You like others make many personal assumptions which don’t apply to anything being said here. I’m definitely not simplifying anything here, these variables you talk about would be considered just that in math a variable. Is everything finite? No… But making a process harder or justifying something that doesnt make logical sense isn’t worth it. Yes in life you won’t be able to rationalize everything and maybe this or that will be profitable but its at a risk that I may not understand or care to take. If you dont want me to use quantifiable data to make decisions in pokemon youre suggesting I use my emotions? Pokemon isn’t some start up company there is literally years of data points to make comparisons… there is tons of information on gambling which pokemon has thrived on the concept… you’ll cross into behavioral science but that can all be thrown into an equation to produce a result. Will it be a definitive no, but it provides me with the information I require to invest a base line. If you’re spending very large amounts of money wouldnt you want to understand everything…?
Math and science works… but sense that seems not to be a common investing or purchasing strategy what do you use to justify large purchases in the antique and collectibles world?
And to touch on credibility that becomes ease of transaction, not a requirement. I have a decent knowledge in the areas of pokemon im interested years of experience and tons of research so I value my understanding and will risk my money based on it but no im not going to pay some massive premium just because… how do you think these credible sources buy their products and what they pay for it? My problem becomes when you attempt to claim a product is the best or cost xyz when the data doesn’t support it
And access? That just comes down to scarcity which is just another variable when evaluating.
I would like to speak to the concept of modeling prices with math. Using mathematical models as a way to understand things is a completely valid approach but when the model and reality disagree, the problem lies in the model, not reality.
The reality is that boxes sell all the time for less than the sum of the contents. This concept is actively exploited by youtube breakers and convenience stores alike. The reason you can’t just multiply the pack price to get the box price is because there’s a difference between theoretical value of a box and the value realized in a competitive marketplace. A real marketplace is simply far more stochastic and involves many more random variables than a muplication can account for.
The simplest, and I believe most accurate, reason for why boxes are relatively valued lower than packs is the level of competition. Other people have already mentioned this and I agree with them. The more competition, the more closer the theoretical value and market realized price aligns. This same logic is why trophies hit lower prices on closed Japanese markets and why we can pinpoint the market value of modern commons on the order of cents. There are just more people who can compete at the levels of packs compared to boxes and just given the stochastic nature of the market it means boxes will consistently undersell realitive to packs.
Under a perfectly optimized market, I would expect the relative value of packs vs boxes to converge but obviously we aren’t there.
Yes sometimes mathematical models and reality don’t align, to say it’s always the model and not reality is a concerning way to look at it in my opinion. If this was the case people wouldn’t buy at highs and get crushed, but that is reality of it nothing is a sure shot.
You’re 100% correct there isn’t a simple or standard formula that is plug and play that will be definitive. I’m personally not using elementary arithmetic to analyze the niche markets in Pokémon that interests me and I see value, I’m also not looking to make a quick flip or a short term investment because that doesn’t align with how I view the collectible market. The short term for these markets is 5+ years when I assess making a purchase and personally 10-15 years is how I view most transactions.
To further your point there is no model or formula that could ever account for the pandemic and how the market would respond. I do take into account for things like for example the average income and spending habits of the generations that are tied to the hobby, which gives some validation to why some loose packs are in my opinion over valued. This is also just surface level…
This is more of a stance of I’m not interested in it because it doesn’t align with my core principles and beliefs. Attempting to understand the reasoning behind those that are purchasing at the prices mentioned here with the investment mindset. Do I think there is money to be made yes, but I also think there are better options.
(Note I’m also currently not buying any set cards/products)
& I agree with your analysis of pack value v seals box value, but as you finished with under “optimized market” as Pokémon is not an established market in terms of collectibles. So should I be investing looking just at the current market or should I be attempting to also look at the future market?
The majority of what I see is very bullish with a select few being publicly bearish that is also very concerning to see soo many people even at the current state after the unthinkable are still very bullish. That isn’t a reality I live in or share, I’d recommend more people to do a deeper analysis maybe math would help them from making poor decisions.
As I stated there are multiple lenses to look at a market through, and by no means do I think I’ve perfected my craft but I’m good at what I do in my oh so humble opinion. Yes I’ve failed and lost money over the years, but I’ve learned from it… there will be a lot of learning to be done and unfortunately it will occur after the purchase not prior to.
To end I really enjoyed your insight @pfm, and I agree with the majority of what you said and would be interested in furthering the dialog. I’m here because I think this is a great platform to discuss and learn, as previously mentioned this isn’t my primary collectible space.
Excellent response, however personally I disagree with you there.
If reality disagrees with a mathematical model, I wouldn’t necessarily say the problem lies within the model - I would say that this could mean the market we are operating in is not optimised as you said, and represents oppurtunity! Just my opinion though!
Having said that some variables may be difficult to account for but that doesn’t necessarily mean the problem lies entirely within the model, it could lie within the model, or it could represent a market not optimised and therefore oppurtunity!
When a stock splits. Think Apple, Tesla and many other blue chips. It usually helps the stock. While nothing else has changed fundamentally. The price point allows for more access(volume) in the lower end If the market.
I think it’s similar in a way.
There are also other variables that don’t always make it advantageous to buy a box, crack and sell it off. A few would be, taxes, time, risk, all while going through the risky process of purchasing the box. The people that can validate their own box, locate reputable buyers and then turn it into a profit, then sort through the taxes, is a small percentage of the overall market. More power to them.
It’s been interesting seeing the divergence of light vs heavy for 1st edition shadowless packs… the latter has been growing more b/c they’re becoming rarer compared to the lights
