Thanks for reading the Attic Update, a weekly look at the exciting world of collecting and investing in alternative assets.
The Attic Update is broken down into three sections – Past, Present, and Future.
- PAST – Interesting ideas about the history of collecting, investing, and markets.
- PRESENT – Ten of the most relevant stories in collecting and alternative asset investing over the past week.
- FUTURE – Where are we headed? We’ll look at what’s next for alternative assets and the people working hard to make visions into reality.
The Secretive Winery –
How long would you wait for a really great bottle of wine? How about 12 years? And that’s just an estimate. It could be much, much longer.
Why would anyone wait that long for a bottle of wine? With thousands of different bottles of great wine on the market readily available, why not just choose something else?
Because then you wouldn’t have a bottle of Screaming Eagle.
Jean Phillips founded Screaming Eagle in 1992, but she owned the property for six years before she was ready to make wine.
As a successful Napa Valley real estate agent, Jean purchased the existing vineyard in 1986. But rows of random disheveled grape vines had been planted since the 1940s and needed much attention. Jean began replanting vines.
She decided to plant 50 acres of Cabernet Sauvignon, Cabernet Franc, and Merlot. This might have been on her own accord, or perhaps it was some well-heeded advice from a local friend, the ‘Dean of Napa Valley,’ Robert Mondavi, who Jean got to know from her days as a top real estate agent.
By 1992, Jean Phillips was ready to make wine. Along with her friend and winemaker Heidi Barrett, favorite vines were picked for the first bottles, and the remaining fruit was sold to neighboring wineries.
Three years later, in 1995, the first 200 cases were complete. Renowned wine critic Robert Parker gave Screaming Eagle a near-perfect, and almost unheard-of score of 99 out of 100.
Screaming Eagle was an instant hit. The name gained cult status almost overnight. As great as the 1992 Cabernet was, each year followed with almost equally stunning quality.
Even with the amazing success of the brand, Screaming Eagle kept their same low production volume. Just a few hundred cases per year. The low volume production and cult status sent prices through the roof.
The waiting list grew to a decade or more, and prices soared to thousands of dollars per bottle. Exact production numbers remained a mystery. Media attempts to learn the methods of growing and producing exquisite bottles of wine failed. Winery tour requests went unanswered or were kindly rejected. Even Jay-Z couldn’t talk his way inside the vineyard gates.
In 2006 Jean Phillips received a surprising request. A wealthy businessman inquired about purchasing the entire property. While Jean was the proud owner of perhaps the best winery in Napa, producing wine was a very capital-intensive endeavor.
In the end, Jean was quoted as saying, “the offer was too good to refuse.” Some guess the purchase price was around $30 million for the winery. Nearly $300,00 per acre for prime vineyard land. But on top of that was the value of the brand itself.
The most secretive winery in Napa had a new owner in 2006. Turns out the new owner was a billionaire. Perfect. Time to expand production and make sure every house in the world has a bottle of Screaming Eagle, right? Vertically integrate, automate, run national ad campaigns, slash expenses, outsource… do what billionaires do, right? Wrong.
In fact, the billionaire owner of Screaming Eagle Winery is best known for his nickname, “Silent Stan.” But his story is for another day.
The allure and mystique of the Screaming Eagle Winery continues. You might now be thinking about how to get a bottle for yourself. Good luck.
The Deep Sea Special, Ferrari Engine Sounds, and Balloon Girl –
Here’s the ‘Attic Top 10’ – The most relevant stories in collecting and investing in alternative assets over the past week. Not only to keep you informed but to provoke deeper thought, investigation, curiosity, and fun!
- Fractional Ownership – Otis offers a pair of 1985 Air Jordan 1s. Fine wine platform Vint offers their 8th IPO, the $84,000 ‘Spanish Collection’ sold out in minutes. The Collectable Weekly Podcast by Alan Goldsher hosted Joe Orlando, former CEO of Collectors Universe. (PSA)
- Memorabilia & Collectibles – A rare copy of the U.S. Constitution is headed to Sotheby’s auction in November. One of eleven surviving copies from the official first printing. Estimates are for the document to sell for $15 – $20 million. It last sold in 1988 for $165,000.
- Sports Cards – Alt is moving into sports card grading. A recent job posting for their Delaware headquarters is titled ‘Card Grader.’ You could write an entire book about the wild world of sports card grading. Here’s a solid intro article by Gold Card Auctions if you’re not familiar and want to get up to speed.
- Rare Books – Signed handwritten letter by Albert Einstein including his most famous equation sells for $1.25 million. The letter, written to Dr. Ludwik Silberstein in October of 1946, includes the opening line, “Your question can be answered from the E=mc2 formula, without any erudition.” Watch the man himself explain his famous formula.
- Crypto & NFTs – Rally completed its first offering of a CryptoPunk. 3,589 investors paid $10.00 per share to own Punk #9670 valued at $72,000. Did you partake in the offering and get in on the ‘ground-floor’? At quick glance on the LarvaLabs website, there are 1,325 CryptoPunks for sale starting at $347,983. Are you a buyer or a seller at these prices? Do you have any idea what I’m talking about right now? It’s ok, don’t panic. Sometimes observing markets is just as much fun as partaking in them. But 20 bucks for a piece of the Punk feels about right. However… Caveat Emptor!
- Watches – Ultra rare vintage Rolex built for the deepest parts of the ocean could sell for millions. The ‘Deep Sea Special will headline The Geneva Watch Auction. The watch is one of just 35 examples ever made and was designed for diving into the Mariana Trench. Jacques Piccard and Don Walsh tested one of the 35 models, now in the Smithsonian in Washington D.C., to a depth of 32,800 feet. Watch this incredible ‘Rolex Presents’ video profiling Piccard and Walsh’s journey to the deepest part of the ocean in 1960.
