Earlier quoted context omitted.
The difference is that stuffed toys have value independent of speculation.
A better comparison is purchasing a star, or a plot of land on the moon.
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The Beanie Baby Bubble of '99
71–80 of 141 posts
Re: The Beanie Baby Bubble of '99
#72Earlier quoted context omitted.
Oh, bubbles can surely happen even in the era of widespread information. Look no further than housing. A few points on housing: - real home prices have now surpassed the 2000s peak - household formation and population growth has been decelerating, while building has been accelerating. - there are 1.1 homes per household, same as the year 2000. We are not at historically low supply as some claim. Only low in terms of…
Whether or not housing prices are in a "bubble" in the sense that the prices are going to correct and drop at some point, they're not a bubble in the Beanie Baby sense of seeing 10000% price appreciation in the span of a few years. Nobody's 4-bed condo is selling for $500 million. There needs to be some acknowledgement of the gap between probably mispriced and tulipmania. Conversely, if prices correct, they're still…
Something with intrinsic value will never collapse to 0. A bubble to me is real prices far exceeding intrinsic value, particularly driven by psychology rather than fundamentals. Housing fits the bill to me.
There's a good argument that crypto presents similar to beanie babies, given that there is no intrinsic value to the coins themselves.
People buy crypto because they think they can sell it to somebody else for more later, not because it unlocks some value by holding it. But don't want to sidetrack the discussion.
Re: The Beanie Baby Bubble of '99
#73Lot of people making comparisons to crypto / NFTs etc. Looking at it from another angle, what are the best examples of things that lots of people thought were bubbles, but turned out not to be?
I thought housing was a bubble in 2005. But the prices keep on going up.
In many places there was a pretty serious correction in 2008, no?
Bubble doesn't mean "pops and value goes to zero". It means something more like overvalued asset class that can lose value rapidly. If there is intrinsic value, it won't got to zero. Nobody imagines that of a real estate market outside scenarios that include major wars, etc.
House prices with any sort of scarcity are largely driven by peoples ability to pay (i.e. finance the debt).
Re: The Beanie Baby Bubble of '99
#74Lot of people making comparisons to crypto / NFTs etc. Looking at it from another angle, what are the best examples of things that lots of people thought were bubbles, but turned out not to be?
This is going to sound ridiculous, but ecommerce? Between the .com crash, and a few high-profile failures like Kozmo, Outpost, and Pets.com, there was definitely an era of skepticism about the whole idea. Also keep in mind Amazon didn't show a profit for the first 10-15 (?) years. They had a decent reason for it (reinvesting it all back into the business) but they took a lot of criticism for it.
Was there ever a serious belief that ecommerce was a bubble? At least in the case of Pets.com they were doing things like free shipping and selling products for 1/3rd cost to try and increase their customer base. It was not sustainable. Mail order catalogs (the analog analog to purchasing through online stores) had been a major driving force in commerce for well over a century by the time ecommerce got started. As a model, ecommerce had something well-founded to draw on at least.
Re: The Beanie Baby Bubble of '99
#75The current state of NFTs etc. amazes me in the context of Beanie Babies. So many people have learned nothing. Granted the time gap means these are entirely new people making those mistakes. We have such a degraded level of discourse now that if it were used in the Beanie Baby craze there would be people arguing about whether all soft toys are evil.
Non-fungible tulips.
Re: The Beanie Baby Bubble of '99
#76Re: The Beanie Baby Bubble of '99
#77Lot of people making comparisons to crypto / NFTs etc. Looking at it from another angle, what are the best examples of things that lots of people thought were bubbles, but turned out not to be?
I thought housing was a bubble in 2005. But the prices keep on going up.
Prices will never stop going up if your unit of account measuring stick never stops shrinking.
Re: The Beanie Baby Bubble of '99
#78Re: The Beanie Baby Bubble of '99
#79Lot of people making comparisons to crypto / NFTs etc. Looking at it from another angle, what are the best examples of things that lots of people thought were bubbles, but turned out not to be?
Re: The Beanie Baby Bubble of '99
#80Earlier quoted context omitted.
Oh, bubbles can surely happen even in the era of widespread information. Look no further than housing. A few points on housing: - real home prices have now surpassed the 2000s peak - household formation and population growth has been decelerating, while building has been accelerating. - there are 1.1 homes per household, same as the year 2000. We are not at historically low supply as some claim. Only low in terms of…
Has building been accelerating in the areas where people want to live, though? e.g. lots of Californians wanting to move to MT or ID, but is building catching up there?
Are people making that move because they prefer the location if their current location had enough housing? I guess more "Are they moving b/c the building is happening there and not in CA?".