Bubbles are visible to most people only with the benefit of hindsight. But with fads, even during the fad, most people understand that it will end. Some consumers simply enjoy the the ride while it is happening. They buy the leggings they saw in
Flashdance. They get tickled by
Elmo. They wear the pastels they see on
Miami Vice. Few consumers view these fads as investment opportunities because they know it will collapse but they do not know when. Meet
Chris Robinson Sr.:
The one flaw in Robinson's financial plan -- and it's a big one -- is that he never sold any Beanie Babies while they were hot commodities. He still has thousands of them. Once that market crashed, odds are that he would have sold them at a loss had he tried to do so. With hindsight, Robinson seems to understand the error of his ways.
Hat tip: Jeff Smith
Interesting. Most entrepreneurs understand that they must sell when the market is hot. Holding onto items in hopes of higher profits is for gamblers. While we may love these items and feel they will become classics - the fact is the market is always best right now. He could have continued to sell and save at the same time. However, selling while the market was hot would have also decreased his inventory costs. He may not have realized that he was attached to his inventory.
ReplyDeleteMost hollywood starts, professional athletes, and fashion models understand that their careers have a short shelf life. So they sell themselves as much as possible NOW because there may not be a later.