Collecting Collectibles

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"Be among the selected people to own ...(fill in the blanks)!" The headline scream. "This offer is never to be repeated again," they go on. "Only 3 million units available!"

That's the typical advertisement for your average collectible. Which you probably have seen more times than any P.Ramlee movies on TV. Further, they promise that your odds of making money from the collectibles (or whatever they are selling) are better than the sun rising tomorrow morning.

Which is not much different from what the average con-artist is touting.

Why I am skeptical about the whole thing

If I sound skeptical about collectibles, then I admit that I am guilty - for good reasons of course. First of all, I have never met, known or even heard of any Malaysian making money from collectibles. As a matter of fact, I don't even know of someone who knows someone else who made money from collectibles.

And by the way, collectibles can include a million things. Among the more popular ones are stamps, coins, postcards, comic books, magazines, antiques, clocks, matches and lately, toys. (Don't tell this to the folks who lined up for hours in McDonalds to collect some furry toys from China).

I fail to see how a "limited edition" of one hundred thousand units (or more) is ever going to be worth anything, fifty or even a hundred years from now. There'll probably be a few thousand still left lying around in the sun even in that period of time. And who'd be crazy enough to pay good money to your great grandchildren for such cheesy items - even if they are approved by the Upper Gambian Ministry of Tourism?

Next, as mentioned in the book Millionaires are from a different Planet, collectibles cannot be considered as investment in the real sense of the word. They do not earn income or have a predictable rise in value. Worse, collectibles are not exactly raining dough on the "investors". In short, don't quit your day job.

Collectibles also suffer from some serious flaws to be considered as an investment grade item. One of the main flaw is the difficulty for people, including the experts themselves, to determine the quality or even the authenticity of some collectibles. Also, unlike financial assets, collectibles do not have fair value which can act as an anchor for the market price.

And of course, the secondary market for collectibles in this country is practically non-existent. Imagine; after spending so much money on the collectible, you have no one to sell it to. Even the shop that sold you the item do not want to have anything to do with it anymore. Can you smell your ass getting cooked?

 

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