One of the things we learn as kids is how to negotiate trading trading cards. At ten years old you understand in the schoolyard, with the envelopes you bought for five pesetasthis scarcity determines the prices. One of the easiest economic lessons to get into our heads, and which the most astute have managed to sublimate by applying the elasticity of demand, has been to take advantage of the sensitivity generated by the ownership effect of those who had no difficulty getting their heads together. -obtain a card and They even exchanged several for the most desired one.
In my case, the card that I remember and that taught me the value of negotiation and also, why not say it, the resignation of not having it, was that of Maradona, recently arrived in Barcelona during the 82-83 season. I could see how this Ediciones Este map had been modified for more than the ones I had repeated, for 500, or even for a thousand. The impossibility of having it helped me to assimilate that if luck were to elude me, because I had no way of getting it in the envelopes I could buy.what we should not do was lose our heads because of the “ownership effect”, which consists of valuing a good more for the fact of having it in our hands than for what it is worth really.
Trading with trading cards, which almost all of us kids do, is the best approach to understanding how markets work. And yet, something that can be understood from a very young age ends up being incomprehensible to the majority of adults, unable to assimilate that the nature by which stock prices rise or fall is the same by which it was necessary to put many cards have Maradona’s and on the other hand, no one wanted to change those of Carrete, Arteche, Migueli, Camacho and Goicotxea, who were piling up the rehearsals, and they had to kick each other even locked in the rehearsal block with the rubbers. But the latter is another story.
Changing trading cards for an investor is a common practice. Stocks that have already risen are traded for those that are expected to rise further. Although we also abuse the idea of cutting off the pretty flowers – the ones that grow and show strength – and keeping the withered ones – the ones that are punished and never recover. It’s also another story, that of falling into the value trap.
The trading card metaphor has another aspect, much more positive for those of us who invest, namely that, tax-wise, it is one of the numbers that favors us the most. Let’s think about the mistake we made in investing in China in recent years with the belief that it is the cheapest market to buy into. The solution is simple: sell the Fidelity China Consumer and you buy it Pictet Chinaor vice versa. Capital losses are used to offset capital gains for the next four years.
