American Gun Ownership Highest In 18 Years

[Malthus]

If I can buy a piece of land with a market value of 2M for 50,000 dollars that is exceedingly cheap and I would do it without hesitation.

I would hesitate just a little. 

Assume the land really does have a market value of 2M.    His point was that the value of being inexpensive is an absolute value rather than a relative value.  So I used an extreme example to show the error of his ways.

Depends on how easy it is to resell the collectible or land in issue, and collect the estimated market value; or indeed if the person buying it wants to resell. 

For some true collectors there is no question of ever reselling stuff (until they are dead or hopelessly broke) so the expense of buying a given collectible is really not an "investment". In that case, it doesn't matter how great a bargain they are getting, it's all consumption, and all that matters is the absolute amount the collector is willing to sink into his hobby. 

[crazy canuck]

If I can buy a piece of land with a market value of 2M for 50,000 dollars that is exceedingly cheap and I would do it without hesitation.

I would hesitate just a little. 

Assume the land really does have a market value of 2M.    His point was that the value of being inexpensive is an absolute value rather than a relative value.  So I used an extreme example to show the error of his ways.

Depends on how easy it is to resell the collectible or land in issue, and collect the estimated market value; or indeed if the person buying it wants to resell. 

That is all factored into the assumption it has a market value of 2m.  If there were things which restricted the ability of the land to be sold then that would be reflected in the market value.

[Malthus]

If I can buy a piece of land with a market value of 2M for 50,000 dollars that is exceedingly cheap and I would do it without hesitation.

I would hesitate just a little. 

Assume the land really does have a market value of 2M.    His point was that the value of being inexpensive is an absolute value rather than a relative value.  So I used an extreme example to show the error of his ways.

Depends on how easy it is to resell the collectible or land in issue, and collect the estimated market value; or indeed if the person buying it wants to resell. 

That is all factored into the assumption it has a market value of 2m.  If there were things which restricted the ability of the land to be sold then that would be reflected in the market value.

You are missing my point, I think.

The minor point is that, in some cases, collectibles can have a "market value" that is quite realistic, but the market for them is not liquid. A person owning a stamp valued at $2 million may have to wait a long time for a buyer of such an object - reducing the price will not hasten a buyer necessarily, because persons or institutions willing to buy such an object are rare.

The major point is that, in some cases, collectors as a group are not necessarily like investors - they have no real intention of reselling, ever. If that's the case, the market value is basically meaningless - what matters is the absolute amount they are willing to spend on their hobby.

If that's the case, it is quite irrelevant that a Glock is worth $800 but is selling for $300 - once the gun is purchased, it disappears into the collection forever, and that $500 value will never be realized - until the collector has to give up his collection.

There has to be a name for the fallacy that a collector, who has no intention of ever reselling, got a "bargain" when he paid "only" $400 for (say) a stamp with a market value of $800.  I'm sure the wife of said collector could think of a few choice terms for that. 

[crazy canuck]

You are missing my point, I think.

The point being missed is that Value is relative not absolute.  If a collector wishes to obtain an item then it is inexpensive to purchase it for 300 rather than the market value which is more expensive.

One does not have to sell the item to determine whether the purchase price was relatively inexpensive.  One need only determine that they purchased the item for less than what it would normally have cost them to acquire the item.

I may never sell that 2m dollar piece of property that I picked up for a song.  I may keep it till the end of my days and use it for target practice using a Glock I also purchased inexpensively.

[Malthus]

You are missing my point, I think.

The point being missed is that Value is relative not absolute.  If a collector wishes to obtain an item then it is inexpensive to purchase it for 300 rather than the market value which is more expensive.

One does not have to sell the item to determine whether the purchase price was relatively inexpensive.  One need only determine that they purchased the item for less than what it would normally have cost them to acquire the item.

I may never sell that 2m dollar piece of property that I picked up for a song.  I may keep it till the end of my days and use it for target practice using a Glock I also purchased inexpensively.

The issue is that there is only a certain absolute amount a rational person can (or should) spend on a hobby. For a collector, in your way lies madness, because there is always another wonderful gun, stamp, or bit of land one could buy. 

At the end of the day, collect too many of these "bargains" and you will have to use your Glock on your bit of land to hunt for food.

[crazy canuck]

You are missing my point, I think.

The point being missed is that Value is relative not absolute.  If a collector wishes to obtain an item then it is inexpensive to purchase it for 300 rather than the market value which is more expensive.

One does not have to sell the item to determine whether the purchase price was relatively inexpensive.  One need only determine that they purchased the item for less than what it would normally have cost them to acquire the item.

I may never sell that 2m dollar piece of property that I picked up for a song.  I may keep it till the end of my days and use it for target practice using a Glock I also purchased inexpensively.

The issue is that there is only a certain absolute amount a rational person can (or should) spend on a hobby. For a collector, in your way lies madness, because there is always another wonderful gun, stamp, or bit of land one could buy. 

At the end of the day, collect too many of these "bargains" and you will have to use your Glock on your bit of land to hunt for food.

Sure but all you are talking about now is the means to pay.

[Malthus]

You are missing my point, I think.

The point being missed is that Value is relative not absolute.  If a collector wishes to obtain an item then it is inexpensive to purchase it for 300 rather than the market value which is more expensive.

