Absolutely everything is frothy right now. I wouldn’t make any long term conclusions from the markets today, since this seems like an exceptional time. That is to say, I think the “bull case” for many things atm are heavily tainted by irrational exuberance.
I think is the case that all the non speculative assets in producción (machines and labor(industrial employes)) are simply not worth, because is not individual problem the supply disruption, The investment and all that free money is simple put in speculative assets
Or it's going to pop regardless and he readily senses the insanity of being worth ~$340b on paper as so many others also sense it ($315b gain in two years), and is using a ridiculous poll as a Musk-style ridiculous cover to finally secure some tangible wealth outside of the paper bubble valuation on Tesla (and to a lesser degree, SpaceX) and the large pile of debt-as-living ($6b and climbing) he's having to maintenance. Musk went from $100b to $340b in a year. He'd be a moron to not sell some of it, secure some safety capital, clear out his debts; if Tesla implodes, he can buy the stock all back; if Tesla's stock doesn't implode that just means he'll still be worth a zillion dollars, shareholders will be happy, and the sale won't have really mattered anyway. The only serious risk is that if the stock crashes shortly after he sells, he will never hear the end of it (and he'll have $20b in new cash to cry upon).
Oh yeah, I absolutely think his intention was to sell from the start.
His brother just sold a large chunk on Friday... totally not coincidental.
He's also frequently made jokes about how overvalued the stock is... definitely knows it's totally mispriced/overvalued.
Makes sense to diversify a bit either way. It may tank bigly before he can even sell though. I'm sure many will try to front run. But who knows, let's see.
The higher-end of the card collecting hobby has changed permanently. The card companies are putting a lot of effort and money into producing unique or otherwise limited cards (autographs, relics, rare prints, etc). That's not going to stop.
For example a lot of the more common rookie card prices have already deflated back toward something closer to sane prices. Take the Greg Maddux 1987 Leaf rookie card - that went up ten fold in less than two years, primarily during the pandemic bubble, and has now deflated by around 60-70% from the peak of the bubble. That card (and numerous others like it from other prominent players of the past 40-50 years) is unlikely to quickly reinflate back to the peak, it might take five or ten years to get back there.
What isn't going to dramatically deflate, are the exceptional cards. The higher quality 1952 Mantle cards are not going to drop by 60-70%. The 1986 Fleer Jordan rookie in a PSA 10 is never going back to the days when it could be purchased for $10,000-$30,000. A high-end Lebron James rookie (seven figures) isn't likely to roll backwards by 70% from the peak. Those days are forever over. There is a lot of money willing to pay up for such cards. The high-end part of the card hobby is and will remain closer to behaving like the art market than like the mainstream cards-from-packs hobby.
And the giant premiums that card companies can command for high-end boxes, they're not giving that up if they can avoid it, they have no interest in rolling that back to the old days. Granted, Fanatics and their new monopoly may screw everything up.
I don't know. How can you say "never" with such confidence? If we get a severe recession, it's hard to say that 25-year-old pieces of cardboard couldn't lose 70%.
Yeah, the higher end is “different” because card grading is a gatekeeper into the market.
There are a lot more PSA 10 quality cards sitting in collections ungraded than have been graded and are “in circulation”. But now that those top cards are 6-figures and higher, nobody in their right mind is going to put one of those things in the mail and not get it back for 12-18 months (the grading firms aren’t even accepting cards now anyway). Something worth $1 million once graded is worth $1000 ungraded. You can’t insure it for $1 million until it’s graded. Chicken v. Egg.
Bubbles of this magnitude are not caused by irrational sentiment. There is irrational optimism about market returns, but that's only a second-order effect from mechanisms such as low/negative borrowing rates and scheduled asset purchases (QE), monetarily incentivizing investments, which in turns incentivizes gambling.
Borrowing as much fiat as one could take and dumping it into assets was the rational choice, unless you were speculating on some black swan.
> Borrowing as much fiat as one could take and dumping it into assets was the rational choice
This. I had a conversation with my boomer father the other day in which I tried to explain that the availability of cheap consumer debt means that individuals can now operate like mini hedge funds, making highly leveraged bets on everything from stocks to crypto to trading cards. Used to be that housing was the only highly leveraged investment available to the average consumer (20% down = 5x leverage).
The answer to this question seems so self-evident that I’m not sure if you’re trolling or really just uninformed.
To be fair, aggregate debt and interest rates don’t really tell the whole story, because credit providers are a lot more creative as well. Anecdotally, I routinely get offers for promotional low- or no-interest balances on unsecured credit (i.e. credit cards) that overlap such that I can fairly easily maintain a condition of “negative working capital” in excess of my annual income for maybe 2% APR.
