 Welcome to the last set of news that get top stories in crypto and bring on bite-sized pieces. So today, just the thumbnail suggests there is an ability to do an exit strategy into art. And up until recently, it has only been available for the super rich, but now it's available to everybody. I'm going to explain exactly why. So we're going to take a look at this opportunity that we have. We're going to take a look at what I call to invest into people or teams. We're going to take a look at the correlation selection and the risk or getting out of risk or exiting risk into this new asset. And then finally, we'll take a lot of talk about a little bit of a wait list. So first things first, let's talk about my new exit strategy. So this is my old exit strategy. And you can see it's pretty diverse because I try to minimize the amount of risk that I have. I don't want to put everything into one pot. I don't think it's a really good idea. But again, my goals are not your goals. This is just one way to do things out of a plethora of our different ways to actually do stuff. So for me, when I take a look at this, I just see myself, well, when I exit out of crypto and I will never exit out of totally, but I'll still stick around 10% to cash. 25% will be in a stable coins because of the yield that you can gain, depending on if you're on Celsius or Voyager or wherever you use it, could be between 6% and 10.5%. So why not just put in stable coins is the easiest play. And that's it. Also, 15% in the land, 20% into real estate. Me and my wife love to purchase real estate for short-term rentals like Airbnb and Verbo and those types of things because it's a very lucrative business right now. Also, it's great to tax benefits. 10% will go on the Amazon business. 15% will remain into staking of crypto assets. Again, it's a great way to do things. And then 5% will stay in the Itrust capital, crypto IRA. Just so you know, this is how Peter Thiel not became, but got $5 billion because he put the shares of PayPal into a Roth IRA, which is available to everybody in the US. And he stuck it in there and he just let everything appreciated. And he paid 0.0% on taxes because it was post-tax. So whatever you put into the crypto IRA, that is post-tax. So Bitcoin goes from, you put one Bitcoin in, it goes to 60,000, goes up to a million. Guess how much you're paying in taxes on that 940,000? 0%. So that is my exit strategy. And also, you can also find these exit strategies because I dollar-cost average in and dollar-cost average out of my crypto positions. And on this one, links in the description, you can find this as well. My exit strategy is always 80-20. Get out 80%, but keep it around 20% of just the crypto assets and don't sell those because you never know. Things can go just ballistically crazy. Except for Bitcoin, that's only a 50-50. And of course, people will say, why don't you just sell everything? Because I think there's fireworks down the road and I will never get all the way out of crypto. So if you take a look here, this is my old strategy. And here is my new crypto exit strategy. You'll notice there's one more thing here. It's a big M and that stands for masterworks. What is masterworks? Well, that is exactly what we're talking about today. And that is the ability to purchase fractionalized shares of multi-million dollar paintings, which is an uncorrelated asset as compared to the traditional equities, to S&P 500, even to cryptocurrency, even to real estate and everything else. And we'll get into exactly why that is. So let's just talk about how masterworks actually work. So wouldn't it be great to take this amount of money and buy a Joan Mitchell for 15.7 million? Yeah, it seems all right, Rob. How about Andy Warhol for 3.3 million? How about Keith Herring for 3.4 and all the other ones that I have no idea before I actually got into masterworks, what these artists work? So Andy Warhol. But yeah, 12.7 million seems like a legit deal. I don't have 12.7 million. That's okay, because it's all fractionalized shares of getting into these fine art paintings. So this is how it all goes down. So as we talked about quickly, and we'll get deeper into it, it's an uncorrelated asset. Compared to the S&P 500, year over year, it's about 14% in contemporary art annual appreciation, 9.5%. Well, that's not too exciting, Rob, because over in crypto world, I can just get massive amounts of gains. Yes, you can. However, there is a good idea as far as an investor to minimize the risk that you do. And especially when you get out of cash, what do you do with that cash? This is what I'm doing to put a portion of it 5% into a different asset. So this is what we have here. And then if we just take a look real quickly of actually how it works. Masterworks does all the hard work. They find the best artists. They purchase the best art. They securitize the artwork. They hold the artwork three to 10 years if you want to go down that route. Or you can sell shares in the secondary market. We'll get to that in a second. But that's essentially how it all really goes down. And it makes sense to do these types of things when you're just talking about being able to minimize your risk. That is the first part. And the second half I want to talk about is investing into