Editor’s Note: Today we welcome a new contributor, Brian Eller. For the past seven years, Brian has been behind the scenes at Crowdability doing investment research and acting as our Managing Editor. Previously, he worked as a Special Agent for the U.S. Department of Defense. We hope you enjoy his writings and investment insights!
“I’m looking to buy a nice pair of shoes. But I’ve got a budget. The most I’ll spend is $300,000.”
I was at a dinner party in New York when I overheard this statement from the man seated across from me. My jaw dropped. Three-hundred grand — for a pair of shoes?
So today, I’ll explain a few things:
Why this man isn’t as crazy as he sounds…
Where he might find the shoes he’s looking for…
And why following in his “footsteps” could help you beat the stock market!
How the Rich Do It
A brief conversation with the gentleman across the table confirmed my suspicion: He was rich.
But now he was aiming to get richer.
The way he planned to achieve this new wealth was by investing in a pair of sneakers that had previously been worn by a famous athlete.
You see, as my colleague Matt has explained (here and here, for example), the rich invest differently than most of us. They don’t have typical 60/40 portfolios. And this difference might explain why they keep getting richer.
According to the Motley Fool, the rich mainly invest in “alternative assets.” These alternatives include private startups and private real-estate deals — the kind we focus on here at Crowdability…
But they also include fine art, vintage wine — and, increasingly, sports memorabilia like the game-worn shoes of famous athletes.
Where can an investor find assets like these?
Welcome to Sotheby’s
Historically, when looking to invest in rare antiquities, buyers would turn to Sotheby’s.
Sotheby’s is one of the world’s leading auction houses for fine art, jewelry, and collectibles.
For more than three hundred years, the company has handled the biggest and most important auction sales — from the $922 million “Macklowe Collection” of art, to The Jacqueline Kennedy Onassis Collection, to the flamboyant contents of Gianni Versace’s Miami mansion.
But starting in 2019, Sotheby’s began auctioning something new: sneakers.
For example, it sold a 1972 Nike “Moon Shoe” for about $437,000. And in 2020, it sold a pair of autographed Michael Jordan “Air Jordan 1” sneakers for $560,000.
But now Sotheby’s is ramping up its offerings for such sports memorabilia — and with good reason…
Investing in Sports Memorabilia Is Soaring in Popularity
The market for investing in sports memorabilia has exploded recently.
According to market-research firm Market Decipher, in 2021, sports memorabilia was a twenty-six-billion-dollar global market. But by 2032, it’s expected to reach $227 billion.
Why has it become so popular? Three main reasons:
First of all, all-time greats like Michael Jordan have become globally-known brands. And as their brands have grown, demand for the things they’ve “touched” — or worn — has soared.
Second, the financial returns from sports memorabilia are uncorrelated to the stock market — that means when stocks zig, they can still zag.
And lastly, their historical returns beat the pants off stocks. In fact, based on the Sports Memorabilia Index, their average annual returns from 2008 to 2021 reached 14.5%. That compares to less than 11% for the S&P 500 during that same stretch.
Get Ready for “Sports Week”
To take advantage of the rising interest in sports memorabilia, Sotheby’s is launching something new.
Starting tomorrow, April 5, the company will host its first “Sports Week,” dedicated to live and online auctions featuring coveted sports memorabilia.
If you’re in New York City, you can check it out in person. The exhibition takes place at Sotheby’s at 1334 York Avenue. You can learn more here »
Items in the auction will include:
- Game-used apparel worn by basketball superstars Kobe Bryant, LeBron James, and Michael Jordan.
- A tennis racket used by 24-time Grand Slam singles champion — and current No. 1-ranked tennis player in the world — Novak Djokovic.
- A football from quarterback Tom Brady’s final career game.
Kobe Bryant’s Lakers jersey from Game 1 of the 2009 NBA Finals is expected to fetch upwards of $2.5 million:
And a pair of boxing trunks worn by Muhammad Ali when he fought Joe Frazier in the legendary “Thrilla in Manila” match from 1975 is expected to sell for as much as six million dollars:
With even the “lower-priced” items expected to fetch at least six figures, this auction will be out of reach for most investors.
But we know a way you can start investing in sports memorabilia for just $100…
Your Chance to Invest — For Just $100
You see, a new type of platform recently emerged to give ordinary people the ability to invest small amounts of money into “collectibles,” including sports memorabilia.
Essentially, just like you can buy a $100 stake in a startup, now you can buy $100 worth of a piece of fine art, a bottle of wine, or even game-worn shoes and apparel.
- Collectable, for example, specializes in sports. Current offerings include vintage Jackie Robinson baseball cards, a 1982 game-used jersey worn by Hall of Fame Cal Ripken Jr., and a ticket from Tiger Woods’ pro debut at the 1996 Greater Milwaukee Open.
- Public, a platform with more than three million users, recently ventured into alternative investments. Currently, it’s offering a pair of Nike sneakers worn by Michael Jordan during a 1985 exhibition game.
- And on Rally, you’ll find all sorts of collectibles, from game-used sports apparel to the tuxedo worn by Al Pacino’s character Tony Montana in the classic film “Scarface.”
Through sites like these, you can invest an amount you’re comfortable with — $100 here, $100 there — and when the item sells, you’ll receive your pro-rata share of any profits.
Before You Get Started
Keep in mind, all the typical caveats about investing apply here:
For example, don’t invest more than you can afford to lose; invest in what you know; and be sure to dip your toe into the water before diving in.
Furthermore, many alternative investments aren’t entirely “liquid.” That means they can’t necessarily be converted into cash at the snap of your fingers.
So don’t invest your rent or grocery money into these offerings.
But if you’re looking to invest like the rich — and Sotheby’s “Sports Week” has piqued your interest in adding sports memorabilia to your portfolio — give these platforms a look.
Happy investing.
Brian Eller
Best Regards,
Editor
Crowdability.com
