WEBVTT - 59: What Sneakers Can Tell You About How Financial Markets Work 0:00:09.240 --> 0:00:12.680 Hi, and welcome to another episode of the Odd Lots Podcast. 0:00:12.760 --> 0:00:18.640 I'm Tracy Alloway and I'm Joe Wish Joe, I bet 0:00:18.960 --> 0:00:22.520 I can guess what shoes you've got on your feet? 0:00:23.040 --> 0:00:27.160 Oh no, I totally messed that up. Well, what were 0:00:27.200 --> 0:00:31.200 you going to guess? I totally messed it up. I 0:00:31.280 --> 0:00:33.800 was supposed to say, I bet I can guess what 0:00:33.960 --> 0:00:39.479 you've got on your know what shoes you've you had? No, 0:00:39.640 --> 0:00:42.000 I remember, I bet I can guess where you got 0:00:42.000 --> 0:00:48.000 those shoes? Where on your feet? That really was a 0:00:48.120 --> 0:00:51.720 disastrous opening to this podcast. I know. I can't believe 0:00:51.720 --> 0:00:55.160 I messed that up so much. Um, okay, Well, with 0:00:55.200 --> 0:00:58.840 that embarrassment aside, Um, we are actually going to talk 0:00:58.840 --> 0:01:01.680 about shoes today. I'm really excited because not only are 0:01:01.680 --> 0:01:04.319 we talking about shoes, we're going to be talking about 0:01:04.440 --> 0:01:08.520 sneakers and collecting sneakers in the market for sneakers, and 0:01:08.560 --> 0:01:12.800 there's someone who owns a lot of Nikes, including one 0:01:12.880 --> 0:01:17.080 or two pairs of Jordan's and dunks. I am particularly 0:01:17.120 --> 0:01:20.800 excited about this discussion. So I know nothing about the 0:01:20.840 --> 0:01:26.280 market for sneakers. Are Jordan's better than Nikes? Well, Jordan's 0:01:26.600 --> 0:01:28.399 Nike you know, it's a it's a kind of it's 0:01:28.400 --> 0:01:32.679 a category of Nike. Oh god, I just keep embarrassing 0:01:32.720 --> 0:01:36.520 myself today. Um okay, well all right, without further ado, 0:01:36.560 --> 0:01:39.800 then why don't we bring on our guest for this episode. 0:01:39.840 --> 0:01:43.680 It is Josh Luber. He is the founder of stock x, 0:01:43.760 --> 0:01:48.120 which is basically a stock exchange for sneakers. So we're 0:01:48.120 --> 0:01:50.680 going to talk all about what it's like to make 0:01:50.720 --> 0:02:07.120 a market in a semi unusual asset. I would say, Josh, 0:02:07.160 --> 0:02:11.160 thank you very much for joining us. Uh, tell us 0:02:11.280 --> 0:02:16.040 about your stock exchange for sneakers? What is it? Sure? Well, 0:02:16.080 --> 0:02:20.720 thanks for having me. Um. Stock x is a consumer marketplace, 0:02:21.240 --> 0:02:24.480 not unlike eBay or Amazon. It's a place where we 0:02:24.480 --> 0:02:28.000 connect buyers and sellers, and in particular right now, we 0:02:28.040 --> 0:02:32.360 connect them to buy sneakers. But the way that we 0:02:32.440 --> 0:02:35.919 do that is in the exact same format, the exact 0:02:35.919 --> 0:02:39.080 same process that the stock exchange uses. And what that 0:02:39.120 --> 0:02:43.120 means is, first of all, it's anonymous, right, buyers and sellers, 0:02:43.240 --> 0:02:45.680 you know, transact with the market. Um. You don't have 0:02:45.720 --> 0:02:47.880 to worry about who the seller is or where they're located, 0:02:47.960 --> 0:02:49.880 or what the review is. It's totally anonymous, just like 0:02:49.919 --> 0:02:53.880 buying the sheriff stock. Second, there is data. There is 0:02:53.960 --> 0:02:56.240 data to understand what things are worth, what things are 0:02:56.280 --> 0:02:58.959 selling for, and have a history of data, so unlike 0:02:58.960 --> 0:03:01.639 going to Amazon and saying only what something is listed for, 0:03:01.919 --> 0:03:04.160 you can see every price that it's ever sold for. 0:03:04.800 --> 0:03:08.399 But more importantly than those two things is what's called 0:03:08.639 --> 0:03:12.280 the live bid ask market, which is how the stock exchange, 0:03:12.520 --> 0:03:15.679 how the stock market reaches a market price. Buyer's place 0:03:15.800 --> 0:03:17.840 bids how much they're willing to pay for something, and 0:03:17.840 --> 0:03:20.600 seller's place asks how much they're willing to sell it for, 0:03:20.840 --> 0:03:24.280 and when it been't, ask me, the transaction happens automatically. 