This is a post about bubbles … from what I learned from selling baseball cards. I started a little business selling baseball cards when I was 13-18. it was a lot of fun. I rode the wave of my first bubble and learned a really good lesson to help be prepare for the Web 1.0 bubble.
Most people get into baseball cards because they love baseball. They love the player statistics, the stories of the players, the beautiful cards, and more. But in 1987, baseball card mania was huge. So I actually got into baseball because of baseball cards. Entrepreneurship has a way of doing weird things to people.
Baseball cards were the “sure thing” of the late 80s like dot-com was of the late 90s. Almost every card went up in price eventually — certainly it was extraordinarily rare for a card to go down. If a player had a great year, the card would appreciate very well. If the player was in some sort of scandal, the card might skyrocket. There was often no rhyme or reason to the prices. It was pets.com in a less efficient market.
The first hint that it was a bubble is that people like me were getting into baseball because of the money-making opportunity. People were doing a lot of speculation. The second was the proliferation is baseball card brands — at one point every baseball player had over 8 different cards of themselves from different brands — like Topps, Fleer, Upper Deck, Score, Dunross, and more. And it seemed like there was a baseball card show every weekend. It was crazy.
And then the levies broke. In one month, everything crashed. Everything. The local baseball store went out of business and the owner, a nice guy named Rich, had to start working in Kmart. My portfolio went down 30% almost overnight. And it really went down a lot more than that because the liquidity vanished from the market.
That’s also what happened again in 2000 in the dot-com world. I fared a lot better in 2000 — maybe because I experienced a smaller but very personal crash a decade before. And right now I’m seeing a lot of signs of a bubble too. The number of start-ups is proliferating. Our biggest competitor in hiring is not Google or other cool start-ups but people starting their own company.
so I’ll be be thinking about my Eric Davis rookie card (once $15 in 1990 and now hovering at a $1)…