Collectibles Markets are Crashing

WINE TALK
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Looks like I may have missed my chance to sell off my wine!

Good news for you young guys building your cellars though…

Whiskey, Rolexes, and trading cards are in a spiraling crash as “the bubbles have popped” in collectibles

George Glover

Jan 18, 2024, 9:23 AM EST

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1914 Baltimore News baseball card featuring a 19-year-old Babe Ruth in his rookie year

Brian Dwyer of Robert Edward Auctions shows a 1914 Baltimore News baseball card featuring a 19-year-old Babe Ruth in his rookie year in Chester, New Jersey, on Monday, November 20, 2023.

AP Photo/Ted Shaffrey

  • Stocks surged in 2023, but it was a rougher year for collectibles.
  • Indexes tracking whiskey, fine wine, and trading card prices all tumbled.
  • Rolexes also struggled as the Fed’s aggressive interest-rate hikes spurred Americans to cut back their spending on luxury items.

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Bull

Stocks and cryptocurrencies had a banner year in 2023, staging rallies that defied market gurus’ gloomy outlooks – but it was a much rougher year for collectibles.

Following the pandemic, collectibles surged in popularity, with luxury watches and fine wines comfortably outperforming equities. In September 2022, Swiss bank Credit Suisse even said that Chanel handbags, Rolexes, and traditional Chinese art would offer better inflation protection than so-called safe havens like gold and long-duration bonds.

But indexes tracking the price of non-traditional assets like whiskey and trading cards and luxury watches tumbled in 2023 as consumers responded to high inflation and rising interest rates by cutting back their spending on big-ticket items.

Meanwhile, the AI investing craze powered the benchmark S&P 500 stock index to 24% gains – and cryptocurrencies like bitcoin shook off a dismal 2022 to rack up triple-digit returns. When those assets are performing better, there’s less incentive for investors to try to diversify their portfolios by piling into collectibles.

“In 2023, traditional markets experienced a resounding recovery, while collectible markets suffered a continued decline that spread across nearly every sector,” Altan Insights, which provides data and analytics on the market for collectibles, said in a recent research report.

“Yes, the bubbles have popped. The frothy markets of 2020 to 2022 are no more.”

Here are four collectibles markets that slumped in 2023.

1. Sports and trading cards

logan paul pokemon card charizard stream

Instagram/Logan Paul

Trading cards are now on a two-year skid, per data from Altan Insights.

CardLadder’s CL50 index, which tracks the price of rookie cards for 49 sports stars and a first-edition card of the Pokémon Charizard, soared 337% between 2019 and March 2021 – but then tumbled 23% in 2022, and another 9% last year.

To add insult to injury, the market for non-fungible tokens (NFTs) has also tanked over the past two years, with 95% of the digital collectibles now trading at near-worthless valuations.

2. Whiskey

Whisky glass with blurred Delta tail in the backgroud, view from Sky Club deck.

Taylor Rains/Insider

Prices for rare bottles of whiskey have also tanked over the past year-and-a-half, after peaking in May 2022.

The Rare Whiskey Icon 100 index, which tracks the price of 100 celebrated bottles of Scotch, tumbled 22% between then and November 2023.

Cheaper brands are also struggling, with Jack Daniel’s maker Brown-Forman posting disappointing sales numbers in December that dragged its stock down 10% in a single trading session.

3. Fine wine

A cluster of wine bottles

Bob Edme/AP

Other alcohol-based collectibles also suffered last year. Liv-ex’s Fine Wine 1000 Index tumbled 14%, while its Champagne 50 gauge fell 18% after doubling between the start of 2020 and the end of 2022.

Trendy regions haven’t been immune from the sell-off, with Liv-ex’s Burgundy 150 Index sliding 18% last year – in a correction that the wine marketplace’s chairman and CEO James Miles described as “long overdue”.

4. Luxury watches

certified pre-owned rolex

Courtesy of Tourneau Bucherer

Watches haven’t managed to avoid the sell-off either, with the Fed’s aggressive rate hikes sparking a great Rolex recession.

WatchCharts’ Overall Market index, which tracks the price of 60 luxury timepieces, has dropped 13% over the past year, with models from each of the Big Three of Rolex, Patek Phillipe, and Audemars Piguet slumping in price.

