Q2 for the U.S. just had a -32.9% GDP drop, the worst in history compared to the Great Depression, which only saw a 30% drop. I know the U.S. isn’t the center of the world, but it is the main focus of the Pokemon TCG collectors market.
Within this GDP statistic drop, there are 4 variables.
HOUSEHOLD SPENDING
GOVERNMENT SPENDING
BUSINESS INVESTMENT
EXPORTS & IMPORTS
-43.5% Services -15.9% Nondurable Goods (Disposable Income +42.1%)
+17.4%BRRRRRRRRRRRRRRRRR
-49%
-64.1% & -53.4%
Looks like an overall mix of people not spending as much + going out as much due to travel restrictions, therefore more people are becoming shut ins and entering the hobby space (now with more disposable income), which in turn creates less overall supply and greater demand for out of print product.
Money printer going BRRRRRRRRRRR on stimulus checks and unemployment boosts, and people seeking alternative investments with their extra disposable income? are the main forces driving the current market.
With no foreseeable unemployment stimulus in sight, my hands are starting to grow weak on my PSA collection right now.
@mrrawb, trimming the fat on your collection to tide over a difficult period is fine. But it’s probably an unpleasant way to collect as well.
If you need something to sustain yourself, are there any jobs that you could take to get over the period? Unemployment amongst fresh university grads is more common in my country nowadays, so they turn to odd jobs/apprenticeship-type programs for the time being.
I’m not exactly jobless, or even strapped for cash, I’m just trying to point out probable factors that are causing the market conditions we’re currently seeing and provide a bit of insight to better project the future based on predicted Q2 GDP data.
@mrrawb, ah, I see, it is because you mentioned this:
“With no foreseeable unemployment stimulus in sight, my hands are starting to grow weak on my PSA collection right now.”
As with Pokemon cards, Sports cards, and the S&P500 - it would’ve been impossible to predict those trends at the beginning of COVID-19. Interestingly, MTG didn’t experience such explosive growth, although there’s something to be said in terms of the difficulty in acquisition of graded Alpha/Beta versus the acquisition of graded 1st ed base.
If you’re implying that due to an increase in disposable income and interest in alternative investments will lead to further market highs, which would therefore make the next couple of months a good time to sell, that is possible. Although, I would factor in how easy/difficult it is to acquire a card in PSA 10 (or a card, even) e.g. it’s harder to find a PSA 10 Southern Islands Mew than a PSA 10 SV Charizard
While I agree with your point that people have fewer traditional avenues to spend their disposable income on, hence an increased interest in collectibles, I’m very hesitant to apply an enormous macro lens to people’s individual lives. It’s why I hate when people associate a climbing DJIA with a booming economy. Almost half of Americans don’t own a single share of stock and will receive no benefit from a company buying back its stock and having a strong quarter. They’re not receiving any dividends and their employment is not directly tied to a few tech companies having record profits.
There’s a massive difference between “If you combine the income of every American, the total disposable income has increased by $1.5 trillion” vs “The average American’s personal disposable income rose 42%” vs actually nailing down the increase in disposable income for people who needed it the most. It is too easy to spin data this way.
Same crap was pulled with a recent tax bill. “The average American saved $XXX”. Sure if you divide the millions and billions of dollars saved by the mega rich to all tax payers you get a nice big “average” but the reality was nowhere close to the number for vast majority of the country.
The goal of my post was to show that the economy is literally being held up by the CARES act + future stimulus programs right now. When the stimulus taps inevitably run dry, and if lockdowns are still in place, we’re probably going to run into some deep financial shit and the speculative collectors market will surely take a hit.
I don’t see collection pieces going down at all considering the trillions that have been injected into the economy as well as a possible 2nd stimulus later this month. Our cash isn’t worth as much as it was a few months ago. Right now crypto, metals, and even Pokemon cards are better than cash.
This. Been reading articles that say the Fed is going to implement policies to create inflation the next few years.
Traditionally inflation has affected consumer goods and services. The past few months, we have seen spikes in values for real estate, stocks, various asset classes. It is arguable that we have already been experiencing inflation just in investments as opposed to consumer goods.
At first I thought the Pokémon price spike was ridiculous. Now I’m wondering if we are just interring into inflationary times for assets in general.
We have been in QE infinity (asset inflation) since 2008. We took a brief break in 2018. The traditional inflation boogey man has been shot and buried.
