Tag: AAPL

How to Invest in Starlink and SpaceX Before They Go Public

by Fred Fuld III

Many investors are interested in jumping on the Elon Musk bandwagon by investing in the companies he is involved with, other than Tesla (TSLA). With the success that Musk has been having with rockets and satellites, many investors see the growth potential in those areas.

Fortunately, there are a few ways to participate in the growth of those companies, even though they are not yet public.

Before I cover those ways, I want to relay a story to you about Apple (AAPL). Why Apple you may ask? Well let me explain.

Buying Apple Before It Went Public

Many, many years ago, before Apple went public, I was using an Apple II computer with the VisiCalc spreadsheet program to create financial planning worksheets. I couldn’t believe that calculations could be done so easily on a small machine and then printed out. I was working for an investment management firm at the time and wanted to invest in this little Apple Computer company. (That was the name of the company before it was changed to Apple Inc.) 

Unfortunately, it wasn’t publicly traded. But fortunately, I read in a Forbes article that a publicly traded venture capital company called the Nautilus Fund, which was a closed end fund, had an equity interest in Apple. The fund held share of mostly public companies but also some shares of a few private companies. So to make a long story short, I bought some shares of the Nautilus Fund, Apple went public, and Apple shares were spun off to the Nautilus Fund shareholders. The rest is history.

Investing If Not Accredited

So you can see why investors, including myself, want to find some way to get access to Starlink and SpaceX shares.

If you are an accredited investor, you are probably aware of the services available to you for buying shares in private companies, and where there might be a minimum investment of $25,000. These services include Hiive, Forge, Microventures, and even NASDAQ Private Market.

An individual accredited investor is someone who has a net worth over $1 million, excluding primary residence (individually or with spouse or partner) and/or has an income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year. There is one other qualification that can allow you to meet the accredited requirement. If you are an investment professional with a Series 7, a Series 65, or a Series 82, then you may qualify. There are different rules for organization investors.

But if you are not an accredited investor, there are still ways for you to participate. 

First, let’s discuss Starlink and SpaceX and their connection to each other.

SpaceX

Space Exploration Technologies Corp., commonly known as SpaceX, is a private aerospace manufacturer and space transportation company founded by entrepreneur Elon Musk in 2002. Musk established SpaceX with the ambitious goal of reducing space transportation costs to make space exploration and colonization more accessible, ultimately aspiring to enable human settlement on Mars. 

Headquartered in Hawthorne, California, the company quickly gained attention for its innovative approach to rocket design and its focus on reusability, a concept that has transformed the aerospace industry.

SpaceX made history in 2008 when its Falcon 1 rocket became the first privately developed liquid-fueled rocket to reach orbit. This success was followed by a series of groundbreaking achievements, including the development of the Falcon 9 rocket, which features reusable first-stage boosters, and the Dragon spacecraft, capable of carrying cargo and crew to the International Space Station (ISS). 

In 2012, Dragon became the first commercial spacecraft to dock with the ISS, marking a significant milestone in public-private partnerships in space exploration.

In 2020, SpaceX achieved another historic milestone with its Crew Dragon spacecraft, which carried NASA astronauts to the ISS as part of the Commercial Crew Program. This made SpaceX the first private company to launch humans into orbit. 

Beyond crewed missions, the company has developed the Starship rocket, intended for deep-space missions and capable of transporting cargo and passengers to the Moon, Mars, and beyond.

SpaceX has also revolutionized global communications with its Starlink project, a satellite internet network designed to provide high-speed internet access worldwide. By combining technological innovation with a vision for humanity’s future in space, SpaceX continues to play a pivotal role in advancing aerospace technology and shaping the future of space exploration.

Starlink

Starlink Services, LLC, a subsidiary of SpaceX, was established to provide high-speed satellite internet to underserved and remote regions across the globe. Launched in 2015 as part of Elon Musk’s vision to create a global broadband network, Starlink operates a constellation of low Earth orbit (LEO) satellites that communicate with ground stations and user terminals to deliver high-speed internet access. Its mission aligns with SpaceX’s broader goals of advancing space exploration and connecting humanity, particularly in areas lacking reliable internet infrastructure.

Starlink officially began beta testing its services in October 2020 under the program “Better Than Nothing Beta,” offering Internet speeds between 50 Mbps and 150 Mbps. It quickly garnered attention for its ability to provide connectivity in rural and remote areas, where traditional cable or fiber infrastructure is often unavailable. The service expanded rapidly, reaching customers in over 50 countries by 2023. Starlink has since developed specialized products, including maritime and aviation solutions, to cater to various industries beyond residential consumers.

Known for its user-friendly hardware, Starlink employs a compact satellite dish and modem for easy setup. Its advancements in satellite technology have included innovations like phased-array antennas and laser inter-satellite links to improve latency and bandwidth. 

By leveraging a network of thousands of satellites, Starlink aims to overcome the limitations of geostationary satellites, providing lower latency and more stable connections for applications like video conferencing, gaming, and remote work. As of recent reports, Starlink continues to grow its satellite constellation and improve its service capabilities, making it a key player in the global push for universal Internet access.

Ways to Invest

Alphabet (GOOG) (GOOGL), more commonly referred to as Google, has a division called Google Ventures, which invested in SpaceX almost ten years ago, giving it a reported 7.5% ownership of the company. However, Google is such a huge company that the value realized from the growth of SpaceX will have a very small effect on Google’s stock. 

