Rich people who bought too much used to be called collectors. Now they – and those who only belong to the target class – are all investors.
It’s not just that they’ve spent the last year getting involved in untested, start-up public companies that don’t yet need to produce products, let alone in profits. During the pandemic, it appears that every luxury acquisition has become a so-called alternative asset class.
Instead of stopping by each other to get reservations at the newest restaurants from Marcus Samuelsson and Jean-Georges Vongerichten, or waging bidding wars for apartments on 740 Park Avenue, they bid on each other at online auctions for jewelry, watches, furniture, sports tickets , Classic cars, limited edition Nikes and crypto art.
The bread lines got longer, the Birkin bags hotter.
A number of retailers hesitated to talk about the trend, stating that at a time of growing wealth inequality, they didn’t want to talk about near-sold-out $ 90,000 earrings.
John Demsey, the president of the Estée Lauder Companies executive group, raised these concerns despite admitting a primary quarantine pastime.
“I just go and watch porn,” he said. “I sell watches, I buy watches. It’s crazy. I have no reason to buy a watch right now. I’m at home at a computer all day. Time is staring me right in the face. What reason do I have to look at my wrist? But I want a tangible sign of something, so I look at watches. “And many other people too.
Rolex Day Dates, which sold for $ 30,000 in the secondary market in 2020, will now cost over $ 50,000 in some resale locations. The Nautilus 5980, a rose gold chronograph sports watch from Patek Philippe retailing at $ 85,000, is rarely available on 47th Street for less than $ 200,000.
According to Benjamin Clymer, editor of the watch website Hodinkee, one reason for the rising prices is that “Switzerland has closed, so there was demand while supply was dramatically reduced”.
But he also said, “The rich who used to spend money on travel don’t use it, so anything that can be collected is growing rapidly in value.”
Coffee tables and Porsches
These include cars, a hobby that began for Mr. Clymer in 2011 and began in 2015 when a multi-million dollar strategic investment in Hodinkee helped turn him from blogger to mogul.
In summer 2020, Mr. Clymer went looking for a 1973 Porsche 911 Carrera RS.
One had sold Bring a Trailer (or BaT as it is known) for $ 560,000 on the auction site just before the pandemic, but Mr. Clymer suspected it could be a buyer’s market. Maybe he could get it for less.
He found a beauty from a dealer who hadn’t listed the price on their website. It was in like new condition. Mr Clymer asked for an offer and nearly passed out when he heard the answer: $ 1.2 million.
“I said, ‘You’re crazy. ‘Less than a month later, it was sold. “
On Thanksgiving, auction houses sent out press releases almost every day to announce their record sales.
A pair of Conoid lounge chairs by famous woodworker George Nakashima, which cost around $ 10,000 in 2019, sold for $ 23,750 through Chicago auction house Wright in October 2020. A Mesa coffee table by TH Robsjohn Gibbings, a British architect whose name is little known outside of the furniture world, raised $ 237,500 in December. The total income from the sale was $ 2.5 million, roughly double what the house was on the same sale last year.
In February, a digital artwork of Donald Trump face down in the grass covered in words like “loser” sold for $ 6.6 million, a record for a non-fungible token, or NFT, so called because the buyer cannot take possession of any physical item.
Fittingly, the image was paid for in Ethereum, a form of cryptocurrency almost as well known among millennials as Bitcoin. Two weeks later, Christie’s sold another Beeple NFT, this time for $ 69 million.
The prices for the best vintage sports tickets reached Warhol levels. In January, a 1952 Mickey Mantle sold for $ 5.2 million on the PWCC Marketplace. In March, Goldin Auctions, a sports collectible, held its annual winter auction. “We grossed $ 45 million,” said Ken Goldin, founder and CEO. “Last year it was $ 4.7 million.”
One of Mr. Goldin’s regular customers is Clement Kwan, the former president of Yoox Net-a-Porter and founder of Beboe, an upscale line of cannabis vaporizers and edible lozenges that the New York Times referred to as “Hermès of Marijuana”.
“Since the pandemic started, my financial portfolio has grown 50 percent,” Kwan said from Miami last week. “My collectibles have increased by 200.”
Mr. Kwan’s stroke of luck came after learning in 2019 that a documentary about Michael Jordan would be released on Netflix the following summer. That led him to buy sets of Mr. Jordan’s rookie cards for around $ 30,000 each. He also got involved in Bleecker Trading, a bespoke sports memorabilia business in the West Village.
