How did this all start?

[Snapolit1]

One factor that I knew would hurt the hobby enormously was the proliferation of monthly and weekly and flash auctions. When I joined the board there was wild anticipation of upcoming auctions. Yes, people waxing poetic about the smell of the catalog and the poor postman who had to carry it up the stairs. Auctions were special. Now amazing auctions come and go without barely a comment. Sure, there are board members who comment on their lots, their wins, etc. But the buzz is totally gone. Things like green and red Cobbs used to be special to see. Now we are inundated with them.

If you are buying into this market it’s for love of the cardboard. And that’s great. I think most of the current sale prices will look lousy in a year.

[benchod]

Totally agree with you Steve
The yearly REA auction and the Mastro December auction were events to look forward to with amazing lots of rarities. There are so many auctions now I don't have time to keep up and go through all the lots

[Republicaninmass]

Originally Posted by frankbmd

Sounds like you Peter

a confession perhaps?

It's called "projecting" lol I kid!

Gary V was a big culprit. I think a few more of these influencer types were buying 1/1 refractors and faking sales. The easy money generation was hoping to capitalize on a swoon. Wvry week a 52 mantle or 33 ruth was bought and sold for more the following week. Just like everything else, when "your neighbor " tells you how much there is to be made, its too late.

The innovator, the imitator then the fool.

Speaking for myself, if your goal is retirement in the next 5-10 years, selling some assets would be wise. 5% in a guxed rate CD should out pace the loss/gain from a "hobby".

[kailes2872]

I wonder who is going to be able to buy these collections. I look at average stats, net worth, average income, etc., and everything tells me that I am living in that top decile. Yet, I can count on two hands the number of cards that I have bought over the past 3+ years.

I guess I got used to the pricing from 2012-2019 and I have not been able to adjust to the new normal.

My PSA 6 '54 Aaron was a $1600 card in 2014. It sells for multiples of that now. If I couldn't comfortably "afford" that now with a paid off house, career in peak earning years, and plenty of discretionary income, then where is the market? I guess that there are a lot of very wealthy people in the hobby - more so than me, but it just seems like we are going to get to a point where the norm is buying groups and having shares of collections instead of someone buying everything and holding it, but what do I know.

I sound like my mother in law. She used to lament as she would be looking for a parking spot at the mall around Christmas time. She would throw her hands up in the air and say "where do the people get the money?" - only to finally find a spot and go in and spend hers.

[bcbgcbrcb]

We’ve all read by now the thread here regarding the buyer who got a steal of a deal and the seller subsequently filing a lawsuit against them.

How about the opposite here, a lawsuit to be filed against those that “faked” sales/comps/YouTube videos, etc. generating all the hype and skyrocketing prices that caused everything to get out of control, leaving individuals who opted to buy into the market at this time with devastating consequences that could completely ruin one’s life because of what these unscrupulous individuals did back in 2021. Any attorneys on the board here game to pursue this?

[Yoda]

With the end of the year approaching and the card market wobbling in places, I would imagine there will be a lot of tax loss selling going on to offset some of the large gains realized during the boom period.

[sb1]

There is no such thing as a tax loss on collectibles....I am sure some get lucky and don't get questioned, but if they do.

Time for the CPA's to chime in.

[raulus]

Originally Posted by sb1

There is no such thing as a tax loss on collectibles....I am sure some get lucky and don't get questioned, but if they do.

Time for the CPA's to chime in.

Like all good accounting questions, it depends.

There's a pretty good summary here that covers a lot of the important elements: https://bradfordtaxinstitute.com/Con...ctivities.aspx

I do suspect that some who might stridently claim to be pure hobbyists around these parts will suddenly determine that for tax purposes they're actually investors. But maybe don't admit that around here, because investor seems to be used as a dirty word (or a serious slur).

[Snowman]

Originally Posted by Fred

Dang, all along I thought that was just a conspiracy theory. Gotta be true if you heard on the internet.

You can't possibly be serious, right?

I subscribe to nearly zero conspiracy theories. I'm also a scientist who demands pretty remarkable evidence before I'd believe something to be true. And even I would place the likelihood of the COVID origins as having come from the lab in Wuhan at very near 100%.

The conspiracy theory, in this case, would be that it, in fact, did not originate from the BSL-3 lab that just so happens to be right across the river from the breakout and which just so happens to F* with bat coronaviruses, to begin with.

