Is coral an investment?

[Daniel@R2R Verified Admin]

Lately I've seen a lot of comments that seem to indicate that it's bad (or possibly even morally wrong) to buy coral with the idea of it being something to frag and sell later on. For example, some big name vendor brings in a rare (or maybe not so rare) color strain of zoa or chalice and sells it at a high dollar price (we'll call our example coral the "razzle dazzle paly"). Somebody buys the Razzle Dazzle with the idea that they can grow it, frag it, and sell it. The comments I've seen seem to indicate that this is bad for some obvious yet unspoken reason ("obvious" because at least half a dozen people agree with the initial comment about how terrible it is and "unspoken" because no one ever says why this is so bad). My experience is that purchase and resell happens in any collector's hobby, but in reef keeping, we have the advantage that I can "have my coral and sell it too." Why, then, is this so frowned upon??

 

[Greenstreet.1]

I will say this for some it is and that's there choice for others and people like me I love this hobby and I buy my corals to see them grow and be happy same with my fish the investment for me is to see a small peace of nature and life in my home so that my family friends and I can enjoy and learn and once my corals grow out I rather trade than sell.

 

[pgravis]

Im probably a lot out of the loop, but I would think its a pretty risky investment. It's great to be able to sell coral/equipment to help fund your hobby, but I would say most would be delusional to think that they are going to net a profit from this hobby. It could have something to do with perpetuating an inflated demand for named coral? Interesting thread, I like it

 

[GHill762]

it's not profitable for most, but can help subsidize your hobby.. you have to have a pretty decent operation to cover the actual costs of operating the tank.. supplements, water changes, lighting/power usage...

 

[PaulKreider]

I think its perfectly acceptable.... If you buy a $1000 frag You better hope it grows fast enough to frag and make back atleast some of your money. I don't think many people bought bowsers planning to horde them to themselves. Most planned to get a nice colony of 15-30 and begin fragging every now and then. Bowser is a great example since it still holds a high market value.

 

[Aqua fire/medic]

I think there is nothing wrong with fragging a big money piece to recoup some cash. I mean let's be serious..... Most of us will frag just so we can either trade for more coral or to make cash to buy more coral..... Am I right?

 

[mnat]

Corals as investments are terrible investments, that is the first part. To even connect the two is fool hardy thinking. Corals die, and sometimes for no seen reason. This is not buying a stock or real estate.

Secondly people are using this line of thinking to jack prices up. Don't worry that I am charging 250 a polyp, it is an investment. They are trying to mask the fact they are overcharging and driving up prices. This effects all reefers. I was at a local vendor (basement shop type) and he was telling me that wholesales are now charging by the polyp on some zoas because people have made this line of thinking main stream. So we are all goin to pay higher prices because people have "discovered" a new investment zoa.

Third it promotes smaller and unhealthy frags. Someone buys a booger for big money then waits for t to get to two boogers and then frags it back to a booger. They then wonder why it dies or takes years to grow or why it looks nothing like the mother.

This hobby is not cheap and fragging some of your corals to make money is part of the hobby. Your thought when you look at a coral is do I like it, not how much money can I make off of it. If gouging your fellow reefers is your first thought, well then I think you are in the wrong.

 

[RichieT]

Lately I've seen a lot of comments that seem to indicate that it's bad (or possibly even morally wrong) to buy coral with the idea of it being something to frag and sell later on. For example, some big name vendor brings in a rare (or maybe not so rare) color strain of zoa or chalice and sells it at a high dollar price (we'll call our example coral the "razzle dazzle paly"). Somebody buys the Razzle Dazzle with the idea that they can grow it, frag it, and sell it. The comments I've seen seem to indicate that this is bad for some obvious yet unspoken reason ("obvious" because at least half a dozen people agree with the initial comment about how terrible it is and "unspoken" because no one ever says why this is so bad). My experience is that purchase and resell happens in any collector's hobby, but in reef keeping, we have the advantage that I can "have my coral and sell it too." Why, then, is this so frowned upon??

I think there are different shade of grey concerning this issue. 1. Buying with the intent to sell sounds a lot like a business. If that is your goal then man up and become a vendor. 2. Buying some you like growing it out and fragging a few times to recoup your cost sounds like a hobbist. 3. Having access to wholesale and buying entire colonies and selling individual polyps at crazy high prices while calling yourself a collector sounds like a business. 4. Buying something for x amount and Turing around and selling it for 2x-3x is in that moral grey area. Yeah the market will pay but is that justification enough to double or triple your initial cost. Judgement call I guess.

I'm sure I'm missing several other shades but I guess my point is that it is situational.

