Collectibles are terrible investments • Hacker News Board

Re: Collectibles are terrible investments

#51

Post by majormajor » Sun, Apr 17, 2022, 2:16 AM UTC

charlieyu1 wrote: post #44

majormajor wrote: post #8

Earlier 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.

Where are you getting your numbers? They don't match my recollection, or some articles I'm seeing:

https://www.investopedia.com/articles/forex/121815/bitcoins-...

"Bitcoin's price rose again on April 13, 2011, from $1 to a peak of $29.60 by June 7, 2011, a gain of 2,960% within three months. A sharp recession in cryptocurrency markets followed, and Bitcoin's price bottomed out at $2.05 by mid-November.4 The following year, its price rose from $4.85 on May 9 to $13.50 by Aug. 15."

So let's use that $2.05 price as "ten years ago," I'm willing to give you 10 and a half years ;). A dollar in bitcoin then would be worth about $20,000 now.

So sure, pretty good. Nowhere near tens of millions, though.

And that $30->$2 change, and a few more up/down cycles between 2012 and 2017, shows that plenty of people thought it had already peaked. See also the various "oh no I lost my hard drive with the bitcoins I'd mined since I didn't think it was that important" stories. So sure, getting in for just a few bucks before 2011 and holding? Yeah, you're looking super great! But most people hadn't heard of it by then, and that's not who the article is talking about... when they did hear of it, you had a huge wave of pump-and-dump shitcoins proving the point of the article: the average person getting in at that point was largely too late for the level of return they were looking for.

Re: Collectibles are terrible investments

#52

Post by ip26 » Sun, Apr 17, 2022, 2:17 AM UTC

Waterluvian wrote: post #35

allturtles wrote: post #7

I 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…

Tangent: based on my internal perceptions throughout the past decades, I’m positively shocked that a Black Lotus is only worth $11,000.

At some point the bidder realizes instead of four lotus, they could buy a late model 911 instead.

Re: Collectibles are terrible investments

#53

Post by zenlikethat » Sun, Apr 17, 2022, 2:17 AM UTC

amznbyebyebye wrote: post #17

I just like little cute miniature things that are all just a little bit different. They all look like they go together like a family but are all unique. But when you put them all together they look complete.

NFTs really have a brain virus to them that it's hard to understand until you buy your first ones and kick around in the communities. Nothing new under the sun so I'm sure there are beanie baby, wine, fine art meetups and communities too but the hyper-charged and Internet nature of NFTs and crypto really creates an interesting phenomenon. Doesn't mean it's a good idea to ape into them, but it's certainly curious.

Re: Collectibles are terrible investments

#54

Post by [deleted] » Sun, Apr 17, 2022, 2:18 AM UTC

grapeskin wrote: post #45

majormajor wrote: post #32

Earlier quoted context omitted.

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 b…

[deleted]

Re: Collectibles are terrible investments

#55

Post by linkjuice4all » Sun, Apr 17, 2022, 2:18 AM UTC

majormajor wrote: post #8

allturtles wrote: post #7

I 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…

There’s some predictability in terms of people trying to buy all the things they wanted as a kid when they finally have the adult income to afford it. Some examples include muscle cars, BMX bikes, LEGO sets, and other things that a large population of children were aware of and wanted. If you just stock-pile the big sellers or scoop up the used stuff when it bottoms out in value then you might be able to profit.

The big issue is carrying costs. If I could have parked a bunch of 70s/80s Porsches in a climate controller garage for 30+ years I’d be cashing in right now.

Re: Collectibles are terrible investments

#56

Post by dntrkv » Sun, Apr 17, 2022, 2:19 AM UTC

eyelidlessness wrote: post #16

I come from a family of collectors, motivated both by personal joy and sometimes potential dollar signs. No one on this side of my family is wealthy, quite a few struggle to make ends meet. To our credit, none of us spend more than trivial sums for any such collecting[1]. It is possible to make money collecting, but it’s very time sensitive and an active hustle. You pretty much only want to do it if also get joy from…

> You pretty much only want to do it if also get joy from the collecting itself

I think this is key. In my experience, the best (and usually most valuable) collections are by those that are very passionate in whatever niche it is. These people usually don’t set out to make money but to acquire pieces that they really want.

In my case, I collect vinyl because I love having physical copies of my favorite music. But I also enjoy seeking out rare albums and getting them for a good price, not because I want to resell them, but because I just don’t want to pay more than I can and I’m in no hurry.

The interesting thing to me is how much time it takes to develop your taste in these niche topics. It’s not something that you can even accelerate. You just dig deeper and deeper over many years until you find yourself listening to some bizarre album on repeat and then decide you have get the vinyl.

Re: Collectibles are terrible investments

#57

Post by Retric » Sun, Apr 17, 2022, 2:21 AM UTC

grapeskin wrote: post #45

majormajor wrote: post #32

Earlier quoted context omitted.

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 b…

If you want to compare specific bets then plenty of companies have seen 500x returns over shockingly short periods. It’s picking the winners that’s tricky and not everyone can get lucky.

Re: Collectibles are terrible investments

#58

Post by djbusby » Sun, Apr 17, 2022, 2:21 AM UTC

Retric wrote: post #42

grapeskin wrote: post #23

Earlier 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.

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.

Really? It just feels like dilution from IPOs would make it less percentage than the original stake.

Re: Collectibles are terrible investments

#59

Post by andygcook » Sun, Apr 17, 2022, 2:22 AM UTC

eyelidlessness wrote: post #16

I come from a family of collectors, motivated both by personal joy and sometimes potential dollar signs. No one on this side of my family is wealthy, quite a few struggle to make ends meet. To our credit, none of us spend more than trivial sums for any such collecting[1]. It is possible to make money collecting, but it’s very time sensitive and an active hustle. You pretty much only want to do it if also get joy from…

What region are you located in?

Re: Collectibles are terrible investments

#60

Post by majormajor » Sun, Apr 17, 2022, 2:22 AM UTC

linkjuice4all wrote: post #55

majormajor wrote: post #8

Earlier 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…

There’s some predictability in terms of people trying to buy all the things they wanted as a kid when they finally have the adult income to afford it. Some examples include muscle cars, BMX bikes, LEGO sets, and other things that a large population of children were aware of and wanted. If you just stock-pile the big sellers or scoop up the used stuff when it bottoms out in value then you might be able to profit. The…

How are 90s baseball cards, pogs, and yo-yos looking? Or "regular" opened copies of NHL 94 or what have you? I think we often overlook all the shit we were into that hasn't gotten expensive. We'd have to basically index-fund this shit if we had really been trying to invest in it in 2000 or so, and I think the losers would be a big problem for our fund. Maybe you bought a 3000GT instead of a Supra because you didn't see The Fast and the Furious coming. Whoops.

Let's try to predict the future instead: which of things that 2022 kids are into should we be buying up for 20 years from now? Roblox items? New Pokemon cards? (I don't know if I actually can come up with any other things off the top of my head, lol.)