I'm not the one who's uninformed. Total consumer credit as a share of GDP was 18% in 2001 and is 19% now.
Those offers aren't new either. They were around 20 years ago. And back then you could stick the balance in a savings account to arb a few percent positive interest.
Thing is everything feels frothy because people haven't reset their mental model on what the dollar is actually worth. Over the past year or so the Fed took every pre-pandemic dollar in your pocket and made it worth about 70-80 cents. PPIA (Post-Pandemic Inflation Adjusted) the values on a lot of things are just fine.
There is (was) this concept of "cinema ticket based" inflation index that linked consumer level effective inflation to the price of one entry for a movie across the years. I wonder if anyone has published a somewhat large scale estimation of the "post pandemic inflation" adjustment from a collection of these (consumer level) frothy assets.
Even if there were a direct relationship between printing and inflation, this wouldn't make sense. Pokemon cards aren't up 25%, which is what you'd expect if dollars were worth 80% as much and everything rose to accommodate. Pokemon cards are up way way way more than 25%.
Why would that be the case? Inflation doesn't put 25% more dollars in the pockets of people willing to buy Pokemon cards. It's distributed differently.
Plus the existence of high inflation makes people demand inflation hedges way more, so why wouldn't they go up in price faster than inflation?
Why not the opposite then? Why wouldn't 25% inflation fail to lead to higher trading card prices? Very quickly, this argument becomes fully disconnected from any principle when you say that any amount of inflation can lead to any arbitrary price change, as it lets us blame literally anything on inflation.
Only the wealthy with nothing better to spend a marginal % of their capital on, the middle class (good income) indebting themselves up the balls, and speculators looking to profit from the prior two categories, are buying these things at these crazy prices.
Some poor folk might fall in to the speculator category, but they're taking huge personal risk on what they hope is a ticket to riches.
As someone who has been into cards and collectibles all my life, the past few years have been wild to say the least.
What we saw in 2020/early 2021 was really a classic bubble - FOMO buying pushing prices to unsustainable levels. Then throw in the grading shutdown caused by backlog of new collectors and investors sending in millions of garbage base cards for grading, clogging up the grading companies, plus profit taking from the insane prices, and we get the pullback we saw in Q2.
Like everything else, the collectible market comes down to supply and demand. Focus on rare cards - numbered cards, colored paralells, refractors etc…the supply is much lower and are generally safer bets because collectors are always chasing them.
I have cards for certain players, teams or inserts that I buy to collect, if I can make money on them great, if not I enjoy having them in my personal collection (PC).
Then there are cards I’ll buy anticipating a rise in value with the intention to sell in 6-12 months or longer. Typically this involves buying rare cards or good players of sports in off seasons when demand dries up, so for example I was buying a lot of big name football cards over the summer when the football news cycle was slow, and recently moved to buying basketball leading into the NBA season.
I never got the idea of being a hobby collector in modern times. Nowadays, everything is available on the Internet for sale, so completing the collection is only a matter of coughing up enough money. How is that interesting or exciting?
I can still understand collecting items which aren't mass produced for the purpose of being collected - things such as history/war memorabilia, rare books fro XIX century etc. There, every item can be unique and obtaining them can demand more from the collector than just typing in their credit card numbers.
The one thing I can truly say I "collect" is rare, first/early edition pre-standardization works from a specific Irish dialect. For me, though, it's not so much the collecting as having access to these books for the rich, natural (.i. non-standard) language that's contained in them. Eventually I might extend it to modern authors from the same dialect, but getting access to these older works is top priority.
There are certain categories of trading cards that can not easily be bought online.
I know some people in the actual hobby collection scene for certain trading cards (as opposed to people calling themselves collectors but actually want to just flip for profit). The items these people collect are things such as rare misprints (with population sizes of below 100), physical printsheets (which sometimes have a population size of 1) or promo cards given out for very specific events (such as the creators wedding), again with single- or double digit population sizes.
From what I gather the appeal is partly just seeing weird things from the history of a hobby you enjoy. It‘s also a kinda nice way to connect with other people in the collection hobby, since when you run into something wacky you can just call up Jon who collects that exact oddity and bring it to him in exchange for a nice dinner or something.
