Russ Roberts

Josh Luber on Sneakers, Sneakerheads, and the Second-hand Market

EconTalk Episode with Josh Luber
Hosted by Russ Roberts
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Knowledge, Ignorance, and Spec... Selling Sneakers and Swooshes...

sneakers2.jpg How many pairs of sneakers do you own? Josh Luber of Campless and StockX talks with EconTalk host Russ Roberts about the world of sneakerheads--people passionate for collecting and trading sneakers. Each week people line up to buy classic sneaker models Nike re-releases. Luber has collected millions of transactions from Ebay on these sneakers and others and has analyzed the return to investing in various sneaker models. The conversation includes a discussion of how Nike has helped to create this market and Luber's work creating a stock market for sneakers and other goods.

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0:33Russ: Before we get started, I just want to remind listeners to please go to econtalk.org and in the upper left-hand corner you'll find a link to our annual listener survey, where you can vote for your favorite episodes of 2015. Please do it today. The survey will close on January 31st.
0.55Russ: Intro. Please excuse my voice today. You can tell I have a cold. [Recording date: January 5, 2016.] My guest is Josh Luber. He runs the website Campless.com, and as far as I can tell, he's the leading authority on the market for athletic shoes, or as they are sometimes called, sneakers. I say he's the leading authority, but as far as I can tell, there is no one else close. Maybe no one else, period. Josh, welcome to EconTalk. Guest: Thank you. Welcome. Russ: Now, I have a feeling many of our listeners don't know much about the sneaker market. Most of us think people buy sneakers when they need them. My sons play basketball, so I went out and bought them sneakers for that. We went to a shoe store at the mall. We spent something between $60 and $100. But there's another world out there. Tell us about it. Guest: Yeah, and I think the other world--I need to preface; it was a very nice intro you gave. But I am I'd say not on the sneaker market in general, but on the secondary market for sneakers, or the re-sale market. So, this is people buying and selling sneakers on E-bay, on other websites, in person at sneaker stores, after they have been purchased at retail. So, a pair of Air Jordans sells for $200 at Foot Locker, and someone buys them at Foot Locker and turns around and sells them on Ebay, and sells them for $400, or $500, or $1000. And that market, the secondary market for sneakers, has existed, you know, forever--for as long as Air Jordans have released, since 1985. But it's really been in the past 5 years really, since the beginning of 2011, 2012 that the resale market really blew up. And in the past 5 years the number of new people coming to the market, the number of new releases, and the overall size of that market has just grown like crazy. And provided me with an opportunity to just start doing this as a career, as opposed to just, you know, just as a personal hobby. I am 37 years old; I have collected sneakers all of my life. I still have sneakers from when I was, you know, 10, 12 years old--that I still have them. And I've never worked in the sneaker industry at all, up until a few years ago when I started Campless on the side while working at IBM (International Business Machines) and did that on the side for a couple of years. And it was only about 6 months ago now that I've been able to do this as a full-time career. Russ: So, how many pairs of sneakers do you have? Guest: That's a tough question. I'm not exactly sure. The last time I counted it was about 250. My guess is it's close to 300. But I just moved: I moved from Philadelphia to Detroit. And as part of that move I'm building myself a new shoe room, wall; and I'm actually still in the middle of the construction of it right now. And so in about a week or so, when it's done, I will get to counting them again, and fill up the wall and have a better idea. But my guess is 300. Russ: Is that a big number? For me--I should have counted mine before I did this interview. I probably have 3 pairs, maybe. I've got--yeah, maybe 3 pairs. So, 250, 300 seems like a big number. Is it a big number? Guest: No. Relative to people who aren't in this game, yeah. But no, it's absolutely not. There are people that have thousands of sneakers. So, it's a relatively modest collection within the sneaker world. It certainly is more than a lot, and it certainly surprises a lot of people. But no, there are people that have thousands.
4:47Russ: So, I saw your TED Talk, and we'll link up to it. One of the things about this phenomenon, one of the things that startled me, is what happens on Saturday mornings--that I was totally unaware of. So, talk about what goes on in this collectible market, the re-sale market, on Saturday morning. Which is amazing. Guest: Yeah. So, you mentioned the name of my company, Campless. And that name is derived from, you know, what is historically even today, the best and sometimes only way to get limited [?] sneakers, which is camping outside of sneaker stores. And so the name Campless is derived--and our motto is: No more, camp less. We are a data company. And so, to get that is every single weekend, every single Saturday, there are sneaker releases. Most weekends there are, you know, multiple--3, 4, 5, 6, 7 big releases that some sneakerheads somewhere care about. And a lot of them are just first come, first served at sneaker stores. And so, what do you do? Kids will start camping out there, the day before, the week before, depending on how big that release is. So, you drive by any Foot Locker, any sneaker boutique at 8 a.m. on a Saturday morning, and there will be a line of kids, you know, sitting outside, waiting to get in and waiting to buy their shoes. And depending on how big the release is, is how long they've been sitting outside waiting to get sneakers. And so, that has changed a little bit over the last couple of years as more and more releases happen online. But that's still the kind of bread and butter of how the sneaker industry works. Russ: So, this is extraordinary--again, if you don't know anything about it. And I didn't. What do you mean, there's these re-releases? Go into more detail about what's actually happening, and how do people know what's coming? Is it announced somewhere? Do they--and what do you mean by 'big'? Why are some bigger than others? Guest: Yeah. So, in 2003 there was a book published called, Where'd You Get Those?. And it was a look at sneaker culture through, I guess, the 1960s, 1970s, 1980s. And that was the kind of seminal sneaker question. You'd walk down the street; you'd someone wearing some sneakers, 'God, where'd you get those?' Because back then, we didn't have the Internet. We didn't have the sort of free flow of information to know where every sneaker was being released and when. And now we do. And so there are--there's probably over 60, 70 different sneaker blogs that track when sneakers are being released, and pictures of them; and what celebrity is wearing them and where to buy them. And so everyone knows where, what sneakers are going to be re-released; where--those can be Air Jordans, they can be Nikes, they can be other brands. And each of the--every single sneaker released--and what I mean by that is a specific shoe, a specific model, a specific color [?]--so the Air Jordan line, there's been 29 different Air Jordan models. So, maybe it's the Air Jordan 8 in a blue and black color, called the Air Jordan 8 aqua, now a couple of months ago. And so that particular release, that particular shoe, has a certain demand; there are certain people that want that. And to try to get that sneaker, people will camp out; they will try to buy it online. And that sneaker, or any of the sneakers that we're talking about, as a general rule, right, there are more people that will want it than there is supply. And because of that, the shoe will sell out instantly at retail. It will be very hard to get a pair because there will be many people waiting to get a pair. So they will sell out instantly, or at least pretty quickly, both online and in stores. And those shoes will immediately be listed on e-Bay and other sneakers re-sale sites for people to re-sell them and make money. And for the past year or so the market as a whole has slowed down a little bit, and not every single shoe, not every single Air Jordan, which is really kind of the core of the sneaker market, can people make a ton of money on. But there's still just so many sneakers where, a sneaker might cost $200 at retail and might sell for $1000 on the secondary market, just because of that difference between supply and demand. And every single release, every single sneaker, is a kind of another shot at that game, at that difference between supply and demand, and how the brands play that, and how Nike and Adidas and the other brands choose how many to release and where--and what those shoes are, become worth on the secondary market, based on who wants them and how many people want them. Russ: You said the market slowed down a little bit in the last year. Of course, so has the S&P 500 (Standard and Poor's 500), so it's not that different from other assets. And one of the things we're going to be talking about later is sneakers as an investment and some of the things you've thought about that and where your data come from. Utterly fascinating.
