Money in the Hobby
 

After perusing the early bids in the current Heritage "Platinum Night" auction, I am reminded again of the large pools of capital ready to pounce on any high graded star/HOF card. It got me thinking back to college Economics 101 with
price elasticity, supply and demand curves, equilibrium points and the like.
What factors are at play? Here are just a few random thoughts:-
1. With the stock market at record highs and the Trump tax bill safely passed, people with large amounts disposable income people are feeling confident, and this has translated into new, existing and once dormant collectors bidding up cards. Given all recent media musings that old baseball cards of the immortals is a good investment, perhaps many may look at card purchases as asset reallocation instead of reliving boyhoods.
2. There will always be more money in the country than old, nice cards. Unless there is some crisis that spooks financial markets and creates a dumping of all those beautiful Ruth, Cobb and Jackson cards, doesn't that mean that prices are elastic and should continue to rise.
3. So many great old cards have been offered for sale over the last 10 years I
wonder how many new finds can be expected and, of course, there are serious
affluent collectors who have no intention of ever selling anything; they just love their cards too much.
Personally, Heritage has some eye-watering cards on display, but I am already priced out.

Over the next 20 to 30 years I think there will be a HUGE drop in prices for cards. When boomers die out and new buyers are scarce, you'll see lifetime collections go for a fraction of what they would today.

No offense, but I'm certain people were saying the exact same thing in 1975.

Has the market collapsed for George Washington signed documents?

Has the market collapsed for rare hot rods from the 1950s?

Has the mark collapsed for vases from the Ming Dynasty?

No. Not saying every card will hold its value. That's not true for anything.

When I was growing up a few dads collected stamps and coins. Yes, the run of the mill stuff has not appreciated. The rare stuff has. And believe me people are more emotionally invested in baseball cards than airmail stamps.

I doubt it. I think the old good stuff will always be the old good stuff.

I disagree with you. I was born in the 80s and I spend a sh*t-load on vintage cards. I also have many friends around my age who spend big money on cards too. And finally, the younger folks that I see - they are in their early 20s - remind me of myself when I was younger. They come to the shows and drool over the vintage cards that they see. They ask so many questions as well. The interest is there. I am certain that once these youngsters get a bit older (and have more disposable income), they will definitely start buying these old cards.

I'm still waiting for the NYC real estate market to collapse like everyone's been telling me is inevitable (since 1970). Totally not sustainable. Yeah, sure.

No offense but real estate, stamps, coins, and car markets have nothing to do with baseball cards. I am going out on a limb, but I'll venture to say that most people collect baseball cards because they collected them as children. Being born in the 80s and using that as some justification for a future vintage market doesn't hold water. Why? Because in the 90s baseball cards exploded. You could buy a pack of cards anywhere. They were always a part of your life.

I could not tell you the last time I saw a pack of baseball cards sitting out on a counter in my local grocery store. That connection just doesn't exist for anyone being born post-2000, which is who you'll have to rely on to buy your collection down the road.

I agree with this to an extent. The exception will be that the best quality and rare pieces will continue to go up. But I do question who will care to pay anything for a mid grade 1958 al Kaline in the future.

Reason why real estate held up is due to cap rate compression. Take a look at this chart on the risk free rate; created the mother of all junk rallies. Add to that limited land supply and rising replacement cost, and you got a secular boom. Going forward, that is an interesting forecast...

http://www.macrotrends.net/2016/10-y...te-yield-chart


On expensive high end cards...I like cardz...I think they are kool.

People aren't buying nice Ruth cards and Type 1 photos because it reminds them of being a kid. They are buying because they see the appreciation over time, have a lot of money to invest, and think why not plow a small amount into something cool like sports memorabilia. Can't call your buddies over and excitedly pass around stock certificates.

I agree that Al Kaline's rookie card won't mean much to anyone in 25 year. But the stuff at the top of the Heritage catalog will hold its value and likely appreciate.

Sorry but I think that's wrong and that you're looking at it the wrong way. You're right, no one is buying Type 1 photos of Ruth because it reminds them of being a kid. But how many people bought a Type 1 Ruth photo before they bought a pack of baseball cards? I would, again, just a guess, feel confident in saying almost no one.

Pointless to try and predict the future.

Collect what you like and can afford

Drool over what you like and cannot afford

Shine the rest

The market for antique furniture has pretty much collapsed. Anyone I know who were collectors or dealers for a long period of time say the same exact thing- the antique market is dead. Not everything goes up forever.

I would say that demographic fear is probably priced in to some degree. But there will always be a market. Stamps, toys, etc. But who knows. Here is my bullish view:

The availability to sell online provided liquidity and reduced transaction costs (no longer selling at a dealer haircut like the 80's and 90's, and having visibility in real time price discovery). The grading from TPAs, has created fungibility in cards, providing further transparency to "value".

