I’m not into art. I’ve never been into art. And I’ll likely never be into art. My mom’s a big art person and she continuously tries to get me to like art and I’m like, “no, it’s not going to happen.” I don’t know, it’s kind of like interpretive dance for me. Most of me just thinks “I don’t get it.” And frankly, I don’t. Don’t get me wrong. I completely respect and understand the skill it takes to paint what many would consider to be a masterpiece. There are some paintings out there that completely blow one’s mind. But when it comes to paintings that look like a simple red square and they’re going for millions of dollars? No, I don’t get it. It’s why I’ll never spend thousands on a painting to hang in my home when I can order a print online and frame it. But by no means does that mean I don’t respect art as a business and if you are any kind of investor you should know that art has actually outperformed the S&P quite handily over the past 50 years or so. It’s not nearly as liquid as an investment as stocks but you can definitely clean up if you know what you’re doing. But since I have no idea what I’m doing, never will, nor do I care to, I decided to try and find a platform that takes the work out of it all. Enter Masterworks.io.
This is a beast of a website. I mean how often can you actually own a piece of a Picasso with other investors, hold onto it for a few years, and then reap the profits on the sale after appreciation? Not too many. In fact my latest investment on there was on a $15 million Picasso painting. You gotta love technology and crowdfunding. Never in my wildest dreams did I ever think that I’d be part owner of a Picasso work. But here I am, with my own share in an LLC that gives me shares of this painting. Like I said, I couldn’t care less about the actual painting myself. I’m simply not a fan of most artwork, but to know I can part own one of these bad boys? Yeah, I’m in, Even if it’s just a tiny piece of my portfolio.
This “Wall Street” quote best captures art:
Watch this clip. It’s one of my favorite moments in the entire movie. The one quote I take out of it that’s relevant to what I’m talking about is this one: “This painting here? I bought it 10 years ago for $60,000. I could sell it today for $600,000. The illusion has become real and the more real it becomes, the more desperate they want it. Capitalism at its finest.” Gekko himself even calls it bullshit. He knows like anyone else that paintings are just mere objects but it doesn’t matter. As long as there’s a demand for it, he’s a buyer, period. And if you think art is the only illusion out there that’s worth real money? Take a look around. At least art is in fact real. At least art is a physical thing we can appreciate. Art’s just the tip of the iceberg. Think about it.
NFTs and the Metaverse
I’m not going to pretend I know anything about NFTs or the Metaverse but I will say this: I know enough to know that people are making money off of them. The best way I can understand it is that NFTs are very similar to collectibles, especially ones with authenticity certificates. It’s kind of like having to prove an autographed baseball card isn’t a phony. You have to have a certificate of authenticity. Except with NFTs that certificate is digital and is stored in the blockchain (I think). So let’s say you wanted to own the very first cat video on Youtube. There are literally millions of copies out there. But owning the original is basically what owning NFTs are. It’s an authenticated digital collectible. NFTs are like art in the sense that most are crap. Most aren’t worth a penny. But the good ones? The rare ones? Some have already gone for millions. There’s no reason to think this trend won’t continue. There will be tons of crap produced but people will be very competitive in going after the rare and few that are valuable, just like art. Look, if these things weren’t going for millions I wouldn’t believe in them, but as Gekko states, “the illusion has become real.” Same goes for the Metaverse.
Did you know that digital pieces of real estate are going for millions right now? Yes, “fake” piece of land, homes, whatever, that are being created in the digital universe are being sold and purchased for real dollars and in many cases, millions of dollars. Seems absolutely absurd doesn’t it? But is it absurd? Not if you think that the Metaverse is going to become a massive part of our culture. I happen to believe it will, but again, that doesn’t really matter. What matters is the perceived and actual reality of it all.
Art is a collectible and there will always be a place for it
NFTs, digital real estate, and whatever else that comes along are collectibles like any other collectible. If there’s demand for a collectible, there’s value in that collectible. As long as people keep seeking rare baseball cards and Pokemon cards, the rarest and the ones in the most mint condition will always have value. But that’s where the rub is. Like any other investment, there’s risk. There’s risk that one day people will wake up and say ” baseball cards suck.” But there’s also risk that your favorite stocks will plummet to zero. It’s a low risk. But it’s a risk nonetheless. The collectibles market is one that I don’t care to know much about but I’ll never ignore it because real money is real money. That’s why, as I said, I invested in Masterworks. These are seasoned people with expertise in art. They do the sourcing so I don’t have to. P.S. I also own wine even though I know nothing about wine. I’ve said my piece.