09/15/2016 by Shaun Kauffman
Hey guys, I’m back again with another installment of 1st Edition Investments. This time we are going to focus on different types of investments, planning our investments, and the risk (nope, still not the board game) associated with investing. Remember, in these articles I’m looking to set you up to become an entrepreneur. If you’re just looking to make a few bucks and card sling, then my articles probably aren’t for you. I’d like to begin by telling you a story that may sound familiar to you, and for some of you, might be similar to your own stories. It was 2010. I was a Freshman in college and my second semester that year was just winding down. I was stoked to say the least. Not only had I survived my first year of school, but summer was coming, garage sales would be everywhere, and I had loan money left over to invest. Earlier that year I had started my investment/business journey by purchasing a Virtual Boy console on Craigslist. I merely wanted one to play for old-time’s sake. I paid $50 for the Virtual Boy, a stand, and two games. After about a week of having it I get a call on the phone from some “Random Joe”. Our conversation went a little something like this...
Random Joe: “Uh hello is this Shaun?”
Shaun: “It might be, who’s asking?”
Random Joe: “Oh uh my name is Random Joe and I am interested in purchasing your Virtual Boy you just bought on Craigslist.”
Shaun: “What!? How’d you know I bought a Virtual Boy on Craigslist? How’d you get my number?”
Random Joe: “Oh I’m sorry. I don’t mean to startle you. I had called about the Virtual boy and the seller told me he sold it to you, and then he gave me your contact information so I could contact you about it.”
-Side Note: What that seller did was completely and utterly unprofessional and rude. Do not ever give away a person’s information to a random stranger. Alas, it was Craigslist, what should I expect?-
Shaun: “Well yes I did buy it, but I just purchased it to play for myself. I think it is incredibly rude he gave my information away and I’m not interested in selling it a...”
Random Joe: “I’ll give you $175 for it.”
Shaun: “What? $175? For the Virtual Boy, stand, and 2 games?”
Random Joe: “Yes. I’d be happy to pay you $175 for it.”
-a brief moment where I mull it over-
Shaun: “Okay, let’s meet up at the Union (a common place on our campus), I only accept cash.”
Low and behold my first official transaction into the world of buy, sell, trade. I had played Yu-Gi-Oh years prior and sold cards/traded, but never for financial reasons beyond just buying more into the game. This was an eye opening experience for me. I managed to just turn my $50 into $175 and was still able to enjoy the Virtual Boy for a few days (let’s be real, you could only enjoy a Virtual Boy for a few days anyways before your eyes would bulge out of your socket’s and profusely bleed from straining them). I had found a potential way to take my hobby and make money with it. For a kid with too much left over student loan money, a few weeks in a dorm to kill, and no part-time job, this seemed like a great idea. I went on a Craigslist splurge. I was buying everything within a 50 mile radius that I could reasonably convince someone to drive and bring to me. I had N64s stacked to the ceiling by my desk. I had converted part of my closet into video game storage, and would even let Craigslisters into my dorm room to test games before buying them (Bless my roommate who put up with me the whole time). I saw an opportunity and I was going to strike. I’d be buying games and consoles at 25%-75% below market value. I was buying so many collections and games that eventually it was far too much for the dorm room. Luckily for me the semester was over and I took it all home with me to my parent’s house. I kept investing there going full steam ahead. I was buying video games, selling games left and right, and just stocking inventory up until about late July.
July however was when it all came to a crashing halt. Boom tuition and my down-payment for my apartment was due. My first semester student loans kicked in around early June, but I had used that money as more seed money for more inventory. My tuition was coming due and I was going to have to make some serious sales if I was going to pay that $9,000+ bill. I was listing on Ebay daily, selling on Craigslist, making lots, doing whatever I could to come up with that magic number. Luckily I was able to come up with the tuition, however at what cost? Looking back over that Freshman semester and summer, I came ahead, but it wasn’t by much. In the end I had few to no video games left, I barely had as much money as I had started with, and I was left staring at the novelty of it all. I could tell people about all the amazing games I owned, how big the collection was, and how many great people I got to meet, but in the end those were just experiences. I had nothing to show for all of that work, all of that effort. I had poor planning and management to the point that I didn’t get anything out of it except “a story” (well, and a few lessons, but I wouldn’t learn those for a few more years in retrospect). So where did everything go wrong? Where did my Virtual Boy Empire hit a brick wall? I knew my tuition was coming due, I was making good investments with favorable margins, how did I end up with nothing? Well, let’s find out.
