11 ms·

The Beanie Baby Bubble of '99

92 points by stephsmithio 5y ago

erehweb 5y ago
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?
- michaelt 5y ago
  I thought housing was a bubble in 2005. But the prices keep on going up.
  - deleted 5y ago
    [deleted]
  - ska 5y ago
    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).
    - stjohnswarts 5y ago
      Yep, I got my house at almost 30% off it's new price and now it is worth 4x what I paid for it in 2009
  - anonporridge 5y ago
    Prices will never stop going up if your unit of account measuring stick never stops shrinking.
  - UncleOxidant 5y ago
    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.
- rhino369 5y ago
  Social media stock?
  - OJFord 5y ago
    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.
    - rhino369 5y ago
      But everyone knew social media would pivot to ads. It was baked into their valuation during the alleged bubble. I was 1000% on team facebook/snap/twitter is a bubble.
- throwaway889900 5y ago
  Magic the Gathering cards probably
- closetohome 5y ago
  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.
  - Jtsummers 5y ago
    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.
- anonporridge 5y ago
  Amazon. https://fortune.com/2010/10/22/the-amazing-amazon-stock-bubble/ https://fortune.com/2010/10/22/the-amazing-amazon-stock-bubb... The internet. https://www.snopes.com/fact-check/paul-krugman-internets-effect-economy/ https://www.snopes.com/fact-check/paul-krugman-internets-eff... Bitcoin. https://www.bitcoinisdead.org/ https://www.bitcoinisdead.org/
jdkee 5y ago
Relevant portion of the article: "According to economists David Tuckett and Richard Taffler, we often view a hot new financial opportunity as a “phantastic object,” or an unconscious representation of something that fulfills our wildest desires. These objects are “exciting and transformational.” They appear to “break the usual rules of life and turn aspects of ‘normal’ reality on its head.” They promise something far departed from the market’s typical behavior. During a bubble, we formulate a “collective hallucination” of prosperity, and fall victim to groupthink, a phenomenon where “a significant chunk of society feverishly buys into a shared dream” and ignores reality."
- jpm_sd 5y ago
  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 estimated net worth of $2.7B, good for the 887th richest person in the world. He owns a fleet of luxury cars, a $153m estate, $41m worth of rare art, and the Four Seasons Hotel in New York, where you can rent the “Ty Warner Penthouse” for $50k per night."
  - Lerc 5y ago
    "$41m worth of rare art" That bit at least is rather amusing.
    - jpm_sd 5y ago
      He could sell NFTs of it and burn it, and double his money!
      - technofiend 5y ago
        You're thinking small. You sell raffle tickets to let someone burn the artwork and pocket the profits from that too. Bonus points if there's a sponsor of the event.
janmo 5y ago
Many parallels with what is going on with NFTs right now.
- deleted 5y ago
  [deleted]
- paulpauper 5y ago
  except 1000x bigger. ppl are spending hundreds of thousands of dollars like it's nothing.
  - dymk 5y ago
    It's easier to spend money when purchasing things with a credit card versus cash. Or, users are more likely to make in-app purchases when it's with pre-loaded Robux or V Bucks rather than dollars. There's got to be something like that at play here with ETH/BTC. It's so much easier to spend it when it's hard to put into perspective just how much physical cash the purchase represents.
  - ceejayoz 5y ago
    They're mostly probably not. https://www.nbcnews.com/tech/security/nft-sales-show-evidence-wash-trading-researchers-say-rcna14535 https://www.nbcnews.com/tech/security/nft-sales-show-evidenc...
- brimble 5y ago
  "Collectibles" bubbles have been a feature of (at least) American society for many decades. The tendency of some people to fall for marketing that describes some mass-market junk as an "investment" or "collectible" and to think they're really getting in on something good, is documented in Fussell's Class, so it was already a recognizable trend by 1983. [EDIT] This is distinct from, or a useful subcategory of, some other "manias" or bubbles chiefly because the effect is often deliberately cultivated by a manufacturer or trade group, and the goods are mass-market in price and quality and lacking in (meaningful) natural constraints on supply. Think Franklin Mint junk on the Shopping Channel, or Precious Moments, or early '90s Topps cards. Pop-culture themed dinner plates intended only for display. Or Beanie Babies.
Lerc 5y ago
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.
- duxup 5y ago
  I wonder how many individuals were buying beanie babies compared to nfts? I suspect far more beanie baby buying individuals.
- technofiend 5y ago
  >So many people have learned nothing. I would argue considering the plethora of NFT offerings both legitimate and plagiarized that many people learned trying to manufacture the next Beanie Baby is better than investing in them, sort of like selling shovels in a gold rush is more reliable than digging for gold.
