A Different Perspective On Pokemon...

Summary

Highlights

• The creator discusses the unexpected ways value is created in the Pokémon card market, likening it to 'money from thin air'! 💸
• There's a unique cycle of profit and reinvestment among collectors and business owners that keeps the market thriving. 🔄
• The video explains how scarcity and continuous demand drive prices up, ensuring market longevity. 📈
• The Pokémon Company’s strategies are based on lessons from other markets, ensuring sustainable growth. 🔍
• The creator suggests that the Pokémon market offers both security and high returns, an uncommon combination in investments. 🔐

Key Takeaways

• Value in Pokémon cards is created and amplified through grading and market demand. 📈
• A lot of profits are reinvested back into the hobby, keeping money circulating within the community. 🔂
• Scarcity combined with high demand keeps values high and the market thriving. 🔥
• The Pokémon Company is strategizing for long-term value and sustainability, learning from past industry mistakes. 🧠
• Investing in Pokémon offers a rare combo: safety and high returns. 💰

Overview

Chapters

• 00:00 - 01:00: Introduction and Market Overview The introduction of the chapter sets the stage for a discussion on market trends, focusing on future developments. The narrator reflects on a personal conversation with friends about the market's direction, emphasizing a customer-centric perspective. The early part of the chapter suggests a focus on analyzing current market conditions and speculating on upcoming changes. It serves as a premise for a deeper dive into market dynamics, likely elaborating on factors influencing these trends and their implications for businesses and customers alike.
• 01:00 - 05:00: Money Creation in Pokemon Market The chapter discusses the financial impact of the constantly increasing price points in the Pokemon market and how it affects consumers, making their wallets lighter. It highlights the phenomenon of money being created seemingly out of thin air within the Pokemon market. The chapter also touches on the need to focus on the flow of this newly created money, examining where it ends up and how it is ultimately used or spent by individuals.
• 05:00 - 10:00: Investments and Market Dynamics The chapter discusses the impact of investments on hobby-related markets, emphasizing that the continued growth of these markets is justified from a broader perspective. The speaker acknowledges differing opinions on the matter but aims to provide insight into why they believe the hobby sector will remain robust.
• 10:00 - 15:00: Scalpers and Long-Term Investment The chapter discusses 'Scalpers and Long-Term Investment,' beginning with a mention of a sponsorship from Low Poppin. The sponsor offers a wide range of items including modern and vintage trading cards, video games, and other collectibles. A highlight is their upcoming auction on Fanatics, which includes rare and coveted items not easily available in the market. Viewers are encouraged to check the auction out, with links provided in the video description and comments.
• 15:00 - 20:00: Future Opportunities and Market Growth The chapter discusses the concept of value creation and market dynamics by comparing the US dollar printing to the production of Pokémon cards. It illustrates the transformation of low-cost materials into highly valued products. The key point is how a small investment in basic materials can generate products with significant perceived market value, using Pokémon cards as an example. This reflects broader market trends and economic opportunities regarding manufacturing and perceived value.
• 20:00 - 25:00: Pokemon's Strategy and Market Sustainability This chapter explores the value creation process in the market for Pokemon cards. It highlights how cards deemed valuable can significantly increase in worth, sometimes reaching hundreds of dollars. The process includes sending cards to grading companies for encapsulation in protective plastic cases, which adds perceived value. This transformation effectively turns inexpensive materials into high-value items.
• 25:00 - 29:00: Conclusion and Final Thoughts The chapter discusses the financial flow within the Pokemon card market, highlighting that the Pokemon Company only receives a small portion of profits. Most of the money circulates between investors and collectors, either as unrealized or realized gains. It emphasizes the impact of grading companies and the distribution of profits among various stakeholders.

