Altan Insights 100 (12/31/21): 1,039.91
Altan Insights 100 (1/31/22): 985.63
January Performance: -5.2%
QTD and YTD Performance: -5.2%
For the third straight month, performance for the Altan Insights 100 was negative, as markets hurtled lower in January alongside risk assets across the investment spectrum. Fractional markets actually held up considerably better, even at the high end of the market, as is monitored by the AI100; for example, in January, the NASDAQ dropped 9%, Bitcoin fell 17%, and Ethereum lost 27%. The slide in fractional, however, had already been in motion well before we turned the page into 2022, and as a result, it does not feel like January performance was a bleed-through of broader risk asset fears in other categories.
For the first time since August 19th, the index dipped below 1,000. From peak to trough, the last prolonged drawdown (20.7%) of the Altan Insights 100 lasted 146 days, spanning about half of the first quarter and the entirety of Q2. The current drawdown has been in motion for 127 days, and through the 31st, the index is down 15% from its peak. At no point in the prior drawdown was there a false dawn where the index broke above the 50 day moving average, and the same has held true here.
The mix of assets tracked skewed heavily negative this month - 51 index constituents lost value. On average, negative performers lost 15.8%. The negative performance was not all encompassing, though, as 23 assets gained value, and on average, those assets returned 20.2%. So, where the comps or underlying subject performance merit it, there's still a strong appetite for the right assets, and there may be a rotation effect of broader-based selling and rolling proceeds into a narrower scope of either 1) blue chip assets or 2) assets with clear catalysts. The latter was particularly prominent in January, as the key cards of elite NFL quarterbacks were frequently found among the top performers.
Four of the top five performers on a percentage return basis in January were sports cards. The bought-out National Treasures Mahomes card led the way, gaining 58.3%. LeBron's SP Authentic Rookie rallied from well below its IPO value at the start of 2022 to 25% above it by the end, gaining 50.4%. Tom Brady's SP Authentic Rookie on Rally gained 39.1%. Finally, the Stephen Curry National Treasures Rookie Patch Autograph on Rally gained 36.8% after Collectable's example was bought out in late December. Leading all assets was Babe Ruth's Batting Title Bat on Rally, which gained 80.4%, erasing large losses since IPO.
The bottom five performers are a mixed bag, comprised of mostly memorabilia, which has been prone to large declines absent comps that offer support to the contrary. Wilt Chamberlain's High School Uniform, a top Q3 performer, continues to pay the price for that rapid appreciation, losing over 40% for the month. The first edition Pokémon Box continued to slide, losing 53% amidst discouraging trends in Pokémon and a weaker sale at Leland's. Joe DiMaggio's game-worn jersey lost a massive 58%. Muhammad Ali's Hemmets Journal card on Rally dropped 62%, as a PWCC result confirmed lower levels for the card. The 90s Bulls Hardwood Floor was the biggest loser in January, losing over 64%.
In dollar terms, the top and bottom performers are quite similar, as is often the case. There is one addition on the positive side, as the Mahomes Laundry Tag card on Collectable, a high market cap asset, added $104k during the month with the Mahomes market perking up. On the downside, Wilt's rookie uniform lost $224k, which was a decline of 9%.
There are ten new constituents in the index to start February. Interestingly, just three are assets that started trading in January, meaning that seven actually performed their way into the index, which is unusually high. This is a factor of both the breadth of the pullback in January and in some cases, strong relative performance of those joining. For example, Batman #3 gained over 50% in January, and will provide sorely needed comic book representation. Of the ten assets leaving the index, seven lost double digits during the month.
There's a healthy shift in asset class allocation going into February. Sports cards fall from 45% to 42% of the index. The biggest gainer in allocation is Memorabilia, which now accounts for 10% of the index, thanks mostly to the addition of the Declaration of Independence. Sports Memorabilia drops from 24% to 22%. The other shifts are mostly small increments, and NFTs notably remain stable at 6% despite the challenged environment in January, thanks to new assets beginning to trade.
Shifts in the top ten constituents are relatively limited, with very notable exceptions. The Declaration of Independence is now the largest asset in the index, pushing various others down the list. The Wilt Chamberlain High School Jersey falls out of the top ten for the first time since it began trading, dropping all the way to 19th, and the Tiger Woods Putter rejoins the ranks.
We'll be diving deeper into both asset class and marketplace specific index performance in a Pro report later this week. We'll also investigate how equal-weighted indices performed, examining a broader swath of the fractional markets. If you want to understand where the opportunities and momentum in the market are, don't miss it - upgrade to Pro with a free seven day trial today!
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