- Wine & Whiskey – The most hi-tech wine cabinet ever created? A robotic system powered by A.I. wrapped in a humidity-controlled environment only accessible by highly secure facial recognition scanners? WineCab is “elevating the wine experience.” Pricing? Sorry, wait list only, at the moment.
- Markets & Investing – Let’s check in on the Fear & Greed Index. I know, I know, many market gurus absolutely HATE the Fear & Greed Index and call it completely worthless. Relax. I’m much less sophisticated I guess. I still find the Fear & Greed Index interesting – entertaining, at the very least. Currently, the index is in solid “Fear” territory. Somewhat intriguing, because the stock market is down just 2% from all-time highs. As worthless as this index might be, I do enjoy looking at the 7 individual components that make up the Fear & Greed gauge. Learn more here.
- Collector Cars – If you want to experience a customized Ferrari 812 Superfast from the comfort of your desk chair, this is a great way to do it. RoCars produced a video featuring the 812 Superfast Ferrari completely tricked out by Carlex Design. Complete with a close-up HD tour of interior and exterior including engine sounds. Hell, just go directly to the 1:20 mark and listen to that engine! If you’re not familiar with Carlex Design, they create designer auto styling packages, taking standard cars to a whole new level. From the company website, “spectacular metamorphoses is our specialty.” You need to visit their website and check the ‘Limited Editions,’ and the Mercedes G63 AMG Steampunk Edition. WOW.
- Art – We can’t get enough Banksy lately, we’ve been tracking the latest street art by the mysterious artist over the last few weeks. ArtPrice has a preview of the upcoming Banksy offering in the October Sotheby’s auction. The famous ‘Girl With Balloon’ will hit the market again… after selling in 2018. You might remember this piece sold for over $1 million, then seconds after the sale, it was remotely shredded in front of the entire world. Estimates are for the same half-shredded piece to sell for $5 – $8 million. Damn! Banksy is now 5th on the ArtPrice ranking of all-time artists behind Picasso, Basquiat, Warhol, and Monet. Is Banksy becoming the most important artist of the 21st century?
Featured Pod –
The Acquirer’s Multiple is a podcast by Tobias Carlisle, who uncovers the tactics and strategies for identifying solid investments, managing risk, and dealing with bad “luck.”
The Pod focuses on value investing, which can be a refreshing change from the high-flying asset classes that make headlines day after day. For value investors, making headlines is not very desirable and/or likely.
‘Boring is beautiful,’ is another phrase that comes to mind when I think about value investing. Maybe Warren Buffett mumbled the phrase, and it stuck in my head, but I digress. Value investing is an important concept every investor should at least try to understand.
In his latest episode, Tobias discusses the latest Value Vs. Growth debate with Bill Brewster and Jake Taylor, and Jeremy Grantham’s latest investment letter.
Someone who was NOT a value investor, but known as The Boy Plunger, and one of the most famous short-sellers of all time. Find out how Jesse Livermore went boom and bust over and over again, making huge bets, and taking on incredible risks.
The Digital Land Rush –
Some think about the future as next week or next month. Others attempt to see what’s coming years down the road and build something for that future they can barely imagine. Can you imagine the day when you will need a Virtual Real Estate Agent?
Metaverse Property is the “first virtual real estate company in the world, offering exposure to the burgeoning industry of virtual land via the metaverses.”
I’m not too sure about their claim of being the “first” virtual real estate company, perhaps they were. And they are definitely not the only ones. Virtual real estate has been “a thing” for decades if anyone remembers back in the heyday of Second Life. But this time around, things seem a bit more “real.”
Global Digital Assets Group is a Canadian-based company focused on online real estate. They buy properties in public metaverses with the intention to develop malls to be rented to real-world brands.
Yes, anything is possible in the rapidly developing metaverses. Both Global Digital Assets Group and Metaverse Property plan to create REIT-type products for investors who want diversified exposure to the virtual market.
How do you get started on your virtual land-grab adventure? Here’s a Medium thread on how to buy land in Sandbox. And down the rabbit hole you go!
Quote From the Legends –
“An investment in knowledge pays the best interest.” – Benjamin Franklin
Quote From the Legends, Part 2 –
“Beware of little expenses. A Small leak will sink a great ship.” – Benjamin Franklin
Tweet of the Week –
Sometimes markets feel a little too easy, and gains pile up a bit too rapidly. If you’ve had this “problem” lately, here’s a good reminder.
If your “community” is buzzing with excitement and growing exponentially – that’s great! Keep it going! I’m not here to rain on any parades. Investing, collecting, discovering, learning, having fun, and sharing with others is what I love to do, too!
But, from time to time, it’s nice to be reminded to stay grounded and humble. And tweets like the one above do that for me.
There are fairly good odds that your favorite asset and community of choice will experience a rocky road at some point in the future, that’s just how it works.
When (or if) a downturn in prices comes for your investing or collecting ‘community,’ observe what happens to the other participants. Do they fold up shop and run for the hills? Or do they persevere and weather the storm?
In Morgan Housel’s book, The Psychology of Money, he says, “Richard Feynman, the great physicist, once said, “Imagine how much harder physics would be if electrons had feelings.” Well, investors have feelings.”
I will admit, I’m a strange bird, that’s a fact. But observing the behavior of communities is endlessly fascinating to me, and a never-ending study.
A Question for You –
What new categories would you like to see more discussion about each week? Highly-graded near-colorless diamonds? Vintage Apple computers? How about World War II armored tanks?? Let me know in the comments.
Thanks for reading! And if you enjoyed it, share it!