Opinion about current market conditions (July 2022)

[candle]

Hi! Wanted to chime in here and challenge you on the “healthy vs unhealthy growth” aspect of your perspective. This is probably going to be very hard for me to communicate effectively but I will try! forgive me if I’m unclear.

If you zoom out and look at YoY appreciation for pokemon as a whole, but don’t have a ground-level understanding of the mechanics of Supply in vintage pokemon, then I can see why the steep increase in price might look “unhealthy” or otherwise abnormal. Especially when compared to other investment vehicals that do NOT share the same physical limiting factors that contribute to supply inelasticity.

I think your oversight here is that this steep increase actually has a rock-solid basis in the inelasticity of supply for vintage graded/sealed pokemon. This spike was a correction, and what was actually “abnormal” was how flat many segments of the vintage market were for decades - despite the immutable facts about condition/sealed scarcity.

The EX Ruby Sapphire box example that @zorloth shared above is a good one to support my point. That booster box is unlikely to be meaningfully rarer today than it was when he purchased it at $450. Yet, the price has skyrocketed! Is this due to hype? everyone wants one of these boxes now, simply for shallow/profit-motivated reasons? OR are the people who are genuinely interested in buying/selling a box like this much more attuned to how scarce such a collectible is? I would argue the latter is true in this case.

To look at this from a graded card perspective: In 2018, I purchased a majority of my English Tyranitar PSA 10 set for roughly the following prices

• Neo Discovery 1st Edition - $250 - current population 59
• Neo Discovery UNL - $120 - current population 49
• Expedition Holo - $260 - current population 51
• Expedition Reverse - $45 - current population 37
• Aquapolis Reverse - $120 - current population 25

I was a “new collector” in 2018. I got my first big boy job, had disposable income and was playing Pokemon GO so I decided to check out graded cards on a lark. When I saw 1st edition tyranitar rookie PSA 10 for $250 it was a NO BRAINER for me. I did 0 research. Didin’t know what a loose pack cost. I didin’t know pop reports existed. Still I knew right away that this was a steal at the time. Why? because achieving a PSA 10 Gem mint grade on a 20 year old piece of paper is harder than most people understand.

Needless to say, the prices for all these cards have gone berserk. 3 of these are in the 10x growth range that you mentioned was unhealthy if you consider today’s current market prices. Between 2020 and 2021 graded card prices shot up. You again attribute this to new, shallow interest but as a collector who was buying in 2018 and still buying the same cards in 2022 I can say: that these new prices that I am paying, and that my competitors in these auctions are paying, are a reflection of our growing, guttural understanding about the true effort, skill and luck it takes to acquire these collectibles. This is the IV (inherent value) that is backed into these vintage collectibles. The sweat equity required to produce another copy. Have you tried to grade 10s? Its no cakewalk.

This is what I mean about the supply for vintage being inelastic. Let’s say the pops for the cards above doubled from 2018 - 2022. They went from low double digits to mid double digits. That is still nothing compared to the number of people who love Tyranitar.

I’m sure I don’t need to explain the concept of inelastic supply, but when it is present in a market, the effect that changes in Demand have on price is magnified and extremely sticky. The veteran collectors in this market had a wake-up call when new collectors entered in 2020 and said “yeah I’ll pay $500, $1000, $5000 for that lmao, how else am I gonna get it? seems fair” and all the price-anchoring and assumptions about value that market veterans had got blown out of the water.

I could point to this exact sort of correction happening in Magic in 2017, and then AGAIN in 2020 and AGAIN in 2022 as people grapple with the true scarcity of reserved list cards but this post is already long enough.

TLDR: Your perspective on the growth is that its relative severity is evidence that it is unfounded and unmoored from the fundamentals of the collectible itself. My perspective is flipped - the spike is a reflection of the fundamentals of the market. A sober realization about what really goes into acquiring a vintage card/sealed box.

[zorloth]

Great analysis! I 100% agree. I bought the RS/PK boxes (along with a couple of others) in 2016 with zero knowledge of the market. By that point, I had realized humungous gains on a lot of my sealed MTG and I wanted to “diversify.” So I figured I might as well throw a bit of money at good ol’ Pokemon and see how it does.

