it’s become a running joke of all the new people who make threads similar to this. Starting a pokemon Hedge fund like the MTG one they are starting. To me, when someone comes into Efour talking about investing, stock market etc I automatically lump them into speculators and non-genuine collectors. It’s that same feeling you get when people jump on a sports team that has won a championship, but they don’t even like sports. There’s always room for people to like a team or enjoy pokemon. There’s no cap on the number of people allowed to like or want to join in on something. However, when the first words out of someone’s mouth are the value, speculation, and investing I feel that person won’t be here for the long haul.
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Yeah, I can definitely see where you’re coming from and I’ve seen it myself on this forum quite frequently, too. I probably made the satire element more clear when I posted this idea on the Discord, encouraging would-be investors to send their venture capital my way.
That being said, the existence of something like this would actually be really useful for all those “non-genuine” newcomers who are interested in investing. It would give them a more safe, liquid asset that’s still exposed to the Pokemon card market, making it easier for them and putting money into the hobby for the rest of us. At the same time, it would mean that more of the actual cards would go to people who genuinely like them, rather than those seeking to merely profit off them, as these investors could much more conveniently buy the SMP 500 fund/equivalent instead.
I’m not interested in investors. This forum is about collecting, and from the responses most posts similar to this get. I think most members don’t care much about these investors pretending to be collectors who post questions that are thinly veiled collection posts looking for us to give you pokemon investing advice.
You said it was supposed to be satire, but then right after you said it would be really useful. People speculating and hoarding cards doesn’t help collectors. There are currently groups and individuals that have been buying out low pop cards PSA 10 cards needed to complete WOTC and ex sets. There are some low pop cards that people are asking 10-20x the prices previously sold. Other than buying cards from collectors who then use that money to buy more cards, how does hoarding key cards to gouge and bleed collectors help? I don’t see how that would have cards go into the hands of actual collectors when they are priced out or availability is artificially decreased.
Edit: rewrote first paragraph.
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Perhaps “amusing” would have been a more accurate term than satirical. I also don’t understand the hostile suspicion - if I was interested in opening a fund or an ETF I would be speaking with lawyers, consultants, and investment banks. I would not be interested in trying to squeeze a few scraps of low quality, free consultancy off a collectors’ forum!
As for speculation and whatnot, that’s going to happen either way. Instead of then having to deal with the hassle of repeatedly shipping cards that are constantly changing in value due to speculation, risking damaging or losing them in the process whilst also adding a massive time delay, owning and transferring a stake in the card would be much more convenient. Furthermore, if multiple people each own a stake in a card rather than having to each outright buy the card to be exposed to its growth, that increases the number of cards on the market. Lastly, if you’ve got a closed-end fund with a limited number of shares, buying in does not involve taking any cards off the market, but rather transferring partial ownership of an already private collection between individuals.
Considering how much you hate investors, wouldn’t you find it useful to redirect them to the fund to keep them away from the real cards? 
Realistically speaking, this idea is a logistic nightmare. Can you imagine the handling of all the transactions, the tracking of cards prices, the verification whether or not the sale of certain assets (cards) are legitimate…the fees to participate would be high to participate in that.
Logically speaking…why? The idea itself in my opinion takes the worst of both worlds: you take the “investors” of pokemon which is not the main demographic of pokemon card collecting, and as an investor you are investing in one of the riskiest, non liquid assets in the world. Making an average of the top 500 cards won’t alleviate that much risk anyways because the underlying assets are all risky. Furthermore, all pokemon cards are inherently indirectly heavily correlated to each other (compared to corporations), unlike companies where one decision can drive them to bankruptcy. If you own a S&P 500 ETF, if one of the 500 companies bankrupts, your stock wont take such a huge hit because it can be covered by the other healthier companies. If one of the top pokemon cards is suddenly worthless, I’m pretty sure that all other cards would significantly drop as much as that one, making averaging them out virtually pointless.
Incoming rant: This is not for you specifically @ static, but to people who are aiming to “invest” into pokemon: honestly, unless you’re below the age of majority where you cannot open a stock account, just open a damn stock account and invest instead in that. There’s so many assets out there that you can “invest” in that has less of a hassle to buy/sell from, or the valuation is much more concrete than Pokemon. Frankly when I see someone mention investing on the forums, I automatically assume that the person is young and his/her true intention is to ask: “What is the pokemon card I should buyout/purchase so I can quickly flip it for profit?”
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You could tokenize ownership of a collection on Ethereum and sell the tokens on same shady chinese crypto exchange
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Yeah, it would be a bit wild running it so I think a closed-end fund, equivalent to just buying a stake in a private collection, would be a much cleaner idea.