[Snowman]

Originally Posted by Peter_Spaeth

Yep. Huge influx of dudes with tshirts, 3 day growths, backwards ball caps, lots of money from some vague online things. 24 hours a day on their devices, etc.

This is probably the 3rd or 4th time I've seen you reference people having facial hair or stubble as a pejorative. It's a very strange take. lol

[Snowman]

Something else worth pointing out is that this ramp up didn't begin during the pandemic. The hobby was already experiencing significant growth prior to that. The Zion Williamson hype began in 2019, and the Luka Doncic, Acuna, and Ohtani hype started before Zion. The market was already sloping upward.

[campyfan39]

i agree with every word of this

Originally Posted by G1911

An irresponsible Chinese lab partially funded by the US, the gigantic overreaction to it, the federal government deciding money just grew on trees and selling out the future to fund their chosen crisis of the moment, some population heavy states trying to keep their people cooped up in their homes with a bunch of people scared to touch grass, and a lot of the country getting time off work with cash flowing in anyways mixed with the usual pumpers telling everyone cards only go up and lying to get morons to inflate their portfolios for them.

A whole lot of collectibles and hobbies saw spikes with many people hiding inside, not working much, and getting paid still. The only surprise is that some people are surprised the pumpers weren't right and the market is falling instead of continuing to just go up forever. None of the pumpers were willing to share the screenshots of them cashing out their 401K's to buy cards like they were advising others to do for some reason. Wonder why.

[Snowman]

Originally Posted by sb1

There is no such thing as a tax loss on collectibles....I am sure some get lucky and don't get questioned, but if they do.

Time for the CPA's to chime in.

I suspect that once the govt decided that we would all be getting tax forms for selling $600 worth of cards on ebay that many sellers decided to acquire a business license and become legitimate dealers, keeping detailed records of everything they buy and sell.

[bcbgcbrcb]

Also at the very top of causes for the rediculous spike in prices in 2021 was those idiotic fractional share companies such as Rally, etc. Those have all pretty much gone bust by now, huh? Entities that were willing to pay “as much as it takes” to get a card to profit from the fees of a thousand buyers per. Great ethics there, huh?

[Exhibitman]

Wasn't an ethics issue, just a crappy business model. The deal structure to get these items overvalued most of them in the first place. They had to. The only way they lured owners of valuable items to go with them rather than sell with an AH was to give the seller a substantial cashout and a chunk of the float. It is the same thing that has brought down more than one auction venture: if the cash advance is too large and the item underperforms, good luck in getting the money back from the consignor.

The fractional interest model counted on a market for these shares that would generate commissions, but it turned out that people who like to trade baseball cards don’t like to trade shares in them. No one was trading. When prices stopped rapidly escalating on the securitized items, the nascent market for these shares locked up tighter than a bullfrog’s butt.

This is not to say that securitization cannot work and is not something that will be tried again. The securitization of cards was an interesting idea, just badly executed. The financial model was based on a bet on continuous and rapid price increases on the assets that would fuel both profitable sales and a vigorous trade of the shares on its internal market. When the pace of gains sputtered, the flaw in the model was revealed. There have been successful securitizations in other fields (notably, music catalogs) but those rely on an existing owned asset that generates income being turned out to investors, not on a flipping model of the asset itself. If a flipping model is to work the asset has to be obtained at an extreme discount to current market so that it can weather a lull or downturn. To go on the market and buy something in the hope it will soar and pay off quickly enough to keep the investors from forming a lynch mob, that would be a foolish and risky bet on a set of atypical circumstances. In other words, quintessentially American.

[Republicaninmass]

Also, lottery set breaks and pack breaks. Aside from 1 or 2 people who score, they only profit makers are the ones doing the breaks

Oh and Evan Mathis trimming/altering

[Johnny630]

Originally Posted by Republicaninmass

Also, lottery set breaks and pack breaks. Aside from 1 or 2 people who score, they only profit makers are the ones doing the breaks

Oh and Evan Mathis trimming/altering

One Hundred % correct. I see these Raffles all the time on Facebook card groups...some as high as $500 a spot....people buy into them....idk if it was die off like Razzes or not but it’s been hot recently it seems.

[bcbgcbrcb]

The fractional shares thing was tried back in the 1990’s/2000’s. Didn’t work then and didn’t work now and never going to work. The idea would have to be revamped entirely into a managed portfolio of cards invested like a mutual fund.

