I currently make my living primarily as a professional poker player, but I also do well betting on sporting events. But once upon time, I did spend time working as a financial advisor. I studied finance and portfolio management obtaining a CIM (Chartered Investment Manager) designation. I quit this job after realizing how much I hated it.
All of these things combined make me unusually qualified to give investment advice about managing a TopShot portfolio. This is a brand new field for investing that is still in its infancy. I have been in this market about 6 six weeks now and that actually makes me veteran in this space.
I jumped into this market head first recognizing immediately its potential for profit and limitless enjoyment for sports fans. Some people like daily fantasy but for me, this is much more interesting and potentially lucrative. I made plenty of mistakes starting out, but I have now created a solid game plan to use for my personal account. It is a strategy that can be easily replicated and I will lay out my strategies in a few simple steps.
Treat your account as an investment portfolio just as you would a stock portfolio.
We all are at TopShot because we love the NBA and the highlights, but we are dealing with real money here the goal should always to invest well and make money. We can have fun along the way, but be clear of the primary objective, making money. If you are consistently losing money, it will be difficult to have any fun.
Dollar Cost average your way into the market.
This is particularly true if you are in any way susceptible to addictive behaviours. I have already seen this even in myself where it would be very easy to turn this hobby into an addiction. If you are maxing out your credit cards to buy new moments in this marketplace, you may be on a quick path to ruin. The thrill of opening new packs and buying new moments can be very addicting.
The best way to deal with this potential problem is to set a monthly budget and make deposits on a regular basis. If $100 a month is in your budget, then that would be a good start. If you can only afford $20 per month, then do that. This way you will not feel the need to put thousands of dollars in at a time when you cannot afford it.
The biggest benefit this will have is to remove the need for a collector to time the market. You will be buying more moments when then market is low, and when it is high you will get fewer for the same amount. This has the natural affect of forcing you to buy low and sell high, which is exactly what you want. One of the best things about this market is that it is set up specifically for collectors to boot strap an account in this manner. There should be a reasonable entry point for all collectors regardless of their financial means.
Set a maximum number of moments to hold in your portfolio.
There a huge temptation in this market to simply buy too many moments. If you are holding hundreds of $2 moments your portfolio will become too unruly to manage. The time required to manage such an account would become burdensome to anyone with a day job. Besides that, it takes away from the enjoyment of ownership if you cannot even remember what moments you own.
I find a good number a moments is between 30-50 and I usually try to get close to 40. With this number, I can still reasonably remember all of the moments I own and I am not spending hours everyday managing it (but sometimes I spend hours anyway). Owning fewer moments than this can take away slightly from the enjoyment of collecting and places too high an emotion bias on each moment.
As you portfolio grows, this will allow you to take your monthly deposits and add a few new moments to the collection while you are selling your less desirable and valuable ones at the same time. This should add to the your enjoyment of collecting and give you something to look forward to every month. Do not become a hoarder that only buys and never sells.
Do not allow any moment to make up more than 5% or less than 1% of your entire portfolio value.
Keeping to this rule will prevent an individual moment from becoming the centrepiece of a portfolio that has the potential to deflate in value quickly. It has happened a couple of times already where the value individual moments have skyrocketed quickly than eventually fallen back to earth just as fast. Examples of these include some of the Lebron and Doncic moments.
If you are fortunate enough to have a moment that balloons to 10% of your portfolio, I would recommend selling it and buying four or five others that will give you more enjoyment and potential profit. This has the added benefit of forcing you to sell high and buy low, again exactly what you want. This also applies if you get a lucky pull from a new pack. I advice selling it and buying a basket of moments to add to your collection.
If a moment falls below 1% of the total value, well maybe it wasn’t a good investment and you are better off without it. Sell of the losers and buy something that will go up. Do not fall victim to the behavioural basis of never selling for a loss. The eventual result of such an attitude is owning a portfolio of bad investments that have little hope of ever going up let alone getting back to even. Not all moments are going to be profitable for you. Get over it and move on to a better opportunity.
Keep 10-20% of your account in Dapper.
It is important to keep a reasonable amount of dapper available allowing you to take advantage of buying opportunities as they present themselves. It is painful to see a great moment at a good price go to waste because you are all out of cash. This has the added benefit to giving you more flexability to complete a challenge or quest.
When the market is going down as it currently is, more than 20% may even be appropriate. This way when it does hit the bottom, you will have more cash available to buy the bargains. The reverse is also true. If there is a bull market and everything is going up and up, you can be fully invested and take advantage.
Don’t buy Sh***y players.
Not that I’m say these guys are bad at basketball, but in relative terms they are. You should really keep the majority of your moment purchases to the top 50 players in the league plus another 10 or so rookies and sophomores. These are the players that will hold their values in the long run and have the best potential to show a profit.
Now I understand we are all basketball fans and we want to cheer on our favourite players. If you are a life long Cavaliers fan and feel the need to buy Kevin Love and a couple of his team mates, firstly my sympathies, then I say go for it. We are having fun here so enjoy, but don’t get carried away it.
If you keep to just these few simple rules, you will enjoy the collecting process more and have a better chance at profiting financially. This is the best case scenario.