If this were true, counterfeit baseball cards should have the same value as “real” ones, and I would have a very profitable company producing beautiful Mickey Mantle cards. So where do you think the real value is?
this is too reductive, there are entire generations of people, plural, that don't draw the line at "I can't hold it". People said the same thing about mp3s and digital music, the people they were criticizing have children now. both of these recipient generations don't care.
but to say more about what you are missing - without drawing a different conclusion just adding an extra variable - is to look at how issuers act. In the trading card world, many series have continual mints from the issuer with no transparency on the supply. People haphazardly buy sets and hope they get a card that has been found to be rare, while the issuer gets continual revenue. (just describing one behavior for comparative purposes)
what is typical of NFT collectibles - which, by the way, is just a subset of the NFT market and is analogous to trading cards, distinct from the one-off art pieces in headlines that have formed most opinions - is that the issuer mints one set. and the community discovers the rare attributes on their own, within hours. in this model, its the same pool of money as the trading card communities would have, except it pools towards a known quantity of collectibles, compared to the same pool of money always buying at MSRP from an infinite issuance and hoping for the best. that leans towards rationale behavior, at least at the same standard as trading card collectors. for the issuer, they get royalties from the NFTs changing hands in perpetuity (at least when traded on the marketplace smart contracts which allow that). and for the industry, there is never a backlog of authenticators so they're extinct now. that doesn't mean the prices are sustainable. but that standard is also being separately applied to NFTs as an entire concept, when such nuance is applied to trading cards: some cards have continual interest in any market and 99% of others are ignored forever.
you can still have the same conclusion, I'm not here to play devil's advocate, I'm just here to say "hm that's not what's going on".
I'm not sure mp3s are a good example. Vinyl is booming because many people want a physically tangible medium and streaming services are otherwise teaching a generation that music isn't something worth owning.
I don't understand why they don't encode the image in base64, so it appears as a alphanumeric string instead of a .png in the DOM. You could still screenshot it, I guess.
I can make a counterfeit baseball or Pokémon trading card which looks identical to the real thing, or even “better”. Yet those don’t sell for nearly as much. Why is that?
I wonder if it's relevant that the golden age of trading cards, the 60s, was prelude to a decade of rampant inflation.
A friend of mine said in late 2020, w/r/t the explosion of NFTs, that we'd look back on it from the great depression of 2028 as the moment when the dollar became worthless, although most people hadn't realized it yet.
Why would you say the 60s was a golden age of trading cards? The iconic cards were printed in the 50s (Boomers' childhood years). Prices didn't get crazy until the late 80s.
From scanning this, it sounds like the author is specifically talking about sports trading cards, most characterized by baseball cards.
This market certainly went crazy price-wise but then, as the author pointed out, tanked. It basically tanked because everyone started collecting the cards. Like any collectible market, it mainly took off to begin with because no one was collecting these things and keeping them in mint condition. The realization of that then created oversupply.
I can't speak much for that market but in the past year Pokemon in particular has exploded, to the point where the the ratings companies where so inundated with submissions that they had to stop accepting them.
The Pokemon market seems to have cooled but prices for mint condition first edition cards still seem to be pretty high. It's impossible to predict where this market will go just like any collectible market because it's so driven by market sentiment.
> It's impossible to predict where this market will go just like any collectible market because it's so driven by market sentiment.
As someone who knows little about trading cards or "markets" in general I guess, how is this different than any other market? Seems like everything is driven by market sentiment, even things like toilet paper from time to time.
Stocks represent fractional ownership of a future income stream - the profits of the underlying corporation. You can (in principle) buy a stock, never sell it, and get back more money than you put in. So you're not completely dependent on what others are willing to pay for it in the future.
Trading cards (and cryptocurrencies) are not like that. You can only make money if someone else is willing to pay more for it.
> Stocks represent fractional ownership of a future income stream - the profits of the underlying corporation. You can (in principle) buy a stock, never sell it, and get back more money than you put in. So you're not completely dependent on what others are willing to pay for it in the future.
Correct me if I'm wrong, as I don't know much about stocks, but doesn't that require the company to have/pay out dividends? Otherwise you do require others to buy the stock when you sell it.
> Trading cards (and cryptocurrencies) are not like that
Don't know enough about trading cards to say that you're incorrect, but you're definitely wrong about cryptocurrencies. You can do various things to earn more without loosing your current amount, from staking (Polkadot), loaning (Compound) to getting rewarded for providing liquidity (Uniswap) or for doing nothing at all (Algorand).
> doesn't that require the company to have/pay out dividends?
If you make money along the way, as opposed to when you sell, then yes. The prevailing corporate playbook seems to prefer stock buybacks over dividends, which accomplishes roughly the same thing but only triggers tax liabilities for the stockholders who “cash out” by selling.
Obviously there is a limit to this process, but in a frictionless world of perfect financial knowledge a stockholder would always prefer the buyback approach since it defers taxes on the gains as long as possible.
