Changing of the Guard: The Commoditization of Sportscards

[Econteachert205]

Here is My opinion of what is going on:

1. Record low interest rates pushing people toward risk assets.
2. Money laundering
3. Rampant speculation
4. People buying on emotion


Stuff like this always ends well. Be careful. Please note I do not blame pwcc for any of this, they are simply a successful business in the midst of this.

[Snapolit1]

Seems to me that 99% of the cards people talk about here are completely removed from the supposed bubble. I venture out to card shows once in a while and there's no one there selling any 52 Mantles. More likely a 85 Ray Knight or Ron Darling. While the activity at the very top of the market looks like cold investing and not any kind of collecting, I'm not sure why it distresses people so much. If you live in Iowa and want to buy a nice house, do you really care what's going on in New York City or Chicago real estate prices? If its manipulation, so be it. Have you heard about the stock market? Not sure but I suspect there are some people manipulating the prices there to.

[ALR-bishop]

As usual I am lost. I am still trying to understand bitcoins.

[Exhibitman]

It distresses people, it makes them sad. Personally,I am sick of the headlines over prices. It isn't fun to have your pastime commoditized. If I go play a round of golf I don't want to hear how valuable the land under the green is. Reality bites; doesn't need to intrude into baseball cards. Plus when the news is all about money in cards a certain element many of us have in common gets ideas about what "your" cards could do for "us" if they were sold off.

[begsu1013]

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[bravos4evr]

Originally Posted by Snapolit1

Seems to me that 99% of the cards people talk about here are completely removed from the supposed bubble. I venture out to card shows once in a while and there's no one there selling any 52 Mantles. More likely a 85 Ray Knight or Ron Darling. While the activity at the very top of the market looks like cold investing and not any kind of collecting, I'm not sure why it distresses people so much. If you live in Iowa and want to buy a nice house, do you really care what's going on in New York City or Chicago real estate prices? If its manipulation, so be it. Have you heard about the stock market? Not sure but I suspect there are some people manipulating the prices there to.

unlike real estate though, the price of a PSA 9 that escalates by 1000% in 6 months DOES impact those collectors just trying to grab a psa 6 or 7 for their collections. People think "well if a psa 9 is now worth $100k, (versus the $10k it was 6 months ago) shouldn't my 6 be worth $2500 instead of $250? and all of a sudden you have a market that becomes falsely inflated and the avg collectors who save up to buy their "one big card" miss out.

[glynparson]

Despite claims there has been nowhere near the same growth in price of low grade rose, Ryan, Stargell, Yaz, Brett and other rookies. If any increase has occurred in low end it is minuscule. 1952 mantle has but that seemed to be taking off before this other price increase started and I'm not sure the two are connected.

[Exhibitman]

Originally Posted by glynparson

Despite claims there has been nowhere near the same growth in price of low grade rose, Ryan, Stargell, Yaz, Brett and other rookies.

Yet.

I would not expect the same rate of growth, but historically speaking when a marquee card in top # slab goes up dramatically, collectors do tend to downshift. I mean as a Hank Aaron collector I cannot afford a near mint RC but I definitely can afford a lower grade one, and I cannot just 'skip' the RC for my collection. There has been growth, though. A vg Aaron RC averaged around $525 two years ago. The most recent one closed on eBay for $760 and that was down a bit from the recent averages of about $900. A vg Clemente RC was a $600 card two years ago; now it runs around $800 on average and a recent one closed at $1295.

That makes sense in context: is an 8 really worth 20x a 6? Is it worth 100x a 4? Not to everyone. If I can get a card with similar eye appeal but a technical flaw like a corner ding for a tiny % of the cost, maybe that is where I go? And if I go there, doesn't it stand to reason that other collectors will do the same and drive up prices on those replacement items?

One thing I'd be interested in seeing is how the relative prices of these cards in various grades vary over time. When a top grade card skyrockets does the multiple it now fetches over the next grades down tend to narrow back down to typical (whether due to price drops at the top or price rises at the bottom) or does the spread remain? What is the historical price differential between the various grades? The answer to that question might suggest where to invest next, in a HOF RC that hasn't grown faster relative to lower grade specimens. I wish I had the time and the mathematical chops to resolve that.

