Session 39 (of 42): Collectibles!

0:00 Hi, welcome back. In the last session, we started our discussion of alternative investments. Investments that are alternative to the traditional stocks and bonds and financial assets that so much of investing is centered on. We focused on real estate as the largest alternative investment class. In this session, I want to focus on collectibles and trophy assets. Let's start with collectibles. What is it that makes for a collectible? The first feature they have is they don't have cash flows. You don't hold you don't get any cash flows while you hold them, but their price might still go up. You're saying, why would people pay a price for something that doesn't deliver cash flows? It could be because it's scarce, but scarcity alone doesn't make for a collectible. The people holding it get some kind of utility from holding it.

0:48 And finally, individual perceptions about whether this this collectible will hold value will continue to drive the price. So investments that don't deliver cash flows but have some other property that makes them attractive to buyers are collectibles. Collectibles can only be priced. We talked about why earlier without the cash flows they cannot be valued. So the notion that you know and we'll talk about gold and artwork is a picasso undervalued overvalued. You can't answer the question. It can be underpriced or overpriced. They can be only priced. But the pricing process can be tricky for the following reasons. Remember, to price something, you got to find other things just like it and see what people are paying for it. With stocks, we talked about finding other stocks just like the stock you're looking at. With real estate, we look for other properties just like ours and see what people are paying for it. That's much more difficult to do with collectibles because finding something comparable can be really difficult to do. In fact, in you know, if you have a Picasso and you say, "I want to price the Picasso, it's not easy to find out the Picassos instantly." Which brings me to the second point, which is even if there are 25 Picassos out there, most don't get bought or sold on a yearly basis or even every decade. They're not that liquid and the market is not public. Many transactions are private and you don't get to observe the price. And finally, if you want to control for differences, how the heck do you do that with a collectible? Again, let's stay with the Picasso example example. You have three Picassos. What are the differences? You would control for the size of the canvas. That sounds like a weird thing to control for. So, you can already see the challenge in pricing collectibles.

2:33 So, in this session, I want to focus in on some collectibles. Let's start with artwork, right? It used Picassos repeatedly in the in the as as my example. But Picasso is just part of a much broader class of art world stretching back in time. Until very recently, probably until about 30 years ago, people had no idea whether art made money or not. You knew that very wealthy people owned art and sometimes that artwork went up in price. But starting about 30 years ago, you started to see indices that track the returns in artwork. Let me tell you though, these indices are not perfect. They're based on transactions and often you got to you got to classify artwork based on whether it's from the the Middle Ages, more recent into different types, you know, impressionist and then look at transactions and mark up prices based on that. But to the extent that you believe these returns, here's what you see. In the periods that people have looked at artwork, and I have the data only through 2010, artwork has lagged returns on stocks, it's neither here nor there because the sales pitch for artwork is not that you will earn higher returns than you will on stocks, but like real estate, it's that it's not correlated with what happens on stocks. So if you're you have the bulk of your wealth in stocks, maybe buying some fine art can help you hedge some of that risk because that fine art might go up in price in periods where stocks are down.

4:01 Now, of course, let's focus in even if you're convinced by that data on correlation on why artwork can be a challenging add-on for most of us. As I said, it's not a very liquid market, very few transactions. So it's very difficult to get the pricing right. Second is said even if you have the same artist you know comparing know what people pay across different artwork can be tough to do and with artwork there's a very real possibility that if you don't know what you're doing you will be scammed because there's a possibility of forgery and fraud. I'll be quite honest, I can't tell a you know some impressionist who who looks like a Monet and I would be a terrible buyer of artwork if I did not have some help. You're saying well I can hire an expert. You can but remember that's going to cost you. So you have expert appraisers. The transactions cost that comes often comes from the fact that you need to get artwork priced and expert appraisers are needed for that.

