What is going on here? We have been operating a collectibles site for 20 years, focus on books and traditional paper ephemera, such as broadsides and manuscripts. The books have been a bit soft the past few years, the traditional ephemera stronger, but all within normal bounds. I don't follow the traditional collecting areas of stamps and coins but I doubt that there has been much out of the ordinary there as I hear very little. However, there are some other forms of ephemera and what we are seeing there defies imagination. We have seen such spectacular increases in value over a short period of time it is hard to fathom. What is going on?
Take for example baseball cards. We have followed them occasionally for a few years as they are a form of paper ephemera, and prices have gone up. But this past year, we have seen one record price after another, and frequently the gap between old and new record is very wide. It's as if someone broke Babe Ruth's seasonal home run record of 60 (or Barry Bonds 73 if it's okay to get a little help from your friends) by hitting 120. At the end of last year, the record was already an astonishing $3.9 million for a Mike Trout card. That record quickly fell to a $5.2 million price for a rookie Mickey Mantle, but by June, a Babe Ruth minor league card surpassed it at $6 million, which was replaced in August by the $6.6 million paid for a Honus Wagner. That's a 70% increase in a year.
It's not just baseball cards. Football, basketball, and hockey cards have also set new price records this year. And, it's not just sports cards. We are seeing crazy prices for superhero cards and those ubiquitous Pokemon cards. Gotta catch 'em all. No, you have to buy them and you had better have a lot of cash as Pokemon cards aren't for kids anymore.
A somewhat older but still lively price explosion continues in comic books. Old comics can be entertaining, but millions of dollars? Just last month, another record price was set for a comic book, $3.6 million for the first appearance of Spiderman. My Spidey sense tells me this is not rational. Think of your favorite writers, and outside of Shakespeare, there is not a one of them who can achieve prices for their books like those of whoever wrote the Spiderman, Superman and Batman comics.
Should I mention NFTs? I'm still trying to get my head around that one. As we saw earlier this year, one sold for $69 million. An NFT is a “nonfungible token,” which essentially means an identifier that is embedded in a digital image which looks the same as any other copy of that digital image. This one was an artwork, and a nice one, but there is no canvas, nothing to touch and hang on a wall, just a file to upload on your monitor. If I had an extra $69 million lying around, and I don't, but if I did, I would not spend it on an NFT. No F...ing Tway.
Now, the latest is video games, specifically, those disks you used to stick in your game consoles and computers back in the '90s before there was downloading. They need to come in the original packaging, and best of all, still sealed in their shrink wrap. I don't know how you can tell whether there's really a disk in there if its in shrink wrapped packaging without destroying the packaging, but I guess it doesn't matter because who would ever be the wiser?
In November 2020, a Super Mario game sold for $156,000. It was a spectacular price, considering the previous record set that July was $114,000. Actually, it wasn't but it's unlikely anyone foresaw what would happen in 2021. In April 2021, that record was blown away by another Super Mario that sold for four times that amount, $660,000. Most records are for various iterations of the enormously popular Mario Bros. games (I played them for a while until I realized I could never beat my single-digit age children and quit in disgust). That record fell in three months as a Legend of Zelda went for $870,000. You know how long that record lasted? Two days. Unwilling to relinquish his crown, Super Mario regained his leadership almost doubling poor Zelda at $1.56 million. Not quite a month later, Mario again bested himself, selling for $2 million. That is 13 times the record price for a video game as it stood at the beginning of the year, with four months still left to go.
Not that surprisingly, people are wondering what is going on here. Some have expressed concerns that there are some games being played with these video games, perhaps collusion between buyer and seller to artificially inflate prices. I have no idea whether any of this is true or if all we are seeing is plain old bubble mentality. Is this like tulips, or the Mississippi Company? Or how about the more recent edition, Aristophil?
Aristophil was a French company that bought up some of the most important and valuable manuscripts to be found. They then sold shares in the company to investors looking to make a profit on the rising prices. Aristophil often overpaid for their manuscripts, great as they were, but that was fine. It just made it look like their prices were rising faster, making investors more excited to part with their money. It worked until some people wanted their money back. Aristophil could not sell their manuscripts to raise cash as they couldn't sell them for what they paid, let alone a profit, so they had to raise the money from new investors. Can you say “Ponzi Scheme?” When cash outflows exceeded inflows the whole thing collapsed and investors had to settle for pennies on the dollar as the Aristophil collection was sold off at auction.
Undoubtedly, much of what we have been seeing is motivated more by money (greed) than a collector's love of the objects. It takes more than that to make prices skyrocket so quickly. Real collectors who love these games have been complaining that these buyers are driving them out of the market they love. We know that the $6 million Babe Ruth baseball card was immediately put on sale for shares selling for as little as $3 for a 0.00005% interest. These aren't collectors buying. They will never touch their cards. They are hoping for a quick profit. There is a website, Rally, where you can buy and sell shares in collectibles. In fact, the $2 million Super Mario game was sold by a group of Rally investors, not a collector. For those of you who favor the type of collectibles more often featured on this site, you can buy an interest in a July 16, 1776 printing of the Declaration of Independence valued at $2 million on Rally right now. The price is $25 per share.
I don't know where this is going but my sense is these sorts of things don't end well. Still, I would never give you advice to buy or not to buy. Maybe it doesn't end poorly, or maybe it continues to fly for some time even if it eventually returns to earth. Maybe the buyer of the $2 million Super Mario game will put it up for $4 million next year and that will be a great deal because a year later it sells for $10 million. I don't know, I just know I don't want to play this game. There are too many poison mushrooms to navigate. Proceed with great caution.
By the way, did you know that people now collect, and you can buy shares on Rally, in collectible sneakers?