All of these factors have aided the upward stability of card prices, along with macro factors like monetary liquidity from global QE, improving unemployment, and yes a rising stock market.

So I say there are many positive aspects of card collecting that makes it a fun asset diversification. And they are just plain kool to look at.

I bought a really nice Coca Cola tray, from 1921, around 17 yrs ago. I think I paid $800 for it as it's in great condition. Then the internet hit them, and exposed their lack of scarcity, and they go for around $350 now. Sure glad I didn't go big on them at the time. :eek: Not everything goes up but I am bullish on great vintage baseball cards.

.

I agree that cards will take a dive in price but for completely different reasons. Between shill bidding, card doctors, and counterfeiting something is going to bring this hobby down.

I would love to know the % of T206's that have had nothing done to them, bet it is pretty low number. Would also like to know the % on "new" old cards in the hobby, bet that number would also surprise most.

To be fair I have been saying this for some time and it hasn't happened yet.:D

Agreed.

Will all cards keep their value? Absolutely not. But many vintage will. Just because of supply an demand.

I personally never saw Mickey Mantle play but whenever I list his cards on ebay they sell very fast compared to some other players of the same decade. I suspect the same will hold true for many other players as well.

But the modern market is a different beast, the supply is infinite. Just check the pop reports and see how many PSA 10's their are of Aaron Judge already.

Exactly. I also want to add something to this: look at the folks who spend crazy amounts of money on paintings - did they even care about art when they were younger? Did they go to museums? Take art courses while in school? No, no and no. As they got older, and their disposable income increased, they decided to just put that money into awesome things, like art.

Everything has its life ups and downs.comic were dead for years then came back like never before. What ever caused cards to go up a couple years back may happen again soon.I see and hear about young collectors all the time.

When I was a kid we had videos games and other distractions. I stopped collecting off and on for years. I’m not a baby boomer and mother are any of my friends that still buy cards. Maybe some lesser know player will fade with time like a max Carey , Paul warner, etc old hofers won’t always appeal to the future generations. As the games changes players won’t be viewed the same.

As in a football I like Benny Friedman. He had the rookie touchdown record season touchdown record, more yards then any other passer and he could run. Etc man a head of his time by decades !!! How many people know who this man is today???

You are right about Paul Warner. The same applies to the rest of the Warner brothers, too.

There will always be "authentication" issues like this, which is why TPGs are vital to this industry. There always is a side story to how much we can depend on TPGs, but that is a separate debate discussed earlier on this site.

That said, same can be said for artwork. When I was looking to add some cheap paintings to my walls, I was looking into the auctions. Above me, but you want a Jackson Pollock with high provenance, tens of millions. You want one where the auctioneer says they have no history and as is, couple grand...

Many people go to museums. In fact, I would bet it would be pretty difficult for you to find a single person who hasn't been to one. You can show almost anyone in the country a photo of the Mona Lisa and they'll know what it is. That could not be said for any baseball card. I also doubt anyone buys art just to spend money on something. It is true that people will invest in artwork, but at it's base level art has a utilitarian purpose that baseball cards never will.

the collecting gene, either you have it or you dont

I could give a rat's rear. I plan to be out-of-here by then.

There are some amazing 1926 Cricketeer cards from England on eBay for ridiculously cheap:

https://www.ebay.com/itm/Luddington-....c100752.m1982

I sometimes get concerned when I think about what it would take for baseball cards to turn into cricket cards over the next 100 years. English cricket was popular enough at one time to spark a marketing campaign based on cigarette inserts, which based on this sale made its way all the way to Australia (does anyone collect T206 cards in Australia?).

And what about the T205, er... T80 Military set, referenced in another thread today? Why are these cards so cheap but we lionize baseball men? Is there a surge in military cards coming in the future? Just as beautiful as the T205 set (which is not a compliment from me, but you get the gist).

https://www.ebay.com/itm/1910-T80-To...kAAOSwVL1WB45f

But, then I remember what John Maynard Keynes said: "In the long run we are all dead."

And the Warner sister, Dot.

I disagree with your opinion on the utility of cards. As stated earlier, the TPGs and online venues have increased the utility of the cards. For art, its a 1 of 1 market (sans the giglees, lithos, and other crap out there). For cards, there is more than one and a standardized grading system, so you have a baseline of what the market is. That baseline is accretive to the utility and thus value of the asset.

But hell, as others say, who cares, we are all dead eventually (and what else am I going to do in the meantime).

Collecting should be all about "fungibility". If you no longer have the ability to have fungi with your cards, you should consider getting out of the hobby.