1st Edition Investments: It Takes Money to Make Money, but Far Less Money With a Plan.
It takes money to make money. You hear it all the time on the news, on the internet, in magazines (do those even still exist?), and sometimes even in casual conversation. While the mentality that if you have nothing you can’t get something is true to an extent, it isn’t the whole truth. Generally, unless you’re providing a service (and even sometimes then), you do need some seed money to get a business started, but you don’t need a great deal of wealth. What you do need is a large amount of discipline, a plan, and a goal. My video game empire of 2010 went wrong because I lacked all of those things. I wanted to buy more and have more. I was getting to purchase and own every video game I had ever wanted (how cool is that), but at the cost of my health and sanity later on that summer when I didn't have the money to pay my tuition. I loved the novelty of a business more than I loved the actual business. I have no doubt looking back that I could have made an incredible amount of money that summer. I had stumbled into a market that was just beginning to flourish and was ripe for the picking (as opposed to today, where retro video games is one of the most oversaturated markets out there). The problem lied in the fact that I had no business sense (an understanding of how businesses operate successfully day to day), no plan for the inventory I was buying, no goal for the money I’d make from the inventory, and no discipline to stick to any sort of a plan for that inventory (I loved those games too much. I was too emotionally invested). The key here though is that I had no business sense and I lacked a plan for selling my inventory within a time frame that worked for my overhead. Let me make this very clear, as you embark on your business journey you are going to meet all different kinds of people. Most of the people you meet, 95%+, in your industry will end up just like I did in 2010, barely ahead, even, or down. They will have little to no business sense, but instead a rose-tinted dream, and a little too much money for their own good. The remaining 5% or less will be your business savvy entrepreneurs. You want to be the latter. If you do not have a good business sense and foundation of business knowledge upon which you can build, then you are not going to be able to be able to be successful. Drafting plans, creating structure, and having goals is futile if you do not understand the market you’re investing in, how to invest your money, and the risks associated with those investments. So before we can build an investment plan and create our goals, we have to boost our business knowledge. To boost your knowledge I’d recommend doing a few things.
- Read everything. I know reading can be boring, but honestly you don’t know everything. I don’t know everything. You’ve managed to make it this far into the article without having fallen asleep, so therefore you can make it through anything! Find books on business, articles on business, read business analysis reports, dissertations that reviewed certain businesses, etc. At the end of this article, and articles in the future, I’ll put some of my favorite recommended readings that you can use to help boost this foundation.
- Don’t just focus on success in your research. Sometimes researching failure is just as important as success. You’re going to hit blocks in the road eventually, but some of those pitfalls you might be able to avoid if you research other businesses that have already failed. Being able to look at a business and see where it is failing is an incredibly valuable skill. It allows you to avoid those mistakes yourself which not only saves you money, but also saves you time (we will get into the value of time vs money in another article).
- Take a course at a local university or workshop. While I myself do not have any business education beyond what I have done myself, I highly recommend it. Sometimes learning from those who have had success is one of the best things you can do. Even if nothing they tell you is revolutionary knowledge, it will lay a foundation of skills and concepts that will allow you to build your business model upon.
- Work a real entry level job at a corporation or business. I’m not talking being a bag boy at your grocery store, or a greeter at Wal-mart (while both of these are completely admirable, they won’t give you what you’re looking for). Instead try to get entry level at a corporation or business that deals in direct sales to clients (even if you’re just the secretary). This might seem counter-productive to enter the workforce when your goal is to create your own job, but working for another company will allow you to see what they do, why what they are doing works (or doesn’t work), and how you can make those things applicable to your own business. I pretty much created my whole business model from my cubicle at another job.
