Hello and welcome to Alts Cafe 👋
Stefan and I took a bunch of Altea members to Mexico in February to uncover the country’s best investment opportunities. TL;DR: we found a lot.
Highlights from the full issue:
- Macro: Could the S&P Hit 5400?
- Real Estate: All cash buyers in CRE
- Startups: Dental AI is hot
- Private Credit: Private Credit exceeds high-yield bonds
- Crypto: Goldman upgrades Coinbase
- NFTs: Layoffs at Sorare
- Art: A $5.6M photo collection
- Vintage Autos: Custom Jeep fetches $400,000
- Coins: Another ancient coin discovered in Judea
- Farmland: Almond farms are hit hard
- Luxury: Impressive return on capital employed at LVMH
- Wine, Tequila, and Spirits: $9.3M invested in Kentucky
- Film & Music: Columbia Records hiring lawsuit
- Precious Metals: Quality issues in Sri Lanka
- Collectibles: Million-dollar bats
- Websites: Canva secures 174 domains
Let’s go.
Table of Contents
Macro View
Bullish News
- China set a 5% GDP growth goal for 2024.
- Christine Lagarde hinted at a June rate cut as the ECB revises its inflation forecast downwards.
- J. Safra Sarasin Sustainable Asset Management raised its year-end target for the S&P 500 from 5100 to 5400.
- Global income inequality may not have worsened due to globalization (despite consensus expectations of the opposite).
- The Canadian dollar is anticipated to strengthen over the coming year.
Bearish News
- The US services sector experienced a slowdown in February.
- US Treasury yields fell over 8 basis points to 4.137%.
- Atlanta Fed President Raphael Bostic said that the US economy is too strong to justify urgent rate cuts.
- Japan’s household spending plummeted by 6.3% year-on-year in January.
- UK consumer card spending in February hit its lowest growth since 2022, growing just 1.9% year-on-year.
- The unemployment rate rose to a two-year high of 3.9% in the US.
- Corporate bankruptcies in Russia have risen sharply in the first two months of 2024.
- Brazil’s dengue epidemic could lead to significant economic losses.
What are the odds?
Get $25 to play around with using this link.
What are we doing?
ALTS 1 Fund news:
We’re updating our prospectus in anticipation of opening the fund up again. Stay tuned
Real Estate
Bullish News
- The share of all-cash buyers in the commercial real estate market reached its highest since 2014 at 32%.
- Dallas-Fort Worth’s commercial real estate market continues to thrive, with a record retail occupancy rate.
- Hedge funds are increasingly betting on a US real estate rebound.
- The New York City housing market had a 6.7% increase in homes entering contract in January 2024.
- A Centreville estate set a new record sale in Delaware at $18 million.
- Life insurers’ real estate assets are performing better than expected.
Bearish News
- Manhattan’s office building delinquency rate soared over 1,000% from January 2023 to January 2024.
- Banks with significant commercial real estate exposure face widening bond spreads.
- Cushman & Wakefield froze salaries for its 52,000 employees worldwide in response to drying up deals.
- Spruce Point is shorting Zillow.
- NYCB’s stock plunged over 80% this year.
How to invest in real estate right now:
Help Cushman & Wakefield employees find side gigs.
Startups
Bullish News
- Investors poured more than $2 billion into seed-stage companies in February.
- Perplexity AI is on the brink of achieving a unicorn valuation.
- Andreessen Horowitz plans to raise $6.9 billion for a master-feeder fund.
- Overjet’s Series C funding of $53.2 million marks the largest investment in dental AI.
- In the first months of 2024, energy startups saw 12 mega-rounds.
- Prudence launched a new $80 million fund targeting prop-tech startups.
- Fluidra Ventures launched a €20 million fund to innovate in the pool and wellness sector.
Bearish News
- The pace of startup acquisitions by other startups hit a three-year low.
- Startup shutdowns hit 770 in 2023, up from 467 in 2022. [Ed: it’ll be higher in 2024]
- Plaid has no IPO plans for 2024.
- Lucid Motors acknowledged that it cannot depend on the “bottomless wealth” of its Saudi owner for financial stability.
- A former Google engineer was charged with theft of AI technology for a Chinese startup.
- Sam Blond left Founders Fund after 18 months, the second high-profile departure from Founders Fund in recent months.
How to invest in startups right now:
Avoid stealing IP from Google.
Private Equity and Private Credit
Bullish News
- Morgan Stanley expects M&A volumes to grow 50% this year.
- UBS Group AG’s shares reached their highest level since May 2008.
- Blackstone Credit & Insurance and Barclays partnered on a $1.1 billion sale of credit card receivables. [Ed: which sucker bought these?]
- Private credit’s market size surpassed leveraged loans and high-yield bonds.
