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[Londres 24 de Reuters]-The stocks, bonds and raw materials are old. Hobbyist investors who are locked in their homes now randomly buy and search for assets that are different from common financial products, from vintage handbags to art stock certificates and even rare Pokémon cards. It seems that the “protected area” where previously only millionaires and strangers lived has become a dream “hunting ground”.
Amateur investors who have saved a small amount of money during the lockdown are looking to get out of traditional financial markets, where prices soar and bubbles are wary of higher returns. Such speculation, in turn, has raised the price of “alternative” assets, with some products rising hundreds percent over the past year.
In the recent GameStop stock market turmoil, a group of individual investors have managed to create a well-designed hedge fund thanks to the Robinhood zero-fee trading app. Similarly, even beginners with just $ 20 of investment can start investing in collectibles using a digital platform.
The value of the investment seems to be rolling all over the place.
The price of cards for Nintendo’s “Pokémon” video game, which was a huge hit in the 1990s, skyrocketed last year.
The card for the first edition of the Pokémon character “Charizard” has risen since it was bought by popular YouTuber Logan Paul for $ 150,000 (about 15.89 million yen) in October, and is up 800% last year. A dizzying price was at stake. Recent offers are priced at $ 300,000.
In 2016, Chicago-based Pokémon fan Zack Browning purchased four Pokémon cards for less than $ 5,000 each. Currently, the value of his entire collection is estimated at $ 3-5 million.
After studying finance in college, Browning went on to invest in Pokémon and was amazed at the resurrection of Pokémon cards and said, “I’m shocked, I can’t believe it.” From Browning’s point of view, part of the Pokémon market is more predictable than the stock market. The stock price is said to be overvalued.
Of course, collections such as paintings are much more difficult to calculate profit and loss and measure demand than in the stock and currency markets. This is because there are often few similar assets and they are only occasionally traded through tenders.
However, according to the luxury investment index released by research firm Knight Frank on the 24th, the most expensive assets, such as fine arts, fell during the crown disaster, but “relatively affordable and fast luxury goods.” he was doing well.
According to the company, the AMR / All Art index, which is based on sale prices, fell 11% last year, while the Hermès flagship bag “Birkin”, launched in the 1980s, rose 17%. . It is stronger than fine wines and classic cars.
According to Andrew Shirley, editor of the Knight Frank report, Birkin had a record $ 200,000 last year, and Asian luxury collectors “voluntarily shopped online.”
For those who can’t afford $ 200,000 per product, there are platforms like Otis, which launched in 2019 based in New York.
These platforms start with Pokémon cards, buy and insure anything from the autographed jersey of legendary pro basketball player Kobe Bryant, who died last year, and sell his shares to investors. Shares can be bought and sold.
Last year, Otis sold a stake in British artist Banksy’s work for $ 20 a share. According to the company, the stock price rose 70% to $ 34 this month, and the work itself was valued at $ 722,000.
Otis founder Michael Kahn Janapracorn, CEO, told Reuters that the age of the lead investor is 25 to 45 years old and he has disposable income of more than $ 100,000 …
According to the CEO, the best-selling item at Otis was sports card maker Freer’s 1986 basketball card set, which had a stock price of $ 10 two months ago but has since risen 305% to $ 40. . Beyond.
Reuters independently tried to verify the rate of price increase, but was unable to.
Another collectible platform, Rally, doubles the number of users every 30 days. CEO George Reamer revealed. It is said to be used by “hundreds of thousands” of investors.
Even at the rally, rare Pokémon cards soared to more than $ 100,000, according to Reamer.
He noted that apps like Robin Hood have become very popular in equity investments and that investing in collectibles “has a very similar strength to that found in other personal investments.”
Yet few investors seem to be making a profit. According to Reamer, the percentage of investors recovering profits without reinvesting is in the “first half of the single digits.”
As more and more people jump into investing in alternative assets, many are warning of the risks.
John Paul Smith, a former senior equity strategist at Deutsche Bank and now an art investor in the northern part of the UK, says there is little difference in the behavior of some alternative and enthusiastic equity investors.
“Banksy is nothing more than a ‘momentum reversal’. It looks like overheated IT stock. Market sentiment is similar everywhere.”
However, buying non-traditional assets seems “less stupid” than traditional assets, now, for the last 30 years, Smith has been chasing the market. Not only are stock prices overvalued, but massive stimulus measures from the central bank and the government should eventually cause inflation.
Investors must distinguish between passion or hobby and investing, Smith said. Markets like art have very esoteric mysteries in every field, so if profit is the only goal, it probably won’t work.
“I don’t recommend anyone to spend a pension,” Smith said. Browning, a Pokémon investor, agrees.
(Elizabeth Howcroft reporter, Tommy Wilkes reporter)
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