Friends giving up collecting in 2023 - Post continuation
 

About 6 months ago, I posted about two of my friends giving up collecting:

https://www.net54baseball.com/showthread.php?t=321801

I ended the post with this statement "I know collectors and collections cycle through, but this year, I have seen more of this than anytime I can remember. It will be very interesting how the rest of the year pans out."

From my perspective, that has continued not only for the rest of 2022, but also into 2023. Another friend I know sold his entire prewar collection (December 2022) to put a rather large down payment on a house. Another this month consigned his collection to an auction house. He stated that value could be used elsewhere. I will keep updating this topic.

Trend continuing for the rest of 2023? I guess we will see.

Not surprised!!
 

They’re just little green rectangles with dead people on them, but if someone is willing to give enough of them to you, at some point it gets pretty tempting to let someone else have the pleasure of owning your cardboard.

I suspect many FOMO Collectors over the past two years may be stepping back.

That is true, just seems like a lot are selling (same as last year).

I knew auction houses were big, but it seems the bigger and better collection go right to them. Collectors know where the money is at it seems.

I suspect a lot of it is coincidental or generational.

There are a lot of us old fart collectors who bought their collections decades ago for a pittance and have huge paper profits. Some are cashing in. Since we all travel in the same relatively small collector circles (I interact with maybe a thousand collectors between boards and in person dealings), a relatively small number of collectors from that core selling out looks like a stampede.

There is also the timing. The early and middle Boomers are at retirement age, and the late Boomers and early Gen X'ers are entering (if we are lucky) the wind-down phases of our careers and the downsizing of our lifestyles and needs. We are moving out of the big empty nests and into smaller spaces more suitable for couples. Part of that is the collection: either sell it off or pay to move it.

When prices are so high as they have been last year and this year, the only surprise to me is why it’s not even more common.

Certainly if I were closer to retirement, or were to experience economic pressures, I would be a lot more motivated to sell myself.

I agree with all and with the spike in prices it makes alot of us look and see the value of the collection and see what can be done with the money made.

Anyone selling to take care of family put kids thru college, make improvements or upgrades on the house, etc.

God Bless they took a passion of collecting and turned it into an investment in there families or quality of life.

I know some that did that and then after a time they came back to the passion of collecting to start again or to start a new set etc.

I hope it isn’t too true! A shrinking buyer base would be bad, since I took the boards advice and emptied my 401K and took a massive tax hit so I could YOLO everything into vintage baseball cards at peak prices that are a rock solid never go down investment.


As the Fed tries to kill the job market and stifle the economy and we’re in for a rough 2023 but cards are still selling pretty darn high, it would be shocking if a number of people didn’t realize gains and cash out. There aren’t a lot of collectors anymore who intend to keep for their natural life.

Don’t forget all the loans you took out to buy more cardboard and are coming due soon!

Ha, I’d forgotten about that. It’s a very good thing for my finances I have you to remind me. I hope the bank will take repayment in Mantle’s!

Hard to say what a good time to sell is. My opinion is the only good time to sell is when you have something to sell for. Meaning a swap of some kind. As in, I want to make a down payment on a house, or anything else you need / want in your life.

What I would not recommend is selling your collection now just because prices seem high.

You never really know what high is. In the 90s people would have told you to sell all the Cobbs you can, people are paying a few hundred dollars a pop! Now those people regret everything.

With Covid, working from home, general uncertainty, etc. . . . I think a lot of people really threw themselves into collecting as a fun way of combatting boredom. I know I did. As life has returned much closer to normal, many of us aren't quite as nailed to the Internet and home as we were. Assuming some degree of trading burnout is perfectly normal and that many people will tone it down from prior levels and reassess.

I also think there is a bit to the scale of the price increases. If you were a collector 5 years ago, you could be deciding between a $400 nice looking Ty Cobb or $600 Babe Ruth vs a very modest vacation (which might be a weekend at a nearby hotel and a couple nice meals). Now, that same collector, looking at the same card options, would have to decide between the same cards at $2000-3000 vs a couple plane tickets out of state, a decent hotel, and some nice meals and activities - in other words, a "real" vacation. It makes it tougher for a collector on a budget to build his collection. Then, once you realize how much it is going to cost to continue to pursue your personal collection vs other options for the same money, it becomes even tougher to justify. Once you start down the slippery slope of not significantly adding to your collection and the realization that your original PC goals will never become reality, the temptation to just liquidate and make potential life changing money is real.

