1 00:00:09,400 --> 00:00:13,200 Speaker 1: Hello, and welcome to another episode of the Odd Thoughts Podcast. 2 00:00:13,240 --> 00:00:17,520 Speaker 1: I'm Tracy Alloway and I'm Joe Wish. Joe, I am 3 00:00:17,560 --> 00:00:20,560 Speaker 1: really sad to say we are coming to the end 4 00:00:20,720 --> 00:00:23,160 Speaker 1: of our bubble series. I thought you were going to 5 00:00:23,239 --> 00:00:25,720 Speaker 1: say we're coming to the end of the podcast overall, 6 00:00:25,760 --> 00:00:28,400 Speaker 1: so I'm actually kind of relieved that were But I 7 00:00:28,440 --> 00:00:30,880 Speaker 1: am sad too. I think I said it last time, like, 8 00:00:30,920 --> 00:00:34,080 Speaker 1: bubbles are just the best. Yeah, I love talking about them. 9 00:00:34,440 --> 00:00:38,800 Speaker 1: We'll probably talk about them again on you know, future episodes, 10 00:00:39,360 --> 00:00:43,440 Speaker 1: but for now we are we're wrapping up, all right. 11 00:00:43,560 --> 00:00:46,160 Speaker 1: So as we wrap up, and as you look over 12 00:00:46,280 --> 00:00:48,360 Speaker 1: a bunch of the different bubbles that we've just been 13 00:00:48,560 --> 00:00:52,320 Speaker 1: um learning about, what stands out for you, like what 14 00:00:52,400 --> 00:00:56,640 Speaker 1: are the lessons that you're actually taking away? Human psychology 15 00:00:56,880 --> 00:00:59,000 Speaker 1: is just so consistent. I think it was the first 16 00:00:59,040 --> 00:01:03,800 Speaker 1: one we talked with Scott Nations about various booms and 17 00:01:03,840 --> 00:01:07,920 Speaker 1: bust throughout US stock market history. There's always the great 18 00:01:07,959 --> 00:01:11,000 Speaker 1: story that goes with them. And so at the kernel 19 00:01:11,240 --> 00:01:15,319 Speaker 1: of every bubble that we talked about, there's some route 20 00:01:15,360 --> 00:01:19,119 Speaker 1: of truth to it. It's not a complete fabrication. Something 21 00:01:19,200 --> 00:01:22,200 Speaker 1: at some point made some sense and then of course 22 00:01:22,280 --> 00:01:25,480 Speaker 1: humans being uh, the animals that we are, we just 23 00:01:25,560 --> 00:01:29,880 Speaker 1: can't put things in perspective and we extrapolate way too far. Yeah, 24 00:01:30,080 --> 00:01:32,080 Speaker 1: that's something that's going to stick with me as well. 25 00:01:32,120 --> 00:01:36,440 Speaker 1: There's always a certain narrative to explain what's happening. The 26 00:01:36,520 --> 00:01:39,399 Speaker 1: other thing I was thinking about is almost every bubble 27 00:01:39,440 --> 00:01:43,200 Speaker 1: that we've spoken about comes or spurs a sort of 28 00:01:43,280 --> 00:01:48,200 Speaker 1: cottage industry around it, Like crazy things like you know, 29 00:01:48,240 --> 00:01:51,080 Speaker 1: the guys that used to stand outside in Florida trying 30 00:01:51,120 --> 00:01:54,240 Speaker 1: to hawk during the lamb bubble Binder boys, that's it. 31 00:01:54,640 --> 00:01:58,760 Speaker 1: Or the baseball card bubble, all the new sets of 32 00:01:58,800 --> 00:02:03,360 Speaker 1: baseball cards that came in. Yeah, that specifically the way 33 00:02:03,640 --> 00:02:09,880 Speaker 1: supply expands when people are in a mania for X. 34 00:02:09,919 --> 00:02:13,720 Speaker 1: Whatever it is, whether it's land, whether it's baseball cards, 35 00:02:14,360 --> 00:02:18,120 Speaker 1: whether it's uh, some sort of equity or whatever, the 36 00:02:18,160 --> 00:02:21,120 Speaker 1: industry will find a way to create supply. The supply 37 00:02:21,320 --> 00:02:23,200 Speaker 1: never just states fixed. And of course, you know we 38 00:02:23,240 --> 00:02:25,840 Speaker 1: talked about the Florida real estates, so you know, people 39 00:02:25,840 --> 00:02:28,600 Speaker 1: have just bought marsh land in the middle of nowhere 40 00:02:28,880 --> 00:02:31,640 Speaker 1: when all the prime real estate like around Miami was 41 00:02:31,720 --> 00:02:34,120 Speaker 1: sold up. So they always find a way to sell 42 00:02:34,160 --> 00:02:36,680 Speaker 1: something new. People don't just sort of say they bought 43 00:02:36,720 --> 00:02:39,320 Speaker 1: it all and now prices will go up. The supply 44 00:02:39,360 --> 00:02:42,440 Speaker 1: eventually swamps demand. The one thing I'm a little bit 45 00:02:42,480 --> 00:02:45,400 Speaker 1: sad that we didn't learn more about is uh the 46 00:02:45,560 --> 00:02:50,160 Speaker 1: catalyst for the bubbles actually bursting. Because if we knew that, 47 00:02:50,520 --> 00:02:53,640 Speaker 1: if we knew that, Joe, we could make so much money. 48 00:02:53,800 --> 00:02:56,360 Speaker 1: We could all be rich. We just have to you 49 00:02:56,440 --> 00:02:58,600 Speaker 1: just see a bubble and just ride it until the 50 00:02:58,680 --> 00:03:01,680 Speaker 1: day before. Yeah. Alright, well, as it is, we have 51 00:03:01,800 --> 00:03:04,600 Speaker 1: to stick with the podcasts and various other things. But 52 00:03:04,720 --> 00:03:08,800 Speaker 1: to celebrate the end of our Bubble series, we are 53 00:03:09,000 --> 00:03:12,200 Speaker 1: going to share with our listeners a rerun of one 54 00:03:12,240 --> 00:03:16,440 Speaker 1: of our most favorite bubbles ever. That's right. So obviously, 55 00:03:16,480 --> 00:03:18,560 Speaker 1: as we're saying, we're probably going to keep doing more 56 00:03:18,560 --> 00:03:21,000 Speaker 1: episodes in the future about bubbles from time to time. 57 00:03:21,240 --> 00:03:23,960 Speaker 1: Of course, we did some even before we started the 58 00:03:23,960 --> 00:03:27,520 Speaker 1: original series, and there was one in particular that really 59 00:03:27,560 --> 00:03:31,040 Speaker 1: stood out there just like totally fits, doesn't it. Yeah, 60 00:03:31,080 --> 00:03:33,800 Speaker 1: this was one of our earliest ever episodes and it 61 00:03:33,880 --> 00:03:37,120 Speaker 1: was so much fun. It was one on the Beanie 62 00:03:37,200 --> 00:03:40,400 Speaker 1: Baby Bubble. So for those of you who are unfamiliar 63 00:03:40,440 --> 00:03:44,000 Speaker 1: with it. In the nines, Beanie Babies, these small stuffed 64 00:03:44,040 --> 00:03:48,960 Speaker 1: animal toys, became a huge cultural phenomenon, and with that 65 00:03:49,000 --> 00:03:53,440 Speaker 1: phenomenon came a lot of speculation, a lot of trading 66 00:03:53,840 --> 00:03:56,760 Speaker 1: that came with it. Right, and you know, they're just 67 00:03:56,760 --> 00:03:59,720 Speaker 1: stuffed animals, But there was this a lot of the 68 00:04:00,000 --> 00:04:03,680 Speaker 1: teams that we discussed in this episode we discussed with 69 00:04:03,680 --> 00:04:06,640 Speaker 1: other Bubbles on later episodes. So the supply thing that 70 00:04:06,680 --> 00:04:09,720 Speaker 1: we just mentioned at one point, you know, the idea 71 00:04:09,880 --> 00:04:13,560 Speaker 1: was that once a line of these stuffed animals was made, 72 00:04:13,600 --> 00:04:16,719 Speaker 1: there would never be another one, but the supply expanded massively. 