Two for a Dollar: Adjusting the Rap Alias 50 Cent to 2018 Price Levels

Introduction

Rapper Curtis Jackson, better known as 50 Cent, released his breakout album Get Rich or Die Tryin 15 years ago this January. Much has changed since then; would Jackson’s rapper name be different if he released it today?  And what would his return be if he had invested in himself?

To find out, I delve into the lyrics of each track of this momentous album to develop a basket of goods which could be used to escalate 50 Cent to 2018 levels.

Methodology

Track list breakdown:

  1. Intro: In the Intro, 50 talks about getting ready to go to war, a pressing topic in the lead up to the invasion of Iraq. US Defense spending levels are the obvious choice for an analog.
  2. What up Gangsta? This track reads like an investment prospectus for a start-up gangsta looking to follow 50’s success model. Some necessary goods:
    1. Vests and semi-autos: more defense sector investment
    2. Diesel: A classic processed commodity and important economic influencer
    3. Ice: He flashes it, but you probably know it better as diamonds used in jewelry
    4. Coke: This is tough – coke is an aluminum processing byproduct, an important manufacturing commodity. However, 50 states that he frequently kills when the price rises, and we know that he is dangerous, so since aluminum costs have trended downwards over the years he is probably referring to the carbonated soft drink (incidentally, also a key makeup of Warren Buffet’s portfolio)
  3. Patiently Waiting God is a seamstress that tailor fitted 50s life, tying its value to the changes in the textile industry.
  4. Many Men Driving home the importance of jewelry prices, 50 states that not only has his heart turned cold (i.e. to ice), but that he himself is a diamond in the rough
  5. In da Club The key components of a successful nightclub visit are varied, and mainly involve popping bottles and hugging [sic] models. In order to avoid double counts, this study uses a measure of growth in the nightclub industry as a whole.
  6. High all the Time At least one part of Jackson’s life has remained stable over the years – airline fares have come a long way since 2003
  7. Heat This is actually a common theme across 50s lyrics – he often brings the heat, which is good, since heating oil has increased in price over the years.
  8. If I Can’t: With each refrain, 50 let’s us know that he lets the champagne bottles pop. Score another one for alcoholic beverages.
  9. Blood Hound Curtis Jackson is an enterprising man. In addition to spending his time in the club, 50 expands on his exposure to global conflict risk in his portfolio. This song is entirely about his guns – another tick for defense spending.
  10. Back Down “If you look closely, 50 don’t back down” – Presumably this is in reference to his use of leverage. Current S&P 500 debt to assets ratios are around .79 so we’ll multiply returns by 1.79, and issue some 15 year corporate debt at using an investment grade 1.8% annual yield.
  11. P.I.M.P Interestingly, the song was reworded – originally, the acronym stood for “Please Invest My Portfolio”, but Curtis was applying for his CFA at the time and the charter expressly forbids guaranteeing returns.
  12. Like My Style The promise to “Teach ya how to turn Yayo into dough” is about exposure to bread products.
  13. Poor Lil Rich A key to Curtis’ gangsta ways is that he ‘gets paper now’. Access to short term debt products (commercial paper) is a great way for high quality debt issuers like 50 to maintain liquidity during operations. We’ll say that this incurs an annual cost of 2% of assets.
  14. 21 Questions This melancholy tune has Jackson reflecting on the finicky debt markets, presumably wondering whether his debt issuances would still be popular if he was “down, and out, would you still have love for me?” i.e. suffered a downgrade in investment rating for his bonds. This is more of corporate communication from 50 that he understands the concerns of his bond holders, and will remain committed to meeting his covenants.
  15. Don’t Push Me In order to fill someone up with lead, you have to have access to the commodity itself.
  16. Gotta Make It to Heaven For going through hell. In this prescient foreshadowing of the 2008 financial sector collapse, 50 will stick to his investment guns and not update his position over time, which makes this analysis a little easier.


Additional Methodology notes

  • Weights are allocated according to track duration
  • Broad-base textile prices is a little esoteric to pin down, so cottonseed price per pound was used instead
  • BLS CPI used for Bread, Airfare, Alcohol, Carbonated Beverage, and Jewelry and assumes a portfolio positively exposed to price level changes for those areas
  • Diesel, Cotton Seed, and Heating oil are based on wholesale commodity price changes in the US
  • Nightclub escalation is based on an annualized growth factor derived from net sales changes, 2007-2012 
  • Debt servicing costs are counted at the end of each fiscal period
  • Tracks which do not have an explicit cost focus are excluded from the calculation of track weights
  • This is a top-down analysis and does not make adjustments for specific items which 50 relies upon heavily, such as Mercedes Benz vehicles, Breitling watches, Crystal champagne etc.


Results


Figure 1: Net Curtis Assets and Album Releases

Peak Jackson occurred in 2012, when Curtis would have rapped at $1.52. During his period of highest growth, he was releasing albums every two years. He appears to have been briefly affected by the 2008 financial crises (which he apparently almost self-destructed over according to his album title), before rallying. His bankruptcy filing in 2015 no doubt was linked to his declining rapper value, however it appears that he should have success in reorganizing under Chapter 11.



Figure 2: Analysis of YoY Variance in Valuation

Textiles and heating oil appear to be the primary drivers of changes to the rap game, although the Iraq Surge in 2007 also had a strong positive impact on his worth and was critical in helping to establish a strong position going into the recession.

Conclusion

It appears that were Curtis Jackson to begin rapping today, he would go under the name $1.44. While it may seem less cool, keep in mind that this represents a compound annual growth rate of 7.3% per year, only slightly losing out to S&P 500 growth over that time. If Curtis ever gets out of the rap-moguling game, he would have a strong future as a hedge fund manager.

Footnote

There is a real value in this exercise. By setting out to look for deliberately novel data, we’ve begun to develop an index of different useful data sets across a variety of industries. This back-pocket information could become useful later. It’s the old argument about why we should go to the moon – the pursuit of knowledge is its own reward, but that pursuit leads us to new discoveries along the way. If you don’t believe me, remember that the satellites launched during the space race let you send pictures of your cat from anywhere in the world through your phone. 

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