Bubbles
82FootballWaxMemorys
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Courtesy https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp
Bubble, in an economic context, generally refers to a situation where the price for something—an individual stock, a financial asset, or even an entire sector, market, or asset class—exceeds its fundamental value by a large margin.
Financial bubbles, aka asset bubbles or economic bubbles, fit into four basic categories: stock market bubbles, market bubbles, credit bubbles, and commodity bubbles.
Bubbles are deceptive and unpredictable, but understanding the five stages they characteristically go through can help investors prepare for them.
The five steps in the life cycle of a bubble are displacement, boom, euphoria, profit-taking, and panic.
The damage caused by the bursting of a bubble depends on the economic sector(s) involved, whether the extent of participation is widespread or localized, and to what extent debt fueled the investments that inflated the bubble.
Some may believe this may somehow not apply to collectibles, but in effect they are a commodity. Of course debt is probably not the same factor with cards as other financial investments but I do wonder how many folks have maxed out their credit cards buying Junk Wax era PSA10's 
Sooner or later the piper will get paid,
The question at the moment is, which phase are cards currently in; Boom? Euphoria? Or have entered "Profit Taking"? My opinion is they are on backside of Euphoria...
It's the singer not the song - Peter Townshend (1972)
Comments
I hope it bursts soon. Paying $45 for a 1983 Topps pack is no fun.
"just be nice, blurry. just be nice"
History has proved me to be 100% correct! #Vindication
It's the singer not the song - Peter Townshend (1972)
Profit taking was way cool---- and decimated my basketball part of my collection. After blowing a couple grand caught up in the hype I decided to move "profit taking" to 2 dividend ETF's & money market that currently produce around $200 a month. Cards are fun, but don't produce income IMO. I don't think we've hit "panic", lots of folks still holding, hoping and refusing to admit losses. Trout, Brady, Lebron come to mind.
For what I’m collecting (hockey) the bubble burst a couple of years ago. Some buyers/sellers are still in denial.
I found this in my email while searching for a some card records -
PSA 10 - 1989 Topps Traded KEN GRIFFEY JR #41T Rookie RC
Sale price: $11.50
Quantity sold: 1
Sale date: Oct-18-11 18:38:08 PDT10/18/11
The card is now around $150. That is 21% annual return over the 14 years.
Not too shabby. I don't think many investments can match that record.
It was a nice return but there were single stocks with way better performance and looking at the results of a single card is no different. What are you comparing the 21% YoY to?
What is the return of the S&P 500 since 2011?
If you invested $100 in the S&P 500 at the beginning of 2011, you would have about $605.98 at the end of 2024, assuming you reinvested all dividends. This is a return on investment of 505.98%, or 13.91% per year.
Are we in a bubble? Yes, all assets are in a bubble now, but as they say the trend is your friend.
Taking profit from time to time is the only way to manage the bubble risk. I can't think of an asset class that hasn't had bubbles.
Comparing one card to an index is not a great comp. do TSLA or NVDA and report back
Also need to consider the cost to buy, store and liquidate cards. They can’t be held in tax free vehicles, don’t pay income (this can matter in retirement ) and transactional fees are obscene. A high value collection needs insurance or vault services.
10-20% to sell 5k in sports cards, I can sell 200k of the SP500 for 9 bucks. And can do that in the time it takes to make this post.
I love collecting sportcards and would agree that they have been a nice alternative asset class. Some of my stuff has done well, some is underwater. Almost all is a PITA to sell and after selling fees most of my stuff - hockey - hasn’t returned that much compared to my financial stuff.
I'm not comparing stock to stock. I'm comparing two asset classes. The SP Index is what I use to measure if an investment is worth the risk over the index. Real Estate has holding costs as well as it doesn't stop people from investing in it.
We have been through at least 2 bubbles and a couple of sell-offs since 2001 when I joined. And somehow we are all still here. If you spend time worrying about this instead of enjoying the hobby, you may want to get another hobby.
I don’t worry about any of this stuff, I am a collector. My investments are in RE and equities. But again you can’t use a single card on a single date as a proxy for a ROI conversation.
Let’s do a Rose RC purchased for 100k in 2020 vs NVDA. The NVDA is worth about 2M, the Rose maybe 150k?
