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The Beanie Baby Bubble of '99

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Re: The Beanie Baby Bubble of '99

#81

Post by OJFord »

rhino369 wrote: post #49
erehweb wrote: post #47

Lot 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?

Social media stock?

If NFTs changed their image (can totally do that in most implementations, there's no hash of the contents) to an advert and made a lot of money, are they a success in a way that disproves a claim they were a bubble?

I'm not really stating an opinion, just an observation that tonnes of social media companies died until the current 'in' ones adopted advertising and (so far, and for longer already) lasted.

Re: The Beanie Baby Bubble of '99

#84

Post by fullshark »

Lerc wrote: post #6

The 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.

Are beanie babies the new go to for this? Cause 10 years ago everyone used to laugh at the irrational exuberance of the dotcom boom, pets.com and all that.

Then 10 years later everyone realized the exuberance was actually totally rational when you're talking about the market shifts the internet brought and the size of the spoils that would eventually befall the winners.

Re: The Beanie Baby Bubble of '99

#85

Post by UncleOxidant »

michaelt wrote: post #48
erehweb wrote: post #47

Lot 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.

Ummm... It was a bubble in 2005/2006 and prices corrected pretty significanlty from 2007 till about 2013. We bought our house in 2010 (not quite the bottom of the market here) for $186K - 2.5 years earlier a similar house across the street sold for $250K. A similar house on the next block sold for $575K in recent days. So yeah, it was a bubble that burst and now has re-inflated to even higher levels. If mortgage rates simply were to revert to mean (about 7%) that will negatively impact prices. If they overshoot (The Fed could find that inflation is tougher to fight than they thought) you'll see a buying opportunity again. Look at some home sales stats from the early 80s when mortgage rates hit the upper teens.

Re: The Beanie Baby Bubble of '99

#86

Post by PragmaticPulp »

Lerc wrote: post #6

The 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.

> So many people have learned nothing.

The more I talk to crypto/NFT people, the more I’ve realized that they’re looking at the same historical events but walking away with completely different take-aways.

For example, they wouldn’t look at the Beanie Baby bubble and think of the people who invested a lot of money and had nothing to show for it after the crash. They’d look at the price charts of Beanie Babies and pattern-match that to NFTs with an assumption that they’re early in the game. Just sell before the line goes down and they’re going to be rich!

Re: The Beanie Baby Bubble of '99

#87

Post by lowercased »

UncleOxidant wrote: post #60
Cd00d wrote: post #29

Earlier quoted context omitted.

Sorry, I think I'm not following. I think you're saying that housing prices are too high. Then you're saying that if inflation continues housing prices will drop? I totally get that most home sales are based on the monthly mortgage bill, so when interest rates are high, house prices are lower. But, if we have 7% inflation why wouldn't rates increase AND prices increase? I don' think the outcome is obvious when high i…

When the Fed starts raising rates to try to counter inflation we'll see mortgage rates follow. If mortgage rates go up to, say, 7% (pretty close to the average mortgage rate over the last many decades) that's going to impact the monthly payment. If people are just barely able to afford a house at a certain price with 3% mortgage rates, they're not going to be able to afford it at 7% - it all comes down to monthly cas…

I vaguely remember knowing that we had a mortgage rate of ... 16% when I was a kid (we moved in 1982). But ... it was a direct note with the previous owner, and when rates fell, they wouldn't refinance at a lower rate. And it was hard to get a bank to lend because we were relatively close to the edge already, financially (it's been.. 35+ years - I'm getting some second hand stories through family). When I first bought a home in the late 90s with a mortgage, I think it was around 8% which - didn't really feel high or low, as it was my first. I just refinance last fall at 2.75%. Insane.

Re: The Beanie Baby Bubble of '99

#88

Post by jallen_dot_dev »

hsbauauvhabzb wrote: post #44

I’m not a crypto evangelist or anything, but what about alternatives like Pokémon cards which seem to have increased in value over the same period. There’s currently a pump and dump on retro video games but I don’t think the same supply issues exist in Pokémon cards, but I’m not actively monitoring either market.

I think part of it is Pokemon and MTG are franchises with fan bases that exist outside of the desire to speculate on them as investments. So there will always be some fans who want to collect them just to have them, and not in the hope of selling to a greater fool. There is enduring demand.

Beanie Babies, on the other hand, only existed for the purpose of get-rich-quick speculative bullshit. Ok, some kids played with them but I remember adults admonishing kids not to damage them and ruin their value. Is anyone actually nostalgic for these? I was 7-10 during the craze and I don't care about them, or know any peers who do. I mean, many of us weren't allowed to play with them.

Another factor is scarcity. Many old cards were played with and damaged, so to have a first edition mint is actually rare. Whereas I'm sure there are (still) 100,000s mint condition Beanies in plastic storage bins in attics across the US.

Finally, some of them were actually special and deservingly command a high price. Black Lotus was a really powerful card in addition to not being printed anymore, so there is another reason why it's sought after. It's so overpowered and game-breaking it won't be reintroduced. Patti the Platypus is not manufactured anymore, but there is nothing special about it anyway. And even if Beanie Babies were to become popular again, who is to say they won't just make another platypus.

Re: The Beanie Baby Bubble of '99

#89

Post by toomuchtodo »

lowercased wrote: post #67
jpm_sd wrote: post #7

Earlier quoted context omitted.

I think the most relevant portion of the article is: "There was one person who emerged handsomely from the Beanie Baby bubble: Ty Warner. Aside from getting caught secretly hoarding $107m of his Beanie Baby riches in an offshore Swiss bank account, Warner has kept a low profile over the years — but he’s quietly amassed a fortune the size of Djibouti’s GDP. Today, the 73-year-old Beanie Baby inventor touts an estimate…

I did some tech consulting and dev work for them around the peak of the craze. I never met Ty personally, but was in their office multiple times. One Christmas (98?) everyone got a bonus of their salary, IIRC. The money was just... pouring in at that point. I'm sure it's died down since then, but the stories were... nuts.

I think we worked at the same place? Office in the suburbs moved to downtown near the train station, foozball table in the kitchen and green carpets? Coldfusion app running on Solaris gear.

Re: The Beanie Baby Bubble of '99

#90

Post by adam_arthur »

lowercased wrote: post #87
UncleOxidant wrote: post #60

Earlier quoted context omitted.

When the Fed starts raising rates to try to counter inflation we'll see mortgage rates follow. If mortgage rates go up to, say, 7% (pretty close to the average mortgage rate over the last many decades) that's going to impact the monthly payment. If people are just barely able to afford a house at a certain price with 3% mortgage rates, they're not going to be able to afford it at 7% - it all comes down to monthly cas…

I vaguely remember knowing that we had a mortgage rate of ... 16% when I was a kid (we moved in 1982). But ... it was a direct note with the previous owner, and when rates fell, they wouldn't refinance at a lower rate. And it was hard to get a bank to lend because we were relatively close to the edge already, financially (it's been.. 35+ years - I'm getting some second hand stories through family). When I first bough…

It is crazy how much rates have fallen. But the historical average for mortgage rates has been around 5-7%. The 70s in particular had very bad inflation that was pretty abnormal relative to history.

Also important to note that rate only matters in the context of price. Rates by themselves don't provide you much info. e.g. 0% on 10 million is still expensive, just as 1000% rate on 1 dollar is pretty cheap

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