I suspect the collectors that are sticking it out are either individuals who have sufficient disposable income that pursuing their hobby does not limit their ability to enjoy other hobbies and travel, or collectors that have a focus on lower end or less sought after issues.

What the past two years have shown me is that this is a highly impulsive buyers Hobby.

All of which should result in the near future in falling prices, yes? Basic supply and demand stuff: if the market becomes oversaturated with T206 Cobbs because many people's priorities change simultaneously, then the current craziness might subside a bit.

Paying 28% to the feds + state tax to invest in the stock market and lose 20% doesn't seem like a smart move. If you are using the money for something useful, like a down payment on a house, then I can see liquidating. Selling just because the market is strong with no real plan isn't very smart.

I think he was teasing.

Does raise a good point (which I will be exploring in nauseating depth for my blog): tax-related decisions are going to drive a significant number of hobby decisions. I don't want to get Bob C. started on another TL;DR post (I kid you my friend) about taxes, but it is a real issue if the value in your collection was acquired more than ten years ago and has a really big profit baked into it.

I think this a very plausible and reasonable take. It's one that I agree with. The collecting bug for me started again in the spring of 2019, prices were steady at this point. I could mostly afford anything that I wanted within reason. Maybe even swing for a big time purchase (a couple of thousand).

Now? It's a completely different story. I really have to pick and choose spots. There are bills to pay. And I'm sure many other collectors are facing this same issue.

There was a fairly long thread a few months ago where members in the pumper wing of the hobby were advising other members to do this or speaking positively about doing it, to drain their retirement accounts to invest in cards well after the peak. It was then followed by another thread where the pumpers also encouraged the taking out of loans to pay for cards that people couldn’t afford, and then getting upset at people who laughed at or questioned the reasonableness of this surely impartial advice.

The first paragraph of my post is a joke about the pumpers on the board who have been advocating people to do absolutely stupid things and promoting the narrative that cards won’t go down, because dumping more money than they have into cards would be good for the portfolios of the people advising this. Pretty slimy.

To be very clear, I would never sincerely advise anyone to do anything remotely like this. I am also not advising people to sell cards and put it into stocks. Mine will be remaining with me until my death, at which point who knows where they go.

Pumpers is not correct. "Fluffers" captures the reality of it a bit more accurately. :D

As for the last part of the post, we all know the answer:

When I die and they lay me to rest
Gonna go to the place that's the best
When they lay me down to die
Goin' up to the card show in the sky

Goin' up to the card show in the sky
That's where my cards go when I die
When I die and they lay me to rest
Take my cards to the place that's the best

Prepare yourself, you know it's a must
Gotta have a friend with a dealer pass
So you know that when you die
He's gonna get you into the card show in the sky

Whoa, he'll get you into the card show in the sky
That's where you're gonna go when you die
When you die, and they lay you to rest
You're gonna go to the show that's the best

Never been a sinner, I've never sinned
I've never collected shiny crap
So you know that when I die
I'm gonna get a dealer pass to the card show in the sky

Whoa, dealer pass for the card show in the sky (in Cleveland)
That's where I'm gonna go when I die (or maybe Chicago)
When I die and they lay me to rest (with my entire collection lining the casket like a Pharoah)
I'm gonna get into the show that's the best (on Tuesday)
Into the show that's the best (before all the good stuff is gone)

Your fluffer phrasing makes me a LOT more uncomfortable :D

Great point(s) Adam. The Baby Boomer generation pretty much coincides exactly with the rise in card collecting brought on by the start of the continuing Topps and Bowman sets. Took the hobby from a more niche fascination with some to something generational that pretty much every kid growing up in the 50s, 60s, and into the 70s, remembers very well. Even though the majority of Baby Boomers never became big-time card collectors, pretty much every single one remembers the cards and opening packs at some point in their childhood. And as you said, as we're all getting near that point of retirement (if not already there), possibly along with seeing the somewhat ridiculous increases in prices during the pandemic, thinking about other things than one's cards may start to come to the fore.