Brian

By utilitarian I meant that artwork serves a purpose beyond being valuable. We all have homes, I assume we all have something on the wall too. And that doesn't take into account other forms of artwork, like furniture, lawn ornaments, comic books, comic strips, cartoons, posters, t-shirts, shoes, logos, etc.

Bingo.

Prices
 

I'm still waiting for Beanie Baby prices to rebound.

:D

Haha see I already forgot who Paul waner was.

Was an article last year about the absolute worst things to have collected in the last 50 years. Had to send a copy to my parents as they touched most of the bases. Hummels. Yadro. Norman Rockwell plates. Check check check.

Beanie babies were there of course. But the biggest disaster was Thomas Kinkaid paintings. What a debacle that turned into. People were paying big bucks for those and the market just got saturated. Every shopping mall in America was selling them. Poor guy died before it all collapsed. Probably for the better.

I have baseball paintings, baseball pictures, baseball posters, uncut sheets of baseball cards, baseball autographs and other baseball display items. Most of what you listed, I would consider worthless. I would agree that baseball cards printed in larger numbers, most postwar, will probably see lower values in the future. Top names in higher grades will continue to increase in my opinion.

Worthless in what way? What does that mean? How are shoes worthless? How is a house worthless? Do you not consider architecture to be art? Advertisements are worthless? Do you wear clothes? Do you have furniture? Do you watch television?
Go to the movies? Art affects your life every day.

Seeing as though our economy has been stagnant at best for the past 2 decades, with the recession in the middle, and card prices have still increased, I'm going to say I'm bullish on the sustainability of the card market. I think as our economy grows (which is should) over the foreseeable future, these cards will just continue to increase. Maybe not your commons, but HoFers and rarities? Heck yeah. I'm 23 and know and handful of people my age that are collecting Pre-War. The hobby isn't going anywhere but up in my opinion, as long as the economy is solid.

Enjoy the present, hope the best for the future, and Make the Hobby Great Again. :)

Lawn ornaments, comic books, comic strips, cartoons, posters, logos. I wouldn't pay a penny for any of that stuff. I would throw away advertisements unless they had a famous baseball player on it. The idea that everyone has the same collecting interests is silly. There will always be people collecting baseball and sports items and who have no interest in items like you listed. Shoes and t- shirts are meant to wear, not collect. I throw them out when I am done using them. I watch sports on TV. I rarely go to the movies, I consider them a waste of money. Art affects your life, not mine.

The economy has been improving, look at unemployment, stocks and interest rates for indications...

But Bingo on the youth collecting vintage. There are tons of facebook groups trading and collecting vintage. Albeit they are looking for beaters, when they get older and have more disposable income, they will be looking to upgrade their beaters...

I'm sorry I didn't make my post more clear. The economy has absolutely been improving recently, but for the good part of two decades, it was in decline/stagnant, yet prices still increased on these cards.

I think my generation, as much as I try to distance myself from them, learned from their parents' errors when it came to card collecting, and are going for the timeless, classic cards that are no longer being produced and show true history.

I understand the sentiment behind Adam's point on it being "pointless to predict the future," but it's hard for me to think it's pointless for not having some thought about the future stability of these assets. If I had no regard for future value, I'd feel like I'd be doing my family a great disservice by being reckless with my spending.

I, like others, am bullish, at least when it comes to high-eye-appeal HoFers from popular sets. The biggest spenders I've met in the hobby happen to cluster in age from late 30s to late 40s. These dudes have a deep passion for the sport of baseball and for collecting. It's not a phase for them. They will outlive boomers. It's a small sample size, but I think it's indicative of a bigger trend of dudes coming into money and trying to reconnect with meaningful sh*t from the past. Bottom line, I think we'll be fine for at least another 40 years; at least that's what I tell myself and my wife.

I've been leery on the hobby for years mainly due to the potential fraud. But...the hobby has survived.

As long as the economy doesn't nose dive like it did in 1929, and that wont be happening anytime soon having unemployment hit 40%, the sky is the limit.

And even think there is more upside. What if a TPG could actually capture the strengths of the two that exist now? A company that could grade and turn around cards like SGC and another with the marketing/registry of PSA and have it lead the way on fraud protection? It would blow even more doors off the barrier to entry in the hobby. I also think lots of people are tired of stocks and traditional investments...they're just boring and the fees associated with them are real...unlike cards.

Everything will cycle, everything will have it ups and downs but over the long term the general hobby will be fine.

Also...art is everywhere and affects us all whether you engage or not IMO.

