October Index Recap: Fractional Markets Take a Breather

Altan Insights 100 as of 10/31/21: 1,139.43

October Performance: -0.6%

QTD Performance: -0.6%

YTD Performance: +13.9%

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After three straight months of strong, positive performance, fractional markets were due for a respite from the feverish and often indiscriminate buying that took the Altan Insights 100 from trough to peak in short order. While the relentless march higher has sputtered, October wasn't particularly bloody (despite it being spooky season), particularly relative to some of the spring's tougher months. There was pain, though, and it was often the case that it was most acutely felt by owners of sports memorabilia and sports card assets that performed very well in the third quarter. Still, that was not an all-inclusive trend.

Over the course of October, the index alternated between negative and positive performance on a weekly basis, never moving more than 2.5%. Twenty assets were positive for the month, while thirty three were negative, the first time those figures have trended unfavorably since June. However, those assets that were up gained 13.5% on average, while those that performed negatively only lost an average of 10.6%, so while negatively-performing assets were more common, the magnitude to which they were negative was smaller.

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On a percentage basis, Avengers #1 on Otis was the top performer of the month, after rising sharply in the last week. The 1952 Topps Mantle was also a particularly strong performer, rising on the strength of the $2mm+ sale at Goldin Auctions. The Pele rookie on Rally continued its rise, while the 1986 Fleer Basketball Sealed Wax Box on Collectable rounds out the top five. NES Super Mario Bros was the largest loser, though much of that drop can be attributed to a spike in price at the end of September. Two modern card darlings were among the worst performers, with the Mahomes National Treasures RPA on Rally dropping over 32% in its trading window and Luka's Prizm White Sparkle falling almost 28% on Collectable. As previously noted, there was some weakness in game-worn this month, and large drops for Wilt's high school uniform and Jordan's rookie jersey are a few key examples.

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On a dollar change basis, the 52 Mantle card was the top performer, followed by Wilt's rookie uniform, which despite only being up 9.1%, added $255k in market cap. The performance of that asset is evidence that the pullback in memorabilia was not all-encompassing. Pele and Avengers #1 appear in the top five by dollar change as well, with the Shattered Backboard Air Jordan 1 rounding out the top five, buoyed in part by the record-breaking Air Ship auction sale. The detractors in dollar terms are the same as those in percentage terms, but appearing in slightly different order.

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Following our monthly index reconstitution, thirteen assets have dropped out of the Altan Insights 100. This is a fairly high turnover month, as a significant number of assets have begun trading in recent weeks. Of the assets removed, ten were on Rally, most of which were flat for the month. In fact, with the exception of the Jordan, Magic, LeBron Triple Patch Auto, which was down over 6%, none of the removals performed their way out of the index. Two assets, however, did perform their way in this month: Love is What You Want by Tracey Emin on Otis (up close to 17%) and the 03-04 Exquisite Box on Collectable (up almost 130%). The latter in particular benefitted from a strong auction comp for a case at Goldin Auctions.

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There is considerable turnover in the top ten assets this month. The Baltimore News Babe Ruth card takes the top slot. As a reminder, the current index policy is to include assets at their full market cap, as owners retaining equity could theoretically sell shares. We will continue to monitor and evalute this policy and its impact going forward. That inclusion bumps the Wilt Rookie Uniform and Honus card to #2 and #3 respectively, while the 1952 Topps Mantle and the 1979 Topps Gretzky hold pat at #4 and #5. The High School Wilt Uniform falls from #3 to #6. The Apple 1 Computer makes its debut at #7, as does the LeBron Carmelo Logoman at #8. The Tiger Woods Putter drops from #6 to #9 after cooling off following a roaring third quarter. Finally, Kobe Bryant's Debut White #24 Jersey debuts at #10, knocking out his Farewell Game Hardwood which dropped from #8 to #12. Also falling from the top ten were Mike Tyson's Punch-Out!! on Otis (11), the Lamborghini Diablo (13), and CryptoPunk 543 (14).

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There are also large shifts in sector composition from asset additions. Most notably, sports cards jump from 40% to 53%, largely owing to the Ruth debut. Sports memorabilia drop from 27% to 21% after a cooler month. Cars continue to have waning index influence, now comprising just 10%. Video games also saw a mild decline from 5% to 3%. Other sectors lost small proportional pieces, with the exception of trading cards which picked up a percent as another complete set of first edition Pokémon cards made its trading debut.

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At the end of the third quarter, we anticipated choppier times ahead for fractional markets, and thus far that's proven to be the case. Despite some strong auction results during October, the widespread fractional exuberance of the summer months hasn't yet carried over to the fall. However, while the rally may have stalled for the time being, it has not yet given way to a broad market sell-off, and more indecisive moments may follow heading into the last two months. As a result, it remains critically important to be thorough in research and asset selection and to prudently strike the balance between capitalizing on shorter term opportunity and positioning for the long term.

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