The same thing is true of Bank of America (BAC), which also invested in SpaceX almost seven years ago, in the amount of $250 million.

Some articles suggest investing in competitors of SpaceX, but be careful. Look what happened to all the new electric car competitors to Tesla (TSLA). Fortunately, there are some other alternative ways to jump on the SpaceX bandwagon.

There is a closed-end fund called ARK Venture Fund (ARKVX), which reportedly has over 10% of it’s assets in SpaceX, in addition to ownership of shares in a couple more Musk companies, X and xAI. 

At the time this article was written, an individual investor would have to buy the stock through SoFi. 

According to the fund prospectus:

“Unlike an investor in many closed-end funds, Shareholders should not expect to be able to sell their Shares regardless of how the Fund performs. An investment in the Fund is considered illiquid.”

It also says, “Unlike many closed-end funds, the Shares are not listed on any securities exchange. The Fund intends to provide liquidity through quarterly offers to repurchase a limited amount of the Fund’s Shares (expected to be 5% of the Fund’s Shares outstanding per quarter).”

The fund has a management fee of 2.75%. The price of the fund has gone up by 27.26% over the last twelve months.

There is one other closed-end fund that owns SpaceX, called Destiny Tech100 Inc. (DXYZ),which trades on the New York Stock Exchange. It currently has 22 companies in its portfolio with SpaceX making up the largest share at 36.9%. Other stocks in the portfolio include Axiom Space, OpenAI, Instacart, Stripe, and Discord. The company has a management fee of 2.5%. In the last six months, the stock has gone up by 189%.

Any of the above ways will give you some participation in the growth of SpaceX or Starlink, but there is one more play in Starlink.

A company called KVH Industries (KVHI) is a Starlink authorized hardware and airtime reseller. This is a microcap stock with a market cap of $108 million, and is therefore extremely risky. The stock, which is currently generating negative earnings, has a favorable price to sales ratio of 0.91, and is selling for 76% of book value.

If you are considering investing in SpaceX or Starlink, even indirectly, you may think your portfolio will go to the moon (or Mars). Just be aware that there are extensive risks involved. 

Disclosure: Author owns TSLA, KVHI, and DXYZ.

Taylor Swift Stock Index: A Great Performer

by Fred Fuld III

Taylor Swift, the name synonymous with chart-topping hits and captivating performances, has also quietly built herself into a savvy business mogul. Her journey extends far beyond the recording studio, encompassing strategic branding, fan engagement mastery, and a fierce fight for artistic ownership.

Taylor Swift’s success goes beyond just being a talented musician. Here are some of her notable business decisions that have contributed to her empire:

1. Reclaiming her music: Swift’s decision to re-record her first six albums was a bold move. While motivated by a desire to own her masters, it also proved to be a successful business strategy. The re-recordings, titled “Taylor’s Versions,” topped charts and reminded fans of her music, leading to increased sales and streaming.

2. Strategic partnerships: Swift has partnered with various brands like Diet Coke and Apple Music, creating mutually beneficial campaigns. These partnerships not only generate revenue but also expand her reach and connect her with new audiences.

3. Building a strong brand: From her signature songwriting style to her nostalgic album themes, Swift has built a strong and consistent brand identity. This allows her to connect deeply with her fans (affectionately called “Swifties”) and fosters a sense of community around her music.

4. Mastering fan engagement: Swift’s social media presence and interaction with fans are legendary. Through online interactions, surprise appearances, and Easter eggs in her music and videos, she fosters a loyal and engaged fanbase, which translates into success in ventures like tours and merchandise sales.

5. Utilizing technology: Swift’s embrace of technology has been crucial. She understands the evolving music landscape and leverages streaming platforms, online exclusives, and digital marketing strategies effectively.

6. Advocating for artists’ rights: Swift has been a vocal advocate for artists’ ownership of their work, influencing industry conversations and inspiring other musicians to fight for their rights. This not only benefits her personally but also contributes to a fairer music industry for all creators.

These are just a few examples of Taylor Swift’s successful business decisions. Her combination of artistic talent, business acumen, and dedication to her fans has made her a true force to be reckoned with in the music industry and beyond.

Six months ago, I wrote about how the Taylor Swift stock index as outperformed the S&P 500. Her index is made up of the publicly traded companies that Swift is a spokesperson for, such as Coca-Cola (KO) and Apple (AAPL).

Her index is up over 319% during the last ten years, versus 261% for the S&P 500, based on the SPDR S&P 500 ETF (SPY).

Swift’s boyfriend, Travis Kelce, has done a ton of celebrity sponsorships. It will be interesting to see how well his index does. Subscribe to our newsletter so you will be notified when it is available.

Disclosure: Author owns AAPL and has a short SPY position.

The Worst Mistake You Can Make as an Investor

by Fred Fuld III

Do you know what the biggest mistake you can make as an investor? Selling too soon. Just because you have a great profit on a stock, doesn’t mean you should sell it, assuming you are a long term investor and not a trader.

I have many examples of selling too soon. Here are just a few.

When I was in the financial services industry many years ago, I was selling a lot of the Franklin Municipal Bond Funds and Franklin GNMA Funds to my clients.

I went to visit the Franklin Mutual Funds headquarters (the company was in its old building at the time, and is now called Franklin Templeton) to do some due diligence, and meet with the broker liaison at the company.

