Quote:
Originally Posted by barrysloate
I admit I am no more than a novice when it comes to understanding the general economy and the stock market, but here is one thing I have learned: The stock market rises and falls by processing information. When an interest rate cut is anticipated, the market goes up. If a tariff is instituted on China, for example, the market tanks. These are just two examples, but I recognize how information determines how markets move.
But in the baseball card hobby, the market appears to be absolutely tone deaf. We know grading is subjective and inconsistent; we know altered cards consistently get upgraded and slabbed; we know the card we buy as an 8 might have been resubmitted half a dozen times as a 7 until we find a grader willing to bump. Yet despite all this information that should be a giant warning sign to anyone thinking of investing in baseball cards, the money comes pouring in like an avalanche, and world records keep getting set.
We see 7's turn into 8's and increase fivefold in value. We see 8's become 9's and increase tenfold. And we all know it's all smoke and mirrors.
Yet buyers don't seem to be processing this information. They can't throw big money at this garbage fast enough. So what am I missing?
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Barry, I'm not an economist, but I believe that you are comparing macroeconomic effects with microeconomics. For many individual stocks, it the same thing in that it can be all smoke and mirrors for all we know. We don't know if the insiders are buying or selling; the companies put forward different metrics like # of clicks, who their social evangelizers are, when they are losing money hand over foot, that you really don't know what the company is doing. You never have all of the information.
It's the same thing here. You have a bunch of cards that were submitted by Gary Moser. You don't know if they were altered or not. There's a good chance they were altered, but maybe not. Is the entire market going to tank because of this group of cards, probably not. Probably only this group is tainted. Are these cards worth 0? No, they are still authentic, but likely altered. So the floor to the price is the price of authentic/altered. However, the card might not be altered, so it probably won't reach that floor, but will likely just sell at a discount to another card at that grade. Why just a discount rather than the floor? Because where many buyers won't stand to have a card in their collection that may be altered/tainted, there's another buyer who's optimistic/naïve, whatever you want to call it, who thinks this card is completely fine after looking at it themselves, and are happy to get the card for cheaper than they would otherwise.
I'm not saying that I agree with this mentality, but just trying to explain it.