How about NFTs?
Collectibles are terrible investments
21–30 of 170 posts
Re: Collectibles are terrible investments
#22I find this argument very strange: > But it is, because in the long run, assets without cash flows cannot increase in value more than the economy as a whole. If something appreciates faster than the whole economy in the long run, it eventually eclipses the whole economy, which is impossible. No one is operating on an infinite time horizon in their investments, so this argument seems moot. You can certainly find colle…
That relies on you being able to guess. You can retroactively see which collectibles gained value, but you are unlikely to know that ahead of time. If you somehow do know - congrats, you’ve hit the jackpot. Maybe you have a place in the art community that introduces you to rising artists before they hit it big. Maybe you have access to sales data for toys before it gets published. But if you’ve read about it in the n…
Isn't exactly the same thing true of stocks? I always wish I had bought Apple or Tesla at the right time, but I didn't.
Re: Collectibles are terrible investments
#23I find this argument very strange: > But it is, because in the long run, assets without cash flows cannot increase in value more than the economy as a whole. If something appreciates faster than the whole economy in the long run, it eventually eclipses the whole economy, which is impossible. No one is operating on an infinite time horizon in their investments, so this argument seems moot. You can certainly find colle…
That relies on you being able to guess. You can retroactively see which collectibles gained value, but you are unlikely to know that ahead of time. If you somehow do know - congrats, you’ve hit the jackpot. Maybe you have a place in the art community that introduces you to rising artists before they hit it big. Maybe you have access to sales data for toys before it gets published. But if you’ve read about it in the n…
No different from buying random small name stocks.
Sometimes you luck out and your stock grows 20x in five years. Sometimes it doesn’t.
On the other hand, buying, say, Apple stock, is not much different from buying a first edition Charizard card or an unopened copy of Super Metroid. It’ll probably steadily grow in value over years and has been. But both could end up collapsing tomorrow for unknown reasons.
Re: Collectibles are terrible investments
#24Earlier quoted context omitted.
That relies on you being able to guess. You can retroactively see which collectibles gained value, but you are unlikely to know that ahead of time. If you somehow do know - congrats, you’ve hit the jackpot. Maybe you have a place in the art community that introduces you to rising artists before they hit it big. Maybe you have access to sales data for toys before it gets published. But if you’ve read about it in the n…
Isn't exactly the same thing true of stocks? I always wish I had bought Apple or Tesla at the right time, but I didn't.
Yes, but the important difference is that on the whole, the stock market goes up.
On the whole, the collectables market does not.
Re: Collectibles are terrible investments
#25What about collectibles like Magic the Gathering? Some cards have had serious appreciation. Eg Alpha black lotus going for $500k
Re: Collectibles are terrible investments
#26One way that collectibles can generate dividends is by renting them out to others. For instance, video game items like CS:GO skins. The popularity of a Chinese skins renting site caused increases in the prices of mid-tier items as investors bought them to lend to others.
Re: Collectibles are terrible investments
#27The math is off, but they have a point.
If you want to invest, buy equities. If you want to collect, collect.
Is my promo copy of the Late Great's "Turpentine" ever going to be worth something? Irrelevant, burn it on the funeral pyre along with the rest of that stuff when I die.
That album rocks, though.
Re: Collectibles are terrible investments
#28Earlier quoted context omitted.
That relies on you being able to guess. You can retroactively see which collectibles gained value, but you are unlikely to know that ahead of time. If you somehow do know - congrats, you’ve hit the jackpot. Maybe you have a place in the art community that introduces you to rising artists before they hit it big. Maybe you have access to sales data for toys before it gets published. But if you’ve read about it in the n…
Isn't exactly the same thing true of stocks? I always wish I had bought Apple or Tesla at the right time, but I didn't.
No, it's not. You can make decisions about buying stock based on fundamentals. You can choose to buy Apple stock based on their products, and on Tesla stock based on their technology. You can't reliably do the same for collectibles.
Re: Collectibles are terrible investments
#29The math gets even worse when you consider the US tax rates for gains on collectibles.
https://www.investopedia.com/articles/personal-finance/06171...
Re: Collectibles are terrible investments
#30I get the urge to collect, and I totally get why people feel their collections are valuable. But having personal feelings of value are not correlated well with financial returns! Indeed, as the Beanie Babies example shows, the more people have feelings of value the more incentive there is for others to profitably reduce the correlation. In high school I worked in a library. Every once in a while somebody would want t…
The other aspect of National Geographic is that people didn't throw them out, because they might be useful in the future for a school project or something. This was such a cultural factor that the Journal of Irreproducible Results wrote an article "National Geographic: The Doomsday Machine", projecting that the massive weight of saved National Geographics would eventually cause geological subsidence, flooding towns and eventually sinking the US into the sea. They concluded that "Publication and distribution of the National Geographic magazine must be stopped at all costs!" if the US was to survive.
https://xray-delta.com/2011/05/10/national-geographic-the-do...