  - deleted 5y ago
    [deleted]
- burnt_toast 5y ago
  I've been hoping someone would make a satirical beanie baby nft website.
- throwanem 5y ago
  The difference is that stuffed toys have value independent of speculation.
  - ARandomerDude 5y ago
    True in the ones to dozens of dollars. I remember in the Beanies Baby era they were going for hundreds or thousands though. I actually knew somebody with an extremely valuable collection in the late 90s whose house was broken into. Only the BBs were stolen, which speaks to their value being well beyond that of regular stuffed toys at the time.
pushcx 5y ago
There's a great history of this, The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute by Zac Bissonnette. It's a quick read, almost entirely original reporting. Aside from the colorful characters, it's really compelling to see the way some individuals' and limited information combined with mass media fell together to create the bubble. It seems like it couldn't have happened at any other time because it needed cheap independent publishing (both print and web) before ubiquity eroded the perceived legitimacy.
- camjohnson26 5y ago
  Also Beanie Mania on HBO, not as insightful as the book but still a good documentary. The Beanie Baby bubble was essentially a textbook example of mania.
- adam_arthur 5y ago
  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 active listings. - mortgage rates are climbing at a historically fast pace... If inflation doesn't abate we can expect 5-6% mortgages within a few months. Rates were kept low due to the belief in transitory, but confidence in this is quickly eroding. Mortgages roughly correlate with 10y treasury which is at 2%, while inflation at 7.5%. typically these values are close together - all in affordability will reach record lows within a few months, if inflation and mortgage trends don't abate - there's clearly a mass FOMO/psychological phenomena going on right now. Buyers aren't acting rationally from a financial perspective Home prices can avoid a correction if we quickly return to 0 or negative rates, which could happen. If inflation persists, they will correct in a big way within a year or two as rates adjust to inflation Sources: https://fred.stlouisfed.org/series/QUSR628BIS https://fred.stlouisfed.org/series/QUSR628BIS https://fred.stlouisfed.org/series/UNDCONTSA https://fred.stlouisfed.org/series/UNDCONTSA https://fred.stlouisfed.org/series/SPPOPGROWUSA https://fred.stlouisfed.org/series/SPPOPGROWUSA https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fix... EDIT: And the fervent denials that it's a bubble is surely a hallmark of bubbles too :). Please refute with actual data if you disagree
anonymousiam 5y ago
Ahem. Bitcoin! *cough*
- amelius 5y ago
  The article mentions Bitcoin!
  - deleted 5y ago
    [deleted]
pg_bot 5y ago
If you are curious about asset bubbles, how they form and how they unravel, I would suggest you read Hyman Minsky's "Can 'It' happen again?".
Damogran6 5y ago
My son learned SO MUCH from 3d printing and selling fidget spinners. Bulk purchasing skate bearings, charging 3 times as much for the same plastic because it had different colors…and the STEM school really couldn’t do much, because that kind of thinking was in their charter…plus, you know, distract the hands while keeping their brains engaged.
tamaharbor 5y ago
If I had $5 for every Beanie Baby my kids had…. Wait - I did.
Cd00d 5y ago
I still have a visceral reaction to seeing Beanie Baby's actually be played with. I had young cousins that were into "collecting" them in the 90s, and remember part of it was keeping the tags and not playing with them. Now I have young kids that immediately yank the tags and carry them to school. I have nieces that have outgrown their's and have passed them down to the family dog as a chew toy. Both give me a moment of 'aaah aaah!' before I can make my rational brain remember they're just a $5 stuffy that once had a bubble.
amelius 5y ago
How were these plastic beans even considered child-safe?
- lotsofpulp 5y ago
  Or world safe. There was a huge thing in 2000s up to 2015 or so with tiny little plastic beads in soap that will forever contaminate the water supply and soil it ends up in, and I think it is still legal. Glitter, which is also tiny pieces of plastic, is still legal.
hsbauauvhabzb 5y ago
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.
- bena 5y ago
  I think the difference between Beanie Babies and Pokemon/Magic cards is that trading cards hold some sort of utility outside of existence. There's a game behind the cards. And certain cards increase your chances of winning.
  - samatman 5y ago
    This is an ex ante explanation, because it doesn't apply to (canceled) stamps, which are valuable and have been for a couple centuries.
    - bena 5y ago
      Well, yes. I was speaking to those items specifically. I don't think those cards are worth anything without the game. Not everything stems from the same reason.
- jallen_dot_dev 5y ago
  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.
deleted 5y ago
[deleted]
a_shovel 5y ago
