Card Prices During Recessions
 

Does anyone have a simple answer on what would happen to high-end card prices during a recession?

Of course it seems there will be inflation as well during the possible recession.

But is there a simple answer?

For example: decent T206 HOFs like Cy Young, worth around 2k-3k in todays market. Or a 1950s Mantle worth 10k. Would a recession drop them down in value? Or would they possibly maintain their value? (I doubt they would go up - but maybe i’m wrong?)

I would expect them to drop due to many buyers prioritizing more important purchases in their lives, such as necessities. But i have heard conflicting opinions.

Any thoughts are welcome.

Thanks

My crystal ball is broken. But so is everyone else's. Stay tuned, we'll see what happens.

As far as recession... we are already in one.

As far as card prices... only time will tell. My guess is that low-mid range cards will flounder while high-end/expensive cards will hold firm. Just a guess, based on historical trends.

They'll go up. And if they don't go up, they'll go down.

Or maybe they'll do a little of both at the same time.

Might also depend on how severe the recession is.

Not to mention what else is going on with other asset prices.

Certainly if enough things go wrong with the broader economy, then we could see cardboard demand wane, the number of sellers could wax, and prices would therefore fall, no more exciting than a simple flip of supply and demand.

Naturally, right now, due to our recency bias, it's hard to imagine this ever happening. But I understand that it's happened in the past, and could always happen again in the future.

If you're dying to really look at historical results, go back and check out prices for a handful of items for 2006, 2007, 2008, 2009, and 2010. Check out a single item at a specific grade. Nothing too exotic - make sure there's a lot of transactions so that you can get a good feel for the market from year to year before the recession, into the recession, and then coming out of it. Do it for a few different items for different players and different years, different sets, just so you don't get weird results by focusing on only one player, only one set, only one year. Since the great recession is our last recession (ignoring the COVID 2020 quickie recession), that's probably going to be your best bet for trying to assess the action during a recession, simply because good data on cardboard prices during the 2001 recession is hard to come by, and before that it's even harder.

My prediction:

https://photos.imageevent.com/exhibi...ns/Clubber.jpg

That said, remember this:

https://www.pgmcapital.com/wp-conten...on-streets.jpg

We’ve been over this a bit lately, they can only go up. YOLO every dollar, and empty your 401K, and take out loans for money you don’t even have to invest in this can’t miss win. That’s what if I’ve been told.

Unemployment is still fairly reasonable so potentially can't just look at recession, in and of itself, IMO. The previous post about looking at card values during the circa 2010 period seems like a good answer to the OP's question.

I got back into the hobby during the housing crisis and quickly figured out that card prices were about 50% of what they had been earlier in the 2000s.

Having said that, I don't believe recessions are all the same so you can't predict that this will happen again.

jeff

I have been collecting on and off for 4 decades. In my experience, over time the good stuff has always appreciated. It may go up and/or down over shorter periods, but in the long run, the good stuff is a good investment.

I have said this before, cards as an investment is a long game (like real estate). Buy good stuff, make sure you can hold (i.e., don’t over extend), and hold. You should make money. If you try to time the market, then it depends on your luck.

Now, what constitutes “good stuff” is the subject of a zillion other threads

I tend to agree

The good stuff in my uneducated opinion tends to be HOFers (with the top echelon always doing well like Ruth, Cobb, Mantle, Wagner, Robinson, etc), rookie cards of key players, and key sets ie 52 topps, 1914/15 Cracker Jack, T206 etc

However key is long term focus not short term, invest/collect within your budget and your collection strategy

And when in doubt the old Rule of Ruth, Ruth, and more Ruth

Yep. If the objective is investment, stick to these basics.

100% agree, like real estate its cyclical, collect long enough you'll overpay and underpay depending on the environment. What constitutes the "good stuff"? Cards that speak to your soul, that make you feel good every time you look at them, cards that fulfill your particular collecting goal. Reminds me of the quote "I'm not sure what love is but I know it when I see it".

I am finally working on my dream collection, and getting some very nice cards right now at very good prices, while having fun. Prime example is a Johnny Kling SGC 5 I just got. Two years ago, this was my dream card, and never would have imagined having this one. A 2 was a dream come true. I am assuming “some” competition is drying up, while the normal competition is always around. I just have to pick my battles and stay focused at the auction houses online, as well as this site.. eBay is a last resort now, and I need to stay away from the eye candy Leon keeps posting. This is a very fun hobby, because there is constant learning from it, risk to take, fun to be had, and lots of friends made. Plus I am sure it is a relief to my wife that I chase cards, and scroll at them and not looking for greener pastures on dating sites or something����

I see no signs of a recession other than down the road in the housing market. Commodity Inflation has peaked and will be rolling over shortly. Wage/Consumer Spending inflation is still too high. Unemployment is still very low, Recession I do not see. Never underestimate the power of US Consumers they’re still spending strongly on travel, experiences, and services. Goods have cooled but that’s a good thing. US Economy IMO is still healthy. A soft landing is coming.