[bcbgcbrcb]

A couple of other names that came to the forefront early on, Geoff Wilson and Vegas Dave.

[jsfriedm]

To answer the earlier question about rooting for prices to fall, I've thought about this, and even though I am a pure collector with no intention to sell, my ideal scenario would be prices exactly tracking inflation. Nothing more, nothing less. I don't need them to go up because they are not my investments and I would rather spend less on cards so that I can put more into my actual investments. But if cards actually dropped a lot in price, not only might I regret some of the ones I bought over the last few years, but I'd probably have a really hard time pulling the trigger on cards I want and could easily afford because I'd always be telling myself to wait until they go down some more. So, paradoxically, lower prices might make it harder psychologically to buy.

[BioCRN]

Originally Posted by bcbgcbrcb

A couple of other names that came to the forefront early on, Geoff Wilson and Vegas Dave.

Vegas Dave started a huge "superfractor" push. I don't mess with ultra-modern except to pick up notable Cubs players, but the media assisted self-promotion push based on his Trout superfractor brought some high end speculators (and their wallets) into the hobby.

[toothcutter]

[QUOTE=Peter_Spaeth;2385204]Yep. Huge influx of dudes with tshirts, 3 day growths, backwards ball caps, lots of money from some vague online things. 24 hours a day on their devices,
Disagree.

[G1911]

Originally Posted by bcbgcbrcb

A couple of other names that came to the forefront early on, Geoff Wilson and Vegas Dave.

Now those guys are pumpers. A lot of Wilson’s picks were really bad and lost a bunch of guys money. He’s not popular anymore in the ‘modern bro’ areas I’m familiar with now.


Maybe we can have a spinoff thread tomorrow completely lying about its purpose before the rage unlocks for any investors who get their panties twisted over that statement that does not express their views for them but instead expresses my own.

[Rhotchkiss]

Originally Posted by bcbgcbrcb

The idea would have to be revamped entirely into a managed portfolio of cards invested like a mutual fund.

This idea has always intrigued me, and I think it could work. It doesn’t have to be limited to cards either, or only sports. It could encompass all sorts of alternatives - comics, entertainment, historical, art, rare books, etc.

[toothcutter]

Originally Posted by Rhotchkiss

This idea has always intrigued me, and I think it could work. It doesn’t have to be limited to cards either, or only sports. It could encompass all sorts of alternatives - comics, entertainment, historical, art, rare books, etc.

Shotwell looking strong.

[glynparson]

As is often the case I believe Peter gave us the correct answer.

[Republicaninmass]

Originally Posted by glynparson

As is often the case I believe Peter gave us the correct answer.

'

"X gets the square" ah too old for that reference amongst the stubbbe-beards.

Speaking of which, there IS an astute ebayed aptly named OLDstubblebeard!

Vegas Dave, yes he was one accused of "boosting (feel better about that word) prices" for his own portfolio.


The same thing happened in the late 80s and 90s right around when the first "booster"...!aka MR mint made is 52 topps find. People were digging in attics, grandmas going hog wild on qvc (thanks for cheating her Ken Goldin) kids busting packs and immediately selling singles back to the "Comic Book Guy" to buy more packs.


Now enter Sports Images a company based in Mass which would do these types of breaks on a major scale, with one sweet change. They would break hundreds of cases of products, take out any rookie or star, then repack and sell commons through distributors like toy stores or Kmart. Then the rookies and stars could be purchased via 100ct lots directly from them! It was done on a massive scale.


Boom...then bust. Just a few years later, nobody was interested anymore. The hype had faded. Card companies had significantly more offerings, and values languished for a long period of time. I'd say for at 10 to 15 years. Collections aka "retirement accounts for kids" can be pick up by thr u-haul load for a thousand bucks. Collection like these all wane around 1993/94, with yard sale pickers hoping to find a base Jeter rc. Many of those collectors never returned due to being burned or simply got a sour taste in their mouths.

Thr hype started after 86f basketball, which actually WOULD have allowed kids to retire now, if they had bought an unopened case or two!

By my posts, it may seem I am jaded, but I love the hobby, just hate the "fair weather fans". Being a patriots, bruins, and red Sox fan in the late 80s, I can spot them pretty well



So although history may not repeat itself, it certainly does rhyme.