A Different Perspective On Pokemon... Transcription

• 00:00 - 00:30 Folks, welcome back. Today I just wanted to share some thoughts on sort of a different angle of looking at what's happening in the market and what is to come in the months and years moving forward. Uh it kind of stems back to a conversation I've been having with some friends of mine uh trying to get a handle on, you know, kind of where the market's headed from here. And I think a lot of the content in the space is really customer ccentric. And what I'm talking about is we're constantly talking about what everything means for
• 00:30 - 01:00 the customers and for the kind of general consumers and how everyone's, you know, wallets getting thinner because the price points are so much higher and and all and there's so many drops all the time and all these good things. But I think what we're not doing enough of is talking about all the money that is being created out of thin air from Pokemon. And then also where all that money is going and where that money goes, what that eventually gets spent on or what those people eventually use that
• 01:00 - 01:30 money for. And uh I think that'll give a pretty wide, you know, more broad perspective of, you know, the hobby and why it will continue to grow in my opinion. So sit back, relax. I'm going to kind of explain to you kind of my train of thinking. And again, you can feel free to agree or disagree with me, whatever, Alex. All this stuff is bad for the hobby. I get it all. But I at least want to like open your minds up to thinking this way so you maybe have a better grasp of why the hobby will continue to be so strong again in my opinion. But first I do shout out
• 01:30 - 02:00 today's video sponsor. It is low popping guys. Lowpoppin.com is something for everyone. Whether it's modern vintage Japanese English graded cards or sealed video games, sealed boxes, they've got it. But this Sunday they literally have an auction ending on Fanatics with some of the grails of the hobby. stuff you maybe not be able to find every day and you have a chance to own it. So, make sure to check out this auction block. I'm going to leave a link to both in the description and the comment section below. All
• 02:00 - 02:30 right, so first and foremost, we think the US prints a lot of dollars, right? Think about Pokemon. They are literally taking a few cents worth of cardboard and ink and putting it in another few cents of wrapping into another few cents of cardboard into another few cents of cellophane and then putting it into another few cents of a cardboard case. So all in all, what are we spending? You know, 50 cents, a dollar to make, you know, boxes and cases of these packs. And then inside of those cases and boxes
• 02:30 - 03:00 and packs, we have cards that the market deems valuable in the, you know, anywhere from, I don't know, a h 100red, $200, $300 to some of the best hit cards in these sets. And then think about this. People send those cards to grading companies. They put them in very cheap pieces of plastic that are worth a few cents, right? Ship them back to you. And now we've created more value out of thin air. And so these, you know, 50 cent worth of raw materials turns into
• 03:00 - 03:30 hundreds and thousands of dollars worth of items. And remember, Pokemon Company themselves is only getting a small portion of that. Where is the rest of that money going? Right? The grading companies, if you grade cards, they get some of it, a very small piece of it for their service, but the money makes its way into the hands of either collectors or investors in terms of unrealized gains or it gets sold for realized gains and realized profits. And the people in
• 03:30 - 04:00 the business, right, the actual business owners who are, you know, selling this product, who are grading cards and selling the cards, who are doing whatever different, you know, product service based thing they're doing, they are making large amounts of money in this hobby right now. Now, I don't know about you, but a lot of people that I know in this hobby that have very successful businesses, they also invest a lot of that money back into not just their business, but also into Pokémon, other collectibles to invest. And we can go back and forth about if this stuff's
• 04:00 - 04:30 investable and and why you should or shouldn't. That's not what this video is about. The fact of the matter is that money does make it back into other products. So, the money stays in the hobby. And so, let me explain to you what's happening. We're creating money value out of thin air. Okay? And then the majority of that money is staying in the hobby. And so people are wondering how these prices continue to go up and how things continue to grow at the rate they are. It's because a lot of the money does never leaves the hobby. A lot
• 04:30 - 05:00 of people in this hobby, successful business owners, people who do very well, they live very meager lives usually that that they're they're fine getting by on just enough and they want to continue to build their collections. They want to build their investment. They want to keep their business growing. The money stays here. And I'm not here to debate when the money is going to leave and how long we have. I'm not here to debate that right now. All I'm trying to say is there is a lot of value being created right now in this hobby for anyone that is successful right now and a lot of
• 05:00 - 05:30 that money staying. Not only that, stay with me here because the confidence continues to grow in investing in Pokemon because you, you know, people have done this now with multiple market cycles because more and more people that are being introduced to the hobby, they see channels like mine, channels like others, they see the data, right? This isn't me telling you. I'm telling you guys, it's going to go up. Believe me. No, you can see the data, right? You don't have to take my word for it or some other person's word for it. The
• 05:30 - 06:00 data is there. you can see the track record. When people have long for long track records of data, they get very much more trusting of it. And again, you can disagree with it and say, "Oh, it's all just been inflated for a long time. It's an oversized bubble." That's fine. But a lot of people don't don't feel that way and they feel comfortable keeping their money there. Um, I saw a clip from on TikTok from uh Robo Skills and Twice Big Jake's podcast and uh Robo was uh he was kind of explaining it.