Heeeeeere’s Johnny!!

This. I 'overpaid' for a beautiful 1957 Gil Hodges last night. It was one of those speaking cards.

Potter Stewart (1915–1985), associate justice of the Supreme Court from 1958 to 1981, is frequently remembered for his famous non-definition of obscenity: “I know it when I see it.”

I always liked the 1957 Hodges. Not only a good looking pose/photo from a wonderful set, but the last of the "Gil Hodges, Brooklyn Dodges" cards. Yes indeed, a great speaking card.

Brian (you have to say it with a Brooklyn accent)

100 percent agree with this. The good stuff never goes down in the long term.

The good stuff for me are popular players in the highest grade. Check out other posts for lists.

But the bottom line is that these cards, over the long term, are not affected by recessions.

IF prices really tak a hit, the really good stuff goes back underground.

I agree about staying to the basics for a financial investment. That said, that isn't always my objective. My objective is to get cards I think are cool and want in my collection. Esoteric cards are not necessarily the way to long term financial success, but they are fun nonetheless.

One for fun and one of the basics (if you will).

https://luckeycards.com/pdunc1936krogerbreadriddle.jpg
https://luckeycards.com/r319ruth2.jpg

If we're in a recession, then previous definitions and understandings is what a recession is and entails have begun to lose their meaning. In my observation, the social and economic dynamics currently in play are so fundamentally distinguished in some ways from other past examples of economic turbulence that we just don't have much to draw from when trying to learn from history.

There's also just so much uncertainty as to how things will play out globally. We're all gambling here. But I'm still placing my bets on high end vintage.

Nicely put Leon! I wanna play too:

One for the basics:

https://photos.imageevent.com/exhibi...06%20Young.jpg

One for fun:

https://photos.imageevent.com/exhibi...ers-Weaver.jpg

I track sold prices on eBay and AHs for all of my "blue chips" (see the other active thread for "blue chip" def'n - haha). Here's some of the average annual sale data I've collected:

T206 Tris Speaker PSA 5 (although this one doesn't go back to the 2008 recession, it's the oldest pre-war in my collection with these data collected)
2010 avg: $914.38
2011 avg: $780.40
2012 avg: $935.75
2013 avg: $1,147.82
2014 avg: $1,068.84
2015 avg: $1,092.89
2016 avg: $1,201.60
2017 avg: $1,183.66
2018 avg: $1,245.96
2019 avg: $2,944.19
2020 avg: $2,007.92
2021 avg: $3,065.00
2022 avg: $3,961.97

1954 #10 Jackie Robinson PSA 8
2007 avg: $813.07
2008 avg: $903.90
2009 avg: $782.68
2010 avg: $773.74
2011 avg: $1,108.24
2012 avg: $1,009.19
2013 avg: $1,176.84
2014 avg: $1,257.32
2015 avg: $1,448.63
2016 avg: $1,624.36
2017 avg: $1,687.01
2018 avg: $1,944.51
2019 avg: $2,660.84
2020 avg: $3,509.34
2021 avg: $7,301.32
2022 avg: $7,883.44

1955 Topps #123 Sandy Koufax RC PSA 7
2008 avg: $882.62
2009 avg: $909.13
2010 avg: $850.15
2011 avg: $915.60
2012 avg: $1,034.23
2013 avg: $1,285.43
2014 avg: $1,249.50
2015 avg: $1,690.90
2016 avg: $3,639.44
2017 avg: $2,632.69
2018 avg: $2,615.77
2019 avg: $2,553.74
2020 avg: $3,357.98
2021 avg: $8,282.95
2022 avg: $7,081.04

1959 Topps #514 Bob Gibson RC PSA 8
2005 avg: $667.04
2006 avg: $619.34
2007 avg: $672.12
2008 avg: $765.71
2009 avg: $854.03
2010 avg: $780.13
2011 avg: $817.88
2012 avg: $838.16
2013 avg: $933.05
2014 avg: $1,262.72
2015 avg: $1,486.38
2016 avg: $2,279.96
2017 avg: $2,018.58
2018 avg: $2,070.23
2019 avg: $2,178.16
2020 avg: $2,749.59
2021 avg: $6,292.13
2022 avg: $6,281.35

The take-away from these data for me are that blue chip baseball cards are a good (long-term) investment. There seems to be a consistent dip in sale prices in the year or two post-recession (2009, 2010) but they all re-gained those losses and continued to appreciate. And of course, the last two years' gains have been unprecedented.