people. And when we take a look at my strategy or what I want to do and how I want to do things, it really goes into investing into people themselves. And for this one, I think that when you look behind the curtain, see what's happening, invest in people usually works out okay. So what I'm talking about here is this is Masterworks. This is part of their management team. And to take a look at here, this is headquartered in New York over 75 plus combined years of art collecting experience. And they found a company's at over a billion. So looks like they know what they're doing sounds pretty good. This is Scott Lynn and addition to Masterworks. I was like to look at where they came from because it kind of wherever you've kind of come from and what you've built will kind of dictate to where you're actually going. Not all the time, but it's a good way to take a look back. In addition to Masterworks, Lynn served on the board of V2 Ventures at Parlor, Giant Media, ReachMobile, Ampley, Celozo, Payability in the Brooklyn Rail, non-profit, Public Art Chain, our art industry. Then you got Josh Goldstein, EVP Chief General Counsel, Corporate Secretary of InterWest Resorts Holdings, Alberto Simon. He's the co-founder and head of Payability. He also was a Senior Product Manager at PulsePoint, AOL, Ad Knowledge, and Anuvo. You got Hyman Tran. Looks like he's worked for a lot of great industries as far as like with Apple, Nike, Nokia, Intel, Heela Packard, blah, blah, blah. Good for that guy. Nigel, Prior to Masterworks, he served as Managing Director at Athena Art of Finance. So good coupling between art and finance. Candy Lights, Prior to Joining Masterworks team, was an auction specialist in artnet auctions, which is pretty good because we need somebody to actually get out there and actually buy those paintings so we can get that nice appreciation. And then lastly, Masha Golovina, over 10 years of experience in art economics, market research, and financial modeling. Again, great to know exactly what we have as far as the artwork. So that really just goes down to the team. And I want to break it down into the correlate, the selection, and the risk. And then really quick, I need to go back real quick and talk about one thing, which is I kind of skimmed over it and didn't really talk about it effectively. But when there was a part here where it talked about, let me bring this up so you can see it. It says, you know, what they actually do. We find the best art, we securitize. We hold the art over three to 10 years. Remember, long term play. But this last part I skipped over, sell shares on the secondary market. What does that mean? That means that the shares that you buy into as far as for these paintings themselves, you don't have to hold it for all these years if you don't want to. And that's the best play if you want to really just appreciate the investment that you did. But if you don't want to, they have a secondary market where you can go in there and go, look, I've got a thousand shares of this Banksy at $32 or whatever you have. And I want to see if someone can actually purchase them from me. Yes, you can do it that way. The only thing with this is, first of all, it's great for liquidity. If something life comes up, we all know that works out. But just so you know, if you do the secondary market like that, that you'll be subject to capital gains tax. So watch out. So it's less than a year, you're talking about say short term capital gains. And then if it's over a year as long term. But if you do the other way where you just let it appreciate for years, then only that your tax rate is as far as your income level. So just be aware about that. So to go back, now let's talk about correlates, selection and risk. And the big thing to me when I was going through all these different things was how is this correlated to all the different markets that are out there? Because we know that Bitcoin is supposed to be uncorrelated and crypto market are supposed to be uncorrelated. But we've seen that when the traditional markets go down, we all see the crypto market goes down. That's because there's a ton of traditional players in the game now, banks, sovereign nations, you name it, hedge funds, they're all here. And there's only one place that's open 24 seven, 365 net is crypto and digital asset markets. However, with art, it flips on the head. So I'm going to just play this real quick. And it's a quick snippet. We're going to play four videos each year about a minute long, which is going to explain exactly what this is and how this works. They're going to talk about how they select the art because look, I'm not an art buyer, obviously. So that's why I depend on these people. We're going to talk about risk. And then we're going to talk about the wait list and how this all works out. So about a minute or so minute and some change, take a listen. Correlation is one of the most important financial factors, I think, really, when one's considering art as part of their portfolio. If an asset class is uncorrelated with another asset class, that simply means that they behave differently. According to Citibank, who produced a report in 2015, studying correlation in the art market, they concluded that the art market had a correlation factor