Let’s buy Shrek

Welcome to The WC — your weekly shot of awesome.

Today, we’ve got:

  1. Prepare for the worst
  2. Own a piece of Shrek
  3. Making a killing on Christmas lights
  4. You can live forever — if you can afford it
  5. Where are America’s best schools?

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Wyatt

Rule 1: Don’t go broke

Most people who are into investing know Warren Buffet’s first rule: “don’t lose money”

And while I lack the arrogance self-confidence to disagree with Uncle Warren, I would probably modify this a bit to say, “Don’t go broke.”

Markets go up and down, but as long as you’re still in the game, you’re still in the game.

Given the recent horrific developments in Israel, today is a good day to stress test your investments. What would happen to your portfolio/real estate/business if the following scenario played out:

  • Iran gets ​directly​ involved in the conflict, pushing Hezbollah into Israel. Israel responds, the conflict escalates, and eventually, Jeruselum uses nuclear weapons on Iran.
  • Russia, losing badly in Ukraine but grateful that the use of nuclear weapons has been normalized, begins using them as well.
  • Taking its opportunity while the world is distracted in Europe and the Middle East, China invades Taiwan.

The situation above is super speculative and unlikely (maybe 1% to 3% chance), but a global pandemic and the 2008 GFC were black swans as well.

Royalties for everyone

At Alts, we’re so into investing in music rights that we’ve written not one but two different guides to how it works.

  1. ​Investing in Music Rights and Song Royalties​
  2. ​Buying music rights: A deeper dive​

It’s more complicated than this, but when you own the rights to a song, you get a few cents every time it’s played. If it’s a popular song, that can add up quickly. So investors will pay hundreds of millions for the rights to an artist’s entire catalog, aiming to earn a 5% to 15% perpetuity.

​Loads​ of musicians, including Bruce Springsteen, Katy Perry, ZZ Top, Motley Crue, Bob Dylan, and Whitney Houston, are cashing in their catalogs for a big payday.

The best stuff is usually expensive (and out of reach for most of us), which is why I was interested to see ​Public offering the rights to Shrek the other day​.

[Disclosure: I requested an allocation.]

They’ve acquired the rights to the music from all four films and the related TV specials. That’s generated around $83k over the last twelve months for an ROI of 8.5%.

I like money

This feels like a more interesting and possibly profitable alternative to the 5.5% treasuries everyone is buying right now.

The risk is that people will stop watching Shrek films and stop going on the rides, but perhaps surprisingly, search volume for the green ogre is actually increasing year over year.

Don’t underestimate the staggering drawing power of Shrek

It’s only available to Americans, unfortunately.*

How to sell Christmas light installations

If you’re active in the very niche SMB Twitter space (or a lurker like me), you’ll know it’s Christmas light installation season.

Tis the season

People who install Christmas lights make a LOT of money. Three houses a day is common, and they ​average $500 to $1,200 each​. Gross margin (not including labor) is around 90%, and many customers come back year after year.

The sales process isn’t exactly high-tech or innovative.

This gave me an idea for a product that needs to exist. This is what it should do:

  • Installers enter a target street, neighborhood, or zip code.
  • It pulls all the mailing addresses and images from Google Maps.
  • Installers spend 30 seconds on each image, virtually decorating each home with a light schema that looks photo-realistic. Drag and drop; point and click. The software uses the same tech ​AI home design apps​ use. This could probably be automated over time.
  • The software guesses a quote based on industry norms ($8 per foot for a one-off job or about $40 per foot for a permanent install).
  • A physical postcard is created that includes the photo-realistic image of the target client’s lit-up home, a quote, a booking page, and contact info.
  • These are all mailed out in early September at a rate of perhaps $5 each.

The conversion rate on these would be enormous. I wouldn’t be surprised by 5% or 10%, which means a $50 to $100 acquisition cost on a 90% margin product you sell for $500 to $1,200 per year, and it recurs annually at a high rate.

This is such a no-brainer product for anyone installing Christmas lights that $5 per card feels cheap.

If you want to build this and market it to Christmas light installers (for next season), let me know — we might invest.

I wanna live forever

Ten or eleven years ago, I told my wife that we’d be together forever because, eventually, science and computing would sufficiently advance that we could ​upload our minds​. She didn’t believe me — thought I was being romantic.

It may be ​closer than we think​.

​Best estimates​ show neurosimiluation (uploading a fully functional human brain) will be possible by 2025 and affordable on a mass scale by 2055.

The red rectangle is where you want to be

Think it’s impossible? Scientists have already ​done it with a fruit fly​, more or less.

This is how much it’ll cost, assuming you want to be able to upload your mind by age 70 based on your current age:

  • <25 – $1000
  • 30 – $5000
  • 40 – $100k
  • 50 – $2 million
  • 60 – $46 million
  • >70- $1 billion

Should this play out (big if, of course), there are two mind-blowing implications:

  1. For everyone under age 30 or so, death will be optional
  2. For every month this tech is delayed, another five million people will die unnecessarily

There are a wide variety of problems that need to be solved to make this a reality, but it feels possible.

If you want to live forever, start planning now.

Who’s got the best schools?

It may surprise you (or maybe not) that ​the best-performing American schools​ often aren’t even in the US — they’re on military bases.

Their schools had the highest outcomes in the country for Black and Hispanic students, whose eighth-grade reading scores outpaced national averages for white students.

Eighth graders whose parents only graduated from high school — suggesting lower family incomes, on average — performed as well in reading as students nationally whose parents were college graduates.

A variety of factors contribute to the DoD’s educational success:

  • At least one parent has a job, and healthcare is always covered
  • There are no mercurial schoolboards or shifting local policies to enforce
  • The DoD spends around $25k per student, which is in line with the best-performing districts in America
  • Teachers are better qualified because it’s often one of the only jobs available to (overqualified) military spouses
  • Teachers are better paid, averaging double the starting salary of normal schools

The schools are also far more racially and economically diverse, which benefits everyone.

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

Cheers,

Wyatt

Disclosures

*Important Shrek disclosure: Available to US Members Only. This offering is made in reliance on Regulation A under the Securities Act of 1933. The securities offered are speculative, illiquid, and an investor could lose the entire investment. Investors should read the relevant Offering Circular and consider the risks disclosed therein before investing.

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Author

Picture of Wyatt Cavalier

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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