Trend toward collecting "scarcity" in t206 continues?

[MVSNYC]

Thanks Scott, i like it when i'm spot-on!

Greg- people have been referring to the Pop reports since the late 90's. The savvy collector likes to know how many of each card exists, so a personal value can be placed on it. it's all subjective obviously, but knowing the pops helps tremendously. a 1 of 2 none higher is a very tough card. 1 of 8, 5 higher, not so much. this rings true across the board, whether it's a Plank, or a McGraw Polar Bear. supply/demand.

It can never be mentioned too many times, that the PSA pop reports can be very misleading, as there are TONS (61,944 to be exact) of cards that fall under "unknown" backs, because PSA only starting listing the pops by backs about 4 or 5 years ago. so if a card is 1 of 2 none higher under the "Polar Bear" section, that's not to say that 15 more don't exist under "unkown".

[cyseymour]

Originally Posted by MVSNYC

It can never be mentioned too many times, that the PSA pop reports can be very misleading, as there are TONS (61,944 to be exact) of cards that fall under "unknown" backs, because PSA only starting listing the pops by backs about 4 or 5 years ago. so if a card is 1 of 2 none higher under the "Polar Bear" section, that's not to say that 15 more don't exist under "unkown".

If the real pops for each back were known, we might not be seeing the types of prices we often see for each card. Because there is uncertainty, collectors assume the worst and that they will not be able to find the card again. Also, it is deceptive because auction houses list a card as "highest graded" without recognizing that there are potentially many more that are listed as unknown.

Basically, the rare back phenomenon can be chalked up to 2-3 advanced collectors looking to complete the master set. As long as these collectors continue to purchase cards and rabidly attempt to collect the master set, it is difficult to envision prices dropping much. Also, considering the amount of skeptics out there regarding current prices, if those people change their minds and start bidding, then things could get really crazy.

We've also seen really high prices for rare poses of OJ cards - again, the same thing, it's advanced collectors attempting to complete a master set of every pose. These collectors obviously possess the financial means to do so, and that is the current trend in the hobby today. There is nothing wrong with that! But if for some reason these collectors stop bidding or choose to sell, prices could collapse in a hurry.

[frankb22]

The pricing scale never made sense mathematically. This is just a
correction based on percentages. If a card is 50 times more difficult
to find with a certain back vs the most common back then pricing it
only 4 or 5 times that of the common back made no sense from a
statistical standpoint. Prices were based on previous sales, not math.
Now they are being based on a more statistically correct formula.

I don't care what the two went for, comparatively in 1998. They didn't
have the information we have now. The market is just becoming more
efficient and there is no reason to think that it will reverse somehow
to it's previous inefficient state.

[GregMitch34]

I tend to agree, but then I don't know anything. I still wonder though about this: While there are many trying to build t206s sets with whatever backs they can get, how many really want to get highest graded card for, say, Polar Bear or Tolstoi? Are they building full t206 sets for them? Or is it just the allure of having highest graded in anything and hoping others down the line will still think that's cool?

[frankbmd]

Pricing and markets will change with time for any commodity for a variety of reasons. Several factors not mentioned with respect to cards and pop reports have not been mentioned in this thread.

1. What percentage of vintage cards have ever been submitted for grading? No one knows but estimates on previous threads here vary greatly. If the majority of the commodity out there is not included in the pop reports, what conclusions can anyone draw from the data?

2. What percentage of vintage cards are cracked out of slabs by purists (sometimes called feelers) and then ultimately resubmitted for grading? Since removing cards from pop reports when slabs are cracked is not done, these cards would appear in pop reports two, three or more times and not necessarily with the same grade. If the highest known example of a card is the 1 of 1 graded 5, is it really better than the one graded 4, the same card from a previous submission.

3. With respect to T206 cards and backs, the various mainstream graders did not initially take backs into consideration. Back specific population reports represent only a percentage (and in some cases a low percentage) of the total cards graded with the same front. If a certain card has 100 graded examples at XYZ, but only 10 of them are Piedmonts, does it make any sense to market an XYZ 6 Piedmont card as a 1 of 1 with none known higher. I think not.

4. I used to follow pop reports to make decisions, but the grading companies will on a whim change their format, such as including different variations such as back info (not including historical data). This can also result in old data disappearing or changing overnight due to a software glitch from an IT guy who doesn't know squat about pop reports being in charge of the changes. Keeping the pop reports accurate seem to be a relatively low priority for the grading companies.

Therefore the arguments made regarding the consumers being more savvy due to increased information resulting in higher prices may be fallacious. I for one have become increasingly more skeptical of pop reports. From a mathematical and scientific point of view, I regard them as junk science.
So there!!!

Having said that, I am happy to welcome the more 'informed" (yet more naive, see above), new collector to the hobby who is willing to pay me
higher prices for my "rare" Polar Bears and forest green Sovereigns.
I'm sure that some of my cards will be perceived as bargains in their eyes.

[travrosty]

pop reports are misleading, there are zillions of these cards out there and most of them havent been graded.

someday there will only be back collectors, which will then be called the fronts.

