Large Amount of High Grade 50s/60s/70s Rookies Coming to Market

[seanofjapan]

Its interesting to see the sheer volume of stuff coming up for sale. Personally I view the post-war market as having a huge sword hanging over its head in the form of the demographics of the hobby. Prices probably won`t come down in the near future but in the next 10-20 years I think they will go down by quite a lot.

The bulk of demand for post-war stuff originated with the baby boom generation reaching adulthood in the 70s and 80s and purchasing cards from their childhood. Its probably safe to say that the vast majority of post-war card "wealth" in the market is in the hands of people from that generation (who are most likely to both have the financial means and personal interest in going after it. Of course there are younger collectors too but in terms of numbers that gen dominates).

The problem for post-war prices (as I see it anyway) is that the early baby boom generation is now entering its 70s and within the next couple of decades its entirely predictable that a huge volume of post-war cards are going to be entering the estates of those collectors as they pass on.

The mass dumping of vintage cards in the form of estate sales has never swamped the baseball card market before because it has never had an entire generation of collectors pass away (at least in the modern hobby). Of course estate sales already happen with baseball cards, but the scale of that is going to skyrocket once the boomers start to pass away. If you look at older hobbies like stamps where they`ve had this sort of thing happen, it leads to huge price corrections.

You also have the double whammy of not just the increase in supply (via estate sales) but also a decrease in demand for that specific era since the boomers are the last generation who remember seeing Mantle, Mays, Aaron, etc play and a lot of the value of those cards are specifically tied to the fact that they are the cards that boomers collected as kids. For millenials, names like Aaron, Mantle and Mays mean about as much as names like Johnson, Mathewson and Lajoie mean to the boomers - vaguely familiar if they are average baseball fans but not much more.

Given the fact that post-war stuff is so much more plentiful than pre-war stuff, and that demand for those cards will likely recede to the same as for pre-war as the "name recognition" factor of the stars reverts back to normal I would expect the prices of that stuff to be much much lower 20 years from now than they are today.

[Touch'EmAll]

If you are an older baby boomer around age 70, then this current market is your chance to sell - a better chance to realize a nice price than you may have had at any time. Hence, we see an abundance of 1950's & 1960's RCs going up for sale. And yes, if one has passed and the surviving family has recently acquired these cards, even more will go on the market as we have recently seen. Ok, that may sum up the supply side. But now who is driving the demand to bring the prices up to crazy high levels? I doubt it is the 70 year old shelling out big time coin this late in their life.

[seanofjapan]

Originally Posted by 100backstroke

But now who is driving the demand to bring the prices up to crazy high levels? I doubt it is the 70 year old shelling out big time coin this late in their life.

Good point, its probably not 70 year olds driving the prices up like crazy.

For the really top end stuff like this you`ve obviously got a pretty small core group of wealthy collectors who drive the prices. I`m guessing this group only consists of a couple hundred people max and they are likely to be pretty diverse in terms of ages (ranging from 20 something tech millionaires or finance guys to older rich guys) and thus not as succeptible to the same demographic shifts that the collector market as a whole is (made up primarily of middle class people who can`t afford to drop 50k or even 1k on a card).

I guess my previous comment probably relates more to the market for us mere mortals who collect mid-range stuff. Prices on PSA 4 cards (or thereabouts) of the post-war era are probably way more vulnerable to estate-sale related price drops in the future than PSA 9 or 10 cards of the stars which by now mostly reside in the hands of 1 percenters and probably won`t be flooding the market. Not sure if those will ever go down...

[robw1959]

Originally Posted by seanofjapan

Its interesting to see the sheer volume of stuff coming up for sale. Personally I view the post-war market as having a huge sword hanging over its head in the form of the demographics of the hobby. Prices probably won`t come down in the near future but in the next 10-20 years I think they will go down by quite a lot.

The bulk of demand for post-war stuff originated with the baby boom generation reaching adulthood in the 70s and 80s and purchasing cards from their childhood. Its probably safe to say that the vast majority of post-war card "wealth" in the market is in the hands of people from that generation (who are most likely to both have the financial means and personal interest in going after it. Of course there are younger collectors too but in terms of numbers that gen dominates).

The problem for post-war prices (as I see it anyway) is that the early baby boom generation is now entering its 70s and within the next couple of decades its entirely predictable that a huge volume of post-war cards are going to be entering the estates of those collectors as they pass on.