- Study your peers. Generally new people enter the business world everyday. The hobby industry is no different. When you begin your startup company, there will likely be others who begin theirs around the same time. Watch them, follow what they are doing right and emulate it. Follow what they are doing wrong and learn from it. Don’t assume every competitor out there is a brilliant mastermind organization ran by the most business savvy man or woman the world has ever seen (last I knew Warren Buffett and Bill Gates weren’t too big into Pokemon or Magic the Gathering). Your competitors, especially if they are at the same place in the business timeline as you, can be valuable resources. I actually had two start-up business that began right when I did and you can be sure I observed them closely.
Once you’ve done your hundreds of hours of research to build up your business fundamentals, you’re ready to move on to creating a plan for the inventory you’re about to buy. Whether you’re just looking to sell cards out of your home part time for supplemental income, looking to go full time and make this your livelihood, or looking to invest in items that can sit back and gain value faster than your 401k or Roth IRA, you’re still going to need a plan for how you handle your investments. Before we create our plan, let me give you an example of how a lack of a plan can drive a hobby business into the ground.
Earlier this year Pokemon Generations released and was incredibly difficult to get your hands on (unless you had the foresight to invest early). Mew Mythical Boxes, Celebi Mythical Boxes, and Charizard boxes were extremely limited. So what did many vendors do? Well they called their distributors and said…
Silly Store Owner: “Uh yes Mr. Distributor I’d like 2,000 Blastoise Collection Boxes and 3,000 Darkrai Mythical Boxes please.
Mr. Distributor: “Oh wow you’re seeing a lot of success with these products then?
Silly Store Owner: “Oh yes yes, I am! Generations has been selling oh so well. We haven’t been able to get much up to this point, but we are excited for this release. This product is selling so hot I just have to have it all”.
Eventually every vendor in the country had their fill of Generations, but it was now May and the Generations fad was waning. The initial release was over, the hype had died down, people were more focused on Fates Collide coming, and overall the product just wasn’t as exciting as Mew and Charizard. That is when vendors created a race to the bottom.
Silly Store Owner: “My God, these 3000 boxes we have just aren’t selling Bob. We have to lower the prices. We have to get this product out the door. We have a million more of these little things coming this year and God knows how many other product releases. We need this capital. WHAT ARE WE GOING TO DO BOB? Blastoise can’t keep the lights on Bob! Hurry liquidate it all before everyone else matches our price.” (this rarely works).
People take pricing and selling to extremes. Sometimes it is based on the emotion of fear (nobody likes the idea of losing a lot of money, so they try to hedge their losses before they hemorrhage money), while for others they base it on necessity. Sometimes a small business just cannot afford to take a loss beyond a certain threshold, so they cut the market down for their own security. While many businesses will liquidate in this fashion if they find the necessity to, our goal is to create a business model for you that will put you in a place that you won’t have to do this and can weather the waves of fluctuation. For a while Darkrai Mythical Boxes on Amazon were $8.25, which after fees and shipping is $4.42. Blastoise Boxes can still, as of writing this, be purchased below MSRP of $24.99. I am still weathering this wave, but it was a wave I had anticipated. While I did get stuck with some Blastoise Boxes (my order was only 60% of my original Charizard order), it wasn’t nearly as many as some of the larger vendors, and you can best believe I didn’t liquidate them below cost. Why not you ask? When I had purchased the product I knew the market, I knew the risks, I had a contingency plan that involved a long term selling plan, and I used my ground floor knowledge of business to make an educated decision on how I’d handle this specific product. Pokemon had never released a product like Generations before, but that didn’t mean I couldn’t do some research and come up with a plan. We can create plans for any product release with enough effort. To create our plan for investing we need to understand the different types of risk that we will be dealing with in a Pokemon economy. Generally there are 8 different types of risk, however in this business you will only use 4-5 of them to assess your potential investments.
- Systematic risk: This type of risk is something that will influence a large portion of your inventory (investments). Generally this relates to an event occurring that will positively or negatively affect your investments. While many believe it is impossible to protect against this risk, research can at least better prepare you for what to expect when the aforementioned events occur.
Example: Set rotations, banned cards, a set announcement, tournament reports/standings, set reprints.
