"Will this still matter in a decade?"

Shiny Thing$ #240: The 10-Year Rule

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This weekend’ Shiny Thing$ is a quick one…

…and its one of the more interesting things about being nearly a decade into building Rally: realizing how much of collecting is really just a lesson in patience. This has always been the difference between the crypto-native crowd (who often expects instant returns) and the equity/401K crowd (who, at least in the past, was more of a set-it-and-forget-it syndicate).

While the fuel for the parabolic rise in much of the collectible space only started getting dumped on the fire over the last 2 years, looking back, almost everything that feels obvious today was extremely questionable in 2016.

Ten years ago, spending serious money on Pokémon cards seemed entirely ridiculous to most people, as it should have. Today, Pokémon is its own economy - a Holo Chansey card - not even a top-3 card in the 1999 base set - just sold for $159,000.

Ten years ago, Shohei Ohtani was a promising young baseball player in Japan. Today, he's the new Babe Ruth but with a much higher market cap - maybe the most recognizable baseball player on the planet, and his collectibles that rank among the most valuable in the hobby. He’s also the face of nearly 30 different brands in Japan. 

Ten years ago, dinosaurs were largely viewed as museum exhibits rather than investment-grade assets, for better or worse… Today, the expectation is that any full dinosaur skeleton that clocks in at >65% complete is going to be a $10M+ sale no matter what venue, attracting interest from institutions, museums, and private collectors from every corner of the globe.

The same story can be told about watches, vintage technology, game-worn memorabilia, cars, comics, video games, and countless other categories - many of which didn’t even exist in 2016. It’s a new world. And while the details and nuance changes, the pattern remains consistent.

The people who benefit the most are never the ones trying to predict what happens next month or trying to make a flip on day 1. They're usually the ones willing to look out ten years and ask themselves one bias-free question:

"Will this still matter in a decade?"

That's a much easier question to answer for anyone who pays attention to the perpetual motion of the world around them. Will people still care about Michael Jordan in ten years? Probably. Will people still care about Pokémon? Almost certainly - it’s the highest-grossing media franchise in human history. Will people still care about Ferraris, Rolex, Babe Ruth, T rexes, or the most important artifacts from pop culture? History says “absolutely” - and maybe more so as the automation of our future makes the physical artifacts we care about now that much more interesting (and far more scarce).

Value aside for a minute, the strongest assets tend to share a common trait: they survive multiple cycles of changing tastes, economic conditions, and market sentiment. For those willing to relax a bit and zoom out far enough, the day-to-day volatility starts to matter WAY less.

This is something we've witnessed repeatedly at Rally. Many of the assets that generated the strongest outcomes weren't necessarily the most exciting on the day they were acquired. Most were met with skepticism, but over time, quality has a habit of becoming extremely obvious (and then in hindsight, everyone was right and it was never questioned, obviously 😉).

The challenge is that ten years feels incredibly long when you're standing at the beginning. It's much easier to consider a decision a “smart decision” when it hits than it is to make one in real time. And that first dip or the shift in market sentiment while you’re holding it is always a scary moment. It makes you question everything you prepared for and puts you into a loop of doubt. Should I sell? Is it going to keep going down?? It’s rough to tell yourself “I’m right… I’m just a little early,” but thats often the case in less liquid alt assets like these. It requires intestinal fortitude beyond the market. 

As we approach our tenth year, one of the biggest lessons we've learned is that collecting anything with hopes of the value increasing isn't about predicting the future. It's usually about identifying the things that are most likely to remain relevant after the conversation of the previous generation fades.

While markets change, technologies change, and trends come and go, the assets that continue to hijack the collective attention decade after decade are usually the ones that matter most.

10 years will always prove it. 

Until next week…