73 00:04:17,360 --> 00:04:20,880 Speaker 1: Last week, remember we talked about the role that the 74 00:04:20,920 --> 00:04:24,320 Speaker 1: Beckett magazine had in baseball cards, the sort of first 75 00:04:24,360 --> 00:04:28,920 Speaker 1: pricing guide, the price guide. Sure, Beanie Babies, as we 76 00:04:28,960 --> 00:04:32,880 Speaker 1: discussed on that episode, also had their price guide. Very 77 00:04:32,920 --> 00:04:36,520 Speaker 1: similar idea, very similar phenomenon at work. As soon as 78 00:04:36,560 --> 00:04:40,200 Speaker 1: people could see visually that prices were changing every month 79 00:04:40,279 --> 00:04:43,440 Speaker 1: or every week, that made people even more inclined them 80 00:04:43,480 --> 00:04:46,280 Speaker 1: to see them as speculative vehicles. Yeah, and of course, 81 00:04:46,320 --> 00:04:49,080 Speaker 1: in the same way that you were a young boy 82 00:04:49,120 --> 00:04:52,800 Speaker 1: trading baseball cards, I was a young girl trading beanie babies. 83 00:04:52,800 --> 00:04:55,280 Speaker 1: So yeah, it was the same time it was traditional 84 00:04:55,360 --> 00:05:00,360 Speaker 1: gender roles here at Joe. All right, so this episode, 85 00:05:00,480 --> 00:05:06,239 Speaker 1: let's see it aired. It was November, so well almost 86 00:05:06,279 --> 00:05:08,880 Speaker 1: two years ago. It's crazy, all right. So this is 87 00:05:08,920 --> 00:05:12,440 Speaker 1: the beanie baby bubble from November two thousand and fifteen. 88 00:05:12,480 --> 00:05:16,840 Speaker 1: We interviewed Zach Bissinett. He's a prolific author and he 89 00:05:16,880 --> 00:05:28,599 Speaker 1: wrote a fantastic book on this exact topic. Take a listen, Joe. 90 00:05:28,880 --> 00:05:31,520 Speaker 1: I've got a question for you. What were you doing 91 00:05:31,560 --> 00:05:36,000 Speaker 1: to make money in the summer of nine was the 92 00:05:36,000 --> 00:05:38,599 Speaker 1: best summer because I think I made about two thousand 93 00:05:38,680 --> 00:05:41,440 Speaker 1: dollars from just a summer job that I had. But 94 00:05:41,600 --> 00:05:44,080 Speaker 1: then I put that all into stocks because it was 95 00:05:44,080 --> 00:05:47,880 Speaker 1: the Internet bubble, and I basically paid for two years 96 00:05:47,880 --> 00:05:52,120 Speaker 1: of college thanks to essentially what I did that summer. 97 00:05:52,200 --> 00:05:55,560 Speaker 1: So that's amazing. It was. It was a good time. Well, 98 00:05:55,600 --> 00:05:57,960 Speaker 1: I was making money to a little differently. I was 99 00:05:58,000 --> 00:06:00,799 Speaker 1: still in middle school. I was going to garage sales 100 00:06:00,839 --> 00:06:03,839 Speaker 1: and selling old toys and one of the things I 101 00:06:03,880 --> 00:06:09,640 Speaker 1: sold was a tiedyed beanie baby lizard, and I sold 102 00:06:09,640 --> 00:06:13,000 Speaker 1: it for two hundred dollars to a forty year old 103 00:06:13,040 --> 00:06:15,680 Speaker 1: man and at the time me as an eleven year old, 104 00:06:15,720 --> 00:06:18,080 Speaker 1: I thought this was amazing money and I was rolling 105 00:06:18,080 --> 00:06:20,799 Speaker 1: in it. That is amazing money objectively for any age 106 00:06:20,839 --> 00:06:24,400 Speaker 1: selling a stuffed animal for two dollars, right, So why 107 00:06:24,440 --> 00:06:27,800 Speaker 1: are we talking about this today? We're going to delve 108 00:06:27,839 --> 00:06:32,160 Speaker 1: into what can drive seemingly rational people to spend hundreds, 109 00:06:32,200 --> 00:06:35,680 Speaker 1: sometimes thousands of dollars on stuffed animals. We're going to 110 00:06:35,800 --> 00:06:37,920 Speaker 1: talk about the beanie baby bubble, and we're going to 111 00:06:38,000 --> 00:06:39,840 Speaker 1: talk about something more than that. We're going to talk 112 00:06:39,880 --> 00:06:43,239 Speaker 1: about bubbles in general, the Internet bubble, and the psychology 113 00:06:43,360 --> 00:06:49,040 Speaker 1: behind speculative mania. So here with us today is Zach Bissonett. 114 00:06:49,320 --> 00:06:52,960 Speaker 1: He's the author of The Great Beanie Baby Bubble, Mass Delusion, 115 00:06:53,040 --> 00:06:55,479 Speaker 1: and the Dark Side of Cute. It's a book that 116 00:06:55,520 --> 00:06:57,800 Speaker 1: came out earlier this year and I just happened to 117 00:06:57,839 --> 00:07:10,520 Speaker 1: finish it this morning. Zach, and thanks for joining us. 118 00:07:10,560 --> 00:07:13,200 Speaker 1: So why did you write a book about beanie babies 119 00:07:13,240 --> 00:07:16,559 Speaker 1: so animals? I like you. I was in middle school 120 00:07:16,600 --> 00:07:18,680 Speaker 1: when the beanie baby craze hit, and I was kind 121 00:07:18,680 --> 00:07:20,760 Speaker 1: of a nerd, and I was into like old books 122 00:07:20,760 --> 00:07:22,760 Speaker 1: and antiques and that kind of thing. And every weekend 123 00:07:22,760 --> 00:07:24,560 Speaker 1: I would go to this flea market on Cape Cod 124 00:07:24,640 --> 00:07:27,560 Speaker 1: with my mother and we had never heard of beanie babies, 125 00:07:27,600 --> 00:07:30,040 Speaker 1: and then all of a sudden, out of nowhere, that 126 00:07:30,120 --> 00:07:33,440 Speaker 1: flea market was like beanie baby dealers, and they were 127 00:07:33,480 --> 00:07:36,320 Speaker 1: wearing like Fannie packs and visors and talking just really 128 00:07:36,360 --> 00:07:39,080 Speaker 1: really excitedly about how much they were going up in 129 00:07:39,160 --> 00:07:41,440 Speaker 1: value and how this one they just paid five dollars 130 00:07:41,520 --> 00:07:44,240 Speaker 1: for was now worth forty and they're not going to 131 00:07:44,360 --> 00:07:47,160 Speaker 1: sell it this week because next week it'll be worth fifty. 