We need to get back to reality….
It was just before Christmas that I sent the last of these missives and what has happened since then? Not much in our personal lives obviously, where ‘have you had your jab yet?’, ‘Pfizer or AstraZeneca?’ and ‘any date for your second?’ have been the basis for most conversations. But, given when I wrote that piece I thought I may get my first dose of the vaccine in May and I actually received it two weeks ago proves that things are a lot brighter than we would have dared hope at that time.
Another thing that doesn’t seem to have been happening is baby making as the birth rate has fallen. Perhaps this is no surprise when government figures indicate our money in the UK is either being saved, spent on home improvements or moving house. A less sexy triumvirate it would be hard to find.
However, not everyone has been considering whether Magnolia or Dusky White would look better on the fireplace wall. In a clear indication that some people have too much money and time on their hands, there has been an explosion in something I did not even know existed. They are known as NFTs. At first I thought this might be a rude text abbreviation, but instead it stands for Non-Fungible Token and it appears that a lot of people with money to burn want to own one.
Now we are all familiar with buying artwork where a physical object is purchased and hung on your wall, but when you own an NFT you in effect become the registered owner of said item on a blockchain. This does not mean that only you can see it, charge others for looking at it, or get any royalties when somebody looks at it, just that it is “yours.”
The sums involved and number of items are staggering. For example the CEO of Twitter recently sold his first ever tweet which said “just setting up my twttr” for $2.9m, and a five second highlight of LeBron James doing a dunk went for $200,000.
I may be missing something but to me this is a bit like companies that sell parcels of land on the moon or stars in the universe. In those cases it is fairly harmless and I assume they are often given as a novelty gift. I hope nobody that has bought a 1sq yard on the Sea of Tranquillity, or a star in the Milky Way has ever thought of it as an investment that somebody may want to buy at a higher price in the future.
The advocates of NFTs say these are the new collectibles, and even though I may find myself eating these words in the future, what comes to my mind is ‘a fool and his money are soon parted.’
No, if I had a spare $2.9m burning a hole in my pocket the last thing I would regard as a good investment is a miss-spelled tweet especially as a lot more tangible assets, you know, things that exist and you can touch and, heaven forbid, may even pay you a dividend for owning them, are available.
The pandemic has been a challenging time for a lot of businesses but those that have survived with strong balance sheets are likely to become even stronger once the recovery gets into gear in the second half of the year, especially when we can do our best Mel Gibson impressions and shout “Freedom!” as we drive to the shops and airports.
It may not be as fashionable as showing people a clip of a basketball player making a dunk and saying “I ‘own’ that” but using spare cash to invest in these “real” assets is likely to be more rewarding in the long run.
On a different note, as many of you know we have been sponsors of Stephen Gallacher for a number of years. As well as being delighted to continue our association with Stephen, we are also now sponsoring Calum Hill. Calum is one of Scotland’s most promising golfers and is ranked 120 in the world which makes him the third highest ranked Scottish golfer at the current time. We hope this will be the start of as long a relationship with Calum and, in this most special of weeks for golfers, hopefully we will see him stride the fairways of Augusta in the future.