It’s a far cry from the state of the market 20 months ago – when secondhand Rolex Daytonas were selling for $30,000 and waiting-list times were measured in years rather than months, according to Altan Insights.

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This article misses a big point.

These markets surged at a pace that was never seen before. It far outpaced the historical trajectory, and by and large these pries are still way ahead of where they should be. All of these markets were very overheated, and it bad need of a cool down.

I’m not a clairvoyant, but these markets will go back up. When? Hard to say.

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Total tangent:

Most of these bottles are upside down, but their labels are right-side-up…!??
(AI generated image?)

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4

Up 225% then down 40% over two years is not exactly a crash.

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My wife’s BFF has a son that trades Pop! Very nice kid with fairly severe mental issues.

At their house ~5 years ago and he asks “want to see my Pop operation?” Uh, sure…

Takes me to the basement and it’s wall to wall figurines, thousands. He hired the kids in the neighborhood to do fulfillment after school. LOL

He was buying direct from the manufacturer as a distributor and for awhile and was in the top 3.

Told me he was doing $120K / year. His Dad found out and had to file taxes for his kid’s business. So awesome.

Well, like Tulips, the market crashed and I asked if he got hurt. He told me “nope, because most people trade paid retail there’s a floor price but because he purchases at wholesale he sells at or below and everyone in that business knows and trust him”

I walked away thinking I’ve wasted my life. :crazy_face:

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Had until now never heard of Pop!

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Reading down the list…
Yep
Yep
Yep
Oh….losers
Thankfully I don’t wear watches or else I would feel like s%#/ this morning. :joy:

Off to pull out my 1987 Topps set.

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It’s big business…

And they primarily trade on Mercari which is a Japanese e-commerce platform like eBay.

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That looks like a wine tree, but normally, the bottles are empty.

Strange picture to use that is basically devoid of collectable wines, save for the bottle of Pontet Canet that appears to have an upside down label!

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“Correction” feels like the more appropriate word given the data, not “crash.”

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This all seems rubbish to me. I suspect that the vast majority of WB’ers collect wine for consumption, not for investment. If this is true, then any “corrections” in the marketplace for Burgundy and other fine wines will only benefit the community. I personally think it’s a sad affair to see wine collecting as an investment. It commodifies a past time which for me is centered around the narratives of producers and the sensual pleasures their wines give to us.

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It was a commodity well before Wine Berserkers ever came along.

BTW, there is a whole section of WB called Commerce Corner, where people are selling all kinds of wines and spirits, and from what I can tell- for a profit.

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every time you buy wine, you’re giving money to people that are making a profit for the wine. when a wine store owner buys wine to resell, she has invested in that inventory for the motive of making a profit in the future.

what an odd take.

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And release pricing hasn’t stopped rising. For 2022 Burgundy En Primeur I saw price rises of 10% for producers of even modest interest, plenty of producers up 20%. Maybe if the secondary market is still soft next year release prices will slow, but it’s hard to see that. By all indications most everything sold through (and quite quickly) for the retailers I work with.

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Still a long way from reaching pre-covid level prices, but it’s good to see a healthy correction.

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PPP funds ran out.

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For some of these markets (e.g. trading cards, Funko pops, even watches) it is extremely easy for producers to increase production in response to demand. Harder for wine, although the new vintages keep relentlessly coming and the sheer volume in some collectible niches such as Bordeaux keeps prices down.

I do think there is a big long-term threat if younger generations just never really get into old world wines. The wine hierarchy I grew up with seems somewhat upended by what is fashionable in wine these days, e.g. young wines from obscure sources, “natural” producers, etc.

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This is probably getting to granular for this thread, but 2022 and 2023 Burgundy are the first years in a long time with a good size crop. A lot of the upward push of pricing has come from the short vintages. 19-21 was basically 2 vintages in terms of crop size.

There could be a retail pricing correction coming for some wines, but certainly not all. There were a small number of producers that also raised prices based on demand (supposedly) that far outweighed any crop losses, so will be interesting to see what happens with those wines first.

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But do you really think WB Commerce Corner participants engage to turn profits? Or is it mailnly to pare their cellars and free up space for other wines, or reduce their cellars as they get older?

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I think you missed my point. I’m speaking of consumers/collectors, not producers or retailers.