With the exception of companies that pay dividends, if you don’t sell the stock you don’t get back anything because it is an unrealized gain(or loss). You trade your money for ownership, and you can only have one or the other.
There was a time when trading in equity shares was driven in part by the so-called "fundamentals". How the business was doing (and the outlook), if the company was making money (and would make money in the future), things like that.
Not any specific company. The person I responded to implied that equity shares are not being traded according to if they were making money or will make money.
But from this list, and the net profit and net profit margin figures, they seem to be mostly ordered correctly.
I was (mostly) joking! Fundamentals are still somewhat relevant.
Nevertheless:
"The basic issue is that right now everything is dumb. You can complain about that, or you can embrace it. In investing in 2021, “my channel checks and fundamental modeling suggest that this company will grow earnings faster than the market expects so I will buy it with a price target 20% above today’s price” might sound smarter than “this company’s chief executive officer just tweeted a picture of a dog at Elon Musk so I’m going to buy out-of-the-money call options expiring Friday because the stock will go up 200% today,” but the latter approach happens to work better right now.
Short term trading might be more dumb than usual, but for investment horizons years into the future, it still seems like people are betting on companies that are in relatively strong positions to have inflation protected cash flows.
Tesla does have good fundamentals and a good trajectory as a car company. They make a product that people want, that sells well even with large margins, for which demand is expected to continue to grow.
The fact that the market ran up its stock price till the P/E went stratospheric doesn’t make their core business any less viable.
If Tesla stock crashes, it likely won’t be because of anything the company did, but because all bubbles eventually burst, and just about every market, from equities to crypto to trading cards and real estate is heinously overvalued right now and due for correction.
> The fact that the market ran up its stock price till the P/E went stratospheric doesn’t make their core business any less viable.
Of course the highly inflated stock price doesn't make their business less viable. It does make it more viable! They've raised large amounts of capital at very favorable terms.
In any case, the point is that the price is quite dettached from those "good fundamentals".
I don't understand who can afford these with gas prices so high. NFTs aren't some typical trading card market. I think it's mostly tax evasion and some wealth posturing.
You create an NFT sell it to yourself, the price tanks you deduct it from your taxes and then sit on a pile of USD coin in another wallet that no one knows about.
I doubt there is any jurisdiction in which one could deduct losses on a collectible of any kind, let alone an NFT, let alone unrealized losses.
The real use is, you have $X dollars that you acquired by doing crimes. You want to buy a yacht with that money, but you don't want the authorities asking questions. So you sell an NFT to yourself, attribute your crime money to getting lucky in crypto, pay taxes on it, and poof! You're on a boat.
I collect everything. I don't have the room to be a Horder, but my compulsion to collect us strong, with the exception of money. I should be collecting money, but that has been too hard for myself.
I started off collecting snails. I would put them on my Tonka Truck, and they were workers. The guys on the roof were the bosses. The others placed all around the truck bed had their own function. As a kid, I was lonely and the garden snails were my friends. (My mom made me put them back after playing.)
I then went into marbles. Kindergarten through 1st grade I was crazy about marbles. I loved them all. The ceramic ones were my favorite because I imagined they were rare, or had a long history behind them. I imagined they were made in a magical exotic country.
I then grew up, and life got in the way. My collecting days were put on hold.
In my twenties, it was first edition books, and any old advertisements, or advertising.
I then got into collecting watches. I never went crazy, but I knew I needed to stop.
I stopped by learning Watchmaking. Even then--I went from collecting watches to collecting tooling.
I'm now so depressed I don't collect anything due to a lot of reasons.
I guess it was about the hunt? Then again, I still look at some of my old books and can't imagine someone mot seeing the value. Someone tossed a 1st edition of The Deep. It was not price clipped, and in mylar wrap. I am still astonished the original owner didn't see the value.
I don't have a point. I just know I'm a Collector at heart. Maybe if I had a more full life, my addiction might be different. It was never a addiction. It was just a passion.
I'm the guy at the beach looking for shiny rocks, even when I was physically passable, and should have been paying more attention to my girlfriend.
I still remember Ingrid saying I came to the beach to be with you, and not collecting small pieces of agate.
I just want to say you sound like a cool and interesting person. I have noticed a lot of similar patterns in my life including struggling with depression. I'm not really sure the point of my reply, but I felt compelled to make it. Reading your post made me actually smile. I don't know maybe it's just feeling like I'm not alone. Thank you.
The book Sapiens: A Brief History of Humankind by Yuval Noah Harari [1] explains the hunter-gatherer is deeply engrained in our cultural behaviour because it helped with our survival.
Recently parlayed all of my 1st edition Pokémon cards into Magic cards so I could play at local stores. Been a great way to meet new people in a safe way during the pandemic and to collect.
At the beginning of the most recent lockdown in my city I had been introduced by a friend to magic (specifically commander), and I had played enough with him to have started to be annoyed at how often I was losing - so I went out and bought a couple of decks. My girlfriend and I were immediately hooked, and have been playing every other day since then (2-3 months now). Now that the lockdown has lifted I am able to play with my friend, as well as introduce the game to other friends. It's a lot of fun and I've only scratched the surface of the game; as an example we have only been playing with preconstructed decks, while most people will design a deck and purchase the required cards. I think the game design really lends itself to being enjoyed by programmers: building a deck is about looking for combos/synergy between cards, high level play requires knowing the exact way that turns resolve and how/when you can respond to other players actions.
I think there has been a lot of stigma around tcg for a while, but the truth is it is just fun.
As an aside, my gf has been collecting Pokemon cards. The high premium for a Charizard is known as 'the lizard tax' by the community, which I think is hilarious.
Ah I wish I had a friend like you. I wanted badly to get into the game, and I tried to get people into it without success. My spouse tried once but it was most definitely not her thing.
I went to a little tcg bootstrapping event at my local game store (way before covid), and that was fun, but everyone else there was such a pro that I felt really intimidated and out of place.
Anyway now I have a little pile of cards in a drawer :(
It's not quite as fun, but you can play MTG: Arena on a phone or laptop to learn the game enough to keep up. It's free, and made by the same company. You only have to pay if you don't want to play enough to earn cards, or want to build decks with a lot of rare cards (which are not common to see in Quickplay).
There are also online platforms that let you use real cards to play online. It's like Zoom, but with health counters and you aim your webcam at your board.
Or, if you go to an event, tell people you're new and ask if they want to play a jank game. Jank decks are basically decks that people like for reasons other than it being effective, i.e. a deck of cards they just like the art on, or that uses an effect that's fun but not very good. That should bring the power level down to where you can actually compete.
Also, don't be afraid to ask people to break something down. I've never seen anyone be upset about that. The Magic rules are 400 something pages long, and most cards have had online rule clarifications added to them individually. No one is expecting you to just "know" how everything works.
It's a fun game, I wish you luck in finding a group! I think Reddit has an active MTG community, you could look there.
Commander is very fun and really requires some brain power/strategy to win (I won once because the two remaining players accidentally took fatal damage, blocked creatures that died killed the attacker and the trample damage killed the defending player). Commander focused cards (not being reprinted anytime soon) have been going up in price during the "pandemic". I was playing commander at least several months before the "pandemic" began and I have been hot/cold with my enthusiasm for it because of price spikes and targeted buyouts. So, if you are getting into commander and want to buy into a custom deck it could be getting more expensive in the future.
I actually got out of Pokemon cards when the "pandemic" began. Almost every store was sold out of packs (I'm in Japan btw). This has been the case the whole time and I have a feeling that Pokemon cards produced during this time frame aren't going to hold value (a lot of product has been opened and when it floods the market it will be worth little).
Go to your local MtG shop that runs Friday Night Magic and ask(people playing, not necessarily the staff). Find a Facebook group local to you and ask. You can just say you're looking to get rid of the entire collection if someone is willing to price it up for you, if you don't want to go through the effort yourself. That's how I see people selling their cards usually.
> Go to your local MtG shop that runs Friday Night Magic and ask(people playing, not necessarily the staff)
Make sure to ask the store employees if this is okay first. I know my store at least has a "trade only" policy on the property. I am not sure how common this is however.
Either prepare to sell the whole thing for much less than 5k, or sell individually (which takes a lot of effort). I put my collection on eBay and ended up trading them for a bunch of SGI machines. This was back in 2003 or so. I had a lot more pleasure from these machines than the cards (worth much more, I est 3k EUR back then), but financially it wasn't a good trade. I am going to give away my Star Wars collection (cards from 4 to 6 only) to a Star Wars fanatic who is fan of 4 to 6. Its also why I knew spending money on World of Warcraft was not worth it (you can sell your entire B.net account only), same with Hearthstone. These are CCG but not tradeable. NFT are even more worthless. They give you nothing.
Off topic, but I quite like the choice of using a domain name for a single blog post. Who needs IPFS - we already have real content-based addressing here.
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[ 2.6 ms ] story [ 173 ms ] threadhttps://twitter.com/elonmusk/status/1457064697782489088?t=t-...
His brother just sold a large chunk on Friday... totally not coincidental.