0:03:24.560 --> 0:03:26.640 There's a reason why the stock exchange has been the 0:03:26.639 --> 0:03:29.440 most efficient form of commerce for hundreds of years, and 0:03:29.520 --> 0:03:32.520 this is why. And we are taking that process that 0:03:32.600 --> 0:03:35.480 the stock exchange uses and bring it to consumer goods 0:03:35.760 --> 0:03:38.960 and we're starting with sneakers. Josh, can we step back 0:03:39.000 --> 0:03:43.280 for a second, because when I think about investable assets, UM, 0:03:43.320 --> 0:03:47.600 I have to admit I do not necessarily think about sneakers. 0:03:48.120 --> 0:03:52.640 What what is the market like for a high value sneakers? 0:03:53.200 --> 0:03:56.680 The biggest distinction between sort of h cong this the 0:03:56.720 --> 0:04:00.360 stock market versus how people traditionally think about it is 0:04:00.400 --> 0:04:03.400 that it's really about connecting buyers and sellers to exchange 0:04:03.400 --> 0:04:05.720 a physical good. The fact that you may or may 0:04:05.720 --> 0:04:08.200 not be able to invest in sneakers and make money 0:04:08.480 --> 0:04:11.840 is almost tangential to that. But that said, the sneaker 0:04:11.880 --> 0:04:14.960 resell market within the United States is about a one 0:04:15.000 --> 0:04:18.720 point to one point three billion dollar industry. So that's 0:04:18.760 --> 0:04:21.680 people buying a pair of sneakers at say, foot locker, 0:04:22.040 --> 0:04:24.320 and then going and turning around and reselling them on 0:04:24.400 --> 0:04:27.080 stock x for a hundred dollars more two hundred dollars 0:04:27.120 --> 0:04:30.520 more than they paid for it. So let's back up. 0:04:30.640 --> 0:04:34.080 Tell us about yourself. How did you get what made 0:04:34.080 --> 0:04:37.400 you want to create this, what's your interest in sneakers, 0:04:37.440 --> 0:04:41.000 and how did your interest in financial markets come together. 0:04:41.640 --> 0:04:45.000 My background is, uh that I'm a startup guy. I've 0:04:45.040 --> 0:04:48.480 started and run a few startups before this, and none 0:04:48.480 --> 0:04:52.159 of them have ever been within the sneaker industry. Because 0:04:52.440 --> 0:04:55.279 on a personal note, I have collected sneakers since I was, 0:04:55.640 --> 0:04:58.400 you know, probably in middle school. Um, I am thirty 0:04:58.480 --> 0:05:00.720 eight years old, and I have the exact same story 0:05:01.200 --> 0:05:03.479 as every other thirty eight year old sneaker head, which 0:05:03.480 --> 0:05:06.200 is I grew up playing basketball when Jordan played, and 0:05:06.200 --> 0:05:08.320 I always wanted Air Jordan's, and my mother never buy 0:05:08.320 --> 0:05:10.159 me Air Jordan's. As soon as I had some money, 0:05:10.160 --> 0:05:13.560 I bought Air Jordan's, and you know, and and so 0:05:13.640 --> 0:05:16.839 that was a personal passion. And at some point along 0:05:16.839 --> 0:05:19.479 the way, as I was doing a lot of other 0:05:19.600 --> 0:05:22.080 data work in my career, I decided to try to 0:05:22.120 --> 0:05:25.320 figure out whether we could pull in sneaker data and 0:05:25.360 --> 0:05:27.599 whether we could build a price guide. And so in 0:05:27.640 --> 0:05:31.159 early I created a company that was called camp Liss 0:05:31.400 --> 0:05:33.480 C A M p l e. S. S. And it 0:05:33.560 --> 0:05:35.640 was a price guide. It was the Kelly blue Book 0:05:35.800 --> 0:05:38.080 for sneakers, where we were pulling in data from all 0:05:38.120 --> 0:05:41.839 the other places that sneakers sold, primarily on eBay, and 0:05:41.880 --> 0:05:44.560 figuring out what they were actually worth. And that was 0:05:44.600 --> 0:05:47.360 the genesis of this as the as the sneaker data company, 0:05:47.400 --> 0:05:49.720 as the price guide grew, as people started using it, 0:05:49.960 --> 0:05:52.080 there was a natural progression of well, if I know 0:05:52.160 --> 0:05:54.760 the price of one pair of sneakers, then I could 0:05:54.760 --> 0:05:57.359 tell you the value of