This leads to a pretty interesting comparison between plain cryptocurrencies and NFTs. Cryptocurrencies are beanie babies: Once available for a trifle, their value has ballooned based on speculation. But that already happened, you missed out on it, and it has no bearing on their future prospects. And if a bunch of people ever feel the need to cash out at once, they'll find out just how much value they really have when there's nobody buying. NFTs are Collector's Edition items: Their original purchase prices are artificially inflated (normally by distributor's decision, for NFTs by wash trading). An association with some pop-culture property or pretty artwork attracts eyeballs to it. You could buy it, or you could just get the regular edition (which, for online artwork, is free.) And the price they're available for doesn't necessarily have anything to do with what you'll be able to get for it.
- pcthrowaway 5y ago
  To play devil's advocate, this is a thing that could have said various times in the past 12 years as each previous peak look like "the bubble that you missed out on". Also, financial instruments work differently from physical assets; if you have conviction that the peak has already happened ("the bubble happened, and there won't be another one"), you can take a bet against the price by shorting. Of course, this leads to very different kinds of market dynamics which aren't directly comparable to the beanie baby bubble. Too much pressure on the short or (with leverage) long side can lead to liquidation cascades which result in very dramatic price movement. On the short side this would look like a short squeeze as a large fund can buy a bunch of the crypto to liquidate shorts, then sell it after the market moves at a profit.
  - yumraj 5y ago
    > you can take a bet against the price by shorting. John Maynard Keynes said, “the markets can remain irrational longer than you can remain solvent.”
- ytjohn 5y ago
  With Beanie Babies, you actually own something. You might not be able to sell it for what you paid, but you still have something to display or give away. With NFT, you own a URL to an image, but you're relying on the NFT marketplace to maintain that. You're not buying the artwork itself, but some token related to the artwork. I think a better comparison for NFTs is a star registry. You pay a company to name a star after you (or someone else as a gift). That company will provide a star locator chart and publish a book each year with all the star names they registered that year. You don't own the star, but you do own an certificate saying the star is named after you. Unlike an NFT though, you can't transfer the star registration to someone else.
terran57 5y ago
My ex-wife and I divorced in 1999 during the height of the craze. She was an avid Beanie Baby collector and I gladly let her have the entire collection in exchange for a quicker divorce.
- MerelyMortal 5y ago
  Thank goodness you didn't end up like this ex-couple, forever memorialized on the internet: https://www.huffpost.com/entry/beanie-baby-fever-in-1999_n_58af7d12e4b060480e0661fe https://www.huffpost.com/entry/beanie-baby-fever-in-1999_n_5... (Article is about picture of two divorcees dividing a Beanie Baby collection on the courtroom floor in front of the judge.)
TedShiller 5y ago
Yeah but they didn't have ape beanies.
nonford150 5y ago
If only we had gone all in on Beanie Babies. We cleared $20K+ selling BBs on the side of the road that year. I wanted to spend our whole savings and hire people to sell them for us - we were buying them out the back doors of Hallmark stores. Wife didn't. But we still made enough to put down a sizable down payment on our current house. It was a crazy time. Crazy people fighting each other for cheap stuffed animals.
PolygonSheep 5y ago
I remember being in grade school while this was happening and a girl was explaining to me how it worked, that such-and-such Beanie Baby was being "retired" and only a few thousand of each one was made. I just didn't get it. Why wouldn't they make more? I mean it's not like we're going to run out of polyester and plastic pellets anytime soon. Not to mention the company itself doesn't benefit if they appreciate on the used market. Why would they leave all that money on the table by deliberately making less than people wanted? There were also rumors going around that the whole thing - production of all Beanie Babies - was going to end in the year 2000 which actually turned out to be very briefly true before it wasn't anymore. As an adult I was smart enough to miss cryptocurrency 10 years ago because I thought it sounded like Flooz.com or Beenz. Magic internet money you can earn by solving sudokus? Who the hell wants that? I then missed NFTs (won't they just right click?) and now I'm too scared to get in for fear I will end up as the bag holder. I'm probably going to end up learning the wrong lesson from this and throw fifty bucks into every crazy-sounding scheme I come across from now on in hopes one of them will hit it big. But that's not so different from venture capital. Just on a smaller scale.
Borrible 5y ago
Poor Beanie Babies, but what about other investments you can hug? https://priceonomics.com/when-the-great-alpaca-bubble-burst/ https://priceonomics.com/when-the-great-alpaca-bubble-burst/