• 06:00 - 06:30 It's just like it's almost becomes a self-fulfilling prophecy because, you know, Pokemon has been an extremely safe place to put your money, especially in the last decade or more. Um, pretty much 99% of the sealed products have went up in value. Now, normally a very safe investment would be something that has very meager returns, has lower percentage gains because, well, it's safer, so everyone trusts it, everyone puts their money in it, and it doesn't allow for as crazy of of appreciation like you would see in a single stock or some, you know, low-level crypto that no
• 06:30 - 07:00 one knows about and pops off. But with Pokemon, it's the exact opposite. You've seen better than average returns. So, we have this this crazy setup right now where you have what people perceive to be a safe place to put your money, but also a place that outperforms most everywhere else you can put your money married together. When you marry those two things together, it just makes the problem even bigger if you see this as a problem of more and more people wanting to deploy cash into these products,
• 07:00 - 07:30 which again makes it a self-fulfilling prophecy. Now, you could say, "Well, Alex, eventually it's all going to blow up and end." That only happens with overprinting because as long as the items and the cards stay scarce enough on the market and enough people are holding and not selling, the prices go up because there's still too much demand for the amount of supply. Again, not here to debate if it ever becomes an issue, but up until now, it hasn't. And it's not looking like it's going to be the way we still continue to see the same patterns happen again and again and
• 07:30 - 08:00 again. Also, everyone hates the scalpers, right? Scalpers evil. What do you think of a portion of these scalpers are obviously here as opportunists and a lot of them, you know, will leave when the opportunity kind of, you know, moves and a better opportunity somewhere else and, you know, things catch up and MSRP is kind of what things are selling for if not less. You can't make a a margin binging all these sites, right? What if a portion of these scalpers actually like get more in tune to the market and they start watching channels like mine and
• 08:00 - 08:30 others and they start saying to themselves, "Wait a second. I think there's more of a long-term play here." Right? Even if a small percentage of those people who are making a lot of money off this stuff start saying, "I actually think I want to have long-term money here." And then they start investing too and want to hold things, right? Also, this is the this is the last part of this whole puzzle. I know myself, I'm not investing in Destin rivals at 250. I'm not buying these new UPCs at 250, 300. I'm not, you know, I'm
• 08:30 - 09:00 not investing right now at these current price points. A lot of my other friends in the hobby who have large amounts of capital, who normally buy large amounts of product, they're not investing a lot right now. Meaning, all of these sales right now are happening to mostly end consumers. Okay? Some people are picking some up for collections. Some people are investing a little bit. A lot of it's happening to end consumers. So you have a time when people are making a lot of money in this hobby. Whether you own a store, you're selling product for, you know, 4x MSRP, you're you're grading
• 09:00 - 09:30 cards and seeing tons of value in graded cards, you're just running a successful business, whatever it is, you're having tons of money get built up. There's not a lot of opportunity. There was for a second in crypto in the stock market. Now everything's rebounded. A lot of the opport the easy opportunities have kind of been taken away again. Real estate's not crashing. You know, you're looking around, you're like, "Well, everything's kind of just normal opportunities. People are still sitting on cash. They're still acquiring cash. What do you think is going to happen when we do finally get a goodiz reprint or one of these sets comes out of the gate and
• 09:30 - 10:00 it's under MSRP? Do you know how much c I know myself, I I have I have hordes of cash I am ready to deploy if the opportunity ever presents itself. And I know other people in the hobby who have more capital than me are sitting on cash waiting to deploy that capital because again they also believe in the longevity of this hobby like many others do, right? Because of all of the performance we've seen. And so what do you think happens when all of this cash starts to come off the sidelines and move into the
• 10:00 - 10:30 hobby? When people get a little less freaked out about the crazy price points out of the gate and you know things being too new because reprints could come. What do you think happens in another one to two years when people get a lot less shy about buying Scarlet Valor era product because now they think it's not going to get reprinted. Maybe some of it's out of rotation. It's not going to get a reprint. You're seeing what's happened with Sword and Shield so fast because it is out of rotation. This pattern will continue because there is more and more money being created in this hobby every single day. Whenever they print a new set, Pokemon is taking
• 10:30 - 11:00 this much raw materials. they release it and the market determines it's worth this much money and then you know the cards get graded now those go from worth this much to this much money and it just it inflates and inflates and sure there's ups and downs in the cards but they're never going to be worth anywhere near what the raw materials are worth they're always going to be worth way more than that and so it it just has a way of continuously compounding and that is why you see people in the hobby who have been here now I mean just just for
• 11:00 - 11:30 like 1 2 3 years let's not even talk about the people who have been here 5, 10, 15, 20 years. Let's just talk about the last few years. I have had so many people send me their collector apps, send me Excel spreadsheets, send me pictures telling me, "Alex, I've been watching your channel for a year and a half, two years, two and a half years now. Here's what I've amassed. I have a $100,000 Pokemon, you know, portfolio. I've got a $200,000 $300,000 Pokemon portfolio. Thank you so much for showing me the opportunity, man. I I heard what you were saying. I looked at the data
