Hello and welcome to Alts Cafe 👋
I’m coming to you from Puerto Vallarta this week after an incredible week in Jalisco for our first-ever community investor trip.
All of which is to say I’m sorry today’s Alts Cafe is with you a bit later than usual, and it probably will be again next week.
Highlights from the full issue:
- Macro: US Employment Looks Good
- Real Estate: Priced Dipped in Silicon Valley
- Startups: OpenAI and Anthropic Are Attracting Top Talent
- Private Credit: Canada Doubles Down On Private Credit
- Crypto: Marathon Digital Makes Major Acquisitions
- NFTs: Walmart Collaborates With Pudgy Penguins
- Art: A Francis Bacon Piece Could Fetch $20 Million
- Vintage Autos: A $200,000 Motorcycle Sale
- Coins: A $20,000 Coin Toss
- Farmland: Florida Protects 2,200 Acres
- Luxury: Louis Vuitton Launches Golf Products
- Wine, Tequila, and Spirits: A New Ultra Premium Sake
- Film & Music: Guardian of The Galaxy Lead Cassette Sales
- Precious Metals: Nucor Steel Invests In The PNW
- Collectibles: Buy Some Unique Neil Gaiman Artifacts
- Websites: .art Domains Are Struggling
Let’s go.
Wyatt
Table of Contents
Macro View
Bullish News
- The US added 353,000 jobs in January, far exceeding the expected 185,000.
- Jobless claims fell to 201,000 last week.
- EU’s agri-food exports are projected to increase by 38% by 2032, thanks to 10 new trade agreements.
- February’s consumer sentiment in the US rose to 79.6.
- Goldman Sachs anticipates four rate cuts this year.
- India’s economy is in a sweet spot, with strong balance sheets across government, banks, and corporations.
- The US’s Q1 growth outpaced the euro area with a 2.8% growth rate compared to the euro area’s 0.4%, strengthening the USD.
Bearish News
- China’s consumer spending stayed below pre-pandemic levels during the Lunar New Year.
- Japan’s government downgraded its economic outlook due to sluggish consumer spending and slow wage growth.
- Germany entered a technical recession, with output falling for a second quarter amid high energy costs and low demand.
- Canada’s budget deficit jumped to C$23.61 billion, up from C$5.54 billion the previous year.
- The European Central Bank faced financial losses in 2023, possibly needing government recapitalization.
- The bond market shows an 85% chance of a US recession.
- Barclays plans significant layoffs in its investment bank due to a $2 billion cost-cutting program.
- HSBC’s earnings took a hit from a $3 billion write-down on its Chinese bank stake.
What are the odds?
Get $25 to play around with using this link.
What are we doing?
ALTS 1 Fund news:
Closing in on another art investment.
Real Estate
Bullish News
- Fractional real estate investment is gaining steam.
- KKR predicts a one-third increase in CMBS issuance this year.
- Reshoring efforts could boost the US manufacturing base by 13% over the next decade, driving industrial real estate demand.
- January 2024 saw existing home sales rise by 3.1%, hitting a record January high of $379,100 median sale price.
- Boston’s housing market is the nation’s hottest, with an Altos Market Action Index score of 60.59.
- American Homes 4 Rent and Plymouth Industrial REIT both raised their dividends.
- Detroit’s rental market saw a 51% growth in properties since 2021.
Bearish News
- Melbourne’s auction volumes surged, potentially lowering property prices due to increased listings.
- Banks’ loss reserves fell short as commercial real estate loan delinquencies nearly tripled to $9.3 billion.
- FinCEN’s new rule requires extensive reporting for non-financed residential real estate transactions.
- German housebuilding construction activity hit record lows.
- Grant Cardone is stopping all new New York City real estate investments due to politics.
- WeWork is negotiating lease reductions at Boston’s One Lincoln St., facing vacancy challenges.
- The Bay Area’s housing market experienced a 6.9% price drop from December 2023 to January 2024.
