Card Prices During Recessions

[MailboxBaseball]

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

[Peter_Spaeth]

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

[perezfan]

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.

[raulus]

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.

[Exhibitman]

My prediction:



That said, remember this:

[G1911]

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.

[MailboxBaseball]

Originally Posted by Exhibitman

My prediction:



That said, remember this:

The Mr. T pic made me laugh haha thanks for posting

[pokerplyr80]

Originally Posted by perezfan

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.

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.

[EddieP]

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

[Exhibitman]

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...

[joshuanip]

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.

[Republicaninmass]

Funko got killed today in the market

[G1911]

Originally Posted by Republicaninmass

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.

[Republicaninmass]

Originally Posted by G1911

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!

[G1911]

Originally Posted by Republicaninmass

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.

[Leon]

Originally Posted by joshuanip

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.

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

[BioCRN]

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.