Watches and shoes beat the stock market

Overnight, my publisher, Paolo Cabrelli, sent me a Barron’s article.

The headline read:

Over a decade, Rolex watches outperformed the stock market

The title itself most aptly describes the content of the article. Therefore I won’t rehash it all. Instead I suggest you go and read the article yourself here.

However, there is a solid point to the article. Albeit I don’t believe the article itself quite unearths the prescient point.

As an investor, most often you will turn your mind to the stock market. I think for most people the minute you hear “invest” that’s where you tend to think.

Your mind turns to stocks and shares, iconic bourses around the world, and acronyms such as LSE, NASDAQ, ASX, etc. More recently, a progressive investor might also think about another asset class like crypto.

Of course, you may also be thinking about commodities, precious metals, property, bonds and yes, … quite possibly something like watches.

In fact, the very fame of stock markets may produce a bias that leads investors astray from thinking about the real aim of investing – buying something at a price and selling it for a higher price, and hence turning a profit.

In the most simple terms, the aim of investing is to generate a superior real return.

Thinking of investment like that opens the door to opportunities – and a certain amount of fun – in a huge variety of different markets.

Big gains from… shoes

On market I think is overlooked because it’s widely misunderstood is the sneaker market. But I think if you do a bit of research, and have a bit of “love for the game”, you can make it work for you.

On 16 February 2021 I bought some shoes.

Not just any old shoes though. They were golf shoes.

Not just any old golf shoes though. They were Jordan 4 Retro Golf shoes in “White Cement”.

I bought these for £169.95 through the Nike “SNKRS” app. This is an app where you can get onto limited release and special edition sneakers from the shoe and apparel giant, Nike.

My original plan for buying these (rather expensive) sneakers-come-golf shoes was to one day actually wear them. As it stands though, I also knew in the back of my mind there was a good possibility that over time these might actually appreciate in value.

There were three reasons for this:

1. This particular version of the Jordan sneaker was iconic from the late 1980s, as Michael Jordan was fast becoming the most famous athlete on earth.
2. This particular colour combination was the original colour combination used in the original catalogue advert also back in the late 1980s.
3. Being golf shoes, these were even more unique, rare and potentially valuable.

Hence, since they were delivered to me in late February, they have not been worn, but have remained in their box in a footstool in my office.

As I say, I do still have intention to wear these (one day) for a special round of golf, perhaps if I ever get to go around Augusta National or St. Andrews.

But, after seeing the article this morning about appreciating Rolex watches, I started to wonder what my Jordan 4 Golf Shoes are currently fetching in the market.

Yes, that’s right, in the “market”.

In case you’re unaware of it, the market for sneakers is red hot. If you’ve got the right kind of sneaker in the right colour combination you can fetch thousands of pounds for the best of the best.

Crucial, however, to this market is that the shoes are unworn, in their original box. So… it does pay to be a bit of a hoarder.

For example, if you’re a real sneaker-head and happen to have an original pair of Jordan 1 sneakers in the “Chicago” colour set from 1985, unworn and in original box, you can fetch as much as £27,000 (US$32,500) for them – that’s the current lowest ask price for a pair on StockX.

For some perspective, in 1985 the shoes were $65. That’s a spectacular 49,900% return in 37 years.

And you don’t even need original ones to have made a pretty penny. Nike realise they can release these shoes over time, same edition, same design, and make a mint from them. There is an opportunity for savvy investors, too.

The current asking price for a 1994 pair of Jordan 1 sneakers in “Chicago” colours is £3,947 (US$4,750) – with the original cost having been $80. That’s a healthy 5,837% return in 27 years.

The current ask for a 2015 pair of Jordan 1 sneakers in “Chicago” colours is £911 (US$1,100) – against the original cost of $160. That’s a 587% return in seven years.

So you can see that even the newer shoes can fetch a pretty penny.

Not life changing, but could be life boosting

Sadly there was a release in late November last year of Jordan 1 sneakers in the “Chicago Lost and Found” colour scheme. I missed that drop; I think I just missed my alarm as I was changing my son’s nappy – but that cost me.

These were retailing at US$180 in November. There was a sale this morning at US$500. That’s a 177% return in two months. For a pair of sneakers.

As for my Jordan 4 golf shoes in White Cement… the good news is that the last sale of a pair in the size I’ve got was at £399. So while it’s not quite the coin I’d get from a good pair of Jordan 1 sneakers, I’m still up around 134% on a pair of sneakers – and that is in less than two years.

Sure, this isn’t life-changing money. But perhaps it’s not a bad market to look at for a number of smaller wins.

If the stock market isn’t getting you up and excited about something, there’s plenty of other markets you can look to in order turn a profit. Rolex watches might be a bit out of reach for buying and selling as an investment. But sneakers? Well, I reckon most people could participate in that market with the right mindset and approach.

The worst case scenario is that you’ll at least have a comfy pair of sneakers to wear one day.

Until next time…

Sam Volkering
Editor, Exponential Investor