Wow that must have taken a lot of time. Thanks for the info and sharing.
Interesting numbers

Great compilation of data and I think it illustrates what many here have stated which is that over the long haul, cards have done well. Sure the data presented is limited but my guess is that the average price even for a 1965 Topps Harmon Killebrew PSA 7 is higher today than it was in 2005 and well above the rate of inflation.

Even with prices on many vintage cards being softer since April 2022, I think most are still well above their pre pandemic highs.

T206 Codd Red Portrait
 

Around 2004 I bought a couple raw T206 Red Portrait Cobbs (Ex) in the $500 range --I sure would like to have a couple more at that level--if history repeats itself, I'm in!

No one knows. But as with everything it’s supply and demand. And when unemployment rises, they move in opposite directions. But that’s cyclical. I rip van winkled through several economic cycles and didn’t know any better, except that card prices were higher.

Funko got killed today in the market

I was watching their collapse this afternoon. Down over 50%.

Lots of indicators that people are spending less on entertainment as the world returns to 'normal' and almost everyone is aware rough economic times are ahead, alongside historical inflation affecting household budgets. I'm sure cards will be unaffected, or if they are affected, it will only be those people trying to make money on modern, those trying to make money on vintage will of course never see any declines regardless of anything else in the world.

Cards will overcorrect... it always reverts back to the mean!

Cards can't correct, that's impossible! And you can't tell me this now! I just finished emptying my 401K to buy T206's after returning from the bank with a fresh loan to purchase Goudey's.

It's actually all about demand in the hobby.
.

Theres your answer from a pro nuff said

Agreed. The most sought after cards have enough interest that if prices even dropped 10-20% people would be lined up to buy them. Ruth, Gehrig Cobb, Mantle, etc. And the recession is here. Hopefully the fed will stop raising rates by Q2 2023 and things will settle down. But as Peter said my crystal ball is broken as well.

I can tell you who doesn’t think there’s a recession: The Fed.

Ryan's right, long term, the blue chip stuff holds and gains. Look at Paleo's tables. You could knock 50% out of the current price on the Speaker and still have a hell of a return over 10 years.

What's really confounding everyone is that this isn't 1977's stagflation it is 1947's inflation, and nobody who isn't sitting in a home gumming their oatmeal experienced the economy as an adult in 1947, but plenty of the septuagenarians and octogenarians who are in power vividly remember the 1970s. What's missing from the 1970s analogies is the "stag" part of "stagflation". Employment is tight and we had real growth last quarter. The simple fact is that inflation was inevitable once the COVID shock wore off. We have a couple of years of pent-up demand due to the plague that is expressing itself in ways that the economy wasn't geared to expect, causing both the supply chain to snarl and the core rate of inflation to rise. The latter is what the Fed is going after hard. But interest rates are an oddly focused brick to the head. They hit factored industries, housing and construction very hard, don't affect the information businesses much unless they have variable loans or bonds, which is rare. On the consumer level, it is a mixed bag. It basically tanks the home selling business but current homeowners who refi'd to fixed loans at 2%-3% are loving life right now; they might even see nominal returns on their savings top their mortgage rates, which is nuts. The gas and food price increases are completely different, essentially they are bets on the war in Europe and its impact on energy and food supply, plus some incredible profiteering by the oil companies (look at the crazy profits they made last quarter) and the usual terrorist tactics from the OPECkers, who yet again kneed us in the nuts right when we needed to get prices to come down (next time we invade can we just kill them all and take the oil instead of pretending we care about anything else? Too much? I can never tell). I kid our great and loyal friends in the Middle East...:rolleyes:

I'm going to echo some of the other statements made in the thread; by and large the Stars will remain the same, maybe ever so slightly dip. Commons will go down a a little bit, modern will probably take a hit.

At the end of the day the prices of Ruth, Gehrig, Cobb, Wagner, Mantle, Mays, etc are not going anywhere.

As a side note, if you see multiple high dollar pickups from me in the coming days, it's because I hit the Powerball :D

REA’ Big fall auction is coming up. They’re going to have record high-price sales numbers again. I see no signs of a recession in the high and vintage market.

Probably important to remember that a slew of people made a lot of money the past 2 years during COVID in the market. I made a good amount of money and I can't imagine what others with greater means did.

When I watch TV I see a lot of commercials targeting people who don't just have money to spare, but actual wealth. Air B/B and VRBO rental commercials are targeting very high end rentals. There's vacation package rental companies targeting high end experiences. I'm seeing a lot more luxury and electric vehicle commercials rather than work truck and economy car commercials. Even the electric vehicle commercials aren't making much of a deal about money saved on fuel.