I totally forgot about them until late 2019. And when I realized how much they had increased in value I immediately listed them on eBay. I figured: “there’s no way in hell this is natural growth” and I wanted to immediately cash in. The Ruby box sold basically instantly. I decided to put some of those funds into a complete set of graded exs from the set (which at that point were only worth $20 to $50 ea, so it felt like a no-brainer). And seeing those exs in person is what got me completely and utterly re-hooked on Pokemon lol.

As I continued to collect, it dawned on me just how cheap these cards were compared to how meaningful they were to me. The prices were completely out of sync with the scarcity of mint condition copies of these cards and just made zero sense. I sold out a significant portion of my MTG collection to continue to pour money into exs, since they were bringing me an amount of joy disproportionate with their monetary worth. By April 2020 they had doubled in value, so I sold out of the graded cards and put my focus on raw sets. But the pursuit essentially remained the same.

Have the prices increased a fuck ton since then? Of course. But the current prices are much more in sync with the amount of enjoyment I get from the cards. The prices of these exs in late 2019 simply didn’t make sense. The current prices make a lot more sense to me, and I think there’s even more potential still (perhaps not in the short term, but in a 5-10+ year time window). Maybe I’m wrong – though if I am, I’ll be buying a lot more haha.

[sparky55603]

In terms of the work you made, its too long with too much fluff. You could have made the same point in 10% of the words written. The content is valid but doesn’t really carry much weight. It feels almost as a summary of the whole website over the past week XD. I understand the analysis but honestly like a lot of people have been saying, just collect. Even if you have a large percentage of your capital in pokemon this is the wrong way to look at it. You made the hobby boring at some points, I think about these things on a daily basis and so does everyone else, but we don’t let it consume us and take up all of our time. I think of these thoughts and processes as supplement to the hobby and not the main focus… if that makes sense. I can’t even imagine how long this took you to write and while I can commend you on your thoughtfulness and dedication, take a step back for a day or so lol.

[xileets]

I gotta say, for some, I think the analyzing, and even over-analyzing, as I’ve been accused of many times myself, is entertaining and valuable in itself. certainly not ‘boring’ for everyone. It was a lot to put on a page, yes, but sometimes, it’s good to get something out in totality.

MHO, but I think to say it IS un-interesting is harsh. OP put a lot of useful, albeit redundant at times, information in there… The thread title is a little misleading, however. haha

[sparky55603]

Didn’t wanna sound too harsh just truthful, there is for sure value in overanalyzing just the way they just happened to do too much. There is valuable information in what they put it was just SO much, I don’t want to discourage them either, it’s a good start post and for sure on the right track in terms of thought process.

[mcorey777]

So outside of Pokemon the stimulus checks they gave us was fools gold. Inflation ended up being way more then the checks we received. The inflation numbers are also off. I’m hearing 8-10 percent but when I go to the store items that use to cost $1 are now $2 or $1.50. For a random example. Price of gas etc. So in the end we have already paid more then what we received in stimulus checks on increased pricing on items.

As far as Pokemon. For vintage Wotc I’m seeing things as more of a price correction. These cards were far too cheap for far too long. The packs these cards come in/booster boxes are thru the roof. That’s for PSA 8/9 I still can’t justify the premium associated with having no whitening spots vs 1. Plus a lot of the time a PSA 10 will still have 1 whitening spot while the 9 usually does as well making the quality difference basically nothing.

Not to mention regraded cards. A PSA 9 sent in enough times can become a PSA 10. The price is also more validated for the later low print/low pop sets Neo-Skyridge) With Neo Destiny-Skyridge having the lowest numbers. Which helps justify the price on most cards. Ex era is also very low print and most prices are with in reason.

Now at the same time I’m talking about auctions, private deals and the occasional buy it now/best offer that will actually sell for around market price. There is still many sellers listing cards for prices that will never sell. Unless you get the occasional careless buyer.

For Modern especially booster boxes some things make sense but a lot doesn’t. For example why should modern booster boxes be this expensive out of the gate. Or the gains for sets like Team up and Cosmic Eclipse, Burning Shadows etc doesn’t make sense. The cards that you will likely pull are worth worlds less then the booster box. It puts it in a situation where you could buy one Burning Shadows booster box or one graded Rainbow Zard in a 9/10 for the same price. And if you want to pull that card yourself good luck! It will likely take tons of booster boxes at extreme prices.