When I was given a tour of the place, I noticed that walls were being knocked down, four employees were sharing a small office designed for one person, and cables were literally being run down the hallways by installers right in front of me.

My first thought was “Wow, this company is growing like crazy. I should check and see if Franklin Resources (BEN) is publicly traded.” It was, on the Pink Sheets. (This was way before it was traded on the New York Stock Exchange.) I bought a couple hundred shares at about $7 per share, and it shortly rose to $8.

Also, at that time, I just bought a rental property. I thought at the time that I should probably sell the Franklin stock in case I needed the funds to do upgrades on the property, plus I had just made a 14% profit in a short period of time. I actually didn’t need the funds for the down payment since I bought the property for nothing down (that’s another story I will write about eventually).

Since then, the stock has had ten stock splits. If I had just kept the stock and forgot about it, my $1400 original investment would now be worth around $542,000.

I have another example. I had 100 shares of Boston Beer Company (SAM) that I held in the form of multiple certificates on one share each (another story). I had paid about $30 a share for the stock back in 2009.

The next year, it rose to $90 a share. I thought that tripling my money in such a short period was a pretty good return, actually a fantastic return, so I thought, why not take all these certificates in to my broker and liquidate them.

While I was in the brokerage firm and one of the representatives was preparing a receipt for me including making copies of every certificate, another representative came over and said “What the hell is with all these certificates?”

When he was making these rude comments, I seriously considered picking up my certificates, and leaving, but I didn’t, unfortunately. I wanted to take my profit. The stocks eventually traded over $1000 a share back in 2020 and 2021. The stock is now trading over $350 a share, still more than ten times my cost.

I could tell you one more story about Apple (AAPL) stock, but it would make you sick. It makes me sick even to think about it.

The point that I’m making is that the dollar amount of profit and the percentage amount of profit you have in a stock is irrelevant. If you believe in the company, there is no reason to sell it, unless you are very desperate for money. And if you are that desperate, see if you can get by with selling half.

Obviously, there’s a chance of holding on to losers, and not getting out soon enough. Maybe you lose $5,000 or $10,000 on a stock that goes to zero. But it’s the big long term winners that pay for all those losses, and still provide huge returns.

The best way to tell if you should sell a stock is to imagine that you didn’t own the stock but you have the money to buy it. Would you buy it now? If the answer is yes, hold on to the stock. If the answer is no, then maybe it is time to sell.

Disclosure: Author owns AAPL and SAM.

You can now SELL YOUR VOTES

by Fred Fuld III

I am surprised that there isn’t a law about this. There is a company that provides a vote exchange where you can buy or sell votes.

It is for shareholders of publicly traded companies. The company is called Shareholder Vote Exchange.

The service allows shareholders to sell the rights to the proxy votes of stocks in order to generate additional income.

Companies and activists are the usual buyers.

For example, if you own 1000 shares of Apple (AAPL), you could sell your voting rights for $187.44 to $9,372.00 per year, depending on various factors.

For 1000 shares of Disney (DIS), it would be $91.07 to $4,553.50.

You don’t need 1000 shares, You could sell your votes for 100 or 10 shares, or even 1 share.

For example, if you own 100 shares of Tesla (TSLA), your votes could be sold for anywhere between $22.37 to $1,118.55.

If you had 100 shares of Meta/Facebook (META), you might get $33.50 to $1,675.20 each year.

Here’s a summary of the Shareholder Vote Exchange:

What they do:

  • SVX enables shareholders to buy, sell, and trade their voting rights for upcoming company meetings on their online platform. This allows passive investors who are not interested in voting to monetize their votes, while also giving activist investors and companies a way to acquire additional voting power.

Key features:

  • Unique auction system: SVX uses a proprietary auction system designed to optimize value for both vote sellers and buyers.
  • Integration with major brokers: The platform is integrated with major brokers like Schwab and Vanguard,making it easy for shareholders to participate.
  • Regulatory compliance: SVX’s auctions comply with all applicable state and federal regulations, ensuring transparency and investor protection.

Benefits for shareholders:

  • Monetize voting rights: Shareholders can earn cash for their votes, even if they are not interested in voting themselves.
  • Increase liquidity: The SVX platform provides a market for votes, which can make it easier for shareholders to buy and sell them.
  • Participate in corporate governance: Shareholders can use the platform to express their views on important company matters, even if they cannot attend shareholder meetings in person.

Current status:

  • SVX is a relatively new company, but it has already attracted a significant amount of interest from investors and the media.
  • The company is currently in the process of expanding its operations and adding new features to its platform.

Potential impact:

  • SVX has the potential to revolutionize the way shareholder voting works. By making it easier for shareholders to buy and sell their votes, the platform could increase shareholder participation in corporate governance and make it more difficult for companies to ignore the interests of their investors.

Now with votes for political candidates, it is illegal to buy or sell a vote, according to 18 U.S. Code § 597 – Expenditures to influence voting.

But that hasn’t stopped people from trying.

Back in the year 2000, some people tried to sell their votes on eBay (EBAY).

Anyway, it will be interesting to see what happens with these shareholder votes.

Disclosure: Author is long AAPL, DIS, and EBAY, and is short TSLA.

