Two “avian” strategies you can use to acquire assets at a fair price
For the sixth episode of Open Wallet, our program about personal finances, we welcomed Nathalie Bondil, Director of the Musée des Beaux Arts de Montréal. During the interview she shared two strategies for acquiring works of art, which can be applied to other kinds of assets: the eagle and the vulture strategies.
The eagle strategy
The eagle strategy involves buying an asset as quickly as possible in order to be sure of being able to acquire it. If you use this strategy, in Bondil’s opinion, you should never make the buying decision alone: “This is fundamental, because no one is immune from making a mistake.”
This strategy requires intensive tracking of the asset in order to establish a price that you feel is fair and above which you will not buy it, whether it is a painting, a piece of real estate, or a stock.
The eagle also requires having a strong global vision of what’s happening in the financial markets in order to be able to identify good deals and react very quickly when you spot them. The eagle knows which assets in which it wants to invest. Adopting this strategy requires being keen and observant.
The vulture strategy
The vulture strategy, as Bondil likes to call it, is the opposite of the previous strategy. She uses this when she wants to acquire paintings that are above her budget. In order to get them for a reasonable price, she just waits. She waits for the paintings to no longer be for sale in order to make an offer.
Bondil shared the example of a pair 19th century Chassériau paintings, which she saw listed for $800,000, but was able to buy them for almost eight times less. She waited several years before being able to buy them.
Waiting for the price of an asset to go down does entail a risk that it will not be available when you want to buy it.
The vulture strategy means that you must be patient…very patient. The vulture awaits opportunities without taking any risk. In investing terms, use this strategy to track a particular asset until it becomes attractive. Applying this strategy requires patience.
Both strategies enable you to acquire an asset at a price that will earn you a return. They are therefore good tools to help you better manage your personal finances.