For other hyper rates the price doesn’t make sense. Like the unpopular ones are usually worth $5-$10 and are incredibly hard to pull.

Then you compare Modern to Vintage why is a card that came out today ungraded instantly worth the same amount as cards from 2001 in 1st edition Holo PSA 8/9? The pull rates for these modern hyper rares and alt arts are definitely tough and the artwork is beautiful on some of them but still makes zero sense to me. There is so much history with the older cards. Where these modern cards still have barely hit the pavement. I feel anything modern needs to be cheaper and/or the older stuff should be even more expensive then current pricing. For things to have any kind of equal librium.

Now these are just my opinions are what I’m seeing. And if things go up or down I’m one of the ones at risk and I’m perfectly fine with it. I bought my favorite artworks. My favorite sets. Low pop cards. High graded PSA 8/9/10 1st edition/e series so I’m fine regardless. Plus while collecting I never take the time to buy doubles. So parting with anything generally will be way more expensive to replace in the future.

I happened to luck out on my ungraded cards that I bought before the boom and decided to upgrade to graded copies. So I did see good gains. But I turned around and bought all graded copies replacing all my played cards. But I haven’t seen much gains after recent price drops on my graded cards. Basically they went up in value after buying them. Then prices dropped basically bringing me back to square one on the card being basically worth what I paid.

For example I paid $500 for PSA 9 Skyridge Articuno Holo which is a stunning piece of art about a year and a half ago. It went up a decent chunk I can’t remember exactly how much but currently you can find that same Skyridge Articuno for around $500 last time I checked don’t quote me lol. Availability on this card in particular isn’t the greatest being Pop of 87 PSA 10s and 95 PSA 9s. With Skyridge unweighted packs going for $1500 and the booster box being worth a ton. I just used this card as a random example and after looking it up it has a high of $635 in PSA 9 before going back down. Other cards reached much higher price points before going down.

In conclusion I guess you just have to take things for what it is and enjoy the ride. Try not to buy recklessly and when buying especially high pop or vast printed items be well aware prices can go down on anything. As shown above even on the most limited set cards. I didn’t touch on trophie cards or promos because it’s stuff that’s out of my wheel house. This is my take mostly on Wotc and Modern. Ex era- Black and white era are also somewhat low print but I’m not familiar with their markets lately.

[mcorey777]

[jakester18]

As someone mentioned previously in this thread, members of this forum have a much different view than most people. I’d be interested in some sort of poll to see how the majority of members that frequent this site feel. I think it’s fairly clear from all of the replies to the OP but who knows.

[jabby]

I think that the market is working pretty much exactly how it should be. In fact, I think it has held up much better than I expected so far. I’ve seen some ‘fire sales’ going on at times, but for the most part cards are still fetching pretty large premiums, especially the more rare/scarce offerings. Unless you are desperate to raise capital, I see no reason to part with high-end collectibles at this time if all possible. There’s still a lot of natural/organic demand, and the price volume at the auction houses is still pretty high and strong. Overall, things are mostly flat and steady and unless you bought in at the peak of 2020/2021, I think the downside risk is much lower at this point.

With this being said, I still have become more of an ‘opportunist’ with my purchases to help mitigate any unknown risks. Basically, just making responsible purchases. I’ve become a big fan of buying raw/NM cards and sticking to highest possible grade slabs instead. If it’s a low grade slab, it’s getting cracked out for a binder/NM copy and this has worked out well for me. I feel this shields me a lot more from slab volatility and price declines we’ve seen happening at times, and it’s still enjoyable to complete my sets and collecting goals this way.

Anyway, as far as the broader economic situation goes, I believe that things will remain slow to negative at least for the rest of the year and possibly into mid-late 2023. A ton of speculation around Fed/macro policy that I’ve been hearing.

I’ve read everything from 4.5%-5% Fed fund rate next year to control the inflation, or that we’ll reach 3.5% by December of this year, only for them to pivot and cut rates to prevent a full on recession if at this point inflation supposedly ‘peaks’. Regardless, the idea around what the policy will be going forward has made the big money crowd run to cash until the fog clears and things become more clear in terms of policy.

I believe when things become clear, you will see capital be re-deployed across all markets again. For now though, many are on the fence. I personally think though that if you can buy anything right now, it will prove to be a long-term opportunity because a ton of market psychology is at play around what the Fed is doing. You just have to stomach the short-term pain/volatility and take a few punches to the face along the way, but I’m willing to bet in a few years from now it will work out pretty much like it always has. Just my feelings however, not advice.

[ORKY]

I feel like I’m missing something, when you say speculative investors, who exactly are you talking about? What is “The Market” by your definition? Everyone buying cards and product slabbed or raw, sealed or cracked? Because I’m finding it hard to believe that Speculative Investors outweigh all the children, TCG players and collectors in the card space

This is anecdotal so obviously not super reliable, but the vast majority I see coming into my card shop and buying cards are card game players and very casual collectors. Never seen anyone who would flip for a profit. When I mentioned I grade cards and buy slabs, the store folks looked at me like a unicorn. Again, just an anecdote from my own experience

[wjames]

Stats and analytics are great and helpful, but don’t always tell the whole story. Also, it’s well known that flipping and “scalping” has always been in the hobby and is present in many others. I would consider it normal. I flip cards to help fund my collection so I don’t have to take money from my career earnings.

I appreciate the time you put in to this, and it’s cool that you did so, but I think you’re way off on a lot of points.

[enigma]

If prices go to 2018 levels I will personally buy every BW box available and burn them in my backyard. The neighbors will think I’m having a bonfire every night, but really I’m manipulating the market. Not only do I guarantee 2018 prices to be the “resistance level” but I also scare every investor into pushing the now severely crippled supply of these boxes through the stratosphere.

[pokepackcollector]

Sadly biggest mistake i made durring 2020/21 was being nieve with certain less rare items like base set 9 holos and certain pack prices… Could have cashed out big time from all my pick ups from 2015-2019 but i let my collectors mindset get in the way and got to sentimental with things (bulbasaur 1st ed psa 10 for instance). The fear of never owning these items again made me hesitant to sell and i let my collector brain trump my investment brain… Im still very long term on eveything i own anyways. It just sucks knowing i missed a huge window to sell off at the time and repurchase everything again at the lows (but that’s always easy to say in hindsight)…

Now i’m just focused on collecting again and finishing goals at this time and can’t worry about the “what ifs”…

Tho i will say we may never see a drastic spike like 2020 was ever again in pokemons lifetime… No one could miss

[smpratte]

If it makes you feel any better, I could have probably doubled my earnings in 2020 if I sold more of my wotc cards. And these are cards I have multiple copies. I just don’t have it in me to be that aggressive. Basically just too much of a collector.

As for if there will be another 2020 situation, I remember when I got back into collecting, I thought the 90s boom prices were never to be seen again. Today, even with a cool off, those 90s prices are bargains. Even when people thought birthday pikachu was one of the rarest cards, I’d take those prices all day over today. Basically prior to 2016 & 2020, I would have been more confident there wouldn’t be another boom. But now I’m just like, anything could happen.

[pokecollectoramy]

Don’t worry, it’s a life lesson learned. We have ALL done it. We are collectors at heart. The only collector with impeccable timing is @jonandek

[candle]

I have a few cards like this that I should have dumped - but if you got them in 2015/16 you are in the black. Deep in the black. And there is no use thinking about it more than that

[zorloth]

I timed WotC pretty well (sold my sets in November/December 2020) but Jon timed multiple entrances/exits perfectly haha. Bought into Pokemon right before the spike, sold out right after the spike, and bought back into vintage MTG right before the spike. From now on, we should all just buy whatever Jon buys!

[jonandek]

Ha you give me way too much credit. I just buy what I love. And generally just hold it. It was not easy to sell my graded Pokemon collection right after I had just acquired it. I wrestled with the decision. But I still have quite a few things up my sleeve. I did not sell my PSA 10 Skyridge holo and crystal set for example, or any raw cards. But yes that “logan paul moment” was too much insanity for me to hold at the time. I don’t want to say what I’m buying now so people don’t pile in haha.

Hope everyone here is well!

[Will]

You’re just trying to throw us off the scent of investing in vintage GI Joe. Well too late, already liquidated the 401k!

[mcorey777]

@jonandek Long time no see! Do you have a insta. Or current collection thread. I’d like to check out progress as you share it