Fractional Ownership Not such a Good idea after all?
 

I got this email from Collectible today.

This was never, ever a good idea from the beginning. Just like 'owning' a timeshare. Ponzi schemes to the max.

B. Turner

Not surprised but this happening just thought it would be further into the future.

I thought it would take off for a time especially with the stock market volatility and people looking to put their money elsewhere.

It is like playing the stocks with the added benefit of collectibles.

But long term never thought it would work since you own a small percentage, you do not possess it to enjoy it, and just an odd business model.

Hopefully not to many people take a loss on some of the items that are not as much of a hot commodity

Apologies for finding the whole thing laughable

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Buying a share in a card is the same as buying a share in a corporation: it is a commitment to a belief system, nothing more. Think about it: you got no control of the asset, no role in the group that controls it, and as we see now, no right to determine the outcome.

With the big difference that one is the financial bedrock of the most powerful nation in world history that will do anything it takes to keep it going and growing, and the other is a share of a baseball card.

Not really. A share of a corporation is a share of an enterprise that earns money from producing goods and or selling services. A baseball card is just a piece of cardboard with subjective value only.

OT....but I think you may have also just defined sports fandom. :cool:

+1 and I wanted to get snoopy belly laughing again

Didn't Evan Mathis try to do this a few years ago??

I thought this IS Evan's business

He can Just trim more cards amd sell to cover the losses.

I'm rooting for speculators to get their due. We need a flush to get the (proverbial) turds outta the bowl

And he can sell the trimmed pieces for a mark up as the new fractional share

What ever happened to that FL investment broker member? The one who collected wrestling cards. I can’t remember his name. He thought fractional card ownership was the best thing since sliced bread.

Obviously the concept works fine if there is a deep pool with lots of churn and the house can take a fee on every transaction, sort of like if we all traded houses every year and realtors took a commission on all of those sales. And if prices are going nuts, then anybody who's anybody can get in and make a killing.

But if the concept languishes with a small pool of die hard acolytes, and the rest of us opting out, then at some point the business model just isn't worth the squeeze.

All these focused on the indefensible belief that collectables could never return to their pre-covid pricing. There is no logic other than prayers and wishes that that would happen and more. Especially as we slide rapidly into an economy that continues to slow and an administration that foams at the mouth when it comes to taxing the living hell out of any fiscal transactions. To the extreme of proposing taxing unrealized profits and leaving out my claims of unrealized losses as things drop, lol.

Evan Mathis, Nat Turner and Geoff Wilson, the "greatest of investors", have taken it on the chin for months as they realize life has no guarantees. "Dibbs" has been a dumpster fire, Attempting to sell collectable backed NFTs at peak value as NFTs in general circle the toilet. The backing material has lost so much value that no one will be profiting.

Here's the promised giant mojo wins - https://www.sportscollectorsdaily.co...tplace-closes/

We are heading for the reckoning for these flippers and they can tell the stories of losing millions for years.

The fun of this is I will be buying all the "Bored Apes" that people have for 20 bucks next year after they sold for 2.5 million just because I want to.

Like most things, a great idea when prices are soaring crazy. Not so much when they crash down to earth.

Never had any interest in the idea, but I don't see where buying 1/5000 of a card for $500 is any stupider than buying an entire card for $2.5M. If it goes up, great deal. If it doesnt, not so much. Seems to be the exact same concept behind mutual funds.

There doing this with high end art my mom says to me ,folks are really really stupid

As my dad used to say, "if it's such a great deal, why are they offering it to you?"

The problem is that the “investors” were underwater from the beginning. The fair market $2.5M card received a premium pricing increase (e.g. to $3.0M) before the shares were purchased and distributed. Thus, the “investors” needed significant appreciation just to get back to the cards real word market value.

Equities are not always going and growing, far from it. From 1970-1979, the inflation adjusted return on the S & P 500 was -2.2%. From 2000 to 2009 it was -24.29%. Sure, it rebounds eventually, as does any other investment. That's my point: viewed from the right point in the timeline, everything can look good or bad. If the chaos monkeys in DC have their way June 1st, let's see what sort of growing and going we get over the next decade.

I hold my nose and place my bets in equities, but only because I have nowhere else to go that might generate enough ROI to fund a retirement. That, plus I don't want to be a landlord.

I am by no means suggesting that Collectable had a good idea--it seemed like a sucker bet to me from the start precisely because it was new and did not trade--but to suggest that there is some special fifth element to equities that differentiates them from other investments is to buy into marketing.

