Market Corrections and Awareness of Pokemon

Hello, with prices (for cards like 1st holos PSA 10, GS PSA 9 and 10, Shining PSA 10 and 1st 9 and 10) rising consistently at a rate that is quite high, are the higher end set graded cards going to have a market correction? Awareness for the higher end accept of Pokemon has recently grown, but even with that how long can the market continue with no correction (Similarly, will Pokemon ever have a correction?) Likewise do you think that the high rate of growth for these cards will continue, slow, or stagnate? Thank you for your responses.

When I say market correction, what I mean is a drop in value/price with no apparent reason (I do not know if this is the correct definition, so I thought I would add this).

I think a market correction is due at some point – people are beginning to buy things purely out of speculation at this point… and in a bullish market – which is dangerous since demand for a speculative item is purely based on the idea that the item will be worth more in the future – there’s no utility provided to the buyer aside from the hope that the item will increase in price in the future. It’s akin to the housing bubble and the soon-to-be bitcoin bubble (unless it becomes a superior currency, etc.) where people are buying with the intention of selling in the future once prices stagnate – and when they do, items start to flood the market, demand drops because the speculation is gone, and prices plummet as a result.

I’ve noticed that the past few years of pokemon collecting have been very different from before, where many people are entering the market to buy pokemon cards hoping that they’ll give them a high return in the future (i.e. there is a firm intention to sell the card in the future) as opposed to buying pokemon cards because of the aesthetics/nostalgia/competitive play. A good example is the flood of “price check” questions on eFour that prompted a sticky post – the uptick in these questions has been apparent.

A good question to ask yourself in order to gauge what kind of economic environment you’re in is “why is XXX worth this much?” – there’s always a reason why something is worth so much – you might not know the reason or all of the important reasons or your reason might not turn out to be the right one – but a lot of times price crashes come from things that are always noticed in hindsight.

2 Likes

Yes of course the market will correct. The main reason is basically demand and supply.

We see a huge increase in prices due to the large amount of demand entering the market this year due to people seeing this as an alternative investments, trying to reconnect to their chilhood or simply just love collecting in general. Most cards will increase in value over time as demand goes up > supply. However, a short term surge of supply will reduce the price of an item at that time period as there is not enough demand.

A great example is the PSA 9 Shadowless Charizard. 6 copies were listed on eBay for $3k while there were 4 on auction after the $2.6k sale. Yeah of course there were some $2k++ sales happened but in the end, supply outweighs demand in this case and now they are going for slightly under $2k. Will that price stay the same in the next few months? I don’t know but there is a lot of great characteristics of the card that would suggest it will see a lot of growth in the future.

There is no such thing as a drop in price with no apparent reason. The main forces in this market is supply and demand, and those are what cause markets to correct.

1 Like

Not sure it’s that simple…people have ALWAYS bought things “purely out of speculation” when it comes to Pokemon…so in that regard, it hasn’t changed. This hobby has always been an avenue for investing as much as it has been for collecting for many people.

You also can’t put all collectibles under one umbrella; the more “premium” items that OP mentioned specifically (high graded 1st Edition Base, Gold Stars, Shinings) can’t really be compared even to some other WOTC product and certainly can’t be compared to Pokemon tcg product of recent years. In that regard, the items OP mentioned will never really experience a “plummet” when it comes to price…they’re already extremely scarce items with consistently higher demand than supply and should always have a consistently high relative market value.

Right now, there’s tons of demand for older product, specifically the ones OP mentioned, and I only see that demand increasing with supply consistently decreasing…we don’t even know yet how much larger the nostalgia-driven audience will grow as more people come into financial stability and enter the collecting fray…

I’d really try not to compare the items OP is talking about with current market trends that encompass newer items, since these older items have established norms/prices/have already gone through bubbles and realistically won’t be “flooding the market” since people aren’t really doing much speculating with these anymore; their price plateaus are already consistently high.

A good case study is a PSA 9 1st ed blastoise. It was sitting around $800 for a while and shortly after the 9 charizard spiked, the blastoise saw a bump from like $800 to $1500 in basically a couple weeks.

I have a few speculations on why the price basically doubled so quickly but its kind of irrelevant here. The point is the demand suddenly increased sharply and drove the price up. There were a few sales around the $1500 mark but since then the most recent sales have been close to $1300 or $1200 (going by memory here, I could look up exact numbers here if anyone is interested).

This is a quintessential example of a market correction. There was a short burst of unsustainable demand that created a sort of micro-bubble and the price has crept back down to a sustainable point.

What is sustainable now will be different in a few years though. These cards that are high demand now will always be in demand. One day $1500 will be a steal for this card (imo)

2 Likes

I completely agree here, however my statements are a generalization that can also be applied to premium products – currently it’s not the case for most premium products (as it’s more experienced collectors who are currently participating in the high-end items), however, the rapid growth of these cards, along with the fact that we are in a bull market, makes me think that some of these items will take a hit at some point – granted they’ll still be worth far more than any other cards in the Pokemon TCG.

I always err on the cautious side and take into consideration past errors with regards to specific markets, which is why it leads me to this conclusion. I’d be more than happy to be proven wrong though, lol.

Will Netflix return to $60?

Will Google return to $100?

Will Bit coin be worth nothing again?

