Are we in a bubble?

Today I shared this on Instagram:

https://instagram.com/p/B_hBfg_lmGM

The PSA 9 Neo Genesis 1st Edition Pichu price has gone up from $46 to $520 in less than 8 months, an increase of $2.05 per day.

This isn’t a one-off. The PSA 9 Jungle 1st Edition Jolteon price has gone up from $110 to $403; the PSA 9 Fossil 1st Edition Haunter has gone up from $45 to $290; the PSA 9 Base Set 1st Edition Machamp has gone from $19.99 to $191.50.

This only seems to affect 1st Edition WotC holofoil cards - WotC unlimited have gone up slightly and WotC promo cards have barely moved. Non-WotC cards appear to mostly be around the same price point they were 8 months ago.

As a seller, this is fantastic, but a as a buyer I’m really put off from buying anything.

Has Covid-19 created a bubble? Are these inflated prices sustainable?

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Does anyone have any dinner ideas? Looking to try something new. Thanks.

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Yeah Pokemon GO bubble

What in the world ahaha

Right, I forgot that I had to wait a few hours until you lot go to sleep before trying to have a productive discussion about the hobby on E4. Thanks for filling this thread with Discord-level nonsense.

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After every significant (and slight) increase in price the same question has been asked, the answer has always turned out to be no.

That’s not to say this time isn’t different, but ask yourself why would this time be different?

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Last Neo genesis box earned 12k. There are 12 heavy packs in a box. If each Holo was a Psa 9 pichu at the “bubble price” of $520, that is about half of the box cost ($6,240), before grading fees.

So in relation to box prices, no. Also the people buying are most likely not speculating and just want the card. Hence why supply is so dry.

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I can think of 4 reasons why this time might be different:

  1. PSA 10 prices haven’t moved nearly as much;
  2. These are cards which have had a very similar price point for almost 3 years;
  3. It only affects a specific set of cards rather than the TCG as a whole;
  4. Most major countries are currently imposing lockdown measures, keeping people furloughed whilst still actively paying them.

I can’t imagine a world where if I were to buy any of these cards today they’d still be this much in demand to warrant a similar price in 1 year from now.

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These definitely could be correction prices, but why now? I believe Neo Genesis booster boxes were floating around the $10k mark 8 months ago as well, so why was it still possible to pick up a PSA 9 Pichu for $46 back then compared to today?

I’m sure if this is a supply issue. There are 6 of those PSA 9 Pichus up on eBay right now along with 5 PSA 9 Jolteons. It’s not like these are cards which haven’t appeared in a while.

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1st ed neo gen boxes were around 5k (possibly less) 8 months ago if I remember correct. I had one listed for a while which didn’t sell.

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This. Box prices climb. Raw supply evaporates. Price inertia keeps the value fixed at an unsustainable position for 3 years.

Demand goes up, buyers disregard the inertia that’s been holding prices down. A more realistic and sustainable price is established. No bubble necessary to explain this.

Maybe the market overshot the equilibrium point and you’ll see a slight correction. Overall though, I see mostly a correction to a more realistic price than a “bubble”

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@pichufan, Americans spending their stimulus wisely on essentials I see.

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$46 to $520 is a massive jump though, right? And for that particular card it’s not like demand has dried up at all. Right now there are 8 raw, 2 PSA 9 and 4 PSA 8 Neo Genesis 1st Edition Pichus I can see on the eBay UK site. As someone who checks eBay frequently for new Pichu listings, I can’t say I’ve noticed that this is less than any other point in the past 2 years. Obviously I can’t speak for other Neo Genesis cards.

Even if the booster boxes were $5k 8 months ago, with regard to @smpratte’s example of 12 PSA 9 Pichus at current price being half a box’s price: $46 for for 12 PSA 9s is just over 1/10th of a $5k box. There’s a big difference between 1/2 and 1/10. Logic would surely dictate that if a booster box doubles in price, the cards should also double in price - not go up elevenfold. The old normal price for a PSA 9 Pichu in that case would have to have been around $200, not $46.

@pichufan, If you had one to sell how much would you sell for, if people are paying close to $500 would you sell yours around $200?

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Are we in a bubble? Idk. Nobody here can see into the future. I guess we’ll know for sure if everything drops back down.

What do I think though?

Box prices are high. Like really high. Pack prices? Also high. Really high. Are people buying them? Yup. In fact, box breaks are huge right now, bigger than they have ever been. These boxes/packs from the past aren’t going to magically replenish themselves. And this was true months before COVID-19.

So what does this mean for the cards inside those packs? Well, the simple fact that the chase cards (holos) of the set in a 9 were like 10 times less than the cost of a pack of that set now, and barely a fraction of what a box goes for, change was bound to happen. And I mean like a pretty big change.

So why now? Well, everyone is at home, so now they are focusing on their hobbies. Not to mention, whether they want to admit it or not, many people are somewhat inclined to go on a bit of a spending spree when they don’t have anything else to fulfill themselves with – for many, nothing says getting your dose of dopamine like convincing yourself you just scored a great deal on a new card. I mean, who doesn’t love getting stuff in the mail? And when some collectors are trapped at home and don’t have a normal life/schedule to keep them in check, several are going to be even more inclined to consult themselves by buying up materialistic items, in this case, pokemon cards.

