🎴 A Savvy Guide to Collectible Assets

What’s on the Menu 🍴

Ever wonder how yesterday's treasures (or even your pet) could unlock tomorrow's fortunes?

From the intriguing world of collectibles to untapped markets in pet care and unexpected twists in the airline industry…

There's a lot more than meets the eye!

Buckle up as we take you on a tour through unconventional investment landscapes and market anomalies.

Let’s roll:

• A Savvy Guide to Collectible Assets 🎴

• Humanizing Pets: An Investable Trend 🐶

• Will The Courtroom SAVE This Airline Stock? 🛬

• Is It Time To Buy Stocks? [Market & Economy Update] 📺

Today’s newsletter is a 5 minute read.

A Savvy Guide to Collectible Assets 🎴

The other day my dad dropped off a box of my old childhood stuff.

Inside, I found a bunch of collectibles from the '80s and '90s.

We’re talking baseball cards, comic books, and X-Men trading cards!

I even uncovered a few thousand Pogs—a milk cap game from the early '90s.

This got me thinking about how collectibles have been gaining steam over the past few years…

And how there are several multi-billion dollar markets ready for entrepreneurs, speculators, and investors to build wealth!

We need to approach this carefully; from Beanie Babies to NFT bubbles, there are plenty of ways to lose money in this space.

But a savvy hobbyist—or full-time professional collector—can build a valuable portfolio by following a few timeless principles.

Thanks to technology, some of these markets have developed charting tools, sales trends, and other ways to track hot themes.

For example, Market Movers is an app for baseball card traders that shows price charts for individual cards.

Technical analysis on baseball cards? Yes, please!

How To Get Started The Right Way

So how does someone get into collectibles and build wealth instead of being a sheep left buying the top?

It all starts by understand what drives prices.

Here are a few things to consider:

• Rarity: Evaluate the scarcity or limited availability of the item.

• Condition: Assess the item's physical state; grading services often provide standardized metrics.

• Historical Importance: Consider the item's role or significance in its domain.

• Demand: Analyze current market demand, often driven by nostalgia, media, or investor interest.

• Provenance: Confirm the item’s origin and ownership history for authenticity.

• Market Comparables: Study prices of similar items that have recently sold or are currently listed.

• Liquidity: Assess the ease with which the item can be sold.

• Investment Trends: Examine broader market trends affecting the item's asset class.

Case Study: NFT’s - Fools Gold or Real Utility?

We’ve recently seen a big boom-and-bust in the NFT space…

And while I think paying $500,000 for a profile picture is asking for trouble, there’s definitely something to digital collectibles.

We’re bullish on in-game assets for popular video games.

If there’s a scarce asset in a high-demand game, I think those assets will do well.

Think of how Magic The Gathering cards have maintained popularity.

Why would digital games be any different?

Pick a Category That’s Fun & Growing

The more fun you have with a category, the more likely you are to learn and invest wisely.

Whether it's classic cars, Star Wars memorabilia, or Pokémon cards…

Pick a niche and dive deep!

Who knows, you might identify the next unicorn in the collectible world!

Humanizing Pets: An Investable Trend 🐶

Pets have come a long way from the backyard into the home.

Especially dogs.

It’s unthinkable now to leave your dog or cat outside all day and not let them cuddle with you on the couch.

It’s deemed the “humanization of pets”.

It’s a trend that doesn’t seem to be slowing down, and the largest corporations in the world know it.

66% of U.S. households own a pet according to the American Pet Products Association (APPA).

That’s over 86 million household pets with the majority of those being dogs and cats.

According to the APPA’s numbers, pet expenditures have grown at a 8.6% compounded annual growth rate.

So, where are the investing opportunities?

1. Chewy (CHWY): Chewy is the Amazon of pets. It’s an online retailer with over 20 million active customers. They’ve positioned themselves well for the “human-grade” food category that is becoming very popular as pet parents care more about diet.

They also have 76% of their sales coming from customers on autoship. This means they’re able to have a better view of future revenues.

It’s trading at a rock bottom EV/S valuation multiple since IPO.

