Speculation

Overview#

Speculation is where you make money decisions, not based on rational decision making, but instead based on your beliefs or hopes. And guess what? That's O.K.

Why not some smelly shoes? For my sneakerhead son.

But, recognize that it's not investing, but speculation or gambling. Here are the things that fall into that category:

  • Individual stocks (TSLA, AAPL, AMZN, your company stock)
  • Cryptocurrencies
  • Other

Now, sure, you can end up with some spectacular results, be recognize that it's luck, not skill. Do this with the money you can afford to lose.

My best "investment" of 2020#

Between June 26th and December 1st of 2020 I made 500% on a single investment. And I don't really care.

What was that "investment"? Pokémon cards. No, I'm not kidding.

15 year old me#

But, I want to call out why this is speculation and not investing. A few years ago I heard somewhere about Rally. Focused on collectible cars, they allowed you to purchase fractional shares of these cars. If I were to be completely honest, the only reason I signed up is probably so I could fulfill every 90's boy dream of owning part of a Lamborghini Countach. I can't convince myself to actually pay for a share because the price continues to plummet. 15 year old me can't convince adult rational me to let go. Sad.

15-year old me crying

note

Update 2021: I finally broke down and did it. A piece of the Lambo is mine! Go big or go home!

Big spender

Older me#

However, Rally expanded into other memorabilia, so I will buy a single share of things that I have an emotional attachment to, or I think might make neat gifts for people. The shoes up top are an example. Through some sort of failing as a parent I have a son who is a bit of a sneakerhead, so I thought those would be neat for him.

As a result, I bought 3 shares of a complete 1st Edition Pokémon Card set. One share for each of my children for $25 each. I thought it would make fun certificates as birthday/Christmas presents.

Then the trading started. First trading they traded at $50 a share. Then I got a buyout offer at $100 a share... that got turned down! They last traded at $150/share or up 500%.

Couldn't catch it with a Master Ball

Now I have a real philosphical dilemma.

  • Do I gift my kids the shares, and suddenly they've made $125?
  • But now I'm reinforcing speculation over investing.
  • Do I hold the cash like some sort of Scrooge?

So far I haven't sold or told them about it. If it keeps up at this rate maybe I'll sell so they can buy a single textbook in college.