If you are a long-term investor, you should try to follow the collector mindset to not make hasty decisions – You should always treat your stocks like a collectible. You love that company so much that you want to own a piece of that business, just like how art lovers are proud to own the art they have bought. This is one of the important traits of a collector mindset.
Unless you are a day trader, you shouldn’t buy any stock with the anticipation of the price going up in the short term. Nothing happens in the short term. Try mastering a skill, losing weight, or even forming a habit in a week or a month. It’s virtually impossible unless you resort to extreme measures.
If you can’t change something in yourself in the short term how do you expect a company to double in value every 3 months? Three months is not enough time to formulate even a narrative for the company.
Here are the traits of a collector mindset.
Traits of a Collector mindset
Collectors buy art for buying art, not with the intention to sell
Do you care if your favorite team’s jersey goes up or down in value? You just buy it because you love it. Hell, you don’t even have the idea of selling it in the future at the time of buying it.
I know few collectors who wouldn’t want to part with their assets even if they are on verge of bankruptcy. They hold them so dear to themselves.
The Collectors world is very sacred, people will proudly show off posters of their favorite movie, an autographed hat.
Similarly, you buy shares and crypto that you want to show off. I have a bucket list of stocks I want to buy – not because they will go up in value but because I want to be the proud owner of a piece of that business.
The shareholder meetings are sacred to me. The voting power you have been given to determine the direction of the company is important.
MicroStrategy asked their shareholders before adding Bitcoin to their balance sheet. Did it ask its employees? Hell No! They don’t have leverage in the company. The shareholders have it! Here is a video of Micheal Saylor explaining his bitcoin plan.
Show off your power. Be an advocate for the company you have invested in. Take pride in them like how the collectors take pride in their purchases.
Every collectible purchased is meaningful
Ask any collector, no one buys art because it looks good. There is always something, some meaning behind it.
Some reasons I have heard around are,
- it reminds them of a special person or event in their life,
- they love the creator behind it,
- sometimes it’s like they don’t want another person to have it as they don’t like them so they bid higher than them and every time they see that art they feel a sense of accomplishment that feels like revenge well taken on the other person.
There is always some emotion and meaning attached to every move/purchase made in the collector mindset.
Whereas the stock and crypto guys are always on the lookout for dumping their asset the minute it goes up in value by a few percentage points.
There are also emotions behind these guys –
- fear that the price will not go further than this and it’s time to sell,
- FOMO that if they don’t buy this coin which is expected to take off to the moon,
- anxiety whenever they read something negative about the company they own shares of
All of the above leads to stress, it isn’t healthy. In fact, you should aim for a life that doesn’t involve even one of the above-mentioned emotions.
But these traders buy into that voluntarily.
Doctors recommend getting off Instagram and TikTok in fear of FOMO taking over your life, but these traders live this life five days a week, 8 hours a day.
Collectors pass on their collectibles to future generations
Grandads pass down gameday traditions to their children and grandchildren, they tell stories of excellent plays, last-minute winners, the rush they felt on certain winning occasions.
These memories and traditions get passed down and along with them, the jerseys, trading cards, mementos, autographed stuff get passed down as well.
If you love the company you own shares of so much, you would also want to pass it down to your grandchildren unless something catastrophic happens. All the legacy companies like Apple, Walmart, Costco, etc on Wall Street and Infosys, TCS, Wipro, etc on Dalal Street have crossed at least 2 generations.
Given the expanse of technology, it is likely that these companies will stand the test of time. If you believe they will why not hold it for your children and grandkids.
Why not choose companies that stand the test of time, markets that will be in demand for at least a decade if not more?
Dark Side of the Art world
Money Laundering, Bypassing tax laws
I will be lying if I said all collectors are sacred and fraud-free. Since I showed you the upside of the collector’s mindset, I would also like to show you how a section of people use art for money laundering, bypassing tax laws (not a crime, but frowned upon).
I have written a separate article where I go in-depth on this topic. Here is a link to that:
Pitfalls you can avoid if you have a collector mindset
Following the collector’s mindset here are some major pitfalls you will avoid. Avoiding these is literally half the battle won in protecting your wealth.
You will not panic sell
You love that company so much, you are so proud to hold on to the stock of that company, you show it off to everyone. There is no panic selling in this scenario.
Will you panic sell your house because your neighbor sold it for a certain sum? You love your home. When you love something, there is no panic involved. If you and your significant other love each other very much, there are no trust issues, no panic between each other.
Taking this option off the table will pay back multitudes in gains and in terms of mental health.
You will not buy into companies you don’t understand
Am I proud of the Euclidean theory? Am I proud of the genome interspacial interstellar theory? Hell no.
Why? No prizes if you guess this correctly.
Your right! I don’t understand either. But am I proud of the 0.23 bitcoin I hold currently as of writing this article? Hell Yeah!!!
You can never be proud or happy about something you don’t understand, that’s why you still hate maths and it still gives you nightmares. Maybe one of the reasons why Anthony Pompliano doesn’t do public math :p
In this scenario, you don’t buy into companies that your friend bought, you only buy something that you understand and believe in. This is important, in bear markets, you need this confidence in deciding if you want to hold or not.
You will not go ape-ing into fads
No one understands a fad, that’s why it vanishes. I still don’t get the use of fidget spinners.
They come and go and by the time you even try to understand them, they just vanish.
Riding off of the previous point, since you do not buy into stuff you don’t understand, you will never ape into fads.
You can make some money off of it if you are lucky, but its really not worth the mental stress. You never know which one is a rug pull.
You will hold them for a longer period of time
You like the company, you hold it for a good amount of time.
Unlike marriage, this is not a match made in heaven. It’s a match chosen by you after you have understood the business, the market and
You don’t need to hit the jackpot and find that one stock/coin that will 1000x. If you find that then good, go for it. But for most people, always remember you don’t need these jackpot wins.
All you need is to make a handful of good investment decisions over your lifetime and the gains will take care of themselves. Warren Buffett once said,
You only have to do very few things right in your life so long as you don’t do too many things wrong.Warren Buffett
Traders and investors have also entered the art world in an attempt to use these assets as an inflation hedge. There is a growing interest in this market, especially with the advent of fractional investing introduced by Rally Road and Collectible.
Whether collectors would adopt the trader’s mindset, I do not know. But personally, I wish the collector mindset doesn’t go away.
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