30 Years Ago, Kevin Costner Starred in ‘Ancient’ Apple Computer Ad: Wall Street Video of the Week

Does any one remember what a Lisa Computer was? Has anyone ever touched one? (I did, for a couple hours many years ago.) This was one of the first follies of Steve Jobs. Talk about a clunky, unattractive computer. Anyway, when Apple (AAPL), ran a Lisa television commercial long ago, guess who the star was? Kevin Costner, star of Field of Dreams, Dances With Wolves, Bull Durham, JFK, and many other movies.

This Day Today in Business & Investment History

by Fred Fuld III

Apple Computer (AAPL) was incorporated in 1977.

The first block of the blockchain of the decentralized payment system Bitcoin, called the Genesis block, is established by the creator of the system in 2009.

The Bell Telephone Company (T) was chartered in Massachusetts by Alexander Graham Bell and his associates in 1876.

The Bank of Italy changes its name to Bank of America National Trust and Savings Association (BAC), solidifying its national expansion beyond its Californian roots in 1928.

IBM Corporation (IBM) introduces the IBM 1401, a pioneering transistorized computer designed for business applications in 1960.

The New York Stock Exchange introduces the Decimalization Plan, shifting stock prices from fractions to whole dollar amounts in 1970.

Sony Corporation (SONY) releases the Sony Walkman TPS-L2, the first commercially successful portable cassette player in 1981.

Taylor Swift is Still Outperforming the Stock Market

by Fred Fuld III

A few months ago, I wrote an article called Taylor Swift Stock Index outperforms the S&P 500. In spite of the market dropping, Taylor Swift related stocks are still outperforming the stock market.

Her Stock Index is up more than 315% over the last ten years versus 20% for the S&P 500.

Taylor Swift is not only beautiful and a great singer, songwriter, and actress, she is also very intelligent, especially in the area of finance.

Did you know that she almost became a celebrity spokesperson for FTX, the cryptocurrency company that was involved in a scandal that involved the arrest of the founder for fraud charges.

Taylor Swift was reportedly offered a $100 million sponsorship deal with the FTX cryptocurrency exchange. However, she ultimately declined the deal after asking FTX representatives a simple question: “Can you tell me that these are not unregistered securities?”

This question was significant because it raised the issue of whether FTX was selling unregistered securities. Unregistered securities are a type of investment that is not registered with the Securities and Exchange Commission. This means that investors in unregistered securities do not have the same level of protection as investors in registered securities.

Swift’s question about unregistered securities appears to have been a dealbreaker for FTX.

In addition to asking about unregistered securities, Swift reportedly also did her own research on FTX before deciding to decline the sponsorship deal. She reportedly read the company’s white paper and spoke to other celebrities who had been involved with FTX.

Unfortunately for those other celebrities, which included Tom Brady, Gisele Bündchen, Steph Curry, Naomi Osaka, David Ortiz, Shaquille O’Neal, Kevin O’Leary, and Larry David, they got caught up in the scandal.

These celebrities appeared in paid advertising campaigns for FTX and promoted the exchange on social media.

In December 2022, a class-action lawsuit was filed against FTX and its celebrity endorsers. The lawsuit alleges that the celebrities engaged in deceptive practices to sell FTX yield-bearing digital currency accounts.

Taylor Swift, as a prominent figure in the entertainment industry, has been sought after by various brands for celebrity endorsements. Three notable endorsements in her career include Coca-Cola’s (KO) Diet Coke, Apple (AAPL), and Coty (COTY).

Swift signed a multi-year partnership with Diet Coke in 2013. She became the face of their brand and appeared in commercials and print advertisements. The collaboration aimed to promote the brand’s message of positivity and refreshment. Swift’s bubbly personality and wide fan base made her an ideal ambassador for Diet Coke, and her endorsement helped raise brand awareness and reach a younger demographic.

In 2015, Swift teamed up with Apple for an exclusive endorsement deal. It started with a public disagreement when Swift criticized Apple Music’s initial policy of not compensating artists during the service’s three-month free trial period. After Apple changed its policy, Swift became an advocate for the platform and released her album “1989” exclusively on Apple Music. She also appeared in commercials and promotional materials for the streaming service, showcasing her influence in the music industry and helping Apple Music gain popularity among her dedicated fanbase.

Coty, a major beauty and fragrance company for the CoverGirl cosmetics brand, partnered with Taylor Swift in 2010 to launch to launch NatureLuxe makeup. The partnership with Coty allowed Swift to expand her brand beyond music into the lucrative world of celebrity fragrances.

These endorsements showcase Taylor Swift’s ability to align herself with influential brands and effectively promote their products. Her partnerships have not only enhanced her public image but have also allowed her to diversify her portfolio and extend her brand beyond the music industry.

I have developed stock indices for many celebrities, such as Gisele Bündchen, which I originally created back in 2007.

Because of Swift’s astute review of endorsements, I thought it would be interesting to see how the stocks of the major companies that she endorsed have done over time, compared to the S&P 500, as measured by the SPY ETF.

She was in the Got Milk? campaign, but obviously, the California Milk Processor Board is not a publicly traded stock. She also promoted L.E.I. Jeans, a brand owned by Nine West Holdings, a privately held company.

So I stuck with the three major companies that she was connected with, Coca-Cola, Apple, and Coty.

What are the results?

I ran the analysis over a ten year period, from July 1, 2013 to July of this year. Over that period of time, the Taylor Swift Stock Index outperformed the S&P 500 by a very substantial amount.