He's also frequently made jokes about how overvalued the stock is... definitely knows it's totally mispriced/overvalued.
Makes sense to diversify a bit either way. It may tank bigly before he can even sell though. I'm sure many will try to front run. But who knows, let's see.
2. Short TSLA
3. ???
4. Profit
For example a lot of the more common rookie card prices have already deflated back toward something closer to sane prices. Take the Greg Maddux 1987 Leaf rookie card - that went up ten fold in less than two years, primarily during the pandemic bubble, and has now deflated by around 60-70% from the peak of the bubble. That card (and numerous others like it from other prominent players of the past 40-50 years) is unlikely to quickly reinflate back to the peak, it might take five or ten years to get back there.
What isn't going to dramatically deflate, are the exceptional cards. The higher quality 1952 Mantle cards are not going to drop by 60-70%. The 1986 Fleer Jordan rookie in a PSA 10 is never going back to the days when it could be purchased for $10,000-$30,000. A high-end Lebron James rookie (seven figures) isn't likely to roll backwards by 70% from the peak. Those days are forever over. There is a lot of money willing to pay up for such cards. The high-end part of the card hobby is and will remain closer to behaving like the art market than like the mainstream cards-from-packs hobby.
And the giant premiums that card companies can command for high-end boxes, they're not giving that up if they can avoid it, they have no interest in rolling that back to the old days. Granted, Fanatics and their new monopoly may screw everything up.
There are a lot more PSA 10 quality cards sitting in collections ungraded than have been graded and are “in circulation”. But now that those top cards are 6-figures and higher, nobody in their right mind is going to put one of those things in the mail and not get it back for 12-18 months (the grading firms aren’t even accepting cards now anyway). Something worth $1 million once graded is worth $1000 ungraded. You can’t insure it for $1 million until it’s graded. Chicken v. Egg.
Borrowing as much fiat as one could take and dumping it into assets was the rational choice, unless you were speculating on some black swan.
This. I had a conversation with my boomer father the other day in which I tried to explain that the availability of cheap consumer debt means that individuals can now operate like mini hedge funds, making highly leveraged bets on everything from stocks to crypto to trading cards. Used to be that housing was the only highly leveraged investment available to the average consumer (20% down = 5x leverage).
To be fair, aggregate debt and interest rates don’t really tell the whole story, because credit providers are a lot more creative as well. Anecdotally, I routinely get offers for promotional low- or no-interest balances on unsecured credit (i.e. credit cards) that overlap such that I can fairly easily maintain a condition of “negative working capital” in excess of my annual income for maybe 2% APR.
Those offers aren't new either. They were around 20 years ago. And back then you could stick the balance in a savings account to arb a few percent positive interest.
Plus the existence of high inflation makes people demand inflation hedges way more, so why wouldn't they go up in price faster than inflation?
Even Limited Edition Warhammer books have been selling for absurd prices. Many books are selling for 10 to 20 times RRP. It’s been very odd to see
Only the wealthy with nothing better to spend a marginal % of their capital on, the middle class (good income) indebting themselves up the balls, and speculators looking to profit from the prior two categories, are buying these things at these crazy prices.
Some poor folk might fall in to the speculator category, but they're taking huge personal risk on what they hope is a ticket to riches.
Same goes for Bitcoin imho
What we saw in 2020/early 2021 was really a classic bubble - FOMO buying pushing prices to unsustainable levels. Then throw in the grading shutdown caused by backlog of new collectors and investors sending in millions of garbage base cards for grading, clogging up the grading companies, plus profit taking from the insane prices, and we get the pullback we saw in Q2.
Like everything else, the collectible market comes down to supply and demand. Focus on rare cards - numbered cards, colored paralells, refractors etc…the supply is much lower and are generally safer bets because collectors are always chasing them.
I have cards for certain players, teams or inserts that I buy to collect, if I can make money on them great, if not I enjoy having them in my personal collection (PC).
Then there are cards I’ll buy anticipating a rise in value with the intention to sell in 6-12 months or longer. Typically this involves buying rare cards or good players of sports in off seasons when demand dries up, so for example I was buying a lot of big name football cards over the summer when the football news cycle was slow, and recently moved to buying basketball leading into the NBA season.
I never got the idea of being a hobby collector in modern times. Nowadays, everything is available on the Internet for sale, so completing the collection is only a matter of coughing up enough money. How is that interesting or exciting?
I can still understand collecting items which aren't mass produced for the purpose of being collected - things such as history/war memorabilia, rare books fro XIX century etc. There, every item can be unique and obtaining them can demand more from the collector than just typing in their credit card numbers.
