COVID-19, Market Plunge, What Now? Investing Like a Philosopher

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Panic and chaos are happening now. From the stock market, foreign exchange, precious metals, cryptocurrency, and to our beloved sports cards, they are all free-falling. However, there’s always one thought that comes up in my mind. I can remember asking my parents, “Why didn’t you guys buy property when everything is down?” Or the nagging outlook of the “Once I grow up, I’m going to take advantage of the economy once it’s down or free-falling.” But it’s not that easy. In this article, I would like to talk about how I am spending my time in terms of investing and my strategy during this COVID-19 pandemic and its aftermath to the investing world.

A lot of this fear comes from the hard work you need to get from working that supposedly 8-hour job but turned into a 12-16 hour job because of a deadline. Also, there’s that graveyard shift you were trying to request to your boss to be a morning shift, but you were given that speech that you need to earn it. That hard-earned cash isn’t going directly for future use, but only for my necessities. Especially now that there is a mist of uncertainty in regards to our public health and market. Regardless, you got that 401-k that you have been pouring on your entire life that’s being handled by your “trustworthy” bank or financial “advisors” for your best interest? To my new readers, that was sarcasm.

I am confident that this should be the time wherein you need to step in and learn about the world of investing. I am not only talking about sports cards but the idea of investing. Grasp it. Use this time to do your due diligence in mastering your craft. No more excuses such as the “I’m new, and I have a lot of responsibilities in my house; therefore, I cannot be bothered with reading a book.” Investing is an art form that requires practice. In my years of spending time in the realm of investing, the people who studied more are successful ones. Whether it is a bull market or a bear market, the real ones are the one who continues and perseveres in learning about the market.

Why am I continually hammering my readers a different outlook on this current market situation? Shouldn’t we panic? Well, it’s because of an 18th-century nobleman’s quote that we can use. “Buy when there’s blood in the streets, even if the blood is your own.” This quote was credited to Baron Rothschild, who made fortunes after buying in the panic during the war of Napoleon in the Battle of Waterloo. This is basically the embodiment of contrarian investing.

So what is contrarian investing? It is an investing style that contradicts the current general notion of the public. This means the person practicing such a style will look for opportunities during a particular situation or event. You do not need a catastrophe to practice such an investing style. However, you need to do your due diligence on how you can take advantage of something that the general market does not see clearly. Again, this is a risk. Any investment is a risk. Also, let me emphasize due diligence. Let me tell you a story of a philosopher who practiced such an investing style that turned out to be a success just to prove a point.

The story of Thales and the Olive Press was an absolute contrarian move. In this story, Thales of Miletus was not known to be a rich person. However, he is a man of wisdom. The general public often describes him as a fool because he questions people about their need for money and material possessions. Moreover, they think that he questions such ideas because they believed that Thales couldn’t earn as much or get such possessions. So, for Thales to prove them wrong, he sought to rent every olive press during the season that olives were ready to be harvested. They again laughed at Thales for his decision making, so they rented him the olive presses at a bargain. Unbeknownst to them, Thales observed the stars and predicted that the olives would be ready to harvest sooner than what the public anticipated. Therefore, the farmers who laughed at him at the beginning praised him for his knowledge, and Thales was able to profit out of them and silenced the critics. But, Thales went on and decided to live in the simplest way.

So, what can we learn from Thales and the Olive Press? Definitely, there were no catastrophic events happening, but he was able to gain leverage because he studied the environment and applied what he knew. Thus, due diligence is a must, and he saw the opportunity to show to everyone that he’s not a fool. I’m emphasizing this because there are so many ways you can invest in the sports card market even when the market is going down. This doesn’t mean go on and buy foolishly and act blind.

Now, is contrarian investing for you? Should I make a move like Thales for today? Honestly, there’s nothing to sugarcoat, but timing is of the essence. Timing the bottom of a particular market is nearly impossible. So, navigating now (may it be buying or selling) is for the people who can afford to risk it. If you are the person, who got laid off because of the quarantine, buying now is not a good idea. If you are the person who’s been waiting for the next recession and prepared money for an upswing, I think buying now is a good idea. The reality is that not everyone can take advantage of this moment. If you are interested in risking your money, the right move is to determine the true value of your portfolio and potential cards to buy whether the drop in price is actually justified.

So how can I justify the price of a card if the drop is deemed to be right? Well, we can make conjectures that this market sell-off shook a lot of people off their investments. Therefore, genuine interest can be easier to be determined. Genuine interest, for me, is the support level of the market for a certain card and price. Remember when Zion Williamson Silver Prizm PSA 10 were being sold at the 2500-3000 dollar range? As of the time of writing, they are being sold at a 2250 to 2500 price range. This means there is a huge support level at the 2400 price point that the market is willing to absorb. Now that you know that, apply this to your favorite cards to invest in. If the market can absorb your cards even in a state of a pandemic, that means there is a genuine interest for your player. Therefore, you might have the relief that you can hold on to those cards or a huge potential to buy them. But, the question remains, “for how long can they be sustained?” 

 In the end, contrarian investing is not for everyone, but it is an option that you can take. Genuine interest will be the key to navigating today’s card market to determine what to buy and hold. Due diligence is also a critical factor in how you can survive this market crash. Thales observed the environment to predict such an opportunity with the olive press. So, be like Thales and use this time to observe the market so that you can use the data you accumulate to guide you in the future. Thank you for reading the article, and I hope you learned a perspective on investing. If you need more information regarding the article or have a topic that you want me to discuss you may email me at sportscardsetf@gmail.com

 Make sure to also look at my two other articles regarding my criteria in determining what cards to buy, and my investment strategy that I learned from silver stacking at https://www.sportscardinvestor.com/author/paolodavid/

Great perspective on an investment strategy. Do you have an investment plan that could help the community during such tumultuous times or a down market? Tell us in the Comments below.

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