Taking Advantage Of Short-Term Opportunities

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OpportunitySeveral weeks ago, I had an opportunity to buy a Nintendo Wii at the suggested retail price. If I had taken advantage of the opportunity and immediately placed the item on eBay, I could have quickly netted a profit of $50 or so in a week with just a few minutes’ work, but it required me to have both $260 in liquid cash on hand (as well as the willpower not to open it).

A few weeks after that, a father of a friend of mine was looking to sell his baseball card collection, a big collection of Topps baseball cards from 1959 to 1965 that had sat in his own father’s attic for about forty years. They were in unbelievably good condition and he offered the entire collection to me for $1,200. Now, I am a vintage baseball card collector and I know very well that I could have had these all graded and sold them individually and made $3,000-4,000 in profit (there were a wad of excellent condition Mickey Mantles, two Pete Rose rookie cards, and many other delicious ones).

In the first case, I didn’t go for it because of the temptation factor – I knew I would be sorely tempted to just keep the Wii and play with it. In the second case, I had the the capital to buy the collection (he wanted cash, literally in the form of bills), but I was uncomfortable taking my emergency fund that low given that we’re moving soon and that my wife is due with a second child soon. So, I worked out an arrangement where I will make a bit of money, but nothing like what I would have made.

This leaves me with a big question: how can I put myself in a position to always be able to take advantage of such opportunities? Here’s what recent events have taught me:

Know how to network I generally think the generic view of the slippery-handed networker is pretty awful – I have little interest in it. Instead, I’d rather build long term friendships and relationships. If you don’t have a large network of friends and associates, short-term opportunities like these are much more rare, so the first step is to know how to build friendships quickly and ethically. The book Never Eat Alone offers some tremendous advice on how to get started with this.

Keep a large cash emergency fund In my eyes, if you have a very well stocked emergency cash fund, opportunities like these are a good reason to tap into it (but not to decimate it). In other words, view a portion of your emergency fund as cash you can grab to take advantage of an opportunity, then replace when you recover the funds from the opportunity.

Know what you know – and keep up to date on it I know home electronics well, I know vintage baseball cards, and I also have a pretty good knowledge of non-sport trading cards and comic books as well. Because of these interests – and my efforts to keep at least remotely up to date on them – I often see opportunities to make a profit in these areas. Even better, when acquaintances have questions in those areas, they often come to me for advice and potential sales.

Know where to go to resell the stuff you have I know quite well that if I come upon some good condition vintage baseball cards, it’s worth the cost to have them professionally graded. Then, I know several potential buyers for these items and, if all else fails, I can turn to eBay. In any case, I’ll always turn a good profit on such an item because I know what to do with it and where to go with it for sales.

Be very giving with advice in your areas of expertise This essentially ties together the ability to network with having domain knowledge in certain areas. Basically, when there are opportunities to discuss topics in areas where you have knowledge, share it and offer to share more upon request. For example, if you’re a home electronics guru and someone mentions upgrading a piece of equipment, mention that you’ve looked at the same thing in detail, drop your recommendation briefly, and tell them they can contact you if they want more help. It might just turn into a great opportunity for you.

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11 thoughts on “Taking Advantage Of Short-Term Opportunities

  1. But, Trent, On July 2 it appears you announced that you had in fact bought the Wii and enjoyed playing tennis (one of the free games included in the box) with friends. This note says you did not.

    Did I miss something here? Misread something?

    I played the “buy the hot item and sell it on ebay” last Christmas with those TMX Elmos. That sure was fun.

  2. I have a question that will likely come out as an accusation that I’m not at all intending to make. I’ve had similar situations and I struggle with them and would love another opinion. At what point is it exploitation, versus intelligent investment/trading?

    In your second case, you could have turned over the cards for triple what your friend wanted. But do you ever find an ethical issue in situations like that, in that your friend could also have tripled the value if you disclosed?

    Like I said, I’m just curious what you think. And I very much enjoy your writing. Keep on.

  3. Kenny, you read it correctly; he is just referring to some earlier opportunities when he did not buy it. This spring he’s run into Wii’s available for sale once or twice, and decided not to buy it that day.

    However, he’s been talking about getting one for himself since before Christmas, and having considered it carefully finally treated himself this month.

  4. When reselling things I always post it on craigslist first, then on eBay if it doesn’t sell. I generally make more profit off of craigslist if I can find a buyer due to not having to pay ebay/paypal fees.

    When researching prices, I always searched ebay’s completed listings.

    eBay listings generally take me about 2 minutes to do. I already have a rough template that I use for everything. All I do is update the description with ebay’s pre-filled information, or I copy and paste a few paragraphs from wikipedia about the item.

  5. Jack — the point could be that the seller wanted cash in hand now for the cards and was offering them at a set rate. It doesn’t mean that he didn’t know the value of the cards, rather it meant that he wanted cash in hand now and wasn’t willing to wait or go through the trouble of listing them on craigslist or ebay. I never have this problem when I’m at a yard sale where items are offered for the price that people want at that time. Sure, they could probably get more for the bike, the jewelry, the house, etc. if they took the time to fix it up, clean it up, or research it. For the most part people don’t want to do the work or don’t think the work is worthwhile. If you’re having serious ethical struggles, then simply comment, “You know, with a little work/research you may find you can get more than I’m paying you” and check the reaction.

  6. Like Ted, I have a fairly extensive collection of baseball cards from the ’70s and ’80s. I pass them daily on the shelf in my basement and think of them as an investment but have little idea of their value. I’ve bought card collector magazines a few times over the last 20 years but I am always intimidated by the amount of time required to figure out how much cards are worth individually. What do you mean by getting the cards ‘graded?’ I definitely don’t want to just sell the whole collection on e-bay. Any suggestions (maybe worth its own blog post)?

  7. You mentioned that you know a fair buit about comic books Trent. I am in the process of trimming down my extensive collection (I went through the 2 long boxes and 8 short boxes and immediately realized I wouldn’t lose sleep over 4 short boxes worth) and am wondering what the best option for liquidating them is. I’m guessing Ebay, but I’ve followed several auctions of items that I have and it seems like the prices vary wildy. Any suggestions?

  8. If you have’t read it already “The Richest Man in Babylon” talks about being lucky. It states being lucky is being prepared to take advantage of an opportunity. Its also a short easy read about simply saving money and having your money make money for you.

  9. “Ethical” issues aside, if you passed up the opportunity to get a ~300% ROI with almost no risk and didn’t because of some “emergency” that might or might not happen, then that’s just stupid. Even if you had bought the cards and the “emergency” actually happened the very next day, let’s say you have to put the $1,200 on a credit card. And let’s say you have to carry that balance for ONE WHOLE YEAR while you sell the cards because you are an extreme procrastinator. If your card is charging you 12% a year (which is probably a lot higher than the card(s) you actually have), that’s what, $150? So you only make $3,850 instead of $4,000 on your $1,200 investment, and that’s assuming the “emergency” actually happened, which of course may not have occurred. Seems like extreme risk aversion screwed you pretty good.

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