Let’s talk about my LEGOs first
In 2017, I started to invest in LEGO, which in my opinion is a kind of alternative investment. Some of the famous Star Wars sets performed amazingly in the secondhand market. Fans are willing to pay thousands to buy a discontinued set even if it’s not sealed and brand new. Those crazy numbers got me excited, so without adequate research beforehand, I jumped right into this market and started to collect LEGO sets.
Things went pretty well in the first a couple months, I managed to hunt some cheap sets from eBay and resold it on the Facebook marketplace quickly. As I got deeper into collecting sets, sales began to slow down and I realised that I overestimated the investment margin and liquidity. Not long after I realised these, I became more cautious about picking sets to collect and resell. Hence, I developed a simple checklist to help me.
- “Is this set on at least a 20% discount”?
- “Is this a set I would like to buy even not for investing purpose”?
If the answer of any of them was “No”, I would skip that set no matter how I want to take it home.
Fast forwarding to the beginning of 2018, I decided to stop investing in LEGO. One major reason is that LEGO started to re-release discontinued sets with a much cheaper price (comparing to the price in the secondhand market). The other reason is that it wasted too much of my time. At the end of 2017, I compared the profits I made through LEGO investments and the profits I got from share markets, the latter one provided about 200% more than my LEGOs. Apart from shares, I have invested a part of my money in cryptos since mid-2017. Only half years later, I saw a whopping 8-fold increase in this investment basket. Therefore, getting rid of the least profitable investment sounds like a smart thing to do. Til now, I still have two Minifigure sets on hand. The others are all sold although I did sacrifice some profits just to get rid of it quickly.
Market is bleeding
The common investment options are not performing well in 2018 so far. ASX200 index is down 160 points, Ethereum price dropped about 550 USD per unit since January, the clearance rate of real-estate auctions is below 50% here in Melbourne.
Another way out?
It’s hard to find another investment option that is suitable for me. I don’t have enough place and proper gears to store wines. I’m not rich enough to collect Rolexes. After torturing Google for a couple of days, I decided to check out Pokemon Trading Cards (PTCG). This game is catching increasing attention in Japan this year. I also want to mention the other two popular trading card games, Magic: The Gathering (MTG) and Yu-gi-oh (YGO), for the purpose of comparisons.
Let’s see what are the search trends of these three games in Australia.
Looks like MTG dominated the web search. YGO and PTCG are not looking very good in this case. However, there are more Pokemon booster pack opening videos on Youtube than MTG during the past 6 months. Maybe it’s because Pokemon release booster packs more often than MTG and YGO. Comparing the groups on Facebook, I found quite a few PTCG buy and sell groups targeting the Australian market, not much for MTG and YGO though. I sense that the liquidity of PTCG cards is not very high after scanning through a couple pages of posts in those groups.
The next thing I want to investigate is the channels I can buy and sell cards.
Much like LEGO, PTCG has some well-known (only to players and collectors) online secondhand marketplaces. For example, Troll and Toad is an online store which is usually used as a price reference for buyers here in Australia although its appearance is so outdated. TCG Player is a more modern-looking trading platform (much better UX). It even provides free RESTful API access which is very good for data analysis. eBay is always a “good” place to sell. Although it offers free listing and zero final value fee quite frequently, I still hate it for historical reasons. Facebook marketplace or groups is the best selling channel I discovered so far. In terms of buying, the pricing of local and online stores are pretty much the same so I’ll just buy from the local stores so that I can save a bit on shipping cost.
So what products I can buy to get Pokemon trading cards? Pokemon Trading Card Game has four types of form factors, namely booster packs, theme decks, elite trainer boxes and other special decks. Booster packs only contain random cards whereas theme decks provide fixed set of cards. Elite trainer boxes and other special decks consist of booster packs and other accessories like pins, coins, figures and etc.
I think the booster pack might be the best option to invest because things like accessories don’t have the rarity, which is essential for high $ value.
Booster packs have a relatively fixed pull ratio. For each pack (10 cards), it has at least one rare or above. So by getting a full box of booster packs (36 packs, 360 cards), I can probably get 36–72 rare+ cards. According to my quick price check, each card probably worth about 2 to 3 dollars on average. Then the estimated profit ratio per box can vary from -20% to 20% based on luck. (Note: calculated based on rough estimates)
So do we have a go?
Ok, here is my verdict, I think it’s more likely to lose money than gaining profit in this investment basket. The profit is highly depending on luck after all and the liquidity seems quite average. However, I’ll still try it out though. Stay tuned if you’re interested in the results, I’ll share my experience in future articles.
