Adidas stock vs. Yeezys: Which has better return?

Time value of money says that a dollar today is worth more than a dollar tomorrow. In other words, the best thing you can do with your money is invest it. You have to not only get the bag, but as Gucci said, you gotta flip it and tumble it. Normally when we think about investing we think about the stock market, but there are other ways of investing that could potentially give you more returns than stocks or even real estate.

The sneaker athletic footwear market is expected to reach $94 billion by 2025 according to Grand View Research Inc. The underground reselling industry has led to many young millionaires and influencers, while the legal reselling industry has leaders like StockX providing a brokerage system for buyers and sellers. One of the most popular and heavily resold sneakers in recent times are the Yeezys, styled by Kanye West. A partnership with Adidas, the sneakers have become crucial in the athleisure boom. So which would give you a bigger return: Adidas stock or reselling Yeezys?

In order to do this we’re gonna take a look at end of day prices for Adidas stock, converted to US dollars as it is a German company. We will also use the adjusted stock price to take into account any stock splits or dividends or other corporate actions. Here is a graph of those price movements over the past 4 years.

Adidas stock price.png

Now we’re going to take a look at total return on investing in the stock price compared to reselling the sneakers. Now for my investing friends, total return can mean a lot of things to a lot of people. So we’ll use the simple return or “Return On Investment” (ROI) formula:

ROI = (Current Value of Investment - Cost of Investment) / Cost of Investment

We will do this for the following four Yeezys (in order):

  • Yeezy Boost 350 Pirate Black (2016)

  • Yeezy Boost 350 V2 Beluga 2.0

  • Yeezy Boost 750 Light Grey Glow In the Dark

  • Yeezy 500 Utility Black

Below is a table comparing total return for each sneaker with the total return of Adidas stock price considering the time frame between the launch date of the sneaker, and hypothetically selling the sneaker on January 31st, 2019. The buy and sell prices for those dates are based on data.

Total Return Yeezys:Adidas.png

Sneaker heads rejoice! The return on all sneakers were at least more than double the return on Adidas stock price. Be sure to note that most of these sneakers are cheaper than owning let’s say 10 shares of Adidas, so your actual cash return investing in the stock could actually be greater —only if you got that dough tho.

A good thing to see if the same could be said for Nike or Puma sneakers, or perhaps any other brands?