🎙️ The Rich Investor Club

Just last week, the S&P 500 crossed 5,500 for the first time. Today, it reached a new milestone: 5,600, its sixth straight record close, which is its longest streak of records in three years.

It was bank stocks on Tuesday, then a sharp rise in semiconductor stocks on Wednesday led the market higher. As for Thursday? Investors await fresh inflation figures, which could mean a soft landing nears.

“We’re at the critical time of, inflation’s coming down, the labor market is cooling, and we want to get it right,” Fed chair Jerome Powell said this week.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• The rich investor club gets crowded

• Evaluating America’s biggest nonalcoholic beer brand

This, and more, in just 5 minutes to read.

Chart of the Day

Together With Long Angle

Private Markets, Powered by Collective Expertise of HNW Investors

Investing in private market opportunities is challenging. The difference between success and failure in private markets comes down to your network.

Long Angle is a vetted community of 3,000 high-net-worth investors who leverage their collective expertise and scale to access and underwrite some of the world’s best alternative asset investments.

After reviewing hundreds of opportunities, Long Angle diligence deal teams greenlight a dozen deals each year. Asset classes range from Private Equity, Search Funds, and Private Credit to Secondaries, Real Estate, and Venture.

No membership fees. All members receive equal access to negotiated fee discounts powered by the community’s $45 billion in collective assets.

In The News

💰 The Rich Investor Club Gets Crowded

News flash: It’s a new era for individual investors amid the rise of the accredited investor. 

A perfect storm of rising markets, elevated inflation, and outdated regulations have driven an unprecedented surge in Americans qualifying as "accredited investors." 

The status, once reserved for a select few, now could include one in five American households, opening doors to previously exclusive investment opportunities. But as this club expands, a crucial question emerges: Is membership truly advantageous?

A changing landscape: Accredited investor status was established in 1982, designed to grant sophisticated, financially secure individuals access to riskier, less regulated assets. The original criteria—an annual income exceeding $200,000 or a net worth over $1 million—have remained unchanged for over four decades. 

• Adjusted for inflation, these thresholds would now be more than triple their original values, and they would apply only to those earning $600,000 or more or with a $3 million-plus net worth. 

The expansion coincides with a shift in the private market. Major alternative asset managers have faced a decline in institutional funding, so they’re increasingly targeting individual investors. 

• One money manager describes this as a "democratization" of investment opportunities progressing faster than anticipated.

The appeal of private markets: Private markets are attractive because they offer the potential for higher returns compared to public markets, though this usually comes with increased risk and reduced liquidity. 

The exclusivity has created a "FOMO" effect among wealthy individuals: Bloomberg reports that conversations at social gatherings now revolve around private investments more often than stock picks.

Why it matters:

The rise coincides with record household wealth, soaring home values, and ever-growing stock portfolio accounts. Simply, the Baby Boomer generation is richer than ever, and many want to grow even richer via the private markets. 

Beware of breadcrumbs: Of course, there are risks with private markets. Less stringent reporting rules make it difficult to assess performance and composition. Plus, some offerings may be "breadcrumbs"—leftovers from institutional investors packaged for retail investors.

• Fees are often significantly higher than those for widely available investments like ETFs.
  

• Psychological factors come into play, as private funds report results less frequently than stocks.

Final thoughts: Though the democratization of private investments presents exciting opportunities, analysts advise that newly minted accredited investors approach the markets cautiously 

• As Noah Damsky of Marina Wealth Advisors warns, discernment is key to navigating these new waters. Several advisors also underscored that individual investors must ensure they're not merely chasing exclusivity or status at the expense of financial prudence.

Read more about accredited investors

More Headlines

📈 The fastest-growing millionaire populations, by country

🤔 How the Mag 7 have become the ‘value stocks’ of the market

🛍️ Why Abercrombie & Fitch's stock exploded faster than Nvidia’s

✂️ Powell highlights slowing job market in signal that rate cuts may be nearing

😐 Hedge funds deliver mediocre first-half performance

🍻 Athletic Brewing Valued at Roughly $800 Million

Two cold cans of Athletics, please.

Athletic Brewing Company, the largest non-alcoholic beer manufacturer in the U.S., has secured a $50 million equity financing round led by General Atlantic, a global growth investor. 

