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Alternative Investment

Alternative investments: Blue chip vinyl

Compression is the practice of manipulating audio to reduce file size. The sound wave is literally compressed, squishing the volume of louder sounds and amplifying the volume of quieter sounds.


However, while compressed tracks take up less bandwidth, they also remove depth and nuance from a song.

Vinyl, on the other hand, remains both incredibly nuanced and riddled with imperfections. Pops, scratches and a discernible white noise are all part of the listening experience. Listening to vinyl feels organic, warmer and closer to attending a live show than anything else.

On top of this, vinyl is more physically appealing. A record’s artwork is a big part of what makes it so cool. There is so much fun stuff artists can do with the packaging. Including lyrics and posters is standard practice, and colouring the record itself is becoming more common.


If you haven’t been to a record store lately, you might think vinyl is cheap. Well, think again. The days of inexpensive records are long gone. New records routinely retail for $50 to $70 each.

The vinyl revival is here to stay. I recommend getting your hands on blue-chip vinyl as part of a broader alternative investing strategy.

Even second-hand vintage vinyl costs far more than you think. Take any Beatles LP, for example. Getting your hands on a pressing from the ’60s usually costs more than $100. And you can forget about original pressings: they’re hundreds or even thousands of dollars. Our fund owns a copy of the White Album worth $US50,000 ($70,000).

This is a serious collectible and a legitimate alternative asset class – especially if you buy blue-chip records. So what makes a vinyl record blue-chip?

Original pressings

I know I sound like a broken record, but scarcity is everything. Original pressings are usually the rarest and most valuable version of an album that you can find.

But scarcity may be even more important than a record’s cultural panache.

For example, an original Elvis record from the ’50s that pressed and sold millions of copies will probably be worth less than a special remastered reissue from the ’90s that only had 1000 pressings.

Data on how many copies of a specific pressing are in circulation can be tricky to find, especially since newer releases intentionally obscure the data to artificially generate scarcity. The best resource for determining the value of a record is Discogs.

Artist popularity also plays into a record’s value. Though vinyl doesn’t have to come from an older artist to be valuable, the most sought-after records are generally from artists that were popular 50+ years ago, such as the Beatles, the Rolling Stones, Led Zeppelin, the Beach Boys, Elvis, Queen, or David Bowie.

Special editions are very common in the vinyl world and almost always make a record more valuable.

Special editions are very common in the vinyl world and almost always make a record more valuable.Credit:Louie Douvis

Special editions

Special editions are very common in the vinyl world and almost always make a record more valuable.

Usually the supply is limited or the artwork is unique. Examples include holograms, bright colours or even a record made from ice or chocolate.


Other special editions include records that are autographed or those that come with exclusive inserts like lyric booklets, album liner notes or rare photographs.

In the case of Radiohead’s The King of Limbs, each vinyl record came with an actual newspaper.

With vinyl, there’s no limit to how creative artists can get. Assigning a dollar amount to each feature is impossible, but special editions are nearly always rarer and more valuable than their standard release counterparts.

Finally, as with most collectibles, condition is directly correlated with value.

A scratched, broken record with tears in the cover artwork will be worth much less than one in pristine condition.

Sealed vinyl is in the best condition but comes with the drawback of being unplayable. If you’re looking to invest in records from a purely financial standpoint, then sealed items will maintain their value the best.

However, if you want to enjoy the music, too, it might be worth buying an opened vinyl in very good condition and carefully looking after it.

The future of vinyl

It wasn’t long ago that vinyl was left for dead, considered well on its way to becoming extinct.

Yes, vinyl accounts for under 4 per cent of total music sales. But if you think about it, even that is tremendously high. What other “dated” technology from the 1950s has this level of market share? Black-and-white TVs? Barbie dolls? Nothing else comes close.

In the past, vinyl was seen as more of a personal collectible for music buffs than a moneymaker. After all, music can be a deeply emotional and private form of art. Those vinyl records that were serious assets (signed original pressings or extremely scarce records) priced out most everyday investors.

Whether vinyl will become popular with investment firms remains to be seen. But two things are for sure: public interest in vintage vinyl is growing, and blue-chip vinyl is holding its value extremely well.

Despite being a 70-year-old technology, vinyl is standing the test of time. Other vintage asset classes have a nostalgia factor, but the technology itself provides no improvement over existing solutions.


And vinyl is arguably a fundamentally better way to consume music. It has higher fidelity sound, beautiful artwork, is easy to display in your home and, unlike other vintage items, it has actual, real utility.

The vinyl revival is here to stay. I recommend getting your hands on blue-chip vinyl as part of a broader alternative investing strategy.

Watch this space. Keep your eyes (and ears) wide open.

  • Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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