Joe Mahavuthivanij of Mythic Markets: “Buy what you know”

Buy what you know — Buying assets and well-managed companies you understand will help mitigate some risk. If you don’t understand some new-fangled, high-flying asset, you may find yourself gambling and losing more often than not. As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Joe Mahavuthivanij. Joe is the […]

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Buy what you know — Buying assets and well-managed companies you understand will help mitigate some risk. If you don’t understand some new-fangled, high-flying asset, you may find yourself gambling and losing more often than not.

As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Joe Mahavuthivanij. Joe is the co-founder & CEO of Mythic Markets, a San Francisco-based startup that gives people the opportunity to invest in pop-culture fandom. Starting with vintage comics, collectible cards and fantasy art, the company makes it easy to trade fractional shares of the rare, high-value collectibles loved by millions worldwide.

Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

Before we begin, I need to remind readers that this isn’t an offering of securities and that private investments are highly illiquid, risky, and not suitable for all investors. Past performance is not indicative of future results. This interview is not an offer to sell or the solicitation of an offer to buy any security, which can only be made through official offering documents that contain important information about risks, fees and expenses.

With that out of the way, I’m really excited to take part in the program! I started playing a trading card game called Magic: The Gathering over 25 years ago. Back then, the most valuable cards topped out around 500 dollars. Today, those cards can fetch well into the 6 and 7-figures! Although I didn’t realize it at the time, I’d been an investor since I was a kid.

Smash cut to adulthood, I worked in product management and business development at startups of all stages. I also worked in venture capital, which was a rare opportunity to experience life on the other side of the startup table. Mythic Markets was born by combining my passion for investing with my love of MTG and nostalgia.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

I’ve experienced several “butterfly effects” that led my career path to where it is today. Perhaps the most important was when I was fired from my very first startup job out of college. I was miserable and it showed in my work. This setback turned out to be a blessing in disguise, because it afforded me the opportunity to join a tiny startup of 7 people. The team worked closely together and the company was eventually acquired by AOL. More importantly, the team remained close, which eventually led to working together again, directly resulting in the founding of my current company. It wouldn’t have been possible without being fired in the first place!

Are you working on any exciting new projects now? How do you think that will help people?

While COVID-19-related lockdowns have been devastating for millions of Americans, some industries and asset classes experienced explosive growth. Alternative assets like collectibles interest me most because they’re incredibly nostalgic, have enormous fanbases, and often overlooked as investable assets. However, the rarest and most desirable assets are out of budget and out of reach, accessible only to the world’s elite. We created Mythic Markets so that anybody could invest in the collectibles they always dreamed of owning.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

“We worked hard so our kids don’t have to.”

As entrepreneurs and small business owners, my parents were the greatest influence on my journey as a founder. Like most Asian parents, they would have preferred I become a doctor, lawyer or engineer. However, they also recognized how rewarding the entrepreneurial path could be. In particular, my dad has the unique ability to identify and capitalize on trends, helping me see problems as new opportunities.

Some of the most memorable things I learned from my dad were lessons on working efficiently and optimizing the value of my time. When I was waiting tables in the family restaurant for example, he taught me to never go out to the dining room empty-handed, and never to come back empty-handed. Walking out with a pitcher of water afforded the opportunity to interact with diners, provide better customer service, sell more food and drinks, clear and turn tables faster, and increase my tips. He also taught me to optimize my value, making more money while working the same hours, all through better customer service.

Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?

We’re all probably “Zoomed” out at this point, and there’s really no replacement for human contact. As an extrovert, I reached my breaking point months ago and decided that creating a “circle of trust” with my closest friends and family was necessary to maintain our collective mental health.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing 500 dollars every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?

I’d want to learn about their risk profile and investing objectives. In either case, I would recommend that they get out of cash and invest in basically anything else.

For most people, standard alternative investments should be considered. Real estate is attractive given that interest rates are at historic lows. Tech stocks are also exciting since these companies continue to operate throughout COVID, and experiencing rapid growth as consumers take to the internet for all of their needs.

Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?

There is enormous pent up demand in the consumer travel industry. Companies like Airbnb (ABNB) are well positioned to take advantage of this demand, especially given that they own no inventory and can scale to meet the demand.

Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?

Bitcoin (BTC) is extremely volatile and entirely speculative given that there’s very limited practical use for the asset aside from a store of value. The sky’s the limit when it comes to crypto, but given the frothy nature of tokens to quickly gain and lose favor with speculators, I’d leave this one for the gamblers.

Are there alternative investments that you think more people should look more deeply at?

People usually look toward traditional alternative investments like the market, gold, and real estate. However, most people don’t realize that collectibles have outperformed them all over the last 10+ years. As the founder of an alternative investing platform, I’m a little biased, but the performance of collectibles like comics, collectible cards, and fantasy art speak for themselves.

If a person in their thirties and forties came to you today and said that they have 10,000 dollars that they want to put away today for a long term investment what would you advise them to do with it?

Again, I would ask about their risk tolerance, investing objectives and liquidity needs. For most people, investing in the market (SPY QQQ) is probably a prudent choice for its long term growth, relatively low risk and ease of exit.

Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?

  1. Avoid day-trading — Most people investing in the market lack the savviness to effectively day-trade. By making a long term bet, most investors can achieve greater returns compared to short term traders, as well as the accompanying capital gains taxes with the quick hits.
  2. Be disciplined — Volatility can cause rapid gains and losses in your riskiest investments, causing anxiety for most investors. By remaining disciplined and resisting emotional buying or selling, you can potentially sidestep short term losses that many investors fall prey to.
  3. Diversify — don’t put all your eggs into one basket — Investing across companies and asset classes is essential to distribute risk.
  4. When investing in the market, don’t be afraid to take profits — It can be tempting to maximize returns by holding out for more profits. However, covering your downside can put you in a positive mindset where your gains all come from “house money”.
  5. Buy what you know — Buying assets and well-managed companies you understand will help mitigate some risk. If you don’t understand some new-fangled, high-flying asset, you may find yourself gambling and losing more often than not.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Bear the bitter. Savor the sweet. — Dad

On a trip to Thailand, my Dad brought me to a local shop where I was asked to drink two small cups of tea. One was bitter and the other was sweet. Being a young kid at the time, I immediately went for the sweet tea and finished the entire cup in one gulp. Then I sampled the bitter tea and immediately wretched due to its foul flavor. I didn’t want to drink it, but we weren’t leaving until I finished the tea. We ended up sitting in this shop for a half hour while I watered the bitter tea down to make it drinkable. When I finally finished it, my Dad explained the purpose of the lesson.

The entire experience could have been incredibly pleasant had I held my nose and quickly shot the bitter tea, ending the dismal experience quickly. Instead of gulping down the sweet tea, slowly sipping it would have offered a pleasant, long-lasting experience.

Ultimately, I learned that, when facing difficult situations and unpleasant tasks, powering through and overcoming them quickly ensures the suffering is only short term. When times and experiences are great, embrace the opportunity to enjoy and prolong them.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂

I believe that “life begins where your comfort zone ends”, so I’d work to inspire the “Go boldly” movement (#GoBoldly). Most of us allow fear to keep us from learning new things and leveling up our lives. So go forth and push your boundaries. You’re more capable than you think!

Thank you for the interview. We wish you only continued success!

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