What Can You Learn From Shopkins
I have recently been introduced by my wife and daughter to the newest toy craze sweeping the country. No, beanie babies are not making a comeback, and you will not be waiting in line at Christmas for the latest and greatest doll. The latest craze is little pieces of plastic called Shopkins.
I am going to go out on a limb and say that 95% of the investing world has never heard of Shopkins and the other 5% must have little girls that are collectors. Shopkins are little pieces of plastic food, cosmetic items, baby items, and deserts with faces on them.
Now I know it is not shocking that there is a new toy craze. There seems to be one almost every year but this one is unlike anything I can ever remember and it is all thanks to the internet and the fact that these things are supposedly very collectible.
Now you may be asking why an investment guy is discussing little plastic toys. Well I am glad you asked. These little plastic toys have created quite an amazing little bubble that is not unlike the tulip bubble in 1600’s, the tech bubble in the 90s and the real estate bubble in the 2000s. People are paying $100’s of dollars on the internet for some of these “rare” little pieces of plastics. Just type Shopkins into Ebay and you will be amazed at what you see.
I know based on the laws of supply and demand that this can go on for quite a while. The supply is currently very low (only a few places carry Shopkins and they have multiple seasons in case you were wondering) and the demand is very high (lots of people collect these things as evidenced by my daughter’s collection). I am sure many people are out there collecting these things, but just like my baseball card collection when I was kid, the value will probably end up greatly lower than what you paid for it.
So what can we learn from this. It is great to spot trends. My daughter was way ahead of the curve on this Shopkins thing. She was buying and collecting last fall in season 1. But better than spotting trends is to understand the dynamics and not be caught when a bubble bursts. Whether its tulips or toys bubbles in asset prices always burst at some point, in the meantime if you see some Season 3 Shopkins let me know but I will only pay the retail price since I am into value investing.
Peter Huminski, AWMA
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.