Taking My Hacks

Market Slowdown versus Market Paralysis

Joe Orlando

As we head to the end of 2010, the economy is still pretty rough and the impact on our industry is clear. That said, I think we are all very fortunate. Why? There is an enormous difference between a market slowdown and market paralysis. What we have experienced is a market slowdown and, believe me, things could be much, much worse.

So, what is the difference between a market slowdown and market paralysis?

Let's take a look at market paralysis. To me, the definition of market paralysis is an industry-specific slowdown so dramatic that sales of a particular product virtually stop altogether. The slowdown is so noticeable that it changes the entire market for that product, many people lose their jobs, companies cease to exist and there seems to be no accurate way to gauge prices since the bottom keeps plummeting.

I am sure you know many people who have been affected by market paralysis. There are many examples of this. Car manufacturers, home improvement centers, furniture stores, certain types of electronics and commercial real estate are just some examples where paralysis has set in. In many cases, the sales in areas like these haven't gone down 20%, 30% or 50%, they have almost stopped completely.

All you have to do is go down to your local car dealership. Car lots look like ghost towns in most cities. Many furniture stores are having their final blowout sales as they go out of business. Since the real estate market is so rough, both commercial and residential, very few people want to invest in permanent improvements. When you hear about all the foreclosures, it all makes sense. Why spend money on your home if you can't take the improvements with you after you leave?

I could go on and on with examples of market paralysis but, at this point, I am sure you get the picture. Yes, the world is a little scary right now and it's not just because people with names like Snooki have their own television shows. It's scary because of the paralysis that has affected so many industries. The uncertainty hovers like a raincloud, refusing to go away.

Now, going back to my original point, why do I think we are fortunate? We are fortunate because our industry is not paralyzed. Has it slowed down it some areas? Of course it has, but the hobby marches on. It almost seems illogical since, by definition, no one needs things like baseball cards or historical autographs to survive. The things we all collect are not necessities like food, water and air but they do provide nourishment for the soul.

I know how cheesy it sounds but beneath the layers of "cheese" is a truth. Everyone has a vice, an area of interest, an endeavor they choose to escape, to relax... something that makes them happy. Some people are avid readers. Are they going to stop buying books? No. Some people love to run outdoors. Are they going to not buy the new running gear they need? No. Some people enjoy fishing. Are they going to cease planning trips? No.

All of the people above might spend less money on their hobbies, their chosen endeavors, during tough times but they are not going to stop and let paralysis set in. If they do, in their own way, they cease to live... the way they want to. As collectors, we are no different. This is part of what we do, who we are. Just like the above examples, we need to feed that part of ourselves and that is why our industry can survive ups and downs in the economy.

That is why I think we should all feel fortunate.

Never get cheated,

Joe Orlando

Joe Orlando
Editor In Chief