[glynparson]

You pointed out two cards I purposely did not mention. I feel both like mantle started their rise prior to this recent boom and are definetly harder in good eye appeal lower grades than those I mentioned. I am honestly not sure those and mantle are solely being driven by these 30 buyers. Maybe but these are at least more defensible in their increases than the current levels on rose and Ryan in particular. I have a friend who sells my stuff for me on eBay, a big name dealer everyone knows, we have sold out of all the hot cards in higher grades but both of us still have several of these listed in lower grades and have sold feW to none over the last 4 month boom where we literally were cleaned out of high end examples. So I honestly don't think it's happened to the extent one would think. If the high end pricing surge continues you maybe right and the prices at the lower end may indeed rise but remember these prices will bring more submissions of these cards and most will be at the lower end increasing supply and maybe not increasing price. You also need to take into account who is buying what sometimes a high price on a mid lower end card is it because a doctor or two have seen it and think they can fix or minimize its flaws or is it being driven by collectors?

[TanksAndSpartans]

I’m wondering about two related things: 1) Are members of the group who are buying cards at record prices also selling them? Is there collusion within the group to guarantee certain cards sell at a predetermined level? Using an eBay search, its easy to see recent 1958 Jim Brown PSA 8 rookie sales:

04-24: 4401
05-08: 2199
06-14: 6499
06-23: 17,500

It could be that despite 3 sales within 2 months, there were bidders who thought the 06-23 card was so unlikely to come up again, that 17.5K was a good price. How many of us think that is smart/rational behavior though? Call it rationality or common sense or whatever, but I can’t help but think the 17.5K price tag may have some other purpose. What the end game is, I have some thoughts, but I’m not sure.

[Snapolit1]

Nick,
Honestly I haven't seen that very often.
I was just thinking this week that I've seen an awful lot of auctions getting weak prices for what look to me like really nice cards. Goudeys, Play Balls, 55 Topps, etc. There are also many items in some of these auctions that don't even draw a bid. I don't want to single anyone out, but was just breezing through an auction closing in the coming days and was amazed at the $7 and $9 bids for some nice cards. I realize those may increase at the end, but I think you could just as easily make the opposite argument: the inflation in a small subset of cards has badly weakened the market for cards that are slightly off center or mid grade. Do I have empirical support for this? No. But it seems that way to me. Take out the Mantles, Ruths, Clementes, rose Rookie cards, and some others and things look very different.

[Steve D]

Originally Posted by bravos4evr

unlike real estate though, the price of a PSA 9 that escalates by 1000% in 6 months DOES impact those collectors just trying to grab a psa 6 or 7 for their collections. People think "well if a psa 9 is now worth $100k, (versus the $10k it was 6 months ago) shouldn't my 6 be worth $2500 instead of $250? and all of a sudden you have a market that becomes falsely inflated and the avg collectors who save up to buy their "one big card" miss out.

I've been looking for a 1951 Bowman Willie Mays card for several years, for my 500 home run club set, preferably a PSA 5 to match my Mantle '51 Bowman. 2 years ago, you could get a PSA 5 Mays for around $1,500. Now, you can't get a PSA 3 for that. I've been the underbidder several times on Mays RCs, but always got outbid.

Same thing with Ernie Banks' '54 Topps. I've wanted a PSA 6 to match my Aaron RC. Now, it's tough to find a PSA 4 Banks for what a 6 went for 2 years ago.

Reggie Jackson: Ditto. Can't find a 7 for what an 8 was going for 2 years ago.

Steve

[begsu1013]

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[Leon]

That was great. Then the kid took the card from Mint 9 to a fair 2 in one fell swoop but I don't think he cared.

edited to add, guess I didn't see the thread concerning this...