LOL

I'll take that as a form of compliment Adam.

Hey, at least some people now realize they actually have to think about that kind of stuff, and at least have some idea on what they might need to do and be aware of.

P.S. Need any help for your tax related blog? And I am being serious.

The funeral parlor is going to have some questions when my heirs arrive with my corpse and thousands of T cards to glue around my casket. The low grade cards will match my rotting low grade corpse.

Or I’ll stamp my logo on the back of every one before my heirs sell them for $50 to whoever makes the first offer for the pile of junk I call a carefully curated collection.

The “G1911 Collection” pedigree on the PSA holders will be the first slab pedigree to definitively lower the value of the cards.

I think a lot of people are holding what they have, and either trading or buying cheap. That is me at this point.

I have been in and out of this hobby for long periods over the decades. I can easily understand getting out now, with the high cost of graded cards. Thus, if you're sitting on a gold mine, I can easily understand selling out. As Joe DiMaggio said, when it's no longer fun, it's time to go.

The only people who appear to be happy with the current state of affairs in this hobby are the deep pocketed, only too happy to buy, sell and trade cards that, unless you were able and fortunate enough to pick them up when they were reasonable, are beyond the grasp of the average guy. Sure there are shows, and people who frequent this forum, and auction houses, and sellers on eBay, and what have you who radiate positivity over buying or selling cards in the thousands of dollars. But that's not the average guy, I do not think. The average guy can only participate in buying expensive cards if he is single, or he has no kids and a very understanding wife who doesn't care if hubby buys whatever it is that makes him happy. It isn't a hobby when you go into debt to further it. I guess it is a hobby if you're made out of money.

A really Nice 1954 aaron psa 8 sold in a major auction for 27k last week. Recent sales are between 40 and 75k. Less than a decade ago, it was a 7k card. Aside from his passing, what constitutes the price increase? Plenty of MOMO and FOMO investors that are going to be hurt if they need to sell. Even at 27k people are thinking twice as the only upside is if someone someday pays 50k for it!

Nothing does, you answered you're own question. It was 60% Fluff and 40% impulse FOMO Hype buyers who got caught up. Over this past recent year, 2022, someone in REA also paid $300,000K for a SGC 5 52 Mickey Mantle and in Memory Lane one in a PSA 2.5 sold for just under $90K. Does it make sense? No, but hey it happened, people got caught up in it.

Well that's because only 10 centered copies exist!

:D :rolleyes:

Wait are you also one of the PUMPERS LOL

I have something else in mind:

https://bigleaguebreaks.com/wp-conte...PM-468x400.png

The Aaron RC is an interesting story. It stagnated for well over a decade (from the time I bought one in 1998 until just after I sold it 15 years later), then took off in the mid-teens pump and dump market manipulation and again in the pandemic. I would argue that it was undervalued substantially for years (when I owned one), then it caught up overnight, got overvalued in the pandemic run, and is on the way down towards equilibrium now. I still throw up in my mouth just a little when I see what they go for.

Interesting article/report on state of the market generally. Seems to track a lot of what people on the board have reported last 6 months.

https://www.sportscollectorsdaily.co...84a65-83282852

Definitely get peoples attention, they’re are talking and writing, thanks for the link.

This got my attention:

Fractional sports cards and sports memorabilia finished the year down 35.9% and 26.7% respectively.

All I heard from those guys for many months was how eveyone who got involved with them was raking it in hand over fist. Then crickets.

Sort of reminds me back in 2008 how the NY Times had an article on the front page of their business section about how everyone from the UPS man to guys in barber shops were checking their stocks in real time like 100 times a day. UPS guy was delivering packages with one hand and watchin the stock ticker with his other hand. Barber shop couldn't turn the TV off of CNBC. Everyone was giddy. Making money was so easy. Swear the market shit the bed like 3 days later.