When I talked about diversity, I didn’t mean making the overall investment any less risky - Pokemon cards are super volatile and have no intrinsic value, after all. I just meant not being too exposed to a single card’s fluctuations. I get that their prices are all correlated, but it’s honestly the same with the S&P 500, where a change in something like confidence or tax law impacts all the stocks inside.
About the investment part, I talked about that in my previous reply - this wouldn’t be a particularly effective or serious venture at all (and if it was, I sure as hell wouldn’t be on E4 asking about it). As for myself, I couldn’t care less about investing in Pokemon and am not touching it for investment purposes with a ten foot pole. All of my own money is in cash/property/a legitimate investment portfolio, and I don’t really believe in making money off Pokemon anyway. I was more interested in the logistics/purpose of something like the “SMP 500” rather than actually making or profiting off of one.
Combine it with Ethereum 2.0 decentralised DeFi AI-accelerated cloud technology on the blockchain with disruptive smart proof of stake contracts and I think we’ve got ourselves a recipe for success!
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This has been discussed a few times in the past. Here is a post from the previous thread that breaks down the cost. In short its not feasible. Plus the people who could make it work don’t need the money or cards, so there isn’t an incentive. A cavalier investment group would have to come in with serious offerings to motivate the top people in this hobby. Even then I would just sell a card directly. But I do like the idea as a thought experiment!
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Thing is, at that point, that’s not really an ETF anymore and it’s just buying a percentage of a collection off of someone, similar to what Gary’s friend did with his charizards. I suppose you can technically do that with a group of people, but the problem is that it’s that the scalability is very limited. Furthermore, it won’t be an ETF either because the whole point of an ETF is that you can buy and sell easily, which won’t work in a limited format since unless you have a HUGE buyer/seller base, the entire “fund” of the portfolio may be in jeopardy if someone decides to just sell off their share randomly.
Fluctuations are tied to risk; if an asset is not risky then it won’t fluctuate much because the asset is very predictable. That’s what I’m getting at with an ETF with pokemon cards; the overall value of averaging out of risk in Pokemon cards won’t do much because the inherent risk as you said will always be there since the cards themselves have no intrinsic value. Furthermore, if you do collect Pokemon cards, the average collector would not even need an ETF since they will be averaging out their collection by buying different cards overtime. If you treat each card as a stock as an example, then you will be naturally buying different stocks which would create an average of your “porfolio”. The only time when you will seriously hit a fluctuation is if you decide to "invest (aka trying to buyout/speculate/flip) and use the entirety of your spending money on multiples of the same single card. The two advantages of ETFs is to reduce transaction costs (so that you don’t have to buy every single stock yourself) and reducing risk through averaging (which I have already explained would happen naturally if you collect the cards). I do see what you mean by saving transaction costs because you dont need to take the risk of shipping/other fees from individually buying each card, but this is counteracted by the fact that now there are transaction costs from individuals buying and selling their shares of the ETF fund that needs to be handled. If you limit the transactions/amount of users, it won’t be considered an ETF anymore because of the problem outlined in paragraph 1, and if it’s just a small handful of people contributing, then it is negligible the amount of shipping/buying costs you’ll be saving.
That’s why I said that post wasn’t specifically aimed at you, but to explain why most older/larger collectors won’t answer these questions seriously.
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The closest thing would probably be Rally, which is an app that allows you to own a “share” of a high end collectible. They have done pokemon cards, old sports cards, sneakers, etc. You buy however many “shares” from the allotted amount (whose total price equals what Rally currently values said collectible at), and when they sell it, you get whatever % you own of the collectible, from the sale price.
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In that case, thank you very much for the serious explanation.
The closed-end fund definitely wouldn’t be an ETF at that point, as you said, but a CEF or something like that. Either way, it wouldn’t be any better than just buying a stake in a collection, so I guess at that point it’s a bit useless. Thanks again though for all the info!
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Thank you for the link - it was a very enlightening read that I didn’t quite catch when I searched about a Pokemon cards index or ETF. As interesting as the concept may be, you’re definitely right - the costs are simply too high given the relatively low and very risky returns and the terrible logistics.
Not a problem at all, hope things are more clear for you now!
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That’s almost definitely the closest thing to a closed fund here - a share of a private collection. Thank you very much for sending it my way!
Something like this was launched in the last year or two for MTG. Rudy posted a video on youtube completely tearing it apart. I can’t find the link, maybe someone else hqas it, was an interesting watch. Essentially, unless a fund like this is regulated, there are a non-zero number of loopholes and tricks the fund manager could take advantage of making the fund a terrible investment for anyone.
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This is what they do in school as a thought exercise, with just a few variables to get you to think and apply some principles of thought ina vacuum. In the real world, this has so many holes, it’d be a harder sell than cryptocurrency. And this isn’t worth the time because Pokémon TCG is laughably small…