The mass dumping of vintage cards in the form of estate sales has never swamped the baseball card market before because it has never had an entire generation of collectors pass away (at least in the modern hobby). Of course estate sales already happen with baseball cards, but the scale of that is going to skyrocket once the boomers start to pass away. If you look at older hobbies like stamps where they`ve had this sort of thing happen, it leads to huge price corrections.

You also have the double whammy of not just the increase in supply (via estate sales) but also a decrease in demand for that specific era since the boomers are the last generation who remember seeing Mantle, Mays, Aaron, etc play and a lot of the value of those cards are specifically tied to the fact that they are the cards that boomers collected as kids. For millenials, names like Aaron, Mantle and Mays mean about as much as names like Johnson, Mathewson and Lajoie mean to the boomers - vaguely familiar if they are average baseball fans but not much more.

Given the fact that post-war stuff is so much more plentiful than pre-war stuff, and that demand for those cards will likely recede to the same as for pre-war as the "name recognition" factor of the stars reverts back to normal I would expect the prices of that stuff to be much much lower 20 years from now than they are today.

It's an interesting hypothesis, but I'm not so sure it will come to pass. As the baby boomers expire, there is bound to be a proportionate increase in the supply of prewar cards as well as postwar. Demand is not so easy to forecast either, because collectors don't just gravitate to cards of players they are familiar with. After all, the baby boomers are loaded with cards of Ruth, Gehrig, Ty, Christy, and Walter, all players they never saw play. So the legends, I think, will always be in demand, regardless of the era.

[drcy]

The often told investing story is about when the Hunts unsuccessfully tried to corner the silver market. When the price of silver zoomed up by their efforts, normal people around the country started selling their silverware etc, increasing the supply on the market, and the value went back down.

[Yoda]

Like many, I have watched these incredible prices with astonishment and amazement but didn't really suffer any real angst until the Rose RC PSA 9 sold for more than 10x a nice N173 Anson. Heritage, I think. Regardless of the price differential, I would always vote for the Anson, because I am first and foremost a pre-war guy, and I think Rose has gone from a pathetic figure to a joke. That got me to thinking all about the internet and tech stocks that were all the rage 15-20 years ago. Billions were made on these issues, most likely by those originally involved in the underwriting. But, likewise, investors at many levels took a hosing, as there really were no assets supporting these stocks only dreamy ideas. Roberto Clemente's rookie card is backed by the man, his record and the legend. So...the S&P and Nasdaq are right now close to the all time high, and I can't help but wonder if some of the smart money is moving some money out of the market and into these cards. Asset reallocation, if you will. Apparently, as well, a lot of hot Chinese money, trying to avoid taxes, is involved with these mega card deals. Chinese investment in the States is red hot now so why not? I do know from my years in Hong Kong that the Chinese will often go to extreme lengths to avoid taxes. Much better a Rose RC than a payment to Beijing. As Chairman Mao himself said, "May you live in interesting times."

[seanofjapan]

Originally Posted by robw1959

It's an interesting hypothesis, but I'm not so sure it will come to pass. As the baby boomers expire, there is bound to be a proportionate increase in the supply of prewar cards as well as postwar. Demand is not so easy to forecast either, because collectors don't just gravitate to cards of players they are familiar with. After all, the baby boomers are loaded with cards of Ruth, Gehrig, Ty, Christy, and Walter, all players they never saw play. So the legends, I think, will always be in demand, regardless of the era.

Yeah, you could be right about that, I`m just kind of speculating (my father is in his 70s now and handed down his collection to me last year. I collect cards so they are staying with me, but it got me thinking about other people my age who`ll be receiving their parent`s collections but aren`t collectors themselves).

One thing I wonder about though is the seeming price/ supply discrepancy between pre and post war cards. Post-war stuff is available in much larger quantities (rare PSA 9s and 10s aside) but the prices relative to the much harder to find pre-war stuff doesn`t seem to fully reflect that, which I think is partly a result of the post-war stars still being pursued by people with a living memory of them. I could be wrong, but I have a hard time coming up with other explanations for it.

[BBB]

Originally Posted by robw1959

collectors don't just gravitate to cards of players they are familiar with. After all, the baby boomers are loaded with cards of Ruth, Gehrig, Ty, Christy, and Walter, all players they never saw play. So the legends, I think, will always be in demand, regardless of the era.

I think collectors go for the players of their and their fathers generation. My dad was all about matty, Cobb and walter Johnson. Those players cards I prize over more recent stars (including the ones I saw play.) I think it's human nature to revere the idols of our parents; sometimes even over your own.

[Stonepony]

Originally Posted by BBB

I think collectors go for the players of their and their fathers generation. My dad was all about matty, Cobb and walter Johnson. