Sneaker Market Says Other Shoe Dropped for Buy and Hold

Investors sometimes believe that prices can only go up.

In the 1960s this led to single decision stocks. These were a group of about 50 stocks that were so good that the investor just had to decide to buy.

The companies disrupted their markets and would have generated large profits Investors.

The companies that were called “Fifty Niftys”, included the American Express Company (NYSE: AXP), Walmart Inc. (symbol: WMT) Walt Disney Co. (NYSE: DIS). The list also included Schaltz discount stores, Kresge (aka Kmart) and Revlon.

As investors have learned, stocks can move down as well as up.

Investors learned the same lesson in the housing market.

What goes up must come down

Driving the housing bubble of the mid-2000s was the belief that house prices were only going up.

When the bubble burst, home prices fell by more than 60% in some markets like Las Vegas.

Last year, investors adopted that philosophy in a new market: sneakers.

Air Jordans, Nike Dunks and Air Force 1s provided strong profits for marketers as markets developed for the shoes.

as per The Wall Street Journal: “The resale market has risen to $6 billion in annual sales, according to research firm Cowen and Co., which expects the market to grow in the next decade.”

People who wanted to flip shoes drove this market.

But StockX and GOAT, two popular shoe exchanges, are now reporting price drops in the sneaker market.

Of course, some market participants see the dip as a buying opportunity.

What the Sneaker Market Means for Bitcoin

Sneaker resale is a market operated by the Federal Reserve and stimulus checks.

It is the same for Bitcoin and other cryptocurrencies.

There are no basics and no reason for high prices.

Some may like to collect high priced sneakers.

But take the easy money out of the economy, and the profits in a small collectibles market disappear.

We saw this happen in the late 1990s when Beanie Babies jumped out with a tolerant pad.

The Bottom Line: History repeats itself with sneakers and bitcoin.

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Michael CarrHe is the editor of Masters of True Options, One Trade, precision gains andmarket leaders. He teaches technical analysis and quantitative technical analysis at the New York Financial Institute. Follow him on Twitter@MichaelCarrGuru.

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