It will be about a 38 card set with several hundred different back variations, (which we now call fronts). trust me, it will happen.

[cyseymour]

Frank, but whether or not the pop reports are accurate, it doesn't explain why prices would be higher. It doesn't explain why there was the massive E-card bubble five years ago. Right now, there is just a massive herd-like mentality going after the backs. It is being lead by 2 or 3 collectors who are throwing a massive amount of money into the set and driving up prices. Other people then hop on to try and buy hot cards.

As FrankB22 says, the rare backs are 50x more rare, so why would they sell for only 4.5x the price - before, it was because the demand for the rare backs wasn't that high - no one felt like they needed the cards, even if they were interesting. Nowadays, with master set collectors throwing massive amounts of money into the cards, it is because they need them to complete their sets.

Point being that the pop reports don't have to be exact - all that is needed for the prices to increase are deep-pocketed collectors who badly need the cards for their master set.

[frankb22]

>>1. What percentage of vintage cards have ever been submitted for grading?
No one knows but estimates on previous threads here vary greatly. If the majority
of the commodity out there is not included in the pop reports, what conclusions
can anyone draw from the data?<<

Here's the reality of it. You are dealing with a pretty significant sample size
of front/back graded cards. I will leave it to you to supply the approximate
pct of cards that are ungraded vs graded but it is pretty certain that you
have at least a useable figure now to work from. Any statistician will tell
you that you will not have that much variance if they were all graded due
to the already large sample that exists. Consider also that the more valuable
a card is perceived, the more likely it is to be graded. You could reasonably
argue that a greater percentage of the existing Sweet Caporal and Piedmonts
are ungraded than are the tougher backs. Most would get a battered Lenox
backed card graded before they would a similar shape Piedmont. A properly
constructed spreadsheet that allowed for the ungraded cards (which is not
hard to do) would show just how out of kilter the prices were IF you were
solely using scarcity of the back as the multiplier.

Either the common backs are over-priced or the tougher backs are
under-priced. It has to be one or the other if you go strictly off of
scarcity. I'm not saying you should price the cards that way. I'm saying
when it comes strictly to the backs and their varying availability that
the scale is off. In some instances way off.

[GregMitch34]

Taking just one point--I am skeptical that there really are zillions of valuable ungraded cards out there, which is often stated as a given. So many years have now passed since grading exploded and also prices, that the vast majority of those even marginally engaged with this hobby have graded these cards. And those who crack a holder don't factor in as much as you say because that card is still counted in the pop reports. It was a "5" and probably still is a "5" if someone gets it graded again.

In other words, the pop reports are definitely incomplete but I think they are closer to reality than many claim--except for those many cards graded years ago without keeping track of the backs.

[egbeachley]

[QUOTE=frankb22;1129329]The pricing scale never made sense mathematically. This is just a
correction based on percentages. If a card is 50 times more difficult
to find with a certain back vs the most common back then pricing it
only 4 or 5 times that of the common back made no sense from a
statistical standpoint. Prices were based on previous sales, not math.
Now they are being based on a more statistically correct formula.

QUOTE]

I respectfully disagree. A card with a back 50 times more difficult absolutely does NOT mean it should go for 50 times more. Even if this is how the pricing were to work statistically, you would need to factor in that 90% of collectors may not care about the back. That would mean a price 5 times more. If that dropped to 80% not caring then the price would be 10 times more.

Of course the correlation betwen difficulty and price is not 1:1 but this example may help explain why back prices are going up - more people collect them.

It may also be partially from herd mentality. Prices are going up and will continue to go up so I need to get in now at any price then sell when it's really high. Tulip bulbs anyone?

[cyseymour]

[QUOTE=egbeachley;1129384]

Originally Posted by frankb22

The pricing scale never made sense mathematically. This is just a
correction based on percentages. If a card is 50 times more difficult
to find with a certain back vs the most common back then pricing it
only 4 or 5 times that of the common back made no sense from a
statistical standpoint. Prices were based on previous sales, not math.
Now they are being based on a more statistically correct formula.

QUOTE]

I respectfully disagree. A card with a back 50 times more difficult absolutely does NOT mean it should go for 50 times more. Even if this is how the pricing were to work statistically, you would need to factor in that 90% of collectors may not care about the back. That would mean a price 5 times more. If that dropped to 80% not caring then the price would be 10 times more.

Of course the correlation betwen difficulty and price is not 1:1 but this example may help explain why back prices are going up - more people collect them.

It may also be partially from herd mentality. Prices are going up and will continue to go up so I need to get in now at any price then sell when it's really high. Tulip bulbs anyone?

Well said. But let's assume that, okay, it used to be that only 10% of collectors care about the back. Assuming that nowadays, 20% of collectors care about the back, that is double the amount of collectors. But then, not all collectors are created equally. The additional 10% of collectors, it seems, have 10x as much money as the original 10%... when it comes to the market, money talks, as they say... you vote with your wallet... not exactly a full-fledged democracy, lol.

[travrosty]

there are more ungraded nice cards out there than you could possibly imagine, millions of them.

[GregMitch34]

What is your evidence for this and define 'nice'?