If you were trying to profit, which would you rather buy to speculate:
5000 $1 cards
1 $5000 card
0voters
@hian_43 and I had a similar conversation recently and I thought it would be interesting to open the discussion to the fourum. The numbers don’t have to be exactly 1 and 5000, rather the spirit of this discussion is aimed towards understanding the pros and cons of speculating on large vs small value cards when total buy-in value is equal.
If I was young and had to start out it would be the 5000 $1 cards. You get more experience, have more upside if you put time in selling and you spread the chance of a few of the cards booming.
But I’m to old for that now, boomer out.
I assume this is strictly profitmaxxing/collectominning.
Nowadays it’s completely plausible for $1-5 cards to go to $100 (or significantly more) in a few years after grading. Some examples: Kanazawa’s Pikachu, 124/S-P Pikachu, Red’s Pikachu (Im starting to see a theme).
However, the average $2-5000 card is not going to $500,000. Call me a skeptic but I can’t imagine beauty looking back pikachu having a market cap of 50 billion.
Scale vs magnitude depends heavily on the individual, and I think realistically everyone does a bit of both. The largest quantity I’ve ever bought of a single card was 200ish of the 25th anniversary Japanese full art base pikachu, for 80 year apiece. I (semi) joked that it was the greatest value card of all time. Even so, 200 felt like it would take years to sell. Sure enough, I should have bought more :thicc: 5000 (or something similar as you said the numbers don’t have to be exact) is pretty incomprehensible though. I think I’d cap out in the low to mid hundreds, and only if the card was $1 or less.
One difference today is the market’s ability to absorb huge numbers of cards. It’s possible to sell large quantities quickly while still getting close to full market price. Assuming that continues to be the case (…) I think it’s feasible to buy larger quantities.
Personally I’m still buying multiples of cheaper cards I think will do well over time, and trying not to tie up too much money in big purchases anymore.
Most people seem to be approaching the question practically which makes sense, but I think it’s more interesting to look at it theoretically by examining the premise: “lower value items are inherently more likely to double in price sooner”. This is a common argument I see made in Pokemon investing circles and it makes sense intuitively; as the price of an item grows the pool of buyers shrinks. But let’s examine why I don’t believe this premise is true.
We all know the price of an item is determined by supply and demand. And since price is an output of these two inputs, by working backwards the price of an item must tell us something about its underlying supply and demand. This is simplest to think about with one of a kind items like a POP 1 card where we can effectively solve the equation for demand. If the price is high, we know people must really want it; if the price is zero, nobody cares. It’s important to note that it doesn’t matter why they want it or how long they want it for. Maybe they’re just trying to manipulate the market, but the price is set in that moment by the demand.
So how do we use this to determine if our premise is true or false? The key is in the inputs. If supply is small, a small increase in demand will cause a large increase in price. If supply is high, a small increase in demand will be unlikely to move the price very much. Put simply, the change in ratio between the supply and demand leads to a percentage change in the price of an item, but the original price of the item is irrelevant. It’s my belief that all other factors held equal there’s no inherent difference between the expected time of an item to double based on its current value.
In the end human supply and demand are emotionally driven and heavily based on expectation of future price. The actual card being speculated on is much more important than the underlying price, and the card that actually goes up the most will probably be the one you bought one copy of for your collection and don’t want to sell.
Sorry for the long post, hope it makes some sense.
I agree in theory, I just think $5000 doesn’t get you anything rare nowadays. Maybe in poor condition, or something like a non-holo victory ring, but that’s like PSA 10 moonbreon/stamp pikachu money.
I guess it’s probably possible to pull up a ton of data from 2021 and do some analysis. In reality the returns are all over the place, some cards are up 100x, some cards have barely changed in value. If you know what you’re looking for you’ll usually do better than a random selection of $1 or $5000 cards, and since there’s a lot more $1 cards than $5000 cards there’s theoretically more good value picks available in that price range.
It’s maybe worth considering non-English/Japanese trophies in that range. The argument for rare cards has always been that you only need a little bit of a change in interest to cause a big change in price.
Step 1: Aquire 5000 $1 cards.
Step 2: Spend $125,000 dollars to grade them at PSA.
Step 3: Every single card gets manipulated while at PSA. Upcharged.
Step 4: Homeless.
Step 5: Go to the library and make a post on E4 about PSA being the worst and how TAG is the future.
1 card would have to be the play for me. I would probably get too attached to at least 10% of those 5000 cards at a minimum which in turn would eat into my profit.