Speculation is in every investment. Do you think every individual buying stocks is Warren Buffet? Sure utility companies, blue chip stocks, or obvious large industries with huge momentum are probably going to carry that inertia forward; like that largest grossing media franchise, the name slips my mind currently, Digemon?

The word “speculation” is generally used in Pokemon to express, “I’m trying to find a reason for prices to decrease”. Not saying that is necessarily occurring in this topic. However, I am all about markets self regulating; I would just like to hear an actual reason why? Saying speculative 1000 times doesn’t mean anything when literally entire markets are built around speculation. Regardless, Collectibles will always have inflection points, where something like ITT Tech stock won’t.

5 Likes

This is essentially what I was trying to capture – except I wonder how a recession/bear market will affect the price of these cards, since Pokemon collections will probably be the first to go when money is needed, lol.

Netflix stock going up from $60 → today is because of data-driven production of hit TV shows whereas Alphabet stock going up from $100 → today is because of its domination in tech, such as the Google search, during a time when the internet is ubiquitous and AI is seen as the hot new thing. They have also seen consistent growth that looks more linear than exponential. Also what @garyis2000 mentioned!

My biggest concern is that I don’t think we’ve seen the Pokemon TCG encounter a recession environment – will people hold on to their collections and forfeit something else, or will their Pokemon cards be the first to go (I’m going off a bit on the market correction topic with this).

Overall the market corrects itself over time, however it may be delayed/etc. due to heightened speculation. Speculation > Nostalgia right now for cards. There’s no concrete example since you can’t really distinguish between the two (at least I don’t think you can unless you can pick apart purchases driven with the intent of owning a card vs. purchases driven with the intent of selling the card in the future), but the overall attitude towards pokemon collecting has definitely changed now that pokemon has proven to be a profitable venture over time.

The market has been correcting for months and continues to right now.

Pokemon has proven that “market correction” doesn’t only go in one direction.

The aforementioned Google, Netflix, and bitcoin are all younger than Pokemon and hold little personal attachment.

2 Likes

Lol, are we going to enter a nuke-filled dystopian future soon or something? Why are people having to ‘forfeit’ their collections? In that case we’d all have bigger things to worry about than taking a “loss” on Pokemon cards we “chose” to hold onto. :wink:

It’s also hard to apply ‘data-driven’ concepts (and I say this as someone who works for one of the FAANG companies) to a market that is driven significantly by emotional attachment, which the collecting hobby certainly is (not just in Pokemon).

Again, you’re oversimplifying the nature of the “premium” collectibles I mentioned earlier; even IF people had to “forfeit” their collections (we’re talking super scarce/valuable 1st Ed Base Set 10 holos, Gold Stars, Shinings, all PSA 10), we already know their place in the market, demand is still going to be there and there will be buyers lined up to happily take that forfeited collection out of someone else’s hands…now, will that affect the overall market for those cards? Sure, probably by a small amount, but certainly not enough that these already-super-scarce products are going to experience a price plummet as if all of a sudden the supply was exponentially greater than the demand…

The older, the rarer, the minter, the better, as smpratte would say. If you tick those boxes in this hobby, you don’t really have to worry about “market correction” or “speculation.”

I guess if Ryan Reynolds pulls a Harvey Weinstein as Detective Pikachu and gropes someone and tanks the franchise…MAYBE then we can worry… :stuck_out_tongue:

I was around during the Housing Bubble crash. Prices were pretty consistent. There was more supply. However, extrapolating data from a completely different era won’t do much.

The examples in this thread are more in relation to certain cards establishing value than an entire market correcting.

1 Like

Stocks like Google or Netflix are not based on personal attachment like collectibles, but how well the company is doing. Pokemon International could be very well financially but this does not necessary translate into cards being worth more.

1 Like

Even if the market corrected in 2018 and our cards went down in value I wouldn’t worry. Unless you plan to sell your collection in the next 2-3 years you shouldn’t be concerned with a market correction. Investing is inherently a long term strategy and market corrections are pretty insignificant on a long timeline.

2 Likes

Exactly this. My only wonder is: is there a significant amount of value currently tied up in speculative pricing, or is much of it retained and rooted in nostalgia? (more rhetorical but feel free if anyone has any input).

The irony in this distinction/discussion: To a conservative investor, this entire market is considered speculative.

2 Likes

True true, but conservative investors yield little return since they’re scared to project out into the future (or unless the realistic premium tcg market just stagnates in the future :wink: ). It’s pinpointing all of the underlying factors and their significance/weight, haha

Correction happens every day all day long every time an auction closes, but I gather that’s not what you meant. So… The basis for your correction assumes two things: 1) that there’s instability in the market, which there isn’t. And 2) that the current market is detached from inherent value (also not happening)

Every time a fluctuation happens this topic comes up because the forces that dictate value are invisible, but are always there.

And by inherent value I mean the emotional value and characteristics of value that people place on the cards.

1 Like

Regarding long term strategy (are we talking like >5 or 10 years?), nobody really knows.

What if WW3 happens? Severe global financial crisises? Massive changes in governments? Changes in the way how we live? Severe pokemon scandals? Bad endings? The list goes on.

But if life continues exactly or almost like this for next every second, minute, day and year, like you expect, then probably.

For sure. There is always uncertainty in any market.