132 00:07:47,680 --> 00:07:50,560 Speaker 1: And that was like that for about two years, and 133 00:07:50,560 --> 00:07:52,520 Speaker 1: then all of a sudden it was gone and no 134 00:07:52,520 --> 00:07:54,000 Speaker 1: one ever talked about it again. I just I just 135 00:07:54,040 --> 00:07:57,880 Speaker 1: want to say, uh, during those same years that my 136 00:07:57,960 --> 00:08:00,920 Speaker 1: mother was dating a guy who was antique dealer, and 137 00:08:00,960 --> 00:08:03,240 Speaker 1: so I also went to a lot of flea markets 138 00:08:03,280 --> 00:08:05,440 Speaker 1: in New England, and I actually saw all the exact 139 00:08:05,520 --> 00:08:08,120 Speaker 1: same thing, where suddenly there were these flea markets where 140 00:08:08,160 --> 00:08:10,520 Speaker 1: that used to be people bringing out their old stuff 141 00:08:10,520 --> 00:08:12,360 Speaker 1: from their barns and then it's just people have stuff 142 00:08:12,400 --> 00:08:16,400 Speaker 1: down and used to be traditionalist antique dealers hated it. Yeah, 143 00:08:16,960 --> 00:08:18,760 Speaker 1: there was there was one guy I talked to who 144 00:08:18,880 --> 00:08:20,600 Speaker 1: who he was so proud of this. He was a 145 00:08:20,640 --> 00:08:24,600 Speaker 1: traditionalist antique dealer who had just railed against beanie babies. 146 00:08:24,640 --> 00:08:26,840 Speaker 1: He would go on CNN, I would say, I'm not 147 00:08:26,840 --> 00:08:29,640 Speaker 1: in kidding. CNN would have these like debates between this 148 00:08:29,680 --> 00:08:32,920 Speaker 1: guy who they called the beanie Meanie and and the 149 00:08:32,920 --> 00:08:35,960 Speaker 1: beanie baby experts who were making millions of dollars selling 150 00:08:36,320 --> 00:08:38,480 Speaker 1: One of them sold a million copies a month of 151 00:08:38,480 --> 00:08:41,080 Speaker 1: a beanie baby magazine that she was publishing, and they 152 00:08:41,080 --> 00:08:44,040 Speaker 1: would have these debates and this, and this traditionalist antique 153 00:08:44,080 --> 00:08:47,400 Speaker 1: dealer was given a group of antique dealers in Indiana 154 00:08:47,679 --> 00:08:51,200 Speaker 1: gave him a crucified skunk beanie baby with a certificate 155 00:08:51,320 --> 00:08:53,760 Speaker 1: thanking him for being a traditionalist who stood up for 156 00:08:53,800 --> 00:08:57,440 Speaker 1: traditional antiques. So this is the amazing thing. Walk us 157 00:08:57,480 --> 00:09:00,680 Speaker 1: through how the beanie baby bubble came in to existence 158 00:09:00,720 --> 00:09:03,480 Speaker 1: and how we at one day actually got to the 159 00:09:03,480 --> 00:09:06,600 Speaker 1: point where people were debating the value of stuffed animals 160 00:09:06,600 --> 00:09:09,839 Speaker 1: on CNN. So it starts out with this this very 161 00:09:09,880 --> 00:09:13,080 Speaker 1: sort of eccentric toymaker named Tie Warner, who dropped out 162 00:09:13,120 --> 00:09:16,000 Speaker 1: of Calamazoo College, tried to become an actor, failed at that, 163 00:09:16,120 --> 00:09:19,360 Speaker 1: then became a toy salesman was wildly successful at that, 164 00:09:19,400 --> 00:09:21,080 Speaker 1: but then he got fired from that and decided to 165 00:09:21,120 --> 00:09:24,240 Speaker 1: start his own stuffed animal company. And he started to 166 00:09:24,240 --> 00:09:28,000 Speaker 1: create these beanie babies initially because he thought at a 167 00:09:28,040 --> 00:09:30,760 Speaker 1: five dollar price point, they would be irresistible and that 168 00:09:30,840 --> 00:09:32,800 Speaker 1: it would help him sort of a foot in the 169 00:09:32,840 --> 00:09:35,560 Speaker 1: door with large accounts, and that he would then be 170 00:09:35,600 --> 00:09:39,160 Speaker 1: able to kind of up sell bigger stores on selling 171 00:09:39,240 --> 00:09:43,199 Speaker 1: his larger stuffed animal line. And it didn't work at all. 172 00:09:43,960 --> 00:09:46,839 Speaker 1: I remember talking to talking to to the sales reps 173 00:09:46,880 --> 00:09:49,440 Speaker 1: for Tye who remembered just there was no interest in 174 00:09:49,440 --> 00:09:51,600 Speaker 1: these bean babies. People worried they were cheap, They thought 175 00:09:51,600 --> 00:09:53,800 Speaker 1: they looked cheap. They worried people would buy the beanie 176 00:09:53,800 --> 00:09:56,480 Speaker 1: babies instead of a more expensive product. He was just 177 00:09:56,520 --> 00:09:58,559 Speaker 1: not getting any interest in them. But Ty Warner, the 178 00:09:58,559 --> 00:10:01,320 Speaker 1: guy created them, really really believed in this product, and 179 00:10:01,360 --> 00:10:05,240 Speaker 1: he combined that belief with an extremely sort of eccentric, 180 00:10:05,360 --> 00:10:08,960 Speaker 1: obsessive approach to the product and the people who who 181 00:10:09,000 --> 00:10:10,319 Speaker 1: had worked with him, which at the beginning was just 182 00:10:10,400 --> 00:10:12,240 Speaker 1: his girlfriend. But but she remembered when I when I 183 00:10:12,240 --> 00:10:15,280 Speaker 1: talked with her, he would keep her up until like 184 00:10:15,400 --> 00:10:18,839 Speaker 1: four in the morning, debating one color of the ribbon 185 00:10:18,920 --> 00:10:21,200 Speaker 1: on a bear should be. And then she'd think they 186 00:10:21,240 --> 00:10:24,520 Speaker 1: would finally be done debating the color, and he would say, well, 187 00:10:24,520 --> 00:10:26,400 Speaker 1: what if it was tied this way instead of the 188 00:10:26,440 --> 00:10:28,559 Speaker 1: other way, And then they would have to go back 189 00:10:28,600 --> 00:10:31,320 Speaker 1: through the iterations of different colors again for hours. So 190 00:10:31,360 --> 00:10:34,200 Speaker 1: he had this really really obsessive approach to the product. 191 00:10:34,600 --> 00:10:37,920 Speaker 1: This is how the retirement came into being, right precisely, 192 00:10:38,400 --> 00:10:41,520 Speaker 1: And so sometimes he would come out with a product 193 00:10:42,440 --> 00:10:44,400 Speaker 1: and then a few months after he chipped a few 194 00:10:44,440 --> 00:10:46,320 Speaker 1: thousand of them, he would like wake up in the 195 00:10:46,320 --> 00:10:49,200 Speaker 1: middle of the night basically and decided that it should 196 00:10:49,200 --> 00:10:52,720 Speaker 1: be a different color. So like one of his first 197 00:10:53,760 --> 00:10:55,400 Speaker 1: beanie baby is not not one of the very first, 198 00:10:55,440 --> 00:10:57,040 Speaker 1: but one of the one of the first was Peanut 199 00:10:57,120 --> 00:11:00,719 Speaker 1: the Elephant, who was originally a royal blue color. And 200 00:11:00,760 --> 00:11:02,680 Speaker 1: then after a few months of that, I think he 201 00:11:02,800 --> 00:11:05,440 Speaker 1: chipped I think like four hundred I can't remember the 202 00:11:05,520 --> 00:11:08,120 Speaker 1: fourteen hundred or so of the of this beanie baby, 203 00:11:08,200 --> 00:11:10,839 Speaker 1: and he decided it shouldn't be royal blue, it should 204 00:11:10,880 --> 00:11:13,480 Speaker 1: be baby blue. And so the fact that they would 205 00:11:13,480 --> 00:11:15,960 Speaker 1: get retired and never made again. There were never more 206 00:11:16,000 --> 00:11:19,440 Speaker 1: than that that's how they became collectible that people would 207 00:11:19,640 --> 00:11:23,400 Speaker 1: see is going up in value entirely accidentally. So because 208 00:11:23,440 --> 00:11:26,160 Speaker 1: this is happening before anyone cares about these, his annual 209 00:11:26,200 --> 00:11:28,440 Speaker 1: sales are like four million dollars a year at this point, 210 00:11:28,520 --> 00:11:31,760 Speaker 1: mostly not from beanie babies. No one cares about beanie babies. 