Quote:
Originally Posted by cubman1941
I subscribe to Adam's Card Blog and this was his entry for today - in line with other discussions in other Net54 Forums -
"What got me thinking was a very interesting piece that ran on Sports Collectors Daily recently, an interview with Chris McGill, the Co-Founder of Card Ladder. In case you don’t know it, Card Ladder is a data aggregating service that scrapes prices on select cards from eBay, auctioneers and so on, and produces recent sales reports for its members. What caught my eye was this quote from the article:
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Card Ladder’s 3,946 card vintage index (comprised of cards issued between 1946 and 1983) is down 5% over the last year. …. In the context of Card Ladder’s 24 other indexes, vintage has performed 6th best over the last year, trailing only Pre-War Vintage (+29%), Tennis (+19%), Outlier (+16%), Hockey (+7%), and Baseball (-1%).”
I quibble with calling anything post-1980 vintage, but I digress.
Where is modern? According to the article, modern is down over 30% for the year. One reason McGill suggested in the article:
“…my anecdotal observation is that the Modern and Ultra-Modern markets became overheated by a subset of folks focused on speculation and flipping over the last few years. Many of them seem to have left the industry this year, causing prices to fall.”
He then went on to point out that modern has outperformed vintage over the last five years by a substantial margin:
Ultra-Modern: +639%
Modern: +744%
Vintage: +270%
Pre-War Vintage: 340%
In other words, modern is a bubble, and it is deflating fast. Bubbles pop and when they do, you lose the most valuable commodity you have: time. Lose a decade on the growth of an investment and you can never make it up. I think it has a long way to go before the modern market bottoms out. Judging from the lessons of the junk wax era, I think when it bottoms it will be there for a good, long time.
This is a cycle we’ve seen before, so why do people keep falling for it?
One potential reason is that the modern card production and sales mechanism, while different than the past mechanism, has inherent flaws that allow the middlemen to systemically screw retail participants and actual collectors. I think they shed light on why modern is a giant sucker bet right now.
The first issue is marketing. The modern card world is driven by unopened material breaks and moves through social media, where influencers are the kings of hype. These spastically energetic live streams and videos feature obnoxious modern card cheerleaders opening packs and boxes and cases on air and going batshit crazy when a valuable insert card is uncovered. Many of them also sell cards, unopened material, and slots to customers in breaks. You either pay a fee for a random slot assigned at the time of the break or you bid competitively to win all cards from a team that emerge in the break. The idea of the latter is that if you buy, say, the Lakers, you may get a valuable LeBron James insert card.
What has become apparent now that there is a track record is that publicity breaks often feature a stunning array of ‘golden ticket” cards. It has been observed (there is a thread on Blowout about this) that certain very popular breakers pull very valuable inserts so often that it is all but mathematically impossible. Very suspicious, but no hard evidence of wrongdoing. But think about this: if these guys pull the 1/1 Logoman and the other big cards, then the top prizes aren’t out there for the average box purchaser to find. Take those top prizes off the table and the value equation on unopened modern unopened changes dramatically for the worse. With so many of the super-limited cards ending up in the hands of professionals, it makes me wonder how legitimate the retail modern unopened market is.
The other issue of note is that there is a scandal brewing on Panini cards that is either intentionally created or that resulted from genuinely stupid planning. This one is empirically proven. Apparently, the holographic authenticity stickers on the fronts of Panini basketball product boxes (and perhaps other products too) are coded differently if the boxes have the very expensive Kaboom inserts in them. Breakers who have cracked the code can open a case, remove the box(es) with the hot inserts, and sell the rest as box breaks knowing that the customers who buy into these remaining box breaks have no chance of receiving the valuable insert cards. How widespread this situation is depends entirely on how many people can crack the code.
One thing is clear: paid breaks are economically terrible for almost everyone. Dealers sell unopened and do breaks because the odds favor the dealers; it is far more profitable to a dealer to sell boxes or break slots than to actually shuck the cards out of the packs themselves and sell the good ones at retail. If the opposite was true, the dealers would just do the latter. Yet people still spend a ton on breaks, despite empirically bad outcomes. Another example of magical thinking in the hobby.
In my view, these issues are part of what has gradually poisoned the modern market and is part of the decline in that market. In my view, the only safe choice is to not buy unopened modern, and especially stay out of breaks. If you just have to scratch that itch, buy a case from a legitimate retailer, not a box, because boxes are suspect for the reasons noted above.