of 0.11 against the S&P over a 40 year period. If the stock market goes up and art is uncorrelated, that does not necessarily mean that art will follow in the same trend for people who are trying to construct an investment portfolio. Obviously, it's helpful to have uncorrelated assets because that lowers their risk profile as one asset class goes up, others may go down, and their overall returns are acceptable. The dot com bubble really affected the markets in the US, but the art market is so global that the bubble bursting didn't have an effect on art prices at the time, really, in a way that was measured by the indices. In 0809, we saw the highest correlation factor ever, which was roughly 0.5. The art market declined roughly half as much as the S&P declined. The art market was impacted in terms of the aggregate amount of sales volume that came to market. What we also found is that the private market, so this is the amount of the market that transacts away from the auction houses, among dealers and art fairs, continued to be incredibly robust. Because you're really dealing with the wealthiest members of society globally, they're actually able to purchase the works that they find interesting at whatever price, regardless of the economic conditions. Doesn't that make sense? If you want to get into a little bit more of a stable asset, then wouldn't it be great to have something that is a little bit more uncorrelated, which is usually been only been bought up by the extremely wealthy, because they don't play by the same rules, but now they're going to level the playing field with Nash work. That's the first part. Now I want to get into how they select the art. This is very fast. It's about 40 seconds or so, and this was the most important part to me, because I'm like, I don't know anything about art. Absolutely nothing. So hopefully we can see exactly how these guys do it. So just take a listen. This is the Masterworks Research Library, and we have an assembly of catalogs from 1970 through the present day for Christie's and Sotheby's. We've taken these old auction catalogs and identified when a particular work was purchased and then resold to understand if there was a profit or a loss by a particular collector. And by doing that tens of thousands of times, it informs us on how to think about performance of different segments of the art market or returns at a particular artist level. We're curious about the price dynamics of works that are now coming up for auction to understand their historical value and also understand the different trends and how cycles work in the auction market. Cycles. Haven't we heard that a lot in the crypto and digital asset market? Aren't we always talking about four-year cycles? Aren't we always talking about Bitcoin and the way that it goes over these time frames as far as the happenings? So it's the same thing with art, and it works out pretty well. So that makes a lot of sense on that part. And the next part is really about managing risk. And this is why I bring it to your attention about these things. Again, these are just options that I am working with, not that something you have to do. Again, my goals are not your goals and vice versa, but this is a good lesson real quickly. It's about a minute or so about how to minimize the risk that's out there. Most new investors focus strictly on returns or absolute returns when investing in a new asset class. And one of the things that we think is critical is that people also consider risk to calculate risk-adjusted returns. So how can we measure risk for art as an investment? It's not an asset that trades continuously, and nor is it priced all the time. At very high level, we tend to think about risk as correlated with data density. So the more data that exists in a particular artist's market, the less risky it is because the better we are to understand the individual standard deviation of returns or risk over time. The easiest lens through which to understand risk is around artist market size. The logic here being that the larger the artist's market size, generally the greater longevity, the greater staying power, and the lower amount of artist's market risk there is around any specific market. So we've taken that logic and put it into a framework that buckets artists into an A, B, or C category. Your A group tend to be artists that are blue chips. So these are artists that have multi-decade auction track records that are selling 50 to hundreds of millions of dollars per year. Your B artists tend to be established late to mid-career artists that simply have comparatively less auction history, but still multi-decade. And if an artist doesn't have an auction track record, for example, we would rate that as a risk level C or very speculative. So at Masterworks, we really focus on these A and B buckets. And while A grade artists typically are lower risk profile artists and your B artists are more moderate as profiles, it's important to understand that both of these groups comprise artists that are selling at major auction houses today have well established track records. So by all accounts, these are liquid well-known artists across the board. So yeah, and I think that is the big thing is about minimizing risk and finding opportunities. And