211 00:11:31,800 --> 00:11:34,840 Speaker 1: Then all of a sudden, this small group of people 212 00:11:34,880 --> 00:11:37,760 Speaker 1: in suburban Chicago who lived on one cul de sac 213 00:11:38,720 --> 00:11:41,440 Speaker 1: started collecting beanie babies. They saw them in stores because 214 00:11:41,440 --> 00:11:43,439 Speaker 1: they were near where TY was headquartered, so that he 215 00:11:43,520 --> 00:11:45,439 Speaker 1: had a big presence in stores there. And they decided 216 00:11:45,440 --> 00:11:48,080 Speaker 1: they liked these beanie babies and that they wanted to 217 00:11:48,080 --> 00:11:51,880 Speaker 1: assemble complete collections for their kids. And they became very obsessive. 218 00:11:52,080 --> 00:11:54,120 Speaker 1: These were soccer mons. They came very very obsessive with 219 00:11:54,160 --> 00:11:57,200 Speaker 1: trying to assemble complete collections. And so they would call 220 00:11:57,360 --> 00:11:59,800 Speaker 1: stores and other towns to ask them what beanie babies 221 00:11:59,840 --> 00:12:03,760 Speaker 1: they had. And then, and they remember this the sort 222 00:12:03,800 --> 00:12:06,400 Speaker 1: of very strange converse, they would realize that there would 223 00:12:06,440 --> 00:12:08,959 Speaker 1: be like these weird variations, and these were the ones 224 00:12:09,000 --> 00:12:11,319 Speaker 1: that he had retired, just changed the designer because he 225 00:12:11,440 --> 00:12:14,360 Speaker 1: took a few thousand and then changed entirely accidentally, and 226 00:12:14,400 --> 00:12:17,720 Speaker 1: they started paying each other more for these kind of 227 00:12:17,720 --> 00:12:20,440 Speaker 1: beanie babies, started this small market for them just in 228 00:12:20,480 --> 00:12:24,199 Speaker 1: this town. As this started to happen, As this kind 229 00:12:24,200 --> 00:12:28,280 Speaker 1: of starts in this small town, this woman, Peggy Gallagher, 230 00:12:28,960 --> 00:12:32,560 Speaker 1: and her sister, Dr. Paula Brinko, who was a doctor, 231 00:12:33,040 --> 00:12:36,400 Speaker 1: had this idea, you know, we're just calling stores like 232 00:12:36,440 --> 00:12:39,439 Speaker 1: in the Chicago area where this all started, but if 233 00:12:39,440 --> 00:12:42,160 Speaker 1: we call stores in like other states, we'll be able 234 00:12:42,160 --> 00:12:44,600 Speaker 1: to find beanie babies that are really rare that no 235 00:12:44,640 --> 00:12:47,280 Speaker 1: one else has. So they go to start going local 236 00:12:47,360 --> 00:12:49,880 Speaker 1: chambers of commerce and getting lists of all of the 237 00:12:49,920 --> 00:12:53,400 Speaker 1: gift shops. The woman who's a doctor is at the 238 00:12:53,440 --> 00:12:55,680 Speaker 1: same time that she's doing this, she's she's doing this 239 00:12:55,760 --> 00:13:00,160 Speaker 1: study on women who were like diabetic or something where 240 00:13:00,200 --> 00:13:03,360 Speaker 1: she had to call hospitals to talk to their researchers, 241 00:13:03,720 --> 00:13:05,760 Speaker 1: and after she called the researcher, she would ask to 242 00:13:05,800 --> 00:13:08,360 Speaker 1: be transferred to the gift shop to ask about beanie 243 00:13:08,400 --> 00:13:10,360 Speaker 1: babies so she could try to order the rare one. 244 00:13:10,480 --> 00:13:12,480 Speaker 1: But this is the part of the story that I love, 245 00:13:12,520 --> 00:13:15,400 Speaker 1: because we eventually go from this like small group of 246 00:13:15,400 --> 00:13:21,240 Speaker 1: soccer mom collectors who professionalize themselves as beanie baby dealers 247 00:13:21,360 --> 00:13:24,120 Speaker 1: and beanie baby market experts. I mean one of them 248 00:13:24,240 --> 00:13:28,520 Speaker 1: had a Beanie World magazine. She was a self described 249 00:13:28,640 --> 00:13:31,960 Speaker 1: Chicago suburban soccer mom. She had a magazine with the 250 00:13:32,000 --> 00:13:34,959 Speaker 1: circulation of more than one million million a month and 251 00:13:35,280 --> 00:13:38,240 Speaker 1: more ads per copy than Glamour. These were like thick 252 00:13:38,320 --> 00:13:41,679 Speaker 1: magazines full of ads. So people start seeing the priceless 253 00:13:41,679 --> 00:13:44,040 Speaker 1: for these beanies and they all figure prices are going 254 00:13:44,080 --> 00:13:47,120 Speaker 1: to go up forever. These are good investments, right, well right, 255 00:13:47,240 --> 00:13:49,880 Speaker 1: And the stores that are hearing all of a sudden 256 00:13:49,920 --> 00:13:52,280 Speaker 1: out of nowhere start getting calls from these out of 257 00:13:52,360 --> 00:13:55,520 Speaker 1: state collectors are like, oh my gosh, beanie babies are 258 00:13:55,520 --> 00:13:58,319 Speaker 1: really hot. It starts out as like two people did 259 00:13:58,320 --> 00:14:00,920 Speaker 1: the did the magazine that published the prices? Because I 260 00:14:00,920 --> 00:14:03,240 Speaker 1: remember I used to collect baseball cards when as a kid, 261 00:14:03,280 --> 00:14:05,360 Speaker 1: and there was the Beckett magazine and there was like 262 00:14:05,400 --> 00:14:08,680 Speaker 1: a crucial avenue by which the baseball card bubble which 263 00:14:08,720 --> 00:14:11,800 Speaker 1: also burst. You know, everyone checked the prices each month. 264 00:14:11,880 --> 00:14:14,120 Speaker 1: So did the magazine for bringing beanie babies serve a 265 00:14:14,160 --> 00:14:17,680 Speaker 1: similar purpose hugely, so that there's a reflexivity. I think 266 00:14:17,800 --> 00:14:21,480 Speaker 1: two price guides where they impact prices as much as 267 00:14:21,520 --> 00:14:24,440 Speaker 1: they report on them. And the first priceless which were 268 00:14:24,440 --> 00:14:27,680 Speaker 1: pread about Lady Peggy Gallagher, which she started to circulate. 