92 points by stephsmithio 5y ago

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?

michaelt 5y ago
I thought housing was a bubble in 2005. But the prices keep on going up.
- deleted 5y ago
  [deleted]
- ska 5y ago
  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).
  - stjohnswarts 5y ago
    Yep, I got my house at almost 30% off it's new price and now it is worth 4x what I paid for it in 2009
- anonporridge 5y ago
  Prices will never stop going up if your unit of account measuring stick never stops shrinking.
- UncleOxidant 5y ago
  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.
rhino369 5y ago
Social media stock?
- OJFord 5y ago
  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.
  - rhino369 5y ago
    But everyone knew social media would pivot to ads. It was baked into their valuation during the alleged bubble. I was 1000% on team facebook/snap/twitter is a bubble.
throwaway889900 5y ago
Magic the Gathering cards probably
closetohome 5y ago
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.
- Jtsummers 5y ago
  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.
anonporridge 5y ago
Amazon. https://fortune.com/2010/10/22/the-amazing-amazon-stock-bubble/ https://fortune.com/2010/10/22/the-amazing-amazon-stock-bubb... The internet. https://www.snopes.com/fact-check/paul-krugman-internets-effect-economy/ https://www.snopes.com/fact-check/paul-krugman-internets-eff... Bitcoin. https://www.bitcoinisdead.org/ https://www.bitcoinisdead.org/

jdkee 5y ago

Relevant portion of the article: "According to economists David Tuckett and Richard Taffler, we often view a hot new financial opportunity as a “phantastic object,” or an unconscious representation of something that fulfills our wildest desires. These objects are “exciting and transformational.” They appear to “break the usual rules of life and turn aspects of ‘normal’ reality on its head.” They promise something far departed from the market’s typical behavior. During a bubble, we formulate a “collective hallucination” of prosperity, and fall victim to groupthink, a phenomenon where “a significant chunk of society feverishly buys into a shared dream” and ignores reality."