your entire sneaker collection. And 0:05:57.400 --> 0:05:59.240 you could look at that data the same way you 0:05:59.279 --> 0:06:02.200 look at a stock portfolio. And once you know the 0:06:02.240 --> 0:06:05.120 price of one pair and you know portfolio pricing, then 0:06:05.120 --> 0:06:07.200 there was this natural leap of maybe we could actually 0:06:07.240 --> 0:06:11.880 create a marketplace that operated like a stock market. So, uh, 0:06:12.080 --> 0:06:16.600 what is in your collection? What is your your single 0:06:16.720 --> 0:06:22.000 prize pair of Jordan's And give us a range for 0:06:22.040 --> 0:06:24.440 the value of your collection if you don't mind, based 0:06:24.480 --> 0:06:27.360 on the prices on your side, Can I hijack Joe's 0:06:27.440 --> 0:06:30.000 question and say, can you also explain the difference between 0:06:30.120 --> 0:06:36.400 Nikes and Air Jordan's. Sure? So, um, there's a lot 0:06:36.440 --> 0:06:39.679 of different sneaker brands out there, and um and Nike 0:06:40.279 --> 0:06:43.600 which owns the Air Jordan brand, right, but they are 0:06:43.680 --> 0:06:48.039 separate brands have historically been the dominant part of the 0:06:48.200 --> 0:06:51.359 resale market, the secondary market for sneakers, dating back to 0:06:52.480 --> 0:06:56.200 when Air Jordan's were first released. And so um, it's 0:06:56.240 --> 0:06:58.680 just a distinction between the two brands that you know, 0:06:58.800 --> 0:07:02.360 Nikes make Nike season and uh and Jordan Brand makes 0:07:02.400 --> 0:07:05.440 Air Jordan's. Um, but they're both, you know, make up 0:07:05.480 --> 0:07:10.240 the dominant chair of the resale market. In fact, through February, 0:07:10.520 --> 0:07:15.360 Nike including Jordan Brand, accounted for nine of the resale 0:07:15.360 --> 0:07:20.000 sneaker market, and in February, Adidas released the Yeasy, which 0:07:20.040 --> 0:07:23.320 is Kanye West shoe with Adidas, and it started a 0:07:23.320 --> 0:07:26.040 really a year and a half process of Adidas becoming 0:07:26.040 --> 0:07:28.280 a lot more relevant on the secondary market. And today 0:07:28.280 --> 0:07:31.960 Adidas makes up about of the resale market in terms 0:07:31.960 --> 0:07:35.120 of dollars, but it is still overwhelmingly dominated by Nikes 0:07:35.160 --> 0:07:37.920 and in particular Air Jordan's all right, now, tell us 0:07:37.920 --> 0:07:41.360 about your collection a little bit. So you know, I've 0:07:41.400 --> 0:07:44.400 been collecting sneakers for probably thirty years, UM, and I 0:07:44.440 --> 0:07:49.239 have a very average collection within the sneaker head world. 0:07:49.760 --> 0:07:53.200 I have about maybe three four hundred pairs of sneakers, 0:07:53.320 --> 0:07:57.200 which sounds crazy, but there are people with thousands of 0:07:57.200 --> 0:08:00.720 pairs of sneakers, so you know, within the sneaker universe. Uh, 0:08:00.800 --> 0:08:04.200 you know, it's a it's a pretty average collection. But UM, 0:08:04.240 --> 0:08:07.520 I do have um one pair in particular that is 0:08:07.520 --> 0:08:11.560 is pretty special. UM so UM. We announced a couple 0:08:11.600 --> 0:08:14.200 of months ago that Eminem is an investor and partner 0:08:14.280 --> 0:08:18.200 with stock x UM and UM and through that UM 0:08:18.240 --> 0:08:21.840 I was able to become friendly with people there and 0:08:21.880 --> 0:08:26.320 I was given a pair of Air Jordan's four Eminem 0:08:26.400 --> 0:08:28.720 carhart and this is a collaboration that Eminem and the 0:08:28.800 --> 0:08:31.680 brand Carhart did with Air Jordan's and there were only 0:08:31.720 --> 0:08:35.200 ten pairs released the public. They were sold on eBay, 0:08:35.240 --> 0:08:37.679 this is before stock ex existed, and they sold for 0:08:37.720 --> 0:08:41.960 an average price of twenty three thousand dollars. And so, UM, 0:08:42.000 --> 0:08:43.960 I have a pair of those, Um, I will not 0:08:44.040 --> 0:08:47.319 be selling mind mine is Uh, there's more sentimental value 0:08:47.320 --> 0:08:50.120 in terms of our relationship with with Eminem and the 0:08:50.160 --> 