269 00:14:27,720 --> 00:14:29,640 Speaker 1: She put an ad in like a magazine for other 270 00:14:29,680 --> 00:14:32,200 Speaker 1: collectors saying he sent her self address stamped envelope, she 271 00:14:32,240 --> 00:14:35,760 Speaker 1: would send you this checklist and she was like, well, 272 00:14:35,800 --> 00:14:38,160 Speaker 1: what should I do? Her prices? She just made them up, basically, 273 00:14:38,200 --> 00:14:40,520 Speaker 1: she told me this that she said this one's rare, 274 00:14:40,520 --> 00:14:42,760 Speaker 1: so that one should be worth twenty. These were not 275 00:14:42,840 --> 00:14:45,520 Speaker 1: really based on anything, and then she kind of sat 276 00:14:45,560 --> 00:14:48,920 Speaker 1: back and watched on like the AOL message boards, is 277 00:14:48,960 --> 00:14:52,560 Speaker 1: these priceless she was making up kind of became the 278 00:14:52,560 --> 00:14:55,320 Speaker 1: the price and so talk about that how the Internet 279 00:14:55,440 --> 00:14:57,640 Speaker 1: and those are the early days of the Internet helped 280 00:14:57,720 --> 00:15:00,360 Speaker 1: stoke that bubble, so that this is a be Babies 281 00:15:00,400 --> 00:15:03,120 Speaker 1: were ten percent of ebays sales in the early days 282 00:15:03,160 --> 00:15:06,400 Speaker 1: of ebays. eBay disclosed in the risk factors to its 283 00:15:06,520 --> 00:15:11,360 Speaker 1: sec FI lanes a dependence on the contain crazy fact yes, 284 00:15:11,680 --> 00:15:15,440 Speaker 1: and so people were getting computers and beanie babies more 285 00:15:15,480 --> 00:15:18,280 Speaker 1: than anything. Really gave people a reason to go on 286 00:15:18,400 --> 00:15:20,640 Speaker 1: eBay and to do online trading and actually just e 287 00:15:20,720 --> 00:15:23,080 Speaker 1: commerce in general, not just there was also trader and 288 00:15:23,120 --> 00:15:24,920 Speaker 1: message wards. In the early days of e commerce, there 289 00:15:24,960 --> 00:15:26,440 Speaker 1: were a lot of stories that it was not growing 290 00:15:26,440 --> 00:15:29,200 Speaker 1: as quickly as people thought it would. People weren't comfortable 291 00:15:29,360 --> 00:15:32,280 Speaker 1: with it. Stuff was too expensive to ship with beanie 292 00:15:32,280 --> 00:15:34,760 Speaker 1: babies something that had a kind of weird You weren't 293 00:15:34,760 --> 00:15:37,960 Speaker 1: sure exactly what they were worth. They were easy to ship, 294 00:15:38,040 --> 00:15:40,960 Speaker 1: and they were really hard to find locally. It brought 295 00:15:41,000 --> 00:15:44,520 Speaker 1: people onto e commerce in a way that other more 296 00:15:44,600 --> 00:15:47,320 Speaker 1: mundane products like pets dot Com we're not able to. 297 00:15:47,960 --> 00:15:51,320 Speaker 1: So even though it's a completely pointless bubble of ultimately 298 00:15:51,360 --> 00:15:54,200 Speaker 1: worthless stuffed animals, it actually did help. It had a 299 00:15:54,240 --> 00:15:57,080 Speaker 1: beneficial effect on the development of these Internet markets. Meg 300 00:15:57,120 --> 00:16:00,480 Speaker 1: Whitman has said in interviews that that eBay and I 301 00:16:00,520 --> 00:16:02,200 Speaker 1: think p r om yards had the same thing that 302 00:16:02,240 --> 00:16:04,160 Speaker 1: you know, eBay may not have gotten off the ground 303 00:16:04,240 --> 00:16:07,120 Speaker 1: without beanie babies. Joe, I know, you remember what the 304 00:16:07,200 --> 00:16:12,240 Speaker 1: late nineties were like. Um, when we look back on 305 00:16:12,320 --> 00:16:14,960 Speaker 1: beanie babies, it seems amazing that people spent all this 306 00:16:15,040 --> 00:16:18,280 Speaker 1: money on them all this time. We had one, at 307 00:16:18,360 --> 00:16:21,840 Speaker 1: least one instance of a guy committing murder because of 308 00:16:21,840 --> 00:16:24,680 Speaker 1: a soured Beatie Baby deal. Do you remember how nuts 309 00:16:24,720 --> 00:16:28,160 Speaker 1: it was the late ninety Are you talking about beanie babies? 310 00:16:28,160 --> 00:16:30,440 Speaker 1: Are just the late nineties? And I mean I would 311 00:16:30,480 --> 00:16:33,960 Speaker 1: say they're linked, right, They're absolutely the people who when 312 00:16:34,000 --> 00:16:36,520 Speaker 1: they think back and they talk about the nineties bubble, 313 00:16:36,560 --> 00:16:39,440 Speaker 1: it's often referred to as the tech bubble or the 314 00:16:39,480 --> 00:16:43,040 Speaker 1: Internet bubble or the dot com bubble, it completely misses 315 00:16:43,080 --> 00:16:47,600 Speaker 1: the point. Yes, it was so much bigger. It was 316 00:16:47,640 --> 00:16:49,680 Speaker 1: such a big I like the closest thing I was like. 317 00:16:50,000 --> 00:16:54,200 Speaker 1: It was a sense of optimism about everything all at 318 00:16:54,240 --> 00:16:57,480 Speaker 1: the same time. And so there's so many wonderful stories 319 00:16:57,520 --> 00:17:01,880 Speaker 1: about people completely losing their mind. My ingle favorite story 320 00:17:01,920 --> 00:17:06,000 Speaker 1: of the late nineties bubble was when a car dealership 321 00:17:06,080 --> 00:17:09,960 Speaker 1: in Nevada. It was called Uniprime Capital Acceptance. And I 322 00:17:10,040 --> 00:17:12,159 Speaker 1: remember this very vividly because I was on the message 323 00:17:12,160 --> 00:17:14,960 Speaker 1: boards at the time. It was a penny stock maybe 324 00:17:14,960 --> 00:17:19,159 Speaker 1: you traded trading. I was. They they put out a 325 00:17:19,160 --> 00:17:22,000 Speaker 1: press release that said they had a cure for AIDS. 326 00:17:22,320 --> 00:17:25,240 Speaker 1: A car dealership in Nevada, Like someone we've worked with 327 00:17:25,400 --> 00:17:28,360 Speaker 1: or if we licensed this thing from a scientist. They 328 00:17:28,440 --> 00:17:30,719 Speaker 1: just straight up we have a cure for AIDS, and 329 00:17:30,840 --> 00:17:34,320 Speaker 1: you know, even in the craziest times, like that's kind 330 00:17:34,359 --> 00:17:37,879 Speaker 1: of a skeptical belief, but enough people believed that that 331 00:17:37,920 --> 00:17:40,800 Speaker 1: the stocks surged, it doubled, and then it doubled again 332 00:17:41,160 --> 00:17:44,160 Speaker 1: because just on the possibility that maybe a car dealership 333 00:17:44,160 --> 00:17:47,080 Speaker 1: in Nevada had found a cure for AIDS. People were 334 00:17:47,160 --> 00:17:53,400 Speaker 1: so optimistic of everything that it seemed not a unbelievable 335 00:17:53,640 --> 00:17:57,119 Speaker 1: And people talk about the internet stocks, anything that was 336 00:17:58,119 --> 00:18:00,919 Speaker 1: that breathed on the Internet, people going crazy for One 337 00:18:00,960 --> 00:18:03,440 Speaker 1: of my favorite facts is the fact that k Tell, 338 00:18:03,640 --> 00:18:06,679 Speaker 1: the company that makes really cheesy compilation CDs of like 339 00:18:06,760 --> 00:18:11,800 Speaker 1: seventies DISCOMs, they sold their CDs online, Big whoop. The 340 00:18:11,880 --> 00:18:15,560 Speaker 1: stock grew tenfold at one point, and then over the 341 00:18:15,600 --> 00:18:18,480 Speaker 1: span of a few months, people were losing their minds. 