jpm_sd 5y ago
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 estimated net worth of $2.7B, good for the 887th richest person in the world. He owns a fleet of luxury cars, a $153m estate, $41m worth of rare art, and the Four Seasons Hotel in New York, where you can rent the “Ty Warner Penthouse” for $50k per night."
- Lerc 5y ago
  "$41m worth of rare art" That bit at least is rather amusing.
  - jpm_sd 5y ago
    He could sell NFTs of it and burn it, and double his money!
    - technofiend 5y ago
      You're thinking small. You sell raffle tickets to let someone burn the artwork and pocket the profits from that too. Bonus points if there's a sponsor of the event.

janmo 5y ago

Many parallels with what is going on with NFTs right now.

deleted 5y ago
[deleted]
paulpauper 5y ago
except 1000x bigger. ppl are spending hundreds of thousands of dollars like it's nothing.
- dymk 5y ago
  It's easier to spend money when purchasing things with a credit card versus cash. Or, users are more likely to make in-app purchases when it's with pre-loaded Robux or V Bucks rather than dollars. There's got to be something like that at play here with ETH/BTC. It's so much easier to spend it when it's hard to put into perspective just how much physical cash the purchase represents.
- ceejayoz 5y ago
  They're mostly probably not. https://www.nbcnews.com/tech/security/nft-sales-show-evidence-wash-trading-researchers-say-rcna14535 https://www.nbcnews.com/tech/security/nft-sales-show-evidenc...
brimble 5y ago
"Collectibles" bubbles have been a feature of (at least) American society for many decades. The tendency of some people to fall for marketing that describes some mass-market junk as an "investment" or "collectible" and to think they're really getting in on something good, is documented in Fussell's Class, so it was already a recognizable trend by 1983. [EDIT] This is distinct from, or a useful subcategory of, some other "manias" or bubbles chiefly because the effect is often deliberately cultivated by a manufacturer or trade group, and the goods are mass-market in price and quality and lacking in (meaningful) natural constraints on supply. Think Franklin Mint junk on the Shopping Channel, or Precious Moments, or early '90s Topps cards. Pop-culture themed dinner plates intended only for display. Or Beanie Babies.

Lerc 5y ago

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.

duxup 5y ago
I wonder how many individuals were buying beanie babies compared to nfts? I suspect far more beanie baby buying individuals.
technofiend 5y ago
>So many people have learned nothing. I would argue considering the plethora of NFT offerings both legitimate and plagiarized that many people learned trying to manufacture the next Beanie Baby is better than investing in them, sort of like selling shovels in a gold rush is more reliable than digging for gold.
- deleted 5y ago
  [deleted]
burnt_toast 5y ago
I've been hoping someone would make a satirical beanie baby nft website.
throwanem 5y ago
The difference is that stuffed toys have value independent of speculation.
- ARandomerDude 5y ago
  True in the ones to dozens of dollars. I remember in the Beanies Baby era they were going for hundreds or thousands though. I actually knew somebody with an extremely valuable collection in the late 90s whose house was broken into. Only the BBs were stolen, which speaks to their value being well beyond that of regular stuffed toys at the time.

pushcx 5y ago

There's a great history of this, The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute by Zac Bissonnette. It's a quick read, almost entirely original reporting. Aside from the colorful characters, it's really compelling to see the way some individuals' and limited information combined with mass media fell together to create the bubble. It seems like it couldn't have happened at any other time because it needed cheap independent publishing (both print and web) before ubiquity eroded the perceived legitimacy.