In May 2020, Mr. Kwan sold a Jordan Rookie card for nearly $ 100,000. By January, a particularly sought-after Jordan Rookie card was sold through Goldin for $ 738,000.
The renewed interest in Mr. Jordan extends to sneakers as well.
Last May, Ariana Peters, who owns the world’s most valuable sneaker collection with her sisters Dakota and Dresden Peters, had her biggest sale in five years: a pair of signed Air Jordans from 1985 that fetched $ 275,000.
In 2019, the sisters sold 572 pairs of sneakers at prices starting at $ 500, Ariana Peters said in an interview. In 2020 they sold 879.
Ms. Peters actually sounded a little surprised when she talked about all of this, perhaps because she and her sisters only got into the business because her father, a retired real estate developer named Douglas Roy Peters, bought so many pairs of sneakers that they got them They had run out of places.
Ms. Peters, who lives in South Florida, now houses the collection in a warehouse that has been modified to look like the Miami Heat basketball court.
Take advantage of nostalgia, from Nintendo to Pokémon
Those who are not prepared to spend large sums of money on vintage collectibles join the action through recently established mutual funds.
Rally, an Android and iPhone app that sells shares from Rolex GMTs to dinosaur scraps, had 100,000 users at the start of the pandemic and monitored $ 12 million in inventory. Rob Petrozzo, its chief product officer and co-founder, said in an interview that the company now monitors $ 30 million worth of goods and has over 200,000 users. According to the company, the median age of a rally user is 28 years and most are male.
The way the app works, investors buy, sell, or trade their stocks as if they were stocks. New product launches are actually referred to as IPOs
“The equity and cryptocurrency space in recent years has produced really savvy investors who understand the dynamics of the market. This is a complement to their Coinbase and Robinhood accounts,” said Petrozzo.
One of Mr. Petrozzo’s “investors” is Nicholas Abouzeid, the 24-year-old Marketing Director at MainStreet, a 50-person company that helps startups find and claim tax credits and incentives from the government.
One recent afternoon, from the bedroom of his Woodbury, Connecticut home, Mr. Abouzeid was talking about Zoom. In his long-sleeved white T-shirt and wooden-framed glasses, he looked like any number of young white men he could work for, Mark Zuckerberg or Josh Kushner. Behind him were shelves of memorabilia – super-plastic toys, sealed 90s Nintendo games, and collectable Nike Sacai Waffle sneakers.
On the actual stock market, Mr. Abouzeid did what he called “more than what someone should make in a year” last year by buying and selling positions in high-growth tech companies like Slack, Stitch Fix, Shopify and Fastly. “I’m in and out all the time,” he said.
He extracted much of his profits and put them into Pokémon collectibles.
On one level, it arose out of his nostalgia for the game he started playing in sixth grade. Second, it is “an alternative asset class and a way to diversify,” as he put it.
His Holy Grail item is a first edition of the “Booster Box” with Pokémon cards.
When it was released in 1999, the set was priced at $ 110. In January, Heritage Auctions in Dallas sold one for $ 408,000.
Mr. Abouzeid doesn’t have that type of money, but when he went public on Valley Road in June 2020, he bought 125 “shares” of one at a price of $ 25 each.
They are now worth $ 120 each, which brings him around $ 13,500 in profit (that’s at least 300 percent more than he made from his Slack inventory).
Jackson Moses, a colleague of Mr. Abouzeid at MainStreet, invests in biotech stocks and vintage whiskey. But Johnson & Johnson and Jack Daniel don’t interest him.
His Merrill Lynch account includes stocks in companies such as Sarepta Therapeutics, a manufacturer of precision genetic medicines used to treat rare diseases of the neuromuscular and central nervous system. His fridge is filled with rare vintage kacho fugetsu.
“When my parents saw them in my apartment, they were very worried,” he said. “They said, ‘Is there something we need to talk about?’ But I don’t even open it. “
Earlier this month, as rising interest rates cornered soaring tech stocks, Kacho Fugetsu delivered what Mr. Moses called “the perfect hedge.”
Of course, he is well aware that the rise of his whiskey collection could also come to an end, but that has at least one advantage. “Then I’ll finally have an excuse to drink it,” he said.