It's really no different than the stock market. There will be peaks and valleys, somewhat in line with the rest with the impact of the economy on other investments. Newer cards and memorabilia are much more sensitive to flavor-of-the-month and people "short" them. Do you think a Tom Brady SP rookie is going to continue to get $15k in the future? Maybe, maybe not. But, I don't anticipate a bunch of new pre-war stuff getting discovered and, with the internets, there is a lot better understanding of how scarce some of the issues really are. Don't expect T206s, 33' Goudeys, or 52 Topps cards to tank anytime soon. Sure, there will continue to be fluctuations as the economy pulls back or surges forward. But, a lot of the vintage stuff is going to continue to rise over time.

It seems we had this discussion back in 2008-2009 when the economy tanked. The smart guys got some great deals :)

Utilitarian means something has a practical use. My point was artwork is not limited to million dollar paintings. You wear clothes a person designed. You live in a house with furniture someone designed. You read books people wrote. That’s all art.

I find this discussion fascinating. I wish I was collecting in 2008-2009 but didn’t get back until last summer.


Sent from my iPhone using Tapatalk

Packs - store of value is also a utility.....I.E. gold, absolutely worthless, cant even use it for industrial reasons like a diamond, yet the shiny stuff retains value.

My cards have been profitable enough for me to continue in the hobby. Looking back at what I paid for them, I probably wouldn't still be in the hobby if they were now worth less. They are historical, neat & cool, but if you're losing money, you kinda like stop.

When big money comes in, the acquisitions are mostly blue chip cards. That's what you want when you drop some serious (for you) coin. Long term? Just hope the trend continues.

Actually gold is one of the best metals there is when it comes to making an alloy durable. Gold is a mechanical ingredient in many things, including your smart phone.

i did not know that, thanks.

+1

Silver too

The king of kitsch! I was only a kid during the Kinkade craze and had no insights to what passed for good art (still probably don't) but I still remember thinking how cheesy the one my great aunt had in her living room looked.

Always good to come across another self hating millennial lol. I totally agree with you on all points.

I always tell people at shows that vintage cards (for the most part) will never go down. Cobb / Ruth / Mantle can't do anything anymore to negatively affect their value while Trout / Harper / Strasburg, etc can blow out a knee / arm for a pitcher and they could be done. Name 1 high profile Ruth / Mantle / Cobb / Matty, etc that has lost value over the last 10 years?

Has a client once with 7 or 8 of them throughout her home. With big lights over them. She and her husband walked me through the house like it was the Louve.

Of course the guy had more talent in on nail then I will ever ever have so not trying to bad mouth him at all.

I count myself among those predicting things will go down.

In the short term (next year or two) the tax cuts and good employment situation will probably lead to a bump in prices, but in the long term its hard to find any indicators which don't look negative.

The baby boomer's reaching their predicted life expectancy is a big one. All the comments I've read here point to that as a demand problem (these people will stop buying cards when they die) but the bigger problem is on the supply side.

Its safe to say that the majority of vintage cards out there are in the hands of baby boomers. When that generation passes away, most of those cards are going to become part of their estates. Probably some heirs will decide to keep them but I would guess that the majority wouldn't be interested in or financially able to sit on valuable cards.

So you're probably going to see a flood of estate sales full of baseball card collections.

This hasn't really happened to the baseball card hobby before because the boomers were the first generation to collect en masse. But if you look at other, older, hobbies like stamp collecting this has been an issue for a while and prices there reflect that (the relationship between catalog prices and actual prices for stamps is so fictitious it makes Beckett or PSA's prices look like they were made with laser like precision).

Some people have said that younger people do collect, which is true, but the problem is that in order for prices to be maintained over the long term you need each subsequent generation of collectors to be at least the same size as, or larger than, the one that precedes it. Every indication we have is that the opposite is going on. Yeah, I'm sure there are plenty of millenials out there who collect baseball cards, but there just aren't as many as there are Generation Xers or Boomers.

So when all those Boomer collections show up in estate sales, there just aren't going to be enough buyers around to keep prices what they are now.

Another thing worth noting is that the baseball card market is one in which marginal swings in demand can have disproportionate effects on price. Like a 5% increase in the number of collectors chasing a given card won't lead to a 5% increase in price but more like a 50% or even 500% increase because just adding one or two determined bidders to an auction often causes them (the auctions, not the bidders) to explode.

That also works the other way though. Just take 5% of the demand away from a given card ( or set or whatever) and it won't just cause the price to go down 5%, it will cause it to collapse. So these generational changes pose a risk of really causing a disproportionate effect on prices.

You also have to kind of draw a line between the "rich people" part of the hobby and the "everyone else" part. The latter part is much more vulnerable to this than the former. So long as you've got a few millionaires/billionaires chasing vanity projects then the top high end market probably won't be affected much by these generational shifts. But the mid to lower end stuff is really likely to tank. A PSA 9 1952 Topps Mantle will probably keep its value (bar some cataclysmic event that shatters civilization as we know it) but a PSA 4 1967 Topps Mantle is probably going to be a very cheap item in the near future.

