How can one truly calculate the value of obscurity? Do we need to hold hidden gems in our hands to understand their true value? Where could the answers to these questions possibly be found?
In the confines of online marketplaces, of course.
When I was younger, there was a piece of lore in my family involving a faded bottle of whisky. It sat on the top shelf of a seldom-opened closet; from the outside, it looked like a normal old spirit — good for show and not much else. Apparently, however, this relic was — with the right explanation and to the right eye — worth a serious chunk of change and destined to occupy a space in only the most devoted of collectors’ cabinets.
In the days of prohibition, Al Capone liked to (among other things, we can be assured) enjoy a few beverages with his buddies at Chicago joints like the Green Mill. Capone was a man with discerning taste, though, so not just any rail drink would do. It took a small army, by land and sea, to secure the provisions he sought.
As it happens, the previous occupant of my family’s old house, on a leafy street in a tiny town in Northern Michigan, was a diver in his free time. On weekends, he’d suit up and explore the great lakes and adjacent bodies of water in search of, well, whatever was down there. Once, in the Detroit River, he came across something remarkable: A sunken ship full of hundred-year-old scotch whisky. What were these bottles doing in this ship at the bottom of this river? They’d been part of a clandestine operation to move alcohol around the US, with no small percentage of the haul headed to one Al Capone himself. Upon discovering the remnants of the party boat, my erstwhile neighbor grabbed a few bottles, put some up for auction with Christie’s, and offered up others as thoughtful housewarming gifts.
The trouble is, nobody we queried could put a real value on this strange, formerly-submerged flask. Some said a hundred bucks, a few tossed out the phrase ‘priceless,’ while others, still, simply advised, “don’t drink that, kid.”
Alternative assets and the obscurity economy
Any good financial advisor will tell you that diversification is the name of the game. (I’m speculating here, actually, but I bet they say things like that.) Those of us coming of age in the digital world are in luck where this endeavor is concerned. Sneakers, Bitcoin, postage stamps, to say nothing of NFTs, there’s no shortage of ways to possess a nest egg that doesn’t sit in a bank vault or under the mattress.
It’s also becoming easier and easier to know the exact origin of the goods you’re seeking, to hire third-party authentication services and, ultimately, to charge a pretty penny with assurance.
All this has given rise to the world of alternative assets, or any store of value that isn’t cash, stock, or conventional tender — the more obscure, the better.
While in years past the modish alternative asset has been coveted streetwear pieces — monetized and mainstreamed by sites like StockX and Grailed — let’s look at a classic example seeing a resurgence. Baseball cards have been traded among devotees of America’s pastime since the mid 19th century. In laminate binders or dusty stacks, they’re a pre-digital means of showing not only that you’re a student of the roster but also, well, a means.
Enter Alt, an e-commerce marketplace for the savvy 21st century baseball card baron. Alt’s website invites visitors to join the next wave of investing and provides some literature on why it is that baseball cards, of all the alternative assets, are a safe bet. They make a convincing case: Between 2008-2020, the market for sports cards returned 392% (the S&P 500, in comparison, saw 160% returned over the same period.)
And if baseball cards are a little too Americana for your taste, why not look to wine. No, not a Chateau or a 40-year-old Pauillac; I’m talking about something raw, hidden by anonymity, and deeply unadulterated. That’s Brutal!!! wine, a label (or, perhaps more accurately, movement) centering on zero/zero production, meaning 0 added yeast and no tinkering in either vineyard or cellar. In chronicling Brutal!!!, writer Alice Feiring learns from a producer that,
“The wine should be bottled with some sort of technical fault. But that fault is part of the wine’s beauty and should get better as time goes on.”
Far from pristine and obscure as they come, could this be the last bastion of ‘priceless goods' in the landscape of alternative assets? Maybe. Or, likelier still, an algorithm to detect and subsequently value flawed-ness will prevail. In any case, as transitory inflation knocks at the door, I’m leaving no closet unopened.