A Rare Bubble?

[anim7]

So what do you guys think of the voracious demand for santas/green masks and blue masks?

 

 

 

People are buying left and right because they know the price will go up. But after a while, what happens?

 

 

 

I was reading wikipedia on bubbles and came across an interesting phenomenon.

 

Popular among laymen but recently discredited by empirical research, greater fool theory portrays bubbles as driven by the behavior of a perennially optimistic market participants (the fools) who buy overvalued assets in anticipation of selling it to other rapacious speculators (the greater fools) at a much higher price. According to this unsupported explanation, the bubbles continue as long as the fools can find greater fools to pay up for the overvalued asset. The bubbles will end only when the greater fool becomes the greatest fool who pays the top price for the overvalued asset and can no longer find another buyer to pay for it at a higher price.

 

 

 

Prices in an economic bubble can fluctuate chaotically, and become impossible to predict from supply and demand alone.

 

 

 

This is how I see the small rare market. Before GE, merchants like myself bought rares and tried to sell for higher. Half the time it worked and half the time I lost money. But what controlled the prices was not necessarily the supply. It was the demand created by holidays like x-mas, and h'ween.

 

 

 

Now, with GE and unbalanced trade, the general idea was that merchanting was killed. People started selling lower. And buyers/potential buyers knew that GE would also lower prices if everyone sold low. Thus, no one bought those rares except a few people who really wanted them. The santa price hit rock bottom at 11.3mil from a high of 21.9mil.

 

 

 

Now that prices have suddenly started to increase, I am predicting a huge bubble burst.

[TheAncient]

You are right about the bubble bursting. At a certain point, they will become too expensive and the continual buying will stop. At this point, people will try to sell to cash in their profits, only to find that they will have to keep on cutting their selling prices in order to successfully sell.

[agamemnus]

Here: http://forum.tip.it/viewtopic.php?t=725850

[MasterMarduk]

I only hold rares to keep my cash away from my spending habits, and while at the same time Increasing in value as demand overtakes supplies.

 

 

 

Rares used to be traded mostly with Items for the exchanged becuase the gp required especially for P hats was way more then most people carried ussually. With The updates this has made that impossible as people would also request additional funds for the trade having Items ussually.

 

 

 

The rares market right now Is kinda in deep freeze until things get worked out, if they ever do. The GE isnt that great as its prices and such dont seem to be able to keep at the right place, Either to high or to low of what the market is, with the exception of commonly traded Items.

 

 

 

Rares will eventually go back up but for now they will be down as there required funds are more then most people can manage, especially in the case of P hats.

[Adam007]

I think it's all about the mentality. Once the items get to a state where people are unable to buy for the maximum price set, buyers freak out and want in. When they're like party hats and are hard to sell for the minimum, people also freak out and madly sell for the lowest they can, causing a bad chain of panic until it hits a realistic bottom for demand. It seems this new cycle will be how things work in the future.

[Mayjest]

I love how you have a quote saying that it's impossible to predict prices based on supply and demand alone, when two paragraphs below that you have a prediction based on supply and demand...

[brt9]

my panic theory regarding rares

 

 

 

i came up with a theory about the fluctuationg prices of rares as it is too complicated to explain with simple supy and demand.

 

 

 

firstly people seeking to buy rares as an investment buy up a large number of rares and hold them, since nobody is selling them at that price and they are being held for profit, the price rises, when the price reaches a point where most people are satisfied with the profit theyve made they sell, as many more rares are being sold at one point the price starts to drop, people then "panic" and try and sell them causing it to drop faster, people then buy at the low price seeking to make a profit and the process repeats itself.

 

 

 

also as these items are discontinued and the rs population is always increasing this means more people want to take advantage of the low prices each cycle, meaning the maximums get higher and the miniums in the cycle get lower, it is also responsible for the slight upward trend of rares as some people buy to keep not for profit.

[joker202]

there is already a thread about this.

 

 

 

 

 

http://forum.tip.it/viewtopic.php?t=725850

[jonni]

there is already a thread about this.

 

 

 

 

 

http://forum.tip.it/viewtopic.php?t=725850

 

 

 

That's your thread. This is looking at the topic from a different perspective.

[anim7]

there is already a thread about this.

 

 

 

 

 

http://forum.tip.it/viewtopic.php?t=725850

 

 

 

That's your thread. This is looking at the topic from a different perspective.

 

 

 

Thank you. I am not chicken little saying that rares are dying...I am looking at this situation economically and trying to see if others agree with what I view.

[Naruto_1001]

The Three Waves

 

How does this sound, first lets explain the title. In holland we say "drie maal is scheepsrecht", guess you don't know what it means but its like if you fail something three times you can better give up. I think a lot of people will try to make profit with santa hats for three times and give up after the 3th time. And I count every time they went from minimum to maximum as a wave.

 

 

 

The First Wave

 

This is going to be the biggest one, people don't know when to buy and when to sell so the difference will be huge between minimum and maximum price.

 

 

 

The Second Wave

 

People who were to late to sell at the maximum think they know how they will be on time this time, also a lot of new people have bought santa hats and think they know when to sell this time, just a littlebit before it dropped the last time, however there wrong this wave will be smaller because there not the only people that think that way.

 

 

 

The Last Wave

 

The smallest one of the three, it wont go down far and also not go up alot, because people just want to sell faster then other people.

 

 

 

No More Waves What Now?

 

People dont want those santa hats anymore for a few months, they lost to much money on them (well most of them) and if nobody buys you cant sell and if you dont sell the price stays the same, however some day (after a few months) there will be someone interested and the price starts to drop again, starting with the first wave again.