Originally Posted by begsu1013

warning: not necessarily prewar content, but i don't know any true collector that can not find joy in or would appreciate this. and i did steal this from another board, but figured some folks around here would enjoy it and the change of pace just as much.

scroll down and just watch the vid first:

http://www.foxsports.com/mlb/story/c...eakdown-063016

[T206Collector]

Originally Posted by Econteachert205

Here is My opinion of what is going on:

1. Record low interest rates pushing people toward risk assets.
2. Money laundering
3. Rampant speculation
4. People buying on emotion


Stuff like this always ends well. Be careful. Please note I do not blame pwcc for any of this, they are simply a successful business in the midst of this.

+1

[bravos4evr]

One good thing that has come from all this ,IMO, is that raw cards seem to have dropped a fair bit. I got a raw Waddell T206 for $35 that probably grades as a PSA1. I got a raw Bonds Tiffany rookie for $15, raw 68 Yaz in damn near mint condition for $8 and am about to add a very rare and desirable raw pre-war card for peanuts as well. It seems that the rush to nab high PSA graded cards has left a lot of nice stuff that is ungraded going for really low prices.

[Stetson_1883]

It may not happen within a year, or even 10, but I'm fairly confident that before I die (I'm 37), we're going to see a global economic cataclysm the likes of which we will have never seen before. I'm talking worldwide breakdowns in financial markets, collapsing governments, sudden environmental implosions, hyperinflation, homelessness, criminality all leading to utter bedlam running amok in the streets...a purge, if you will.

Speaking as a former financial academic, I believe there's simply too much interconnectedness in this age of globalization. We're all teetering very precariously in an ubsurd balancing act. One small shift somewhere in the market will cause a tital wave effect. Everything we see is unsustainable at this point. I feel a breaking point is lingering in the air and eventually it's going to crush us.

When, not if, this time comes, these pieces of cardboard won't be able to buy you a loaf of bread.

Have a nice day!

[bravos4evr]

deleted

[pokerplyr80]

Time to sell the collection and stock up on guns, ammo, bottled water, and canned food?

[Steve D]

Originally Posted by pokerplyr80

Time to sell the collection and stock up on guns, ammo, bottled water, and canned food?

Don't forget batteries, a flashlight, candles and matches

Steve

[Dpeck100]

Originally Posted by Stetson_1883

It may not happen within a year, or even 10, but I'm fairly confident that before I die (I'm 37), we're going to see a global economic cataclysm the likes of which we will have never seen before. I'm talking worldwide breakdowns in financial markets, collapsing governments, sudden environmental implosions, hyperinflation, homelessness, criminality all leading to utter bedlam running amok in the streets...a purge, if you will.

Speaking as a former financial academic, I believe there's simply too much interconnectedness in this age of globalization. We're all teetering very precariously in an ubsurd balancing act. One small shift somewhere in the market will cause a tital wave effect. Everything we see is unsustainable at this point. I feel a breaking point is lingering in the air and eventually it's going to crush us.

When, not if, this time comes, these pieces of cardboard won't be able to buy you a loaf of bread.

Have a nice day!

There is no disputing that the current debt globally is unsustainable. You will continue to see the treasury yields fall to reduce the interest expense to prolong the inevitable which is indeed a serious financial issue as you suggest. That said it isn't stopping people from buying luxury real estate, 170 million dollar pieces of art, 52 million dollar cars and so on.

If indeed we see an event of epic proportion that is as serious as you believe is coming, the best investment one could make today is guns, ammunition and silver coins. If all paper money becomes worthless than so to will trading cards but who cares. Your F'ed regardless so why not enjoy them while you can.

The super rich will be safe in an environment like the one you describe as they will buy large plots of land before paper money has no value and be self sufficient should they need to be. Anyone buying a $500,000 baseball card has to be liquid for at least 10 million or more I would think and perhaps even higher. They will find a way to survive don't you worry. In the mean time they can whip out their rare cards and be reminded of how awesome they are and also be reminded that they can afford a piece of cardboard that very few can.