10:18Russ: But I just want to make an observation now that's crucial, and I think a lot of people get confused. In an open market, supply and demand is very powerful. So, the resale market is a pretty open market, as you point out in your talk about TED. And as a result the price reflects the relative--the demand, certainly. The supply, though, is not a free-market supply. It's decided by Nike. They make a decision; they are the dominant player in this market, as you point out. They make a decision about two things: they have to decide what retail price to set and how many shoes to produce. That in turn is going to affect, certainly the number is going to affect the resale price in the open market on eBay. But they've made a conscious decision to limit the quantity such that there is a big premium on the resale market. They don't have to do that. They could either meet the demand at the $200 retail price, or they could decide to create a lot more shoes, still sell them at $200, but reduce the resale value of those as well. And they've chosen not to do that, correct? Guest: Yeah. That is a good intro to the very nuanced and complicated business construct that Nike has created and how many pairs they release and how much they charge for them while trying to maintain the secondary market. At a most basic level, the secondary market becomes a marketing platform for Nike. They can ensure sell-outs. They can ensure level of demand, and hype and marketing and prestige that goes along with their produce by having a mismatch between supply and demand. And a simple sort of example of why limited supply is more valuable in this market. So let's say demand is 100, and they produce 96. Well, you are going to definitely sell out all 96, right? There's going to be more people that want it than you produce, so there will be retail sellouts; the secondary market will exist. And shoes will be worth more than the $200 retail price. But let's say that they produce 102: demand is 100 and they produce 102. They might only sell 90, or 80, or some number below 96. And they produced more. And the reason why is because once that demand-supply match crosses and now there's more supply than there is demand, sneakerheads don't necessarily want those shoes any more. They are not worth more than the $200 they are going to pay for it. They are not rare: anybody can walk in the store and get a pair. So it doesn't even go back to the entire sneakerhead desire to have sneakers that no one else has. The whole 'where did you get those'--that is still very true today, that the underlying reasons for that, even though people know where you get it; but the idea of wanting to wear sneakers that no one else has or to make people say, 'Where'd you get those? I want those because I can't just walk into a store and get them and find them.' And so it's a really fine line between that supply and demand line. Because obviously the brands are in the business of selling sneakers. They want to produce as many pairs as they possibly can, and sell as many pairs as they possibly can without crossing that line. And obviously demand is not a known quantity, right? They have to predict it. And it's also--not only do they have to predict it, but it's not a constant variable. It is absolutely tied to supply. Scarcity drives demand.
14:23Russ: But there's a piece of this that is we need to quantify; and you've quantified it, which is phenomenal. A lot of brands would like to try this; they can't. There's something special about Nike, a certain cultural phenomenon that happened. If other people tried it, said, 'Well, we'll just make our stuff scarce and we'll make a lot more per sneaker or a lot more per whatever it is,' they can't always do that. Most of them can't ever do it. But if Nike has a little bit of monopoly power because of this caché we're talking about, they are also giving away a lot of money. When you see people waiting in line it means you could have charged more. Now, there is uncertainty, as you point out. And if you make a mistake, you can lose your caché--if something becomes relatively available and easy, you don't have to get the heroic nature of camping out and all that. But the amount of money that's being made on the resale market is substantial. So, talk about that for a minute as a measure of how much Nike is willing to sacrifice in order to create this overarching idea that their sneakers are special or scarce or rare. Guest: Well, I disagree with the premise a little bit, of Nike sacrificing that money. But let me come back to, first, the amount of it. So, the average profit on the secondary market is about a third. So, markup is about 33% on retail price. And in 2014--and we're kind of just doing the 2015 numbers now--but in 2014 the secondary market was about $1.2 billion in the United States. So, a third of that is about $400 million profit that's being made by resellers as a whole. Right? And it sounds like a lot of money. But the global--the U.S. sneaker market, the retail sneaker market is in the billions. It's like $20 billion for the United States. So, there's a $400 million piece of profit that is being made by, it's not a handful of people that make a lot of money; it's a lot of people that make a little bit of money. In 2015, there were 136,000 people that sold at least one pair of sneakers on eBay. So, it's a lot of people making a couple of bucks here or there. And so, the idea that it's money that Nike is sacrificing--they can necessarily sell the sneakers for 30% more, right? Russ: Correct. Guest: They can't necessarily sell more sneakers because we'd get in the same construct that I was just talking about: they'd produce 102; they might actually sell less than if they produce 96. And so there is that piece of money that's out there. And Nike can take a little bit of it--and I keep saying Nike because Nike, which owns Jordan brand, accounts for 96% of the secondary market in dollars. So it's really all about them. They can take a little bit of the margins by increasing prices a little bit, by increasing supply a little bit, and therefore driving down margins and demand a little bit. But if they cross that line, right, then they are going to actually make less money than they would originally. So, it's a really fine balancing act; and every single release--every single shoe that comes out every single weekend is another chance to get that balancing act right and try to figure out where they are maximizing their business in relation to the secondary market and everyone else, both in terms of a short-term perspective, in terms of maximizing sales, but also, what does that mean in terms of the long-term brand equity and caché of owning Nikes and owning Jordans. Which is a lot of what this is about. Russ: Is there a premium paid for condition of the sneaker? Especially mint. If the shoes are never worn do you make more money, or if you can at least claim that credibly? Guest: Yeah, absolutely. The term for new sneakers is called 'deadstock'. Deadstock refers to shoes that have been unworn, new in the box, and on the secondary market about 2/3 of the market is deadstock and about a third is used. And deadstock is relatively easy to value because people know what that condition is. And there's definitely ways to tell if a shoe has been worn, even if it's been cleaned well, etc.--there's ways to tell. And that obviously commands the most amount of money; and it's just like any other--cars or baseball cards or anything else: the worse the condition is, the less valuable it will be. And so, for people that buy and sell used sneakers, a lot of it is like a car, right, like driven once or just driven off the lot. If a shoe has been worn just once or twice, you can usually get a great deal on a shoe that is basically like new. People share pictures and try to figure out what a shoe is worth, the more it's worn, because every shoe is also different. Some shoes crease differently; some shoes show wear differently. So it's very much a shoe-by-shoe bases. Russ: Do you think that Nike profits or benefits from this phenomenon in their current release? I don't know if that's clear: but this is a strange phenomenon. This is a--this re-releasing of collectibles, this idea that there has become a market for these 'antique shoes,' you could call them, the way there is for baseball cards, for coins, for other things. And of course, baseball cards don't get reissued. They are valuable in general, for being collected and being old. These are new releases of older models that are limited in number. Does Nike expect to benefit for their non-antique releases, non-re-releases? Because usually, you do this to create excitement; but it's excitement among a small subculture--people like you, sneakerheads. And people like me don't know about it. I've never seen the lines. There's not much promotional side-benefit. In your TED Talk you mention how people, every two years, see