camjohnson26 5y ago
Also Beanie Mania on HBO, not as insightful as the book but still a good documentary. The Beanie Baby bubble was essentially a textbook example of mania.
adam_arthur 5y ago
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 active listings. - mortgage rates are climbing at a historically fast pace... If inflation doesn't abate we can expect 5-6% mortgages within a few months. Rates were kept low due to the belief in transitory, but confidence in this is quickly eroding. Mortgages roughly correlate with 10y treasury which is at 2%, while inflation at 7.5%. typically these values are close together - all in affordability will reach record lows within a few months, if inflation and mortgage trends don't abate - there's clearly a mass FOMO/psychological phenomena going on right now. Buyers aren't acting rationally from a financial perspective Home prices can avoid a correction if we quickly return to 0 or negative rates, which could happen. If inflation persists, they will correct in a big way within a year or two as rates adjust to inflation Sources: https://fred.stlouisfed.org/series/QUSR628BIS https://fred.stlouisfed.org/series/QUSR628BIS https://fred.stlouisfed.org/series/UNDCONTSA https://fred.stlouisfed.org/series/UNDCONTSA https://fred.stlouisfed.org/series/SPPOPGROWUSA https://fred.stlouisfed.org/series/SPPOPGROWUSA https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fix... EDIT: And the fervent denials that it's a bubble is surely a hallmark of bubbles too :). Please refute with actual data if you disagree

anonymousiam 5y ago

Ahem. Bitcoin! *cough*

amelius 5y ago
The article mentions Bitcoin!
- deleted 5y ago
  [deleted]

pg_bot 5y ago

If you are curious about asset bubbles, how they form and how they unravel, I would suggest you read Hyman Minsky's "Can 'It' happen again?".

Damogran6 5y ago

My son learned SO MUCH from 3d printing and selling fidget spinners. Bulk purchasing skate bearings, charging 3 times as much for the same plastic because it had different colors…and the STEM school really couldn’t do much, because that kind of thinking was in their charter…plus, you know, distract the hands while keeping their brains engaged.

tamaharbor 5y ago

If I had $5 for every Beanie Baby my kids had…. Wait - I did.

Cd00d 5y ago

I still have a visceral reaction to seeing Beanie Baby's actually be played with. I had young cousins that were into "collecting" them in the 90s, and remember part of it was keeping the tags and not playing with them. Now I have young kids that immediately yank the tags and carry them to school. I have nieces that have outgrown their's and have passed them down to the family dog as a chew toy. Both give me a moment of 'aaah aaah!' before I can make my rational brain remember they're just a $5 stuffy that once had a bubble.

amelius 5y ago

How were these plastic beans even considered child-safe?

lotsofpulp 5y ago
Or world safe. There was a huge thing in 2000s up to 2015 or so with tiny little plastic beads in soap that will forever contaminate the water supply and soil it ends up in, and I think it is still legal. Glitter, which is also tiny pieces of plastic, is still legal.

hsbauauvhabzb 5y ago

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.

bena 5y ago
I think the difference between Beanie Babies and Pokemon/Magic cards is that trading cards hold some sort of utility outside of existence. There's a game behind the cards. And certain cards increase your chances of winning.
- samatman 5y ago
  This is an ex ante explanation, because it doesn't apply to (canceled) stamps, which are valuable and have been for a couple centuries.
  - bena 5y ago
    Well, yes. I was speaking to those items specifically. I don't think those cards are worth anything without the game. Not everything stems from the same reason.
jallen_dot_dev 5y ago
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.

deleted 5y ago

[deleted]

a_shovel 5y ago

This leads to a pretty interesting comparison between plain cryptocurrencies and NFTs. Cryptocurrencies are beanie babies: Once available for a trifle, their value has ballooned based on speculation. But that already happened, you missed out on it, and it has no bearing on their future prospects. And if a bunch of people ever feel the need to cash out at once, they'll find out just how much value they really have when there's nobody buying. NFTs are Collector's Edition items: Their original purchase prices are artificially inflated (normally by distributor's decision, for NFTs by wash trading). An association with some pop-culture property or pretty artwork attracts eyeballs to it. You could buy it, or you could just get the regular edition (which, for online artwork, is free.) And the price they're available for doesn't necessarily have anything to do with what you'll be able to get for it.

pcthrowaway 5y ago
To play devil's advocate, this is a thing that could have said various times in the past 12 years as each previous peak look like "the bubble that you missed out on". Also, financial instruments work differently from physical assets; if you have conviction that the peak has already happened ("the bubble happened, and there won't be another one"), you can take a bet against the price by shorting. Of course, this leads to very different kinds of market dynamics which aren't directly comparable to the beanie baby bubble. Too much pressure on the short or (with leverage) long side can lead to liquidation cascades which result in very dramatic price movement. On the short side this would look like a short squeeze as a large fund can buy a bunch of the crypto to liquidate shorts, then sell it after the market moves at a profit.
- yumraj 5y ago
  > you can take a bet against the price by shorting. John Maynard Keynes said, “the markets can remain irrational longer than you can remain solvent.”
ytjohn 5y ago
With Beanie Babies, you actually own something. You might not be able to sell it for what you paid, but you still have something to display or give away. With NFT, you own a URL to an image, but you're relying on the NFT marketplace to maintain that. You're not buying the artwork itself, but some token related to the artwork. I think a better comparison for NFTs is a star registry. You pay a company to name a star after you (or someone else as a gift). That company will provide a star locator chart and publish a book each year with all the star names they registered that year. You don't own the star, but you do own an certificate saying the star is named after you. Unlike an NFT though, you can't transfer the star registration to someone else.

terran57 5y ago

My ex-wife and I divorced in 1999 during the height of the craze. She was an avid Beanie Baby collector and I gladly let her have the entire collection in exchange for a quicker divorce.

MerelyMortal 5y ago
Thank goodness you didn't end up like this ex-couple, forever memorialized on the internet: https://www.huffpost.com/entry/beanie-baby-fever-in-1999_n_58af7d12e4b060480e0661fe https://www.huffpost.com/entry/beanie-baby-fever-in-1999_n_5... (Article is about picture of two divorcees dividing a Beanie Baby collection on the courtroom floor in front of the judge.)

TedShiller 5y ago

Yeah but they didn't have ape beanies.

nonford150 5y ago

If only we had gone all in on Beanie Babies. We cleared $20K+ selling BBs on the side of the road that year. I wanted to spend our whole savings and hire people to sell them for us - we were buying them out the back doors of Hallmark stores. Wife didn't. But we still made enough to put down a sizable down payment on our current house. It was a crazy time. Crazy people fighting each other for cheap stuffed animals.

PolygonSheep 5y ago

I remember being in grade school while this was happening and a girl was explaining to me how it worked, that such-and-such Beanie Baby was being "retired" and only a few thousand of each one was made. I just didn't get it. Why wouldn't they make more? I mean it's not like we're going to run out of polyester and plastic pellets anytime soon. Not to mention the company itself doesn't benefit if they appreciate on the used market. Why would they leave all that money on the table by deliberately making less than people wanted? There were also rumors going around that the whole thing - production of all Beanie Babies - was going to end in the year 2000 which actually turned out to be very briefly true before it wasn't anymore. As an adult I was smart enough to miss cryptocurrency 10 years ago because I thought it sounded like Flooz.com or Beenz. Magic internet money you can earn by solving sudokus? Who the hell wants that? I then missed NFTs (won't they just right click?) and now I'm too scared to get in for fear I will end up as the bag holder. I'm probably going to end up learning the wrong lesson from this and throw fifty bucks into every crazy-sounding scheme I come across from now on in hopes one of them will hit it big. But that's not so different from venture capital. Just on a smaller scale.

Borrible 5y ago

Poor Beanie Babies, but what about other investments you can hug? https://priceonomics.com/when-the-great-alpaca-bubble-burst/ https://priceonomics.com/when-the-great-alpaca-bubble-burst/