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Thanks for sharing. That is an unbelievably insightful, and IMO extremely accurate, commentary on the state of the hobby in regards to the modern card market. On some levels it sort of mimics aspects of other situations, like the crypto market and the current implosion that entire industry seems to be facing right now. I've always wondered why the modern card collectors so easily bought into the idea of manufactured rarities, and elevated their value with really nothing behind them. Especially when after a card manufacturing sells one 1 of 1 card, they simply create another new 1 of 1 to sell to someone else.
The idea/concept originally started/carried through with GUs and autographed cards as well. Those started out great, until you eventually end up with literally hundreds (or even thousands) of different GU/autographed cards of every player. There are so many GU cards of the likes of Mantle, Ruth, and other superstar/HOF players out there, along with all the then current common players, how would anyone in their right mind expect the values of those initially rare GU/auto cards to remain so high when the card manufacturers just seemed to keep producing more and more and more of them? And then, the card manufacturers simply moved on from the cost/work/trouble of producing limited GU and autographed cards, and simply started printing just limited numbered runs, or even 1 0f 1 cards. Now they didn't even have to worry about finding bats or jerseys used/worn by players, or figuring out how to get cards actually signed by players. Anyone want to take a guess between all the modern card manufacturers how many different 1 0f 1 cards in total actually exist today? And then compare that to the number of true 1 of 1 cards still existing in the real vintage and pre-war card sectors.
Look at crypto (or even NFTs), same basic idea/concept. Someone comes up with an original idea of just one, limited version of a cryptocurrency, and for whatever reason, it seems to take off. So naturally when it does make someone some money, you know others will quickly follow to create more and more cryptocurrencies of their own to take further advantage of an unsuspecting public that doesn't really know better, and cash in for themselves. And look where that market is today and seems to be heading to in the not so distant future.
And as for market manipulation, perfect example was a few years back in Ohtani's rookie year. A friend and former co-worker of mine that also partly owns a well-known online Breaking company told me about one of the upcoming products releases from Bowman. Apparently, it was advertised in advance that there was going to be an Ohtani rookie card included in this release, which I think was supposed to be a 1 of 1. He told me about two weeks prior to the product's actual release that it had come out through some online sources that were supposedly acting on behalf of an anonymous person/collector, that if anyone pulled that particular Ohtani card, they would pay something like $60,000 for it, as long as the card ended up grading as at least a 9.5, and they were offered it by a certain date. So, I asked my friend how many cases of this particular product did he and his Breaking company partner already order and commit to buy. He just laughed and answered, not enough! Never did hear or see any follow-up stories on what happened after that product was released, and if someone did pull that Ohtani card and get paid the $60K for it that was supposedly offered. The entire thing sounded to me like a contrived marketing ploy to get unsuspecting people to buy a particular product thinking they had a chance for a big payday. Doesn't seem like much has really changed in the marketplace.
https://sports.yahoo.com/shohei-ohta...044305844.html
And here's a really dumb question maybe, why would it matter what a card that is a 1 of 1 be graded at to better determine its value? I can understand a lowered value if it got chewed up by a dog or otherwise damaged/trashed somehow, but if it really is the only one in existence, why would it only be worth the original $60K if it graded 9.5 or higher? A 9.0 would be worth less? That makes absolutely no sense at all to me.
And here is what did end up happening with that Ohtani card.
https://www.beckett.com/news/2018-bo...h-tops-184000/
Also, anyone surprised the card in question wasn't apparently found/pulled till after the originally imposed deadline date for the initial $60K offer?
And as has been stated by some people in the hobby (and even on this forum), the idea of TPGs and the card grades they hand out may also be a vehicle for others in the card industry (dealers/AHs/consignees) to somewhat take advantage of the manufactured rarity concept the card manufacturers have been able to play all along, by creating perceived "limited" editions or versions of certain vintage and pre-war cards, based on specific grades they are assigned by the TPGs, who often work in conjunction with dealers, AHs, and consignees. Anyone who thinks or believes there is not even the slightest possibility of a "quid pro quo" or "I'll scratch your back if you scratch mine" element to and in this hobby among its industry participants is either extremely naive, or extremely foolish, IMO.