Investing in collectibles?
Curious to see if anyone else here invests in alternative assets like art, trading cards, books, etc. I was super into that stuff when I was younger and the returns over the past few years have been absolutely stellar (e.g., if you invested in certain Pokémon boxes ~5 years ago they have increased 5x-10x).
I just dumped my last IB bonus into a few different assets that I think (from my research/experience) have the best chance of 10xing over the next few years. And the great thing is that they are almost 0% chance of losing value (i.e., worst case downside scenario is being able to sell them at original retail price). Obviously there’s a lot more work involved with actually selling the assets at the end (time, fees, etc.) and they’re relatively illiquid, but you can make some crazy returns. I wish I had a full year PE bonus to deploy because there are plenty of good investment opportunities right now.
Also, just to be clear, I max out my 401k and have a bunch of money in a Roth IRA/traditional savings account - I feel like I have more than enough exposure to S&P/Nasdaq.
Ben Graham would remind you that this is speculation not investing.
*Benjamin
If you count watches as art, I have made a fair bit on them, but really just love watches and am a total nerd about them...so that part is icing on the cake.
Usually go for independents right around when they start up or more mature independent brands that I think will be raising prices quite a bit.
That’s awesome and also such a good point about collectibles - if you like the underlying item and it has value to you outside of hoping it might appreciate in value, then you almost can’t go wrong. Even if all the shit I bought isn’t worth anything I still enjoy it for myself so don’t really care.
Yeah, it's a lot of fun and stress relieving etc. I love browsing listings, meeting other collectors etc.
Maybe ~20% of my friends are other watch nerds and whenever I visit a big city I'll usually have some friends to meet up with that I met through the hobby.
Been trying to learn more about independents, do you have any resources. I really got into watches over the last few years
Ticktocking (Steve Hallock) on Youtube is a great channel for independents. He's the former president of MB&F North America.
Watch nerd as well
I've been investing in Pokemon for around a decade (first year analyst now, and have been investing since my job at 14).
Here is my MoIC for each year:
2015: 17.81x gross, 14.6x net
2016: 10.77x gross, 8.83x net
2017: 8.88x gross, 7.28x net
2018: 4.29x gross, 3.52x net
2019: 4.78x gross, 3.92x net
2020: 3.3x gross, 2.7x net
2021: 1.21x gross, .99x net
2022: 1.08x gross, .89x net
2023: held at cost
Net total MoIC is 3.21x (heavily weighted towards recent years)
Total current value: $101k
Net value (after taxes, insurance, and eBay fees): $83k
Total cost: $26k
Big into Gold Stars and Japanese exclusives / trophy cards
That’s sick man, everything ex-era was always such a good investment. Wish I had purchased more boxes when I graduated highschool (was going to dump my savings into a few boxes at ~$2k-$3k and got convinced to invest in stocks instead).
Also trophy cards are sick cause there’s suck huge demand for them and so few available - but also difficult due to the capital requirements. Try picking up one of those $100k Lillie cards lol.
Wow your fund performance has been going to shit
Dude that’s some seriously impressive gains.
Wonder what the next set of high returning collectives will be.
Can second this, I also collect pokemon cards but graded ones, as well as Yugioh and Topps Football cards. If you want to get into it, to start with I would recommend buying pikachu or charizard limited edition graded cards, especially those graded PSA 10 (PSA is a grading standard).
That's very solid. Especially in your first several investments
Even net total MoIC of 3x over 8 years on collectibles is pretty good overall.
Great returns btw, and makes a lot of sense especially for the older cards.
My greatest regret was not buying more Pokemon cards back in the days (loved them all this while, but didn't have the disposable income back then). Had some from the Plasma Burst/Freeze era that made my eyes pop out of their sockets when I see what prices sealed boosters are going for these days, which is almost 20x retail at some places I see.
Also had some nice "ex" card with my friend, but that was sadly lost with time. Been getting back into the hobby since I have some spare income now, been trying to master set the recent JP 151 release, but that's more for personal enjoyment than investment purposes really. Though I do think many years down the road it will increase in value.