5:02 So you look at the big agencies, Suddies for instance, that sells artwork. You're going to leave a substantial amount of the price behind. There's a big transactions cost involved. So when you look at artwork, here are the things I would suggest you think about it. If you're thinking about adding artwork to your portfolio, first recognize you will be spending substantially more time doing research, collecting specialized knowledge if you want artwork to be part of your portfolio. Now you I've talked about paintings but art you know you could expand collectibles to look at baseball cards and that's a lot of research you would need to do if that is the place you want to put your money much higher transactions cost be ready for them. But my advice most of all with artwork or baseball cards or any other collectibles is buy them because you enjoy them. The emotional dividend part.

5:54 If you buy Picassos and you keep them locked up in a closet I don't think this is a great investment. But if you buy Picassos, you leave them hanging on the wall and you enjoy that Picasso every time you walk by it. That's emotional dividend. And sometimes you will be fooled. Even the very best art collectors, and you've probably read stories about this, have been fooled by fakes and scams. So, can artwork belong in your portfolio? Yes.

6:20 But walk in with open eyes. Let's move on to the second and perhaps the longest standing collectible known to man, gold. You go back to ancient times, you see stories about how gold was held by people because they thought it had value. So the notion that gold is precious is not just in the last few centuries. It's been essentially for as long as you have human history. And early on it should be it should be recognized that gold preceded paper currencies. And many of the governments that had issued paper currency ran into a problem which is people didn't want to hold paper currency because they didn't trust governments. So you know how governments got them to trust them? By linking the paper currency to gold. The gold standard very simply came into place because that was the way governments got people to hold on to paper currency. And in a true gold standard they allowed people to bring the paper currency in and convert it back to gold if they didn't trust the government. the the 1800 in the 1700s the the US government during the 1800s in fact both the the the English government and the US government initially made their currencies convertible into both gold and silver but both screwed up by setting the ratio of gold to silver too low in other words you needed too many too few units of silver to get gold so silver got you know and this is the basis of Gresham's law which is good bad money drives out good money. What happened was people brought in all their silver convert to gold. The gold standard but the gold standard know while it became you know the the central theme for paper currencies in the 1800s ran into two tens two two events that made it kind of fall apart. The first was the first world war. You're saying what do world wars have to do with the gold standard? Well the world wars governments had to spend money on weapons. They didn't have enough paper currency to do it as long as they stayed connected to gold. So many governments broke the link between their currencies and gold because they needed to print more money.

8:31 The US kind of hung in there with the gold standard until the Great Depression. In fact, there are some people who argue that the constraints of the gold standard made the depression greater. I mean, that's debatable, but it's it's and so after the go after the Great Depression, the US stayed on the gold standard but didn't allow individuals to convert their currencies into gold effectively undercutting one of the dimensions of the gold standard. Then the second world war and emerging from the second world war the US was the dominant global economy and the US dollar became the standin for gold in in fact instead of making their currencies convertible into gold other currencies made themselves convertible into the US dollar. The reason that worked though is the US still connected the US dollar to gold until you get to the early 70s where even that linkage was broken. So gold has been around longer than paper currencies and you can see its basis. So let's start with the with a very simple question. How good an investment is gold? And the answer is not very good.

9:37 In fact, if you look at pure statistics, your question is going to be why would anybody hold gold? So in this table I've compared the returns the annual returns you'd have made on gold versus stocks and looking from 1984 through 2024 and you're saying why are you going back only to the to 1984 until 1971 gold prices because they were linked to the US dollar really didn't I didn't reflect a demand supply set price it was set by governments for conversion rates so it's only since the 70s that you had gold prices that are based on demand and supply that we can use to Compute returns the last 40 years annual returns on gold have been about 5 1.5%.

10:18 Stocks 11.7%. It's true if you move it back to 1980 and get started there in 1979 gold does a little better but overall gold lags stocks in terms of returns and it actually has a slightly higher standard deviation. If you pause right there and say why would you ever invest in something that has a lower average return and a higher standard deviation. Let's hold on because if you stayed with the just these numbers, here's how it would pay off. A $100 invested in gold in 1984 would be worth $8.48 today. The same $100 invested in stocks in ' 84 would have been worth $8,300 at the end of 2024. And you can look across time how much of a price you'd have paid putting your money in gold. So now let's look at what makes gold essentially stand up. If you look at gold, it's not a great currency, right? It's true.