[jacksons]

The spike in card prices around the COVID period also parallels interest in other alternative assets, like crypto. 2020-2021 were extremely volatile market years. Younger generations with cash gambled on bitcoin and jumped into cards for the same reason, especially the vintage ones. These assets were a safe haven from a choppy market. Finite amount of bitcoins, finite amount of T206s (excluding recent attic finds).

[BioCRN]

Junk wax era collectors did return to the hobby and in early-Spring 2021 they were snapping up graded cards from their junk wax youth. It was enough to wake up a long-dead market.

I got rid of so much stuff that had been sitting around since the 90s and very early 00s at a rather nice price. Didn't see that coming. They were a storage afterthought for so long.

It was one thing to see PSA 8 UD Griffey Jr's return to $100, but for a good chunk of 2021 you could get $120+ for one. They seem to be down to $70-ish now. In 2019 and quite a while before that this was a $35 card.

So many other examples, even for mid-range stars.

As a personal anecdote, I did see a notable number of those collectors venture into vintage after they slayed their thirst for all the junk wax cards they used to want/have as a kid. Many of those are still around in the hobby.

[toothcutter]

Originally Posted by glynparson

As is often the case I believe Peter gave us the correct answer.

Totally disagree

[packs]

How many people do you guys know that both collect baseball cards and invest in crypto? I personally know zero people who do both.

[Johnny630]

Originally Posted by packs

How many people do you guys know that both collect baseball cards and invest in crypto? I personally know zero people who do both.

Mostly the modern guys I can’t think of many vintage hard core collectors of prestige that were big into the crypto crap, I could be wrong but I think that’s where most of it came from …the nft Geoff Wilson’s, Vegas Dave, Gary Vee types ect.

[packs]

I can see that in the modern crowd. I’m curious if the pre-war crowd got into crypto. I never dabbled myself.

[Rhotchkiss]

Originally Posted by packs

How many people do you guys know that both collect baseball cards and invest in crypto? I personally know zero people who do both.

I own only prewar vintage cards and I invested in crypto. In late 2020 (I think), I funded a guy and we mined for etherium. It was a great investment until 2022, when the cost of electricity spiked, which caused (in part) the value of crypto to go down. In mid 2022, we sold all of our hardware, and did well on that since there was a shortage of GPUs (remember the chip shortage) but still decent demand from basement warriors looking to do personal mining. Then, late last year, I had the guy liquidate my etherium. It was a solid transaction soup to nuts.

Not sure how it all shakes out, but personally, I believe there is a “there there” with crypto.

[Snowman]

Originally Posted by Exhibitman

Wasn't an ethics issue, just a crappy business model. The deal structure to get these items overvalued most of them in the first place. They had to. The only way they lured owners of valuable items to go with them rather than sell with an AH was to give the seller a substantial cashout and a chunk of the float. It is the same thing that has brought down more than one auction venture: if the cash advance is too large and the item underperforms, good luck in getting the money back from the consignor.

The fractional interest model counted on a market for these shares that would generate commissions, but it turned out that people who like to trade baseball cards don’t like to trade shares in them. No one was trading. When prices stopped rapidly escalating on the securitized items, the nascent market for these shares locked up tighter than a bullfrog’s butt.

This is not to say that securitization cannot work and is not something that will be tried again. The securitization of cards was an interesting idea, just badly executed. The financial model was based on a bet on continuous and rapid price increases on the assets that would fuel both profitable sales and a vigorous trade of the shares on its internal market. When the pace of gains sputtered, the flaw in the model was revealed. There have been successful securitizations in other fields (notably, music catalogs) but those rely on an existing owned asset that generates income being turned out to investors, not on a flipping model of the asset itself. If a flipping model is to work the asset has to be obtained at an extreme discount to current market so that it can weather a lull or downturn. To go on the market and buy something in the hope it will soar and pay off quickly enough to keep the investors from forming a lynch mob, that would be a foolish and risky bet on a set of atypical circumstances. In other words, quintessentially American.

Great insight, and well said. It seems like it should have been somewhat predictable, but I think most people didn't see that coming.

[Snowman]

Originally Posted by Republicaninmass

'

"X gets the square" ah too old for that reference amongst the stubbbe-beards.

You guys are cracking me up with the stubble/beard shaming. I don't even own a razor. I've probably been clean-shaven for maybe 10 days of my entire life. Never trust a man in a suit. Especially if he's clean shaven