342 00:18:18,520 --> 00:18:20,679 Speaker 1: And then the other fact that I love is the 343 00:18:20,720 --> 00:18:24,000 Speaker 1: fact that the Segue that you know, didn't really take off, 344 00:18:24,000 --> 00:18:27,080 Speaker 1: but people still go tours around. People really thought entire 345 00:18:27,160 --> 00:18:30,080 Speaker 1: cities were going to be redesigned because of how the 346 00:18:30,119 --> 00:18:32,720 Speaker 1: Segue got people around. So basically it was a time 347 00:18:32,760 --> 00:18:47,600 Speaker 1: of just incredible optimism about everything. So, Zach, I'm curious 348 00:18:47,640 --> 00:18:49,960 Speaker 1: in your book you quote a lot from existing, you know, 349 00:18:50,000 --> 00:18:53,199 Speaker 1: economic and financial literature. You quote people like Robert Schiller 350 00:18:53,320 --> 00:18:56,280 Speaker 1: on the optimism that precedes bubbles when it comes to 351 00:18:56,359 --> 00:18:59,720 Speaker 1: beanie babies. If you could kind of pinpoint one thing 352 00:19:00,440 --> 00:19:03,560 Speaker 1: that flipped it into speculative mania, what would it be. 353 00:19:04,400 --> 00:19:08,399 Speaker 1: It's people seeing prices rise. That that is what drives 354 00:19:08,560 --> 00:19:11,440 Speaker 1: what drives speculative bubbles, is that as soon as there's 355 00:19:11,880 --> 00:19:15,600 Speaker 1: you know, this insignificant phenomenon of someone who's trying to 356 00:19:15,640 --> 00:19:18,760 Speaker 1: complete a set for their kid, as soon as they 357 00:19:18,800 --> 00:19:21,320 Speaker 1: pay a hundred dollars for a beanie baby that someone 358 00:19:21,320 --> 00:19:25,399 Speaker 1: paid five dollars for, that's what sets in motion. Or 359 00:19:25,560 --> 00:19:28,520 Speaker 1: these can set in motions certainly this kind of chain, 360 00:19:28,640 --> 00:19:31,080 Speaker 1: because that becomes a story. And beanie babies, and I 361 00:19:31,119 --> 00:19:34,080 Speaker 1: think all bubbles are spread by by narrative, by people 362 00:19:34,119 --> 00:19:36,280 Speaker 1: saying I bought this beanie baby for five dollars and 363 00:19:36,320 --> 00:19:38,760 Speaker 1: sold it for a hundred. Anyone who did that told 364 00:19:38,760 --> 00:19:40,600 Speaker 1: a thousand people about it because it was so weird, 365 00:19:40,800 --> 00:19:42,240 Speaker 1: So hum big did it get in the end? Is 366 00:19:42,280 --> 00:19:45,159 Speaker 1: there an estimate of what the total outstanding value of 367 00:19:45,200 --> 00:19:48,159 Speaker 1: beanie babies was at the TIS annual sales peaked It 368 00:19:48,200 --> 00:19:51,440 Speaker 1: around one point five billion dollars um and that was 369 00:19:51,520 --> 00:19:56,840 Speaker 1: just wholesale other people who there must be but have 370 00:19:56,960 --> 00:19:58,600 Speaker 1: a bunch and held it all the way down and 371 00:19:58,640 --> 00:20:00,520 Speaker 1: now just they live in a hou filled with it. 372 00:20:00,600 --> 00:20:04,760 Speaker 1: There is a retired soap opera star in Arizzona. I 373 00:20:04,760 --> 00:20:07,000 Speaker 1: think I remember what's been so long as I talked 374 00:20:07,000 --> 00:20:09,520 Speaker 1: to him. Um, there's a retired soap opera star who 375 00:20:09,560 --> 00:20:11,720 Speaker 1: lost his kids six figure college funds on them and 376 00:20:11,800 --> 00:20:14,200 Speaker 1: has like thirty thousand of them still in his home. 377 00:20:15,040 --> 00:20:18,800 Speaker 1: That's we talked about how these sort of bubbles began, 378 00:20:18,840 --> 00:20:20,800 Speaker 1: at least in the case of beanie babies, how did 379 00:20:20,840 --> 00:20:23,720 Speaker 1: it end, because it did start to fizzle out in 380 00:20:25,080 --> 00:20:28,080 Speaker 1: and within a couple of years the secondary market value 381 00:20:28,119 --> 00:20:31,439 Speaker 1: of thousands millions of stuffed animals was gone. This was 382 00:20:31,480 --> 00:20:33,720 Speaker 1: one of the funniest things about the reporting on this, 383 00:20:33,840 --> 00:20:35,919 Speaker 1: and I think there's a lot of very similar stuff 384 00:20:35,920 --> 00:20:39,679 Speaker 1: with the reporting on the housing bubble and the Internet 385 00:20:39,680 --> 00:20:43,360 Speaker 1: stock bubble, is that I would kind of pose this 386 00:20:43,440 --> 00:20:48,880 Speaker 1: question to the collectors anti executives about kind of how 387 00:20:48,920 --> 00:20:52,359 Speaker 1: this thing had ended, and they all had these really 388 00:20:52,520 --> 00:20:56,159 Speaker 1: specific explanations for it, these kind of linear cause and 389 00:20:56,160 --> 00:21:00,600 Speaker 1: effect things, you know, like you know, there was one saying, oh, 390 00:21:00,640 --> 00:21:03,920 Speaker 1: you know, the counterfeits really invaded the market and people 391 00:21:03,920 --> 00:21:05,800 Speaker 1: were paying you know, six hundred dollars and if it 392 00:21:05,840 --> 00:21:08,120 Speaker 1: hadn't for pieces they trying to be fake, and if 393 00:21:08,119 --> 00:21:10,240 Speaker 1: it hadn't been for all the fraud this, you know, 394 00:21:10,280 --> 00:21:13,000 Speaker 1: it wouldn't have ended that way. A lot of people felt, 395 00:21:13,000 --> 00:21:15,560 Speaker 1: you know, Ty got greedy and made too many, too 396 00:21:15,560 --> 00:21:20,560 Speaker 1: many styles, um and and and and overproduce them. And 397 00:21:20,600 --> 00:21:23,840 Speaker 1: I'm like, okay, you know, maybe kind of, but you know, 398 00:21:23,880 --> 00:21:25,960 Speaker 1: if he hadn't done that, then being would they still 399 00:21:25,960 --> 00:21:27,720 Speaker 1: be ten per cent and B B based sales and 400 00:21:27,760 --> 00:21:30,320 Speaker 1: we'd all be rich. I Mean, these things end because 401 00:21:30,320 --> 00:21:33,960 Speaker 1: they're stupid, right, Like that's ultimately they're they're unsustainable, and 402 00:21:34,000 --> 00:21:36,879 Speaker 1: eventually there is something that nixed them and causes that 403 00:21:36,960 --> 00:21:40,680 Speaker 1: kind of the kind of cascade of confidence that started 404 00:21:40,680 --> 00:21:44,520 Speaker 1: it to just crescendo down and and that's what happened. Um, 405 00:21:44,760 --> 00:21:48,440 Speaker 1: there's this thing. At the end of nine. Everything is 406 00:21:48,440 --> 00:21:52,520 Speaker 1: still basically going well. Secondary market sales still good, top 407 00:21:52,520 --> 00:21:55,680 Speaker 1: pieces still valuable, some overproduction on some of the newer pieces, 408 00:21:55,680 --> 00:21:58,400 Speaker 1: those are stacking up a little bit, but basically still 409 00:21:58,400 --> 00:22:01,359 Speaker 1: a strong market. No one's saying this things ending, collectors 410 00:22:01,359 --> 00:22:05,320 Speaker 1: still confident, magazine still selling, and Tie announces at the 411 00:22:05,440 --> 00:22:11,320 Speaker 1: end of that on that on January one, all of 412 00:22:11,359 --> 00:22:16,000 Speaker 1: the Beanie Babies will be retired. Whoa, and that they 413 00:22:16,040 --> 00:22:19,520 Speaker 1: won't be made anymore. Theoretically, prices should have gone through 414 00:22:19,560 --> 00:22:22,720 Speaker 1: the roof at that point for a minute. Yeah, um, 415 00:22:23,560 --> 00:22:25,680 Speaker 1: they did for a minute, and people were very excited, 416 00:22:26,520 --> 00:22:28,399 Speaker 1: and people like, what's going on? This is going to 417 00:22:28,480 --> 00:22:32,400 Speaker 1: do a different product and uh. And then he announced 418 00:22:32,440 --> 00:22:34,720 Speaker 1: that he would do a vote to raise money for 419 00:22:34,880 --> 00:22:38,440 Speaker 1: AIDS on whether people wanted to Beanie Babies to continue, 420 00:22:38,480 --> 00:22:40,840 Speaker 1: and you would log in and online and don't and 421 00:22:40,880 --> 00:22:42,719 Speaker 1: donate that there was some other stuff going on in 422 00:22:42,720 --> 00:22:45,000 Speaker 1: his life, but where you could donate a dollar forty nine. 423 00:22:45,000 --> 00:22:47,640 Speaker 1: I think it was to vote on whether Beanie Babies 424 00:22:47,680 --> 00:22:50,360 Speaker 1: should be continued. First, I'll raise the question of who 425 00:22:50,400 --> 00:22:53,800 Speaker 1: would spend a dollar fifty to vote to end Beanie Babies. 426 00:22:54,680 --> 00:22:56,960 Speaker 1: We're not kind of like. But so he does this 427 00:22:57,359 --> 00:23:00,320 Speaker 1: and almost no one does voted, ended up time to 428 00:23:00,320 --> 00:23:03,800 Speaker 1: donate all the money himself because he hadn't gotten so 429 00:23:03,800 --> 00:23:06,240 Speaker 1: many votes as he had claimed he had, and announced 430 00:23:06,240 --> 00:23:08,960 Speaker 1: that Beanie Babies would be continued and that all the 431 00:23:09,000 --> 00:23:11,480 Speaker 1: new releases, there would be all these new millennium collection 432 00:23:11,560 --> 00:23:14,840 Speaker 1: coming out and no one cared, and the whole thing 433 00:23:14,920 --> 00:23:18,159 Speaker 1: just every month after that, the sales collapsed and people 434 00:23:18,200 --> 00:23:21,280 Speaker 1: started to that cause your crisis of confidence about the 435 00:23:21,600 --> 00:23:23,520 Speaker 1: and then what causes and then what happened was so 436 00:23:23,560 --> 00:23:26,080 Speaker 1: these were tire beanie babies. I remember talking to one 437 00:23:26,080 --> 00:23:28,920 Speaker 1: of the first collectors who was under way back from 438 00:23:28,920 --> 00:23:31,920 Speaker 1: speaking in a beanie baby convention as a paid expert, 439 00:23:32,000 --> 00:23:34,199 Speaker 1: you know, like a keynote speaker on beanie babies, and 440 00:23:34,240 --> 00:23:37,000 Speaker 1: she was at the O'Hare airport and she saw a 441 00:23:37,080 --> 00:23:40,760 Speaker 1: stack of beanie babies. There were still five dollars in 442 00:23:40,800 --> 00:23:44,480 Speaker 1: the store, but we're retired, and this was like mind blow. 443 00:23:44,520 --> 00:23:46,840 Speaker 1: I mean, people thought it was a law of physics 444 00:23:47,119 --> 00:23:49,760 Speaker 1: that a retired beanie baby was worth more than five 445 00:23:49,800 --> 00:23:54,000 Speaker 1: dollars and that that was just true. And uh, I mean, 446 00:23:54,280 --> 00:23:55,880 Speaker 1: you know, kind of like you know, hoving prices don't 447 00:23:55,880 --> 00:23:57,919 Speaker 1: go down. None of the models included that. None of 448 00:23:57,960 --> 00:24:01,040 Speaker 1: their models include the idea that a retire beanie baby 449 00:24:01,080 --> 00:24:04,720 Speaker 1: could conceivably still just be worth the retail price. So 450 00:24:04,800 --> 00:24:06,800 Speaker 1: one of my favorite stings on Wall Street is that 451 00:24:06,880 --> 00:24:10,159 Speaker 1: the only thing that's a bubble, well, something becomes a 452 00:24:10,160 --> 00:24:13,520 Speaker 1: bubble once the bubble bursts. Anything else is a great trade, 453 00:24:13,960 --> 00:24:18,479 Speaker 1: right he just made Tony. When you look around the world, 454 00:24:18,880 --> 00:24:22,240 Speaker 1: it seems like we are continuously seeing warnings about bubbles 455 00:24:22,280 --> 00:24:25,640 Speaker 1: again in tech, lots of other areas and financial markets. 456 00:24:26,880 --> 00:24:30,440 Speaker 1: Having studied, uh, the science of stuffed animals, do you 457 00:24:30,520 --> 00:24:33,679 Speaker 1: have any wisdom for how we can spot bubbles before 458 00:24:33,720 --> 00:24:36,919 Speaker 1: they burst and before they burst? Yeah, I mean, you know, 459 00:24:37,760 --> 00:24:41,600 Speaker 1: I think the thing, just behaviorally is that when wood 460 00:24:41,640 --> 00:24:45,560 Speaker 1: is driving, it is entirely stories about how much money 461 00:24:45,560 --> 00:24:48,119 Speaker 1: people have been making on it. That's something to be 462 00:24:48,200 --> 00:24:52,800 Speaker 1: really concerned about. And I think any time you have 463 00:24:52,880 --> 00:24:56,320 Speaker 1: a kind of surge of interest in new entrants into 464 00:24:56,320 --> 00:25:00,760 Speaker 1: a field based on sort of past successes of other ones. 465 00:25:00,800 --> 00:25:02,680 Speaker 1: There was a ton of that with the Internet bubble. 