The one thing I can truly say I "collect" is rare, first/early edition pre-standardization works from a specific Irish dialect. For me, though, it's not so much the collecting as having access to these books for the rich, natural (.i. non-standard) language that's contained in them. Eventually I might extend it to modern authors from the same dialect, but getting access to these older works is top priority.
I know some people in the actual hobby collection scene for certain trading cards (as opposed to people calling themselves collectors but actually want to just flip for profit). The items these people collect are things such as rare misprints (with population sizes of below 100), physical printsheets (which sometimes have a population size of 1) or promo cards given out for very specific events (such as the creators wedding), again with single- or double digit population sizes.
From what I gather the appeal is partly just seeing weird things from the history of a hobby you enjoy. It‘s also a kinda nice way to connect with other people in the collection hobby, since when you run into something wacky you can just call up Jon who collects that exact oddity and bring it to him in exchange for a nice dinner or something.
reading this, I honestly can't believe the separate higher standards levied at NFTs. that's the whole thought.
NFTs are effectively the new reading cards. It’s gonna explode then implode, but I know a lot of people are getting into it.
But hey, I could be wrong.
but to say more about what you are missing - without drawing a different conclusion just adding an extra variable - is to look at how issuers act. In the trading card world, many series have continual mints from the issuer with no transparency on the supply. People haphazardly buy sets and hope they get a card that has been found to be rare, while the issuer gets continual revenue. (just describing one behavior for comparative purposes)
what is typical of NFT collectibles - which, by the way, is just a subset of the NFT market and is analogous to trading cards, distinct from the one-off art pieces in headlines that have formed most opinions - is that the issuer mints one set. and the community discovers the rare attributes on their own, within hours. in this model, its the same pool of money as the trading card communities would have, except it pools towards a known quantity of collectibles, compared to the same pool of money always buying at MSRP from an infinite issuance and hoping for the best. that leans towards rationale behavior, at least at the same standard as trading card collectors. for the issuer, they get royalties from the NFTs changing hands in perpetuity (at least when traded on the marketplace smart contracts which allow that). and for the industry, there is never a backlog of authenticators so they're extinct now. that doesn't mean the prices are sustainable. but that standard is also being separately applied to NFTs as an entire concept, when such nuance is applied to trading cards: some cards have continual interest in any market and 99% of others are ignored forever.
you can still have the same conclusion, I'm not here to play devil's advocate, I'm just here to say "hm that's not what's going on".
there is nothing to extrapolate from any of it, only to understand the behaviors of the market
A friend of mine said in late 2020, w/r/t the explosion of NFTs, that we'd look back on it from the great depression of 2028 as the moment when the dollar became worthless, although most people hadn't realized it yet.
This market certainly went crazy price-wise but then, as the author pointed out, tanked. It basically tanked because everyone started collecting the cards. Like any collectible market, it mainly took off to begin with because no one was collecting these things and keeping them in mint condition. The realization of that then created oversupply.
I can't speak much for that market but in the past year Pokemon in particular has exploded, to the point where the the ratings companies where so inundated with submissions that they had to stop accepting them.
The Pokemon market seems to have cooled but prices for mint condition first edition cards still seem to be pretty high. It's impossible to predict where this market will go just like any collectible market because it's so driven by market sentiment.
As someone who knows little about trading cards or "markets" in general I guess, how is this different than any other market? Seems like everything is driven by market sentiment, even things like toilet paper from time to time.
Trading cards (and cryptocurrencies) are not like that. You can only make money if someone else is willing to pay more for it.
Correct me if I'm wrong, as I don't know much about stocks, but doesn't that require the company to have/pay out dividends? Otherwise you do require others to buy the stock when you sell it.
> Trading cards (and cryptocurrencies) are not like that
Don't know enough about trading cards to say that you're incorrect, but you're definitely wrong about cryptocurrencies. You can do various things to earn more without loosing your current amount, from staking (Polkadot), loaning (Compound) to getting rewarded for providing liquidity (Uniswap) or for doing nothing at all (Algorand).
If you make money along the way, as opposed to when you sell, then yes. The prevailing corporate playbook seems to prefer stock buybacks over dividends, which accomplishes roughly the same thing but only triggers tax liabilities for the stockholders who “cash out” by selling.
Obviously there is a limit to this process, but in a frictionless world of perfect financial knowledge a stockholder would always prefer the buyback approach since it defers taxes on the gains as long as possible.
And yes, a company would have to pay dividends, which is what I was hiding in my "in principle" parenthetical.