0:08:52.719 fact that it came from him. But it's certainly the 0:08:53.160 --> 0:08:55.719 most valuable and most interesting pair in my collection. That 0:08:55.840 --> 0:09:00.160 is pretty sweet, Josh. I have so many questions, um 0:09:00.600 --> 0:09:03.600 right now, I'm trying to narrow them down. UM. Okay, 0:09:03.640 --> 0:09:06.200 So first of all, I have to ask do you 0:09:06.360 --> 0:09:12.720 wear your collection of sneakers? Everyone within this sneaker world, Um, 0:09:12.760 --> 0:09:16.079 there's a there's a spectrum from people on on the 0:09:16.080 --> 0:09:19.240 far one end where pure business people and are here 0:09:19.720 --> 0:09:23.720 just to to to make money, UM, to the sort 0:09:23.720 --> 0:09:26.000 of pure sneaker collectors who could care less about the 0:09:26.080 --> 0:09:28.920 value of the shoes and they wear them and um 0:09:28.960 --> 0:09:32.680 and aren't really trying to aren't concerned about about sort 0:09:32.679 --> 0:09:36.760 of maintaining the value or the or the condition sneakers 0:09:36.800 --> 0:09:39.920 just like anything else. Um, once they're worn, the more 0:09:39.920 --> 0:09:43.559 they're warned, the value of them goes down. Me in particular, 0:09:44.000 --> 0:09:46.640 I wear pretty much all of my sneakers. UM. I 0:09:46.720 --> 0:09:48.760 buy sneakers for myself and I wear them. And I'm 0:09:48.800 --> 0:09:51.680 not a very big reseller trying to make money. Um. 0:09:51.720 --> 0:09:54.040 But with about four pairs of sneakers, there's certainly some 0:09:54.040 --> 0:09:57.400 pairs I haven't worn yet. UM, but I'm certainly I 0:09:57.480 --> 0:10:00.360 certainly will at some point. All right, let's get to 0:10:00.640 --> 0:10:04.839 the subject of the you know your financial market for sneakers, 0:10:04.920 --> 0:10:08.520 because this sort of speaks to a reoccurring theme that 0:10:08.559 --> 0:10:12.000 we've discussed on the Odd Lots podcast, which is the 0:10:12.080 --> 0:10:16.840 relationship between the listing of a price, the creation of 0:10:16.880 --> 0:10:21.080 an index, the creation of transparent pricing, and then the 0:10:21.120 --> 0:10:24.360 market itself. And we've discussed this in several ways. We've 0:10:24.360 --> 0:10:28.800 had multiple episodes about the bond market and its relative 0:10:28.960 --> 0:10:33.840 transparency or lack of transparency. We've talked about baseball cards 0:10:33.920 --> 0:10:37.760 and the Beckett magazine and Beanie Babies and the magazine 0:10:37.800 --> 0:10:40.360 that came around those in the nineties and how that 0:10:40.440 --> 0:10:43.960 led to price booms. So let's talk about what the 0:10:44.080 --> 0:10:48.840 creation of transparent pricing and consistent listing means for the 0:10:48.880 --> 0:10:52.400 actual functioning of the sneaker market. What have you seen 0:10:52.480 --> 0:10:56.359 in terms of the back and forth, what your initial 0:10:56.880 --> 0:10:59.800 recording of eBay prices meant to the market and how 0:10:59.840 --> 0:11:03.480 it traded, and then of course your news site stock 0:11:03.679 --> 0:11:06.640 x and how that has affected the market itself. That's 0:11:06.640 --> 0:11:11.040 a phenomenal question, right Transparency of data is everything, and 0:11:11.320 --> 0:11:16.320 it is uh so rare to find true transparency of 0:11:16.440 --> 0:11:20.240 pricing information UM in any market right now besides the 0:11:20.280 --> 0:11:22.800 actual stock market. And that's a big part of what 0:11:23.320 --> 0:11:27.280 UM drives us in and was the foundation of creating this. 0:11:27.960 --> 0:11:30.679 A phenomenal example of this go back to the camp 0:11:30.800 --> 0:11:32.920 Less days and so when we were a price guide 0:11:32.920 --> 0:11:35.360 and we were the sort of the the the index 0:11:35.440 --> 0:11:39.360 for sneakers and what they were selling for. We created 0:11:39.640 --> 0:11:42.160 a blog that was kind of like fre Economics for 0:11:42.160 --> 0:11:44.880 sneakers and doing this really high level data analysis and 0:11:44.920 --> 0:11:47.920 putting it on the blog. And one of them was 