Apple products are in high demand; there's a big line outside the Apple stores. This is going on every week and it's kind of quiet. Is Nike benefiting from that in a--other than just that they can keep selling old models for $200? Guest: Yes, so two things. First of all, there certainly are the re-release of older Jordan models and other shoes. But it's also about the new releases every week. And some of those have very high demand and some of them sell for a lot on the secondary market. So it's not just what you'd call sort of a collectible or an antique. They are new releases as well that have that same supply and demand profile. That said, there is definitely [?] marketing value in having this sort of sneakerhead market and what happens there. Well, first of all, let's also point out that a lot of these sneakerhead releases are the biggest individual releases of the year for the Nike and Jordan brand across all the categories across all of their sneakers. Now, obviously in the aggregate they sell a whole lot more; if you add up everything else that doesn't fall within the sneakerhead world. But the Air Jordans, for example, those are usually the biggest release every month, for Nike and for Jordan brand, are those retro Jordan releases. The Christmas release there's a pair of Air Jordan 11s--the Air Jordan model 11--that is released. And we haven't seen the numbers from this last Christmas, but last year's called the Air Jordan 11 Legend Blue, sold something like 700,- 750,000 pairs at retail. Right? And that's in basically one weekend. So, those numbers are still-- Russ: Those are good numbers-- Guest: really driving the retail business for Nike and for Jordan brand. So, that said, to your point: Does it influence the rest of the market. Now, you may not be as familiar with it, but any time you've seen any media around sneakers and violence and riots and any sort of crazy stuff around--it's all related to this. And a lot of the mainstream media has been, at least up until the last couple of years, it's always been kind of on the negative side and sort of violence that surrounds this sort of stuff. And look, that definitely happens. I'm not denying that that happens. But that's a very small part of a bigger picture and a bigger story that's going on here. Which is just the kind of hysteria and sort of consumer passion and collector passion that happens that causes every single weekend there to be thousands of people that line up outside of stores all across the country, and are doing the same thing on line, violently as well. So these stories kind of build or where you see--if you happen to be going into a Foot Locker on a Saturday morning and you are like, well, 'Why are there 600 people waiting on line out there waiting to get in?' And all that builds the same scenario that I think brands hope happens--which is that when your average consumer goes into a store and buys whatever: maybe they buy one pair of sneakers a year. Well, maybe now they are more inclined to buy Jordan brand products or Nike brand products, because they have this, all the hype and marketing and all the things they've seen that's happened. And in the past couple of years it's become more kind of prominent within mainstream media, etc. And so that hopefully kind of trickles down to a marketing and basic brand caché that other people can still wear those products even if they are not wearing a pair of shoes that costs $1000. Russ: The whole thing reminds me a little bit about De Beers and the flow of diamonds into the market, where--this huge stock of diamonds out in the world, but it's kind of--most people want a new one. They want their own. And they don't spread it around much. In the De Beers case, there's not as much of a resale market. But there's still people who give away their wedding rings to their children or grandchildren to use in some situations. It's just a fascinating phenomenon that you're describing.
25:32Russ: Let's talk about your website. It's an incredible bit of data analysis. Tell listeners what you did to create it and what it contains. Guest: Yeah. So, Campless, we've talked about it as a sneakerhead company at the most fundamental level. Campless is a price guide for the secondary market. It's the Kelley Blue Book for sneakers. And I started Campless in the beginning of 2012. And the goal at the time was just: Can we build a price guide? Can we use real data to figure out what sneakers are actually worth? And so I started by tapping into eBay's API (application program interface) to pull in eBay auctions, knowing that eBay is the largest sneaker marketplace. I mentioned the U.S. sneaker market is about $1.2 billion: eBay is about a third of that, about $350-$400 million. And no one else has even a fraction that eBay does. So it's clearly where the majority of the transactions are taking place. So, we start putting in eBay data; we start trying to analyze it and figure out: can we tie this back to individual shoes; and can we create a price guide? From there, the data--we were able to do a lot more with it. We say it's a price guide; but there's probably 10-15 standard statistics for every single sneaker: price and volume and volatility and premium. So there's a lot of different statistics that are out there that people can use, either just for their own amusement--for content that people are interested in knowing more about it--but also if you are trying to buy or sell sneakers to understand how many pairs are on the market. Right? How volatile is the sneaker rate[?]? How much can I expect the price to fluctuate? In addition to things like: What is the market price? And that led to the blog, which is kind of the second half of the site. And the Campless blog is like, economics for sneakers. And some blog posts are as simple as just: What shoe was re-released this past weekend? How many pairs are on the market? What's it selling for? Others are as complicated and nuanced as a finance textbook. There's one post that is an analysis to how Nike leverages the secondary market. And that took months to write. And is probably as dense as a finance textbook. But it's a level of analysis on this industry and this market that just didn't exist. And it's fun. And we get to kind of dive into this and see what insights we can pull out from this data. And that has evolved, where we are at an unbelievable transition point to have this conversation, where we are about to launch a stock market for sneakers and move what is essentially a data company into a marketplace where--a stock market is essentially just a data company; it's a collection of data to service[?] what is a market price and how to match buyers and sellers across a market price. And so we're doing that; and so we're transitioning Campless from a data company to a stock market. And that company is called StockX. And that actually will launch within the next couple of weeks. Russ: So, talk about the amount of data that you are looking at. It's quite a bit, right? Guest: Yeah. So, I think right now in our database we have somewhere around 25 million eBay auctions. And then, I don't have exact numbers, but we collect data from basically every corner of the sneaker resale market that we can get our hands on. That includes Facebook, Instagram, consignment jobs, other resale sites. Again, none of them have a fraction of the market that eBay does right now. So, we use all that data in different ways. But it's a lot. And in some cases it becomes a little bit overwhelming? Russ: What are some of the issues that you have--you talk about them occasionally on the site--in gathering the data? I think most people--and I have to confess, I think some economists--they just take whatever they've got, and they say, 'Well, that's the best we've got.' But you've been very thorough. One of the issues you've dealt with is fakes. So, talk about how you've dealt with that, and what other issues arise in trying to make sure your data are accurate. Guest: Yeah. So, the fake issue is a subset of the sort of larger issue around eBay of just cleaning the data and making it useful. E-Bay is not an inventory marketplace, right? Anyone can go there and they can create whatever listing they want, and they can describe it however they want. And so you get a whole lot of junk--a whole lot of keywords that people put into auctions and descriptions so that their auctions pop up. And so you might get something like, an Air Jordan 6 Karma, which is the name of a particular shoe, and it will say 'Air Jordan 6 Karma' and then it will say 'Yeezy Kobe LeBron' and 19 other words in the title. So, as a data analysis, how do we know what shoe is actually being sold in that auction? How do we know it's a Jordan 6 Karma and not, you know, a Kobe Bryant shoe or LeBron James shoe? And so that process of cleaning the data and identifying it is by far the most complicated and most time-consuming part of all the work that we've done. But, because we've done it, we now have really clean data that we can do cool stuff with. And the secondary part of that is then: Well, now we know exactly what shoes they are, now how do we do things like eliminate fakes? How do we do things like eliminate multiple sneakers within one auction? And, you know, there's about 3 or 4 different tactics that we do to get there. But, at the most basic level there's just standard statistical outlier analysis. So we can see, right, if 95% of the shoes are all within a certain price range, and 5% are all way, way low, that's a pretty good indication that those shoes are fake or at least not the shoe that we are trying to look at. Also, there are certain words that people put in an auction. Sometimes people are trying to sell fakes and are not trying to be secretive about it. So, words like 'unauthorized' or 'UA', or 'replica', that we know that people are actually trying and saying, being honest about it and saying, 'Hey, here's a fake shoe; I'm trying to sell it.' So, there's a lot of things that we do--at the end of the day because we are looking at 25 million auctions and always adding more. If someone was selling a fake shoe but used real pictures and said this is real and priced it exactly like a real, we would never know. But there's a question about whether that's even a problem. Right? Because what we're trying to do is ascertain market price. And if the buyer doesn't know and genuinely believes they are buying a real sneaker, maybe it doesn't matter. And that's a kind of philosophical, data debate, right? But at the end of the day, we do do everything we can to eliminate them.