There are people out there with money to spare that see nothing worth having in stocks, bonds, real estate, or other traditional investment. I'm not saying we're due for a rush of high end investors, but I think there's enough playing around in the vintage market to keep prices elevated after other parts of the hobby experience a value downturn.

Semi-unrelalted, but I've also noticed a chunk of the people who returned to the hobby the past 2-3 years that have gotten burnt out on modern and hunting junk wax childhood favorites...they really want "a few" vintage cards and are heavily gravitating toward T206s. Some branch out beyond the T206s.

It seems like this summary is missing the broader business impact, because real estate isn’t the only industry under fire.

Headline from yesterday’s WSJ:

“Raising money on Wall Street is hardest in a decade”

If the layoffs and/or hiring freezes at many of the tech startups and even established tech shops are any indication, the impact of higher rates spreads deeper than just leveraged companies with variable loans and bonds.

Rising rates means that the cost of capital for just about every business is higher than it was a year ago.

I suspect that we are closer to the top than to the bottom. How much further we have to go before we hit the bottom is where most of the debate seems to lie.

I've put the figures from paleocards into Excel to show the Year over Year change. My observations:

• The increases started accelerating later in the economic cycle. Kind of when I started seeing more and more youtube videos about card investing.
• You can see some pretty big spikes. The spikes are generally followed by declines the year after (but the gain far exceeds the decline)

I agree that quality wins out over time but I also think we haven't seen a traditional economic cycle since 2007. The COVID induced recessions was unique with the vast amounts of money that was printed and put into the ecoomy. I don't think that we've had had a "proper recession" since the credit crisis and the figures really only start after that. I'd love to have the same data going back to the 1980s.

As Leon says, it's all about the demand because the supply of pre-war and post war vintage isn't really changing. I'm starting to notice some softening of prices. Not everywhere but in some places. But if the economy turns south where people are losing their jobs or they're scared that they'll lose their jobs....then discretionary spending on things like cars, art and baseball cards will be amongst the first to go. That's just the way the economic cycle goes.

At that point, prices will inevitably fall. I have no idea by how much. We all have collections of cards, that means that we have a natural bias about how we look at this. It's human nature to want to find information that aligns with what we want to hear. My gut tells me that there will be some substantial falls over the next few years. For the "investors" that joined the hobby in the last 5+ years, I can't help but think that when prices start to fall that they'll bail out. That'll only accelerate things. Then again....I'll be able to buy at cheaper prices. :-)

Do the investors have the stomach to stay the course? The quality high-end vintage not the mediocre, the cream, always comes back and when it does come back it comes back strong and falls the least in down markets. Things are looking good. I’m not worried.

1980 recession cards went up
1982 recession cards went up
1991 recession cards went up
2001 recession cards went up
2008 recession cards went down
2020 recession cards went up

2016-2019 we see stagnation or drop, other than Jackie. Then a divergence from the historical annual gains by 30-50%. If you dont have to sell in the next few years, you will be fine.

Edited "dont have sell:

All modern cards tanked from 1990 to about 2020. It was the last card bubble

Base Jordan's for a few bucks started going for hundreds as did wax boxes.

Until the get rich quick gang started their YouTube pump videos, the cards were slowly appreciating

Separate the 'must' from the 'can'. The cost of capital is an externality. The need for capital is highly variable across industries and businesses. Many of the large multinational tech companies are hoarding cash overseas and opting for financing here to evade US taxes:

https://fortune.com/2022/08/05/us-co...ax-incentives/

Those companies do not 'need' capital, they use it as a tool when it is cheaper than paying their taxes. There are many businesses and industries that exploit situations like interest rate hikes and recessions or fears of recessions to justify wage freezes, wage reductions, firings and so forth. They shift from capital to those tools when capital costs rise.

I agree. Those of us lucky enough (I won't say prescient enough) to have purchased the big boys 10+ years ago will be just fine regardless, even if we have to sell into a price drop. Which many of us might not have to do. Again, though, we aren't in a recession, it is inflation. I'd rather have hard assets that are not interest rate dependent than cash in an inflationary period. We will be in a recession some day for sure but when that is I don't know. if I did I wouldn't be worrying about card prices, I'd be placing bets, er, investing in futures.

Meanwhile, since we have financialized collecting, I wonder how many of us have serious chunks of buying cash set aside waiting for the dip in card prices? I have a big shopping list for then...someone please ring a bell or something when it happens.

And yet, they're engaging in hiring freezes and/or laying people off. It may not be driven by rates, at least not directly, but they're clearly getting ready for deteriorating economic conditions.

Got to have lots of dry powder standing by for when the goons leave!