0:11:48.160 --> 0:11:52.400 an analysis into the difference between actual price and the 0:11:52.600 --> 0:11:57.080 perception of price on eBay. Right So, there was this 0:11:57.120 --> 0:12:00.440 perception within the sneaker community that sneakers were very sensive 0:12:00.559 --> 0:12:04.880 on eBay, and we had a hypothesis that whatever you 0:12:05.040 --> 0:12:08.160 see on eBay at any given moment is something that 0:12:08.400 --> 0:12:13.079 is overpriced because it's been sitting there for a long time, 0:12:13.240 --> 0:12:15.599 or or the inverse, right, it's been sitting there for 0:12:15.640 --> 0:12:18.120 a long time because it's over priced, and that you're 0:12:18.160 --> 0:12:20.880 more likely to see those because the good deals will 0:12:20.920 --> 0:12:23.960 disappear immediately and someone will buy them until by having 0:12:24.080 --> 0:12:27.160 access to the the actual sales data and to be 0:12:27.200 --> 0:12:29.440 able to look through that and create transparency into what 0:12:29.480 --> 0:12:32.640 its sinkers actually sell for, what we found was there 0:12:32.720 --> 0:12:37.080 was a difference of about thirty between people's perception of 0:12:37.160 --> 0:12:40.520 price given the average number of days that we see 0:12:40.520 --> 0:12:42.800 each auction. I mean, we can go into the details 0:12:42.800 --> 0:12:45.440 of it, but essentially between the actual price of what 0:12:45.480 --> 0:12:48.920 are you sold for versus what people would think it 0:12:49.080 --> 0:12:51.679 sold for given how often they saw it, there was 0:12:51.679 --> 0:12:54.840 a difference of thirty in the perception of what a 0:12:54.880 --> 0:12:59.280 sneaker was worth. So josh Um Joe kind of already 0:12:59.360 --> 0:13:01.440 touched on us. But we've we've done a lot of 0:13:01.440 --> 0:13:05.000 episodes about the bond market and how difficult it is 0:13:05.400 --> 0:13:09.680 to trade bonds simply because unlike stocks, a bond will 0:13:09.679 --> 0:13:13.800 come in all sorts of flavors of maturity and coupon 0:13:13.960 --> 0:13:16.120 and things like that. And it kind of strikes me 0:13:16.160 --> 0:13:20.280 that sneakers are similar in the at the very least, 0:13:20.520 --> 0:13:24.760 you have a variety of sizes, right, So, like, how 0:13:24.760 --> 0:13:29.480 does the size issue affect trading of sneakers? Do people 0:13:29.559 --> 0:13:32.640 only want to buy sneakers in their sizes or do 0:13:32.720 --> 0:13:36.920 they look beyond that because they're betting on future value. 0:13:37.920 --> 0:13:41.360 There's I think there's some similarity, um in this sort 0:13:41.360 --> 0:13:43.559 of lack of transparency in the sneaker market. But it's 0:13:43.600 --> 0:13:46.960 not really around UM size, right, It's really about channel 0:13:47.480 --> 0:13:51.200 UM first to mention quickly on size UM. You know, 0:13:51.320 --> 0:13:55.160 the entire sneaker recent market is just supply and demand, right, 0:13:55.280 --> 0:13:57.720 It is econ one oh one UM. It is the 0:13:57.720 --> 0:14:00.800 difference between the supply that the brands put out and 0:14:00.840 --> 0:14:04.120 what the demand is for those particular sneakers, and the 0:14:04.200 --> 0:14:06.720 gap in that UM and how big or small that 0:14:06.840 --> 0:14:09.240 is will depend you know, how much the shoe sells for. 0:14:09.320 --> 0:14:12.760 I mean it is pretty straightforward. And in general, even 0:14:12.760 --> 0:14:16.280 on the limited and exclusive sneakers, the brands uh know 0:14:16.440 --> 0:14:20.040 pretty well the size distribution of the population. So there 0:14:20.040 --> 0:14:22.400 may be less size fourteens in the market, but there's 0:14:22.440 --> 0:14:24.400 less people that want to buy a size fourteen in 0:14:24.440 --> 0:14:27.800 the market. So in general, UM, that doesn't have too 0:14:27.840 --> 0:14:31.520 much UM difference, too much disparity in the price based 0:14:31.560 --> 0:14:35.280 on the size. But where the majority of the sort 0:14:35.280 --> 0:14:38.480 of lack of transparency still happens is in the distinction 0:14:38.480 --> 