Hello and welcome to Alts Cafe
Highlights from the full issue:
- Macro: Nigeria raised rates by 200 basis points
- Real Estate: Brookfield takes a $100 million loss
- Startups: Pepsi is afraid of Liquid Death
- Private Credit: Infrastructure debt set records
- Crypto: Dogecoin had a great week
- NFTs: Blue-Chips are struggling
- Art: High ticket sales at Art Basel Hong Kong
- Vintage Autos: Volkswagen brings buttons back
- Coins: A $10,000 state quarter
- Farmland: Massive property tax hikes in Indiana
- Luxury: Market share grows for AP watches
- Wine, Tequila, and Spirits: Craft beer is struggling
- Film & Music: Sony wins $800,000 in court
- Precious Metals: Silver could double
- Collectibles: Someone bought the “Titanic” door
- Websites: Bagels.com sold for $500,000
Let’s go.
Wyatt
Table of Contents
Macro View
Bullish News
- The US economy grew at a 3.4% annualized rate last quarter.
- Wall Street’s “biggest bull” raised his year-end S&P 500 target to 5,500.
- The Federal Reserve projected strong growth over the next three years.
- Nearly half of investors expected a “no landing” scenario for the US economy.
- US corporate profits hit a record high of $2.8 trillion in Q4 2023.
- Canada’s GDP rose 0.6% in January and is projected to grow 0.4% in February.
Bearish News
- US inflation ticked up to 2.5% in February as consumer spending jumped 0.8%.
- The eurozone faces weaker-than-expected growth prospects, with 0.7% GDP growth projected this year.
- Britain’s economy entered a recession with GDP shrinking 0.3% in Q4 of last year.
- China’s economy has barely grown in the past two years.
- France’s 2023 public deficit overshot its target at 5.5% of GDP.
- Nigeria’s central bank raised interest rates by 200 basis points to 24.75%.
- US state and local governments employ 2.1 million fewer people than before the Great Recession.
What are the odds?
Kashi is running a market for the film Civil War, which will be released next Friday.
Initial reviews put its score at 92% on Rotten Tomatoes. You can bet on a Rotten Tomatoes score over 85% for a 50% return if you don’t think that won’t change as more critics’ opinions trickle in.
Get $25 to play around with using this link.
What are we doing?
Altea Highlights
Check out the full roundup.
Live Deals
- Investment size: $260k ($10k minimum)
- Hold period: 3 – 5 years
- Potential IRR: 35% to 40%
- Fees: 2% management | 20% carry | nominal one-time subscription TBC
What’s the deal
Altea will acquire 50 barrels of 100% agave tequila through this SPV to buy and hold for at least 3 years as the spirits age.
The barrels will be acquired, stored, and disposed of through our network of tequila brokers, private collectors, and exclusive brands in Jalisco, Mexico, over the course of 3 to 5 years.
If you’re an accredited investor and want to get involved, please let me know ASAP. There’s no cap on investors here, so it’s open to everyone — not just Altea members.
Funding Status: $524k soft commits (up from $200k last week)
Upcoming Deals
South Island, New Zealand NRL Expansion
What’s the deal
We’re working with an organization looking to expand NRL rugby to New Zealand. They’re raising a small working capital round of $200k to $300k to finalize the bid (which already has wide support).
Investor Field Trips
We’ve locked in Nashville 🎸 for a music-themed investing adventure to Music City, USA.
Get your boots spit-shined and your guitar tuned.
Est. dates: October 21 – 25
We’ll discount the first few members who make a deposit. Let me know if you’d like to join.
ALTS 1 Fund news
K1s are done! Thanks for your patience. Q1 report is inbound ASAP.
Real Estate
Bullish News
- Home prices are expected to rise between 1.4% and 4.1% in 2024.
- The CEO of Invitation Homes said housing prices will stay elevated due to a decade of cheap money.
- China’s Commercial Real Estate Market is expected to hit $1.07 trillion by 2029, with a 3.49% CAGR.
- Morgan Stanley upgraded their rating for Vornado Realty Trust.
- Residential real estate owners are 1% to 4% richer following the judgment against the NAR.
- The NAHB/Wells Fargo housing market index rose by 3 points to 51 in March, an 8-month high.
- Blackstone’s battered real estate trust, BREIT, may be poised for a revival.
- David Rosenberg said Canada’s housing market is no longer in the danger zone.
Bearish News
- Mortgage demand stalled, with a 2% weekly decrease in refinancing and a 0.2% weekly drop in purchase applications.