- Unsystematic risk: This type of risk is something that will generally affect specific portions of your investments, even down to singular items. This type of risk is usually able to be spotted with enough research and planning. That being said however you can never catch everything and therefore should diversify your assets so that not everything will be hit at once. Think of it as the more you diversify the more you take your investments and not only make them more impervious to unsystematic risk, but the more likely the event would have to be colossal for systematic risk to become a factor.
Example: A singular card reprint, a card printing that makes another card obsolete (VS seeker making Pal Pad obsolete), hype surrounding cards fades (or sometimes increases such as Mega Audino winning worlds), etc.
- Credit or Default Risk: Generally this type of risk only applies to stocks and bonds, but anytime I sell something on a payment plan I generally factor in the risk that the person either won’t be able to make the payments, or will have delayed payments. That combined with the time it will take them to pay off the item plays a large factor into whether or not it is worth it to sell to them. I usually put that risk assessment in this category.
Example: Joe Bob wants to buy a case, but cannot afford a full case. To secure his price of $520 shipped, he offers me $86.66 each month until it is paid. I then have to weigh out the risk he won’t be able to pay, what to do if he can’t, and whether or not it is worth it to wait that long, etc.
- Foreign-exchange Risk: This type of risk generally is used when people trade across markets for stocks and bonds. I usually categorize risks in Pokemon in this category if it is an international deal that involves currency exchange, customs fees, import/export taxes, and international shipping.
Example: Selling now and incurring these additional responsibilities, or holding out for another buyer. Do I take a hit from the currency exchange? Are they paying right now or do I have to wait to get paid, in which the exchange rate could change? Am I covering shipping? Am I importing product that is on a timeline? Does the exchange rate kill the profit margin on my investment? Would there be a better time to buy this product when the exchange rate changes in our favor? Is there something political like BREX-IT that could influence the exchange rate in my favor? (Note I posed these as questions because it seemed easier to understand this way. Also I know BREX-IT could fall under political risk, however that type of risk rarely applies to Pokemon and therefore I’d rather not make things additionally confusing if I can avoid it).
- Market Risk: This in the stock market world is the day to day changes that a stock would see on the market (also known as volatility). This is when you’d weigh your investments (cards/product) on a basis on how the Pokemon market is doing as a whole. If Pokemon announces they are seeing increased numbers of player registration, then that means there are more buyers, the money being pumped into the game is at a high, and it generally means it is a Bull market (that prices are beginning or already have risen and will continue to rise). This is generally when you want to sell your investments. Most would say this is when you want to hold and capitalize as the market transitions to a Bear market (when the market is taking a negative turn), however you risk missing that climax and therefore your opportunity to sell. I generally consider buying in a Bear market, as prices are dropping and are low.
Example: The best example I can give doesn’t even relate to Pokemon. In 2008 when the housing market collapsed due to credit-default swaps, it was a Bear market. People were selling what they had left and right if they hadn’t already lost everything. This however for investors was the time to swoop in and capitalize on everyone else’s loss. Investors could get things such as property for next to nothing and then wait out the recession to rent or sell the property for large gains later (Similar to sitting out Blastoise boxes, but also quite different).
If you had no knowledge of different types of risk prior to this article I’d advise reading on each of the different types and some real life applicable scenarios in which each have been present. This will help you better understand each type and make judgments calls for each. While I could sit here and break each one down farther, I’d rather reign this back in and try to keep it focused on Pokemon. When it comes to me discussing business we are always one wrong step away from falling down the deep rabbit hole and never making it back to the original topic. Ahem, once we know our different types of risk and how they apply to Pokemon, we can then begin to look at the different types of investments that we can make and how those risks apply. I generally break investments down into four categories…
- Quick-Flip Investments: These investments are the ones that you’ll generally get in the mail and turn right around and list them online if you haven’t already. Your turnaround-time goal is going to be less than a month. Anything that is a quick-flip investment is something that either has large systematic, unsystematic, or market risk associated with it, as that is what will push you to feeling the necessity to flipping it quickly for any margin of profit.
Example: Anything that you’d buy and feel there was a necessity to sell right away as fast as you could. These could be products or singles that have a very limited span of utility, something you have access to before the general public, or something that has a very high unsystematic risk attached to it (such as a potential reprint on the horizon). Think of these as your high risk, high reward investments.
