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I like the concept. I believe the value of back catalogs will only increase. As they increasingly corner the market, there should be a corresponding value incre

I like the concept. I believe the value of back catalogs will only increase. As they increasingly corner the market, there should be a corresponding value increase in stock. What's not to like?

peteretep 7y ago
The thing not to like is the current stock price, because everything that you like about it will have already been analysed in deep detail by the market, and priced in. By investing in a public company, you are saying “I think the market is wrong about the potential for this company”, and I’m curious to know why you think that having read this public piece, you think the company is currently undervalued? The shares are at £109 — what price do you think they should be really?
- MaximumYComb 7y ago
  Very similar to the attitude I take with sports betting (legal in my country). You don't bet on who you think will win, you bet on who is paying odds that don't reflect your view on the event. I only bet relatively small sums and I don't bet very often (since I don't often find odds that seem poorly priced) but I've won way more than I've lost.
- erpellan 7y ago
  When I invest it’s usually because I think “I like this dividend yield.” I can buy, forget and auto-reinvest the dividends. Stock price swings are not particularly interesting if you never plan to sell.
  - peteretep 7y ago
    Do you think the market ignores the yield when pricing assets?
  - speedplane 7y ago
    > When I invest it’s usually because I think “I like this dividend yield.” That's a pretty sophomoric way to look at investing. Many companies provide no dividends. Many give large dividends, but their stock value decreases. Obviously, when considering an investment, one considers both the dividends and potential growth of the underlying asset together.
    - erpellan 7y ago
      Boring. The word is boring. Boring companies whose stock prices do nothing for 30 years but gently drift up and down with the market (or not), steadily yielding 5% dividends year after year. Usually they sell things like toilet paper, soap, electricity or other boring everyday things. When it comes to long term investing, boring is good.
      - conistonwater 7y ago
        This analysis is definitely wrong, it's discussed in textbooks too. You need to seriously, properly consider the risk of the investment, and if your model of the stock price is that it gently drifts with the market while yielding 5%, then that's just wishful thinking on your part.
      - speedplane 7y ago
        > Boring companies whose stock prices do nothing for 30 years but gently drift up and down with the market (or not), steadily yielding 5% dividends year after year. ... When it comes to long term investing, boring is good. The S&P 500 has pretty consistently had yields of 10-15% over the last 100 years. It makes more sense to invest in a "boring" ETF that follows the market making 10% than a "boring" stock that yields 5%.
    - saaaaaam 7y ago
      In this specific situation one of the clearly stated aims of Hipgnosis is to return income through dividends. https://www.hipgnosissongs.com/investment-objective-and-policy https://www.hipgnosissongs.com/investment-objective-and-poli...
- CathedralBorrow 7y ago
  That's why I ignore coins I find on the street. If they were real someone would have picked them up already.
  - jeremysmyth 7y ago
    If the market was aware of them they'd have been picked up already.
  - peteretep 7y ago
    If you see a coin on a street aggressively patrolled by hundreds of people whose fulltime job is searching for dropped coins, you’re better off assuming it’s not a coin
    - CathedralBorrow 7y ago
      Exactly. No point in even trying anything, if it's a good idea someone has already done it.
      - peteretep 7y ago
        It’s foolish to assume supernormal returns on investment in a highly competitive market without either innovation or insight, yes.
        CathedralBorrow 7y ago
        Assume supernormal returns? Who did you mean to reply to? If it was me, why are you creating words out of thin air and placing them in my mouth?
        deleted 7y ago
        [deleted]
      - lonelappde 7y ago
        It's delusional you think you are the best person in the area at something you haven't put any effort into. Especially when the area is the whole world economy.
- saaaaaam 7y ago
  You've missed a decimal point - the shares are at £1.09, not £109!
- andrepd 7y ago
  >everything that you like about it will have already been analysed in deep detail by the market, and priced in. This sounds like some religious creed, with dogmatic status. You do realise that The Market, hallowed be its name, is just people, and people are (often) wrong. The recent high profile news about wework should be a great example of this, or indeed any regular observation of our world. He just thinks the stock is going to go up in the future, based on his observations. What's so strange about that?
  - peteretep 7y ago
    No, he thinks the company has an interesting and strong business model, which is not the same as saying the stock will go up.
speedplane 7y ago
> I like the concept. I believe the value of back catalogs will only increase. ... What's not to like? Termination rights. In the 1970s, a new copyright bill was enacted that said that 35 years after the creation of a work, the ownership of that work automatically reverts back to the original creator. The idea behind the proposal was to give artists control of their works later in their career, when they may no longer be a pop sensation, kind of like a retirement account. For example, Lady Gaga may be super popular right now, but roughly around 2050, she will automatically regain the rights to her original recordings. She can then resell those rights to someone else, generating an additional bit of income later in life. So as an investor, if you buy up the rights to a bunch of works, you need to know that your ownership has an expiration date.
- lonelappde 7y ago
  Are you sure Lady Gaga and other corporate pop stars own the copyright to songs they sing? I'd expect these huge team projects to have corporate copyright. https://blog.reverbnation.com/2018/05/09/music-law-101-owns-copyright-song/ https://blog.reverbnation.com/2018/05/09/music-law-101-owns-...
  - speedplane 7y ago
    > Are you sure Lady Gaga and other corporate pop stars own the copyright to songs they sing? I'd expect these huge team projects to have corporate copyright. Lady Gaga almost certainly sold all of her rights to her label, a corporate entity, when she was signed. However, because of termination rights, 30 years later, that contract will lapse, reverting the rights back to the original artists. If 20 people created the Lady Gaga song, then it will revert back to all 20 of them jointly, and if a label wants to buy the rights, it will need to make deals with each one individually.