466 00:25:02,720 --> 00:25:07,320 Speaker 1: You had legitimate companies, we go public first, and then 467 00:25:07,359 --> 00:25:08,879 Speaker 1: the next one you know, this is gonna be the 468 00:25:08,920 --> 00:25:10,560 Speaker 1: next that and that was a piece of crap. So 469 00:25:10,600 --> 00:25:12,760 Speaker 1: I think I think those are you know, anytime you 470 00:25:12,800 --> 00:25:15,320 Speaker 1: see well to me, you know, to bring your point 471 00:25:15,400 --> 00:25:17,639 Speaker 1: to the current era. You know, we've been hearing about 472 00:25:17,760 --> 00:25:20,880 Speaker 1: a possible tech bubble for the last ten years. I mean, 473 00:25:21,040 --> 00:25:23,640 Speaker 1: when Facebook was valued at a billion dollars, people said 474 00:25:23,680 --> 00:25:26,440 Speaker 1: tech bubble, and now it's worth hundreds of times hundreds 475 00:25:26,440 --> 00:25:28,800 Speaker 1: of times that. But I did see an add on 476 00:25:28,880 --> 00:25:32,240 Speaker 1: Instagram this week that like was promising how to make 477 00:25:32,280 --> 00:25:35,359 Speaker 1: your billion dollar app, like a service that would teach 478 00:25:35,359 --> 00:25:37,040 Speaker 1: people how to make an app that would be worth 479 00:25:37,040 --> 00:25:40,359 Speaker 1: a billion dollars. And that reminds me of like telling 480 00:25:40,440 --> 00:25:43,119 Speaker 1: stories just about the money. It's like it is the 481 00:25:43,119 --> 00:25:45,879 Speaker 1: next level of the euphoria. I always love those like 482 00:25:46,000 --> 00:25:50,959 Speaker 1: JP Morgan shoeshine bubbie stories about bubble. So I think, 483 00:25:51,000 --> 00:25:52,920 Speaker 1: I mean, I remember when I was in high school, 484 00:25:53,400 --> 00:25:56,040 Speaker 1: my bus driver and this was dangerous because he was 485 00:25:56,119 --> 00:25:59,200 Speaker 1: driving a bus full of kids and he had to 486 00:25:59,400 --> 00:26:01,560 Speaker 1: cell phones and he was slipping houses while he was 487 00:26:01,640 --> 00:26:03,800 Speaker 1: driving talking to his like real estate ass and his 488 00:26:03,920 --> 00:26:06,120 Speaker 1: manager at I just so I always look for things 489 00:26:06,160 --> 00:26:10,760 Speaker 1: like that, and im when that year at a summer job, 490 00:26:11,400 --> 00:26:14,280 Speaker 1: we'd go to the pizza place and they would also 491 00:26:14,880 --> 00:26:16,679 Speaker 1: while it was just a little pizza shop, and they 492 00:26:16,720 --> 00:26:21,120 Speaker 1: would also have a rival financial network to Bloomberg on 493 00:26:21,240 --> 00:26:25,480 Speaker 1: TV all the time. And you know, I think the pizza. 494 00:26:25,600 --> 00:26:27,439 Speaker 1: You know, that was what the pizza guys were watching 495 00:26:27,600 --> 00:26:33,200 Speaker 1: was CNBC Wow, rival network. Well, said Joe, you actually 496 00:26:33,240 --> 00:26:36,120 Speaker 1: managed to make some money from internet stocks. How did 497 00:26:36,160 --> 00:26:38,399 Speaker 1: you time it? Because it seems like the timing is 498 00:26:38,480 --> 00:26:40,760 Speaker 1: key here. Lots of people did get rich off beanie 499 00:26:40,800 --> 00:26:42,840 Speaker 1: babies and lots of people got really poor. It was 500 00:26:42,920 --> 00:26:45,679 Speaker 1: really it was the best luck I've ever had. I 501 00:26:45,720 --> 00:26:51,120 Speaker 1: was trading through UM the basically Christmas break of two 502 00:26:51,160 --> 00:26:56,359 Speaker 1: thousand and or anyway two thousand and then I UM 503 00:26:56,560 --> 00:26:59,720 Speaker 1: had to study. I studied abroad in Switzerland, and the 504 00:27:00,080 --> 00:27:04,359 Speaker 1: ring of two thousand and before I left UM, I 505 00:27:04,480 --> 00:27:06,040 Speaker 1: sold all my stocks because like, I'm not going to 506 00:27:06,080 --> 00:27:08,280 Speaker 1: be able to trade while I'm studying abroad. That it 507 00:27:08,320 --> 00:27:12,240 Speaker 1: didn't seem plausible. And then the bubble birth while I 508 00:27:12,280 --> 00:27:15,080 Speaker 1: was studying abroad, So out of pure luck with no insight, 509 00:27:15,160 --> 00:27:17,560 Speaker 1: you need to craft that into a narrative about your 510 00:27:17,600 --> 00:27:22,199 Speaker 1: own foresight. No, it was just the opposite. That's just 511 00:27:22,280 --> 00:27:24,640 Speaker 1: pure luck. I just happened to sell like a couple 512 00:27:24,640 --> 00:27:27,679 Speaker 1: of months before the peak, so that that worked out well, 513 00:27:27,680 --> 00:27:30,040 Speaker 1: all right, So you made thousands off internet stocks and 514 00:27:30,080 --> 00:27:33,159 Speaker 1: I made two bucks from a single beanie baby, but 515 00:27:33,160 --> 00:27:37,239 Speaker 1: you got to cuddle it, so that's okay. I'm not sure. Um, 516 00:27:37,280 --> 00:27:39,960 Speaker 1: all right, Zach, it was lovely having you on the show. 517 00:27:40,040 --> 00:27:53,720 Speaker 1: Thank you so much. It's great. Thank you all right, Joe, 518 00:27:53,760 --> 00:27:57,680 Speaker 1: We just had a really interesting, entertaining conversation. What did 519 00:27:57,680 --> 00:28:00,720 Speaker 1: you learn? I actually think my favorite single fact was 520 00:28:00,760 --> 00:28:04,359 Speaker 1: that point about the magazine and the relationship between seeing 521 00:28:04,480 --> 00:28:08,359 Speaker 1: prices written down and seeing prices move and then the 522 00:28:08,359 --> 00:28:10,440 Speaker 1: effect that has on actual prices. I think that's a 523 00:28:10,480 --> 00:28:12,840 Speaker 1: fascinating point, right. I just love the idea that this 524 00:28:12,880 --> 00:28:16,560 Speaker 1: group of soccer moms in Chicago became a market and 525 00:28:16,720 --> 00:28:20,000 Speaker 1: Tycoons and I have thought about that before, this idea 526 00:28:20,080 --> 00:28:22,640 Speaker 1: of their being there needing to be a complete set 527 00:28:22,680 --> 00:28:25,280 Speaker 1: of them, um, and so it sort of creates this 528 00:28:25,400 --> 00:28:29,240 Speaker 1: inherent scarcity to them that drives up demand. That was 529 00:28:29,359 --> 00:28:32,240 Speaker 1: an aspect of the beanie baby boom that I had 530 00:28:32,840 --> 00:28:35,760 Speaker 1: not realized before. All Right, Well, artificial scarcity is a 531 00:28:35,800 --> 00:28:38,720 Speaker 1: hot topic in economics right now. Maybe that's something for 532 00:28:38,800 --> 00:28:42,640 Speaker 1: another podcast. This is Tracy Alloway. You can find me 533 00:28:42,840 --> 00:28:46,320 Speaker 1: at Tracy Alloway on Twitter and I'm Joe Wisnthal. Find 534 00:28:46,360 --> 00:28:48,840 Speaker 1: me at The Stalwart on Twitter and If you want 535 00:28:48,840 --> 00:28:51,960 Speaker 1: to follow Zack, he's on Twitter too at Zach Pissinet. 536 00:28:52,440 --> 00:28:55,120 Speaker 1: And thank you for listening to Odd Lots. Tune in 537 00:28:55,240 --> 00:29:01,320 Speaker 1: next time. O