- Short Term Investments: Short Term investments are any investments you make that have a turnaround-time goal of immediate to three months. These investments generally have less market risk associated with them, but still have a high level of systematic and unsystematic risk.
Example: These are the investments that generally begin as quick-flip, but might transition due to new information, a change in the event that caused the unsystematic risk, an outlying event or piece of information that changed the structure of your plan (such as volume of product being released is less than what you had anticipated), etc. These are investments that could be something you’re willing to sell right away for the right price, but might just be on the cusp of an increase that you feel will happen relatively soon. Regardless, any investment that falls into the short term category would be something you’d want to turn over within its first three months. It will not only gain you liquidity in its sale, but will also prevent the risk of additional factors dragging the price down. Remember, just as time can be a great factor toward increasing the value of a product, it can also bring more opportunities for your investment strategy to be thwarted by an outside player (A large scale event, TPCi, etc.).
- Calendar Year Investments: These investments are the ones that you generally will pick up and hold no longer than 12 months. The actual carrying time of the items you buy will vary depending on multiple factors including, but not limited to, the time of the year, the current meta, future product releases, the overall economy, reprints, etc. Strong Calendar Year investments generally have a very low unsystematic risk, while having a standard market risk that any investment would have. When it comes to CYI, sometimes these investments can actually benefit from systematic and market risk scenarios that other investments would tank under. That being said, you have to sit on these products for much longer than a normal investment, meaning that you have more opportunities for systematic and unsystematic risk to strike. Try to buy your CYIs that have little to no systematic risk during a Bear market to further protect yourself.
Example: These are your investments that you’ll make during a Bear market and sit on until the market positions itself favorably (a Bull market) to move them. A good example would be sitting on Hoopa Ex tin promos until the market transitioned. Hoopa Ex tins last year on Black Friday (best holiday of the year!) were $10 each. If you sold the packs at $2.50 a piece the Hoopa Ex’s were pure profit. Selling them last November for a mere $3-4 was not worth the effort after shipping and fees, however waiting until farther into the investment to turn them over once the tins were long gone and Ancient Origins was on the cusp of being at the end of its print run and you had a recipe for success. Hoopa tin promos 10 months later sit between $7-9 each. Over a 100% increase in the same calendar year. These were incredibly susceptible to systematic and unsystematic risk however (which is why some may have said this was a riskier CYI). Hoopa could have fallen out of favor in the meta, it could have seen another reprint (such as in a battle deck), Pokemon could have decided to reprint the tins, the 20th anniversary could have flopped and the influx of players never happened (it would cause there to be no reason to have additional stock), etc. On the flip side, reprints, rotations, etc. (things generally deemed to be risk factors for other investments) could actually aid Hoopa and make it more prominent in the meta. This is one of the instances where the systematic changes made out of your control can play in the favor of your investments.
- Long Term Investments: Finally you have your long term investments. These are the investments that when you buy them you are ready to sit on them for a year or more. You’ve weighed out the pros and cons, the ROI, the opportunity cost, and the risks. LTIs should generally be fairly resistance to all forms of risk and only increase in value as time goes on.
Example: These are the products you can expect to sit on the shelf for a long duration. They will need to have a high ROI (return on investment) to justify the time they will have to sit around (this will be another article in the future - how to put a value on time). A base set booster box is one of the best examples. Back in 1999 those booster boxes were $100-140 depending on where you purchased it. 17 years later, those same boxes are upwards of $1200. That’s quite a large increase and would have definitely been worth the long term investment as long as you could afford the spare capital, and that all of the long term risks fell in your favor (back to the question, what if Pokemon wouldn’t have survived?). Long-term investments truly suffer from systematic risk and is something you need to be extremely wary of because you lack a lot of control when it comes to this form of risk. You might not be able to prevent or avoid all of the different events that could wreak havoc on your investments, and sometimes simply unloading investments isn’t as easy as it sounds.
So now that we at least understand, on some level, the different types of risk and the different kinds of investments we can make, let’s take a look at a new product coming out soon and figure out the best investment strategy for that product. Once we have this strategy in place, it will allow us to better manage the investment, our money, and better formulate future plans around this investment so that we don’t end up with another crashing Virtual Boy Empire.
