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Chapter 1: What surprising asset has outperformed the S&P 500?
We are back in your life, and today we are talking about the asset that has outperformed the share market that you must need to know. Michael, there's a lot of alternative investments out in the market, but my goodness, Pokemon cards are going crazy. Who is your favorite Pokemon? Good question. Did you watch Jigglypuff vibes? Oh, absolutely. Yeah.
I remember it was very big when I was in primary school and they got to the point where people were trading cards and you weren't allowed to trade with the people in year one anymore because- Well, you just wrote them off. You just wrote them off. Yeah. There was a band. Stand over these juniors with their Pokemon cards. How about you give me that, Charizard?
Man, this is the mean streets of Remu era. Yeah. Do I have a favorite Pokemon? Actually, to be honest, I can't even remember them anymore. Definitely into it when I was a kid. Had the Game Boy with the game.
That was legit. That was good times.
Good times. Jigglypuff.
You a Jigglypuff guy?
No.
No. You're like, I don't know what to do. I don't know what to do with that. I will make sure to pop in the comments what your favorite Pokemon was. So the background of this story, and then we're going to talk about some other alternative assets, is myself and Ash, one of our financial advisors, was meeting with a client the other day, and we were reviewing his financial position.
And there was $45,000 worth of Pokemon cards in his asset table. I've been doing this for a long time. Never seen that. And I was like, this is a first for me. So I did a little Google and I was like, how have Pokemon cards been performing? And so the S&P 500, just as a reference point, is up 483% since 2004, which is a pretty good return. You'd be pretty happy with that.
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Chapter 2: How have Pokémon cards achieved a 3,800% return?
Yeah. And, you know, they were going for like millions of dollars and now they're all worth like nothing.
Right.
And that's the thing is like if you get caught up in the hype and the hysteria and you pour your money into it, you could be left holding the bag and that bag could be worth nothing.
Yeah. And you touched on it before around what is the underlying value if you buy a property? There is somebody who needs to live somewhere. There is rent being exchanged. If you look at the share market, somebody is going around, hustling, selling a product, selling a good, a service, whatever it might be. There is something happening. But if you are just holding something going like, oh, yeah.
Makes sense. This goes up over time, but you can't give me a reason why, which is probably why we, you know, in terms of the discussions with Bitcoin, et cetera, you kind of go around in circles a little bit. Uh, there's just risk.
Yeah. The other thing is like, um, a lot of these assets don't provide you with kind of the traditional things you would get from another to asset class, dividends, cashflow, rent, something like that. Um, so you're basically spending the money, hanging onto it and just hoping that, I don't know, maybe for nostalgia's sake, this Pikachu gold edition is going to go up 5,000%. Yeah.
And how do you value it?
That's the thing.
You've got to ask another nerd what they think about it.
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Chapter 3: What are the risks of investing in alternative assets?
On alternative assets.
And people can bring up their Pikachu cards. No, no, I'm not going to Armageddon. Okay.
Yeah. Right. Armageddon in the comments. If you want us. James and Emily can go to Armageddon. Yeah. Yeah. And what do you want Mike to dress up as? Wrong answers. The other thing though, coming back to the value of Pokemon cards I've heard is it also depends like movies that are dropping and TV shows or magazines or whatever. Any sort of Pokemon-related stuff.
If a new character or an old character features in this thing, the value of the card goes up because they've been featured recently. So, like, hypothetically, it could be like some of the US politicians, where if some people are holding undervalued Pokemon cards, they feature them in a new movie, you get a spike in the asset price. So, you know...
Anything can happen, Mike, when it comes to Pokemon cards. I guess the other point, Mike, is this important point to touch on. This is not personalized financial advice where we're saying to start to invest into Pokemon cards. Easy to look back at the 3,800% return and say, we should have invested. Should people sell everything?
I know you've had people sell houses before to go all in on certain assets. Should these people sell everything? Yeah, sell everything and go into Pokemon.
Yeah, look, you know what? It's important for people to have hobbies, right? Should you sell your house to go in on Pokemon cards? Absolutely not. It's the same as every alternative investment though, right? Highly speculative, highly risky, could be worth something, could be worth nothing. It's probably rife with scams as well. That's the other thing.
Like when we're talking about how hard is it to value something, how hard is it to verify something's authenticity? You know, like Providence is huge with art, right? You've got to prove where the painting came from and how it got where it is. Like, Mate, like you can't prove that any of this stuff is weird. A lot of wines get faked as well, right? Like the ultra high value wines.
So yeah, look, it's a hobby.
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Chapter 4: How do other collectibles compare to Pokémon cards?
Have some money left over, pay down debt, buy property, invest into shares, be consistent. If you want to have like a couple of percent in some of these alternative assets, go for gold. But if you can't articulate why they're worth anything, then you shouldn't be investing in them to start with. Absolutely. Cool. All right. Make sure to like, review, subscribe. We'll catch you next time. Cheers.