🦕 Triceratops skull, the Federalist, Tetris, and Zelda

You'll need to read to the bottom to see the 🦕

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📕The Federalist 1st Edition

What is the Federalist first edition?

Widely considered the most important work in American political theory, the Federalist laid out the argument for the ratification of the US Constitution subsequent to the American Revolution.

Authored by Alexander Hamilton, James Madison, and John Jay, the work originally appeared as a series of articles in newspapers. There were only 500 copies of the book published (it struggled to sell).

Importantly, two versions of the book were published; a standard copy and a rarer “thick pages” version. This is the more common standard copy.

Cultural Relevance of the Federalist Papers

From Sotheby’s, who recently sold a copy for $150k

“The essays in The Federalist are now recognized as one of America's most important contributions to political theory.”

While their importance to the ratification is questionable, every university student in America who has taken a politics class knows what they are and has at least pretended to read them.

They remain relevant with a positive trend since around 2010, and the papers see an uptick every September, presumably as befuddled students return to the classroom.

Valuation

There have been a number of recent sales of comparable copies in the $150k to $200k range.

Heritage - $187k

Heritage - $175k

Sotheby’s - $150k

When researching previous sales, it’s super important you’re only looking at non “thick pages” copies. The thick pages go for around 2x to 3x, and George Washington’s personal copy sold for well over $1m.

Category performance

The rare books subcategory on Rally has been exceptionally strong with an average ARR of 53%.

Outlook and catalysts

Failing a violent overthrow of the American government (he laughs nervously), not much is going to change with this specific title. That said, the rare books subcategory is a long-term asset class that retains value well. As more money flows into fractional ownership, blue chip titles like this should continue to appreciate.

Verdict

I like this one. Some of the books on Rally have been overpriced (looking at you, Dickens), but this is a fair price for a great asset.


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🎮 Zelda II: The Adventure of Link NES game WATA 9.6 | Seal A+

What is Zelda II?

Released in 1988, the follow up to Nintendo’s classic Legend of Zelda game sold 4.38m copies. This title broke new ground across a wide variety of gameplay elements and introduced a number of characters to the Zelda universe.

Cultural Relevance of the the Legend of Zelda franchise

Over 100m copies of Zelda games have sold since the original hit the shelves in 1986. If you were a child of the 80s or 90s who played video games, you almost certainly owned this title.

The franchise was stagnating slightly until the wildly popular Breath of the Wild was released in 2017 and seems to have reclaimed its mojo.

Valuation

As you may recall from last week’s issue of Fractional, video games are currently valued using a strict set of guidelines as follows:

The best guide we’ve got is an identical copy that recently sold with Heritage for $38,400, which is significantly more than the market cap for this issue ($29,500). A WATA 9.0 B+ copy sold on eBay a few days ago for $4,400.

Category performance

The games category is doing pretty well across both Rally and Otis with everything in positive territory and an average ROI of > 50%. The category is being carried by Super Mario Bros 3 over on Otis at the moment.

A number of titles are set to begin trading in the next month or two, so we’ll have more data soon.

Outlook and catalysts

He’ll keep saving princess Zelda, but things do seem to have sort of flatlined for our good buddy, Link.

The asset class is probably more relevant to this title than the title itself. As games investing stabilises and strengthens, so too will this title’s value.

Verdict

I like video games generally as an asset class, particularly when you can pick up a title at a steep discount to a recent comparable sale on Heritage.

🎮 Tetris and Tetris II WATA 9.8 | Seal A++

Quick hit on this since we just talked about games above.

The Tetris franchise has sold over 495m copies, placing it behind only Mario at 1b.

Valuation of these titles is anyone’s guess with even less to go on than Zelda above. From eBay

There’s a buy it now copy identical to the one is this listing up for $15k. See it here.

And a WATA 9.2 A+ went is up for $10k here.

[I’ve made those both affiliate links just in case any of my readers actually decide to buy them]

In terms of actual sales:

WATA 9.6 A++ went for $5,386 a few days ago.

WATA 9.2 B+ sold for $1,499 also a few days ago.

So make of this what you will.

🦕 Triceratops Skull “Deaton”

What is the the Deaton triceratops skull?

Discovered by the late Dr Bobby Deaton in North Dakota in 1999, this skull is over seven feet long and 81” tall. Its intact horns and braincase [shiver] make it an extremely rare and impressive specimen.

Cultural relevance of dinosaurs

Dinosaurs first captured our imagination in 1842 when the term was coined. They’ve featured in books, films, television, artwork, and every other imaginable form of media. They’re the inspiration for a wide variety of franchises from Pokemon to Godzilla to Jurassic Park. Here’s a list of about a million films featuring dinos. The Godzilla franchise alone has around 20 films including one coming out in March 2021.

Perhaps the most famous triceratops is Uncle Beazley, who occupies Lemur Island in the Washington National Zoo.

Valuation

Dinosaur fossils can command tremendous valuations. Stan the T-Rex recently sold for $31.8m. A full triceratops sold for $657k in 2011, and the skulls routinely fetch between $150k and $300k. This is so morbid.

$285k is near the top end of the valuation for this type of item, and Rally is keeping a much larger than usual cut of the price (presumably storage is egregious).

Verdict

It’s a dinosaur skull. If twelve-year-old you Just Wants A Dinosaur Skull, you’re going to buy it.

For the sake of completeness, I do think it’s a decent buy at a decent valuation. It’ll probably pop during the first trading window as well.


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Disclaimer 1: I plan to buy shares of the Federalist and Dinosaur skull. Because I too used to be a twelve year old boy.

Disclaimer 2: Nothing in this email is intended to serve as financial or legal advice. Do your own research, you lazy rascals.