What's more important, Supply or Demand?

[toppcat]

Originally Posted by nat

Price is where supply and demand curves meet. By definition neither can be more important than the other.

Not sure about that-the curves don't measure "amplitude", just trajectory based upon independent inputs.

[Exhibitman]

The latest run-up is just the latest market manipulation. Watch where the prices are in a year.

[GasHouseGang]

I have always thought like you, that the low supply of vintage cards would mean they would be worth more. But I haven't always seen that play out in the market. So, I guess it's been a bit of an education for me about how economics can fool you.

[seanofjapan]

I think supply is only a relevant consideration if demand is greater than it.

Consider this comparison.

There are only 100 copies of card A. But only 20 collectors want card A in their collections. Since demand is much lower than the supply, the card's price remains low because all 20 collectors can easily find a copy of it without needing to competetively bid against each other.

On the other hand, there are 1,000 copies of card B. But 2,000 collectors want card B. Since demand far outstrips supply, the price will go through the roof since the people looking for it will bid it up whenever one comes to auction.

There are 10 times more copies of B than A, but A is worth less than B.

This is an oversimplified example since there are a lot of real life things that prevent these two examples from ever playing out like this (even when there are 100 cards but only 20 collectors after it, if one guy has 95 copies of it leaving only 5 to freely circulate the price can still go way up for example). But it demonstrates why demand is the main driver of price rather than supply. Jordan rookies look more like Card Bs right now while vintage stuff is more like Card As.

[Phil68]

The one thing I know is ANYTIME I want a card--the demand instantly skyrockets. It becomes THE card everybody chases. What typically sells for 300 bucks, I can't touch for under a grand, Lol.
If I go to sell it, 12 of them suddenly appear on eBay and I end up with a really expensive coaster to place my drink on.

In the end, it's probably more demand, but every post I read in this thread makes sense. A lot of good insights.

I guess we should just collect what we like without breaking our budgets. Everyone should definitely stay away from all high-end 1950's cards. Those are pure crap.

[bnorth]

Originally Posted by Phil68

The one thing I know is ANYTIME I want a card--the demand instantly skyrockets. It becomes THE card everybody chases. What typically sells for 300 bucks, I can't touch for under a grand, Lol.
If I go to sell it, 12 of them suddenly appear on eBay and I end up with a really expensive coaster to place my drink on.

In the end, it's probably more demand, but every post I read in this thread makes sense. A lot of good insights.

I guess we should just collect what we like without breaking our budgets. Everyone should definitely stay away from all high-end 1950's cards. Those are pure crap.

LOL, glad I am not the only one that happens to. Want to see an instant spike, post on a few forums you are looking for a specific card.

I have also noticed that EVERY spike in prices is someone(multiple people) manipulating the market. Never buy the "in" hot card because it is all smoke and mirrors to con people. Demand is very easy to create, supply is WAY harder to manipulate.

[hcv123]

Not so simple a question or answer, but both are relevant.

1) Textbook economics teaches that Price is determined where supply meets demand. Further there is a concept of "elasticity" of either that looks at the affect on price of a specific item or commodity based on changes in supply or demand. In other words how significantly does price change in response to a spike or decrease in supply or demand. ( To illustrate - In the case of a 1/1 A potential seller can try to "hold out" for any price he wants as he is the only one with the supply - if there are multiple potential buyers they likely know they are competing for a single in supply and the one who is willing to pay the most sets the price. If that 1/1 has no one that cares or wants it - the seller then must entice people by dropping his price as there is no demand and hopes to reach a point where someone will pay him for it) - very oversimplified, but hope it helps.

2) Some factors that are variables that come into play in our hobby world that in theory factor in to the above, but can cause significant variation are; 1) Current owners of cards I would argue have a wide range of prices paid and therefore more or less of a tolerance to sell at a higher or lower price. 2) inefficiency of markets/arbitrage/perceived supply and demand - best by example perhaps - I participate in numerous auctions across a handful of categories - just yesterday I was in a coin and jewelry auction - there was a Rolex watch that sold for $6700 against a house defined $8300-$10600 estimate. Was that a good price? I'm sure the buyer thought it was. A simple google search showed that I could buy the same watch in the same condition from 3 different vendors for about $5600. This is the definition of what I mean by inefficiency of markets. A potential buyer almost always is clueless about the availability of the item they want in all places where it is possibly available - which information would give them the ability to find the best price. There is also a time value and of course the desire factor which are other variables.

Probably already said too much. At the end of the day - buy what you enjoy!

