Alternative Assets are defined as financial investments that fall outside of the traditional categories of publicly traded stocks, bonds, and cash. Examples include private equity, private credit, real estate, hedge funds, collectibles and antiques, and digital assets (crypto, NFTs, etc). Historically, this asset class’s appeal lies in diversification. Because alternative assets often move independently from stock and bond markets, they can serve as a stabilizing force in a portfolio. Additionally, they offer the potential for higher returns than conventional markets. But buyer beware, these higher returns come with higher risk. The most prominent risks include low liquidity and low regulation of the markets in which these assets fall under. Since alternative assets are not traded on public exchanges they have low liquidity and are hard to convert into cash/sell. This poses a problem for many investors seeking quick gains and efficient capital distribution. Along with this, another risk of alternative asset investment is that they often require long-term capital commitments where the investor's capital is locked up for an extended period of time (hence the low liquidity mentioned above). 

Alternative Assets Lowering Demand for Publicly Traded Firms

As demand for alternative assets grows, demand for publicly traded companies falls. Nowadays, companies are staying private longer as institutional investors seek higher returns and diversification through private equity and credit. As a result, there are fewer public companies available and many large companies are choosing to remain private, reducing the supply of public-market investments. Here is an example to illustrate this trend–The Wilshire 5000, an index that tracks all American stocks traded in the U.S, had around 7,500 equities in it at the turn of the century. In 2005, it had around 5,000. In December of 2024 it had just 3,300 and this number is still falling today. This steady decline reflects a broader shift: alternative asset demand is rising while public market participation is shrinking. 

Combining Alternative Assets with Tokenization / the Future 

As we covered in last week's newsletter, tokenization–the digital representation of physical assets on a blockchain–is poised to revolutionize investing. But something we did not cover in regards to tokenization was how it combines with alternative asset investing. 

Here's how tokenization will transform the alternative asset landscape… 

1) Tokenization will make alternative assets cheaper by eliminating the middleman, thus reducing transaction fees and eliminating overhead. 

2) Traditionally alternative assets required a high net worth and lots of capital to be able to invest in them. Tokenization will change that and democratize alternative asset investing by permitting fractional ownership of the asset at hand. Tokenization breaks down high value assets into tokens that represent a fraction of the asset. Thus the investor can purchase a fraction of the asset and not need the capital to purchase the whole asset. The barriers to entry will thus be lowered by tokenization.

3) Tokenization will enhance the reach of these assets as the issued tokens can be bought globally on a blockchain, thus allowing for a more diverse pool of investors. 

Equity Insights 

↑Bunge Global SA (BG): Bunge is a global agribusiness company with its HQ in St. Louis, Missouri. Bunge is a consumer staple that could appreciate off of retail investors buying up consumer staples during the eventual bursting of the AI bubble. Coupling Bunge’s strong competitive advantages such as product and geographic diversification, with a strong management team makes for a great play. As of 11/5/25 Bunge beat on Q3 revenue and EPS projections by a wide margin causing the stock to shoot up 4% on Wednesday 11/5.

↓Palantir (PLTR): After a strong earnings beat this week Palantir is down around 6% as of Wednesday. This drawdown shows investors starting to see the frothy overvaluations within the market as Palantir trades at a multiple of 433 times earnings! The infamous predictor of the 2008 financial crisis Michael Burry recently revealed big short positions on AI related tech stocks Palantir and Nvidia, drawing down their prices even further.

About This Newsletter 

This newsletter shares insights into our complex current day economic/geopolitical situations and provides clear, actionable equities insights as well. Whether just getting into the game or a seasoned veteran, this newsletter is your edge.