Mega Beedrill Ex Boxes.
What do we know about Mega Beedrill Ex boxes? We know the MSRP is $39.99 and its release date is set for October 31st, 2016. It contains one Beedrill EX, one Mega Beedrill EX, 6 booster packs, 1 jumbo card, 1 pin, a spirit link for Beedrill, a Beedrill coin, and a code card. So let’s take a look at how we can invest into this product.
The first option we have with Beedrill is to quick-flip it. In my opinion this is your best option because it seems to be void of a lot of risk potential. You preorder out the product or your purchase them on release day and sell them quickly (note this will probably only work for store owners). The product does have a high risk potential for systematic risk in the fact that there is likely to be an incredibly large volume of these produced. With the high price point ($39.99), they might be a tough move with only 6 boosters included. That being said you have unsystematic risk playing at your side this time. Currently Beedrill is seeing some buzz (ugh, I’m sorry) as to whether or not the card could see success in standard. That hype could drive the value of the individual components up (especially the online code card for testing). If you are confident you have buyers ready and can sell the sealed box or the individual contents for more than you paid relatively quickly, then this is the option for you. You won’t have to wait to see how the meta turns out and it will really cushion yourself against the unsystematic risk.
The second option would be your short term investment (1-3 months). I actually do not like this investment strategy at all for these boxes. First, you run the same risks that you do with the quick-flip strategy, in that there could be a large volume produced and the meta uncertainty. The only difference is that now you missed the window of people with money burning a hole in their pocket. You also have an unsystematic risk in terms of meta that could play in your favor, but very well could play against it. If Beedrill doesn’t do well, the investment automatically becomes poor. If it does do well, great, the card will see value and likely be a worthwhile investment until late November. Why late November? Black Friday. Historically these types of collection boxes (similar to Mega Metagross, Mega Diancie, Mega Absol, Mega Blaziken, and Mega Swampert) have all seen drastic Black Friday discount sales at major retailers. All of the aforementioned have been sold at half price if not less on Black Friday. If history repeats itself Mega Beedrill will follow suit and the general accepted market price will now be half of what your original investment cost you (unless you’re buying wholesale). This means that now your meta call will have to be so substantial that it can make up the ground on 50% of your investment. This my friends is unlikely. In addition, even if it did, the individual cards would outweigh the value of the box and most people would likely just pick up a sealed box on Black Friday instead of buying the individual components. Your short term investment of 1-3 months has now been limited to a month and a half time line, which might as well be a quick flip investment. Avoid this one.
Your third option would be a calendar year investment (up to one year). Once again I am against investing in this product for the aforementioned reasons. In addition next year is likely to lack the “surge” of popularity that Pokemon saw this year since the 20th anniversary celebrations will be dying off. While I don’t think the numbers for players and buyers will drastically drop, I do believe the media coverage will. This means you have an increased systematic risk that Pokemon as a whole will not be the general focus of the hobby industry and therefore your investment is less likely to flourish. In addition, if less people are buying into the game, we could see a shift from a Bull market to a Bear market (it might be too soon for this, but it is still something I’d advise considering). The popularity we are seeing in Pokemon right now could be a long standing growth for the game, or it could be a similar fad to what the game experienced in 1999. Only time will tell, but this risk is very real and one you should keep high on your radar.
Finally your last option is the long term investment. This investment is for over a year and one I’d advise against. Beyond repeating all of the risk factors we have already mentioned, this is an incredibly niche product that doesn’t feature a generally high ranking Pokemon in terms of popularity. Had this been the Mega Charizard Box, my viewpoint might waiver, but alas it is Beedrill. The likelihood that the product increases long term beyond its original MSRP to a meaningful amount (I say meaningful because most products eventually rise back to MSRP or slightly above after many years, but not enough to make it worth sitting on them) is incredibly low. There is little to no collector’s appeal to the box, and with the Black Friday sale potential, the box will have to contend with the already reinforced idea that the market value is whatever it was sold for on Black Friday. Additionally at this point it is tough to know what will be relevant in the meta, so any speculation based on favor of Beedrill is a gamble. Could it still be seeing large amounts of play? Sure, but it could also be seeing no play. We do not even have definitive proof that it will see play on release, let alone a year from now. Beedrill also runs the systematic risk of a set release having a card that just outclasses Beedrill. So while right now we know what will be released for the most part in the quick-flip and short-term scenarios, we have no way to gauge the calendar year and long-term scenarios. This one just poses too much risk for my liking. Avoid.