Steve that whole fractional sports card hype was another failed attempt at pushing baseball cards as an investment. Anyone with half a brain knows that was ridiculous. Sports cards aren't shares of a business to own interest it, they're a hard asset.

Regardless Johnny, in times of economic instability and panic, many people often view "hard assets" as a viable alternative to the volatile marketplace. Think of people who buy gold, silver, and other precious metals as a potential hedge against that market instability. Whether any of us like it or not, there are many people that now look at cards as one of these "hard assets" that may be a viable alternative to the stock market and other investment vehicles. With the proliferation of TPG grading, AHs, online sellers/consignors, and even Ebay, cards are not such an illiquid asset as they may have been just a couple decades or so ago.

And the eventual drop in value of such "hard assets" as cards is not entirely unpredictable either. There are more than a few well known advisors out there telling people to put, and keep things, in cash for now, and leave it there until the overall market volatility factors start to play out and we can maybe get a better idea of where things are headed.

No doubt, I don't disagree. The point of my comment was this whole hype of fractionalizing shares of cards was an attempt to bring in perspective investors into BIG Time Expensive Cards that couldn't normally be purchased outright by most people due to the cost. To me in order for the card to be consider a Investment Type "Hard Asset Vehicle" Like Gold or Silver you need to actually own and posses said card. Not pieces of it.

Hey, I'm with you Johnny, but in the end, it seems to be the same idea/concept that you then actually own a piece of a physical card that does exist. Kind of like how card companies cut up bats and jerseys to create GUs cards for people that otherwise may not be able to afford buying the entire GU bat or jersey for their collection. At least it seems a little better than buying into an NFT or a crypto-currency that has absolutely nothing physical actually backing your investment up.

Having said all that, aren't there monetary and other types of funds you can buy into that supposedly do all the investing/buying, and then holding, those physical gold and silver assets for you as well? If so, then it isn't always all about having physical access/possession of an item. In the end, if there's any way someone can come up with an idea to make a buck off of someone else, they've already done it, or they're working on it. And that you can bet on! LOL

It’s not for me, but I don’t have an issue with fractional ownership and/or investing in a fund that invests in cards/collectibles. Bottom line is that sports stuff has value. If it has value, you can invest in it- if value goes up, you make money; if value goes down, you lose money. Once something has value and can be an investment, people will find all sorts of ways to make money off it, both directly and as a secondary player to the investment (like auction house, offerer of shares, TPGs, etc).

From what I understand, Gretzky and the Kings owner partnered to buy the Gretzky Wagner. A partnership to own a card is necessarily a fractional share relationship. Suppose I go out and find 10 guys all willing to put in $100k to buy a $1mm item- whether we do it through a business entity (like an LLC) or on a handshake, it’s a fractional share relationship. Collectible simply takes that concept to an extreme.

Again, it is not for me and I do not, and likely will not, own a fractional share of a card or other collectible. But I certainly understand it, do not begrudge it, and see how (at least people thought) it could work.

As far as the OP’s question is concerned, I personally have witnessed cards exist as a viable hobby (and yes Investment) for 40 years, and from what I understand, the hobby (and the profit motives it sometimes brought) existed long before I came along. I expect this trend will continue for many years to come. In fact, I think the past few years brought a large influx of new collectors (or used to be collectors back) to the hobby, at least some of whom will stick. I don’t think the hobby is going anywhere. That said, I certainly expect people to take some money off the table, which means some may sell their entire collection. I have sold my entire collection twice, but always return like a moth to a flame. If stuff you own is worth a lot of money and you could use that money to do things better/more important than owning cardboard, sell the cards! I suspect most sellers are in this boat. Profit taking, however, is hardly the death knell of the hobby.

Interesting article, thank you for the link.

Has anybody created a Sports Card Index that tracks the value of the top 500 cards in the hobby? My thought is that it would have a cross section of highly sought after cards. Create an index for higher grade, mid grade and lower grade cards. If one exists, it'd be interesting to hear about it.

Regarding fractional ownership, not something I'd be interested in doing unless I was the person hanging on to the card until it sold. At least having the card would allow you to get a good feel of ownership, even if it's fractional.