33:02Russ: So, you had a very nice analysis of how people's perception of the price of a particular sneaker can be inaccurate and how you discovered--I think it was--which way does it go? People think the shoes are worth less than they actually are, or more? I forgot, now. Guest: More. And that's a great, great--of all the work that we've done that's kind of one of my personal favorites that often gets overlooked or that people don't--so the analysis was, we were creating this price guide. And we would get people all the time that would say, 'Oh, those prices are way too low. I can never find them on eBay.' And so we said, all right, we need to look into this more. Maybe we're doing something wrong. And what we found was that there is a big difference between people's perception of market price based on basically just-- Russ: Browsing?[?] Guest: Browsing eBay. And so if you browse eBay, or any marketplace for that matter--if you browse any marketplace, you know, at any given time what you are going to see are shoes that are sitting. They are not sold, because they are overpriced. If a shoe is a great deal--if a shoe is underpriced--someone is going to buy that immediately. So, it's going to sit for a lot shorter time than if a shoe is overpriced. And the more overpriced something is, the longer it sits and the more likely it is that you are going to see that if you look at eBay at any given time. So, we-- Russ: [?] coolest[?] Guest: we add a [?] Russ: [?] Guest: Yeah. Russ: I just love that. Guest: --figure it out: how long do sneakers sit, at what price, etc.; and we figured out that there was something like a gap of--I don't know what it was, maybe like 18% or 20% or something, I forget the exact number--because this was, like 2 and a half years ago. I should know it. But there was a gap between people's perception of what the market price was and what it actually was. And that was pretty cool. And to be able to quantify that. Russ: Yeah, no, that's beautiful. Reminds me of, on Stub Hub, people will say, 'Super Bowl tickets are selling for x.' Well, not exactly. They are being listed for x. And most of us have no idea whether those transactions take place and what price they ultimately take place at. And I think one of the--what you've done here, which is really--I mean, that's just a beautiful, beautiful bit of applied empirical analysis: the idea that prices that are "too high" or the seller is willing to wait, and maybe they'll get the higher price--those are going to be seen more often by people who just periodically visit the site and browse around, look around. It's really quite--it's really cool. Guest: And let me say that that analysis was actually a big part of how we are building StockX, the stock market. Which is to say that, you know, on the StockX marketplace, when you go there, you can see on the product page every single pair that has sold. So, what the actual--and right next to all the listings. So, you can see what the actually sales are, so that you don't have this perception problem. Right? That was, at the most fundamental level, if we are going to build a marketplace that's built on this data, we need to be able to surface[service?] it at the exact same time to be able to eliminate this perception problem. Russ: And one of the things you have at the old--at Campless--I don't know if you still do this, and I'm sure you'll do something like it maybe in the new one, but, you can create your own portfolio--that is, your own collection of shoes that you own, and then watch it go up and down over time. Do you still do that? Guest: Yeah. Absolutely. Right? That concept of sneaker collections or sneaker portfolios is one of the most fun things that we build, right? To allow sneakerheads to basically manage their sneaker collections in the same way that someone would manage an investment portfolio. And have access to the same analytics and see the value over time. And then, you know, back to the sort of sneakerhead mentality, share it and compare it with other people: to be able to rank your collection versus other people and share it. And we've never had more requests to add more sneakers to the site as quickly as we did once we put that up. Because then everyone wanted every sneaker they ever had in their collection, no matter what it is, no matter how valuable it is. You know, like, I had this sneaker because everyone wanted to basically have their full collection up there. And so we've been trying to do that. But, yeah, that same concept will move forward. But then it will actually be even more like a portfolio on StockX. Because then it's as simple to trade, to buy and sell it, as looking in your portfolio and just clicking Sell. Because it's already lined up in that fashion. So, sneaker portfolios are a pretty cool thing.
37:59Russ: So, in economics there is an idea of a thin market or a thick market. It's inherently a vague and somewhat ambiguous concept. But let's say I'm like you and I have, say, 300 pairs of sneakers. And according to current prices there's some value of that whole portfolio. Which in theory if I liquidate it I would get something like that. If I put it all up, one at a time, up on eBay, say. But I assume some of those sneakers trade rarely--very infrequently. Or is that not true? If it is true then there's more uncertainty about the value of any one pair that you might have in your portfolio. If they are trading regularly, then you always know you can get a certain price; then the value of the portfolio is more reliable. How thick or thin is this market? Guest: Yeah. So, the--within the, so, the majority of sneaker sales for any individual shoe that's released happens the day of released. And then the next day, and then the next day. And it's a slowly sort of deteriorating-- Russ: It's quiet [?]-- Guest: And so usually what we see is by 18 to 24 months, the market has gotten to a place where there's only a handful of transactions that occur at any given time period. And you're really in a seller's market that, you know, particularly at that point if you have a new pair, a deadstock unworn pair, that the seller can pretty much command whatever they want, because there are so few pairs on the market. And particularly if that seller is willing to wait, right, and find the right buyer, they pretty much have all the leverage, because, you know, they've gone out--there's not that many pairs out there. There's a relatively high level of volatility anyway within sneakers, just because there are a lot of different channels; there are a lot of different places. And, up until Campless, and now StockX, there has never really been a centralized place where all that data comes together, that people can actually see that, 'Oh, well, this is what the market price really is.' But, that said, you know, we see that kind of 18-24 month flip[?] that really changes the overall dynamic in, you know, in what that looks like and moving from where the buyers have a lot of leverage because there's so many pairs on the market, you know, or at least a low volatility, to really high volatility and sellers having leverage when there is not a lot of pairs to buy [?]. Russ: Can you tell us how many visitors come to your site? Guest: To be honest, I haven't even looked at Campless numbers in a while. But it was relatively modest--it was somewhere under 100,000. But it's--you know, usually what happens is a lot of people use our App; a lot of our blog posts in comments[?] get somewhat heated. And you know, it's--up until--a big part of building StockX is around making a product and making something that is useful for all sneakerheads, not just those that are kind of really into sneakers and data and are kind of actively buying and selling sneakers. That was also the concept behind, you know, stock portfolios, sneaker portfolios: is that, even if you are not buying and selling, right, you have a sneaker collection so you can use it. Russ: So, again, not getting into the specifics, because I understand it's not a precise number. But you say, under 100,000. A hundred is under 100,000. And if you'd asked, I think some listeners like myself: 'How many people, how big is this whole group of people who are really into this?'