How Do You Do Fellow Kids?

Together with Masterworks:

The Unexpected Way Millionaires Invest in Alternatives (And How You Can Too)

The Power Law dictates that 1% of the world’s population holds 45% of the wealth— and they’re only getting richer.

What are the 1% doing that we aren’t? They allocate 30% of their entire portfolios to alternatives like Contemporary Art. 

It makes sense why: The US faces a debt crisis. Nearly every firm from Goldman to BlackRock is projecting equity returns of less than 5% until 2035. And Inflation is at 6.4%, the highest rate since 1990.  

In fact, I added real multimillion-dollar paintings to my portfolio. 

Here’s why I’m investing in art:

• Contemporary Art outperformed the S&P 500 by 174% from 1995–2020.

• Global value of art expected to grow by 53% by 2026

• 86% of wealth managers recommend art investing to clients

But I didn’t have to buy entire paintings myself. That would’ve cost me tens or even hundreds of millions.

I used Masterworks.io—the first and only tech platform that lets you invest in iconic art without needing millions. By securitizing works by artists like Warhol, Banksy, and Basquiat, everyone can be a bona fide art investor. 

They just raised $110M at over a $1B valuation, so their future looks bright, to say the least. 

The best part? Ramp Recap readers get to skip their waitlist*

*See important disclosures

Constitution:

And the troll of the year award goes to…

Ken Griffin!

*audible gasps from the crowd*

Come on down and accept your award!

Ken Griffin, the billionaire founder of the hedge-fund firm Citadel LLC and electronic-trading firm Citadel Securities, made waves earlier this year during the Robinhood, GameStop, and payment for order flow fiasco. Now he’s in the news once again after we learned Friday afternoon that he was the winning bidder for a copy of the U.S. Constitution at the Sotheby’s auction on Thursday night.

This version of the U.S. founding charter is one of thirteen surviving copies printed after the Constitutional Convention of 1787. The late real estate developer Howard Goldman purchased it from Sotheby’s in 1988 for $165,000.

Proceeds from the auction went to the Dorothy Tapper Goldman Foundation, which was founded by Howard Goldman’s widow in 2018 and provides scholarship funding for constitutional studies and the preservation of rare documents from U.S. revolutionary history. 

The auction was particularly special because of the other main bidder(s) involved. A random group of crypto enthusiasts and youths created @ConstitutionDAO to pool money together through a DAO to bid on the copy of the U.S. Constitution. Although they were unsuccessful in their attempt (because they showed their entire hand on Twitter) they were able to raise over $40MM dollars with more than 17,000 donors.

For those who have yet to travel deep down the web3 rabbit hole, a decentralized autonomous organization (DAO) is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government.

I first learned of DAOs from Packy McCormick’s piece back in March. He listed out a bunch of potential structures and use cases for DAOs. I will not attempt to rehash his or other’s research on the matter so I will just pick out the paragraphs that stuck out the most to me:

DAOs are novel, and they just feel kind of hippie. Giving ownership and control of a project or company to the community is just not how things are done. The more I think about it, though, the more I think that stakeholder ownership is the natural state of things, and that we just haven’t had the technology or models to coordinate such widely distributed governance and ownership before. 

I think just the idea of governance tokens and community opens people’s crypto wallets in a big way.

Right now, DAOs are in the experimental phase. The concept itself is working to find meta-product-market fit. At this stage, many people are drawn to create DAOs out of curiosity and a desire to experiment with new models of community participation, creation, and collaboration. 

Remember back in December of 2020 when Dave Portnoy launched the Barstool Fund to help small businesses get through the pandemic lockdowns? The fund has since raised over $40MM in roughly 9 months since inception. Not to discredit anything Barstool did or the fervor of the “stoolies”, but rather to use it as a comparison.

The ConstitutionDAO raised $40MM in a few days with the intent to buy a historical document. This set the record for the largest sum of money raised within 72 hours. Now imagine if a DAO was able to raise a ton of money for an actual noble cause in such a short time. That would be something I’d be interested in, as long as the gas fees can come down (Solana?). Maybe this turns into the new decentralized GoFundMe. Maybe it’s already out there. Someone point me to it.

While many secretly wanted the DAO to fail, in the end it still won. This was a watershed moment for the space. They won simply by putting themselves on the map and I think things are only going to move faster from here on out. There were lessons learned from the organizers to the errr donors, but as Packy put it: DAOs don’t need to be better yet, just novel. 

Novel indeed sir.

Maybe I should turn WeRamp into a DAO? 🤔

Performance Update:

Now let’s see how the People’s Portfolio did this week…

The indices bounced again this week. However, the 6-week rally for our portfolio finally came to an end. Blame it on Solana or Penn, take your pick.

Stocks closed mixed on Friday after new Covid-19 restrictions in Europe clouded prospects for the global recovery. Covid-19 cases are rising in the U.S. and Europe, according to data from Johns Hopkins University. It turns out stocks can’t actually predict the end of a pandemic.

On Friday, we voted Penn National Gaming (PENN) to remain in the portfolio for the next 6 weeks. This is our biggest loser of the year yet somehow it keeps getting voted back into the portfolio.

Target (TGT) is on the chopping block next week for the 1st time. We’re currently holding onto a 1.59% unrealized gain over the past 9 weeks. During that time, we’ve seen Target dip from 246 to 223 then bounce all the way up to 269 this Monday before reporting earnings.

On Wednesday, Target reported adjusted earnings of $3.03 cents a share, up 8.6% from a year ago and beating Wall Street's consensus of $2.83 a share. Revenue totaled $25.65 billion, up 13.3% from a year ago and beating analysts' expectations of $24.78 billion. The stock subsequently sold off as they cited margin pressures due to supply chain disruptions and labor costs during the call.

Keep an eye out for the new Twitter poll every Friday. Follow along in real-time with nearly 300,000 others on Public.

Portfolio News Highlights:

The biggest stories affecting our portfolio this week:

• Nvidia’s Blowout Earnings Push the Stock to a Record Close (Barron’s)

• IPO Leader Airbnb Tests New Buy Point As Travel Industry Explores Rebound (IBD)

• Target tops earnings estimates, but shares fall as retailer focuses on keeping customer prices low (CNBC)

What Else We’re Reading:

Blogs/Articles:

1. The Golden Age of Grift - Jack Raines (Young Money)

2. Decentralized Finance (DeFi): A Primer for Professional Investors - Ryan Rasmussen, David Lawant, Matt Hougan (Bitwise)

3. Tokenize Everything - Dave Nadig (ETF Trends)

4. Ideas Are the New Oil - Naval (Blog)

Books:

The Minimalist Entrepreneur: How Great Founders Do More with Less - Sahil Lavingia

Need new reading material? Visit my Amazon page for my most purchased book recommendations.

Tweets of the Week: