Money supply is also just simply much higher in today’s markets which would mean you need an excess of 80-90% of volume leaving for prices to reach lower than that. I suppose if you truly see 95% of people leaving the hobby then 2018 prices don’t seem unrealistic. That scenario just feels a little extreme in my view.
2 Likes
At that point you would once again become the majority and you would have more control over market direction, much much more so than current time.
This would actually be a very neat thing to see!
The opinion of saying “everything went up” can be easily researched though if you just go look at past historical data sales prices for vintage/key cards. The prices outpaced the overage YoY rate by an insane amount. Not many places you can put your money and get 7-10x returns in a single year, legally that is haha.
Yea, its just a major hassle when you have so many cards and sealed product 
Ideally, I would want something where you can pick a card or search an entire set and just see at a glance what prices were in any given month of any given year. Pipedream though
1 Like
Hrm, I am interested in this idea that due to increase money supply, that out weighs demand from buyer interest.
Do you have any examples or views deeper on this topic? From my experience, buyer interest out weights overall money supply. If you are talking about inflation and more money in circulation preventing retest of older prices, I am definitely interested in hearing your view on this.
Honestly, I am surprised something like this does not already exists? Have you tried looking into it?
Maybe someone here in the forum has insight that they can share, maybe it’s a paid only thing, which would make sense, most of the time, people pay a subscription for access to that type of analytics.
I appreciate these types of posts, it is always interesting to see different opinions on the state of the hobby, especially from people who justify things instead of just saying “card will go stonk” or “everything gonna crash.” However, I think a main problem with your approach is that in the entire essay you’ve written, unique factors for Pokemon are barely mentioned. It seems like you’ve written an economics lesson on speculative asset classes as a whole, which is commendable, but in my opinion shortsighted. Trying to eliminate the “collecting” aspect of cards from any discussion of investment is also not accurate in my view, because collecting is what will drive prices. In order to understand investment, you have to understand what drives collecting.
For example, you seem to place the entirety of the responsibility for 2020-2021 rises on hype, federal monetary policy, and raises in some job sectors. With the benefit of hindsight, I agree that these in part may have driven some rises, for example the late-2020 base set 1st edition mania was accelerated by Logan Paul and influencer marketing. I still believe that absent these conditions 1st ed base would still have risen significantly, but I do want to acknowledge the contribution of some of the factors you’ve listed.
However, there are also significant factors that are unique to Pokemon that led to the rise in interest and prices on 2020-21, which are important to understand. It’s also why by-and-large, Pokemon cards started increasing in value before the pandemic truly kicked in. I’ve listed some of them here:
- Demographic factors: people who grew up with the early eras of Pokemon cards are now reaching an age where they have stable jobs, clear expenses, and larger amounts of disposable income. This led to a rise in Base Set/early WOTC card prices in 2016-17 with the 20th anniversary, and we were starting to see that again in 2019 with Neo era cards. (T17 anyone?) In 2020-21, I believe we saw continued growth based on Pokemon fans with disposable income returning to the hobby and purchasing cards.
- Pokemon cards are fun and exciting. In the midst of a pandemic, people aren’t just looking for speculative asset classes which they can throw their money into. They’re looking for escapes, ideally escapes which are pandemic-safe. Enter Pokemon cards, a nostalgic, exciting, well-known product with a market already highly optimized for online shopping.
- Pokemon shifted their product to cater more to collectors in 2020-21. In the past, Pokemon focused nearly exclusively on TCG players. However, in 2020-21, this shifted and Pokemon focused much more on collectors. From the introduction of alt arts and CHRs to sets like Hidden Fates, Shining Fates, Celebrations, collectors suddenly had a lot more reasons to buy modern Pokemon cards.
These are just a few examples, but my point is that you can’t just explain the rises with wider market factors. You have to look at the unique situation for Pokemon. All this is to say that I disagree with your conclusion that people are going to leave en masse because they are uninformed investors who will get caught holding the bag. This just isn’t the reality of the average Pokemon collector (yes, the average purchaser is a collector not an investor). Will prices continue to drop? Sure. But I’d bet an incredible amount of money that we will never get back to pre-2020 prices for the majority of cards. On some modern items it would not surprise me, but for things like high grade vintage cards, the game has changed so much.
19 Likes
I confirm, he is the best chef I know! Oh wait…
1 Like
I appreciate this response 
So lets dive into this!
Regarding removal of collecting from market analysis:
The reason I believe that we should remove the collector sentiment from the investor sentiment (philosophy) is because, a collector will view their purchases differently than a person buying to make money. A collector will hold even as their purchase depreciates in value because it’s rarely the economic value that drove them to make the purchase. Unless, you are a savvy collector, they will gladly sell and rebuy when prices are more favorable.
Collecting is the base, the root, the tree of life as some may say. However, speculative investors are like vultures that cling to the branches on the tree of life, looking for easy prey to take advantage of, that failed on the journey to climb the tree of life. You can’t have speculative asset classes without a base, and I agree with you whole heartedly on this point.
Regarding what drove the rise:
It is important that we differentiate between unhealthy and healthy growth here. Unhealthy growth is not sustainable and majority of events where unhealthy growth, especially times of rapid volatility upwards or downwards, retest of previous lows/highs occur, with price ranges before the unhealthy growth kicked in.
Why does this happen?
Well, we first must understand to remove our biases from investment. We must remove our preconceived ideas that we understand the market and we know what will happen and what causes. All we can do is estimate to some degree and apply some for of analysis.
Collecting in Pokémon needs to be treated as a speculative asset. The same about people reaching mature age to buy cards can be said about people growing old and buying cards or houses. Those are speculative markets and they have the same issues I described, and that market cap is much larger than pokemon or TCG in general.
Now, I am not saying that all the growth experienced was unhealthy, I am sure some healthy growth was achieved; however, even with Pokemon products being created that catered to the collectors, I don’t see that justifying 7-10x+ ROI in a few months/year or so. This is insane growth, if you went to a hedge fund and told them you could give them 10x returns in a year they would sign up immediately. It’s insane not to take that deal; however, at what risk?
You could go back in time look at this period of Pokémon go or 2016-2017 and look at the rate of growth and compare it to today, did you also see across the board back in those times, 7-10ex returns on product across the board for the most part (I’m not talking about cheap 1$ products but higher end vintage).
Regarding market movers:
- Collectors in times like these don’t matter, they wont move the market.
- Majority who at this time, I am betting are flipper/investors/quick buck chasers, will control the market more than collectors.
- People leaving enmass, will be realized because the growth is unhealthy, I mentioned earlier go to whatnot right now and 75% of the peoples selling TCG and Pokemon are new. Go to eBay, its new, go to discords, its new. These people are here to make money, heck I say a guy earlier on whatnot having 20k on his desk in slabs he didn’t even know the era they were from.
It’s important to remember that majority controls market not the minority. I am sure some growth was realized, but retest will most likely happen due to the unhealthy rate of growth and that’s why I said earlier, these short term investors are actually bad for the overall growth of the asset class. They will buy in, when they get spooked and dont see the same gains they will liquidate. They do it in all classes not just pokemon.
Regarding never touching before pre 2020 prices:
I find this one hard to believe, due to current economic conditions major sectors across the board are getting hit hard this year and in the second quarter most sectors are currently bleeding money on their balance sheets. Banks are losing money, home builders are losing money, automotive industry is losing money, tech giants are seeing their stocks drop insane amounts. If they can fall and hit highs before 2019 then nothing is preventing pokemon and in fact I have a few points on why I think it will happen even more.
- More avilabaility of vintage sealed. Because due to the hype/unhealthy growth, more sealed vintage got ripped and more sealed got graded and more is available on the open market then before 2019.
- All the volume/interest will die once the short term investors (vultures) leave because they realize their won’t realize 7-10x returns anymore. Once a few get scared it’s like a domino effect.
- Return of market directional power will return to long term collectors/high even investors and balance go back to normal and healthy growth will be realized.
- Long term sustainability of unhealthy growth will kill your market faster than anything else, I promise that. It’s seen in all industries.
Also I do agree with what you are saying it makes sense, I Just don’t think the points you bring up justify the rate of growth and explain what I am seeing. If only 20% of people streaming/whatnot/YouTube/eBay/discord were new and flippers/short term investors, then I would say exposure to potential decline / retest would be minimal but when you have greater than 50% of your entire market on short term interest from people trying to make money well… you are at the mercy of what they decide to do sadly.
UNLESS, you have like extremely extremely rare product that is worth an ungodly amount of money and it is genuinely rare. You will most likely be less impacted because that is a sellers market for truly rare product.
I think we will just have to agree to disagree on the percentage of people who are flippers/investors. One word of caution would be not to confuse the people who are the loudest with the people in the majority. There is a ton of noise on social media about investing and flipping and making money, but I doubt that translates in significant numbers to people solely purchasing things to invest. It is easy to point out the egregious exceptions but much harder to figure out what the norm is. That really only comes from deep involvement in all aspects of the hobby.
One thing people always seem to miss out on is the sticking potential of people who join. In my view as a forum moderator and active participant in the hobby for years, 2020-21 brought so many new, serious collectors into the hobby, and that shouldn’t be discounted.
21 Likes
I think the chance of prices going back to 2018 levels is incredibly unlikely (for items with good fundamentals, at least). Not only is the demographic 4 years older (meaning much higher levels of discretionary income), but starting salaries in most professions have seen significant increases. The amount of available capital is just significantly higher now than it was 4 years ago. Pokemon cards are not unique in having seen recent, significant increases in value.
8 Likes
Genuinely curious: how likely do you personally think it is that we see these prices again:
Because, in my view, the chance of us returning to these prices is 0%. This is not to say that prices can’t drop, but I just can’t imagine prices on items like the above going back to 2016-18 levels.