11:14 There have been gold coins over time, but it it's it's, you know, can you imagine going into a Starbucks and trying to pay with gold? It's very difficult to get in fine enough units to be able to pay for most of the things. It's not a great currency. It is true that gold has used as a commodity starting with fillings. You remember tooth fillings used to be gold, jewelry, even in some tools where you need essentially there is a use as a commodity but it's as a collectible that gold is stood out while you hold gold you don't get cash flows no but to the extent that governments and banks and individuals attach a value people hold gold. So let's ask the question is it a good collectible and in the process you can develop a framework for looking at any collectible first it is scarce why it is a natural resource at the end of 2025 it's estimated nobody knows for sure there are 244,000 metric tons of gold in the world it's true people are still extracting gold from the ground but only about 3,000 tons were added to that mix in 2024 and that's a typical year there's not that much gold being added and there's only so much gold left under the ground.

12:24 That puts it in a sweet spot. In what way? You don't want something for a good collectible. You want you don't want something that's so scarce that the prices and the price is so skyhigh that people can't hold it. So something like platinum doesn't work. It's too scarce. And something which is much more plentiful is not going to work because the price will drop very quickly. So scarcity, gold has it. Gold also has durability. If you look at the elements and you wonder why people pick gold as their instrument for putting for holding as a collectible, it is durable. It's very difficult to destroy gold. You can melt it. You can shape it into things.

13:03 It's chemically stable. It's it's malleable. So, you can make it into into different things and store it. And it doesn't oxidize or corrode. It has physical properties that make it durable and it's desirable. There's something about gold that exerts a hold on humanity. Think of all the fables, right? The Greek myth of Midas, the king who everything he touched on turn to gold. El Dorado, the city in supposedly in South America that was built of gold that actually create changed history, right? Because the Spanish crossed an ocean to colonize South America gold. So gold is a good collectible and it's collectible and and and its allure comes from all of those features. So when you look at other collectibles like baseball cards, pass them through the same list. Is it scarce? Is it durable?

13:55 Is it desirable? So let's look at gold prices from 63 to 2025 to see if we can crack the code for what makes gold an attractive add-on to to a portfolio or not. So in this graph I have the gold price by year from 1963 to 2025. So you can see the red line but I've also computed what I call the inflation adjusted price of gold. And for much of this table you can see the inflation adjusted price of gold really kind of stuck in it was stuck in in a quagmire.

14:26 It's only in 2025 that it's kind of popped through the roof. But for and we you know there's a theory out there that in the long term gold prices increase at the inflation rate. We'll come back and look at whether that's true. But you can see that the gold price over time has gone up. And in fact, let's focus in on what it is that drives the gold price up or down. Because there have been periods where gold prices have gone down.

14:51 You know, one way to think about you know, precious metals in general and gold specifically is to look at three factors. One is inflation and how it plays out in gold. The second is and there is a story of gold being the something you invest in when you're scared scared of political crisis, economic crisis. And there's a third story which is when real interest rates become low. This is what you make net of inflation by investing in bonds. When real interest rates become low, gold becomes more attractive because you pay a lower price for holding gold. Remember gold has no cash flows. If real interest rates are high, you give up more by holding gold. And there should be so let's say in fact those factors explain gold first graph I have is the percentage change in gold price every year was the inflation rate you can see the very strong connection the 70s but across this the overall time period the link between gold and inflation contrary to conventional wisdom is fairly weak the R squ is only 19% another way to think of it 81% of the movement in gold prices on a year-to-year basis have nothing to do with inflation, but there is a link. Every 1% increase in the inflation rate creates a 3.92% increase in gold with a standard error.