- Despite higher homebuilder confidence, material shortages continue, especially for chip-based construction equipment.
How to invest in real estate right now:
Consider high-dividend REITs if you’re a gambler.
Startups
Bullish News
- Union Square Ventures and IA Ventures reported returns of 59.25% and 42.99% from 2020 – 2022. [Ed note: returns were probably much lower in 2023]
- PE firms are increasingly investing in Startups.
- L Catterton led a $5 million Series A for Wthn.
- Some notable fundraising news:
- Figure AI, supported by Jeff Bezos and Nvidia, aims to raise $675 million at a $2 billion valuation for humanoid robot development.
- Monzo’s £350 million funding round will boost its valuation to £4 billion.
- Moonshot AI raised $1 billion in a round led by Alibaba.
- Reddit’s IPO plan could lead to another meme-stock frenzy.
- Square’s fourth-quarter profits surpassed expectations.
- Jasper acquired image generator Clipdrop from Stability AI.
Bearish News
- Techstars Seattle is shutting down.
- Twilio’s stock dropped 23.2% in four weeks.
- The Lordstown EV company risks NYSE delisting.
- Lucid Motors cut its production forecast to 9,000 EVs for 2024, just 10% of its original target.
- Sequoia faces boardroom battles at Klarna over IPO strategies.
- Stripe is losing employees to OpenAI and Anthropic.
- Carbon Health laid off 56 employees in its fourth job cut round as demand decreases post-pandemic.
How to invest in startups right now:
Raise money from PE instead of VC
Private Equity and Private Credit
Bullish News
- Canadian pension funds plan to double their private credit investments over the next 5 years.
- Charlesbank Capital Partners secured a $1.5 billion fund for distressed debt.
- CVC’s sixth Asia fund raised a record $6.8 billion.
- Over half of securities lawyers expect a rise in PE legal work in 2024.
- PE’s focus on insurance is growing.
- Banks are making a comeback in leveraged buyouts.
Bearish News
- Foreign capital in Russia’s private markets dropped 39% to $1.50 billion in 2023. [Ed note: I’d love to see a country-by-country breakdown of this]
- Bain Capital Tech Opportunities Fund is avoiding AI investments.
- Steward Health Care faces a $50 million rent debt and possible hospital closures in Massachusetts.
- Some major insider selling
- Ares Management Director Robert DeVeer sold 84% of his shares for about $29 million.
- Arch Capital Group insiders, including the CEO, sold shares worth millions.
- UBS plans to sell its investment banking business in Turkey.
How to invest in PE and Private Credit right now:
Start raising money from Canadian Pension funds
Crypto
Here’s what you need to know:
Bullish News
- Japan’s Cabinet approved plans to let VCs invest in crypto startups.
- Andreessen Horowitz invested $100 million in EigenLayer.
- Revolut launched a crypto exchange targeting advanced traders with lower fees and advanced analytics.
- 25% of Australians view Bitcoin more favorably after US spot Bitcoin ETF approval.
- 18 exchanges applied for virtual asset trading licenses in Hong Kong.
- Marathon Digital Holdings expanded its Bitcoin mining operations with a $178 million acquisition in Texas and Nebraska.
- Prosecutors demanded tighter controls on Binance’s CZ, including passport surrender.
Bearish News
- Binance delisted Monero, causing XMR to hit a record low against Bitcoin.
- South Korea collected $4.6 million from crypto tax evaders.
- Genesis was cleared to sell $1.6 billion in Grayscale Bitcoin ETF shares.
- European investors are wary of Bitcoin ETFs.
- Circle ended USDC support on the Tron blockchain.
- Bakkt’s value dropped below $1.
How to invest in Crypto right now:
Expect increased adoption in Hong Kong.
NFTs
Bullish News
- Sheboshi NFTs sold out instantly.
- Yuga Labs acquired PROOF.
- Volcano X entered the inscription market.
- Sports Illustrated’s NFT ticketing moved to Avalanche.