[mintacular]

Originally Posted by hcv123

Not so simple a question or answer, but both are relevant.

1) Textbook economics teaches that Price is determined where supply meets demand. Further there is a concept of "elasticity" of either that looks at the affect on price of a specific item or commodity based on changes in supply or demand. In other words how significantly does price change in response to a spike or decrease in supply or demand. ( To illustrate - In the case of a 1/1 A potential seller can try to "hold out" for any price he wants as he is the only one with the supply - if there are multiple potential buyers they likely know they are competing for a single in supply and the one who is willing to pay the most sets the price. If that 1/1 has no one that cares or wants it - the seller then must entice people by dropping his price as there is no demand and hopes to reach a point where someone will pay him for it) - very oversimplified, but hope it helps.

2) Some factors that are variables that come into play in our hobby world that in theory factor in to the above, but can cause significant variation are; 1) Current owners of cards I would argue have a wide range of prices paid and therefore more or less of a tolerance to sell at a higher or lower price. 2) inefficiency of markets/arbitrage/perceived supply and demand - best by example perhaps - I participate in numerous auctions across a handful of categories - just yesterday I was in a coin and jewelry auction - there was a Rolex watch that sold for $6700 against a house defined $8300-$10600 estimate. Was that a good price? I'm sure the buyer thought it was. A simple google search showed that I could buy the same watch in the same condition from 3 different vendors for about $5600. This is the definition of what I mean by inefficiency of markets. A potential buyer almost always is clueless about the availability of the item they want in all places where it is possibly available - which information would give them the ability to find the best price. There is also a time value and of course the desire factor which are other variables.

Probably already said too much. At the end of the day - buy what you enjoy!

Thank you for this, very insightful

[Mike D.]

If it was all supply, wouldn’t all these 1/1’s being produced today all be worth big bucks? Some stars are, but an awful lot of lesser known are dirt cheap.

[brian1961]

Supply and demand are both important; however, demand trumps supply in the long run. There are other very important considerations, of course, when determining the extent of "demand".

If we are talking about a particular set or a player, how many collectors collect the set or the player? If there's substantial number of collectors for that set or player, then we turn to supply. Within supply comes the matter of examining the number of examples for each grade. One of the key factors with the demand will be how beautiful was the set's design and for a player, how does his card look---stunning, amazing, breathtaking OR humdrum, raunchy, or flat-out ugly.

The brother that mentioned the addition of having an enthralling story to go with the set, and therefore a player from the set, is thinking wisely and offers striking examples that back his claim of its importance.

Distilling all of this, when you have a set or player that collectors love, and the supply of high-end graded examples are few, or the supply of collector-grade examples seem to take months and months to locate, the price point will keep rising.

Many regional / food cards and team-issue items are sleepers, for their supply is disturbingly low; however, the far majority of collectors seem to gravitate to the tried and true gum cards. Their design is usually appealing; their availability is easy to locate; and they don't have to think too hard or deeply whether or not they're worth collecting.

Whereas, the attractive regional / food items, with their built-in scarcity, rarity, and a paucity of a pop report, often seem over-looked and under-appreciated, for the collector bandwagon does not enjoy having to think for themselves, work hard at researching, and works even less still at tracking down the elusive.

Then again, the little secret is that the few collectors who long ago got their gum card fix, and then decided to launch out and go after better game or white whales, entering the narrow path full of obstacles to get to the gorgeous, tough-to-get regional / food cards would prefer, and I mean adamantly, that the gum card collectors who constitute the far majority of today's collector base, would just remain happy and content with their gummies----FOR THEY DON'T WANT ANY MORE COMPETITION FOR THOSE ITEMS; LIFE'S TOUGH ENOUGH COLLECTING THE BLUE DIAMOND REGIONALS!!!

Just some "food for thought"......

Oh yes, since other companies are forbidden to release regional / food cards today, and have been so for decades, that is why the current legal sport card makers have produced their manufactured rarities, or "chase cards", to replicate in their own way the original, all natural chase cards---those same aforementioned difficult to get regional / food items----tough to get back in the day; often tougher to get today.

Supply or demand. I say both, but mention demand first.

Stay safe. Drive carefully, as many seem to have had their driving skills affected by the Coronavirus and its accompanying fear factor.

--- Brian Powell

[Republicaninmass]

Originally Posted by Exhibitman

The latest run-up is just the latest market manipulation. Watch where the prices are in a year.

Didnt they say the same about the double printed mantle in 1976?