Taylor Swift was up 362.95% versus the SPY, which was up only 221.04%. Just look at the chart to see the difference.

Data Source: Yahoo! Finance: Historical Prices

Maybe one of these stocks is singing your song.

Prices are beginning of month first trading day close, adjusted for splits, dividends, and capital gains distributions. The Taylor Swift Index is a price-weighted index, similar to the Dow Jones Industrial Average.

Disclosure: Author owns AAPL.

Investing in Gargling? The Scoop on Entertainment & Other Royalty Investments!

by Fred Fuld III

Have you ever thought about owning the rights to music from your favorite band? Or maybe you would like to own the residuals from a movie you like. Maybe even investing in trademarks.

Recently, investors had the opportunity to own the right to royalties from Listerine. Yes, the mouthwash you use to gargle with. Yup, every time someone uses Listerine and spits it out, the investor would make money.

This investment was available through an organization called the Royalty Exchange. Investors could make an offer on what they would pay for receiving a flat rate royalty on worldwide Listerine sales, for as long as Listerine is sold. Listerine has been providing royalties for 142 years. 

Royalties are paid monthly and Listerine has paid $12,507 during the last twelve months.

What other things can you invest in? The music from the film Shrek, royalties from standardized tests, Apple (AAPL) alert tone royalties, and tracks of music from Enrique Iglesias and Rihanna.

Previous transactions that the company handled include royalties from Coldplay and Beyonce, Jerry Garcia’s Cherry Garcia Trademark Royalties, and Naked & Afraid TV placements.

I want to point out that these investments do have some risk, like any investments. Second, I am not recommending any of these investments; I’m only mentioning them for you to do your own due diligence. Third, I have no connection to the Royalty Exchange whatsoever. 

So what is the Royalty Exchange?

Royalty Exchange is an online marketplace that facilitates the buying and selling of royalties and intellectual property rights. It allows creators, artists, and copyright holders to monetize their intellectual property by selling a portion of their future royalties to investors. Here’s a general profile of Royalty Exchange:

Business Model and Purpose:

  • Royalty Exchange serves as a platform connecting creators of intellectual property (such as musicians, songwriters, authors, and other content creators) with investors interested in purchasing a share of their future royalties.
  • The platform allows creators to access immediate capital by selling a portion of their royalty income, often in exchange for a lump sum payment.

Types of Intellectual Property:

  • Royalty Exchange deals with a wide range of intellectual property, including music royalties, book royalties, film and TV show royalties, patent royalties, and more.
  • Music royalties are one of the most prominent categories on the platform. This includes royalties from songwriting, publishing, performance, and mechanical rights.

How It Works:

  1. Creators looking for funding list their intellectual property rights on the Royalty Exchange platform.
  2. Investors browse the available opportunities and can place bids on the rights they’re interested in purchasing.
  3. A competitive bidding process takes place, and the highest bidder wins the right to receive a portion of the future royalties.
  4. The creator receives an upfront payment, and the investor receives a share of the royalties generated by the intellectual property over time.

Benefits:

  • Creators can access immediate funding without taking on debt or selling ownership of their intellectual property outright.
  • Investors can diversify their portfolios by investing in various types of intellectual property.
  • The platform aims to create a win-win situation by allowing creators to unlock value from their royalties while providing investors with potential long-term income streams.

Marketplace Transparency:

  • Royalty Exchange aims to provide transparency by providing data and analytics related to the performance of the intellectual property being offered for sale.

The advantage of royalty trusts include the fact that they are uncorrelated assets, they have the potential to provide high yields, and offer passive income.

One thing you should be aware of is the time frame of the investment. The company provides these definitions:

  • Term Based: Investor collects royalty income for a fixed period of time (typically 10 years). Royalty income then reverts to the original seller after the end of the term.
  • Life of Rights: Investor collects royalty income for the length of the underlying copyright (Lifetime of the creator PLUS 70 years).

A Publicly Traded Entertainment Royalty Trust

If the Royalty Exchange investments are too rich for your blood, you could also consider Mills Music Trust (MMTRS), which is a publicly traded stock that trades Over-the-Counter.  It receives income from royalties from the music catalog of EMI Mills Music Inc. 

The catalogue is estimated to be composed of over 12,000 music titles, of which approximately 1,430 have produced royalty income in recent years. Some of the top songs include: 

  • Little Drummer Boy
  • Sleigh Ride
  • Star Dust
  • It Don’t Mean A Thing
  • Mood Indigo
  • I’ve Got the World On A String
  • Ain’t Misbehavin’
  • Lovesick Blues
  • Hold Me, Thrill Me, Kiss Me
  • Stormy Weather
  • Red Roses for a Blue Lady

This New York based trust was founded in 1964. It pays a dividend of 8.3%, and has very low trading volume, with a wide spread between the bid and ask prices. At one time, Paul McCartney was a major shareholder of the company.

Because it is a trust, it avoids the double taxation of corporations. There may be personal tax benefits to the investor; talk to your accountant about it.

Buying royalties is a quick way of getting into show business, but it carries a lot of risk.

Disclosure: Author owns MMTRS. Author and this site have no connection to Royalty Exchange, has not done due diligence on the company, and are not recommending the company or its royalty investments. No investments are expressed or implied. All investors should do their own due diligence.

Taylor Swift Stock Index Outperforms the S&P 500

by Fred Fuld III

Taylor Swift is not only beautiful and a great singer, songwriter, and actress, she is also very intelligent, especially in the area of finance.