So what does this mean going forward? Well, there is a possibility that people over extended themselves during this time, in which case they might be forced to sell out and some cards will re-enter the market. Ultimately though, I think the demand will already be there to pick them right back up. These old cards aren’t going to be entering the market in mint condition and at this point we are more so just cycling through the same cards again and again, but slowly they are getting placed into more permanent homes. I could see a small decrease come about, as maybe people speculated the demand to be higher than it is at the current prices. Do I think we will see a giant crash though? Not really. COVID-19 may have expedited the process, possibly by a lot considering the immense growth, but I don’t think it will be quite as simple for the prices to come back down. The demand is growing as people yearn to acquire these cards for their collection and the supply is only decreasing in the process. Packs aren’t flying off the shelves. The net supply on the market for “reasonable” prices is pretty only going to keep going down over time.

In short, the fact is prices went up. They were going to go up. COVID-19 pushed the process along. Prices could go back down a bit, but collectors and sellers will be ready to catch them if they fall. As long as the sufficient demand exists, over time, prices will climb.

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$46.
~$10 to grade
~$4 shipping
~$6 in fees

$26 profit

~$350 per pack
1/3 holo rate
Expected condition is PSA 9

$1050 cost

What’s gonna happen?

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Bubbles are easiest to predict in hindsight of course. But here’s some food for thought.

On the demand side, the “fundamentals” for Pokemon are strong. It’s a popular, global franchise that’s been around long enough, and consistently enough, to appeal to multiple generations now. And it’s still popular with kids today so not close to dying out. There is more pokemon media to consume than ever before. Video games, the tcg, “plushies”, movies, tv shows, etc. Right now you might even say there’s a bit of a perfect storm Driving the demand side at this moment in time. A hollywood mainstream movie release last fall, a new nintendo switch video game, then COVID coming right on the heels. People have lots of free time to consume the above media and also pursue hobbies. These factors make the interest in pokemon very current and “stoke the flames”.

It is often discussed here, but the aging of the fan base and growth in earnings over time is another demand factor. Let’s ignore the new Pokemon fans for this part and focus on the original fans. If the average age of the original 1999 “pokemon craze” fan base was a wide range like 8-14 (a guess), you have the middle of that curve approaching some prime, but not yet peak, earning years. This is a very real phenomenon that I’ve watched play out in my lifetime across two other collecting hobbies, comic books and MtG, both of which I have followed since the early 1990s. In summary, analyzing the demand side paints a pretty rosy picture for the hobby long-term.

Examining the supply side is easy. Of the cards you referenced, they are finite. If you layer growth in demand dollars (volume of fans times spending power) against a very finite supply and prices can only go up.

But to get to the bubble question you have to consider some other factors too. If “sustainable” prices are right where supply and demand meet, where are we now? Are we mis-interpreting supply, or is a large increase coming? If we are strictly talking about WOTC-era cards, I think we can assume supply is fairly constant. Supply is not going to move drastically and “pop the bubble”. What about demand, and here we are talking about demand dollars. Are demand dollars artificially inflated? What could cause demand dollars to be artificially inflated? To me, the main risks here are speculation and over-extension. By speculation, I mean people from outside the hobby coming in to try and invest or make a buck. By over-extension, I mean people buying cards with money they don’t have via debt, or money they’ll realize in hindsight they needed for other things.

So are we in a pokemon bubble? Are speculators here? Definitely new people (like me) to the hobby. But I think most of the new people coming in have genuine interest in both pokemon and collecting, and are shifting dollars from other hobbies. That’s healthy for the hobby. I don’t think we have many people coming in to “take positions”. So speculation doesn’t seem rampant to me, but are people over over extended? I worry about this one. The deep, global recession we are entering into has the potential to greatly over-extend people, even if they aren’t today. But, dose of calm. Insulate yourself by not spending money you don’t have. If you stretch, do it for vintage, higher grade, mainstream (not niche) parts of the hobby. The vast majority of “modern” product in any mature hobby are terrible investments. Don’t set yourself up for panic selling. Collect, don’t invest, in Pokemon. That said, it does have the potential to be a great investment. The medium-to-long term fundamentals are fantastic.

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Sell? Hell yeah, show me the money.
Buy? Hell no.

This is why I believe we could well be in a bubble. When lockdown measures are relaxed the same people will likely be less inclined to spend money on their hobbies, right?

So this could just be a very long overdue correction for all of the WotC sets which only really affects the PSA 9 and lower grades and not so much raw or PSA 10?

If you think it’s in a bubble sell all you’re willing to part with and re buy when it dips. I dont want to sell my collection but if it continues rising like this at some point the market will value most of my cards more than I do so I will sell them. Hell it already does for most of them I just value the completion of the set so haven’t and probably won’t.

I’m in a position where I have most of what I want, but even for those who don’t a similar thing applies. Buy what you value more than the market does. If everything seems too expensive then it is what it is. I like the thought of getting some alpha magic, but the little that I had I sold a year or two ago when I just didnt value it as much as everyone else. I’ve always sold PSA 10 pokemon because I never have valued them as much. I chose to be a PSA 9 collector due to the extreme value I found in them.

Given what 9s are doing now I may become a PSA 8 collector soon. Hell maybe I’ll just wind down all the way back down to binder sets.

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