fine wine is said to appreciate over time. As the quality improves so does the value. Sure enough there are platforms that allow you to invest in wine and Vinovest is one of many. Their website claims that “Wine has outperformed the S&P for the past 30 years, including during downturns.”
Many funds invest in music royalties. These funds allow artists to get liquidity and security and allow investors to get an uncorrelated return to the stock market. (if the song performs well that is) . Primary Wave Music is one example of a firm that has a music fund (for institutional investors)
Retail investors can invest in songs individually. Websites like Royalty Exchange allow investors to invest in music and yes NFTs have entered the music world.
There is a growing market around the idea that sneakers can be treated as investments. According to estimates by Cowen research analysts, the sneaker resale market could potentially reach $30 billion by 2030. That brings up the interesting question that can sneakers be considered as assets. Before I try to answer that let’s look at the story of Joe Hebert.
Joe and 15 members of his team were up at 3 am for the release of the new Yeezys. When the shoes went on sale, Hebert's team swarmed the Yeezy Supply website using specialized computer programs to remove the limit to purchases to one pair per customer. By 6 a.m. the shoes were sold out, and Hebert's bots had bought shoes worth $132,000 on his card. His company, West Coast Streetwear, resold the shoes in almost as little time as it had taken to buy them, clearing $20,000 in profit.
Flipping sneakers, which is what Joe essentially did, is not a new business. It has been around for quite a while. The crazy demand for sneakers emerged as far back as 1985 when Nike dropped the Air Jordan 1. The emergency of sneaker resale websites like Stock X and Goat only enhanced the growth of this market. These websites allow you to bid for or auction sneakers off.
Spencer Dinwiddie who plays basketball for the Washington Wizards (As of 2021) came up with a concept where one can invest in a basketball player (like a bond). The investment could be secured by the player’s professional contract (in the case of Spencer it was his 33 Million Dollar NBA contract).
One would get a return on their investment like any other investment. It resembles a loan with a secured contract along with added bonuses depending on player performance.
Furthermore, Fantex Holdings is a U.S.-based financial services and brand development company headquartered in San Francisco, California which provides an investment service allowing investors to trade securities tied to the cash flows of professional athletes and their brand contracts with Fantex. (Wikipedia)
Luxury and limited edition watches have been known to increase in value as time passes. Watches like the Rolex Daytona, Rolex Submarine, etc have dramatically increased in value since inception. This has led to a niche set of investors, who try to get their hands on limited edition watches. There is a website known as the “Watch fund” that claims to allow you to invest in such limited edition watches.
NFTs have revolutionized investing in art. However, there are other platforms that allow the same. Masterwork allows investors to buy shares in paintings with the goal to sell them for a profit after holding them for a certain period of time. On a side note if you are interested in purchasing some incredible art at reasonable prices do check out Artrochis.com.
A fund, run by Seoul-based Ryukyung PSG Asset Management Inc., had invested close to $500,000 in the movie “Parasite”. As you may know by now, the movie went on to win an Oscar. The cost to make the movie was close to $11 million and the movie has already returned more than 10 times that amount. Most investments in films will be open/possible for only family offices and hedge funds. Of course, the simplest way is to buy entertainment stocks.
Popular Youtuber, Mr Beast had said that he wanted a way to invest in up-and-coming creators, and Get Juice does just that. As mentioned on the Get Juice website “The creator economy is set to exceed $30 billion this year, supported by 2 million creators and 2 billion monthly consumers worldwide. And yet, when creators turn to banks for a loan, the phrase “I’m a YouTuber” still elicits confusion and blank stares.” Get Juice plans to solve that problem by investing in content creators.
What is an alternate asset which you have invested in? I have spent an absurd amount on playing cards, but that is mostly expenditure and not an investment. Atleast I stimuled the economy though!(my excuse for shopping)
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