How Pokemon is Like the Stock Market

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Do your kids collect Pokemon cards? Do you have a favorite niece or nephew who just can't get enough of the craze?

In many ways, Pokemon is like the stock market. In its most basic form, a Pokemon card--one that is rare--is just like a non-profitmaking, non-dividend paying asset. Rare cards are parallel to a tiny free float. To top it off, children seek to find the rarest of the rare cards, just like a fund manager finds 'scarce' stocks so they do not underperform the market.

Capital gains are the long-term solution, just the same as when a fad like Pokemon must continue long enough for someone to pay a higher price than previously for the same cards.

Knowing when to hold and when to fold also is a concern. Children hold on to Pokemon cards just long enough for the price to go up--and then hope to sell the cards for a profit. In the stock market arena, today's hot Internet stocks are not held very long and often are sold prior to the company turning any kind of profit.

If you would like to learn more about this, check out the story at FT.com

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