Investment options in music

My friend has improved at playing the guitar. Particularly during lockdown this year he has spent time learning, recording and sharing songs online. His repertoire has grown. An investment in his own musical skills which will pay off many times over.

His efforts got me thinking about investment in music. The result is a scattering of options in the form of a blog post. Here are a few random thoughts and discoveries from looking at investment options in music.

There’s a company called Hipgnosis which recently listed on the London Stock Exchange. It buys up music catalogues from artists or other owners with the view that the IP will retain its value and pay back the investment over time as the songs continue to sell. You can buy their shares on the LSE today.

In March 2008, Anchorage Capital Partners announced The Guitar Fund, a $100M fund investing in the rare and vintage guitar market, citing an average annual return of over 31%, according the ’42 Guitars’ tracking index. I would find these sorts of guitars impossible to let go of, and very stressful to keep with toddlers running around my house wielding weapons and generally destroying everything in their wake.

Music Memorabilia can also be a source of alternative investment income or growth if you have the time and the inclination. There is a market for almost anything touched by a rock star. Proof of the rock n roll connection is often the hard part. I have some signed pics of Clapton, Beach Boys, BB King and Aerosmith. Hopefully the signatures are all real. How would I ever find out?

How do you invest in music?

Timing

I just received an email from my bank. It was an investment piece describing various scenarios they had researched for the effect of Coronavirus on the markets. Lots of volatility, mixed with under priced companies which will be good bets when the timing is right. (That’s a ridiculously simplistic summary by me, but you get the picture).

So when will the timing be right? When there are no more cases recorded? When the death rate slows? (For the best stats check out worldometer.info/coronavirus).

I just got off the phone from my folks in Nairobi and I think we’re in for a long haul in Kenya and in South Africa. I don’t have the spare cash or the inclination to be making any bets at this stage.

I’d like to thank my bank for thinking of my cash investment at such a time as this though. Its comforting to know some things don’t change.

Match

Are you more of a corporate manager, or a children’s show presenter?

Do you have the time to enter an ultramarathon or are you better off focusing on the problems in front of you?

Will a holiday away actually be relaxing for you? Or should you rather sleep in at home?

Will you benefit from buying that new iPhone, or should you put the money into a savings account?

I think all of the options above are valid. They just need to match up with the rest of your life to avoid angst.

Behavior vs. logic

Behavior trumps logic. If you want to pay off debt quickly, the maths says that it is best to attack the highest interest amount first, then work your way down to the next highest.

However, it turns out that debt payments are not a maths problem, they are a behavior problem. Therefore the opposite (attacking the smallest interest amount first, and then using the payments from that amount to pay off the next smallest etc) is the best way to change behavior and cancel debt.

Small manageable victories are always more sustainable than large sacrifices, even if they are not scientifically going to get you to your goal most efficiently.

Extrinsic rewards

I would like to pass CFA level one. I have already tried the exam twice and failed! Like anything this is a multi-variable problem – I have a job and 2 young kids, I never did maths at school, I don’t have a lot of time for studying. Etc. Etc. But I was very close to passing the last time.

Previously all the reward for studying has been intrinsic. But now I am going to give myself some sort of extrinsic, materialistic, awesome enticement for passing the next exam in December. Hopefully this sort of motivation works. It can’t hurt. Candidates for the prize include:

  • an apple device ( I like the look of the new watch and the new phones and the new speaker)
  • a hifi device (my speakers could do with an upgrade)
  • a holiday (after all that studying)
  • a new bed….because sleep.

I am stretching the limits with this exam, but I like the challenge and am lucky enough to be able to try.

To be chanted like the Americans chant: C F A…C F A…C F A

Mixing business with pleasure

Business vs. Pleasure – Ideally one is the other, and vice versa. To that end, I will be posting a weekly update on my studying for CFA, Level 1. CFA will help me to be a better researcher, analyst and ESG integrator. I need to learn more and CFA will be a deep dive into investments.

My goal is to one day be able to finance responsible projects around Africa. Socially and Environmentally conscious capitalism are possible and are growing fields, but I need to understand the financial world better to get more involved in the movement.

This will mix with my creative pursuits on this blog. Business and pleasure all in one.