Let’s all die of Spanish Flu

These pieces are getting a bit longer as I add more context to each (also, it’s 4 am off a flight from Spain to the US), so I’m only including three sections today.

Let me know what you think of the format.

Today, we’ve got:

  1. 🇲🇽🇨🇳🇺🇸 Mexico’s onshoring boom
  2. Can K-Pop get bigger in the US?
  3. Alaskan Ghost Towns

ICYMI, we did a Q&A session for the ​Alts 1 Fund​ last week. You can watch the recording ​here​ and express interest in the ​fund​ here.

Let’s go.

🇲🇽🇨🇳🇺🇸 Mexico’s onshoring boom

American President Joe Biden ​introduced​ $18 billion worth of Chinese tariffs, including a 100% hike on electric vehicles.

Tariffs are complex, and a lot goes into them, but I want to focus on the tariffs’ impacts on Mexico, which benefits from free market trade with the US (no tariffs).

This means Mexico’s status as an onshoring haven for China is set to boom over the next decade.

One key driver behind this shift is Mexico’s significant reduction in production costs compared to the United States and China.

With a competitive labor market and a strategic geographical location, Mexico is set to become an even more attractive destination for manufacturers looking to sidestep the hefty tariffs imposed on Chinese goods.

This anticipated boom in Mexico’s manufacturing sector is poised to create numerous economic opportunities, not only inflating the local job market but also spurring infrastructure development.

Moreover, Mexico’s existing free trade agreements with the United States provide a seamless pathway for goods produced in Mexico to enter the U.S. market duty-free.

This will likely encourage a migration of supply chains from China to Mexico, as companies seek to maintain competitive pricing while avoiding tariff barriers.

Furthermore, the Mexican government is expected to capitalize on this opportunity by rolling out incentives to attract foreign direct investment, making the country an appealing hub for manufacturing endeavors.

However, this transition is not without its challenges. Mexico will need to address several logistical and operational hurdles to fully realize its potential as an onshoring haven.

These include improving transportation networks, enhancing port capacities, and ensuring the security of investments against organized crime and political instability.

Additionally, workforce training and education will be crucial to equip the local labor force with the necessary skills to meet the demands of high-tech manufacturing industries.

As companies increasingly consider Mexico a viable alternative to China, the global trade landscape is likely to undergo a significant reconfiguration.

This shift will redefine international supply chains and alter geopolitical dynamics as countries reassess their economic alliances due to changing trade policies.

The next ten years will be transformative for Mexico, presenting opportunities and challenges as it steps into its newfound role as a manufacturing powerhouse in the global economy.

One important note. If President Biden slaps tariffs on Mexican goods, all bets are off here. Former president Trump has promised a ​200% tariff​ on anything coming from Mexico (I guess because it’s twice as big as what Biden said).

Investment Opportunities

  1. Industrial Real Estate: Due to the increasing demand for manufacturing facilities and warehouses, investing in industrial real estate in Mexico can be highly profitable. Companies moving their production facilities to Mexico will require modern, well-located spaces, driving up the value of industrial real estate properties.
  2. Infrastructure and Construction Companies: Investing in companies that specialize in infrastructure and construction is another viable opportunity. As Mexico ramps up its efforts to improve transportation networks and build new industrial zones, companies involved in construction, building materials, and infrastructure development stand to benefit significantly.
  3. Logistics and Supply Chain Companies: With the anticipated increase in manufacturing activities, there will be a heightened need for efficient logistics and supply chain management. Companies providing transportation, warehousing, and logistics services, especially those with a focus on cross-border operations between the U.S. and Mexico, present attractive investment opportunities.

Do you want to know more?

  1. The World is Flat: A Brief History of the Twenty-First Century” by Thomas L. Friedman: This book delves into the concept of globalization and how interconnected the world has become. It provides a useful context for understanding the global trade environment and how shifts in trade policies can impact economies.
  2. Global Supply Chain and Operations Management: A Decision-Oriented Introduction” by Dmitry Ivanov, Alexander Tsipoulanidis, and Jörn Schönberger: This book offers a comprehensive overview of supply chain and operations management, including strategies for global logistics, which are pertinent for understanding the logistical shifts driven by tariff changes.
  3. ​Mexican wave of nearshoring firms is all at sea​

Can K-Pop get bigger in the US?

K-pop–Korean pop–has exploded over the last decade but only claims a 3% share of the US market.

Revenues have tripled over the last four years as agencies, managers, talent scouts, producers, and, yes, even performers are cashing in.

Annual Revenue and Growth

  • 2000s: K-pop started gaining popularity, but data from these early years is sparse.
  • 2010: Approx. $200 million global revenue.
  • 2015: Around $3 billion, driven by international expansion.
  • 2019: Revenue hit nearly $10 billion due to the rise of groups like BTS.
  • 2020: Estimated industry revenue was $6.82 billion worldwide.
  • 2022: All-time high sales revenue of around 11 trillion Korean Won (approx. $9.3 billion).

While the BTS star is fading, there are a lot of reasons to think K-Pop is here to stay. Here are a few ideas if you want to suckle the K-Pop teat.