Legos - specifically Lego Star Wars set generally increase value by 11% after they retire. Which out performs the SnP I think
(Pokemon guy from above) Although you are correct about Lego Star Wars sets having an around 10-15% CAGR post retirement (when they go out of print), it is important for investors to factor in exit costs. Since Lego sets (especially the higher end ones such as UCS) take up so much space, costs such as storage, shipping, and eBay fees have to be factored in. It's a bit of a J-curve situation
I purchased a handful of sets that were super nostalgic to me that I have in storage:) one day I’ll display them somehow when I get a house.
Also cool side note - one of my relatives has been buying one of every set that they see at the store for probably like ~10 years. That collection is worth an insane amount of money now.
Can second this too. Seen people invest in and 'hold' items like Legos, but this is getting into people who know their launches, know what's limited etc. as opposed to buying stuff for fun (perhaps they started this way). Cool site to see some returns of these items over time is this: https://www.brickeconomy.com/
Have personally profited off of one launch myself, though never 'held' onto it, rather just arbitrage. There was a supposed launch (lego code: 42113), stock of this went to stores but ended up being recalled ASAP. Long story short, some stores didn't know it was being recalled and were selling it on...and of the retailers who did accidentally sell this set, it went out of stock pretty quick. It never releasing meant that a set that had an RRP of £125 started going for £500+ instantly.
Collectibles are awesome. I would recommend finding one or two collectible markets that you are passionate about to begin with, learning a lot, and proceeding accordingly. These markets are not efficient.
One thing to keep in mind depending on how much capital you’re looking to put to work is the difficulty of deploying capital at scale. Definitely easier to do with something like watches than legos for example. The markets for some of these collectibles can be rather thin, so keep this in mind when thinking about your potential exit strategy (trying to sell 20 star wars legos at once could flood the market).
In general, as is the case with many different areas of investment, you should try to stay away from the thing that is currently extremely hot, as the market could quickly reach a point where there are far more speculators than actual users/collectors of whatever item you are working with. But in general, I do strongly believe that it is relatively easy to earn returns in excess of the stock market with, in some cases, less risk, by investing in certain collectibles.
Somewhat similar but I used to buy Michael Jordan shoes at retail and sell them online. It was always an instant profit. You can easily 3-5x on any pair, and worst case resell at the price you purchased and get your money back
I’ve sold dozens of pairs, and all sold above retail.
Second this.
Those shoes are a heavy cash printing business.
Buy and Sell Anime merch? Why not create anime out of thin air!
Thoughts on comics?
Also, do we have any empirical data/studies on collectibles? I feel that it's heavily dependent on cycle and shoes for example recently dropped a lot when consumers had less savings because of job market & higher interest rates. Hype seems to build up when a ton of people have plenty of excess cash, and that's very cyclical.
Agreed on the cyclicality point, but that’s why it’s important to buy things that you want/at prices you would be okay keeping the items at.
And I actually have decent exposure to comics - have an ungraded and graded collection. Generally will only buy rarer ones (e.g., older, autographed, limited edition, etc.) and only CGC 9.8s.
From my experience, bad condition/lower ticket items tend to get crushed with the cyclicality. It’s the best of the best stuff that usually retains/grows in value regardless.
I want to learn more about comics as a potential investment, could you please DM me? I'm the anonymous Intern that previously asked the question.
Make a comic that gets hyped up in a bear market
Collect adult toys and sell them to your MD - easy $
Clothes and shoes are pretty easy to get into, I’m holding a lot of stuff
I personally am fond of quite a few. Been a nerd my whole life, and had stuff going from Gunpla (Gundam model kits), Lego (Star Wars etc), Hot Toys (realistic looking collectibles) etc.
While Gunpla isn't really a huge generator of returns bar a few, and Lego spiked like mad during COVID, my Hot Toys had pretty decent and stable gains (though I never sold them, so it's unrealised). I think while the investment aspect is great and I love the fact that most of these can at the very least hold their value, I don't really approach it from the investing standpoint, and it's really more of personal enjoyment.
But having the option to sell them and earn a bit from them certainly is nice. Would love to hear what else the people here collect.
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