- Florida’s housing inventory rose 34% year-over-year, concentrated in areas affected by Hurricane Ian.
- Brookfield Asset Management sold a distressed LA office tower for $145 million, nearly half its loan value.
How to invest in real estate right now:
Insurance for the new Florida listings… that’s another story
Startups
Bullish News
- Female-led startups captured a record 27.8% of total VC deal value in 2023, up from 18.7% in 2022.
- Beverage startups like Liquid Death have begun to challenge industry giants.
- Startup secondary markets have picked up, with firms like Stripe seeing a 30% valuation increase from previous rounds.
- Over half of the top 50 open-source startups in 2023 were related to AI.
- Cloud security startup Rubrik has planned to file for an IPO this week.
- Index Ventures closed a trio of new funds totaling $3 billion.
Bearish News
- Unicorns in Europe are an endangered species.
- Interest rates have continued to force venture capital firms to be far more disciplined with their new investments.
- Fitness startups faced tough times in 2023:
- Global seed through growth-stage funding hit its lowest point in years for the industry.
- Peloton shares shed 97% of their value since their 2020 peak.
- Most of the $50 billion raised in AI startup investments went to tech giants, leaving smaller players with limited opportunities.
How to invest in startups right now:
I still don’t understand Liquid Death.
Private Equity and Private Credit
Bullish News
- Infrastructure debt funds collected a record $19.5 billion in 2023, 10.2% of total capital raised.
- Private capital AUM more than doubled since 2012.
- New EU legislation is expected to create up to €100 billion of new retail investment over the next five years.
- The secondary market saw $115 billion of stakes in private funds change hands in 2023.
- Japan bucked the PE slowdown in Asia Pacific, with deal value surging 183% in 2023.
- Pemberton Asset Management closed its third Strategic Credit Fund with €2.3 billion.
- Saudi Arabian PE investment hit an all-time high of $4 billion in 2023.
Bearish News
- Lawmakers scrutinized PE’s impact on healthcare, critical technologies, and investments in foreign adversaries.
- The Bank of England stepped up its oversight of PE.
- The US Treasury Department announced its intention to extend anti-money laundering rules to PE funds.
- Asia Pacific PE deal value fell to $147 billion in 2023 as fund-raising declined to its lowest level in a decade.
How to invest in PE and Private Credit right now:
Lots of new regulations to read.
Crypto
Bullish News
- March’s trading volume for Bitcoin skyrocketed to heights not seen since May 2021.
- Central, Northern, and Western Europe emerged as the second-largest cryptocurrency economy.
- BlackRock partnered with Coinbase and Anchorage Digital for its first tokenized fund on the Ethereum network.
- Galaxy Digital’s CEO said Bitcoin ETF approval would drive Bitcoin’s price to $500,000 by 2030.
- Fidelity’s Bitcoin ETF saw $470 million in inflows in its first three weeks.
- Dogecoin surged 40% last week, reaching a $31 billion market cap.
Bearish News
- Sam Bankman-Fried was sentenced to 25 years in prison.
- Losses to crypto scams have risen 53% since last year.
- A judge ruled the SEC’s claim that Coinbase engaged in unregistered sales of securities could go to trial.
- Crypto funds saw record outflows of $942 million last week.
- Stronghold Digital Mining was sued over claims its Pennsylvania bitcoin mine pollutes nearby communities.
- Binance ended support for USDC stablecoin deposits and withdrawals on the Tron blockchain.
How to invest in Crypto right now:
See ya in 2049, Sam.
NFTs
Bullish News
- Last Friday saw a massive surge in global NFT sales volume, driven by Bitcoin NFTs.
- NFT NYC 2024 is expected to showcase a significant NFT resurgence.
- SEI’s ecosystem grew 10,731.65% year-over-year.
- OpenSea landed a $13.3 billion valuation.
- Robert Alice broke new ground with an auction of generative art NFTs at Christie’s 3.0.
Bearish News
- The Blue-Chip NFT Index hit a 30-day low in March.
- Bored Ape Yacht Club NFTs dropped 79% in 18 months.
- AMC’s initial excitement for NFTs has waned, with no new releases in over 500 days.
- Donald Trump’s digital trading cards were pulled from sale.
How to invest in NFTs right now:
Probably time to get familiar with the SEI ecosystem.
Artwork
Bullish News
- A Willem de Kooning painting sold for $9 million.
- Sotheby is set to auction a major Warhol-Basquiat collaborative work, estimated to fetch $18 million.