1. K-Pop Agency Expansion

  • Overview: Investing in leading K-pop music agencies as they expand globally.
  • Opportunity: Agencies like HYBE, SM Entertainment, and JYP Entertainment have shown a tripling in revenue over the last five years

2. Fan Engagement Platforms

  • Overview: Platforms facilitating exclusive interactions between K-pop stars and fans.
  • Opportunity: Strong subscription models and high demand for exclusive content promise lucrative returns.

3. K-Pop Merchandise and Concerts

  • Overview: Revenue from albums, merchandise, and concerts.
  • Opportunity: With high fan loyalty, merchandise and concert ticket sales offer substantial revenue.

Would you like to know more?

  1. The Birth of Korean Cool” by Euny Hong – An exploration of South Korea’s cultural boom.
  2. K-POP Now: The Korean Music Revolution” by Mark James Russell – Insight into the rise of K-pop.
  3. Globalization and Popular Music in South Korea” by Michael Fuhr – Discusses K-pop in the context of global culture.

Alaskan Ghost Towns

More than ​100 ghost towns​ dot the sprawling Alaskan expanse, more than any other state in the US.

Alaska, which relies on resources more than most places, has historically been very boom and bust. Gold is sniffed out, people move in, gold runs out, people leave.

But not all the ghost towns ended as banally as this.

The delightful Alaska Economic Trends (I read it so you don’t have to), shared the story of three such towns and their oddball stories:

Curry

  • Curry was established as a luxury resort and railroad stop halfway between Seward and Fairbanks. It had a hotel, a ski area, and a suspension bridge.
  • Reason for abandonment: A series of fires and economic shifts.
  • Timeline of Decline:
    • 1926: First fire destroys the engine house and power plant.
    • 1933: Second fire destroys the rebuilt engine house.
    • 1939: A larger hotel opens in Denali, drawing visitors away.
    • 1945: Boiler explosion again destroys the power plant.
    • 1957: A fire destroys the Curry Hotel, abandoning the town.
  • Current State: Now viewable only from railroad tracks, with few remaining structures.

York

Screenshot

  • Founded in 1899 following the discovery of tin deposits, York experienced initial growth but failed to meet mining expectations.
  • Reason for abandonment: Complete population death due to the Spanish influenza epidemic in 1918.
  • Timeline of Decline:
    • 1902: Post office closes abruptly.
    • 1918: Entire population dies from the Spanish flu.
    • 1920: Census records only six residents, mainly Danish miners.
    • 1922: Geological survey reports a single family living in York.
  • Current State: Never regained population or economic viability after the flu epidemic.

Portlock

  • Founded in the early 20th century as a cannery town. Also had logging and mining activities.
  • Reason for abandonment: Fear of a creature called Nantiinaq and economic decline.
  • Timeline of Decline:
    • 1949: Residents flee, citing fear of Nantiinaq and economic reasons.
    • 1950: Post office closes, and the town is completely abandoned.
  • Lore: Stories of a large, hairy creature stalking the town have persisted, contributing to its abandonment.
  • Current State: Remains a curiosity, with some recent attempts by descendants to revisit the area.

If you fancy reviving an Alaska ghost town (yes please!), there are lots of opportunities to do so:

  1. Heritage Tourism:
    • Curry: Develop guided tours, ski trips, and historical reenactments, utilizing its history as a luxury resort.
    • Portlock: Capitalize on the lore of Nantiinaq for adventure tourism and paranormal investigations.
    • York: Create educational tours focusing on the mining history and the tragic impact of the Spanish flu.
  2. Ecotourism and Adventure:
    • All: Leverage the natural beauty and untouched landscapes for ecotourism, hiking, and wilderness exploration.
    • Curry and Portlock: Establish outdoor adventure activities like fishing, hunting trips, and wildlife photography.
  3. Real Estate Development:
    • Curry: Rebuild lodging facilities to accommodate tourists and adventure seekers.
    • Portlock: Develop small-scale accommodations for tourists interested in its natural and paranormal history.
  4. Historical Preservation:
    • Apply for grants and work with historical societies to preserve and maintain the remaining structures, turning them into museum exhibits or educational centers.

Or if you want to get as far from humans as possible for as little as possible, ​this may be your winning ticket​.

Would you like to know more?

  1. ​Gold, Ghost Towns & Grizzlies​ (Alaskan Treasure): Ron Wendt. Explores Alaskan ghost towns and historical sites.
  2. ​Cold Mountain Path​: Tom Kizzia. Delves into the history and stories of McCarthy, a famous Alaskan ghost town.
  3. ​Ghost Town Living​: A book about the author’s experiences buying and developing a ghost town into a tourist attraction and real estate opportunity.

That’s all for this week; I hope you enjoyed it.

Cheers,

Wyatt

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Wyatt Cavalier

With a background in finance & intelligence analysis, Wyatt has an unhealthy obsession with finding the best blue chip investment opportunities. His previous newsletter, Fractional, resonated deeply with subscribers, bringing actionable insights and unconventional trading strategies. His rare book collection specializes in banned editions. He currently lives in Spain with his beautiful wife, three young boys, and dog Monty.

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