Buy High, Sell Low, Too

Today’s post is a quick follow-up to last week’s parental financial advice titled “Buy High, Sell Low.” In the closing of that post, I mentioned the upcoming resale event in Strongsville that weekend. Well, we attended said event and demonstrated almost immediately our Buy High, Sell Low mantra.

Andrea worked the event while I took the kids to ice skating. While there, she saw a real find: a Barbie Princess Castle. It was a little faded from age, but otherwise was in pristine condition. Retailing at well over $200, she bought it for $50.

After ice skating, I brought the kids to the event, mostly to avail ourselves of leftover bake sale goodies. Andrea showed Chiara her prize. Chiara demonstrated her excitement by almost immediately breaking off one of the clock hands off the tower clock.

Just so I don’t put too fine a point on it, let me re-emphasize. Somehow this other family, with children the same age as ours, had lovingly and carefully maintained this castle doll house in excellent condition for years and we, the Kimmels, couldn’t manage to leave the building without breaking it.

It gets better. We brought the castle home. As I was reassembling the staircase, I broke a piece of the wall off. I super-glued it back on, but it is visibly marred.

In one hour of ownership, we rendered an “excellent” condition toy worth $50 into a “good” condition toy worth $10. We bought the tech stock the day before the market crashed. It was classic Buy High, Sell Low strategy.

There’s an obvious profit opportunity here: short sell the toys that the Kimmel family will buy. Let’s say you know you’ll be in the market for a “good” condition Barbie Castle two years from now. You could buy the castle from the first family, immediately sell it to us for $50 and then buy it back in two years for $10. You’d have your castle (albeit with fewer clock hands and crack-free walls), and you’d have turned a nice $40 profit.