Opinion: cryptocurrencies are for boys. You should invest in records


Opinion: cryptocurrencies are for boys. You should invest in records

NiT chronicler Nuno Bento explains how you can make money with good music.

Here is the money.

You will hear your parents and grandparents say that buying gold is the best investment. As a cryptocurrency, exchange or mutual fund, it is not risky and offers a safe return. Okay, but what’s the joke? Unless they’re fans of numismatics, none. And even if it does, the level of fun is seriously controversial. Do you have records? Hours of buying and listening fun and an unbelievably high return. Of course it’s plastic wrapped in a cardboard sleeve, but if you know how to “invest”, that is, if you know what to buy, vinyl will leave the cryptocurrency in its tracks. To like? Here Uncle Nuno explains.

The logic of the market for records has its nuances, but is basically relatively easy to understand – the price is a direct function of the rarity of the record and its demand. The discs released in the 90s and 00s (“dead” decades vinyl) had limited pressure so prices for these discs are invariably high, although the demand is not very high. When the demand is high, the price explodes. A simple example is Radiohead’s discography in the 1990s.

Assuming Radiohead is a very popular band including today’s (12.6 million monthly listeners on Spotify), the original printing presses for their albums will always be expensive. Introduced in the 1990s, this price has skyrocketed. and in the most established albums the price is even more obscene. If not, let’s see: the average price of the first British pressing of “Pablo Honey” – a rare but not very popular album – is in the order of € 100 (Discogs data); The first printing machines from “The Bends” and “Ok Computer” (the most popular, but also the most common) cost around € 200 – twice as much as “Pablo Honey”. Any of these records are always an instant buy if you find them “in the wild” (which, as I said, gets lost in a record store) at a reasonable price under $ 100. The investment is guaranteed to return.

This is exactly what happened to me this weekend when I was on my record store tour in London. On the same day I saw Beach Boys’ Smile Sessions and David Bowie’s Singles Collection in various stores, both for £ 50. I bought both without blinking. When I got home, I posted Smile Sessions for three times the price on eBay, and it sold two days later. I didn’t put it up for sale, but if it went on eBay I would easily double it up. Clean, clean.

The nuances of this market are key to knowing where to invest. Any limited edition is a good investment right from the start, as the price will automatically double when it is withdrawn from circulation. And there is never any devaluation on this disc. If for any reason the price doubles, it will stay there forever. Unless there is a new edition and it collapses a little, at least until this new edition is withdrawn from circulation. Then it comes back for the same price or a higher price.

It is also necessary to pay attention to the phenomena that cause the rising peaks. We have already seen that the circular exit (the disc is out of print) is one of them. The artist’s death is the most obvious of them all. The most noticeable case is the death of David Bowie, which caused the prices of his entire discography to skyrocket. The original (and only to this day) pressing of George Michaels “Older” was already at prohibitive prices in the order of 100 € to 200 € before his death. Today the average price for Discogs is € 650. Yes, you read well. € 650 for a record. Now tell me about the Bitcoin appreciation.

Recently we also have the case of the split from Daft Punk, which caused a peak of absurd demand at Discogs, the biggest in the band’s history. We also have the Queen case, where the movie “Bohemian Rhapsody” caused the cost of all records to double. And even if we don’t account for these peaks, recovery is always a constant, especially with older discs that are increasingly difficult to find in good condition.

I’m a collector, not a record dealer, but when I see a business opportunity I can’t resist putting my hand in it. Last year I saw a box of The Rolling In Stones in Mono that was sealed for £ 300. I listed it on eBay for £ 900 and in three months it was selling at the price I set. Gold? No, plastic. Much cooler, it has the benefit of having music and they don’t depend on the volatility of the markets, government policies, or Elon Musk’s fire statements that will make you lose it all. Not only is your music collection getting cool as damn it, it’s growing all the time. Music never loses its value.