You also have a ton of cultural and other shifts that don't look good. Baseball isn't as popular as it once was, people spend more of their time in the digital world and have less time and interest in collecting physical objects, cards in particular have lost their function as a source of information sharing, etc etc.

I think its funny when the 'hobby not going down' in flames guys say in not so many words the 'key vintage historical' cards will keep their value etc

What we talking about .1 of 1 percent of cards out there? The T206 Wagner going up doesnt impact most people here on net54 or the Babe ruth rookie..

also what exactly are the key cards everyone seems to agree will always have value....there will be difference of opinion once you get to the 4th or 5th card...

The t206 Wagner is more than a baseball card , its not really apples to apples to say if that card does great so does the hobby....its in a special world as well as those other 'key cards' that everyone thinks they will agree on but they wont..

Most cards will go down as collections start hitting the market from people that inherited them etc..

As far as the hobby is concerned, the canary in the coal mine to me what a rookie Frank Robinson will go for 15 years from now in a PSA 8 etc....great player and big prices now..... ...commenting on T206 Wagners is pointless to me as far as how it relates into the health into the hobby as a whole...

[In the short term (next year or two) the tax cuts and good employment situation will probably lead to a bump in prices, but in the long term its hard to find any indicators which don't look negative.]

Except for the global coordination in economic improvement, when was the last time we were ALL firing on all cylinders? Its gone longer than anyone expected, and likely to go longer than anyone expected. But that's the optimist in me.

[The baby boomer's reaching their predicted life expectancy is a big one. All the comments I've read here point to that as a demand problem (these people will stop buying cards when they die) but the bigger problem is on the supply side.]

We are not all going to die in the same time, I expect a transitory orderly process. On the demand side, there are new collectors coming in the market, thanks to the modern cards.

[I think its safe to say that the majority (in terms of value) of vintage cards out there are in the hands of baby boomers. When that generation passes away, most of those cards are going to become part of their estates.]

I believe in an orderly distribution and consolidation. I probably will hold my cards for my son, and I will just turn 40 this year.From channel checks (facebook groups) there are many vintage collectors our there younger than me.

[Those estates will pass to their heirs. Probably some will decide to keep them but I would guess that the majority wouldn't be interested in or financially able to sit on valuable cards.]

This I agree, but not material.

So you're probably going to see a flood of estate sales full of baseball card collections.

This hasn't really happened to the baseball card hobby before because the boomers were the first generation to collect en masse. But if you look at other, older, hobbies like stamp collecting this has been an issue for a while and prices there reflect that (the relationship between catalog prices and actual prices for stamps is so fictitious it makes Beckett or PSA's prices look like they were made with laser like precision).

[Some people have said that younger people do collect, which is true, but the problem is that in order for prices to be maintained over the long term you need each subsequent generation of collectors to be at least the same size as, or larger than, the one that precedes it.]

I think their ability to buy cards will grow along with their income. So they will "fit" into our shoes. Give it time.

[So when all those Boomer collections show up in estate sales, there just aren't going to be enough buyers around to keep prices what they are now.]

Valid headwind, like stocks when there is distribution, there will also be consolidation into stronger hands.

[Another thing worth noting is that the baseball card market is one in which marginal swings in demand can have disproportionate effects on price. Like a 5% increase in the number of collectors chasing a given card won't lead to a 5% increase in price but more like a 50% or even 500% increase (I'm pulling these numbers out of a hat to illustrate the point and not because they are accurate) because just adding one or two determined bidders to an auction often causes them (the auctions, not the bidders) to explode.]

I disagree, prices in all assets move on a random walk, not linearly.

That also works the other way though. Just take 5% of the demand away from a given card ( or set or whatever) and it won't just cause the price to go down 5%, it will cause it to collapse. So these generational changes pose a risk of really causing a disproportionate effect on prices.

[You also have a ton of cultural and other shifts that don't look good. Baseball isn't as popular as it once was, people spend more of their time in the digital world and have less time and interest in collecting physical objects, cards in particular have lost their function as a source of information sharing, etc etc.]

Baseball is in decline, but its still part of history and will still be relevant after we die.

Just my one cent.

I agree. The biggest spenders I know are in their late 30s to mid-50's. i think this is only natural, considering these are the peak financial years for an adult male. Sean did raise some interesting issues about supply going up as the baby-boomers' collections make their way back into market. But I don't think this will affect the values of rare cards, high end cards, or cards of the legends.

