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The Rise of Card Trading as Alternative Investments

The Rise of Card Trading as Alternative Investments

I first got exposed to alternative investments in 2016 when I did my internship as a fund of hedge funds summer analyst. Subsequently, I landed a role in a Private Equity firm which further broadened my horizon in the world of alternative investments. These days, alternative investments are quite loosely used eg. Bitcoin, Sneakers, Wine, Watches, and even collectable cards.

The pandemic has given a boost to prices for cards of all forms from Pokemon cards, to Basketball and Soccer cards. For example, sales of Pokemon cards increased by almost 6x last year, while sales of Basketball cards has risen by almost 4x in the same period. Who would have thought that just by collecting cards, you could make a profit?

Card trading has also been popularized by Shark Tank’s Mark Cuban and controversial YouTube Logan Paul. I was surprised to read that a signed rookie card for NBA star Luka Doncic could fetch USD 4.6m. Sounds pretty insane just for a “small piece of cardboard paper” but who cares when there is a buyer out there who value it at this price.

I myself stumbled into collecting wrestling cards in my primary school days. I remember the fascination of buying cards from Comic Connection, opening them up, and hoping it would be those foil cards. It was not so much of trying to profit from it at that time, but rather, you want to build up a collection of all these rare cards.

Source: Finance and Toast. Author’s own collection of WWE cards.

Source: Heritage Auctions. Did you know that there are professional valuers to value your trading cards?

Later on in life, I found the joy of collecting such collectable items to help me in my investing and trading. It all boils down to the “mindset” on finding unloved, undervalued or even lesser-known growth stocks, the same way you hunt for rare cards. The key is to always be on the lookout for opportunities where no one is going to. Also, it helps in knowing when to exit because you do not want to hold on to such cards or stocks “forever”. Paper gains are not actually real gains until you realized it.

Of course for those who are thinking of doing this as a part-time or even full-time job – trading cards, there are risks involved. Just like watch collecting, prices may be irrational and the fad may die down over time.

However, I still believe as long as people value the joy of collecting rare cards, the market should still hold up for now. Not everything needs to make sense and ultimately, it boils down to demand and supply.

How many of you still have such trading cards collected while you were young? Share with us in the comments box below.

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Best wishes,

Finance and Toast

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