This document discusses passion investments, which are collectible items from hobbies that increase in value due to rarity and popularity. It provides examples of vintage watches increasing in value as passion investments. The key points made are: - Passion investments appeal emotionally and tell unique stories that cannot be replicated. Their value comes from the time period they were made. - Rarity drives value, as vintage items cannot be replicated, unlike new products that face imitation. - Advantages include fun from the hobby, inflation hedging, portfolio diversification, and potential high returns. Disadvantages include risk of a fad ending and lack of hedging options. - Case material, provenance, and brand

1. Passion Investments:
An Asset Class that
won’t put you to sleep.
By Leon Liao

2. What is an Investment?
• ɪnˈvɛs(t)m(ə)nt/
o Noun
o the action or process of investing money for profit.
o "a debate over private investment in road-building“
o synonyms: investing, speculation; More

3. What is a Passion?
• ˈpaʃ(ə)n/
• Noun
• A strong and barely controllable emotion

4. What is a Passion Investment?
• A collectible item from a hobby that increases in value due to
rarity and popularity.
• Originates when a person wants to unite a hobby with
speculation.
• E.g. Alfredo Paramico former head of Global Markets at Banco
Bilbao Vizcaya Argentaria SA now runs “Precious Time”
($35mm AUD) a fund that invests in vintage watches

5. Why do Passion Investments
increase in value?
• People love stories. Passion investments tell stories that
cannot be replicated by modern luxury. It is an emotional
purchase – similar to why people will pay $15k-100k for a
Birkin.
• Rarity. Normally, when a new product is released, there will be
imitators. Vintage items cannot be replicated because their
value comes from the time period from when they were
released.
• Fad. Contrarians believe that there is a bubble. (good luck
shorting vintage watches)

6. Ben Clymer from Hodinkee
Rarity
• “…there is nothing that is so lasting. These are all so
multigenerational….I think this can connect one generation to
another generation even though they never overlapped”
Emotional Value
• “These things can be real talismans to a previous life, a
previous generation…. This is one of the few things that
belonged to him and one of the things that I can take with me
everyday”

7. Advantages of Passion
Investment
• It’s your hobby! So it’s fun!
• Inflation hedged – the vintage items run in line with inflation.
• Diversifies a portfolio. Passion investments are equity/debt
market uncorrelated.
• Incredible returns if you pick a winner

8. Disadvantages of Passion
Investments
• What if it is a fad?
• No way to hedge exposure with derivatives.
• Opaque and asymmetric market.
• No central marketplace.
• Fakes?

9. Price Evolutution

10. Paul Newman Daytona
Sold for $1,089,186 on
November 10, 2013
(Christies)
Manufactured in 1969 with
original Rolex guarantee
dated 1978 and Rolex box

11. Things to Look out For
• 1. Case Material (Steel is Best!)

12. 2. Historical Provenance
Duke Ellington is an American jazz legend.

13. 3. Brand
• Mainstream brands, Rolex, Patek, AP, Vacheron Constantin,
Tudor are easy to sell
• You could take a long position in a brand that is about to be
resurrected.
• E.g. Vintage Panerai before being resurrected by Richemont
• Blancpain before being resurrected by by Jean Claude Biver
and being sold to Swatch