Houses also do not generate income. And many people also feel the urge to consider them an investment.
Tell that to my landlord.
Collectibles are terrible investments
41–50 of 170 posts
Re: Collectibles are terrible investments
#42Earlier 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…
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.
Stocks have a positive bias above overall economic growth in dividends. In other words if you owned 1% of the US stock market in 1980 then without luck or skill you could turn that into owning more than 1% of the stock market in 2020.
Re: Collectibles are terrible investments
#43Have to disagree. I would say choosing the right collectibles is an acquired skill that takes a long time to develop and usually applies to a niche market, and that's why it seems like collectibles overall are a bad investment. Not only do you need to be good at estimating future value/demand, you need to be good at acquiring items for a good price + ensuring they're not fakes. If you blindly buy "collectible" items…
Venture capital is the same thing. Most collectibles/startups are trash. But there's that 1 out of 1000 that outperforms everything else combined.
Re: Collectibles are terrible investments
#44I 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…
The article is arguing that you aren't likely to be able to pick the ones that will grow faster than the economy as a whole over the time frame you intend, because it relies on an extreme amount of right-place-right-time luck. If you were looking for the next Beanie Baby for the last 20 years, do you think you would've found it? I think it's also arguing that the particular appreciation you need to capture largely on…
$1 on Bitcoin ten years ago are worth over ten million dollars now. And I think people thought Bitcoin had potential, even back then. Definitely something you wouldn’t mind spending a few bucks on. But back in the day it was quite different for average folks without enough tech knowledge to mine or buy crypto.
Re: Collectibles are terrible investments
#45Earlier quoted context omitted.
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.
This is covered in the article in the cash flow aspect. Outside of a total economic collapse that took out "real" investments and collectibles both, the reasons the value of an Apple share would fall, or the price of land would fall, would be much more tangible and understandable. The relationship for land is more obvious and immediate that business investment (you can charge rent!) but someone in 2010 who said "this…
People will also keep buying pristine copies of old games so long as that series has some popularity.
People aren’t going to lose interest in Nintendo series any time soon. Even if Nintendo made some awful business decisions, went bankrupt, and the developers and executives were all revealed to be violent criminals, people would still love those games and want to own them.
There’s a non zero possibility Apple could be bankrupt in 5 years and all those stocks become worthless. You never know what the next ENRON could be.
Re: Collectibles are terrible investments
#46I am sure NFTs perform terribly in the short term too, in aggregate. Most NFTs are not celebrity endorsed and will just languish even in the bull run. (Like most shitcoins). Real estate is in between IMO - kind of a collectable but there is cash flow but it doesn’t have the upside growth of stocks, unless it is some kind of rezoning or redevelopment. Gold is more like a collectable (no revenue stream) as is any other…
Sorry but real estate is nothing like a collectible. It has tangible value as a form of housing or for some commercial purpose (retail, office, etc.).
Real estate that isn't being used for anything and won't be for the foreseeable future is sort of kind of like a collectible. But even then presumably there's the idea it will be used for something someday.
Re: Collectibles are terrible investments
#47Re: Collectibles are terrible investments
#48Earlier quoted context omitted.
The article is arguing that you aren't likely to be able to pick the ones that will grow faster than the economy as a whole over the time frame you intend, because it relies on an extreme amount of right-place-right-time luck. If you were looking for the next Beanie Baby for the last 20 years, do you think you would've found it? I think it's also arguing that the particular appreciation you need to capture largely on…
$1 on Bitcoin ten years ago are worth over ten million dollars now. And I think people thought Bitcoin had potential, even back then. Definitely something you wouldn’t mind spending a few bucks on. But back in the day it was quite different for average folks without enough tech knowledge to mine or buy crypto.
Getting in early on BTC, ETH, or crypto of your choice from this bull run was probably a pretty non-reproducible fluke though. Once the leverage in crypto markets gets cracked down on (up to 100:1 leverage is definitely contributing to the wild moves including to the upside), the return profile won't look like that any more.
And with NFTs, there's just this endless sea of them. Even within one collection, most of the supply stays dormant so there's no telling who might wake up at any moment and completely flood the market.
Re: Collectibles are terrible investments
#49In general I completely agree with this article, unless the collectible generates value in itself and is limited.
For example film cameras and more rare medium format digital cameras are appreciating now quite a bit, above original MSRP