Millenials grew up around a culture of trading. Each kid had at least one collection of something that he would save up for, splurge on, and actively trade around. This could be in the form of trading cards like Yu Gi Oh!, figurines like Pokemon, stamps, basketball player cards, or pins like custom baseball pins. While many have outgrown these hobbies, some of these traders and collectors claim to have learned valuable life lessons from it, especially in finance and investment.
From Frustrated Player to Pin Trader
Meet Gary. He grew up in a family of baseball fans. His older brothers all played in the school varsity, and he would have, too, if his asthma wasn’t too uncontrollable. His father sensed his distress, so he gave him an alternative hobby that still revolved around baseball: trading custom baseball pins.
Gary got his first pins at the age of 8. His entire family all pitched in for their baby brother to get a lot of pins. He would request for pins as prizes for when he got high grades or awards in school, and by the age of 12 he had more than a hundred pins in his collection. As the hobby also became popular in his school, he learned how to ask for his classmates’ pins in exchange for some of his.
Learning the Concept of Intrinsic Value
At first, it was all a matter of, well, it looks pretty cool, so I want it! He knew that some teams were better at baseball than others, but he didn’t think that their value in the sport would carry over to the pins. At one Major League event, he met a few people asking to trade his 2004 Most Valuable Player Ramirez #24 pin in exchange for theirs. He looked at the pins that one person offered and chose a World Series Champions 2004 pin because it had a spinner. Later on, he found out that another trader was keeping an eye on that pin and was willing to trade an entire 2004 World Series Champions, Boston Red Sox pin set for that single pin!
That was Gary’s first lesson in investment. He felt quite bad for missing that great opportunity and started studying the pins a bit more. He found out which pins were worth a lot, and which pins weren’t. He learned that simply considering the aesthetics of custom baseball pins wasn’t enough. He learned which upgrades were worth more: that glitter looked cool but wasn’t that important in comparison to pins with sliders, where the sliders can also be traded by themselves. Gary learned which pins are worth a lot, and which pins are worth very little. Professional investors call this the principle of intrinsic value.
Once Gary learned the value of his pins, he began strategizing. He learned which pins (or sets of pins) had equivalent values, and how he could haggle for bargains. Over a few years, Gary gained a lot of firsthand experience in something that’s analogous to the stock market. Thinking back, Gary equates the baseball teams to companies – good performing teams and companies had valuable, but sometimes expensive, pins and stocks. He learned to do forward-thinking instead. Trading pins of teams that were starting to do well, but whose pins were undervalued at the moment, were his priority. This concept of value investment was popularized by investors Benjamin Graham and Warren Buffet, but young Gary had a working idea of how it worked in the micro-level of trading custom baseball pins.
Today, Gary is a successful investor. He learned from his experiences in trading custom baseball pins to determine which stocks were valuable, how to strategize his investments, and how to trade these for better prospects. Gary says he’s not the only one; he also has a few friends from his trading days that are good investors today.