That’s impossible. I was assured by pumpers that this was free money. Pure profit baby

That's what I always ask the idiots cold-calling me to buy stocks. Unless I decide to put them on hold instead and see just how stupid they are. The real dumbasses will stay on hold for 60-90 seconds before they realize I ain't coming back. Yes, I am a small and petty person, but I have fun with it.

Attachment 572288

"Told ya!!!"

These guys are never good salespeople either, they always come across way too aggressively. Maybe marketing tells them that's what works.

That is me. I did want to invest in the 1953 Topps Mickey Mantle PSA 10. I decided not to but those who did made out great. Close to 25% net return in less than a year.

If you followed Collectable they turned over loads of cards early on at large profits to their shareholders. Selling these assets and earning transaction fees vs. ongoing fees was probably to their detriment.

The collapse from the huge run up to me is more of the issue as many piled in and as so many cards that had parabolic price moves declined the investors were left sitting on large losses and I would assume that made it harder to attract new investors to purchase future deals.

I think also the price declines have probably made it harder to attract new items being consigned.

The price run ups the industry saw were unprecedented and the price declines in many cases have been just as dramatic.

Longer term I would imagine fractional ownership is here to stay. Art, high end collector cars, sports memorabilia all make sense for smaller time players to participate on items they simply can’t afford.

I at the time said it was a game changer and it was and helped fuel the boom. I like to own cards and have them in my possession but the rational for some to simply invest in a particular item they cannot own on their own makes sense to me and why these platforms exist. High end art has been very effective using this concept and if you look at the items Collectable turned over the Wilt Chamberlain Warrior’s uniform was a huge winner.

The shakeout in the industry is obviously underway with this news and the news about PWCC today but the amount of activity you see at shows and on social media is very strong and I think the hobby will adjust and move forward.

If you cherrypick two dates schewed most to your argument out of a 90+ year sample size, you can make anything look like anything. It is immediately obvious at the quickest of glances at the chart that the market increases with time. Our entire economy is fundamentally based on this need, and has been for decades now. Here's the S&P chart, inflation adjusted, without cherrypicking dates. Not all investments rebound eventually. Many do not, ask the beanie babiers. Many individual stocks will not rebound either. But the stock charts going up over time is the bedrock of world order and the economy.

If the stock market collapses, not has a bad year but collapses, the US dollar craters and law and order collapse with it. If it has too many bad years in a row, the end result is about the same. The market is propped up by the first world nations at any cost. States will do whatever it takes to keep the market going and growing over the long term.

If the card market collapses, a small number of people will experience fiscal pain. It is backed by no institution, no state, no people with actual power. It is obviously not the same. I know this is the board where pumper fantasies are popular, people are advised to empty their 401K's to pump cards instead and people have a vested interest in justifying their cardboard portfolios, but it is backed by nothing. That chaos is why it can pay off so big - and is also the risk. The stock market is the bedrock of our entire system. There is an absolutely massive fundamental difference.

The stock market goes up over time because innovation results in improved efficiency which means greater return on capital, at a very high macro level.

I invest in Mutual Funds. It's different from Collectables. I invest in Large Cap funds, International Large Cap funds, and also one Environmental Conscious fund, plus the Retirement 2055 fund. At the end of the year, Dividends are paid out for the mutual fund owning XYZ shares. That number is then divided by the number of mutual fund shares and paid out to shareholders as additional shares of the fund. So I always own the mutual fund, and I receive additional shares at the end of the year, and when I want to sell my mutual fund shares I can. When the market is down, my share value is down, but the dividends have continued. When the market is up, my share value increases and the dividends continue. If it's seen as a long term investment, then the ROI is worth it. Whereas in Collectables, the flippers were looking for quick money.

While I totally agree with your concept, it's highly important to note that one should hold mutual funds in a tax free Roth or SEP, Simple or other tax deferred account. Holding them in a taxable account will generate taxable income each and every year, some with large capital gains, even though you have not sold a nickels worth. ETF's would be the better choice, same make up of companies or sectors, but much more tax efficient.

Smart man your dad

Cash out my stocks 06 07 bought real estate

Sold real estate 08-09 bought cards

Sold cards 2022 and went back to dividend stocks

Likely that's it for me. First two seem just too risky in these times. I'd expect a 50% drop in both home prices and (some) cards in the near future. People way over leveraged and credit cards are coming due. No more cash out refis to pay credit cards or buy cards that "just go up".


Wish all the best, but don't put you or your families livelihood on the line for a "great deal"....ever

love this!!! Boom

Exactly! This way to the egress!

Perhaps all of this is just another post Covid shakeout.