[ALR-bishop]

Wish I was younger. I am going to miss all that stuff

[ls7plus]

Originally Posted by ALR-bishop

Wish I was younger. I am going to miss all that stuff

LOL. +1!

Hi, Al,

Larry

[Paul S]

Originally Posted by Stetson_1883

It may not happen within a year, or even 10, but I'm fairly confident that before I die (I'm 37), we're going to see a global economic cataclysm the likes of which we will have never seen before. I'm talking worldwide breakdowns in financial markets, collapsing governments, sudden environmental implosions, hyperinflation, homelessness, criminality all leading to utter bedlam running amok in the streets...a purge, if you will.

Speaking as a former financial academic, I believe there's simply too much interconnectedness in this age of globalization. We're all teetering very precariously in an ubsurd balancing act. One small shift somewhere in the market will cause a tital wave effect. Everything we see is unsustainable at this point. I feel a breaking point is lingering in the air and eventually it's going to crush us.

When, not if, this time comes, these pieces of cardboard won't be able to buy you a loaf of bread.

Have a nice day!

Tidal, not tital.

Have a nice day yourself, Sir!

[tschock]

Originally Posted by Paul S

Tidal, not tital.

Have a nice day yourself, Sir!

Since you are proofreading, you missed "ubsurd" as well.

[WhenItWasAHobby]

First off, this latest phenomenon of skyrocketing high-grade rookie cards from the '50's and '60s makes leaves me highly skeptical. I can recall the superficial manipulation of silver prices in the late 1970's by the Hunt brothers and there was another event in the mid-90's where modern rookie cards were being horded and re-sold on the early days of the internet by a group of dealers that also ended badly. Obviously, some unknown person or persons are jacking up the prices of these cards and it's not the natural progression of hobbyists at-large.

I also have a great distrust for anything associated with PSA. These ridiculously high prices will only bring more scammers out of the woodwork and will only elevate the frequency of card altering, card restoration, phony holders and flips, questionable bump-ups among many of the well-documented PSA-related scandals.

So in the final analysis, it's the label and the holder that's the commodity - not the card and that's not a good thing.

[griffon512]

Originally Posted by Stetson_1883

It may not happen within a year, or even 10, but I'm fairly confident that before I die (I'm 37), we're going to see a global economic cataclysm the likes of which we will have never seen before. I'm talking worldwide breakdowns in financial markets, collapsing governments, sudden environmental implosions, hyperinflation, homelessness, criminality all leading to utter bedlam running amok in the streets...a purge, if you will.

Speaking as a former financial academic, I believe there's simply too much interconnectedness in this age of globalization. We're all teetering very precariously in an ubsurd balancing act. One small shift somewhere in the market will cause a tital wave effect. Everything we see is unsustainable at this point. I feel a breaking point is lingering in the air and eventually it's going to crush us.

When, not if, this time comes, these pieces of cardboard won't be able to buy you a loaf of bread.

Have a nice day!

if we mention your promo can we get a discount on purchases from your ebay store

[sbfinley]

Thanks to Brent for posting, as from experience I attest he cares about the hobby foremost. I disagree though, and believe (using nothing but rationality) that the market has to correct at some point. Which is the most likely scenario? Something, collectible in nature, that has risen 500%-1000% in the span of a couple dozen months will continue to exponentially grow or that something collectible in nature that has risen 500%-1000% in a span of a couple dozen months will stagnate?

Common sense tells me it obviously won't continue growing at the same pace. I don't understand why the only two futures the market holds in the vast majority of collector's minds are "exponential growth" and "collapse". The two most popular phrases in the hobby are now "don't miss the train" and "don't get left holding the bag." Couldn't it, you know, just settle and correct? Sports card are hot investments right now, but I'm assuming hot investments are hot when they're cheap. I'm baffled that smart people with plenty of money (and obviously, surely, have heard of buy low - sell high) think we're just at the start of market growth. I don't know, could be wrong. Personally I don't have a dog in the hunt. If I can afford something in a 9 I buy a 9. If I can only afford a 2 my heart doesn't really break.

Happy collecting guys.