Hustle Capital // Intel // Jan. 13
Public Markets
Seven trading days into 2022, looking at the YTD S&P 500 returns will elicit a 😐. Meh. Down a little more than a percent after a great year…no big deal, right!?!
But if you’ve dug below the surface at all, there has been some decent action.
More details:
Tech stocks are anything but 😐. They have been 😫 instead. After going up 0.6% on the first day of the year, the Nasdaq went down four days in a row..a whopping -5.7% before recovering a bit.
Value stocks have been on an absolute tear. Outperforming growth by over 3.2% in a day on Jan 4.
Bonds have gotten SMOKED. The 30yr Treasury bond declined almost 10 percent in price last week as rates rose significantly. Aren’t bonds supposed to be boring/safe?
Private Markets
Pitchbook just released their US PE deal metrics for 2021 and, to the surprise of literally no one, it was a banner year for deals, exits and capital formation, though not one in which any records were broken. Interesting takeaways: Growth Equity was the most active sub-asset class, seeing an uptick of 25% in deal volume for the year. But it was also a year in which capital was spread across deal stages, sectors and geographies, with few notable areas of concentration.
We’ve fired the starting gun for Industry Report Season. Still coming are Preqin, Bain Consulting, EY, KPMG and more.
Residential Real Estate
Home prices are a local phenomenon most of the time, but right now we are facing a national housing shortage. Twitter user Mike Simonsen at Altos Research posted a great thread on supply & demand dynamics heading into the active spring buying season. Takeaway: if you’re in the market for a home, buy ASAP because in 10 months, average prices will be 10-12% higher. You can see in the second tweet in the thread that sellers are already marking up their prices big time in anticipation of strong demand.
Digital Assets
Nike continues to make moves in the Metaverse. In December, they acquired NFT studio RTFKT, with whom they worked on the virtual Cactus Jacks for Travis Scott’s concert on Fortnite and with whom they’ve already sold IRL and digital shoes already.
Other apparel makers are taking note and registering IP left and right.
How to protect trademarks online? High-end apparel makers are leading the charge. Roblox is facing scrutiny of user-generated content that may infringe on trademarks. As more platforms emerge, the notion of protecting intellectual property will become even more complicated.
“While brands deemed to have famous marks, such as Gucci and Louis Vuitton, are likely to succeed in persuading courts to recognise their marks (and overrule land grabs), smaller brands “could see themselves preempted by opportunists in the digital space, much like fashion brands that achieve even a modicum of exposure in the US get hijacked by opportunistic registrants in China,” Trexler says. As the market for digital goods and NFTs matures, he expects brands will step up legal action.”
Apple, preparing to release a ‘mixed reality’ device, will apparently not optimize it for the Metaverse. While other Metaverse boosters (read: “Meta”) have focused on immersive experiences, Apple is making the bet that it will take time for users to want want to ‘live’ there.
They are optimizing for episodic use, as Mark Gurman from Bloomberg’s Power On blog explains:
“He noted that Apple believes that new visitors to virtual space will be more interested in “bursts” of activity rather than the immersive experience pushed by Mark Zuckerberg and company.”
Which leads to an interesting question: as apparel and other consumer goods firms continue to enter the Metaverse (and not just buying digital billboard space), what’s the craziest CPG play we’ll see this year? Will Red Bull partner with Decentraland to sell you a digital beverage that actually gives you wings? We’ll definitely see both serious and novelty approaches imminently.