I keep telling myself to dump what I have, take the money and run but I just can't do it. If I ever do something like that, I'll let everyone know because if I'm selling, then it'll be time to buy because everything I sold would increase in value by 50% a month after I sell it off. :o Don't believe me, just wait... :)

Might not be exactly what you had in mind, but PWCC created some indices to track prices.

I haven’t spent much time digging into the weeds here, but here’s a link:

https://www.pwccmarketplace.com/market-indices

Which raises the question, how long you think before they go out and acquire all the cards used to measure and create their index, and then start selling people interests/units in it, just like say a DOW or S&P fund does?

Not an expert in securities law, so not certain exactly when someone would have to be afraid of crossing the line and become subject to actual securities laws and regulations of they did start trying to do something like this. However, I do believe there can be such laws and regulations at both the federal and state levels. So, the answer could vary based on where you, or maybe the entity offering the investment sales, are located as well.

There is a top 100 index, sorry I forget the name but a member here is trying to complete it. Maybe he can chime in if he sees this.

"in times of economic instability and panic, many people often view "hard assets" as a viable alternative to the volatile marketplace"

https://photos.imageevent.com/exhibi...e/franklin.jpg
https://photos.imageevent.com/exhibi...ler%20Pimp.jpg

Always liked the old Wall Street expression "trees don't grow to the sky . . . ."

For those talking about fractional interests, at this point I really think it is more of a question of not if, but when! Just replace the word "art" in the article's title with "baseball cards", and you're all set for the future.

https://moneywise.com/investing/alte...+Pablo+Picasso

Count me among those in a big holding pattern. I tracked prices for so long that I have trouble pulling the trigger on anything now because it is so much more expensive than when it was when I started tracking it. In the past year, I have only bought a PSA 6 56 Minosa and a 55 PSA 6 Hodges to keep my HOF sets on the registry 100% complete. I kick myself on what I could have bought both of them for 4 years ago. I should have anticipated the hall and got them for a much less.

The prior year, I think that I only bought three or four cards. It is somewhat of a blessing that I got 90% through my collecting goals before the big spike. If I were a market timer, I would be giving myself a high five, but it makes it pretty crummy for a collector.

Somewhere along the way, a hobby became an asset class. I have thought about condensing my collection into a handful of true waterfront cards, but after sales tax and buyers premium, I would lose 30% of the value in the transaction. I would also have to make sure and keep those cards safe - so, at that point, I am just betting on those to appreciate faster than an investment and try to go visit them in a safe deposit box a few times a year.

At 50, with a junior in high school as my final one at home before the nest becomes empty, I am pretty sure that I am almost through with Pittsburgh winters. When that time comes, to Adam's point, I will have to decide if it is time to move on them or with them. We are still trying to figure out what that ultimate destination looks like. Is the house smaller than this one? Is it bigger? Do I want to deal with yard work and maintenance? If the place is smaller, do I have room for the collection? Yet, every time I get out a binder and look at a set, I remember why I love this hobby so much. I remember why I decided a decade or so ago to go get every set that I wanted so much as a kid but seemed so unaffordable at the time.

Also, (and maybe a Bob C. question), Do cards have a stepped up basis upon death? Said another way, if I keep them and then pass them on to the kids, is it like a house where their current market value is the stepped up value and they would not be subject to capital gains? Only subject to any federal inheritance tax above the maximum plus any state inheritance tax (PA is currently 4% but I don't plan on retiring here).

I get the occasional email from an auction house or two coming through the area and looking for consignments. I have thought about of it for some of the reasons above, but I can't yet part with them. It took a lot of work to build my collection. I am proud of it. I bought those cards, $10, $100, $1000 at a time. Some of them have increased exponentially. My only hope was to at least break even after fees but it will be some multiple of that when it is time to sell. But, until them, I'll make random trips to the basement and pull out a random binder and remember each card, where I bought it, how much I paid, and how much I enjoyed putting all of them together.

Your heirs do get a step up to FMV at your death. At least under current law! Every once in a while there will be proposals to poke at this, but no changes yet.