BBC Radio 4
Where do investors put money during the time of a credit crunch — commodities, wine, art, films or exclusive property? Financial guru Alvin Hall explores the options in this new series.
Program 1: Commodities
Program 2: Wine
Program 3: Art
Program 4: Film
Program 5: Property
Here Alvin talks about his experiences of investing in alternative asset classes and making the program.
When I moved to New York in 1982 to work for a Wall Street training company owned by my college roommate and his father, one of my first assignments was to write an exam-prep training manual for professionals studying for the commodity futures licensing examination, widely known in the US financial community as the Series 3 exam.
I still vividly recall writing about and lecturing on how the forces of supply and demand, which could be elastic and inelastic, affect the price of a commodity. All money lessons, even those seemingly unrelated to your lifestyle, are potentially useful. With some of the profits I made from the sale of my commodities study guide, I began to collect contemporary art. During one of my early gallery tours with my friend and mentor, Marvin Heiferman, he talked about how supply and demand worked in the art world. "It's all about how much good work is out there and who wants it enough to pay the highest price for the best of it."
At the time, I had not given much thought to the relationship between the price of an exceptional work of art and the economic forces of supply and demand. Today, the astonishing prices resulting from the relationship between these forces are making headlines in areas as diverse as commodities, art, film, wine, and high-end property. They seem, in fact, to defy the effects of the economic slowdown caused by the credit crunch and the price rise of staple products.
In my new series, Alvin Hall's World of Money I seek to find out and share with Radio 4 listeners why these investment areas seem to have economic dynamics different from those of the general economy. In each of the five areas covered in this series, two key contributing factors to the price rises are (a) rarity or uniqueness, and (b) the amount of new wealth being created in the world.
It is at that fertile nexus where the right information and opportunity meet, that good and profitable investments are made. But what's truly rare, unique, and fun in this segment of the economic ionosphere? And does it trickle down, to borrow a Reagan-era economic term, to affect the average person on the street?
In this new series I not only find out why these five segments of the investment markets are bucking the pervasive economic trend in the news, but I also give the listener a peek, if you will, into the inner workings of the business of each of these areas. I'm sure some of the ways money works and profits are made will at times be a revelation, and at other times a surprise. But it will never be dull.
RELEVANT TO YOU
If you both listen to and reflect on the information presented in the series, I suspect that over time you will begin to see how you can adapt this knowledge to your own interests and financial situation. One of my core beliefs about building financial security or wealth is that all money lessons, even those seemingly unrelated to your lifestyle, are potentially useful. You can never tell when that small insight you had while listening to a program in this series will help you, at a crucial moment, make a better financial decision. It is at that fertile nexus where the right information and opportunity meet, that good and profitable investments are made.
While all of the programs in this series reflect my ongoing curiosity of how money works in all areas of life, the first program on commodities brings together some of the seemingly most disparate elements of my own life, past and present. My goal in doing this series is to provide you with many of these insightful and hopefully fertile moments about the way money works. I was raised on a subsistence plot of farm land in the Florida panhandle, and when I entered high school I joined the Future Farmers of America (FFA). I gained an appreciation for farming, nature, and especially the land, that remains an essential part of me.
When I came to Wall Street, my first assignment was to write a commodities-futures training manual because, as my college roommate put it, "You know what the real stuff is." So as I stood with Peter Kendall recording an interview about arable land and crops in Bedfordshire, it was a curiously emotional and satisfying full-circle moment.
I knew and understood what he was talking about and I seized the opportunity to ask Peter questions that would enable him to share the insights he gained over the years that I knew would be useful to you and the ways you manage your money. My goal in doing this series is to provide you with many of these insightful and hopefully fertile moments about the way money works.