2. Walmart (WMT): Walmart is moving their business deeper into the pets category. They’re already a go-to retailer for pet essentials like food, pet beds and toys.

Now, they’re piloting grooming and vet services in their stores.

Most customers likely have pets, so, what a brilliant way to get customers coming back in store outside of regular grocery runs.

There are other investable companies like Bark Inc. (BARK), big box retailer Petco (WOOF) and even Amazon (AMZN) that all have pet products.

In fact, Amazon is trying to find ways to keep up with the growing pet industry:

So, as pet owners continue to want the best for their fur children, and are willing to cough up the dough for them…

Corporations lurk in the shadows to capitalize on the opportunity.

Will The Courtroom SAVE This Airline Stock? 🛬

Airline stocks have been seriously CRUSHED over the past three months.

In fact, no US based airline stock has a positive return over the past quarter, and the median return is a staggering NEGATIVE 35%.

Recent industry performance seems to once again validate Warren Buffett’s opinion that airlines are terrible businesses to invest in over the long term.

Buffett wrote this about airlines in his 2007 shareholder letter: “The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines.”

The long standing issues of the airline business include:

• intense fare competition

• costly planes

• pilot & flight attendant wage increases

• rising jet fuel costs

• heavy government regulation

• demand declines during recessions & pandemics

Interestingly, in recent years we’ve seen demand rebound dramatically to higher than pre-pandemic levels and airline fares went up significantly.

But rising fuel costs, higher wages, and competition have rapidly pushed profit margins down for many airlines just in the past two quarters.

Most airlines are bracing for tougher times ahead, hence the stock selloffs.

But there’s also a very unique situation brewing in the industry:

JetBlue is trying to acquire Spirit Airlines, and the Department of Justice took them to court to block the acquisition.

JetBlue has an agreement to acquire Spirit (ticker: SAVE) for roughly $31 per share and SAVE stock is currently trading under $12, a discount of more than 60%.

The market is VERY pessimistic about the deal closing.

However, JetBlue still appears committed to the deal despite industry turmoil.

JetBlue has even given up key partnerships with other airlines to help alleviate regulatory concerns over the proposed deal with Spirit.

The DoJ trial started on Tuesday this week and will run for the next several weeks, with a final decision expected in late December 2023 or early January 2024.

One other oddity here is that JetBlue stock (ticker: JBLU) is trading at multiyear lows; it’s now well below the price it traded at during the pandemic.

If the deal isn’t allowed to proceed, JetBlue won’t be saddled with billions more in debt and the headaches that come with integrating another airline.

So you’d think that JBLU stock would reflect more optimism about its own future given the pessimism about the SAVE deal priced into SAVE’s stock.

It’s surprising that the market seems to be simultaneously pricing a low probability of acquisition completion via SAVE stock yet a high probability of completion via JBLU stock.

That feels like a potential trading opportunity…

Theoretically an investor could capitalize on their view of the outcome by going long JBLU stock/options or going long SAVE stock/options, or even hedging by doing some of both.

Given the relentless selling of airline stocks lately, there could also be other lucrative trades out there.

So even though airlines might not make for the best long term buy-and-hold investments, keep an eye on this troubled sector for trading opportunities!

📺 Video of the Day
Is It Time To Buy Stocks?

It's been an event-filled past few weeks in stocks and crypto!

Stocks have been flopping while Bitcoin is up a whopping 100% this year.

All the while, recession fears continue to run rampant in the face of not-so-bad economic data.

So, how do you make sense of it, and make investing decisions around it?

I cover it all in today’s market update video.

You’ll learn:

• Why stocks are REALLY falling

• Where to consider buying more stocks

• Why Bitcoin is popping

• My take on the economic data

• And more!

Delicious Bites 😋

• Americans are deeply pessimistic, and social media is to blame

• Meta given 30 days to cease using the name Threads

• Roe v. Wade repeal impacts where women choose to go to college

• How Much is a 3% Mortgage Worth?

• The Best Selling Vehicle in Every U.S. State in 2022

Food For Thought 🧠

"Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing.”
- J. Paul Getty

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.