Index Update: Momentum Drives Markets Higher in August
Altan Insights 100 as of 8/31/21: 1,048.02
August Performance: +15.4%
QTD Performance: +29.2%
YTD Performance: +4.8%
July was a phenomenal month for fractional markets, and the train gathered steam in August with even stronger returns. More notably, the Altan Insights 100 once again turned positive for 2021 in August, gaining 140 points and putting an exclamation point on a remarkable mid-year turnaround. While buyouts led the charge in July, there was just one buyout in the index this month, though it was quite a large one. Indeed, on the day the massive sale of Rally's Super Mario Bros was finalized, the Altan Insights 100 climbed 40 points, a single day record. That result aside, it still would've been a strong month for the index at large, as gains were incredibly widespread. 47 of the assets in the index were up during the month of July, and more jarringly, just 8 were down! This even compares favorably to a strong and buyout-heavy July, when 37 assets were up and 11 were down. On average, the assets that were up during the month gained 34%, while those that were down lost just 8% on average (also an improvement on July's +28% and -9%). We've seen fractional markets ride momentum in both directions, and certainly, momentum carried markets higher in August.
In news that should surprise absolutely nobody, the best performer for the month on a percentage basis was Super Mario Bros on Rally, up 133% on a net basis after the buyout. The Tiger Woods Tournament Used Putter was a close second, closing the month at $425k, up 125%, as Golden Age Auctions made waves with their sale of a Tiger Woods Scotty Cameron backup putter for $393,300. In third was the First Edition Pokémon Set on Rally, which was up 114% after finding itself at the bottom of these rankings back in June. The 1964 Dodgers Sandy Koufax jersey was fourth, doubling in value as a handsome buyout offer was recently rejected. Finally, the Goudey Babe Ruth card on Rally was up 93% in its recent trading window. Just two assets were down double digits in August - Banksy's Police Car fell 29%, while the Fernando Tatis Blue Refractor dropped 12%.
In terms of dollar movement, the top mover was again Super Mario Bros, adding $920k. The Wilt Chamberlain Rookie Uniform on Collectable, recently the subject of a rejected $2mm buyout offer, added $357,000 (a mere 28% gain). The Koufax jersey, Woods Putter, and Pokémon set added $256k, $236k, and $213k respectively. Last month, just two of the top five movers gained more than $200k, versus all five this month. Police Car by Banksy lost $186k, by far the largest detractor of the last two months. The next largest detractor was the Tatis Blue Refractor, which lost $25k. Thirty-two constituents gained more than that in August, underscoring again that the positive skew was very real.
We completed our monthly reconstitution of the index to incorporate the new top 100 trading assets by market cap, and there are some notable changes to share. First, seven assets in the index as of 7/31 have dropped out as of 8/31. One of which is Super Mario, and of the other six, none truly performed their way out of the index, though two were negative: the SP Authentic Tom Brady Rookie Card on Otis fell 4% and the 1956 Topps Roberto Clemente Basket on Collectable fell 6%. Two assets did perform their way into the index, however. The same Tom Brady Rookie, but on Collectable, gained 51% to re-enter the fray, while Manchester United bound Cristiano Ronaldo and his rookie card on Otis gained 154% in August.
There's a considerable re-shuffle of the Top Ten Constituents this month, particularly in the bottom half. The first four remain unchanged from July, but our previous #5, Super Mario Bros, was bought out. It's replaced by the 1954 Chamberlain Jersey, which jumped three spots to join the other Wilt uniform in the top five. The Kobe Farewell Hardwood moves from 7th to 6th, and the Lamborghini Diablo jumps from 9th to 7th. The 1986 Fleer Basketball Set on Otis also leaps two spots, from 10th to 8th. Rounding out the top ten and making their debuts are the Sandy Koufax Jersey and the Magic Johnson & Larry Bird Dual Logoman, which has recovered from a difficult start to trading. Departing the top ten was Police Car by Banksy, now 14th.
Some small changes to the sector composition occurred in the course of reconstitution. The biggest shift was a 3% addition to Sports Memorabilia, which now sits at 22% of the index, following strong performance and some key additions. Sports Cards added 2%, while Cars surrendered 2%, primarily due to assets that did not trade dropping out of the index - trading performance was actually relatively strong for the category in August. The Video Game allocation is down from 4% to 2%, largely the result of the Mario buyout. Art and Jewelry & Fashion each surrendered a percent.
While indiscriminate selling and negative momentum led the Altan Insights 100 lower in the spring, it seems a sustained reversal of that momentum has led it higher this summer. This month's results were not buoyed by a buyout frenzy as they were in July, though the one buyout did help, and trading activity has showed considerable strength. Surely, some of that strength remains a re-tracing of overwrought selling earlier in the year, but the incredibly widespread nature of the positive trading activity will be watched closely, as we've seen a boom and bust cycle already in this space's early days. To the degree buying activity remains or becomes indiscriminate and large in magnitude, there may again be choppy times on the horizon. Whether or not a ridiculously strong third quarter can be at all derailed in its final month, though, remains to be seen.
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