- 45% of Hong Kong family offices plan to boost their allocations to private credit funds in 2024. [Ed: omg the bubble]
- PE firms have invested over $80 billion in Intelligent Automation.
- Ares launched Ansley Park Capital.
Bearish News
- PE firms that invested heavily in tech during 2021 are facing challenges as high valuations plummet.
- Federal agencies launched a probe into PE in healthcare.
- The debt cushion for LBOs has significantly thinned.
- PE firms are scaling back on investments in consumer companies.
- Taiwan’s insurance giants are dialing back on private equity investments.
How to invest in PE and Private Credit right now:
Sell your private credit now.
Crypto
Here’s what you need to know:
Bullish News
- Bitcoin’s price soared to an all-time high of over $69,000.
- VanEck Europe projected that half of its AUM will come from crypto in the future.
- Asian investors are driving Bitcoin’s rally with 70% of trading volumes.
- Goldman Sachs upgrades Coinbase to neutral.
- MicroStrategy aims to raise $600 million through convertible notes to fund further Bitcoin acquisitions.
- Bitstamp becomes the first EU-based crypto exchange to receive in-principle approval in Singapore.
- Solana surged to $150, a first since January 2022.
- Revolut partnered with MetaMask to enable direct crypto purchases from Revolut accounts.
- Dogecoin surged 77% this week. [Ed: ffs]
Bearish News
- Only €11 million in digital assets are under custody by American banks, a stark contrast to Europe’s €3.7 billion.
- Cryptocurrency scams were identified as the riskiest in 2023, according to the BBB’s annual scam report.
- Binance US laid off 2/3 of its staff following a significant lawsuit from the SEC.
- Tether’s $100 billion milestone raised stability concerns among regulators.
- Investment fraud related to crypto surged by 53% in 2023, according to the FBI.
How to invest in Crypto right now:
American digital asset custody volume is staggeringly low.
NFTs
Bullish News
- CryptoPunk #3100 sold for around $16 million.
- Bitcoin NFTs surpassed Ethereum in weekly sales volume.
- Coachella and OpenSea launched Coachella Keepsakes.
- Magic Eden became the leading NFT marketplace by trading volume.
- The “LILLI NFT Crypto.com Exclusive Edition” by LILLIUS sold out immediately.
- Lost Worlds launched a creation portal for easy GeoNFT minting.
- Azuki NFTs surpassed $300 million in sales, outperforming Bored Apes and CryptoPunks in one-month sales volume.
Bearish News
- Some Bad Kids NFT holders missed out on Wormhole’s $900 million token airdrop due to specific Discord role requirements.
- The World Wildlife Fund canceled its “environmentally friendly” NFT initiative.
- Sorare laid off 13% of its staff.
- OpenSea dropped to fourth in NFT marketplace rankings.
- HitPiece faced backlash for selling songs as NFTs without artists’ permission.
- BAYC’s NFT floor price plummeted to its lowest since July 2023.
How to invest in NFTs right now:
Is OpenSea going to bounce back?
Artwork
Bullish News
- Auckland Art Gallery unveiled Julian Robertson’s $190 million art collection, the most significant bequest of international art to New Zealand in the past century.
- Frieze Los Angeles 2024 concluded with significant sales, including Richard Serra’s “Pamuk” (2009) for $2 million.
- Martin Margulies is set to auction a $5.6 million photography collection for charity.
- Sotheby’s London’s contemporary art sale garnered $126.6 million, with 60% of works by women exceeding their high estimates. A stunning Frank Auerbach piece netted a very nice result.
- Andy Warhol’s Portrait of Princess Diana is estimated to fetch between $1.5 million to $2.3 million at Phillips Auction House London.
Bearish News
- Sotheby’s Modern and Contemporary evening sale in London netted 40% less than the previous year.
- New EU regulations threaten the art market with stringent import and documentation requirements for items over 250 years old.
- Guy Wildenstein was sentenced to prison for tax fraud involving a hidden art collection.
- The Frida Kahlo Corporation filed lawsuits against Amazon sellers for trademark infringement.
How to invest in Artwork right now:
We’re finalizing an art SPV for a Frank Auerbach charcoal portrait. LMK if you’d like to invest.
Vintage Autos
Bullish News
- The Aurora Collection of 12 rare Ferraris is expected to fetch over $20 million at RM Sotheby’s Villa Erba sale.
- A 1903 Mercedes-Simplex 60 HP ‘Roi des Belges’ sold for over $12 million at Gooding & Company’s Amelia Island Auction.
- The March Classic Auctions reported $183.8 million in sales.
- A 1981 Jeep CJ7 Custom SUV fetched $425,000 at auction.
- A 1926 Bugatti Type 37, was sold for $750,000 at Donington’s.
- ModaMiami 2024 at The Biltmore Hotel in Coral Gables, Florida, led to a record-breaking $50 million auction for RM Sotheby’s.