Did you know that she almost became a celebrity spokesperson for FTX, the cryptocurrency company that was involved in a scandal that involved the arrest of the founder for fraud charges.

Taylor Swift was reportedly offered a $100 million sponsorship deal with the FTX cryptocurrency exchange. However, she ultimately declined the deal after asking FTX representatives a simple question: “Can you tell me that these are not unregistered securities?”

This question was significant because it raised the issue of whether FTX was selling unregistered securities. Unregistered securities are a type of investment that is not registered with the Securities and Exchange Commission. This means that investors in unregistered securities do not have the same level of protection as investors in registered securities.

Swift’s question about unregistered securities appears to have been a dealbreaker for FTX.

In addition to asking about unregistered securities, Swift reportedly also did her own research on FTX before deciding to decline the sponsorship deal. She reportedly read the company’s white paper and spoke to other celebrities who had been involved with FTX.

Unfortunately for those other celebrities, which included Tom Brady, Gisele Bündchen, Steph Curry, Naomi Osaka, David Ortiz, Shaquille O’Neal, Kevin O’Leary, and Larry David, they got caught up in the scandal.

These celebrities appeared in paid advertising campaigns for FTX and promoted the exchange on social media.

In December 2022, a class-action lawsuit was filed against FTX and its celebrity endorsers. The lawsuit alleges that the celebrities engaged in deceptive practices to sell FTX yield-bearing digital currency accounts.

Taylor Swift, as a prominent figure in the entertainment industry, has been sought after by various brands for celebrity endorsements. Three notable endorsements in her career include Coca-Cola’s (KO) Diet Coke, Apple (AAPL), and Coty (COTY).

Swift signed a multi-year partnership with Diet Coke in 2013. She became the face of their brand and appeared in commercials and print advertisements. The collaboration aimed to promote the brand’s message of positivity and refreshment. Swift’s bubbly personality and wide fan base made her an ideal ambassador for Diet Coke, and her endorsement helped raise brand awareness and reach a younger demographic.

In 2015, Swift teamed up with Apple for an exclusive endorsement deal. It started with a public disagreement when Swift criticized Apple Music’s initial policy of not compensating artists during the service’s three-month free trial period. After Apple changed its policy, Swift became an advocate for the platform and released her album “1989” exclusively on Apple Music. She also appeared in commercials and promotional materials for the streaming service, showcasing her influence in the music industry and helping Apple Music gain popularity among her dedicated fanbase.

Coty, a major beauty and fragrance company for the CoverGirl cosmetics brand, partnered with Taylor Swift in 2010 to launch to launch NatureLuxe makeup. The partnership with Coty allowed Swift to expand her brand beyond music into the lucrative world of celebrity fragrances.

These endorsements showcase Taylor Swift’s ability to align herself with influential brands and effectively promote their products. Her partnerships have not only enhanced her public image but have also allowed her to diversify her portfolio and extend her brand beyond the music industry.

I have developed stock indices for many celebrities, such as Gisele Bündchen, which I originally created back in 2007.

Because of Swift’s astute review of endorsements, I thought it would be interesting to see how the stocks of the major companies that she endorsed have done over time, compared to the S&P 500, as measured by the SPY ETF.

She was in the Got Milk? campaign, but obviously, the California Milk Processor Board is not a publicly traded stock. She also promoted L.E.I. Jeans, a brand owned by Nine West Holdings, a privately held company.

So I stuck with the three major companies that she was connected with, Coca-Cola, Apple, and Coty.

What are the results?

I ran the analysis over a ten year period, from July 1, 2013 to July of this year. Over that period of time, the Taylor Swift Stock Index outperformed the S&P 500 by a very substantial amount.

Taylor Swift was up 362.95% versus the SPY, which was up only 221.04%. Just look at the chart to see the difference.

Data Source: Yahoo! Finance: Historical Prices

Maybe one of these stocks is singing your song.

Prices are beginning of month first trading day close, adjusted for splits, dividends, and capital gains distributions. The Taylor Swift Index is a price-weighted index, similar to the Dow Jones Industrial Average.

Disclosure: Author owns AAPL.

Top 5 Pure Play AI Stocks

By Fred Fuld III

You’ve seen it on TV, you’ve read about it on news websites. Artificial Intelligence, commonly referred to as AI, is now the hottest industry. Stocks that are involved in this industry are taking off.

I originally wrote about a form of artificial intelligence back in October of 2021 in an article called The Future of Artificial Intelligence: Can You Invest In It Now?

So you may be wondering what companies are the purest plays.

WHAT AI IS

Artificial Intelligence, or AI for short, refers to the ability of machines to perform tasks that typically require human intelligence, such as learning, reasoning, problem solving, and decision-making. AI algorithms are designed to analyze data, recognize patterns, and make predictions or recommendations based on that analysis.

In other words, AI is a way to teach machines to perform tasks that would normally require human intelligence, and to improve their performance over time based on the data they analyze. This technology has the potential to revolutionize many aspects of our lives, from healthcare to transportation to entertainment. AI is even being used to write articles and books.

WHAT CHAT AI IS

One of the most popular types of AI services is Chat AI. 

Chat AI refers to the use of artificial intelligence technologies, such as natural language processing (NLP) and machine learning, to enable machines to communicate with humans via chat interfaces, such as chatbots or virtual assistants.