10 Likes
I can tell you that i personally will not allow that to ever happen again so no need to fear
In fact everyone on e4 would buy before that happened again
5 Likes
I’m not fearing for that. As someone currently offering $8k for a Ruby box, I’d love nothing more than to see prices reach those levels again.
3 Likes
Alright alright its time for me to weigh in. I cant sit around any longer. @sturdyboards have you considered the DN multiplier before presenting us with your findings?
1 Like
I’ve been waiting since 1999 for prices to go back to 2018 
9 Likes
Well you may get to see it soon
1 Like
I think possibly you misunderstood what I was saying.
I am asking for you to show me the growth of the years your mentioned, 16-17, then show me the growth now, and explain to me how is is “healthy” market momentum and its sustainable long term at this rate.
I am fully convinced the majority are people buying to quick flip. The amount of short interest out weights collectors. I watch streams constantly and see thousand and thousands get bought and people don’t even know what they are buying and the sellers have no idea either, what they are selling. They just go to eBay then sell around that price.
You say its easy to point out the egregious but harder to point out what the norm is. I don’t agree, the market value growth will tel you what the “norm” is and what was experienced recently is not “norm”. If it was normal we would see insane growth YoY at the same rate, yet you look at historical data and that is not the case.
Everyone here should be happy for a decline in price, it means cheaper product, unless you bought a bunch at the top, over exposed your self, and are nervous about future economic issues. Just today, I think I seen on LinkedIn, another 1,800 people laid off from Microsoft. In one day.
I am looking at this purely as a investment vehicle, not a collection/hobby/have fun and buy cards.
If you look at literally ANY OTHER investment vehicle, you will see the same, moments of solid healthy growth YoY, moments of unhealthy growth followed by extreme volatility until the market normalizes again.
Here I will give you an example.
Lets say:
- 10 of us sold apples for 1.50 - 2 each day.
- People realized we were only paying .10 cents for each apple.
- 20 new people started buying apples.
- The amount of apple available for purchase, because these are special scarce apples, not enough to satisfy so price starts climbing.
- Now we pay more for our apples and so does everyone else. This continues for a few months
- It reached a point where apples are now selling for $10 and thousands and thousands are trying to join to make money selling apples.
- People who were once able to buy are now losing their jobs, no longer able to buy apples. Interest dies off.
- All those new thousands of people selling apples over exposed their selves by investing to much into the apple games and now have to sell and liquidate because they are scared. Remember emotions play a big part.
- Market resets back to normalization rates of 1.50-2 and maybe goes a bit higher to correct for the natural growth that should have been realized instead of the moments of insane unhealthy growth / volatility.
- Rinse & Repeat with any speculative vehicle in history.
This is literally like, go read any investment book or anything and these points are all valid. Basic market principals.
Unhealthy extremely volatile growth, is followed by retest/normalized rate of growth of what should have been YoY. Unless the company goes to shambles and collapsed but this is something, we are looking at an entire market.
The only people who would be upset about short term drops in price back to lows with retests then long term HEALTHY growth back to normalized rate of YoY growth would be those who over exposed them selves during the times of unhealthy growth. Everyone here should be extremely happy for what’s coming ahead. Thats the part I am most confused about.
It’s almost like people are made in short term prices will drop.
@sturdyboards: I don’t disagree with your analysis – I just think you’re mistaken about the proportion of people involved in the hobby that are just in it for a “quick flip.” In late 2020 or early 2021? Sure. But prices have been declining on most items since then and we’ve seen a significant number of people leave the market. Of the people involved now, I’m not convinced that a majority are in it for a “quick flip.”
Maybe that’s true of people watching the streams you checked out, but I don’t think the people watching those streams are a representative sample of people involved in the hobby.
Again, I’d also be genuinely curious to hear your thoughts on the likelihood that we see $500 EX Series boxes again in the next 5 years. It’s just something that I can’t envision, but maybe my perspective isn’t clear-minded.
2 Likes
Hey! Thanks for taking the time to interact and share some of your insights, it is appreciated!
Now lets see.
Regarding Quick flip percentages:
I could be wrong, maybes more around 50%, at this point its still dangerous waters though, not as bad as having 75% of your market exposed to vultures haha. But still worrisome. If you think its more of only around 20% then that’s probably more on the conservative side and I would say their actions will have minimal impact on the future momentum of the overall market.
Re $500 EX Series Boxes:
I don’t know off the top of my mind on this, from 2016 that is some years ago, I was originally basing my view off highs of 2018 right before the pandemic and everything kicked off.
Sadly I don’t have a crystal ball and can only look at other highly speculative markets, look at how they worked in 2018 leading up to 2019 and make my analysis.
- Factor in healthy YoY growth.
- Understand what Unhealthy growth looks like
- Try and understand what the “average” over a few years would look like then just roll with that trajectory after stepping back on the 30 year scale. This is not PERFECT and is an extreme light overview but general gist.
That will tell you what you should be able to expect. If it 10x in 2 years and every 2 years before that it only went up 30% in value well. You know the right answer lol
1 Like