Today we’re exploring another angle on the question: Is it possible to predict price movements in collectibles?
Lets look at this from the lens of current events. Do current event impact collectible prices in a significant way? IF SO, is there an example of this we can show with data.
We crawled our collectible transaction database and pulled every LeBron James collectible sale that we could find over the past 5 years. We then sorted them by day of the week and plotted them all on a monthly graph from 2016 – 2020.
THEN, we pulled Google Trends results for ‘Lebron James’ over the same time period – plotted these by month from 2016-2020 and placed both on top of each other.
Below is the result:
Now, many of us have wondered if Google Trends could be a leading indicator of pricing change. Could increased searches in Google for a player translate to higher asset prices immediately after? Or, could Google be a lagging indicator.
I think what we have above is the simplest explanation.
Now, this is pretty cool:
The top graph tracks sales of LeBron collectibles with a price point BELOW $1000.
The bottom graph tracks sales of LeBron collectibles with a price point ABOVE $1000.
Let’s look at just the top graph. Do you notice a spike in sales each time there is a spike in LeBron James searches on Google?
Ok, that’s the first step in showing they are correlated.
But, what’s interesting is that the spike in searches for LeBron coincided with his team being in the NBA Finals.
More people searched for LeBron James on Google when they heard about his team making the finals.
Ok, stick with me… it gets interesting and applicable.
So, there was a clear spike in sales and activity in the collectibles market when LeBron was in the finals in 2016, 2017, 2018 and 2020. Items below $1000 clearly have a high transaction volume during these times.
But, look at the second chart. I’ll put it below so you don’t have to keep scrolling.
For items priced higher than $1000, there wasn’t this clear spike in activity like for items below $1000.
That’s really interesting.
I think the below explains this:
1. People new to the hobby are moved by current events and hope to make a profit from these events by purchasing collectibles.
2. BUT, this is only limited to the lower end of the market, not the upper end.
3. This is likely due to the fact that the surge in activity are from newcomers to the market — inexperienced investors/collectors who feel easy profits can be made by speculating on current events.
4. Therefore, they are treating sports collectibles like fantasy sports investments.
5. However, the upper end of the market isn’t moved by current events.
6. Likely due to the fact that higher net worth individuals have a longer term horizon on their investments AND
7. These individuals aren’t in it for a quick flip — but rather these collectibles may be items of nostalgia and passion. Not necessarily investment utilities.
So, the next time your favorite player is headed to the NBA Finals, The Super Bowl or the World Series, that may be the time to sell your lower end collectibles.
If you plan to buy and speculate during that time, expect increased competition.
Our recommendation would be to SELL key players when they are having on court/field success. Let the speculators give you a payday.
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