0:14:42.240 between the channels. So unlike you know, a stock market 0:14:42.280 --> 0:14:46.040 which essentially has a monopoly on any particular UM stock, 0:14:46.720 --> 0:14:49.400 you can buy yourself sneakers anywhere. UM. You know, eBay 0:14:49.480 --> 0:14:52.640 is is still the largest marketplace stock x. There's other 0:14:52.720 --> 0:14:55.840 mobile sneaker apps. UM. There are people buy and sell 0:14:55.840 --> 0:14:58.400 on Twitter, on Facebook, on Instagram, I mean anywhere that 0:14:58.440 --> 0:15:01.200 sneaker has come into contact with a each other, shoes 0:15:01.200 --> 0:15:03.520 are gonna be bought and sold. And the majority of 0:15:03.520 --> 0:15:07.200 those channels, just like the majority of other marketplaces, there's 0:15:07.280 --> 0:15:11.000 just there's imperfect information. Right. The seller UM is the 0:15:11.040 --> 0:15:13.520 one who really understands the market better and the buyers 0:15:13.600 --> 0:15:16.440 left it well whatever the sellers, I can see whatever 0:15:16.480 --> 0:15:19.320 they're they're selling for, and so I bring that all 0:15:19.320 --> 0:15:22.480 in one place, right, And a really fundamental tenant of 0:15:22.520 --> 0:15:24.920 house stock X works and why It's like the stock market, 0:15:25.000 --> 0:15:29.640 is that there's one place, there's one called ticker symbol 0:15:29.680 --> 0:15:32.040 for one shoe. Right, So if you go to eBay 0:15:32.040 --> 0:15:34.520 and you type in the Air Jordan eleven space Jam, 0:15:34.600 --> 0:15:37.800 which is the shoe that is the the most popular 0:15:37.800 --> 0:15:41.040 shoe that Air Jordan put out, and there's a rumor 0:15:41.120 --> 0:15:43.480 to be over a million pairs, but people are buying 0:15:43.520 --> 0:15:45.480 and reselling them. If you type in air Jordan eleven 0:15:45.520 --> 0:15:48.000 space and one eBay, you will get a thousand listings, 0:15:48.040 --> 0:15:50.320 maybe five thousand listings. But if you go to the 0:15:50.360 --> 0:15:51.960 New York Stock Exchange and you want to buy a 0:15:51.960 --> 0:15:55.480 Sheriff Apple stock, there's one ticker symbol for Apple. And 0:15:55.520 --> 0:15:58.040 in the same way, there's one place there's one ticker 0:15:58.080 --> 0:16:00.960 symbol for Jordan eleven space Jam, one stock X. And 0:16:01.000 --> 0:16:04.040 by bringing every bit and every ass to one place, 0:16:04.520 --> 0:16:07.280 you can now create more transparency of what's going on 0:16:07.320 --> 0:16:10.000 in the market. There's still nineteen other channels, and you 0:16:10.040 --> 0:16:13.840 still lose that transparency if you're within any of those channels. 0:16:13.880 --> 0:16:16.440 But that's the bigger idea around using a stock market 0:16:16.520 --> 0:16:20.240 drive transparency. It's not only historical pricing data, but it's 0:16:20.240 --> 0:16:22.720 also about what is going on right now? What do 0:16:22.800 --> 0:16:24.440 people want to buy it for and when people want 0:16:24.480 --> 0:16:28.920 to sell it for? So I have two questions. One is, 0:16:29.640 --> 0:16:32.720 since you've had this push in sort of multiple endeavors 0:16:32.760 --> 0:16:36.920 to create transparency, a has there been an observed I 0:16:36.920 --> 0:16:40.520 guess I would say narrowing of spreads where even across 0:16:40.640 --> 0:16:44.360 multiple channels, because there is this reference the prices of 0:16:44.480 --> 0:16:47.000 a given sneaker, do they tend to cluster more as 0:16:47.080 --> 0:16:50.880 people start to four months some idea and to um, 0:16:51.000 --> 0:16:55.360 is there any sort of cross sneaker price correlation Gaussian 0:16:55.400 --> 0:16:59.600 copula is so to speak, where one sneaker trade sort 0:16:59.640 --> 0:17:02.440 of sit milar lead to another sneaker. They're not identical, 0:17:02.920 --> 0:17:05.000 but maybe they're of the same year or of the 0:17:05.040 --> 0:17:08.199 same style, and so you start to see relationships in 0:17:08.240 --> 0:17:12.760 the pricing of slightly different sneakers. These are these are 0:17:12.920 --> 0:17:15.840 phenomenal questions, right, This