16:11 But if you focus in by decade, you're going to see why gold might be a better inflation hedge than that 18 or 19% R squar would suggest. This is a slightly modified version of the investment returns by decade I showed you in the real estate section where I've moved everything by a year to and made it a more up to- date through 2025. So as I said between 31 and 60 I've not even tried to compute the return on gold because it was linked to the dollar. It looked like a it looks like a flat line.

16:44 Starting in the 60s I'm I can compute an annual return and in most periods gold lags stocks and even bonds but the 1970s clearly things get blown out of the water in a year which was which was not a great in a decade which is not a great decade for financial assets. gold at 38% annual returns each year. But it was also a period where unexpected inflation was high. I want to draw a contrast between expected inflation and unexpected inflation.

17:20 When you invest in financial assets, you build in an expectation of inflation being 3% 5% 7%. When you build it in, it's already priced in. Why? Because if you expect inflation to be 5%, you set interest rates at 7%, you're covered. And you can say the same thing about stocks. It's unexpected inflation that's deadly for investors. What's unexpected inflation? Let's go back to our example. You thought inflation was going to be 5%. You set interest rates at 7%. And you went home happy. But let's say the actual inflation rate was 12%. You had unexpected inflation of 7%. 12 - 5. As a bond holder, you're badly hurt. And in fact, unexpected decades when unexpected inflation has been high. 1970s is the most classic example have not been good for financial assets. But gold deals with unexpected inflation really well.

18:11 In fact, you could argue that when you have unexpected inflation, people flee paper paper currencies, they go into gold. In fact, one reason, and this is something we'll talk about more, that gold has done so well in the last 5 years might be because unexpected inflation again has been higher than expected. 2022 was that breaking point where inflation jumped above expectations. So here's how I think about gold and inflation. Gold is not a great hedge against year-to-year inflation if that inflation stays moderate. So if inflation goes from 3 to 4% or 4 to 5% gold is not going to do much for you. But if inflation jumps from 3 to 8% 3 to 10% gold is the place to be. That's the basis for gold as a hedge against inflation. Say, what about crisis? Now, of course, we could go back in time and isolate crisis. A 2008 was a crisis.

19:08 2020 was a crisis. But I think that's hindsight. So, instead of doing that to get a continuous measure of crisis, I measured two risk premiums which you've seen before. One is the equity risk premium which measures whether equity investors are in crisis. When they're in crisis, the equity risk premium becomes higher. and the BAA spread over the T- bond rate again measure of you know scare of worry in the bond market in fact if you look at 2008 you can see how those numbers spiked and then I asked a question how do gold prices work with you know how do they move relative to these measures because both the equity risk and the bond default spread then become measures measures of crisis the R squar is close to zero so you're saying that's terrible I thought gold was a hedge against crisis. Again, I would like to draw a distinction between small crises and big crisis.

20:02 Just like I drew a distinction between moderate inflation and hyperinflation. Gold didn't do very well with moderate inflation, did really well with hyperinflation. I'm going to make the same argument about gold and crisis. If your crisis is a run-of-the-mill crisis, and you can use your own definition, run-of-the-mill, gold is not going to be the place to go. But if your crisis is potentially catastrophic, gold should then behave much better in terms of responding to that. So as with inflation, it's the big events, the unexpected events, the potentially catastrophic events that gold protects you against. Finally, on real interest rates, this actually has the highest R squared when real interest rates are low. And the way you measured real estate, real interest rates in this graph is until about 2000. And I measured real interest rates by taking the nominal interest rate, what you see on a T- bond rate, subtracting out inflation. Starting in 2000, I have something I can use which is a marketbased measure of real interest rate in the form of a tips rate. This is an inflation protect treasury bond. The bottom line is no matter what definition of real interest rates used, there is a link. Low real interest rates are good for gold prices. High real interest rates are bad for gold prices. So in summary, inflation crisis and real interest rates and in summary again while it's touted as a hedge against inflation crisis, it's really a hedge against hyperinflation and potentially catastrophic crisis. Now things to think about when you think about should I add gold to my portfolio. It's really insurance against extreme events rather than small events that are more within the bounds of what you'd expect to see in an economy or markets.

