Interest lags inflation on the way up and on the way down so it should balance out into a small premium over time. I think cash is a bit underrated as part of an investment strategy, the returns are small but it’s as risk free as you can get with government backed deposits and in times of credit crunch it allows you capital to take advantage of opportunities. Obviously you’re not changing your life with cash, but I don’t think the 5-8% you get from responsible investing is life changing either.
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But it´s not just that. Pokémoncards are slowly becoming a staple in investing, like precious metals and art. The more ´big guys´ moving in, the more this becomes solidified.
This is actually terrifying - especially the comparison to art which has historically been a gated community for the rich. Pokémon cards being a gated community for the rich feels absolutely dystopian.
But I can’t deny that feels like the direction the hobby is headed. I REALLY hope we’re wrong, I’d hate to see Pokémon turn into a Great Gatsby-style symbol of extreme opulence and unbridled greed. If that does end up being the case, future generations won’t see Pokémon the way we did and fall in love with the franchise. Instead, they’ll view Pokémon as superficial vanity symbols that convey high status, similar to the way people see Rolex watches.
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It does, but for people who grew up with the cards recently, it probably does less. Also, it´s very much tied to higher PSA grades. Your average Pokémoncard would still be available to everyone.
It´s definitely possible. But the truth is that if Pokémon keeps going like it is going (they have become pretty good at that), or if Pokémon get´s backed more and more by big players that don´t want to lose their money and have the means to guard that, I don´t really see it happening. It´s just that so many people are watching the market day in day out. If you do that, even if your initial motivation was solely money, you start to get engaged. People fighting over what set is better. You don´t do that with something you care less about. 30/40 percent corrections here and there, sure, but so far the line has always been up. Pokémon is just so great of a concept/has gotten so big that more and more people/companies are starting to notice. It´s hard to stop a snowball like that.
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5-8% is life changing. Play with a compound interest calculator and see what small, consistent investments do over a long enough time horizon.
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Interest lags inflation
Double-clicking. What do you mean when you say this?
This is an old chart but I think it illustrates the theory well. You can see how during the late 70s the CD rate was below the inflation rate as both were rising, but the CD rate peaks later and remains higher as both were falling during the 80s.
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Thank you for the chart, this is helpful. One thing I’d push back on is that cash is underrated as an investment strategy. While the spreads (b/t CODI and CPI) were at times large during Volker’s time at the Fed, they’ve narrowed significantly as the Fed is very quick to react to changes in CPI.
I would also argue that CPI has a tendency to understate inflation through continuous changes to the underlying “basket of goods” they base it upon and through “shrinkflation” where companies give you less product in their standard service offerings (or a product made with cheaper materials than it used to be crafted with).
Cash is great to have on hand for buying assets when prices drop, or if you want to preserve capital without too much purchasing power erosion. But I don’t think I’d ever consider cash in a CD, treasuries, or HYSA an “investment”.
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Anyone remember that time when TPCi switched from plastic to cardboard inserts in their Hidden Fates tins in later print runs, cos demand for product was skyrocketing and people were complaining about the waste?
LOL
Not really, considering in-print booster packs - the most basic entry products into the hobby - are already $8-16 on market. Right now the average in-print pack is $10, and it feels like we’re transitioning to $15. At this rate, what does the future hold - $25 average for Winds & Waves packs??
If the hobby continues to move in this direction, then in 40 years when millenials like myself are old and gen z is middle-aged, this is all Pokémon will be to anyone under the age of 50 - a superficial status symbol like Rolex.
The rate of both shrinkflation and skimpflation is terrifying. Just look at food. I sold wild halibut steaks at 229kr a kilo in 2013, it’s now 649kr for farmed. Pork isn’t properly bled anymore, it already smells when you buy it and you have to do the job of separating the blood protein yourself when you prepare it (the stuff that gives hermetic food its rubbery consistency, looks like grey egg white which is pretty much what it is.) Beef isn’t far behind.
