At a sports bar the other night, some friends and I were having a conversation when the topic of shoes came up. Lisa is a tall, smart pulchritudinous blond who’s in the high end retail clothing business. Clothes and accessories are integral to her life.
In an introspective mood, having just turned 30, Lisa concluded that in three decades she had accomplished little except having a good shoe collection.
“I’m good at investing in shoes,” she said.
Being a supportive person, I complimented her on her achievement and asked if she would start on handbags next?
“That market is way out of my league. Prices are too high,” she said.
Hmmm, like Google stock? I thought. But the concept of shoes as an investment started me thinking. Do shoes qualify as an investment? If so, what’s the return? What’s the risk? What’s the asset allocation of a good shoe portfolio? Can shoes be traded? Is there money to be made in a shoe hedge fund? Should I start a shoe index fund? What’s the forecast for the shoe market this year? Does the Dodd-Frank financial reform bill affect shoes? (Note: comments here concern women’s shoes only. Male investment in shoe collections is minor, although there are men who collect women’s shoes).
An investment is capital employed to provide a return which can be high or low depending on risk. Return is measurable and should be commensurate to the amount invested. The Manolo Blahnik designer brand has a pair of alligator boots available for $16,000. Excluding guarantees of no blisters, bunions or excess sweat, how can the return be measured? Apparently it doesn’t matter. Lisa says you can’t put a price on something that makes you feel special. (Sure you can: 100 shares of Google stock bought at $85).
So, shoes provide a psychic return. Is that good enough? The secondary market for shoes (financial jargon for “used”) exists only at Goodwill. Thus feeling good is the only return you can expect. Reminds me of the time I lived in New York and worked for a bank. Some mornings I would get my shoes shined. It made me feel special. But it cost only $4. Now that’s an investment.
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