Nearing Unicorn status: The investment has doubled the company's valuation to about $800 million in just two years.

• Founded in 2017 by John Walker and Bill Shufelt, a former hedge fund trader, Athletic Brewing has grown from one of the smallest breweries in America to a top 20 U.S. brewery.
  

• Credit its innovative approach to non-alcoholic beer production. Plus, it’s a rapidly growing category that accounts for about 2% of all U.S. beer sales. It’s been growing at an annual rate of over 30% in recent years, with few signs of slowing down.

• The company sold over 258,000 barrels in 2023, up from just 875 in 2018.

Less alcohol these days: Athletic Brewing's rise aligns with a broader trend toward non-alcoholic drinks, particularly among younger generations. While overall beer sales are declining, health-conscious consumers, especially Gen Z adults, reportedly drink 20% less than previous generations at their age. 

Fueling growth: The company plans to use the new capital to fuel long-term growth, including purchasing a third U.S. brewing facility and expanding its product distribution. Athletic Brewing's products are available at over 50,000 retailers and 25,000 on-premise venues nationwide. 

• General Atlantic has also secured a seat on Athletic Brewing's board of managers. The partnership could leverage General Atlantic's international platform and technology, digital marketing, and merchandising capabilities to help Athletic Brewing keep growing.
  

• One co-founder said, “We are passionate about transforming the way modern adults drink and converting critics into believers. We're at the start of a long-term trend, and we couldn't be more excited to have General Atlantic by our side as Athletic begins its next phase of growth."

Why it matters:

According to recent polling, 41% of Americans are actively trying to moderate their alcohol consumption in 2024, a 7% increase from 2023. Athletic holds more than a 19% market share within non-alcoholic beer and is driving 32% of category growth, according to NielsenIQ data.

• Last year, Athletic exceeded $90 million in sales. The company's product range includes the Free Wave Hazy IPA and Upside Dawn Golden, brewed using a process similar to regular beer but with carefully monitored temperature and other factors to keep alcohol levels extremely low (virtually zero).

Widening trend: Major beer companies have embraced the nonalcoholic beer trend, too. Heineken, Corona (owned by Constellation Brands), Budweiser (from Anheuser-Busch), and Guinness (part of Diageo) have all launched nonalcoholic alternatives to cater to changing consumer preferences. 

Watch more from Athletic’s CEO

Therapy, the gift to give yourself

We often forget to give to ourselves. Be #1 on your gift list and treat yourself to a therapy subscription that guarantees you make time for yourself every week.

With BetterHelp, therapy is flexible, affordable, and entirely online, so you can start the process in minutes.

Start today and take 25% off your first month.

Quick Poll

On Monday, we asked: Do you own shares in Tesla directly? Why or why not?

— Answers were 50/50. Many said they won’t invest in the company because of its polarizing CEO, Elon Musk, or because it’s too difficult to value it.

— As for Tesla shareholders, one said: “I’ve owned a Model 3 since ‘18 and Y since ‘22 and love them despite my disdain for Elon. I don’t ever anticipate buying a combustible engine car again but would consider a Rivian one day.” Another: “It seems that Tesla is not a car company but a technology company with many new income streams being created that will see its value accrete significantly when this is recognized.”

— Other responses included, “The Tesla investment thesis is not obvious to me & I pass on anything that is not obvious,” and “It’s difficult to comprehend or predict the outcome of the multitude of force vectors acting on that stock.”

— Others wrote: “I don't hold Tesla anymore because: 1. Poor risk-reward ratio 2. Impossible to value 3. Better options available.” And “There are more competitors, and the EV marketplace is not expanding fast enough.”

See you next time!

That's it for today on We Study Markets!

Enjoy reading this newsletter? Forward it to a friend.

Was this newsletter forwarded to you? Sign up here.

Use the promo code STOCKS15 at checkout for 15% off our popular course “How To Get Started With Stocks.”

Advertise with us.

Follow us on Twitter.

Keep an eye on your inbox for our newsletters on weekdays around 6pm EST and on weekends. If you have any feedback for us, simply respond to this email.

You can also leave your comments/suggestions/feedback anonymously here.