Baby boomers' collections have been coming onto the market for a long time now.

the future
 

Who knows? For years, my dad spent time and money on a tremendous collection of stamps that now has very little value. I wish he had collected impressionist paintings, but he had a great time with stamps. If you collect baseball cards because you think it's cool as hell to have a t206 set or some rarer set, then you are doing great. It would, however, be very risky to count on selling the cards in 20 years to fund your retirement.

Personally, I think that baseball is here to stay (at least for another 100 years) and that the always increasing US population will produce enough collectors to support the prices of the most appealing and famous old cards. But I certainly am not banking on it, and I don't put money that I can't afford to lose into them or into memorabilia. (at least I try not to do that)

Good point Peter.

No way..... (I have my collection sale bookmarked :))

Of course not everyone from a generation is going to die at the same time, but statistically we can say with a very high degree of confidence that a large percentage of them are going to be dying within a time frame of a few years.

And I think its quite unrealistic to expect the number of new collectors entering the market to be enough to replace (or exceed) the number leaving. Modern cards (if that is what is going to draw them as you say) just aren't the cultural staple that they were pre-1990s anymore. While I'm sure there are lots of individual young collectors picking up the hobby, it isn't anything like the shared cultural experience that I had of baseball cards as a kid (I'm 41). Everyone collected baseball cards on the playground until about 20-25 year ago. Since then, its been more of a niche thing, which means it is appealing to a much smaller segment of that demographic than it was for earlier ones. Unless there is some secret society of young card collectors ou there that I am not aware of.


This is a problem of information availability. We have no direct data on the number of collectors out there, so we rely on anecdotal personal experience (like checking Facebook groups) and try to extrapolate from that. The problem is that we can't conclude from there mere fact that some younger collectors exist that they constitute a mass large enough to replace the baby boomers in the market. Other anecdotal evidence (which is also problematic but the best we have) suggests that isn't the case.



Of course the younger generation will have more income as they progress through their careers, but the question is whether or not they will want to spend that income on baseball cards. Some undoubtedly will. From what I have seen, I doubt that enough will to replace the hole that the baby boomers will leave in the market a few years from now. I just don't know how you are going to convince millions of millenials (and whatever they call the generation after them) to get interested enough in this thing that most of them don't care about, to start spending the kind of money that boomers did to create the prices that exist today. It just doesn't even remotely seem plausible.

I didn't describe a linear movement, I described an exponential movement.

But that aside, random walk theory actually applies to stock prices and not all assets. I agree that trying to predict the values of individual cards in the future is a fool's errand, but that is not what I am trying to do, I'm just saying that the overall market faces a lot of factors that will likely put downward pressure on prices over time.

True, but the relative value that people place on it as part of history is decreasing and its likely this has some (as yet unquantifiable) effect on their willingness to buy baseball cards!

Sean, why do you think the card market requires “millions of millenials” to keep prices strong? I’d bet that the card market today is influenced by less than 250000 collectors, perhaps fewer.

That number sounds reasonably plausible. But those 250,000 (or so) dedicated collectors emerged out of an initial base of millions of children who had cards as kids, with their numbers being whittled away as they grew up and many lost interest.

So I wouldn't say that you need millions of young people to become serious collectors to sustain it. But if you want to keep that 250,000 number of regular collectors, you do at least need a much larger cohort of young people to at least dabble in card collecting at some point so that they can decide if its something that they like or not, on the assumption from past experience that only a small number of those who dabble will go on to become regular collectors. That is where I get that "millions" number from.

I live in Japan so my direct knowledge of what young people in the US are doing these days is limited, but my impression is that there are nowhere near the same number of young people being exposed to the hobby like they used to.

Hi Sean,

I don't thing they will immediately die off. I am hopeful advancing med tech will not only prolong life, but also improve it. Regardless, many baby boomers are already paring down/selling their collections or handing them down, as this board has suggested.

There is more information now than ever, we affectionally call it "big data." You can see how many members are in facebook groups, how many podcasts or apps are being downloaded, online bid volume trends, what cards are being liked, tweeted or instagrammed. What did we have before? card convention attendance counts? Definitely more information now than ever. The issue is how to find it and do you want to pay up for it.

Regarding where the next generation will choose to spend their money, I do agree with you. There is a change from homes, extra cars and purses towards experiences like dining out and travel. Definitely a shift in preferences, but we haven't been mainstream anyways after the junk bond, whoops I mean junk card rally and collapse.

Not to bring in finance, but random walk applies to efficient market hypothesis, not stocks, so it applies to all assets and not just stocks. Stocks are a key example illustrating an efficient market. Whether or not they really are is not the debate (because if they were, I wouldn't have a job).

WRT historical value, I have never seen Ruth play, but I enjoy learning his history and appreciate his cards. So I believe there is enough intrinsic value in his cards for me that I am willing to pay up (my discretionary income for). That aside, I don't think relative value and willingness has been decreasing, we have seen record breaking after record breaking auction prices.