21:46 So in October of 2025, gold prices it soared above 4,000 for the first time in history. So if you look at gold prices, the question is, you know, so in October 2025, the question is, is gold overpriced? Well, one way to measure that is look at at it relative to inflation. In this graph, what I have is the gold price divided by the CPI index by year. And if you stop went all the way through 2009 and you stopped there, you can see why people really love this measure, right? Until 2009, gold and inflation seem to be kind of locked at the head. In fact, a very widely cited paper called the golden dilemma to you know it it's a book it's a paper which looked at gold prices over time and concluded that you know inflation is what drives gold and if gold prices go above this line then gold is overpriced. In fact when the paper was written in 2013 the argument is gold is overpriced it's going to go back down. But if you look at what's happened since, it initially went down, but it's kind of sold. So the there's clearly a break with a historical relationship at least in the last decade. Now, this might all dissipate. Gold prices might go back to where they should be, but that's something to think about. The other thing you can price gold against is the other widely used precious metal, which is silver. The median value for gold to silver is about 57. gold prices at 57 times silver prices. And you can see that, you know, kind of ups and downs over time. But clearly, you've blown through that again. In October of 2025, gold prices were 85 times silver prices.

23:30 So, both against inflation and against silver, you could make the argument gold is overpriced. Now, before you get too excited about that conclusion, know it's based entirely on looking at history that there's going to be mean reversion. And the push back against that is maybe something has shifted structurally that can explain why gold prices should be higher than they've been historically both against inflation and against silver. You may say what could have shifted. I I don't know but I I'll throw out four things that might potentially explain why gold should be priced higher than it's been historically. The first is gold has become much more liquid. There are more ways you can buy gold. Instead of actually having to buy physical gold bars, now you can buy gold ETFs. There are ways in which you can trade gold. So the liquidity barriers have come down and maybe that in remember gold is a is a collectible demand and supply. So if there's more demand because more people can buy gold that could potentially push up the price.

24:32 The second is remember gold competes against paper currencies. Who issues paper currencies? Central banks. And what do we think about central banks? Well, clearly a lot of people have lost trust in central banks partly because of what's happened since 2008. The view that central banks have lost control of the currency and are doing the bidding of governments. True or not, there is this lack of trust. And if you have a lack of trust, that mistrust is going to feed into a higher gold price. The third is the global world order that we set after the second world war that held for several decades is starting to see stress, right? To begin with, the US dollar which was the center of the universe and every other currency was measured against it has become shakier as a global currency and there's no other currency right now ready to step in the euro, the Chinese yuan, the Indian rupee, they're not ready to be global currencies and maybe they never will. The the go gold is reasserting its central role as hey you don't trust the dollar. say you know relate back to us we're the base and the other part of the global economic order that's shifting is you know for much of the last the second half of the last century the US was the center of the global economic system and things revolved around it globalization free trade the things we took for granted that have all come under assault in the last decade or so across the world maybe that contributes to gold prices going up as Whatever the reason, before you jump out there and sell short on gold because it looks expensive, think about those structural changes. So, here are the ways gold may or may not fit in your portfolio.

26:17 It there are people out there to whom gold is the center of their portfolio, right? What kinds of investors is that the right thing to do? Remember, gold is a hedge against extreme events, hyperinflation, catastrophes. If you're an investor who believes that the probability of those things have increased significantly, then you can make gold the center of your portfolio. But remember, if you're wrong, there will be a price to pay. You would have earned a lower return than those people who don't if that doesn't happen. Okay? No catastrophe, no hyperinflation. You could buy gold as insurance. So, if you're worried about these events, but you don't think they're likely, but they could happen, you could add it to a portfolio composed of stocks and bonds to provide insurance against those extreme events. As you saw, gold is momentum up, momentum down.