is exactly what we see happening 0:17:15.840 --> 0:17:19.919 and what we UM observe and look for as we 0:17:19.960 --> 0:17:22.240 continue to build the market and make sure that that 0:17:22.280 --> 0:17:25.040 it works the way it should. Um. So the first 0:17:25.080 --> 0:17:27.720 question with regard to to spread, and it's really about 0:17:27.720 --> 0:17:31.119 sort of narrowing of margins. The people that are most 0:17:31.880 --> 0:17:35.360 upset about stock X on today as we as were 0:17:35.400 --> 0:17:38.560 you know, ten months into this. UM are the ones 0:17:38.600 --> 0:17:41.520 who used to be able to UM sell sneakers for 0:17:41.600 --> 0:17:44.840 more money and trade on imperfect information. UM. But as 0:17:44.880 --> 0:17:47.320 you bring more buyers together, and in particularly the shoes 0:17:47.359 --> 0:17:49.960 that have high volume, where there's really a lot of 0:17:49.960 --> 0:17:52.480 bids and a lot of asks happening at the same time, 0:17:52.760 --> 0:17:55.159 and you can literally see business coming off the board, 0:17:55.240 --> 0:17:59.320 you know, real time, you know, as as trades are happening. UM, 0:17:59.359 --> 0:18:02.960 what we see is that there's lower profit within those 0:18:02.960 --> 0:18:06.680 shoes within the market then people used to be able 0:18:06.720 --> 0:18:09.000 to get. And that's natural, right, I mean that that's 0:18:09.080 --> 0:18:12.920 natural to happen. As more buyers then come into the market, right, 0:18:13.000 --> 0:18:15.960 it'll start to to push that price back up. But 0:18:16.119 --> 0:18:19.280 on day one, all the sellers are constantly looking for 0:18:19.320 --> 0:18:21.560 as many places to sell as possible, So they're the 0:18:21.560 --> 0:18:24.640 ones that are more easily UM, were more quickly gonna 0:18:24.680 --> 0:18:27.159 gonna utilize stock X and list there. So as you 0:18:27.200 --> 0:18:29.679 have more sellers, the price will come down. And we 0:18:29.800 --> 0:18:33.240 do see spreads really low on the very populous shoes 0:18:33.280 --> 0:18:35.280 like the Jordan eleven Space Jam. So you may see 0:18:35.280 --> 0:18:39.040 a spread of two five dollars, But on a shoe 0:18:39.080 --> 0:18:41.400 that came out maybe six seven years ago, where there's 0:18:41.400 --> 0:18:44.200 a lot less volume, that spread might be fifty dollars 0:18:44.320 --> 0:18:47.120 or a hundred dollars. And so it's really about liquidity. 0:18:47.200 --> 0:18:49.880 And we don't have perfect liquidity the way a stock 0:18:49.920 --> 0:18:52.439 market does, where every apple stock needs to be traded 0:18:52.480 --> 0:18:55.520 through that ticker symbol, right, But the more liquidity that 0:18:55.560 --> 0:18:58.280 comes there, that the better that that becomes. Sounds like 0:18:58.320 --> 0:19:00.080 on the run and off the run bond price. Know 0:19:00.280 --> 0:19:02.959 this sounds exactly. I'm sorry, but this sounds exactly like 0:19:03.080 --> 0:19:07.359 pitches I've heard from bond trading venues for the past 0:19:07.480 --> 0:19:10.440 five or six years. It's really phenomenal. The overlap here. 0:19:10.920 --> 0:19:14.199 The larger hypothesis is that you should be able to 0:19:14.200 --> 0:19:18.280 buy or sell any consumer good using this process, right, 0:19:18.320 --> 0:19:21.440 as long as it's not a purely commoditized product already, 0:19:21.520 --> 0:19:25.400 like say plastic water bottles or toilet paper, and it's 0:19:25.440 --> 0:19:27.679 not a complete, unique, one of a kind item like 0:19:27.680 --> 0:19:30.840 a work of art orhouse anything that has some finite 0:19:30.880 --> 0:19:34.359 quantity of supply. All we're doing is adding the demand 0:19:34.400 --> 0:19:36.720 side of the equation. And once you do that, you 0:19:36.760 --> 0:19:39.000 can get into a place where you have a more 0:19:39.040 --> 0:19:42.080 efficient market that UM that allows people to to buy 0:19:42.080 --> 0:19:44.760 and sell leveraging you know, the piece that no one 0:19:44.800 --> 0:19:47.600 ever had, which is the demand side. So it really 0:19:47.680 --> 0:19:52.520 is in some cases or in some views almost logical. 