• 11:30 - 12:00 myself. I took action and this is what's possible in the hobby. And again, I understand there's a lot of people that watch this channel that are against this. I understand. Like I I know you're against me. You're against investing in this stuff. You're against this stuff rising in value. I understand, right? And you know, I I hate the fact that we have to be at each other's, you know, throats all the time and one side has to hit the other. Um, and I'm I'm actually on your guys' side a lot of the time. I I agree. I think new sets should be affordable. I think new sets should be at MSRP or under. I'm with you, right?
• 12:00 - 12:30 And I think we will get back to that. However, when you're talking long-term, this is the natural growth of things. When things are no longer in production and there's still demand and you have demand rising with supply never increasing again, there's nowhere to go but up. The only way to go down is if demand falls at a greater rate than supply. Not demand falls. I I've been through this in other videos if you guys watch my channel for a while. The the thing with sealed product is it's different than singles, right? Singles are always going up in population,
• 12:30 - 13:00 right? There's always more singles being opened. There's always more singles being graded. So, the population reports always rise. Meaning, you need a steady increase of demand to meet the steady increase of singles to keep the values high. Sealed product is always decreasing. Maybe it has a little reprint here or there and then it decreases again. And after 2 to 3 years, it does nothing but decrease in supply. Okay? As long as demand is decreasing at a slower rate, the price continue to rise. You would need demand to fall at a
• 13:00 - 13:30 greater rate than the product is is falling for the price to actually go stagnate and then fall. And that is why you see this stuff continuously go up year after year after year. It doesn't take much, especially the more that is removed and open on the market. And so I do think we'll meet reach an equilibrium where prices will be affordable out of the gate again at release for the first year or two. But I don't think this stops guys. I do not think any of this stops rising in value when it reaches
• 13:30 - 14:00 that 2 3 4 5 year old mark. And that's why it remains in most people's minds a safe place to put your money where you can see above average returns. And because the Pokemon company is the biggest media franchise because they've done such a good job at creating a brand that everybody wants. just slap Pokemon on it. People want it. And also because it's the last thing I'm going to end with, they're very smart on how they handle the printing of their products. Okay? A lot of people try to use the the '9s, you know, sports cars, the junk
• 14:00 - 14:30 junk wax era, all that stuff as kind of a argument against why this stuff will eventually fall in value. People learn over times. Companies learn over time. Do you not think there's not at least one maybe more people that work at Pokemon that are on the boards that are in decision-making positions that weren't at least around if not directly involved to sports cards in those times? You don't think they have anybody that was in any kind of of of you know market back in sports cards when everything
• 14:30 - 15:00 went. You don't think they have any advisors that have re they've really looked at all the data themselves and figured out what overprinting does and figured out how to destroy a brand. looked at things like what Bandai's done in the past, other card games, right? They probably studied Magic the Gathering. They probably have people from the, you know, that worked at some of those companies. Do you really not think that Pokemon is running all kind of different models on exactly how to keep their product having good longevity and value and people wanting to continue to buy it while also keeping it
• 15:00 - 15:30 affordable for a period of time so that so everyone that wants to play the game and just collect the cards and newcomers can afford it? You don't think they're constantly trying to find that equilibrium? I know it's easy to say, "Let's just put this stuff into the ground," but that is not how you grow a a longevity card game that's going to last for decades and decades down the road, right? Because if things have no value, inherently people will no longer be attracted to them. Now, you can say, "Well, I'm a true fan. I'll always be here." Yeah, maybe a small portion will. Most people won't. If everything's a
• 15:30 - 16:00 dime a dozen, nothing has any value. None of the cards have value. None of the products have value. You can buy a booster box for 20 bucks down the road. it doesn't induce a lot of, you know, kind of emotions, you know, it doesn't have that same reaction to to, you know, opening the stuff to pulling those cards if they're if they have no value, right? Even the collection. And so I truly think that just the culmination of everything happening right now, right? Pokemon doing a lot of right things, right? How we're creating money out of
• 16:00 - 16:30 thin air based on the how the market values these things. how uh a lot of these people who are here maybe being as opportunists are probably going to stick around and also keep money in here long term. A lot of the business owners and people who make money in the hobby also keeping a lot of that money in the hobby and not taking it out, right? A lot of investors with tons of money on the sidelines itching to use it and at the first sign opportunities when they when they have a chance to they are going to use it. There is just so many positives still in this market right now and those
• 16:30 - 17:00 kind of get drowned out by a lot of the negativity because we're always customer focused on a lot of these videos where if you think about like the actual finance focus the finance ccentric type uh you know way of thinking I think we have a long way to go guys. So uh that's all I got. Hope you enjoyed it. Again, you don't got to agree with anything I said in this video, but at least give it some thought and kind of get out of like your own like bubble or way of thinking and at least allow it to maybe I I don't know, g give you a different perspective
• 17:00 - 17:30 that may change the way you think about the hobby. That's all I got today, guys. Hope you have a great weekend. I'm out.