that's why that's what Masterworks does. And then also just when they talked about as far as like finding the right art and getting the right to the right artist and the ones that actually sell and are extremely liquid. When we take a look at that and we see all these different art pieces, this is behind the scenes at Masterworks. These are the ones that have an offering right now. And I want you to notice one thing that down here like this this Basquiat where it says sec.gov forward slash Edgar, it is a link right to a listing because these are securities and they register every single painting that they buy with the sec. So there's no fear about is this security is not a security like that security. And that is why they do these things because they want to protect the we all talk about the protect the consumer. And that's another argument for another video about as far as cryptocurrency and things like that. But this is something that to watch out for and it makes a lot of sense. And then lastly to talk about minimizing risk. This is where it comes down to talking to the individuals at Masterworks to see what your goals are. Again, my goals aren't your goals. So we're all different. So when they talk about on this last video, they talk about the interview process and how it all works. And then the wait list, this is an important piece about getting you to like what you need individualized to yourself. Just take a listen. Every day, we have hundreds of individuals that apply for membership of Masterworks. We try to get to know each investor, understand more about them and really make sure that the investment is suitable for them. We find it very important to speak with each of the investors individually, explain to them how the platform works, answer questions that they might have about investing in art or about the asset class. We also like to get a better idea of what type of investor you might be. So it's important for us to know, you know, why you're interested in allocating to art and how you think about allocating for the next year or so. And determine what type of portfolio construction works for them in terms of blue chip artists, in terms of mid-career, mature artists. So we can be walking through that process. The membership interviews typically take place over the phone. We also have a gallery space here in Soho in New York where our members are welcome to come by. They can meet the team. We can show them some of the works that we have. So, you know, just kind of providing that personal touch if you are in New York City here. So we do have a waitlist of a couple thousand and potential new members. We have investors that are in New York. We have investors that are global. You know, it's a pretty large base that we deal with. We prioritize the waitlist based on marketing partnerships and high value investors, but we encourage everyone to sign up for Masterworks regardless of the waitlist and regardless of their investor size. So here's the good news. When they talk about that, like, oh, you know, it's like a specialized thing. It is a specialized thing. When I sat down with the people at Masterworks, they, because everybody's there for me and said, well, what do you want to do? And I told them, it's like, it's a very small portion. They go, okay, well, this is something, you know, different from the blast person that we talked to and the last person I talked to before that. So they can just pretty much individualize everything around that. And the great thing is when they talk about a waitlist, you know, they put you on a waitlist, well, if you go to the website itself, you're going to see this nice little picture that's going to say Masterworks.io, request invitations can take a long time. However, there's a link in the description. Looks something like this. When you click on that link, it's going to look a little bit different. It's going to say skip the waitlist, digital asset news, and you're going to be able to jump all the people over there because you are part of my subscriber base. And that is exactly what I have now. You don't have to use the link. This is an affiliate link. Just so you know, if you don't want to use it, that's fine. Just know this is a little bit of wait time, but whatever you want to do. And again, this is what I'm doing for right now. And if you're in the United States, this is not just for American citizens. International investors are welcome. Any person, including corporate entities outside the US, can invest in our offerings. We use a Cayman structure that allows for any gains to be taxed in your country of residency. So everything is on the up and up. And just as a reminder, this isn't something that is going to be a major or a huge amount of my portfolio. It's just a small part to balance everything out. I'm not saying that this is what I would do for like 100%, but I think it might be a good alternative for me and what I do and for my goals. So that is it for today. I just want to bring that to your attention and hopefully it brings value. So if you liked the video, go ahead and give it a thumbs up, consider subscribing. All things to talk about are time sensitive. And that's it for today. So thanks so much for watching. I appreciate it. I'll see you on the next one.