Just messing around fwiw, I think the right cards have done really well, but against individual flyer stocks not even close. Against a card index? Haven’t seen one since PWCC stopped maintaining their indexes when they stopped under performing the SP 500.
First post of course was my reaction to the pandemic bubble while we were in it. On this and other threads. myself and others were scoffed at simply for pointing out basic economics.
Outliers of course will always exist, however lasting money is seldom made on the occasional outlier.
For those that spent more 300,400,500,600 on 1990 Leaf Frank Thomas I say HA HA! FMV is now slightly below 2019.
Same can be said for 1990 Fleer Michael Jordan's ad 400,500,600,700,800 while not below 2019 level its not longer all that much above it.
A possible moral is; avoid High census Pop Junk Wax card on the occasion they get "hot" as they will drop again and never scoff at someone looking out for you best interest in laying out that for you.
It's the singer not the song - Peter Townshend (1972)
You are comparing one card to an index. One card is kind of like one stock. You could measure the performance of the 1989 Topps Traded set in PSA 10 to the S&P index and see that a Jamie Moyer PSA 10 auction is at $8 with a day to go and say that set or that card was a terrible investment in the past 14 years. Griffey is like one of the best stocks in an index in 2011 So comp to Google, 16 to 184. Close. Meta not available until 2012 but 31 to 713. Meta wins. NVDA 34 cents to 132 dollars. Not close. Big win NVDA. You have to pick your stocks right and pick your cards right. Griffey over Moyer you win big NVDA over CSCO you win big. I'd say use the NAS ETF as a comp too because it performs better than the S&P over time. Can your card beat the QQQs or the best of the megacaps?
With stocks and cards though it is heavy on the timing. We can say should you buy and hold this for 14 years? Yes or no. But we have to keep our options open. Was it smart to buy TSLA 14 years ago? Absolutely. Was it smart to hold it for the past 3 years? It was not. Gotta know when to hold them know when to fold 'em.
I had a PSA 7 Hank Aaron rookie that I may have sold in 2021 taking a meager profit. Thinking this money would be better placed in tech stocks. The tech stocks promptly nosedived in 2022. Sold a lot of stuff to raise cash for that beatdown I received. Felt like one of the worst decisions I ever made. Hank may have reached 25K after I sold. But that card and many other cards may have been in a kind of pandemic bubble that burst and its value went down significantly. Then from Oct 2022 to now, the NAS has close to doubled. So think it all depends on when you are keeping score. 14 years ago to today. 2022 to today.
I feel that we had a card bubble that popped maybe somewhere in 2022 2023. Everyone at home, places closed and social distancing and keeping occupied with trying to win auctions and build a collection. A lot of people doing what we have done for a long time to keep entertained until they can go back to what they used to do. Demand decreases and card prices do as well.
I feel like that is one of the few bubbles I have noticed. We may be setting up for a vintage unopened bubble to be popped. It makes sense on principle but probably not. I think there is value in leaving it unopened and appreciate the box or pack. But think the old idea of there could be something incredibly valuable inside there so it should be expensive is losing something. Unopened prices stay on the moon but the value of what is inside is decreasing with stricter grading.
I am thinking along these lines now. I look at a 48 Leaf Ted Williams in a Heritage auction and I am biased because I love the way the card looks. But purely business I can say I think Meta will do better than Ted Williams in the next two years. So no on Ted.
https://finance.yahoo.com/news/invested-1000-jpmorgan-chase-co-133008576.html
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If you had invested in JPMorgan Chase & Co. ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in February 2015 would be worth $4,764.21, or a 376.42% gain, as of February 10, 2025.__
On my advisors recommendation, 12 years ago I purchased 10K of JPM. Lot better than the Griffey card in that it's highly liquid, I can put in a sell and have my funds right then with a few mouse clicks. In addition for me the taxes are lower than on selling a collectible. Which is why I never do. That does not even factor in having to give up 10-20% of card sale to the Auction "house".. Not to mention time it takes to sell and receive funds. Then you have quarterly DIVIDENDS! No Griffey Jr trading card pays those!
Reason I mention that one stock is late last week I sold 20% of my stake. when it hit what as of this writing is is all-time closing high.
Anyhow comparing Trading cards to Stocks in my opinion is apples and oranges territory.
It's the singer not the song - Peter Townshend (1972)