 

[RichieT]

Mnat was faster at typing lol

 

[swayd]

Coral is not a safe investment but I know people who look at coral as investments. A fellow I know has been consumed with this. He started off with a 90 and now every room in his house has a reef. He buys these huge colonies and hacks them up real small and sells the frags for decent prices. I love buying frags from the guy and I know he is profiting from doing this but where else am I going to get $5-$10 frags. I have fragged up coral myself but cant see myself waiting for coral to grow out to frag and make money. If you were to look at it as an investment then like others had said before, buy wholesale and open up shop. I myself would love to do that but I know its not realistic because I am not even close to being experienced enough to maintain a full shop, pshh I dont even dose yet lol.

 

[PaulKreider]

I think there are different shade of grey concerning this issue. 1. Buying with the intent to sell sounds a lot like a business. If that is your goal then man up and become a vendor. 2. Buying some you like growing it out and fragging a few times to recoup your cost sounds like a hobbist. 3. Having access to wholesale and buying entire colonies and selling individual polyps at crazy high prices while calling yourself a collector sounds like a business. 4. Buying something for x amount and Turing around and selling it for 2x-3x is in that moral grey area. Yeah the market will pay but is that justification enough to double or triple your initial cost. Judgement call I guess.

I'm sure I'm missing several other shades but I guess my point is that it is situational.

I agree with a lot of things you say, I don't like that some people are practically making a business out of it. Yet I completely understand when people are just trying to recoup some money or put money back into their "tank" fund. As a college student I don't have limitless funds so Im forced to sell off frags in order to get more. Don't get me wrong Iv never bought a one polyp frag and fragged it as soon as another polyp pops out, but I think if your sitting on it and get a reasonable sized colony then your no longer in the grey or negative aspect of this delema.

 

[diesel3443]

Personally, I like to pay it forward with frags or trading possibilities. I have been given so many frags from reefer buddies that I can imagine selling some of them.

If I was given the frag that is now a colony, I only trade or give out the frags to someone else.

 

[k2parkstar]

I think there are different shade of grey concerning this issue. 1. Buying with the intent to sell sounds a lot like a business. If that is your goal then man up and become a vendor. 2. Buying some you like growing it out and fragging a few times to recoup your cost sounds like a hobbist. 3. Having access to wholesale and buying entire colonies and selling individual polyps at crazy high prices while calling yourself a collector sounds like a business. 4. Buying something for x amount and Turing around and selling it for 2x-3x is in that moral grey area. Yeah the market will pay but is that justification enough to double or triple your initial cost. Judgement call I guess. I'm sure I'm missing several other shades but I guess my point is that it is situational.

I agree with Richie, fragging to recoup, or make room is great. Buying from a wholesaler with intention to profit=vendor. Buying said coral and charging more than you paid, just cause people will pay, that's wrong in my opinion.

 

[Daniel@R2R Verified Admin]

So to recoup what I think is the general consensus, fragging and selling as a hobbyist = no big deal. Buying with the intent to sell probably means you should open a shop. Price gouging just because you can is morally wrong.

I agree with most of this as well. The one thing that I would humbly submit is that some folks may buy in order to sell as a means of investment (I agree that this is risky, but hear me out) because a) this is an investment they understand and enjoy better than other investment options (like stock
portfolios), and b) they don't have the money to open a store, but do have the money to buy one good colony at a time. My thought is that this would be alright...though one could still argue that it's very risky with the possibility of death, tank crash, no interest from other hobbyists, etc.

As far as price gouging goes, I agree that greed is a REALLY REALLY ugly thing. However, what I think is pretty grey is the question of what is considered price gouging... I say that because in every collector's hobby (stamps, coins, etc.) price is determined by rarity and popularity. That means that price is not based on utility or actual "worth" (I mean a 3 cent stamp is at best only "worth" 3 cents). Therefore, the argument could be made that "price gouging" becomes a question of conscience since a "reasonable price" is determined by the popularity of the coral.

The only practice I have seen that I think is definitely morally wrong is deception. To me this occurs when someone misrepresents intentionally in order to charge more. For example, a coral kind of looks like a collector's piece that I know goes for $250 pp, but it is kinda different in some ways...so I call it by the name of the piece it's similar to even though I know it's not that piece. This to me is theft motivated by greed and is definitely wrong.

This is how I see this issue.

