Crazy investment idea

I’ve come up with a crazy investment idea and I need someone to talk me out of it before I buy a plane ticket to Chicago.

Recently, me and Maddie went to the Seattle Art Museum. That last sentence is grammatically incorrect. Me is an object pronoun so it should be acted upon. The sentence calls for a subject pronoun so me should correct it. Rather than utilizing the backspace button, me thought it was important to point out the common grammatical malfunction. Furthermore, the sentence is also virtuously wrong. The chivalrous thing to do is to put the girlfriend first, so the sentence should be re-written: Recently, Maddie and I went to the Seattle Art Museum. 

Enough about grammar, the museum showcased many inspiring exhibits. Inspiring in the sense that I bought the museum tickets a consumer, but left the museum a creator. That’s right, I’ve wandered out of the flock. Most of my daily feed is recycled thought, so it’s refreshing to see original creation. 

The art museum inspired me mainly because many of the paintings, while obviously professionally done, were unimaginative. I was inspired because I was unimpressed. If this was the showcase of today’s greatest artistic minds, why did so many of them paint circles and scribbles? Even I had that foresite as a toddler; just check out my early works: Coloring Book Num. 5 - 1999, Jackson McKenzie. Easy to say from the viewer's side, but I could do better. The lack of imagination left me wanting to create my own masterpiece. It made me want to rush home and write. (Hoping to have my book done by 2023.)

Apart from feeling inspired to create, I also left SAM with another desire - the desire to invest in fine art. The gift shop included originals with price tags, opening my mind to the idea, and I’m ready to use my Catan bartering skills to turn sheep into wheat. Every month I throw my money at the S&P, and I’m getting tired of aiming at the same target. It’s not really a fun tangible asset that you can show your friends. 

Me, driving down main street with a friend, in a hypothetical scenario: “You see all these businesses? I own one 1-billion-nth of them?”

Friend: “That’s pretty cool. Does it mean we can get a free milkshake?”

Me: “No, but I get a dividend at the end of the quarter. I guess I could use that to buy a milkshake.”

Friend: “Why not just use the money you would invest in the S&P to buy a milkshake now?”

Me: “Well, with the interest I’d make I could get extra whip cream, extra toppings, and extra milkshakes later”

Friend: “How long does that take?”

Me: “Just one lifetime. Why have one milkshake now, when you can have fifteen milkshakes at 65, right?”

Friend: “Sure. See you in forty years.” 

The friend opens the hypothetical car door and barrel rolls into a Dairy Queen. I’m left in the driver seat, with a handful of pixels telling me I’ve got ownership in an asset I can’t see.

After leaving the art museum, Google Maps helped us find a nearby art gallery. For the price of three stimulus checks, I could buy an original Chihuly painting. (My sister, a ramen-broke college student, has started using a stimulus check as a cost metric and I’ve adopted the practice.) I don’t have a strong background in art appraisal, so Maddie decided it was a bad idea to invest $3,600 on a whim. I’ve since run the numbers and she was right. Nonetheless, the desire to invest in something physical still remained, so I decided I’d look into gold. 

This yielded a dead-end as well. Gold is tricky in the sense that the return highly depends on when you buy it. The price jumps around from year to year. If you narrow in on a specific time period, you can convince yourself of colossal gains, like 32% in 2008. But from a 20-year or 50-year lens, the annual return is about five or six percent - less than the S&P. Rock collecting is cool though, so I don’t fault anyone who invests in it.

I looked at other options - cards, coins, crypto - until I found the option crazy enough that I could get behind: rare books. Do you know those people who after researching a topic for 30 minutes from sources they self-selected, they declare themselves subject matter experts? Well, totally different circumstances, I spent a full 60 minutes reading articles on the rare books market, so I’m well-versed in the area. The value of rare books comes mainly from their print edition and unique characteristics, i.e., is it signed? The only books worth investing in are well-known, first editions with a low production count. These books are the authors' big break and fill top-ten lists. Some examples: Lord of the Rings, Harry Potter, Frankenstein. The value of a book usually spikes when the author dies, so I’ve decided to invest in a book where I’m convinced the author will die soon. 

George R.R. Martin is nearing the end of this actuarial table at age 72. His Game of Thrones books have captured a die-hard following. And I’m ready to capitalize on the situation. Here’s my crazy investment idea: I buy a first edition Game of Thrones book for about $500. I sell a first edition, signed Game of Thrones book for about $2,500, the current market rate. The cost to get the book signed is about $1,115. Thus, for a $1650 investment, I make $860 or a return of 52%. 

Obviously there are many variables that could cause this idea to deflate, so let’s ignore those and instead focus on the variables which make the idea great. First off, I’d get a free trip to Chicago. George’s next book signing will be in 2022, in Chicago, at an event called Chi-con. When the idea pays off, the return pays for the trip. The plane ticket would cost $337, the event entry - $110, the hotel - $468, arbitrary Uber costs - $100, and food - $100. Apply frugality and all of those could be cut significantly. Plus, most hotels offer iron-flip waffles which are one of my favorites foods. #EnjoyTheSmallThings

Secondly, the $2,500 sale price of the signed copy is based on today’s rate - it could be more in the future. My research indicates that the book will increase in value once George embodies the true spirit of a Game of Thrones character. If all goes well, the book could double in value. The annualized return of the idea beats the S&P, produces a tangible asset, and is something fun I could tell my friends. It checks every box.

All that being said, I’m not pulling the trigger quite yet. I’d need to be fully convinced the idea is good and I’m only 65% of the way there. During my research, I scraped auction websites for data points, but eight points isn't a convincing amount. In fact, it isn’t even statistically significant. Furthermore, based on how long I’d have to wait to sell the book would determine my annualized return. If it’d have to wait 20+ years, it’d be less than the S&P, which I’m using as a benchmark to determine if my crazy investment is a good idea.The best investments are the ones that still work out even against negative factors; this idea doesn’t quite have that.