Great debate. Cheers!

Like all of us, who knows how the factors will all end up playing out for the hobby in general. I hope it continues to be sustainable, and doesn't die a slow death as other peer hobbies have such as stamps and, to a much lesser degree, coins.

I certainly think it's optimistic to expect vintage to continue to appreciate as it has done in the past 5 years. I got back into cards full-throttle in about 2011/2012 and it was phenomenal timing -- a good bulk of those purchases from 2011-2015 have increased by 70-100% in value in the last few years. My personal feeling is that we are on the back end of the recent run-up in prices, and folks who were able to be drawn in to spend considerable amounts in the market have indeed been drawn in. Were prices to continue accelerating at current rate, I would personally take a hard look at the wisdom of continuing to be in a strong acquisition mode.

A reckoning certainly came in 2008 by all accounts, and we also had a significant correction in post-war prices after the "alleged" market manipulation in Spring 2016 on certain cards (Rose, Aaron, Clemente RC's, etc.). It was actually reassuring to see the market find a new level after that fiddling, and then relative stability, albeit still with some soft pricing on those cards in particular.

Some food for thought, courtesy of my cousin who is a PhD Social Psychologist and always good for a fresh perspective... The group characteristics of the Millenial generation are truly different from the generations prior (BB, GenX, GenY), insofar as they choose to prioritize Experiences over Material Goods. As apparent proof of this, they spend a disproportionate amount of their disposable income on Vacations/Travel, etc. Not sure where a baseball card fits into that ethos... Certainly doesn't preclude individuals behaving differently, blah, blah, but this is an apparent reality.

Last random thought, as a late GenX'er it's interesting to think back and recall the mid/late 80's and early 90's. I recall that absolutely *everyone* was buying/collecting baseball cards. Not to get rich, but it was a cultural phenomenon. It was an absolute fantasy for me to ever think of owning a Mantle. I still remember the awe I felt when a friend told me he had a beat-up '58 Maris (and the thrill when he finally sold it to me for $35 and about 5 Todd Zeile Score Rookies...). Card collecting seems a lot more compartmentalized today, but I do expect that a good number of those who collect modern today will someday hear the siren song of vintage.

Let's hope the numbers bear out enough willing collectors to dedicate their disposable income to vintage to keep us ticking along, or at least keep our heads above water.

Oh, and for a prediction, I'll throw out my suspicion that high-end vintage commons (8's, 9's, 10's) will crash and burn someday price-wise. Right or wrong, I'll go with that.

I'm all for that! If I don't make it to 90 I'll be very disappointed :)

But my point is that even if it doesn't happen all at once, and even if cards are disposed of via gifts rather than through estates, there will be a lot more of them coming into the market over a relatively predictable time period (I don't know the years but you could look at actuarial data on the US population to get a rough idea).

I'm not sure how it will play out, but I think its safe to say that most cards bequeathed in some way will end up on the market if for no other reason than the personal tastes of children and their parents are rarely in perfect alignment and selling will probably make sense to most.

Yes, though ironically the lack of "big data" from before the internet age makes it difficult for us to assess the relevance of that (for the purposes of the subject we are discussing) since there is so little to compare. If a Facebook group dedicated to vintage cards today has 500 members, since we don't know how many members a Facebook group dedicated to vintage cards would have had in (say) 1990 if Facebook had existed then, we don't know if that number suggests there are more or fewer people collecting (and the same for other information sources).

Yeah, but it takes time for these broader changes to be felt.

Oh yes, that was my mistake.

But I suppose that baseball cards are an interesting example which is quite different from stocks. Stock prices under efficient market hypothesis are supposed to reflect all known information about a stock (subject to debate about timing, insider information, etc), which mostly relates to its risk and expected future cash flows.

Baseball cards produce no cash flows, risk is harder to measure, and we pretty much already know all there is about most of them (no insider information), save for where there might be the odd attic find, but those are rare. Plus the market actors are way more irrational in the sense that most purchases are made on subjective considerations (favorite player, etc) rather than objective analysis. Plus there are no institutional investors spending time and money on analyzing the market and providing signals to other investors (instead it has fickle big shots who seem to make purchases for the same reasons small shots do - bragging rights, ability to have something they really really want, etc etc, none of which is predictable or rational). So the market definitely walks randomly, but way more so than with stocks, which I think makes it way more vulnerable to the things I was talking about in my earlier post.

Fair enough, but here is an interesting card that always gives me pause for thought about how much the market is dependent on the slightest and most irrational of whims.