But from this list, and the net profit and net profit margin figures, they seem to be mostly ordered correctly.
https://companiesmarketcap.com/
Nevertheless:
"The basic issue is that right now everything is dumb. You can complain about that, or you can embrace it. In investing in 2021, “my channel checks and fundamental modeling suggest that this company will grow earnings faster than the market expects so I will buy it with a price target 20% above today’s price” might sound smarter than “this company’s chief executive officer just tweeted a picture of a dog at Elon Musk so I’m going to buy out-of-the-money call options expiring Friday because the stock will go up 200% today,” but the latter approach happens to work better right now.
https://www.bloomberg.com/opinion/articles/2021-11-04/macy-s...
The fact that the market ran up its stock price till the P/E went stratospheric doesn’t make their core business any less viable.
If Tesla stock crashes, it likely won’t be because of anything the company did, but because all bubbles eventually burst, and just about every market, from equities to crypto to trading cards and real estate is heinously overvalued right now and due for correction.
Of course the highly inflated stock price doesn't make their business less viable. It does make it more viable! They've raised large amounts of capital at very favorable terms.
In any case, the point is that the price is quite dettached from those "good fundamentals".
You create an NFT sell it to yourself, the price tanks you deduct it from your taxes and then sit on a pile of USD coin in another wallet that no one knows about.
The real use is, you have $X dollars that you acquired by doing crimes. You want to buy a yacht with that money, but you don't want the authorities asking questions. So you sell an NFT to yourself, attribute your crime money to getting lucky in crypto, pay taxes on it, and poof! You're on a boat.
I collect everything. I don't have the room to be a Horder, but my compulsion to collect us strong, with the exception of money. I should be collecting money, but that has been too hard for myself.
I started off collecting snails. I would put them on my Tonka Truck, and they were workers. The guys on the roof were the bosses. The others placed all around the truck bed had their own function. As a kid, I was lonely and the garden snails were my friends. (My mom made me put them back after playing.)
I then went into marbles. Kindergarten through 1st grade I was crazy about marbles. I loved them all. The ceramic ones were my favorite because I imagined they were rare, or had a long history behind them. I imagined they were made in a magical exotic country.
I then grew up, and life got in the way. My collecting days were put on hold.
In my twenties, it was first edition books, and any old advertisements, or advertising.
I then got into collecting watches. I never went crazy, but I knew I needed to stop.
I stopped by learning Watchmaking. Even then--I went from collecting watches to collecting tooling.
I'm now so depressed I don't collect anything due to a lot of reasons.
I guess it was about the hunt? Then again, I still look at some of my old books and can't imagine someone mot seeing the value. Someone tossed a 1st edition of The Deep. It was not price clipped, and in mylar wrap. I am still astonished the original owner didn't see the value.
I don't have a point. I just know I'm a Collector at heart. Maybe if I had a more full life, my addiction might be different. It was never a addiction. It was just a passion.
I'm the guy at the beach looking for shiny rocks, even when I was physically passable, and should have been paying more attention to my girlfriend.
I still remember Ingrid saying I came to the beach to be with you, and not collecting small pieces of agate.
[1] https://www.goodreads.com/book/show/23692271-sapiens
As an aside, my gf has been collecting Pokemon cards. The high premium for a Charizard is known as 'the lizard tax' by the community, which I think is hilarious.
Interestingly, Magic is turing complete.
https://arxiv.org/abs/1904.09828
I went to a little tcg bootstrapping event at my local game store (way before covid), and that was fun, but everyone else there was such a pro that I felt really intimidated and out of place.
Anyway now I have a little pile of cards in a drawer :(
There are also online platforms that let you use real cards to play online. It's like Zoom, but with health counters and you aim your webcam at your board.
Or, if you go to an event, tell people you're new and ask if they want to play a jank game. Jank decks are basically decks that people like for reasons other than it being effective, i.e. a deck of cards they just like the art on, or that uses an effect that's fun but not very good. That should bring the power level down to where you can actually compete.
Also, don't be afraid to ask people to break something down. I've never seen anyone be upset about that. The Magic rules are 400 something pages long, and most cards have had online rule clarifications added to them individually. No one is expecting you to just "know" how everything works.
It's a fun game, I wish you luck in finding a group! I think Reddit has an active MTG community, you could look there.
I actually got out of Pokemon cards when the "pandemic" began. Almost every store was sold out of packs (I'm in Japan btw). This has been the case the whole time and I have a feeling that Pokemon cards produced during this time frame aren't going to hold value (a lot of product has been opened and when it floods the market it will be worth little).
Make sure to ask the store employees if this is okay first. I know my store at least has a "trade only" policy on the property. I am not sure how common this is however.