A Brief Note On Alternative Assets

Vintage Instruments

Given my background and love of vintage guitars, mandolins, and instruments in general I’ve started thinking about them as a hard alternative asset class over the last several years.

What sort of return would an alternative asset fund composed of vintage instruments generate?

The “42 guitar index” (The DJIA for vintage guitars) has apparently averaged an annual return of 22% over the last 19 years since its inception. Who knew?

I obsessively research and read about all of my interests. Who knows if it is a pain or a benefit.

Fly-Fishing, Trail Running, Bow hunting, it doesn’t matter.

It is the same with instruments.

Guitars, Mandolins, Banjos, modern masters like Dudenbostel, Arnold, Walker, Henderson and writings put out by Gruhn and any number of vintage instrument experts. I’d like to think I’ve read all there is to read on them.

In my opinion an alternative fund composed of specific year acoustic and electric vintage guitars, specific mandolins, and builds by modern masters would yield a very nice return over segmented, say, 10 year lock up periods.

Eventually you would have to monetize the asset.

Come to think of it, this may be an actionable idea. Something I can take advantage of even before transitioning from my current job.

I’ll leave it there for now. I have ideas. More to come.

Credit Suisse on Vintage Guitars

Vintage Guitars

More alternative assets

In the quest for Alpha and a market edge I am also continuously researching the viability of different investment vehicles.

One of the more recent deep dives has been established ranch operations with business segments as a cash flow…cash cow.

No, I don’t apologize for that pun.

It seems that market data is spotty and ranches hold their financials very close to the chest. That would look like a bad environment for finding value…but not at all. Whenever imperfect information is held, there is always an angle for alpha and profit generation. Are you motivated and enterprising enough to find it?

For a ranch to be a long term cash flow yielder, established operations need to be in place.

It seems that it is very unlikely to find a property that can service a standard 20% down mortgage just off of its business segments. However, with a cash purchase, finding a property that will yield 3% annually, or a “cow dividend” as I like to call it, is doable. That’s on par with your favorite blue chip stock.

Related to ranch cash flow:

Sporting Ranch Capital and Beartooth Capital renovate and flip beaten ranches into billionaires sporting and conservation havens.

There is money to be made in all sorts of interesting ways!

 

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