Investing lessons from the Beanie Babies bubble
Few things epitomize an economic bubble as well as the Beanie Babies explosion of the 90s, and there are some lessons for collectors who fancy themselves as investors.
On Friday, a film based on the craze debuted in theaters, a week after it appeared on Apple TV+. “The Beanie Bubble,” starring Zach Galifianakis and Elizabeth Banks, comes 30 years after the plastic bead-filled animals were created.
By creating a sense of exclusivity and restricting the distribution and lifespan of some of its models, the company, Ty Inc., prompted many people to treat the tiny figures as commodities. The company took full advantage of the rise of the internet, which further stoked the fever among collectors.
Some poured thousands of dollars into acquiring Beanie Babies, viewing their caches of the plushies as investments that might fund retirement or college.
That was the case for one man whose son 10 years ago made a short documentary about $100,000 of the family’s money being used to buy thousands of the toys, only to have them decline in value and sit in storage bins years later. The purchases had been meant to pay for college for three children.
Of course, few people likely got rich off of the craze, with an obvious exception being company owner and CEO Ty Warner,who made billions and went on to add the Four Seasons Hotel New York to his portfolio.
“It’s an awful lot like the tulip craze in Holland,” Bart Brewer, an adviser at Global Financial Advisory Services, said of the recent rise in interest in collectibles in general.
Brewer, who has been an avid baseball card collector since he was 6, said the same principles drive all collectibles: scarcity, condition and emotional connection.
“The Beanie Babies aren’t going to be any
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