--is it 100? Is it 20,000? Is it 60,000? Is it 30? Guest: Oh. Well, if you are talking about the entire sneakerhead market-- Russ: Yeah. Guest: That's much different than the people coming-- Russ: I understand-- Guest: to Campless website. Russ: Sure. What would you say that number is? Guest: So, all right. It is so hard to figure out how big the number of people are within the sneaker market. Right? Russ: Well it's hard to define. Guest: Yeah. From a seller's perspective, like I said, there were 136,000 people that sold at least one pair of sneakers last year. Right? Those are different eBay accounts--for lack of a better-- Russ: Yeah. Guest: And that's just the sell side. So, I mean, you've got to figure that--I don't know--3 million people? Somewhere like that, that are buying it, right? If there were 750,000 pairs of, you know, the top Jordan release sold last year, right? And there is no way that everybody buys every shoe. And, you know--so I don't know. My guess is, I don't know, maybe about 3 million people, you know, who are sneakerheads, who are actively part of this marketing, collect sneakers. Russ: It's a little had to understand how someone can make a living being an expert on this market. And again, without going into your personal details, which are relevant[?]--but this is--are you making money off of this? Off of Campless? Is this just a labor of love? Or is there a profit for you? Guest: It was a labor of love for a long time. I started this business in early 2012 while I was working at IBM. And before I was a strategy consultant at IBM, and before that I'd started and run a couple of startups. And so, I was running Campless on the side for 3+ years. And it was something that was a labor of love that became a volunteer joint labor of love, as we ended up having a lot of people who wanted to help build this thing, because they just loved sneakers and loved data and what we were doing. And so we built this into a larger company where the primary revenue source actually comes from selling data and selling consulting services around the secondary market where--and that's all, the kind of the secondary, vis-a-vis[?] part of this business where investment firms and brands and retailers will buy data related to the secondary market to help better understand the primary market. And so that was a revenue, you know, source for us. But, you know, the goal was always to build a stock market, right? Or build a data-driven marketplace, because that's where the money is. If you can be eBay, if you can be eBay and be a better version of that, that's where, you know, the bigger business is. And so, I talked to just about everyone within the sneaker industry around partnering with and there were job offers and there were acquisition offers and there were partnership offers to figure out, you know, how to take Campless to the next level and how to create, you know, a stock market, and a different marketplace. And I talked to sneaker blogs and brands and retailers and resellers; and like I said, almost everyone within the sneaker industry. And there just wasn't the right fit, you know, for me to partner with and go and do this. And then one day I get a call from someone who has no current ties to the sneaker industry, and the very long story short is that I actually have sold Campless to Dan Gilbert, who is the owner of the Cleveland Cavaliers and Quicken Loans and about a hundred other companies. And I'm now partnered with him in the new version of this StockX, where I've moved to Detroit to work with Dan and build a team. And so now we're, you know, running this. It's kind of like a startup; it's kind of not. And we get to build it out and prove the stock market can work as a construct for buying and selling physical goods. And prove that within sneakers. And then ultimately it's been that beyond sneakers to other goods as well. And I happen to have, you know, one of the most successful people in the world as my partner to go and do this. So that's what the company and my job is my right now.
46:10Russ: It's an incredible story. I want to talk about more about StockX, but last one last question about sneakers, per se. In this odyssey of the last 3 or 4 years, where you are doing this creative thing, pulling the data from eBay, writing a blog--did Nike ever contact you and say, 'Hey, this is really interesting?' Or did you contact them? Have you had relations, conversation with them at all? Guest: Yeah. I have. And I can say I have talked to just about everyone within the [?] at some point, including Nike. And I've had various conversations with different people there, at different levels. So, yeah. Russ: Did they ever see you as a threat? Or was it all good? Guest: So, I don't--certainly all my interactions with them have been great. Right? And everyone I've met with there, interacted with, has certainly treated me well; and no one has treated me as an enemy or threat. Nike has a very interesting relationship with the secondary market. Everything that they do creates it. Like I said, they're 96% of the secondary market. However, publicly they don't acknowledge that. They have this kind of willful blindness policy towards the secondary market, where, it exists: Obviously everything they do around their supply and demand, you know, supply and demand creation policies, create the secondary market. But they just kind of pretend like it doesn't exist. And I think if I worked at Nike and I kind of set those kind of corporate policies, I would do that as well. It's just easier to kind of say, 'Hey, that's not us; you guys do whatever you want, but we're not involved in that.' And so, for that reason, it's been--we're a huge giant [?] for the secondary market. And so I would never expect Nike to publicly support us. Or publicly come out against us. They would never sort of publicly acknowledge that, and they're not, right, so that's their business. Russ: Sure.
48:41Russ: Let's talk about StockX and just the whole idea of what a stock market for stuff would look like. One of the advantages that the stock market has--the real stock market or stock markets, plural, have--is that a share of stock is a share of stock. There's no variation in it. It's a commodity. And of course there are commodity-like aspects to what you are talking about. I'm thinking about, for example, a different kind of collectible, which is books. So, if you go onto Amazon or Half.com, you can find almost an enormous number of books in different qualities. You can find hard-cover, paperback; but even within those there is brand new, there's like new, there's good, there's acceptable. And usually they tell you what's not quite right about these things--if it's got Marx in the margin; and some people don't care, so people do. But how are you going to deal with that, if you want to expand beyond sneakers? If you want to create a stock market in collectibles? How are you going to solve that quality issue? Guest: Well, the--at the start--StockX is only for deadstock shoes. You can't create a market pricing around something that has too much variability in the value based on the condition, because then you'd have to have pictures; you'd have to have a standard grading system; and that becomes pretty hard. You know--there became a standard grading system for baseball cards and for coins. You know, certain things that had certain shapes and had an official grading system. And so you could easily, you know, integrate a standard grading system for any industry that has that. But to start, you just stay at the deadstock new level for whatever product that is. And so, for some of those things maybe it becomes a lot harder. Right? Watches might be a lot harder to do than people might assume because a watch is inherently always used, right? The second a watch is made and given to a consumer, you don't know if that person is banged against a wall, or just because. But something like, you know, handbags, women's handbags, unused--you know, and other pure collectibles. But the concept of a stock market for any consumer good is really just a different way of matching a buyer and seller, right? Russ: Yep. Guest: And it's using that [?]. Now eventually we will actually put a securitization layer on top of some [?] and whatever verticals we are working with. And then you can actually use this as an alternative investment vehicle. But, you know, on Day 1, it's just about instead of getting a share of stock, right, a buyer and seller meet over price and you get a share of stock, you get a physical good. And every vertical that we add will have to deal with that physical around, you know, condition and how people value that particular item. A very obvious next vertical for us to add is streetwear. And in particular, the brand Supreme, which is probably the most our resold version of streetwear. Well, an unworn shirt or an unworn jacket is a defining thing. Right? I mean if it's new in the plastic, if it's never been taken out of the original wrapping, then you know that's new. And so we can create a market around that. And there is a big market for those particular clothes, which is as crazy and as secretive, right, or unknown to the average person as sneakers are. And so it's about finding those other verticals that have similar demographics and similar dynamics that sneakers do.