0:19:52.680 --> 0:19:56.160 The logical step of you know, stock is stock market 0:19:56.240 --> 0:19:59.680 is about the delivery of a digital certificate for ownership 0:19:59.760 --> 0:20:03.159 of UH piece of the company. This is just a 0:20:03.200 --> 0:20:06.119 delivery of a physical good. Everything else should be exactly 0:20:06.200 --> 0:20:11.560 the same. Josh, what is the most valuable sneaker of 0:20:11.640 --> 0:20:15.520 all time? And what would you recommend that Joe and 0:20:15.560 --> 0:20:18.800 I go by now if we were looking for something 0:20:18.840 --> 0:20:22.080 that was maybe undervalued that was going to UM pop 0:20:22.280 --> 0:20:26.600 sometime in the future. The most valuable sneaker, let's say, 0:20:26.640 --> 0:20:30.560 the most expensive sneaker that is sold recently. UM. About 0:20:30.760 --> 0:20:35.560 a month or two ago, Nike released what's called the 0:20:35.560 --> 0:20:39.440 the Nike mag which is the self lacing shoe from 0:20:39.480 --> 0:20:44.679 Back to the Future Too. They made eighty nine pairs, right, 0:20:44.760 --> 0:20:48.840 they made eighty nine pairs. They were sold through raffles 0:20:48.960 --> 0:20:52.320 UM to raise money for Michael J. Fox Parkinson Foundation. 0:20:53.600 --> 0:20:56.840 And once they got into the market, UM with only 0:20:56.880 --> 0:20:59.159 eighty nine pairs and it being. You know, you have 0:20:59.280 --> 0:21:01.639 the nostalgia aspect of back to the future, and you 0:21:01.640 --> 0:21:04.800 have sneaker heads, and you have power lacing. UM. There 0:21:04.880 --> 0:21:07.600 was one pair that reportedly sold for two hundred thousand 0:21:07.640 --> 0:21:10.879 dollars at an auction, and another pair that's sold for 0:21:10.960 --> 0:21:14.199 a hundred thousand dollars at a different auction. UM. We 0:21:14.240 --> 0:21:16.320 had one of those sell on stocks so far and 0:21:16.320 --> 0:21:18.639 it sold for about It sold for twenty five thousand 0:21:18.680 --> 0:21:21.280 dollars UM, and there's others that are listed right now 0:21:21.280 --> 0:21:23.480 on stock x for about fifty or sixty thousand dollars. 0:21:24.080 --> 0:21:26.680 But that shoe is so rare, with only eighty nine 0:21:26.720 --> 0:21:30.399 pairs in the world, it essentially doesn't exist. I mean, 0:21:31.200 --> 0:21:32.760 it might as well be a unique, one of a 0:21:32.840 --> 0:21:34.919 kind item because the odds of finding any one person 0:21:35.160 --> 0:21:37.200 that's going to pay twenty five thousand dollars letter in 0:21:37.240 --> 0:21:40.879 two hundred thousand dollars, it's so you know, it's just 0:21:40.960 --> 0:21:43.720 so rare. But that's the that's what's out there right now. 0:21:44.560 --> 0:21:46.960 It's certainly the thing that UM that all sneaker heads 0:21:46.960 --> 0:21:49.320 are sort of aware of and UM, and it's a 0:21:49.320 --> 0:21:51.919 pretty cool thing because it it literally works like in 0:21:51.960 --> 0:21:53.600 Back to the future too. You put your foot in it, 0:21:53.840 --> 0:21:56.280 and it and it laces automatically right around it and 0:21:56.320 --> 0:21:59.720 for a real quickly before you go, uh for an 0:21:59.800 --> 0:22:03.119 end shrint like me or Tracy who sort of I 0:22:03.160 --> 0:22:06.120 have a few sneakers, but I'm not really a sneaker head. Yeah, 0:22:06.160 --> 0:22:09.200 I clearly have no sneakers and I'm not a sneaker head. 0:22:09.400 --> 0:22:11.560 Like if we wanted to sort of dip our dip 0:22:11.600 --> 0:22:13.800 our foot into the water, where might be like a 0:22:13.840 --> 0:22:16.359 fun place, what would be one sneaker that a beginner 0:22:16.440 --> 0:22:20.080 might buy, something cool, but that's available and affordable, right 0:22:20.160 --> 0:22:23.160 and and and that's the key, because you know, buying 0:22:23.200 --> 0:22:26.000 sneakers on the recall market to make money is not 0:22:26.680 --> 0:22:29.000 actually a great idea. The majority of the money is 0:22:29.080 --> 0:22:31.159 made by those who can acquire the sneakers at the 0:22:31.240 --> 0:22:33.480