Bearish News
- DriveShare has suspended rentals after its acquisition by Drive Co.
- Jerry Seinfeld settled a lawsuit over a disputed $1.5 million sale of an “inauthentic” 1958 Porsche.
- Cazoo transitioned to an advertising marketplace.
- Porsche recalled 8,101 of its 911 models for improperly manufactured windows that may detach.
How to invest in Vintage Autos right now:
Make sure your windows don’t fall off.
Rare Coins
Bullish News
- Stack’s Bowers Galleries sold five rare coins for over $600,000 each in 2023.
- An Ides of March Denarius coin is now valued at $150,000.
- A World War II Lincoln cent that previously fetched $1 million is set to be a highlight at the National Money Show.
- A rare 1849 Mormon gold coin fetched $705,000 at a Heritage Auctions event.
- The 1839 English “Una and the Lion” £5 gold coin sold for $336,000 at Stack’s Bowers Galleries.
- A coin from the Bar Kokhba Revolt era, inscribed with “Eleazar the Priest,” was discovered in the Judean Desert.
Bearish News
- Several coins have lost over 90% of their value in the last decade…
- The 1993 $1 Silver Eagle First Strike saw a dramatic price drop to $75 from $1,500.
- A 1969-D 1C, RD coin’s value plummeted to $325 from an initial $4,500.
- The 1982 Lincoln Penny Bronze Small Date, RD decreased in value to $225 from $3,000.
- The US is lagging behind in featuring women on its currency compared to other countries.
- Less than 1/3 of countries worldwide have women depicted on their currency.
- Harriet Tubman’s appearance on the $20 bill is scheduled for 2030.
How to invest in Rare Coins right now:
Values will fluctuate, sometimes dramatically.
Farmland
Bullish News
- Cibus Capital secured $645 million for agrifood investments
- Farmland values in the upper Midwest reached all-time highs in 2023.
- The USDA’s Grown Climate Smart program awarded $40 million to support sustainable farming across 11 states.
- A $20.4 million USDA grant aims to protect farmland and restore watersheds in Leelanau County, Michigan.
- Two tracts of farmland in Sioux County, Iowa, sold for a near-record $29,600 per acre.
Bearish News
- Farmland values are showing signs of weakening, with a rise in no-sales at auctions in Iowa.
- Farmland property taxes in Indiana are expected to climb until 2029.
- The Corporate Transparency Act imposed new reporting requirements on small farms.
- Young producers are frustrated by soaring land prices.
- Seventeen California almond farms filed for bankruptcy
- Proposed regulations in Kentucky could increase risks for farmland contamination.
How to invest in Farmland right now:
Oat milk is the new almond milk (for better or worse).
Luxury Goods
Bullish News
- Prada’s annual earnings jumped, with especially strong results in Japan.
- They also invested €1 billion to expand and refurbish their global retail network.
- The RealReal reported positive cash flow for the first time since 2019.
- Vêtir’s luxury shopping app launched.
- Hermès and Chanel increased handbag prices to maintain exclusivity, with Birkin bags seeing a significant hike.
- LVMH’s ROCE remained impressive at 21% over the past 5 years.
Bearish News
- Matches Fashion closed down, unable to recover post-acquisition.
- Audemars Piguet’s new CEO plans to limit growth to ensure brand desirability and independence.
- HSBC and Jefferies advised caution on luxury stocks.
- Luxury brands struggle with a billion-dollar excess inventory issue.
- London’s luxury retail downturn intensifies as tax-free shopping ends.
- Nearly 900 luxury watches went missing in Japan.
How to invest in Luxury Goods right now:
Don’t wait to buy that Birkin bag. It’s not getting cheaper anytime soon.
Wine, Tequila, and other Spirits
Bullish News
- The Whisky Exchange debuted the Lost in Time collection.
- Beam Suntory and the University of Kentucky renewed their partnership with a $9.3 million investment.
- Guatemalan Spirits celebrated six years of growth.
- DIAGEO launched the first Apple Vision Pro experience with Tequila Don Julio.
- Whisky Auctioneer announced its first auction dedicated to women in whisky.
- High-net-worth women represent an untapped market for fine wine.
- Jiugui Liquor investors have seen a 215% return over five years, with EPS growing at 20% annually.
- ProtectYourCask.com launched to protect investors from Scotch cask investment scams.
Bearish News
- Duckhorn Portfolio lowered its full-year guidance.
- Australian wine producers face a massive vine removal due to an oversupply causing plummeting prices.
- Brown-Forman reduced its sales forecast for 2024
How to invest in Wine and Spirits right now:
We’re taking expressions of interest to acquire 50 barrels of 100% agave tequila. Here’s why.
Smash reply if you’d like to learn more.