27:08 It's you can trade it. And if you're good at trading, who knows? You can end up becoming rich trading gold by getting in at the right time and getting out at the right time. I don't own gold in my portfolio, you know, but I do look at gold prices because there's a signal there that I can use. If you look at that graph of gold prices rising, there's at least a signal there that inflation is not benign, that there's at least a possibility that inflation could become that there could be hyperinflation, a crisis, and I've got to factor into the types of stocks I buy in even my asset allocation mix.

27:44 So, make a choice. There's no right choice that fits all people. But you can see how gold is something to think about. So let's take each of these. There's a core investment. You know, when does it make sense? Most periods you're going to lose money, but to the extent that you distrust financial assets. You think a catastrophic risk is coming. Go for it. I'm not going to contest you. There are people who look down on gold bugs. People invest their money in gold. I don't. I can understand the draw. I know you you look paranoid, but remember paranoia is not always wrong if there what you're paranoid about is on the horizon as insurance.

28:20 And you saw this. It's a weak hedge against against small movements in inflation and small crisis, but it's a pretty good hedge against really catastrophic events. Good to add to a portfolio composed of financial assets, especially if you're older and more risk averse, right? It'll help you sleep better at night. You could trade it, buy and sell. I mean, think of how much money you could have made if you could call the low points and the high point points. The only caveat I would add is while you can make money riding momentum, you got to get out at the right time because if you stay in too long, you'll lose all your profits.

28:55 Those people who made money on gold between 77 and 79 lost it all over the next five or 10 years because they stayed too long in gold. It's a pricing game. You've got to detect mood and momentum. And in this case, that might come to detecting how scared are people of catastrophic risk because that might be what causes those shifts. And finally, as I said, gold is a signal. Now, I don't even though I don't hold gold, there is information in gold prices that I should be using in deciding my asset allocation mix. How much in stocks, how much in bonds, how much in bills, how much in real assets, and also what types of stocks I might buy. So if gold is signaling that higher inflation is a very real probability, I might buy more, you know, companies with more pricing power because they can hold their value better if things go bad.

29:47 The last set of collectibles I want to talk about are trophy assets. You know, trophy assets are assets. They have cash flows. You can value them as assets, but that value is completely washed up because they have an emotional appeal that makes them priced. they're going to be de there's demanded supply that sets a price well above the value and there's no reason for convergence. So unlike a stock where you say the value is much much lower than the price the price has to converge value with a trophy asset that might not make them that might not happen. What's a trophy asset? It first it has to be unique. It has to be very rare. We talked about scarcity. This has to be really scarce. So as examples of trophy assets, you can take properties like the Ritz Carlton, right? Of itself, you can buy it as real estate, but you're also buying a legendary hotel. It could be a publication like The Economist publication. You can value it as an asset, but it is the economy. It's been around a couple of hundred years.

30:44 No. And one of the things I'm going to talk about is trophy assets. It's become, I think, the biggest class of trophy assets, sporting franchises. You want to buy Manchester United, it's unique. A Premier League team is not easy to get. It is scarce and is often bought and sold for non-financial reasons. Let's stay with Manchester United. Why would you buy it? Well, clearly you're not buying it because you think you're going to make money as a business. You're buying it because you now own Manchester United.

31:14 And if you're a United fan, this is your dream, right? Who hasn't dreamed about owning the team that they cheer for every year? It's hell for non-financial reasons. Now to to see how sports franchises evolved over time, go back almost a hundred years when the Rooney family in Pittsburgh bought the Pittsburgh Steelers for a pittance and it is worth the pittance then, right? It was a NFL team and there was no NFL. So now American football was just coming into being as a business.