- Forbes bought virtual land in The Sandbox. [Ed note: What?]
- V3V Ventures acquired Metaverse.sg for $3 million.
- Ninjalerts launched a Nintendo 64 emulator on Bitcoin.
- Walmart expanded Pudgy Penguins toys to 3,100 stores.
Bearish News
- Rarible’s value fell 10.49% in a single day.
- eBay scaled back its Web3 efforts, cutting over 30% of its related staff due to halted NFT initiatives.
- Jaychris.eth lost 65 NFTs in a phishing attack.
- After a $2.7M hack, HectorDAO was taken over by an insolvency firm.
How to invest in NFTs right now:
Play some classic NES games… on Bitcoin
Artwork
Bullish News
- Harriet Parkes’ animal paintings are set to appreciate by 30-40% annually. [Ed: this seems totally made up]
- Saudi art is set to take off.
- A Cezanne mural, “Entrée du port,” was found at his childhood home.
- David Cox’s 19th-century landscape sold for £18,386, over 200 times its estimate.
- The Pepco Edison Place Gallery reopened.
- Inversion Art and aShareX launched an online auction.
- Francis Bacon’s Landscape near Malabata, Tangier could fetch £15-20 million at Christie’s London.
- Sotheby’s Jean Dubuffet collection from the Mary and George Bloch collection has presale estimates of $6.2-$8.8 million.
- Mega gallery expansions have been boosting sale prices for emerging artists.
Bearish News
- The Art Institute of Chicago was accused of possessing Nazi-looted art.
- Brian Walshe received a sentence for selling counterfeit Warhol pieces.
- Western interest in Chinese art continues to decline.
- The UK art market’s AML controls are tightening.
- Louise Blouin’s bankruptcy auction of La Dune sold for $26 million less than expected.
- Ukraine struggles to recover over 10,000 looted cultural artifacts taken by Russian forces.
- A Quebec art teacher is accused of selling students’ art online without permission.
How to invest in Artwork right now:
Don’t sell art without permission.
Vintage Autos
Bullish News
- A 1928 Indian Ace motorcycle fetched $220,000 at Mecum’s 2024 Las Vegas auction.
- Over 600 rare vehicles were found in a South African barn. They’ll be auctioned online starting March 25, 2024.
- A TikTok influencer found three forgotten Porsches in Canada.
- The 1927 Packard Eight 443, “The Lindbergh Packard,” could reach CA$250,000 at Miller & Miller’s auction.
- Bentley Motors saw record demand in 2023, fueled by its Mulliner customization program.
- The Ford Mustang stands out for resale value, retaining 79 percent after 5 years, 7.7% above average.
- The Oberoi Concours in Udaipur showcased nearly 100 of India’s top vintage cars.
- Miles Nadal’s Toronto auction, featuring 500 Air Jordans and 144 vintage cars, is set to earn $62 million.
Bearish News
- The collector car market saw a 10-month decline, with the Hagerty Market Index falling 20 points since December 2022.
- Rising costs and a global skills shortage pose a dual threat to classic car restoration.
- Classic Jaguars have lost their allure, with prices stagnating over the last five years.
- The Lincolnshire Steam Fair was canceled for 2024 after nearly 40 year.
- Car insurance rates surged up to 20% due to more accidents and a 46% increase in vehicle repair costs.
How to invest in Vintage Autos right now:
Watch out for insurance hikes across the board.
Rare Coins
Bullish News
- Turkey increased its gold coin production by 67.8% in 2023.
- A collection of American Silver Eagle Proof coins, hidden for 30 years, will be auctioned on March 20th at Halls Fine Art in Shrewsbury.
- The 1796 half-cent remains highly sought-after.
- Anglo-Saxon pennies from 1066 fetched £325,560 at auction, surpassing the £180,000 estimate.
- This year’s Super Bowl ’coin-flip’ coin is expected to sell for more than $20,000. [Ed: But why?]
