I just cannot, for the life of me, understand how you make a profit by it.
In: Economics
You think 1st edition Charizard cards aren’t worth as much as people are buying them for. Your friend has a 1st edition Charizard card, so you ask them to borrow their card and you promise you’ll give them back a 1st edition Charizard card one year from now. Your friend agrees, you give them a small fee to borrow it, and they give you the card. You immediately sell that card for $30,000 since that’s what people are currently buying it for.
Fast forward one year. You no longer have a 1st edition Charizard card, but you promised your friend that you’d give them one back. So now you have to go buy a 1st edition Charizard card that you can give your friend. But the good news is that now people are only buying 1st edition Charizard cards for $20,000. You buy one for $20,000 and give it back to your friend.
By doing this you immediately got $30,000 and then a year later had to spend $20,000, so you’ve gained $10,000 (minus whatever small fee you paid your friend for the right to borrow their card).
Latest Answers