31:45 And bought it for $2,500. They still own it now. by by most estimates it's worth 4 billion but there is no way if you value the Steelers as a business and you can right it is a business you value it as a business you're going to hit anywhere close to 4 billion in fact I will make that assertion you pick sports franchises in some of the most widely followed leagues football in the US soccer in in Europe cricket in India you can't get close to the pricing so trophy assets to illustrate the disconnect between pricing and operating metrics. Take a look at this table. It looks at some of the major sports franchise leagues around the world. It looks at the collective pricing. So basically what you've looked what I've looked at with the NFL is taken every NFL team taking the estimates of pricing and their estimates. The collective pricing is 132.5 billion. Collectively NFL teams had 16.1 billion in revenues, 4.7 billion operating profit. Then if you look at net profit, even worse numbers, they're trading at 8.23 times revenue. So I know companies that do that, but the companies that do that are companies where the revenue growth is going to be 30, 40, 50% a year. That's not going to happen here. You look at any traditional pricing metric and you look at across the leagues, you see that companies that trade trade at a pricing that has lost connection with the numbers. You're saying, then what explains the pricing? If you get a chance, take your favorite league and take a look at who owns the franchises in your league. I took the in the in this case, I took the the the NBA, the the National Basketball League, and I looked at the teams in the league and I looked at the owners of the teams.

33:34 You're saying, where are we going with this? Most of them are worth hundreds of millions or even billions and most of them made their money elsewhere. They didn't make their money in the sport. They made their money as private equity investors in hedge funds, in media. They're taking money they made elsewhere and they're buying a sports franchise. Why? It's a toy. It's a very expensive toy. But think of how much fun you can have with this toy. No, I I remember valuing the the Los Angeles Clippers a decade ago when it when when NBA teams was just taking off as franch as as as these trophy assets. And I remember valuing the the Clippers using the best possible fundamentals I could get and coming up with the value of about $800 million. And Steve Armer, the ex-CEO of Microsoft, had bought them for two billion. And the only way I could explain the 1.2 billion difference was he's buying an expensive toy. And who can blame him? In fact, if you've ever seen a picture of Steve Balmer on the sidelines of the Clippers, I would strongly suggest if you haven't, take a look and think of how much and and you'll see how much fun he's having on the sideline with his team and his friends able to watch him watch his team. Increasingly, sports franchises are becoming wealthy people's toys. And as long as the number of franchises is fewer than the number of billionaires, you're going to get this process play out. There's no be no correction happening. So, can you buy a sports franchise? Well, if you're worth hundreds of millions of billions, of course you can. You need a lot of money.

35:13 But, you know, it is an illquid market and you have to get a buyer to get rid of it. And that buyer comes from a very small subset of people. So, you got to accept that this is a trade. You're pricing it. And if you want to make money on it, you got to find somebody else who wants it even more than you do. There is potentially a way you can make money on it. Even if you're not worth a billion or hundreds of millions, you could pick a league which is still up and coming. Remember the Roies bought the Steelers when the NFL was not a league, when the football was just taking off. Maybe you can find the next NFL. At the risk of being laughed at, hey, what if you think pickle ball is going to become the next great sport and you find a professional pickle ball team that you can buy for 500,000, the New York pickle ballers or whatever they decide to call themselves. If you're right and pickle ball takes off, you will be like the Roies. I know it's a long shot, but if you truly enjoy watching pickle ball and this is your thing, hey, why not? You know, it might be like buying a young under the radar company. So, here's the bottom line. Collectibles come in lots of different forms and they all come with limitations. They have no cash flows and you hold them. They're often illquid. They can be difficult to authenticate.

36:32 But as a class, the reason you might be attracted to them is because you might enjoy being in that space. You might enjoy fine art. You might enjoy baseball cards. You might enjoy sports. you get it and if you're willing to spend time and research it, maybe you can have a differential advantage over other players and you get emotional dividends while you hold them. Now, you can also hold collectibles as a hedge, right? So, if you are able to buy a piece of a franchise and put it into your mostly financial asset portfolio, that could still pay off. So, it's a choice to make and I hope you found the session useful in making that choice.

37:12 Thank you very much for listening.