I learned the other week about a whole new investment space which could take on increased relevance for retail investors and no, this is not about “crypto”. StockTwits founder and chairman Howard Lindzon talked about two investment ideas which kind of overlap each other in my mind. One was focused on a “stock market” of sneakers called StockX. He also talked about collectible cars as investments too via a startup he invested in called Rally Road.
Mr. Market has securitized all kinds of debts but the asset side of the ledger is ripe too.
Instead of debts & cash flows, how about cool assets you could wear or drive (very carefully)?
The odds of most car lovers owning a classic car worth millions, like my personal favorite, the Aston Martin DB5 from Goldfinger (ejection seat optional), are close to zero.
But we could imagine owning a piece of a multi-million dollar classic ride and doing it as easily as buying a share of an auto stock with an trading app on phone. That is happening over at Rally Road – a startup that allows people to invest in collectible cars.
At some point I look forward to owning a piece of an Aston Martin sans ejection seat.
There is a larger market already running quickly in a “stock market for sneakers” at StockX operating at massive scale. (They also do watches and collectible handbags. Think instagram and you get the idea of the vast market being covered.)
StockX is a great looking platform and I have shared notes with my brother. Let’s just say he has a room filled to the ceiling with boxes of Jordans . When my brother talks about the shoes he invests in, suddenly I feel like I’m chatting with someone on StockTwits or “Fintwit”. He becomes a master of free market economics in about a size 10 and a half.
Seeing RallyRd and StockX feels like I’m looking at what might have been for eBay:
A one-stop platform breaking down a collectibles market into trackable discrete smaller pieces, offering market price updates and with monitoring like a stock portfolio. This creates a deep and valuable well of alternative data about the atoms of all those goods. The market for collectibles are being atomized in every sense of the word.
One of my takeaways from what happens with these kinds of platforms:
It feels like the Moneyball of cool stuff is emerging.
If you saw the film, recall the scene where Brad Pitt’s character goes, “we can recreate (a high priced player the As couldn’t afford) in the aggregate”.
That moment made me think about what had happened in the financial markets with investment instruments like exchange traded funds, which bundled together different assets at lower cost than doing the same in a conventional portfolio. Maybe that will happen with cool kicks and sweet rides too.
But let’s take this a step further. Let’s go beyond sneakers with athlete endorsements. What if Mr. Market one day offers us a chance to invest in athletes themselves? What if investors went from owning or trading Jordans, to being invested in the next actual “Jordan”?
Can you imagine doing RallyRd/StockX with sports athletes?
I recall films where characters talked about owning a piece of a “fighter”, a boxer. Maybe the future is less about athletes becoming VCs and but more about everyday “Joe Angels” investing in athletes. What if fantasy sports merged with what is happening at StockX and Rally Road? It’s not as crazy a notion when we factor in the 2012 Jobs Act’s crowdfunding and what’s been going on at Angellist and RepublicX. There is a potential retail market for what used to be only for accredited investors.