 

[Dalmatia]

I buy from people that messed up their system or that can't run it or just a sale ASAP! That's where the $ is I think, plus you get to keep the stuff you really like. I do this on a monthly bases. Most of my hobby comes from selling this hobby

 

[mnat]

I think you hit the nail on the head with the word deception. Supply and demand gets thrown around a ton in this hobby as a knee jerk reaction whenever someone brings up price as far as corals go. However, if you read into supply and demand theory, it is more than just a chart, there are certain assumption that are made. One of those assumptions is a free exchange of knowledge, in other words everyone knows the same thing. There are people that knowingly hide information or change it (photoshopping) which then distorts the supply demand graph. This is why I think the word deception is very apt in this case, when people are knowingly deceptive, that is where it is wrong.

As far as people who don't want to open a store, fine don't open a store, in fact there were vendors on here who started with a 180g in their living room. However, they at least paid the sponsorship fee here to sell so people knew they were a vendor instead of pretending they were a hobbyist out to help others. If you are going to import and chop for a profit, at least have the cojones to say what you really are.

 

[CastAway]

The market is whatever the market will bare. If we're talking about retailers getting mad because hobbyist sell frags and undermine their business, that's tough; that's what's supposed to happen. If we're talking about one retailer undermining another, that's capitalism; that's supposed to happen as well. If I buy a thousand dollar Razzle Dazzle Paly from Joe Blow that I could have bought from John Doe for five hundred, then that's my fault. (If it's a retailer on this site, then that's Rev's fault!) LOL Anyway, when you sell your house, it doesn't matter what the appraiser says it's worth, it's only worth whatever you get, that's my point. Moreover, IMO, it doesn't matter whether your a seller, buyer, "hobbyist", "collector", "sponsor", "retailer", "wholesaler" or whatever - no manning up required, no infringement on morality. Investment? Yes, hopefully, if you see a return. Agree, deception is another thing. When and where we see that, it behooves us all to call it out.

 

[mnat]

It is funny because sometimes people will called out and threads get shutdown like this:

https://www.reef2reef.com/forums/selling-forum-livestock/121396-new-hornet-zoanthids.html

Other times, people just are like whatever, we will let it go.

 

[tuna_bullet]

So to recoup what I think is the general consensus, fragging and selling as a hobbyist = no big deal. Buying with the intent to sell probably means you should open a shop. Price gouging just because you can is morally wrong.

I agree with most of this as well. The one thing that I would humbly submit is that some folks may buy in order to sell as a means of investment (I agree that this is risky, but hear me out) because a) this is an investment they understand and enjoy better than other investment options (like stock
portfolios), and b) they don't have the money to open a store, but do have the money to buy one good colony at a time. My thought is that this would be alright...though one could still argue that it's very risky with the possibility of death, tank crash, no interest from other hobbyists, etc.

As far as price gouging goes, I agree that greed is a REALLY REALLY ugly thing. However, what I think is pretty grey is the question of what is considered price gouging... I say that because in every collector's hobby (stamps, coins, etc.) price is determined by rarity and popularity. That means that price is not based on utility or actual "worth" (I mean a 3 cent stamp is at best only "worth" 3 cents). Therefore, the argument could be made that "price gouging" becomes a question of conscience since a "reasonable price" is determined by the popularity of the coral.

The only practice I have seen that I think is definitely morally wrong is deception. To me this occurs when someone misrepresents intentionally in order to charge more. For example, a coral kind of looks like a collector's piece that I know goes for $250 pp, but it is kinda different in some ways...so I call it by the name of the piece it's similar to even though I know it's not that piece. This to me is theft motivated by greed and is definitely wrong.

This is how I see this issue.

pretty well said.....my wife calls it monopoly money because i frag some stuff and trade it,,, or frag and sell it..(mostly local)...and i use that money to buy my Krak and these other crazy zoas that cost ungodly amounts....it does not hurt as bad when the hobby sustains itself.......

 

[Dalmatia]

The market is whatever the market will bare. If we're talking about retailers getting mad because hobbyist sell frags and undermine their business, that's tough; that's what's supposed to happen. If we're talking about one retailer undermining another, that's capitalism; that's supposed to happen as well. If I buy a thousand dollar Razzle Dazzle Paly from Joe Blow that I could have bought from John Doe for five hundred, then that's my fault. (If it's a retailer on this site, then that's Rev's fault!) LOL Anyway, when you sell your house, it doesn't matter what the appraiser says it's worth, it's only worth whatever you get, that's my point. Moreover, IMO, it doesn't matter whether your a seller, buyer, "hobbyist", "collector", "sponsor", "retailer", "wholesaler" or whatever - no manning up required, no infringement on morality. Investment? Yes, hopefully, if you see a return. Agree, deception is another thing. When and where we see that, it behooves us all to call it out.

Yaaaa,, what he said