Convenience food is reformulated for profit on not even a yearly basis, grams are stealthily cut at the same frequency, frozen vegetables are now shavings and the ones that aren’t cost as much as processed meat, some generational staple products are straight up just shelved because the margins aren’t there, the big chain stores do illegal things to undercut each other, prices aren’t listed online anymore, prices are centrally regulated 24/7 via electronic spot price markers as if you’re buying stocks, nigh on every possible natural resource except corn and soy (“natural”) seems to be more endangered by the second. You’d think the world was going to end.
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Maxing out your traditional roth or backdoor ira from the time your 18 until retirement is an undefeated strategy. Point blank. Tax free compounding interest is a hell of a drug.
IMO these buckets should be filled before anybody buys and or flips pokemon cards. I bet a large portion of individuals paying these record prices for cards are doing just that. Its house money at that point.
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Food has become extremely low quality. The last 3-4 years has seen a dramatic shift in quality and freshness. Half the stuff you get at stores, especially places like Trader Joe’s, will be rotten a week before sell by dates. Items you used to be able to store for weeks now are already rotten at purchase or rot rapidly.
Potatoes and onions are rotten on the shelf, shallots moldy inside, etc. Chicken is pumped full of liquids to inflate weight. On top of that prices are up 100-150%.
10yr T bills and 30yr are still rallying. Things are getting very very ugly.
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Based on the additional responses to others you’ve added, I get the feeling that we agree on the underlying causes, but maybe not the semantics?
Economy Bad > People want to escape bad economy > How do I escape bad economy? > Oh yeah, I used to like this Pokemon thing > everybody else seems to still like this Pokemon thing > Nobody can afford a house > Stock Market is boring > Where do I put what limited cash I have? > I will now spend 300%+ over card comps from a year ago > Surely line will go up forever > everything is fine in the world
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2020s USA seriously feels like 1780s France/1920s Germany. It’s insane. The other day when I was shopping at local CVS, the assistant manager was telling me that the only foods she can afford are the food from CVS that she gets an employee discount on, and 711 pizza. Mind you, this wasn’t a kid, she looked to be somewhere in her late 30s-early 40s. And she was the ASSISTANT MANAGER, not some random cashier, stockperson, or entry-level supervisor.
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Some of the world’s largest stocks are trading like penny stocks. I can’t remember that ever happening in the last decade or more. Timing the market used to be a calculated process, now it is memes and astrology.
The system was gate kept by complex terms, math, filings, etc. A lot of non-traditional people since Covid have been heavily educated on the system and realized that it is basically all fake. Investors take your 401k, lend and invest it with extreme risk, reap all the rewards, and you get less than S&P returns plus potentially a huge tax bill.
We increased our deficit ( devalued each dollar in our pocket ), by such insane amounts that we may need an entirely new currency like what happens historically ( fourth turning ).
The projections are absolutely terrifying, and only lead to one historically repeating solution.
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Love this perspective, a lot. Makes purchases ‘easier’ yet curious as to why it’s easier.
I´m confused. Is this what you think I´m saying, or is it what you think. It´s not exactly what I meant, especially the last three parts, but I´m not entirely sure I understand what you´re saying.
True. Rudy (Alpha Investments) has some good takes on this. He believes (and I kind of agree) that Pokémon will keep products scarce, to keep it wanted. At the same time I think they will also make sure that prices won´t go too overboard.
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Well, the solution to this one is pretty easy. Don´t eat pork. It´s bad for you and bad for the pig, given how we treat these intelligent animals.
Other than that, I agree. The quality of things like potatoe-chips has gone so far down that I don´t really like eating it anymore.
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Well, the solution to this one is pretty easy. Don´t eat pork. It´s bad for you and bad for the pig.
Agree with the latter but the former, I disagree with. Heavily processed pork is harmful to health outcomes but lean pork isn’t bad for you. The logic of, “well if things are getting worse in that market, simply don’t buy the products” could also be applied to Pokemon. If the shiny cardboard is too expensive, don’t buy the products.
We shouldn’t have to accept that the only option for shitty business practices undertaken by many players in a market is to give up.
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Yeah, it was more about the pig. If I inspired one person to stop eating them (mostly because of the way they are treated) that´s a win in my book.
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