Music and Film
Bullish News
- Bryan Ferry partnered with Irving Azoff’s Iconic Artists Group, acquiring 50% of his catalog.
- JKBX launched a platform for music royalty shares, featuring artists like Beyoncé and Adele.
- John Legend sold his entire music catalog to BMG Rights Management and KKR & Co.
- The proposed Living Wage for Musicians Act would increase streaming royalties to at least one cent per stream.
- SESAC Music Group partnered with KOSCAP for global music rights management.
- BMG acquired the ‘What Is Love’ catalog, including Haddaway’s hit and other tracks.
- UMG acquired a majority stake in Nigeria’s Mavin Global.
Bearish News
- Sony Music Entertainment Japan closed the PRISM Project.
- Disney halted production on the live-action remake of “The Sword in the Stone” amidst a broader spending reassessment.
- Cox Communications and major record labels are in a legal dispute following the overturning of a $1 billion copyright verdict.
- Lots of legal battles…
- Columbia Records faces a lawsuit for alleged discriminatory hiring practices.
- Strasse Haus faces a copyright lawsuit from ASCAP for unlicensed music playback.
- Cox Communications and major record labels are in a legal dispute following the overturning of a $1 billion copyright verdict.
How to invest in Music and Film right now:
Oh baby, don’t hurt me Don’t hurt me No more
Metals and Gems
Bullish News
- Gold prices hit a new all-time high of $2,141.70.
- The platinum market is set for a 418 koz deficit in 2024.
- Wheaton Precious Metals Corp.’s earnings are expected to grow by 34.8% year-over-year.
- Gold prices present a lucrative opportunity in dividend-paying gold stocks.
- Metals Exploration’s shareholders have seen a 645% gain over the last five years.
- Costco’s e-commerce sales surged over 18% due to significant sales of gold bars and silver coins.
- Dubai’s 2DOT4 Diamonds introduced lab-grown diamonds.
Bearish News
- Despite a record deficit, platinum prices continue to fall.
- Hong Kong’s diamond shows fell short of expectations.
- Sibanye Stillwater reported a $2 billion loss and scrapped its final dividend.
- Black Diamond’s Q4 sales declined due to challenges in the European market.
- Sri Lanka’s gem trade faces a reputation risk from a surge of cheap imitation stones.
How to invest in Metals and Gems right now:
Pair a $1.50 hot dog with your next silver purchase (thx Costco).
Collectibles
Bullish News
- Caitlin Clark signed an exclusive partnership with Panini America, the company’s first multi-year deal with a female athlete.
- Jackie Robinson’s 1949 MLB All-Star game bat was sold for $1.08 million.
- Ultra PRO announced a partnership with Games Workshop to produce Warhammer gaming accessories.
- Leonardo DiCaprio secretly collected Star Wars toys, using an alias to bid on rare items from the 1970s and ’80s.
- Office chair retailer Herman Miller released a series of archival posters from the 1960s to the 1980s.
- McFarlane Toys partnered with Amazon MGM Studios and Bethesda for a Fallout collectibles line.
- The dining booth from “The Sopranos” final episode fetched $82,600 on eBay.
Bearish News
- Fanatics and Topps face a challenge with aging customers.
- Joe Pepitone is suing the Baseball Hall of Fame based on ownership rights over Mickey Mantle’s historic 500th home run bat.
- New England Comics closed a store in Brookline due to declining sales.
- Charles Martinet stepped down as the voice of Mario after nearly three decades.
- A lawsuit broke out over Bugsy Siegel’s memorabilia.
How to invest in Collectibles right now:
Booths and desk chairs… how exciting
Websites and Domains
Bullish News
- Girlfriend.ai led the .AI domain sales chart, selling for almost $200,000.
- Orange Domains was launched by Tucows, Hiro, and Trust Machines.
- GLD upgraded to GLD.com for $1 million.
- Canva won a cybersquatting case, securing 174 domain names.
- Beyond, Inc. acquired Zulily’s IP and brand assets for $4.5 million.
- NowOn.com sold for $19,000.
Bearish News
- Squarespace’s new registrations dropped 10% month-over-month.
- ASIC’s crackdown on investment scams resulted in the removal of 3,500 fraudulent websites.
- Bodis can no longer monetize adult domain traffic due to its primary advertising partner’s decision.
- Google’s March 2024 spam updates target scaled content and expired domain abuse.
- ICANN is considering banning private auctions for new gTLDs.
How to invest in Websites and Domains right now:
Read through Google’s March 2024 spam updates.
Cheers,
Wyatt
Disclosures
- We hold BTC, Tequila, and ETH in our ALTS 1 Fund.
- We own a sizeable chunk of British contemporary art in other funds.
- There are a couple of affiliate links above. If you click them, we may get a couple of bucks.