52:32Russ: So there's two psychological aspects of this I want to talk about. The first is why do people collect things. I'm not a collector. I think I have about 40 or so P. G. Wodehouse books, and I think he wrote 92. I don't know how many are in print. I have a lot. And it's plenty. I've got all the good ones that I think I have, and I've never had an urge to finish my set. So I'm not that kind of person. Can you speculate a little bit about the psychology of that--why? Obviously there are people who want to have every Jordan release in every color. And they never wear them. So, all the utility--in the economics term--all the satisfaction or value comes from knowing that you have something that's complete. Or that you have a lot of it. What do you think is working there? What's the human urge to collect? Guest: Well, you tapped into the human urge to collect, which is absolutely a big part of sneakers. But it's not the only part. It's the only part of other, you know, things that people collect. There are certain things that people collect that maybe they have no intrinsic value or maybe they have no function. But sneakers are so many different things. And this is one of the reasons why, when people ask is the sneaker market going to collapse--we're not going to have a crash the way that you'd think of a market crash, because there are so many different reasons of why people buy sneakers. And I use the word 'buy' instead of collect because collecting is just one of the reasons. There are some people that are collectors, right? And they want to own it, and they want to have it, and whether it's complete some part of the collection every model of Air Jordan or whatever that is, that's part of it. But some people buy sneakers solely to make money. They are here just as reseller; they are just trying to make money. Some people re-sell not to make money as much as it's just to buy more sneakers: it's a way to fund the rest of their collection. Right? There are some people that just want to own the sneakers for the prestige and caché around owning a certain rare or exclusive pair of sneakers. And that's kind of exponential when you take into consideration the fact that you can pay $200 and then have something that's worth $1000. And so now you are wearing a $1000 pair of sneakers instead of a $200 pair of sneakers. Right? And so then you get into concepts of fashion and all the things that go around with how people dress and how people want to show off that. And then there's the kind of just pure sneakerhead who just wants to wear the sneakers, right? He doesn't necessarily care about collecting them for its own value, whether it's going to go up or whether it's going to go down, but he just wants to own them and wear them because they are sneakers, and at the end of the day you wear sneakers. And then you get into even more functional--people that wear them for a particular sports and performance and all that. So there's just so many different reasons, right? And the athlete, people who like the particular athlete or the team or whatever it is. So, it's just--there's so many different parts of it. But the collector mentality and that person who--and the word 'investor'--obviously we are talking about stock markets and how it relates to what we're talking about--there's an investor aspect. Well, the person who is collecting today and buying and holding today, they don't necessarily know why. Maybe it's because it's going to be worth more later and they are going to sell it and make money. Maybe it's because it's going to be worth more later or hard to get later so they are just buying it now so they have it later. Right? So that sneaker investor has a lot of different motivations for basically buying now and holding. Which is somewhat like a collector, but it's also based on value. So there is just so many sort of inner-related parts, and the collector mentality that obviously applies across many other things that people collect, is I think for a lot of people, particularly my demographic of sneakerheads, the kind of older demographic here: I collected baseball cards. I collected baseball cards; I used to collect, you know, hats. We have a lot of the same stories, kind of my demographic, where we used to collect cards and now we collect sneakers. Russ: I wonder what's next. Guest: Who knows, right? But there's a really big difference between baseball cards and sneakers, which is that baseball cards were essentially an investment. Right? And when they started to become not worth the money and once people realized there was a lot more supply out there than they thought, there was kind of a run on baseball cards, and everyone tried to sell. And then they became worthless; and then people didn't want to collect them any more. I just ran through about 10, 12 different reasons why someone will keep their sneaker, even if it isn't necessarily worth anything. So there is a big difference between the two. But at the core of that collector mentality, that's the same. Russ: Yeah, for sure.
57:46Russ: You must spend a lot of time looking down at the ground when you go out. Guest: Absolutely. I think we all do. I think all sneakerheads inevitably look at people's shoes first. One, because you never know what you are going to see. But also it's kind of a way to identify other sneakerheads. I mean, if you see someone wearing a particular pair of sneakers, you know they collect sneakers because there just isn't any other way to get that particular pair. But it's also, you never know what you are going to see. So yeah, absolutely. Russ: Do you talk to strangers? Guest: I don't. I don't like to bother people. I'm more of an introvert anyway. But I've definitely had people come up to me and comment on my sneakers, and I certainly will talk to them about it. Russ: How many pairs do you think you could recognize by sight--if you are at the mall or at the game or somewhere out where there's a crowd and I said, 'What are those?' what do you think your success rate would be? Guest: Well, there's 3000 pairs or so on Campless, so certainly every one of those. And then you've got at least 4 or 5 times that, so maybe 15,000 maybe? Russ: Wow. Guest: I mean, a lot. Because there's also a lot that--I know there's one shoe that's been produced in 50 different colors. So, but yeah. I certainly--and that's another area where, we talked about I have 300 pairs of sneakers but there are people that have many more. There's a lot of people that are much more, have a lot more knowledge about sneakers than I do, in terms of just the history of every shoe, who have been working in sneakers all of their life. I've just been a consumer and a passionate fan of sneakers. But I've only been working in sneakers for a couple of years. Russ: On your website, you ask whether sneakers are more like stocks or drugs. What do you mean by that question? Guest: Yeah, I mean, the sneaker market has unbelievable similarities to the illegal drug trade in every way except for its not being illegal, or a substance that will hurt your body. You have a central distribution, supplier--Nike--which operates--and this is not a negative shot at them, but they operate like a drug cartel. They are basically the only supplier. They decide who gets what when. And if you don't like it, too bad. There's not much that you can do about that. And they have kind of complete control for it. And then the way that sneakers get distributed down is not kind of unlike the drug hierarchy, where, you know, a store gets some allocation and then they sell it, and then those re-sellers will get some amount of supply from them and they will sell it out and they will try to resell it to make some money to pay for their habit. I mean, you know--sneakerheads even use the word 'cop'--c-o-p--to refer to buying a sneaker. So, I go, 'Yeah, you're gonna cop,' which is a drug term. So, it looks very much like that. The data however, looks exactly like a stock market. We have stocks, we have shoes that have a price and increase in value, and people are buying and selling them and create a market price around them that changes. Every sneaker has a different market price and a different supply profile. As opposed to, drugs, which would be kind of a single product with a certain, you know. So it looks like both of them, and people will use those terms--people use stock terms all the time around investing and profit on it, as opposed to people often use drug terms and terminology around it. So, it's a really interesting thing. And I use the term 'drug cartel' in the most positive sense. There just isn't a better example except for the fact that they are not selling an illegal product or killing people for it.