One does not have to sell the item to determine whether the purchase price was relatively inexpensive.  One need only determine that they purchased the item for less than what it would normally have cost them to acquire the item.

I may never sell that 2m dollar piece of property that I picked up for a song.  I may keep it till the end of my days and use it for target practice using a Glock I also purchased inexpensively.

The issue is that there is only a certain absolute amount a rational person can (or should) spend on a hobby. For a collector, in your way lies madness, because there is always another wonderful gun, stamp, or bit of land one could buy. 

At the end of the day, collect too many of these "bargains" and you will have to use your Glock on your bit of land to hunt for food.

Sure but all you are talking about now is the means to pay.

To my mind, this is what Gray Fox was talking about.

To translate: "spending $350 on a hobby an a regular basis is not a bargain, even if the objects you are buying are, in theory, worth far more."

[garbon]

My grandfather did this (the collecting bit especially with bargains) with a lot of things including a lot sunk into trading cards.  We've looked into a few times after his death but most all of it is basically worthless at this point.

[crazy canuck]

To translate: "spending $350 on a hobby an a regular basis is not a bargain, even if the objects you are buying are, in theory, worth far more."

Well even if that is what he was saying then you are still talking about means to pay.  Obviously our resident gun enthusiast has made the judgment he does and the price is less than normal.  Therefore it is inexpensive.

Bill gates could pick up several such deals a week and if he were an equal gun enthusiast he would be smart to do so rather than purchasing the guns at a greater price.

[Malthus]

My grandfather did this (the collecting bit especially with bargains) with a lot of things including a lot sunk into trading cards.  We've looked into a few times after his death but most all of it is basically worthless at this point.

I have several friends with the collecting bug in various forms. It's a characteristic of the species to find bargains irresistable. OTOH, hopefully the collections of stamps, coins and guns really do have some value - so at least the relations can benefit at some point. 

[Malthus]

Well even if that is what he was saying then you are still talking about means to pay.  Obviously our resident gun enthusiast has made the judgment he does and the price is less than normal.  Therefore it is inexpensive.

For a collecter, as opposed to an investor, "in that way lies madness". 

An investor cares about the difference between market value and actual value, because the investor intends to capitalize on that difference.

The collector cares about collecting, of which there is really no end. If a collector is moved to purchase a new acquisition because it is a "bargain", they are spending money above and beyond what they have allocated to their hobby. It's not a good sign, if indulged in too frequently.

[garbon]

My grandfather did this (the collecting bit especially with bargains) with a lot of things including a lot sunk into trading cards.  We've looked into a few times after his death but most all of it is basically worthless at this point.

I have several friends with the collecting bug in various forms. It's a characteristic of the species to find bargains irresistable. OTOH, hopefully the collections of stamps, coins and guns really do have some value - so at least the relations can benefit at some point. 

Yeah he had a diverse amount of stuff - stamps, cards,  coins, rocks (like geodes many of which he actually found himself in the desert), these native american dolls (of whose name I don't remember), etc. I think he was somewhat like what one would call a hoarder today, though it was really just one room that was very full of the stuff - rest of his place looked presentable.

[crazy canuck]

Well even if that is what he was saying then you are still talking about means to pay.  Obviously our resident gun enthusiast has made the judgment he does and the price is less than normal.  Therefore it is inexpensive.

For a collecter, as opposed to an investor, "in that way lies madness". 

An investor cares about the difference between market value and actual value, because the investor intends to capitalize on that difference.

The collector cares about collecting, of which there is really no end. If a collector is moved to purchase a new acquisition because it is a "bargain", they are spending money above and beyond what they have allocated to their hobby. It's not a good sign, if indulged in too frequently.

No, that assumption may is not necessarily true.  For example in this very example.  He bought it because he both wanted to acquire this gun and it was a good deal.  He does not go out buying up all the guns he can on the basis they are good deals.  Although to the extent he has the means to do so - why not?

[Malthus]

Well even if that is what he was saying then you are still talking about means to pay.  Obviously our resident gun enthusiast has made the judgment he does and the price is less than normal.  Therefore it is inexpensive.

For a collecter, as opposed to an investor, "in that way lies madness". 

An investor cares about the difference between market value and actual value, because the investor intends to capitalize on that difference.

The collector cares about collecting, of which there is really no end. If a collector is moved to purchase a new acquisition because it is a "bargain", they are spending money above and beyond what they have allocated to their hobby. It's not a good sign, if indulged in too frequently.

No, that assumption may is not necessarily true.  For example in this very example.  He bought it because he both wanted to acquire this gun and it was a good deal.  He does not go out buying up all the guns he can on the basis they are good deals.  Although to the extent he has the means to do so - why not?

I'm not saying he shouldn't.

I'm simply pointing out that, for a collector, it is wise to look at absolute and not just relative value - because, in the end, money spent on collecting is consumption, not investment.

So it should be budgeted accordingly. It isn't foolish to for someone like me to spend $50,000 on a land investment deal (your example) if I seriously think I can flip it for $2 million. It is, however, the height of folly for the same person to spend $50,000 on what is basically a hobby; I don't really have $50K to spend on hobbies, not without serious impact on other plans.

[The Brain]

Why you lie?