- Analysts are bullish on Type II and III Liberty Head Double Eagles this year.
Bearish News
- The US Mint’s revenue from bullion coins dropped 12.8% in FY 2023, despite a 24.5% rise in sales volume.
- Thieves stole numerous coins and banknotes from USPS.
How to invest in Rare Coins right now:
Buy shipping insurance.
Farmland
Bullish News
- Spain’s agriculture returns have consistently outperformed most other asset classes in the region.
- Michigan’s specialty crop farms saw growth in layers, hogs, pigs, vegetables, and orchards from 2017 to 2022.
- Farmland values in Southwest Minnesota increased by 14.7% in 2023, setting records.
- Florida secured nearly $9 million in deals to preserve over 2,200 acres of farmland from development.
- The National Farm Machinery Show forecasted a smooth 2024 for agricultural equipment thanks to a strong global supply chain.
Bearish News
- US net farm income is set to drop 25% to $116.1 billion in 2024.
- High interest rates have led to the collapse of vertical farms like AeroFarms and InFarm.
- Vertical mushroom farm Smallhold declared bankruptcy.
- Archer-Daniels-Midland Company’s shares fell 24% after an accounting investigation.
- Farm unions turned down a government proposal linking MSP to crop diversification.
How to invest in Farmland right now:
Think twice about vertical farming.
Luxury Goods
Bullish News
- The UAE’s luxury watches market is growing.
- Saudi Arabia’s luxury sector is poised to become a global leader.
- Gucci’s 2023 revenue was dominated by leather goods, accounting for over half of its global sales.
- Vêtir’s luxury shopping app is targeting profitability by Q2 2025.
- LVMH launched 22 Montaigne Entertainment to produce and finance film and TV endeavors to promote their brands.
- Louis Vuitton launched a luxury golf collaboration with Tyler, the Creator.
Bearish News
- Martin Currie Ltd. sold 10,578 shares of Estée Lauder.
- Analysts think that LVMH’s 25% stock jump will probably be short-lived.
- Instagram ‘live’ luxury sales face investigations in Europe and the US for potential fraud and tax evasion.
- A legitimate pair of Jimmy Choo sandals was wrongly identified as fake on Vinted.
- A SoHo luxury store lost $225,000 to thieves.
How to invest in Luxury Goods right now:
Keep an eye on trends in UAE and Saudi Arabia.
Wine, Tequila, and other Spirits
Bullish News
- Scotch whisky exports increased by 14% in 2023.
- The Scotch Malt Whisky Society’s owner expects more profits in FY24, driven by growth in China and Taiwan.
- AI winemaking is having a moment.
- Beam Suntory’s net sales rose by 7% in 2023, thanks to demand for premium Bourbons and Japanese whiskies.
- Richard Geoffroy launched IWA 5 Reserves, an ultra-premium aged sake blend.
- Wisgy, an independent consultancy for old and rare spirits, launched to offer services like fraud prevention and collection strategies.
Bearish News
- Sula Vineyards’ stock dropped 8% after Verlinvest Asia Pte and Mousserena LP sold their stakes.
- Brown‑Forman Corporation sold its Alabama cooperage.
- Viva Wine Group’s EPS fell short, with net income down 58% and profit margin dropping to 2.7% from 6.6%.
- Australian wine exports declined 2% in value to $1.9 billion AUD and 3% in volume to 607 million liters in 2023.
- Virginia’s liquor monopoly reported an $82 million shortfall.
How to invest in Wine and Spirits right now:
See if AI can find the right wine for you.
Music and Film
Bullish News
- Kinepolis Group’s net profit doubled to $60 million in 2023.
- “Guardians of the Galaxy” soundtracks led US cassette sales in 2023, with four albums in the top 10 bestsellers.
- Universal Music Group and Ntwrk acquired Complex for $108.6 million.
- Catch Point Rights Partners launched a program allowing songwriters to sell performance rights income while keeping publishing royalties.
