The Wrap: PSA 10 - Stake New Zealand

🗞️The Wrap: PSA 10

Swapping poker cards for trading cards, the media monopoly dominating our downtime, and one of the hottest new stocks on Stake.

5 stocks reaching new 52 week highs

    • Big 5 Sporting Goods (BGFV) +20.4% in the last week
    • Crocs (CROX) +11.59%
    • Nautilus (NLS) +9.2%
    • Sonic Automotive (SAH) +12.8%
    • Bloom Energy (BE) +15.7%

PSA 10*

To the disciples of Gary Vee, I’m sorry for bringing up a topic you’ve been hearing about for years. To the uninitiated, like me 72 hours ago, get ready for your jaw to hit the floor.

Sports cards are apparently making a resurgence. Just 6 weeks ago, a Lebron James Upper Deck 2003 PSA 10 RC sold for US$1.8m, doubling the previous largest sale. No, a UD PSA 10 RC is not the name of some sort of junk bond. Yes, a piece of signed cardboard is worth as much as an apartment on Sydney Harbour.

In fact, sports cards have been outperforming stocks for some time now. The PWCC Top 500 is an index which tracks the value of the 500 most valuable cards in the world – the Jordans, the Gretzkys, the Mantles. Since the start of 2008, the PWCC500 is up 216% while the S&P500 is up 135%. Of course, anyone can own the S&P500, not everyone can own a one of one Michael Jordan rookie card…sorry, no fractionals yet but it shows the strength of the market. New found strength driven by nostalgia, a new breed of hustlers, and even the growth of sports gambling according to Gary Vaynerchuck.

Astute fans and traders can hit 10 baggers season on season as prices fluctuate based on real-life performance- the volatility in performance mixed with low liquidity sees massive swings in prices on a week to week basis. Josh Jacob rookie cards were selling for US$9 each before the season, after a 3 touchdown week 1 they soared to US$35 each. Giannis Antentokoumpo has won back-to-back MVP awards. His rookie card has shot up from $500 to $2000 after his first MVP, to US$5000 just last month when he took the crown again. Can you imagine what happens to these values when Dave Portnoy catches wind of this?

Fear not, this is not an exercise reserved exclusively for sports nuts. Did you know that Pokémon is the world’s largest media franchise? At US$92b, the Japanese anime is worth 1.5x as much as Star Wars. In 2018, a “Pokemon Illustrator Card” closed for US$224k. The card has a cartoon character on it!

If you’re keen to dive into some alternative investing, here is one of the best beginner’s guides I’ve come across.

Check in your parent’s garage, who knows what’s sitting in there. But be warned, for every Charizard worth more than $10, there are thousands worth less than the paper they’re printed on.

*BTW, a PSA 10 is the highest possible grade a card can receive for its quality.

Panem et Circenses

We will have to wait another 6 months to see Daniel Craig’s final appearance as 007, as No Time to Die was delayed until April. With this announcement Cineworld decided to close 200 cinemas in the UK and US for 2 months, dragging US-listed AMC down 10% overnight in the process. Film is a big-money business… and there’s one company dominating the game.

The top-grossing film of all time, Avengers: Endgame brought in almost 3 billion in box office sales. Its competitors are also dragging in 10 figures on a regular basis. Notice a common thread? Maybe the asterisks can help point it out.

Disney owns 7 of those top 10 films. The Walt Disney Company, from theme parks to blockbusters to video games is the king of entertainment.

In the piece above we touched on the biggest entertainment franchises in the world. The list may surprise you. Following Pokémon, Hello Kitty, Winnie the Pooh, Mickey Mouse and Star Wars round out the top 5. Do you know who owns those last 3 franchises? Yep, Disney.

The US$222b company has 4 major revenue streams: Media Networks, Theme Parks, Studio Entertainment and Direct to Consumer. The amazing thing? Apart from theme parks (for obvious reasons), every other sector is seeing double-digit growth.

From Disney World to ESPN, all of your leisure time may belong to just one party.

Top 5 Gainers

  • Myorkardia (MYOK) +64.7%
  • Group 1 Automotive (GPI) +36.5%
  • Assured Guaranty (AGO) +36.1%
  • Daqo New Energy (DQ) +31.8%
  • Sunpower (SPWR) +30.5%

Top 5 Fallers

  • Mesoblast (MESO) -37.7%
  • Palomar (PLMR) -15.3%
  • Unity (U) -12.8%
  • JFrog (FROG) -12.7%
  • Workhorse Group (WKHS) -11.7%

New on Stake | Palantir

As you’d be aware, Palantir went public over the last week. While we covered the specifics of its unique direct listing last week, let’s take a look at the company behind one of the hottest listings in Stake history. Palantir is a data analytics company on the surface. Sure, we’ve seen it before. But digging deeper it’s clear why this stock was so popular on debut.

Palantir only has 125 clients, but those clients are big value…like the US Government. The Navy, Space Force, US Defence all funnel millions to Palantir annually to help them improve processes and even find an edge. Read more about it here.

Trade Teaser

The Heat v Lakers are tied at 24 points after the first quarter in game 5. Each team has scored 12 baskets, including at least one each of 1-, 2-, and 3-point baskets. The Head had made more 3-point baskets than the Lakers. The Lakers had scored an equal number of 1-, 2-, and 3-point baskets. What baskets did the Lakers and Heat hit?

What We’re Listening To | Upside Down Markets – Fiscal and Monetary Policy

I’ve said it before, and I’ll say it again, economic policy is hard to understand. It’s far more complicated than the interest rate policy we learnt at high school/uni but it is rarely rigorously explained in the media.

This podcast by Patrick O’Shaugnessy of US$6b fund O’Shaugnessy Asset Management breaks down what we’re seeing in markets today with guest Jesse Livermore. Jesse talks about his theory of upside-down markets before explaining what role the Fed has in today’s markets and what the impacts of their stimulus are. Check the show notes for a breakdown.

Best Buy | PTON

One of the hottest COVID-19 stocks, as the world continues to settle into work-life from home, Peloton Interactive, the at-home sports equipment and media company continue to thrive, with this trader riding their 12-month bike to the green.