Chat AI is used in a variety of settings, such as customer service, where chatbots can be used to answer frequently asked questions, provide information, or help customers troubleshoot issues. Chat AI can also be used in healthcare to provide personalized support and advice, in education to assist with learning, and in business to streamline operations and improve customer engagement.

The key advantage of Chat AI is that it enables organizations to provide 24/7 support to their customers, without the need for human intervention. Additionally, Chat AI can help organizations save costs by automating routine tasks and reducing the need for human labor.

To enable effective Chat AI, developers must ensure that the algorithms are capable of understanding and interpreting natural language, as well as providing appropriate responses to user queries. This requires a combination of NLP and machine learning techniques, as well as ongoing training and improvement of the chat AI system.

Overall, Chat AI is an increasingly popular technology that has the potential to transform the way we interact with machines and automate routine tasks in various industries.

CREATING IMAGES WITH AI

Yes, artificial intelligence is now being used to create images, such as book covers, logos, album covers, and many other purposes. You just need to type in a simple description, and a picture will automatically be created. One of the most popular AI image services is called DALL-E.

DALL-E is an artificial intelligence system developed by OpenAI that is capable of generating images from textual descriptions. The name “DALL-E” is a combination of the artist Salvador Dali and the Pixar character Wall-E.

The DALL-E system uses a combination of machine learning techniques, including natural language processing and computer vision, to interpret textual descriptions and generate corresponding images. It is capable of creating images of objects and scenes that do not exist in the real world, such as a teapot made of giraffe or a snail-shaped harp.

THE BIG PLAYERS

The DALL-E system was trained on a dataset of text-image pairs, which enabled it to learn the relationship between textual descriptions and their corresponding visual representations. The system was trained on a massive amount of data, including images from the internet and text descriptions from a variety of sources.

The potential applications of DALL-E are numerous, including in the fields of art, design, and advertising. It has the potential to streamline the creative process and help artists and designers bring their ideas to life more quickly and easily. However, there are also concerns about the potential misuse of this technology, such as the creation of fake images or the propagation of harmful stereotypes.

First, let’s get the large stocks out of the way. There are many companies involved in AI, ranging from startups to large corporations. However, some of the biggest companies involved in AI are:

Google (GOOG) (GOOGL) is known for its search engine, but it’s also heavily invested in AI, with products like Google Assistant, Google Photos, and Google Translate all utilizing machine learning.

Amazon (AMZN) is using AI in many areas, such as its recommendation engine, its Alexa voice assistant, and its Amazon Go stores, which use computer vision to enable a checkout-free shopping experience.

Microsoft (MSFT) has been investing heavily in AI and has developed several AI-powered products, including Cortana, Skype Translator, and Microsoft Cognitive Services.

IBM (IBM) has a long history of developing AI technologies, and its Watson platform is one of the most well-known examples of AI in action.

Meta/Facebook (META) uses AI in a variety of ways, including facial recognition technology for tagging photos and content moderation.

Apple (AAPL) has been incorporating AI into many of its products, including Siri and Face ID.

NVIDIA (NVDA) is a leading manufacturer of GPUs, which are essential for training and running AI models.

Baidu (BIDU) is a Chinese search engine that is heavily investing in AI, with projects ranging from self-driving cars to voice recognition.

Tesla (TSLA) is using AI in its autonomous driving technology and is working to develop a fully self-driving car.

Alibaba (BABA), the Chinese e-commerce company, is investing in AI to improve its recommendation engine and other areas of its business.

THE PURE PLAYS

Now let’s get to the purer plays in artificial intelligence.

C3.AI

C3.ai, Inc. (AI) is a software company, located in Redwood City, California, that provides enterprise AI solutions for a variety of industries, including energy, healthcare, and finance. The company was founded in 2009 by Dr. Thomas M. Siebel, who is also the CEO of the company.

Before founding C3.ai, Dr. Siebel was the founder and CEO of Siebel Systems, a leading enterprise software company that was acquired by Oracle Corporation in 2006. After the acquisition, Dr. Siebel focused on developing AI-based solutions for the enterprise market and founded C3.ai.

Initially, C3.ai focused on developing predictive maintenance and energy management solutions for the energy industry. The company’s first product, C3 Energy Management, was designed to help utilities optimize their energy generation and distribution systems using machine learning algorithms.

Over time, C3.ai expanded its focus to other industries, including healthcare, financial services, and manufacturing. The company’s current product offerings include C3 AI Suite, which is a platform that enables organizations to develop and deploy AI applications, and C3.ai Ex Machina, which is an AI-powered data science platform for data scientists and developers.

C3.ai has received funding from several prominent investors, including Breyer Capital, TPG Growth, and the Rise Fund. In December 2020, the company went public on the New York Stock Exchange under the ticker symbol “AI,” raising $651 million in its initial public offering.

The stock has a market capitalization of $2.45 billion. This debt-free company has $6.76 in cash per share.

SOUNDHOUND AI

SoundHound AI, Inc. (SOUN) is a Silicon Valley-based technology company that specializes in developing sound recognition and voice-enabled AI solutions. The company was founded in 2005 by Dr. Keyvan Mohajer, who is also the CEO of the company.

Initially, the company started as a music recognition app called “Midomi,” which allowed users to hum or sing a song, and the app would identify the song. Later on, the company expanded its focus to voice-enabled AI technology and changed its name to SoundHound Inc.