- Mark Bradford’s painting May the Lord be the first one in the car sold for $3.5 million at Art Basel Hong Kong.
- The Eagles Autism Foundation hosted an art exhibit featuring 35 original Eagles-themed pieces.
Bearish News
- The Art Institute of Chicago’s reputation has been tainted by refusing to return a drawing stolen during the Holocaust.
- The British Museum sued former curator Peter Higgs for stealing over 1,800 items from its collection.
- An Andy Warhol “Mao” screenprint valued at $50,000 has been reported missing.
- California lawmakers introduced a bill to enhance Holocaust survivors’ and heirs’ ability to reclaim stolen or forcibly sold artworks.
How to invest in Artwork right now:
Chicago — get your act together.
Vintage Autos
Bullish News
- The last Porsche 917 to race at Le Mans is expected to fetch up to $5.4 million at auction.
- A 1967 Toyota 2000GT, the first production model to leave the assembly line, headed to auction.
- A rare 1956 Continental Mark II went up for auction on Hagerty.
- An auction of over 100 cars from Miles Nadal’s collection came to Toronto.
Bearish News
- The owner of a property with 300 classic cars passed away from cancer in 2020, leaving mostly parts cars.
- This collector’s modification to his 1972 Yamaha U7E motorbike accidentally made the vehicle much worse.
- Volkswagen brought back physical buttons and knobs after complaints about difficult-to-use touchscreens in 97% of new vehicles.
- Legendary dealer Jack Kain passed away at 94 after serving over six decades.
How to invest in Vintage Autos right now:
Dear Volkswagen, thank you for the buttons.
Rare Coins
Bullish News
- A rare 1999 Georgia state quarter could be worth up to $10,000 due to a minting error.
- Two Carson City Mint Morgan dollars from the David T. Miller set each realized $228,000.
- The US Mint reported that Harriet Tubman commemorative coin sales topped 50,000 in three months.
- The 1930 Proof Penny may be worth up to $1.3 million.
- A Wisconsin coin collection sold at auction for $895,371.
- Rare dimes circulating in Bucks County, Pennsylvania could be worth up to $1,000 due to a missing mintmark.
Bearish News
- Medium-grade barber series coins in dime, quarter, and half-dollar denominations remain elusive.
How to invest in Rare Coins right now:
Check your collection for Georgia quarters.
Farmland
Bullish News
- The average price for Illinois farmland increased for the fourth consecutive year, up 5.5% from 2022.
- The estimated market value of the average Maine farm rose to $649,229, the highest since 1997.
- An Iowa farm with 40% of the land reaching a 100 Corn Suitability Rating sold at auction for $4 million.
- Precision agriculture technology with AI has shown promise for improving livestock yields.
Bearish News
- Farmland values are facing pressure as corn and soybean prices hover at break-even levels.
- University of Missouri reported net farm income will drop to $118.2 billion in 2024 from $162 billion in 2022.
- Indiana farmland property taxes are expected to jump 27% in 2024 after a 17% increase last year.
- The USDA’s March 28 acreage report set corn acres at 90 million, lower than the average trade guess of 91.8 million.
How to invest in Farmland right now:
After our trip to Mexico, there was significant interest in acquiring cash-flowing agave farmland. We may have found the right opportunity. There are ten hectares of prime roadside land available for around $1.1 million, which is a good price. There’s also room to build a distillery and accommodation for STRs. More to come on this.
Altea members get first dibs, but you can get on the waitlist in case there’s extra space.
Luxury Goods
Bullish News
- The latest Prosumer Report showed strong demand for luxury items from Gen Z.
- Perth is becoming a luxury market destination with Christian Dior and others planning openings.
- Richemont teamed up with Alibaba to crack China’s online luxury shopping market.
- Audemars Piguet has consolidated its place among the “Big Four” watchmakers, growing revenues by 2%.
- Goldman Sachs maintained a Buy rating for LVMH anticipating a 3.0% increase in Q1 underlying sales.
Bearish News
- Secondary market prices for Rolex, Philippe, and Audemars Piguet are projected to continue to decline as supply remains high.
- Kering projected a 10% decrease in Q1 revenue compared to the previous year’s $5.5 billion.
- The implosion in luxury e-commerce hit MatchesFashion, driving them into administration.
- Burberry Group’s shares dropped 1.50% to £12.13 on Thursday.
- Estée Lauder Companies insiders sold a significant stakes in the company.
How to invest in Luxury Goods right now:
I’m curious to see Alibaba’s approach to luxury evolve.