I like the concept. I believe the value of back catalogs will only increase. As they increasingly corner the market, there should be a corresponding value increase in stock. What's not to like?

peteretep 7y ago

The thing not to like is the current stock price, because everything that you like about it will have already been analysed in deep detail by the market, and priced in. By investing in a public company, you are saying “I think the market is wrong about the potential for this company”, and I’m curious to know why you think that having read this public piece, you think the company is currently undervalued? The shares are at £109 — what price do you think they should be really?

MaximumYComb 7y ago
Very similar to the attitude I take with sports betting (legal in my country). You don't bet on who you think will win, you bet on who is paying odds that don't reflect your view on the event. I only bet relatively small sums and I don't bet very often (since I don't often find odds that seem poorly priced) but I've won way more than I've lost.
erpellan 7y ago
When I invest it’s usually because I think “I like this dividend yield.” I can buy, forget and auto-reinvest the dividends. Stock price swings are not particularly interesting if you never plan to sell.
- peteretep 7y ago
  Do you think the market ignores the yield when pricing assets?
- speedplane 7y ago
  > When I invest it’s usually because I think “I like this dividend yield.” That's a pretty sophomoric way to look at investing. Many companies provide no dividends. Many give large dividends, but their stock value decreases. Obviously, when considering an investment, one considers both the dividends and potential growth of the underlying asset together.
  - erpellan 7y ago
    Boring. The word is boring. Boring companies whose stock prices do nothing for 30 years but gently drift up and down with the market (or not), steadily yielding 5% dividends year after year. Usually they sell things like toilet paper, soap, electricity or other boring everyday things. When it comes to long term investing, boring is good.
    - conistonwater 7y ago
      This analysis is definitely wrong, it's discussed in textbooks too. You need to seriously, properly consider the risk of the investment, and if your model of the stock price is that it gently drifts with the market while yielding 5%, then that's just wishful thinking on your part.
    - speedplane 7y ago
      > Boring companies whose stock prices do nothing for 30 years but gently drift up and down with the market (or not), steadily yielding 5% dividends year after year. ... When it comes to long term investing, boring is good. The S&P 500 has pretty consistently had yields of 10-15% over the last 100 years. It makes more sense to invest in a "boring" ETF that follows the market making 10% than a "boring" stock that yields 5%.
  - saaaaaam 7y ago
    In this specific situation one of the clearly stated aims of Hipgnosis is to return income through dividends. https://www.hipgnosissongs.com/investment-objective-and-policy https://www.hipgnosissongs.com/investment-objective-and-poli...
CathedralBorrow 7y ago
That's why I ignore coins I find on the street. If they were real someone would have picked them up already.
- jeremysmyth 7y ago
  If the market was aware of them they'd have been picked up already.
- peteretep 7y ago
  If you see a coin on a street aggressively patrolled by hundreds of people whose fulltime job is searching for dropped coins, you’re better off assuming it’s not a coin
  - CathedralBorrow 7y ago
    Exactly. No point in even trying anything, if it's a good idea someone has already done it.
    - peteretep 7y ago
      It’s foolish to assume supernormal returns on investment in a highly competitive market without either innovation or insight, yes.
      - CathedralBorrow 7y ago
        Assume supernormal returns? Who did you mean to reply to? If it was me, why are you creating words out of thin air and placing them in my mouth?
        deleted 7y ago
        [deleted]
    - lonelappde 7y ago
      It's delusional you think you are the best person in the area at something you haven't put any effort into. Especially when the area is the whole world economy.
saaaaaam 7y ago
You've missed a decimal point - the shares are at £1.09, not £109!
andrepd 7y ago
>everything that you like about it will have already been analysed in deep detail by the market, and priced in. This sounds like some religious creed, with dogmatic status. You do realise that The Market, hallowed be its name, is just people, and people are (often) wrong. The recent high profile news about wework should be a great example of this, or indeed any regular observation of our world. He just thinks the stock is going to go up in the future, based on his observations. What's so strange about that?
- peteretep 7y ago
  No, he thinks the company has an interesting and strong business model, which is not the same as saying the stock will go up.

speedplane 7y ago

> I like the concept. I believe the value of back catalogs will only increase. ... What's not to like? Termination rights. In the 1970s, a new copyright bill was enacted that said that 35 years after the creation of a work, the ownership of that work automatically reverts back to the original creator. The idea behind the proposal was to give artists control of their works later in their career, when they may no longer be a pop sensation, kind of like a retirement account. For example, Lady Gaga may be super popular right now, but roughly around 2050, she will automatically regain the rights to her original recordings. She can then resell those rights to someone else, generating an additional bit of income later in life. So as an investor, if you buy up the rights to a bunch of works, you need to know that your ownership has an expiration date.

lonelappde 7y ago
Are you sure Lady Gaga and other corporate pop stars own the copyright to songs they sing? I'd expect these huge team projects to have corporate copyright. https://blog.reverbnation.com/2018/05/09/music-law-101-owns-copyright-song/ https://blog.reverbnation.com/2018/05/09/music-law-101-owns-...
- speedplane 7y ago
  > Are you sure Lady Gaga and other corporate pop stars own the copyright to songs they sing? I'd expect these huge team projects to have corporate copyright. Lady Gaga almost certainly sold all of her rights to her label, a corporate entity, when she was signed. However, because of termination rights, 30 years later, that contract will lapse, reverting the rights back to the original artists. If 20 people created the Lady Gaga song, then it will revert back to all 20 of them jointly, and if a label wants to buy the rights, it will need to make deals with each one individually.