In 2015, SoundHound Inc. launched its flagship product, Hound, which is an AI-powered voice assistant. Hound uses a natural language processing (NLP) technology that enables users to speak complex and specific queries in a conversational manner. The Hound voice assistant is available as a mobile app and can be integrated into other devices and applications.

In addition to Hound, SoundHound AI, Inc. also offers a suite of AI-based products and services, including sound recognition technologies for speech-to-text and music identification, and voice-enabled AI solutions for automotive, hospitality, and other industries.

The company has received funding from several prominent investors, including NVIDIA, Samsung, and Tencent Holdings. By 2021, SoundHound AI, Inc. had raised over $250 million in funding.

SoundHound has a market cap of $580 million. The company is debt-free and quarterly sales increased by over 79% year-over-year.

BIGBEAR.AI

BigBear.ai Holdings, Inc. (BBAI) is a technology company that develops and provides artificial intelligence (AI) solutions for defense and intelligence organizations, as well as for commercial customers. The company was founded in 2018 and is headquartered in Reston, Virginia.

BigBear.ai’s technology solutions use AI and machine learning to help customers make sense of large and complex data sets, as well as to automate decision-making processes. The company’s AI-driven solutions are designed to improve situational awareness, increase operational efficiency, and support decision-making across a range of industries and applications.

The company’s solutions cover a range of capabilities, including computer vision, natural language processing, and data analytics. BigBear.ai’s solutions are used in a variety of applications, such as intelligence analysis, threat detection, predictive maintenance, and supply chain optimization.

BigBear.ai has a broad customer base that includes government agencies and commercial customers in various industries. The company has received funding from several venture capital firms, including Riverside Partners, Chart National, and Blu Venture Investors.

In 2021, BigBear.ai announced that it had entered into a definitive agreement to merge with GigCapital4, a special purpose acquisition company (SPAC), in a deal that valued the combined company at $1.57 billion. The merger was completed in August 2021, and the combined company is now publicly traded on the NASDAQ under the ticker symbol “BBAI” as “BigBear.ai”.

This debt-free company has a market cap of $458 million. 

T STAMP

T Stamp Inc. (IDAI) is an identity authentication software company that uses artificial intelligence (AI) to develop solutions for government, enterprise partners, and peer-to-peer markets in the United States, the United Kingdom, and Malta.

T Stamp’s AI-powered solutions leverage biometric science, cryptography, and data mining to deliver identity and trust predictions, protect sensitive user information, and extend the reach of digital services through global accessibility. The company’s solutions include converting biometric and other identifying data into an Irreversibly Transformed Identity Token that serves as a secure tokenized identity. T Stamp also offers solutions for privacy and data protection, document validation, identity verification, geolocation, duplicate detection, and biometric capture.

T Stamp’s solutions serve a variety of industries, including banking/fintech, humanitarian and development services, KYC/AML compliance, government and law enforcement, P2P transactions, social media, and sharing economy, and real estate, travel, and healthcare. The company was incorporated in 2016 and is headquartered in Atlanta, Georgia.

Overall, T Stamp’s mission is to provide secure and scalable identity authentication solutions that leverage AI and advanced technologies to protect user privacy and combat identity fraud.

This is a microcap stock with an extremely low market cap of $18 million, and should therefore be considered extremely speculative. 

MARPAI

Marpai, Inc. (MRAI) is a software company that specializes in developing and deploying artificial intelligence (AI) systems for the enterprise market. The company was founded in 2016 by a team of experienced entrepreneurs and AI researchers, including CEO and Co-founder Mark Sears.

Marpai’s platform, called “Cortex,” is designed to help businesses leverage AI to automate processes, extract insights from data, and improve decision-making. Cortex uses advanced machine learning algorithms to analyze large amounts of data and provide actionable insights to users.

The company has received funding from prominent venture capital firms, including Bain Capital Ventures, Crosslink Capital, and SVB Capital, among others. In May 2021, Marpai announced that it had raised $30 million in a Series A funding round led by M12, Microsoft’s venture fund, with participation from other investors.

Marpai has a range of customers across different industries, including finance, healthcare, and retail. The company’s solutions are used for a variety of applications, such as fraud detection, customer service automation, and supply chain optimization.

Overall, Marpai’s mission is to democratize AI and make it more accessible to businesses of all sizes, by providing a scalable and user-friendly platform for deploying AI solutions.

The stock is debt-free and quarterly revenue growth year-over-year was 28.8%. This is another microcap stock with an extremely low market cap of $40 million, and should therefore also be considered extremely speculative.

AI SUMMARY

According to Fortune Business Insights, “The Artificial Intelligence market is projected to grow from $387.45 billion in 2022 to $1394.30 billion by 2029, at a CAGR of 20.1%.”

Just remember, that there are many ups and downs in new industries, and all the pure play stocks in this list should be considered speculative. Remember, no recommendations are expressed or implied. 

If you want to learn more about artificial intelligence, you should get the book Artificial Intelligence: What AI Is and How You Can Use It to Make Your Life Easier: A Guide to AI for Beginners, available in both paperback and Kindle.

Disclosure: Author didn’t own any of the above at the time the article was written, although may be making purchases in the near future. This article contains Amazon affiliate links whereby I would receive a small commission on any sale through those links at no additional cost to you.