Summary: Quick-flip seems to be the best strategy for the Mega Beedrill Ex box. Even with the holiday looming, I don’t foresee Beedrill making a big impact on your investment future for the better. I personally will be avoiding this product altogether, however with the right amount of marketing and strategy (such as selling individual contents), quick-flipping the product could possibly be profitable. All other investment strategies are likely to report a loss and should be avoided.
I hope breaking down investments, risks involved, and the strategies about how you can look at products has helped enhance how you will study products and collections for your future investments. This should allow you to better formulate your long term business plans so that you can avoid being crushed by overhead debt like my Virtual Boy Empire was. While we only scratched the surface with it in this article, you are now on the right track to making wise investments. My last tip of advice to you is to not be scared to pass on an investment you’re not sure about. Sometimes it is better to look back and confirm you were right about your gut feeling, even though you missed the opportunity, than to look back and wish you could have avoided investing. There will always be more opportunities, but not if you make foolish investments from the start. Until next time, good luck with your investment planning!
Products to watch:
- 20th Anniversary Elite Trainer Boxes - I think these have extremely strong long-term investment potential. Their small print run, combined with the fact that Pokemon is growing larger each day poses a strong indicator that these could have a higher than MSRP average farther down the road. I look at these similar to how the 15th anniversary Pikachu boxes did in Japan.
- Shaymin EX - I actually think unloading Shaymin EX now is an extremely wise decision. The card poses so many risk factors that could result in a price drop, while have very little indication that the price will continue to rise (beyond the market just staying the same). I also believe Shaymin is approaching that glass ceiling similar to what Gold Ultra Ball did, where people just won’t pay more for it.
- Octillery - This card, even though it is getting reprinted as a 1 of in the Keldeo vs Rayquaza Battle Decks, is extremely hot right now. With Shaymin getting close to its glass ceiling, I think a lot of players (especially more casual ones) will find a home for Octillery in their decks instead of Shaymin. With players looking for more cost effective methods for deck building, you can expect that they will test Octillery more and potentially find more success with it.
- Pikachu Ex Boxes and Promo Cards - These actually have the exact same reasoning behind them that the 20th Anniversary ETBs do. I think a lot of vendors will flood the floor with them below MSRP until they run out, then they will be gone. The patient players who held theirs will see a nice return in a year or two. I used the previous Pikachu EX box as an example which has now broken above its MSRP of $49.99.
- Umbreon EX - I’m going to continue to hammer this one home. Just from my last article the full art has went from $11.99 average to $18.99. The regular art is slower to catch up, but will break the $10 threshold by Christmas. The card has yet to find its home in the meta, but the potential to take 4 prizes off a surprise Ninja Boy is just an incredibly strong threat that will keep Umbreon relevant until Mega Pokemon are no more.
- The Wall Street Journal
- How to Win Friends and Influence People
- Investor’s Business Daily
Note: You can make plans for any product, card, toy, etc. Sometimes one investment will just seem to be too good to be true and you might have stumbled on a nice little gold mine, but all investments contain some degree of risk. Sometimes the risk just isn’t noticeable at first. Even if you have an investment that you think is a sure-fire, fool-proof, investment, there is a guaranteed scenario in which that investment could go Red (non-profitable, meaning you take a loss). Every investment has them, including investments in Pokemon or other hobby games. For example: what if Pokemon goes under? While this is unlikely, if it did happen, would any of your cards, figures, memorabilia remain valuable? Maybe. Or it might all be worth nothing. This is an example of risk for any investment, regardless of how small the risk actually is. There is no such thing as a guaranteed return on investment. Thinking such is just going to set yourself up for failure because it will catch you when you least expect it. Always plan for the worst and live for the best.
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