Quote:
Originally Posted by Exhibitman
Econ 101, right: the demand raises prices until owners decide to sell and the supply increases enough to achieve equilibrium.
Econ 102: the speculators then bail out, prices drop, and many people who jumped on the FOMO bandwagon are left holding their...cards.
Econ 103: eventually, they capitulate and get out for whatever they can. People who've waited out the run up now buy.
Econ 104: ten years later another bubble inflates.
You know you are getting older when you can recall three or four of these card price cycles. The bizarro world part of this latest one is that the boom is driven by boredom and is taking place despite the economy and the bust likely will result from a return to more normal economic activity.
|
Why is this bizarro? The hobby originally took off during the second worst economic crisis in our country's history after the great depression? We had double digit unemployment, double digit inflation and double digit interest rates yet there were enough people with money to buy baseball cards that everything rose dramatically in price.
Now we have the government sending everyone 3200.00 and people are locked in their homes with little to spend it on. Why wouldn't you expect some of it to go into cards when the government gives out free money to people who don't need it? After the stock market crash last year, why shouldn't people diversify into this hobby which has a 40 year history of solid growth?
I agree with your 4 points, but what we don't know is how many of these new investors will leave when we have the correction. That will determine if the drop will be minor or prices will correct back to close to where they were a year ago.