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Collectibles are never 'an extremely sound investment'. They sometimes are a lucky investment. There is no way to determine what collectibles are worth 'invest

Collectibles are never 'an extremely sound investment'. They sometimes are a lucky investment. There is no way to determine what collectibles are worth 'investing' in, they generate no cash flow, and they have a large carrying cost. Further, the market for purchase is extremely small; even if you manage to luck out in collecting something that appreciates in value, finding an actual buyer is itself hit or miss. Even with Rolexes, which you call out, every article I've seen talks about -specific models- of Rolex. Not all of them. And the reason for that is the scarcity; if you happen to buy a sufficiently rare model, that is sufficiently iconic when you want to sell, yeah, it'll be worth more, and provided you can find a buyer (the scarcity compared with demand likely means you can, but the market is inefficient; there is no obvious safe place to sell the watch that will get bids from any and all interested parties, unless it's so high value as to warrant a well known auction house) you can liquidate it at a higher value. But that's a lot of ifs.

nightski 4y ago
I never said all collectables were an extremely sound investments, just Rolex. I agree not all Rolex watches either, obviously some due diligence would need to be performed. But yes, scarcity is precisely it. That is what NFTs are trying to bring to digital assets. Whether it will succeed or not is an outstanding question but I wouldn't straight up dismiss it altogether. Especially considering the sheer amount that has been spent on digital goods in video games which you would say have precisely zero value. Don't get me wrong, the space will be filled with scams just like real world collectables are (late night infomercials for coin collections right?)
- lostcolony 4y ago
  "Due diligence" - except you can't. Did people in the 1950s know that Submariner watches were going to be a big gain? No. People bought them to wear. Why did Rolex watches persist and gain value, while Bulova watches did not? We can come up with reasons -now-, but in the 1950s you wouldn't know. Just like with the NFT of the first tweet, 'due diligence' for collectibles is just speculation because there is nothing to base it on. Most investments have cash flow of some sort you can evaluate. Not collectibles. The expected value of every collectible trends negative, since it's a physical thing subject to wear and tear, and most physical things depreciate. NFTs are worse than collectibles in that the scarcity isn't even of the thing; it's just an artificially created scarcity around "ownership" of an infinite thing. Unprovable ownership, no less. If you 'invest' in a Rolex, at the end of the day you have a nice watch. If you 'invest' in an NFT, at the end of the day you have a freely available graphic. In terms of digital goods in video games...yeah; companies have been selling digital goods for their games without NFTs for years. Not sure what NFTs are bringing there.

nightski 4y ago

I never said all collectables were an extremely sound investments, just Rolex. I agree not all Rolex watches either, obviously some due diligence would need to be performed. But yes, scarcity is precisely it. That is what NFTs are trying to bring to digital assets. Whether it will succeed or not is an outstanding question but I wouldn't straight up dismiss it altogether. Especially considering the sheer amount that has been spent on digital goods in video games which you would say have precisely zero value. Don't get me wrong, the space will be filled with scams just like real world collectables are (late night infomercials for coin collections right?)

lostcolony 4y ago
"Due diligence" - except you can't. Did people in the 1950s know that Submariner watches were going to be a big gain? No. People bought them to wear. Why did Rolex watches persist and gain value, while Bulova watches did not? We can come up with reasons -now-, but in the 1950s you wouldn't know. Just like with the NFT of the first tweet, 'due diligence' for collectibles is just speculation because there is nothing to base it on. Most investments have cash flow of some sort you can evaluate. Not collectibles. The expected value of every collectible trends negative, since it's a physical thing subject to wear and tear, and most physical things depreciate. NFTs are worse than collectibles in that the scarcity isn't even of the thing; it's just an artificially created scarcity around "ownership" of an infinite thing. Unprovable ownership, no less. If you 'invest' in a Rolex, at the end of the day you have a nice watch. If you 'invest' in an NFT, at the end of the day you have a freely available graphic. In terms of digital goods in video games...yeah; companies have been selling digital goods for their games without NFTs for years. Not sure what NFTs are bringing there.