- The European Film Market saw a dealmaking resurgence post-strikes.
- J-Pop’s global streaming market share rose to 2.1% in 2023.
Bearish News
- Warner Bros Discovery’s shares fell 12% after reporting a quarterly loss.
- KKR sold its stake in Chord Music to UMG and Dundee Partners.
- The UK’s Intellectual Property Office warns that equitable remuneration for streaming could raise costs, deterring investment in new artists.
- A $1 billion piracy verdict against Cox Communications was overturned by a federal appeals court.
- Disney withheld 20 classic films from release, despite completing their 4K remastering.
How to invest in Music and Film right now:
Study up on Japanese Pop Music.
Precious Metals and Gems
Bullish News
- Askari Metals acquired the Matemanga Uranium project in Tanzania.
- Olympic Steel increased its dividend by 20% and achieved a 100% shareholder return in 2023.
- Elliott Investment Management announced plans for a $1 billion investment focusing on energy transition metals.
- Globe Metals & Mining insiders bought AU$5.56 million in shares.
- Aluminum prices rose due to speculation about new US sanctions against Russia.
Bearish News
- The Global Precious Metals MMI dropped 4.71% from January to February.
- Iron ore and copper prices fell amid ongoing demand doubts in China.
- Gold also lost momentum due to reduced demand from China.
- Wheaton Precious Metals was downgraded to hold due to expected production declines.
- Amplats plans to cut 3,700 jobs as metal prices slump.
- Ferrous scrap prices fell across the US, with prompt grades dropping $19 per ton.
- Newmont’s stock approached a five-year low after cutting dividends and planning asset sales to improve profits.
- Olympic Steel’s annual sales fell to $2.2 billion from $2.6 billion.
How to invest in Metals and Gems right now:
Seems like everything depends on China right now.
Collectibles
Bullish News
- eBay is hosting a massive 24-hour Pokemon auction tomorrow.
- A pair of Shaquille O’Neal’s shoes just sold for $54,000.
- Elton John’s Versace dinnerware sold for $55,440 at Christie’s.
- A pair of Trump’s new sneakers sold for $9,000.
- Panini partnered with LIV Golf to create trading cards for the league.
Bearish News
- Comic store graphic novel sales dropped 11.9% in 2023, worse than the 5.8% fall in periodical comics.
- The CFO of Electronic Arts Inc sold 1,500 shares.
- In Fresno, three collectible stores experienced break-ins, losing nearly $6,000 in comics and Pokémon cards.
- Author Neil Gaiman is selling several collectibles including his original comic book art.
- NFL running back Adrian Peterson was accused of selling his NFL trophies.
How to invest in Collectibles right now:
Trump shoes or Shaq shoes… Which Way, Western Man?
Websites and Domains
Bullish News
- Sedo sold DroneShop.com for €33,000.
- Pudgy Penguins launched a .pudgy domain.
- BuzzFeed sold Complex to NTWRK for $108.6 million, cash.
- Uniswap introduced ’uni.eth’ subdomains.
- Gumroad reported $11.1 million in revenue in 2023.
- Walmart’s eCommerce sales surpassed $100 billion for the first time.
- CoFounders.com was sold to Chris Koerner for $65,000.
- Pokémon ENS domains are hot right now.
- A .Bet domain, initially purchased for five figures, was resold for $600,000.
Bearish News
- Escrow.com’s domain sales fell to $79 million in Q4 2023.
- AI chatbots are expected to cause a 25% decline in traditional search engine use by 2026.
- Ethereum Name Service (ENS) domain owners are being aggressively targeted for phishing scams.
- The .art domain registry cut premium prices for nearly one million domains.
How to invest in Websites and Domains right now:
Not sure if I’d use “.pudgy” for my business website.
That’s all for this week
Cheers,
Wyatt
Disclosures
- We hold BTC and ETH in our ALTS 1 Fund.
- There are a couple of affiliate links above. If you click them, we may get a couple of bucks.
