maandag 23 juni 2014

The Idea of Geeky Speculation part 1

It is the wet dream of every hobbyist, letting the hobby pay for itself.  It is the dream of every small scale entrepreneur, finding a niche that pays him a nice buck for a car or television set.  It is the nightmare of everyone with a live saving account since the international banking crisis...

Speculation.

According to Wikipedia:

Speculation is the practice of engaging in risky financial transactions in an attempt to profit from short or medium term fluctuations in the market value of a tradable good such as a financial instrument, rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, interest, or dividends. Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements. Speculation can in principle involve any tradable good or financial instrument. Speculators are particularly common in the markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives.
Speculators play one of four primary roles in financial markets, along with hedgers who engage in transactions to offset some other pre existing risk, arbitrageurs who seek to profit from situations where fungible instruments trade at different prices in different market segments, and investors who seek profit through long-term ownership of an instrument's underlying attributes.

Roight, that sounded all very technical and big... and as a guy who loves numbers for some reason, I have taken those risks in the past as well.  Some where successfull, some broke even, and some went so sourthat the successes had to cover up the losses...

Now, from a geeky point of view, I have been trying to do this once or twice lately on the side, in order to fund my more expensive hobbies (the GF comes to mind ;-) , she`ll kill me if I call her an expensive hobby though, so shhhht on this post against her), and after years of finding a niche, I can honestly say I haven`t really found one.

Yes, I have binders full of `pricey` rares of various card series, trading card lines, ccg`s, promos etc... but for every card there, there are also those bulk rares you just can`t get rid off.

I follow on Facebook a group called `Lego Investors`, basically a bunch of people buying up whole pallets of kits at the -50 mark in retail sales, only to flip them over in the infamous Q4 (more on this later) at +50% retail.

Now, I must say I wouldn`t be able to get it over my heart to buy for sell Lego... I`m to much a hobbyist for that, and if there is one thing a speculator isn`t allowed to be, it`s attached to his product.

Never the less, I do intensively follow that group... as while they tell of possible finds, this also learns me which sets I better can pick up because prices are expected to skyrocket in months or years time... because they are all bought up now.  Or polybag promos.  Especcially `licensed` ones, they tend to surely go up in price post retirement, because they have very limited runs to start with, usually going only for about a month.



So Q4?  Well, for toys, this is the best selling, and worst buying moment, as everyone is looking for end of year gifts, so prices rise high.  On the opposite end sits the `summer lull` where everything drops as people look for a fast buck to sponsor holiday expenses.

Buy in the summer, sell in the winter, and preferably after sets get retired or cards for ccgs cycle out...

Or visit a lot of flea markets and try to find good hauls there, though chances are slimmer and I usually just scour it for bricks for personal use...

But enough on my beloved bricks, let`s talk that other hobby I have and which it IS worth your time to do some speculation, though the numbers are far more small scaled: Magic: the Gathering.

I have a premium on Star City Games.  I don`t copy competitive decks for trying to get those wins raked in.  I either play something pulled from the casual pile (yes, I am ready to give my Kraken of the Straits deck a go next week) or red aggro (because after studying or work on a friday, i don`t want to make to many thinky thingie plays).



Chas Anders is my number one read there.

He talks every week about speculation, finanes and the Magic market in general, and even thoug I don`t take his word as a written law, he has defined the Magic community of speculators in three big groups.

The Daytrader: the guy that works sites like Magic Card Market for the quick flip

The Storeowner: the big stock, fixed prizes kind of seller

The Long-Hauler: you and me, trying to keep a card in the binder just that bit longer in the hopes it`ll rise.

Now, I usually don`t go with the buy-inns and such, but with the Theros block, for the first time, I did invest.  I bought in on a lot of Scry Temples for around 90 euros total from an italian eBay vendor.  they where around 3 a piece, mostly the less popular staples of today`s Standard format, but all it takes for those lands to skyrocket is one decent all players deck coming out with the new sets.  And if not, dual lands are always a safe bet, they tend to pay themselves back at least in time.



But the second one IS a gamble.  I bought a LOT of Silence the Believers, at 50 cents a piece, from the same store.  The day after, he relisted them at 2 euros, but heck, mine are underway.  Why?  Look at the `Souls` coming out with M15, especcially the Ravnica (blue) and Phyrexia (colorless) ones, who can even wreck your day from the graveyard.  And then look at all those mono black players out there... 1 + 1 is hopefully a good investment...

So that is it for part 1 of my thoughts, in a while I`ll be returning to this topic when more research has been done, and more of my mental mayonaise has been turning around in my head...

Cheerios!

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