COMMENTS (16 to date)
Joseph writes:

Curious to find out whether there's a difference in the price of shoes of different sizes?

BZ writes:

At one point the guest is asked to speculate on the psychology of collectors. He dodged a bit by commenting on the psychology of Sneaker Buyers instead, but it got me thinking.

As a collector, I have no idea why. Any reasons I come up with feel like post-hoc rationalizations anyway.

Twenty or so years ago, having never collected anything in my life, I decided I wanted to play with some of the computers I always read about, but never could afford when younger. Since they were obsolete by then, they were cheap. Out of college I found myself with more money than good sense. Pretty soon I found myself haggling with a German guy over some disk drive I knew I'd never use and asked myself "WTH are you doing?" That's when it occurred to me that I was "collecting" and no longer just buying new electronic toys.
(http://gallery.zimmers.net)

Zyryab writes:

Very interesting concept, but it's hard to see this as anything other than "Beanie Baby for Boys."

Unfortunately, Luber's insight into this tops out at the low-brow TED level. It would have been nice to get more into Nike's incentive in going along with this (the "prestige" thing isn't really convincing). Is there a chance of the bottom of this market dropping out if Nike decides to start making more money from this?

Does this stock market of sneakers grow the economic pie, or is it just "people ruin[ing] themselves by laying out money on trinkets of frivolous utility?” Collecting things that "may sometimes be of some little use, but all of which might at all times be very well spared, and of which the whole utility is certainly not worth the fatigue of bearing the burden.” (Adam Smith).

Finally, Luber was extremely evasive about the actual business (how many people his site is actually serving, whether or not his company can be profitable, who are the people who buy his information on shoe markets?).

[Edited with commenter's permission--Econlib Ed.]

Matt writes:
Very interesting concept, but it's hard to see this as anything other than "Beanie Baby [sic] for Boys."

Zyryab, can you explain the similarities?

BZ writes:

Zyryab: Does this stock market of sneakers grow the economic pie, or is it just "people ruin[ing] themselves by laying out money on trinkets of frivolous utility?”

