This article is not “click bait.” For a long time, Taylor has been in my life because my 12-year-old daughter and wife LOVE T. Swift. Frankly, I’m a classic rock guy, but my heroes are retiring or doing concerts from a chair (looking at you Phil Collins, still love you.) But when I looked to see what the Taylor “fuss” was about, I was frankly impressed. She and her team are a genius organization, to be this popular, this long and put out a product that changes but keeps original fans still engaged. When artists update the type of music they create, some people drop off because that was not what they wanted. With Taylor, she keeps those fans and attracts even more. Add to that the “Easter eggs” in all she does and it is a business strategy that should be taught in business schools. If her people see this, please tell her Abby loves her lol.
SAO PAULO, BRAZIL – NOVEMBER 24: (EDITORIAL USE ONLY. NO BOOK COVERS.) Taylor Swift performs onstage … [+] during “Taylor Swift | The Eras Tour” at Allianz Parque on November 24, 2023 in Sao Paulo, Brazil. (Photo by Buda Mendes/TAS23/Getty Images for TAS Rights Management )
Getty Images for TAS Rights Management
Back to business. There are 10 ways I see that Taylor Swift is like an alternative investment, let’s dive in.
Uncorrelated with Traditional Markets: Most alternative investments are not tied to the public stock market, that is basically the point of an alternative. Just like the fact that Taylor’s success isn’t directly tied to the popularity of the type of music. She has country songs, but is not considered a traditional “country star”. Her albums span many different genres regardless of market popularity of the genre. This is very similar to alternative investing because there are times that the thing out of favor (like multi-family) could also be a good place to invest. She also started as a young woman in the stuffy country music genre and made her own space there before moving on. As a teenager no less. The lesson, good alternative investments might come out when and where you least expect it.
BALTIMORE, MARYLAND – JANUARY 28: Travis Kelce #87 of the Kansas City Chiefs (L) celebrates with … [+] Taylor Swift after defeating the Baltimore Ravens in the AFC Championship Game at M&T Bank Stadium on January 28, 2024 in Baltimore, Maryland. (Photo by Patrick Smith/Getty Images)
Getty Images
High Growth Potential: Taylor’s ability to reinvent herself and captivate new audiences is by plan. Alternative investments also benefit from changing what you invest in overtime. Real estate has cycles, energy has a cycle, and many alternative investment strategies have their time to shine. Only if you are aware of the need to do something different will you make changes to where you invest. I’m not against the stock market, and when it goes on sale, dollar cost averaging would be a strategy to review. Revising at a strategic level where your money should go is a prudent choice. It’s not always going to be the same alternative, and someday it may not be an alternative at all; it may be going back “in” the market if the time is right.
Limited Availability: Ownership rights to her music masters (like owning a rare asset class) create scarcity and potential for value appreciation. She’s been at the forefront of artist rights and she understands that the creation of something out of thin air is a valuable service and should be rewarded as such. Taylor has walked a balanced path of serving her fans but not milking them. Most of the alternative investments I’ve seen work in good and bad weather are also limited in availability. These “small deals” are sometimes over $100M of a capital raise but that is probably a rounding error compared to the volume the largest non-alternative firms do in a day. This limited availability is usually because the underlying asset is a business or real estate, and there is an appraisal value that caps out the capital raise.
LONDON, ENGLAND – JUNE 23: (EDITORIAL USE ONLY. NO BOOK COVERS) EXCLUSIVE ACCESS. Taylor Swift is … [+] joined on stage by Travis Kelce (R), during “Taylor Swift | The Eras Tour” at Wembley Stadium on June 23, 2024 in London, England. (Photo by Gareth Cattermole/TAS24/Getty Images for TAS Rights Management )
Gareth Cattermole/Getty Images for TAS Rights Management
Active Management: Taylor’s strategic control over career moves (like hedge funds actively managing investments) can significantly impact returns. She doesn’t just stick with something until it gets unpopular, she makes moves before they are needed.
Intangible Value: Swift’s brand loyalty and cultural influence, like brand recognition in luxury goods, contribute to value beyond just album sales. There are many intangible values when it comes to alternative investments. As I wrote here, the best alternative investments have three things in common. They have a legal, ethical, and morally unfair advantage. That unfair advantage is a type of intangible value. Tell a room of her fans that you don’t think she’s a good singer and you’ll feel the impact of brand loyalty.
Long-Term Investment: Taylor’s career longevity suggests a long-term hold strategy, similar to private equity investments. She’s already rich, so she’s not just doing it for the money. She’s already a vocal supporter of artists’ rights and she’s comfortable making industry players uncomfortable. This long term view and strategic outlook is shared with most if not all alternative investments. All investments tend to need time for the investment thesis to be applied to real life. This is one of the few things alternative investments have in common with the public stock market. Only with a long term outlook can real wealth be created.
Emotional Connection: Fan devotion creates a passionate investor base, similar to the passionate following some alternative asset managers attract. Life is a “contact sport” and if you find a great alternative investment company or management team, there is a tangible emotional connection when your investment goes “full cycle” and you do it again with the same company. You do need to be cognizant that you are not just “running the same play” just because it’s familiar and easy.
SEATTLE, WASHINGTON – JULY 22: EDITORIAL USE ONLY. NO BOOK COVERS. Taylor Swift performs onstage … [+] during the Taylor Swift | The Eras Tour at Lumen Field on July 22, 2023 in Seattle, Washington. (Photo by Mat Hayward/TAS23/Getty Images for TAS Rights Management)
Getty Images for TAS Rights Management
Innovation and Adaptation: Her constant evolution in music and marketing is a major element to her historic success. Most alternative investments share the intent to be creative and adapt to a changing economy and the opportunities that exist in any situation reflects the need for innovation in alternative investment strategies.
Calculated Risks: Her strategic re-recordings and ownership battles are calculated risks, mirroring risk management in alternative investments. In a year that would exhaust anyone else, she decided to re-record all her previous albums and name them Taylor’s version. Which not coincidentally is the version played on the streaming services. Every investment worth its weight needs to take risks, and the more calculated you are when looking at the risks, the better able to handle rough patches.
Focus on Brand Building: Her focus on building a strong personal brand aligns with the importance of brand building in alternative asset classesThere are many alternative investment shops that “stay in their lane” and build a brand and reputation that gets stronger over time.
Are you in your Alternative Investment Era?
PARIS, FRANCE – MAY 09: (EDITORIAL USE ONLY. NO BOOK COVERS.) Taylor Swift performs onstage during … [+] “Taylor Swift | The Eras Tour” at La Defense on May 09, 2024 in Paris, France. (Photo by Kevin Mazur/TAS24/Getty Images for TAS Rights Management )
Getty Images for TAS Rights Management
Securities are offered through Arkadios Capital. Member FINRA/SIPC. Advisory services are offered through Creative Capital Wealth Management Group. Creative Capital Wealth Management Group and Arkadios are not affiliated through any ownership.
This material was created for educational and informational purposes only and is not intended as tax, legal or investment advice.
Source link : https://www.forbes.com/sites/fredhubler/2024/07/02/why-taylor-swifts-career-is-a-masterclass-in-alternative-investment/
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Publish date : 2024-07-02 07:00:00
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