As an icon of 1920s culture, Charlie Chaplin is probably about as recognizable and popular as Babe Ruth in America (and considerably more well known internationally). He is huge. This card is from the 1926 Player's Straight Line Caricatures set. Its a really striking card that captures his image perfectly and with an artistic style that is totally suitable to the era. While Ruth cards generally start in the thousands of dollars, you can find this card on Ebay usually for under $10 (in fact you can probably get the whole set it came in for under $20).

The discrepancy doesn't make much sense, the Chaplin card wasn't produced in greater numbers than most Ruth cards and he is culturally about equal. The only reason I can think of for the Chaplin card being so cheap relative to Ruth stuff is that American kids in the 50s were accustomed to seeing baseball players on cards but not movie stars (well, movie star cards existed but weren't as popular). So that association in their minds grew into the modern hobby, while movie cards never took off the same way.

But that association no longer really exists in kid's minds today. While there is a lot of path dependence at work which props up the baseball card hobby, there are so many things like this Chaplin card that are equally interesting out there (at a fraction of the price) which can compete for the attention of younger people with an interest in history. Thus my pessemistic forecast about the future of baseball card prices!

Well heres another thread such as the 'help the hobby is dieing' type of thread where we will have the same viewpoints over and over....

in a few more months will be another one of these....i think we should just save this thread and add the link the next time someone asks if the card market is taking off due to some recent auction or if asks if the market is falling due to some recent auction....just show this link

seeing the same thread over and over is sort of like watching the NBA semifinals or playoff round when a home team wins the first 2 games...the series is 'over'..but then the other team wins the next 2 game at home..now they suddenly have won it......

or the annual argument in the NFL whether a bye week makes a team rusty or if the rest is better......

#this

The irrationality of pursuing Baseball images over Chaplin images should concern us all. Stamps, art, and coins are internationally regarded. Baseball is primarily American, and it’s card values are driven by something in our culture which is probably fixed in time.

Stated another way, the reason why people don’t collect Chaplin cards today is likely to be the reason why people tomorrow would not collect Baseball cards — if we can identify the reason and stop it from happening we stand a chance!

Wow. . . I think you guys are making this a lot more complicated than it has to be.

Charlie Chaplain's last great movie was 1940. 78 years ago.


I was in Port St. Lucie last week for the very first day of the Mets Spring training. The parking lot was crowded by 9 am. By 10 am all of the fences were lined with people including many many young kids holding cards, caps, and other stuff screaming for autographs. Young kids running in jerseys from field to field trying to see the top stars. All holding something to be signed.

I didn't think to ask any of them if they knew who Charlie Chaplain was.

the chaplain card is also a british card...and they are never that popular here...even when baseball players are on them!

Chaplin was a silent movie actor. There was never a following of actor cards and they never really had value to begin with so it’s not a strong link.

I’m not saying it’s all rosy but I would put Chaplin more in the spoon collecting camp than sports cards. And yes cards don’t produce cash flow, but there is a personal connection and historical relevance which adds value to it. Art is no different, so as many other precious assets.

Want proof, people still collect hockey and boxing cards...

Hi Pete, isn’t there a couple babe Ruth cards on actor type cards, they command a few hundred dollars. Wait you’re right they command a few hundred dollars.

I think there's a very rational reason this topic comes up so often. These discussions strike me as a group enabling session. People who know better get together and attempt to justify their behavior through “group think”. If I can find other people who tell me my behavior is ok, it must be ok then, right? If I know other people are spending their kids’ college tuition on baseball cards, then it becomes rational for me to do it too.

And as an aside: I think there's a very real possibility of an MLB player’s strike looming in the near future. The strikes of ’81 and ’94 turned a lot of people off to baseball for a long time. What happens to the value of a Mike Trout card if there's a prolonged strike?

exactly! and I second Scotts herd mentality comment.

My daughter is 12
 

She mildly collected football cards for a couple years. Most of the football playing boys in her class buy football cards and many of them also buy Baseball. Many of those that are not athletic buy Pokémon or magic or some other form of gaming cards. It seems at least in my area that the myth of kids not buying cards is just that a myth. Just cause it may be done differently than we did it doesn't mean it isn't being done.

And how is that different than the millions of people who watch CNBC all day, or participate in stock chat boards?

I'd personally be much more excited when everyone starts yelling to sell.

These threads get made out of fear, I think. And the fear is that our collections will cease to have buyers. Threads like this get made all the time and the discussion has taken place over and over again. That's because this fear is very real. But then every time the discussion takes place there's always people who pretend like everything is fine and have some counterpoint to every point someone makes re: the eventual demise of the value aspect of the hobby.

Listen, if these fears were totally unfounded this thread wouldn't be made so often. There's nothing wrong with accepting you've poured money into something that may one day have little value. Just sell soon and buy again later.