Changing of the Guard: The Commoditization of Sportscards

[71buc]

Originally Posted by Exhibitman

Question: who could be next?

Answer: who won the most games in the 1970s?

I'm a collector so a PSA 6 meets my needs. I would never purchase a PSA 8 even if I had the means to do so. Because of this preference the recent crazy prices seemed to have little bearing on my collecting efforts until now. I have always believed that the 55 Killebrew was an attractive undervalued card. I didn't purchase one until last month. I thought I should do so rather than run the risk of a mid grade version exceeding my budgetary constraints. I'm sure that there are many other mid grade collectors like me who are reacting/panicking in the same manner which has also served to inflate prices. I cringed when I paid $250 for my PSA 6 Killebrew last month. After looking at recent sales for a PSA 6 I don't know what to think. A PSA 6 is far from rare so if there is a crash/bubble obviously collectors like me will likely get stung.

http://www.ebay.com/sch/i.html?_from...p2045573.m1684

[Aquarian Sports Cards]

Originally Posted by 71buc

I'm a collector so a PSA 6 meets my needs. I would never purchase a PSA 8 even if I had the means to do so. Because of this preference the recent crazy prices seemed to have little bearing on my collecting efforts until now. I have always believed that the 55 Killebrew was an attractive undervalued card. I didn't purchase one until last month. I thought I should do so rather than run the risk of a mid grade version exceeding my budgetary constraints. I'm sure that there are many other mid grade collectors like me who are reacting/panicking in the same manner which has also served to inflate prices. I cringed when I paid $250 for my PSA 6 Killebrew last month. After looking at recent sales for a PSA 6 I don't know what to think. A PSA 6 is far from rare so if there is a crash/bubble obviously collectors like me will likely get stung.

http://www.ebay.com/sch/i.html?_from...p2045573.m1684

Relax, you can still get it on a buy it now from kit young for $260. I don't know what is inflating these auction results when you can BIN so much cheaper. Oh, wait, you can't shill a BIN...

[71buc]

Originally Posted by Aquarian Sports Cards

Relax, you can still get it on a buy it now from kit young for $260. I don't know what is inflating these auction results when you can BIN so much cheaper. Oh, wait, you can't shill a BIN...

Thanks that is good information. I only buy from eBay it seems. Can you share that link please? I looked at eBay BIN a moment ago and couldn't find it. http://www.ebay.com/sch/i.html?_odkw...C+-oc&_sacat=0

[Aquarian Sports Cards]

ugh, now I can't find it. Just Dean's over-inflated silliness at $445. However there are a number of PSA 5's between $149 and $199, so while I can't find the card I mentioned above, there are still signs of sanity in the market.

[Tennis13]

I am a relative novice to this world compared to you all. A few things with respect to economic theory that could be going on here. First, you have supply and demand curves, and relatively speaking, you have a fixed supply curve at best, or an inward shifting one at worse. Prices could go up due to contrived scarcity, or due to rising demand. It seems based on discussions, nobody is certain.

Second, you could have cartel pricing going on here. A few people/organizations are working together to control supply. In order to do that, one must first corner the market supply, and then trickle it out at an agreed upon speed. Or they could be divvying up players: you got Aaron, I got Mays etc. by company. OPEC has done this for close to 50 years to varying levels of short term and long term success. The DoJ is not going to go after collusion in the baseball card secondary market.

Third, you could have somebody buying 10 or 15 of a sort of specific card or player, then purposely bidding up the last one purchased to set the market so they can unload 1 or 2 at 10x value to an ill informed buyer to break even, and then unload 13 remaining in the OPEC manner. Would this require auction manipulation? Perhaps, but that's apparently not stopped many people before in this industry. In addition, if you owned a company that charged based on final pricing for your services, this could almost be a lost leader in your business.

Fourth, I see a ton of posts about "1000% year-over-year growth in price. That's a bubble." Well, not necessarily. It depends on if we started with an undervalued asset or an overvalued, mega-liquid, mature product. If you bought Sirius XM Satelitte stock at the trough of the 2009 financial crisis, you would have a similiar return over 3 years. Same wih gold from 2004 to 2011, but from 1980s to 2004 you would have been flat on gold notional terms. My point is that assets don't appreciate linearly, and when they move, they move. Sometimes they have a blowoff top (bubble) and sometimes they don't. But 1000% on a $0.25 asset is a heckuva lot different than 1000% on a $5 million asset. Elasticity of demand is much more inelastic on cheaper prices than higher prices. So I would be careful about getting wrapped up in percentage increase numbers, in my opinion. As crazy as it may sound, $1500 is not a lot of money to professionals in large cities where the cost of living may be 5x middle and southern America.

Finally, the industry is well known for lack of good institutionalization of risk and controls. Think about the worst firms you can find in finance, and that's sort of where this industry stands in my mind as a collective. Sad, but unfortunately true. So there could be some dodgy things going on. Again, you all know so much more than I do about that. When you have prices charged based on appraised value rather than a flat rate, it's in that comapny's best interest to have higher appraisal values. It's in long-term market players best interests to see their assets appreciate quicker.

To hear people bit h about how expensive things are, though, is a welcome change to the past 25 years in this hobby. You have all dealt in depreciating assets for so long, that any inventory you actually hold that's appreciating could be unloaded at these "absurd" prices and you get all the joys and experiences the past few decades free of charge or with a small profit. Not bad, I would say.

[Exhibitman]

The hobby definitely is a scummy business. More card auctioneers and dealers have gone to jail since 2008 than banksters.

As for the run up I've decided to post certain cards for sale at 'ridiculous' prices and test the waters. If they sell I will happily take the profits. If not I will happily keep them.

[Leon]

Originally Posted by Exhibitman

The hobby definitely is a scummy business. More card auctioneers and dealers have gone to jail since 2008 than banksters.

As for the run up I've decided to post certain cards for sale at 'ridiculous' prices and test the waters. If they sell I will happily take the profits. If not I will happily keep them.

It is a scummy business for some but they might have been scummy in other areas had they been there. We are in an unregulated billion dollar industry. Need anyone say more? There is no doubt in my mind there is some manipulation going. I am in the corner of thinking that says whomever is doing it is spinning their wheels at best and will get creamed financially at worst (or go to jail if they are doing something illegal). I am not talking about a collector buying an 8 or a 9 for their set. I am talking about trying to corner the market on cards which there are hundreds and thousands of, and that is crazy if you ask me (and some others).