The Economist Baseball Card Article

[arc2q]

Today's Economist magazine (or 'newspaper' as they call it) has an article on baseball card investing as a classic financial speculation example. What caught my attention was the photo of the T206 Wagner on the cover of the magazine.

http://www.economist.com/news/christmas-specials/21636506-how-childrens-hobby-turned-classic-financial-mania-baseball-card-bubble

I would disagree with the overall premise of the article. It is nothing new to discuss the bubble of the 80s/90s. We all know that investors who bought cases of 1988 Donruss thinking they would become rich failed in that pursuit. But the examples provided by the author are the T206 Wagner, 1952 Mantle, 1963 Pete Rose, and 1973 Mike Schmidt. By any measure those cards would have been fantastic speculative investments in the 80s, 90s, and now. All have held their value or sky-rocketed.

There was another similar article only days ago. What is often forgotten in the discussion is the role of TPGs in deflating speculation of that era. Before TPGs, most collectors and speculators defaulted to the highest values in the guides because they had no way of knowing better and assumed (or wanted to believe) their card was Mint or Near Mint. The advent of TPGs proved that most cards are not that high grade and are not deserving of top dollar.

Too many of these articles and the general public believe the 80s/90s bubble affected the hobby as a whole. Vintage cards were a great investment then and still are. Thus I would assert the premise of the article is slightly wrong.

[Exhibitman]

The article is accurate insofar as shiny crap goes...accurate but entirely derivative of many earlier analyses. What I find shocking is that the writer did little to no research into the most basic market issues. He made no effort to differentiate blue chip stock from penny stocks, so to speak, and ignored entirely the TPG issue which can still make shiny crap into gold. I also found the focus on Pete Rose irksome because it completely ignored the damage done to his card values by his gambling and lifetime ban. Of course his cards were going to drop when he was shamed and given the heave-ho.

What all of these articles either miss or skip over intentionally is that not everyone got hurt. Dealers who turned their inventories quickly did just fine with even the most speculative rookie cards. It was only the naïve buy and hold types who ended up holding the bag.