Wine, Tequila, and other Spirits
Bullish News
- Linlithgow Distillery announced plans to raise funds for a new whisky distillery.
- Demand for small-batch spirits is increasing.
- Oregon’s wine industry brought in $8.1 billion in 2022, up from $7.2 billion in 2019.
- The Artisanal Spirits Company, owner of The Scotch Malt Whisky Society, reported 8% revenue growth in 2023.
Bearish News
- Climate Scientists have forecasted 90% of the world’s wine regions will close by 2100.
- Hermit Thrush Brewery announced its closure in April, part of a flattening craft beer trend.
- Gen Z considers alcohol “poison” and the “2024 cigarette,” with 45% saying they’ve never consumed it.
- French Bordeaux wine exporters expected a rapid fall in exports after China lifted import tariffs.
How to invest in Wine and Spirits right now:
Last chance to get in on our tequila SPV. Let me know if you’re interested.
Music and Film
Bullish News
- The US recorded music industry generated $17.1 billion in 2023, marking the eighth consecutive year of growth.
- BMG’s 2023 revenues reached $905 million, a 50% increase since 2020.
- HYBE expanded its long-term agreement with Universal Music Group.
- Tennessee officially passed the ELVIS Act, the first state law protecting musicians from unauthorized AI replication of their voices.
- Sony Music won $802,997 in damages from rapper Trefuego for illegal sampling in a viral TikTok track.
Bearish News
- S&P Global cut Paramount Global’s debt rating to junk status.
- States are grappling with film tax credits as they see returns as low as 15-31 cents per dollar given.
- AMC Theatres’ shares plummeted about 15% after the company said it may sell $250 million in stock to offset box office revenue.
How to invest in Music and Film right now:
Thank you Tennessee, Thank you very much. (The Elvis accent is a work in progress)
Metals and Gems
Bullish News
- Forecasts showed that silver prices have the potential to double before 2025.
- Gold prices continued their unstoppable rally, closing out Q1 near record highs.
- Fund managers rushed to buy copper after the price broke out of its one-year trading range earlier in March.
- Kazakhstan discussed its potential in rare metals development at a recent EU conference.
- Gold mining stocks marked their best month in a year with the VanEck Gold Miners ETF (GDX) rallying over 13%.
- Russia’s Ministry of Finance has been purchasing diamonds from state-owned miner Alrosa.
Bearish News
- Nickel prices are projected to continue falling in 2024 due to increased production.
- Orezone Gold Corporation analysts forecast a 14% annual revenue decline by year’s end.
- The Indian government annulled the auction of 13 critical mineral blocks.
How to invest in Metals and Gems right now:
How much longer can the gold rally continue?
Collectibles
Bullish News
- The iconic “Titanic” prop door sold for over $700,000 at auction.
- Hake’s auction of pop-culture rarities closed at $2.5 million, with a Star Wars action figure selling for $42,242.
- The best-unrestored copy of Superman’s Action Comics #1 has a current high bid of $4.2 million.
- eBay’s Authentication Guarantee has generated over $10 billion in gross merchandise volume for collectibles on the platform.
Bearish News
- GameStop’s Q4 collectibles category sales have dropped over 25% compared to Q4 2022.
- Nike has scaled back production of its classic sneaker lines due to competition from upstart-running brands.
- Stamp collecting is dying, with the average collector over 60 years old.
How to invest in Collectibles right now:
I’d also “Let Go” of the Titanic door for $700,000. [Ed: I’m so sorry]
Websites and Domains
Bullish News
- Sedo broker Mark Ghoriafi sold bagels.com for $500,000.
- ArtificialIntelligence.com name was listed for $9.9 million.
- ICANN opened a $217 million Grant Program that could allow one-letter gTLDs.
Bearish News
- Afternic and Sedo have millions of invalid listings.
- In 2023, investors funded 471 ecommerce deals valued at $11.7 billion, down 30.4% year-over-year.
- Digital Domain Holdings reported a net loss of HK$394.6 million for FY 2023, a 91% wider loss compared to FY 2022.
- Google updated its algorithm to combat the use of expired domains for ranking manipulation, cutting down unoriginal, low-quality content by 40%.
How to invest in Websites and Domains right now:
Bagels.com… I wonder what they’re going to sell.
Cheers,
Wyatt
Disclosures
- We hold BTC, ETH, and a couple Star Wars Action figures in our ALTS 1 Fund.
- There are a couple of affiliate links above. If you click them, we may get a couple of bucks.