You honestly think you know what makes a Sneaker Head happier than they do? What do you think the point of the economic pie is? Numbers on a spreadsheet? GDP bragging rights? No, it's quality of life for physical humans. Utility, or what we used to call "pursuit of happiness:, which you scorn, IS the whole point.

Buzz writes:

The prestige+promotion explanation does sound plausible to me. Same reason Apple doesn't double their new phone prices for the first couple of weeks.

Collecting sneakers is like collecting art. If you don't get why people do it, then it's like collecting art you do not appreciate.

On the same topic of big companies leaving money on the table, I would love to hear a conversation on IPO pricing, why they don't use auctions, etc...

Norm Hapke writes:

In the ninetys there was a game developed called "Magic, the Gathering." It was a card game on a sophisticated 'rock, paper, scissors' concept. Cards were sold for characters with various capabilities/vulnerabilities. The numbers of 'good' cards and 'better' and 'best' cards were differently priced and artificially made scarce. Brilliant example of supply/demand interaction for my kid.

dcurve writes:

It was a fun podcast to listen to. I am very into collecting and reselling LEGO's. Listening to the podcast had me thinking of all the similarities.

There have been some fun articles discussing the comparative returns on LEGO's. There are also some very vibrant and extensive communities that are for LEGO investing.

My Favorite Investing Site is : http://www.brickpicker.com/index.cfm

Article on returns, popular media, but still fun:
http://www.telegraph.co.uk/finance/personalfinance/investing/11817380/Lego-a-better-investment-than-shares-and-gold.html

http://time.com/money/4162059/lego-investment-compare-gold-return/

Keith Hemstreet writes:

This episode should have been called “How to Destroy a Collectibles Market”.

First problem, collectors are encouraged to enter their entire inventory into this site to show off. I am guessing this will have the effect of putting all of those shoes up for sale, as once they are entered into the public domain, and once people know where to find them, offers will be made for desirable shoes. Will this increase supply by orders of magnitude over what has been listed for sale on ebay at any given time?

Second problem, true price revealed. Since the shoes that sell fastest are the shoes that are the best deals and therefore current listings (unsold shoes) at any given time are somewhat overpriced (not a new concept because I used it in real estate investing a dozen years ago), people who just look at listings get the idea that the shoes are “worth” more than true sales prices would indicate. This Sneaker stock market will destroy that illusion. By doing so, the price of Sneakers will likely fall.

Third problem, demographics. I am guessing that the people who collect Sneakers are young urban males. Because who else would find that interesting? Their goal would be both to show off and to make money, all in an atmosphere of street wisdom. There is nothing less “street” than middle aged investors like myself analyzing Sneaker stock market graphs (or writing analyses of Sneaker stock markets for Econ Talk) in order to chose the best Air Jordans given my particular retirement goals (should I include them as a part of my commodities portfolio? Can I buy them on margin? Do they have high holding costs like gold?). In other words, if the explosion of supply or the revelation of the true sales prices don't destroy the market, the White and Nerdy masses chatting about their Sneaker portfolios certainly will.

In the long run the only potential use of this stock market to me would be Sneaker shorting and Sneaker Puts. Interestingly, in the short run there could be an explosion of interest in Sneaker collecting after the stock market hits the popular press, but before all the fundamentals disintegrate. Maybe I will go long on a pair of size 12 Air Jordan Daily Commuters with arch support.

Glenn writes:

Not mentioned was the cost of production and distribution of new sneakers. Excluding Nike's high marketing costs, the cost of a pair sneakers has to be pennies on the dollar. The price of mass-produced "collectibles" on the secondary market is bound to fall sooner or later (e.g. Barbie's, Beanie Babies, Longerberger baskets) when people lose interest. Collectibles retain value when they are truly rare and have a high level of craftsmanship. Short this market!

Henry writes:

Russ made the comment of Nike giving up profit of 100's of millions by facilitating this secondary market, i.e. that whenever you see lines of people at your stores it implies one could have sold more.

Sneaker brands appear to derive their appeal from the perceived scarcity (assessed under uncertainty) and this is at the very heart of their appeal.

One way to look at it, is as a game. Nike could have made more profit in any one particular release or season but over time this would result in a reduction the long term perceived value of the brand and therefore receive the economic rent Nike is able to command from the brand in future releases. The best comparison is a single vs. a repeated prisoner's dilemma. In the repeated game setting, cooperation naturally emerges. In the same way the secondary sneaker market can be viewed as a repeated game where Nike has an incentive to perhaps "cheat" in a given year or season to make more profit, but that over time in a repeated setting the winning strategy is to cooperate and give up some of its surplus to the consumer in order to maintain its brand/reputation.

Long writes:

I came to the website looking for the survey but I don't see it in the upper left hand corner.. am I missing something?

[It's on the upper left of the homepage at http://www.econtalk.org. But I'll save you the trouble: the survey is at https://www.surveymonkey.com/r/93B7D8J. --Econlib Ed.]

Kevin writes:

Niki has revenues of 8.41 billion and profits of 1.18 billion. There must be serious reasons for them to leave 400 million of profit (if I understood the podcast correctly) on the table or serious ignorance. It could be they view it as a short term thing, they think setting up auctions for their shoes has serious consequences for current distribution models, they may have long term contracts which prohibit transitioning to a different model.

Interesting discussion. I wonder what Gilbert wants the data and analytics for - I am certain it is not shoes and he has plans for something very interesting if it pans out.

don rudolph writes:

I think collecting is connected to obsessive compulsive behavior patterns. I think economists,as well as all academics, like to collect data and organize it with idea patterns. It is part of human nature to collect random things divide them into different piles and organize those piles. Obsessive compulsives have this human trait to a degree that can go against their overall best interests.

Luke J writes:

Regarding the psychology of collecting [blank]:

I do not consider myself a collector of anything, so I was a bit unfair in my opinion of Mr. Luber throughout this episode. I decided to take a moment to consider what I have a hard time getting rid of.

Turns out that I am a collector of podcasts, stubbornly refusing to delete any of episodes for any of the podcasts I subscribe to. They do not occupy the space that 300 pairs of sneakers do, but it is unnecessary to keep them all. I feel better knowing they are all there and "complete."

jw writes:

Late to listening to this one, but:

The same effect is in play for first growth Bordeaux wines, Pappy Van Winkle, Birkin bags and scores of other high end goods, but the dollars are an order of magnitude higher.

Nevertheless, I too thought the analogies ran more towards Beanie Babies than securities (or tulips?...).

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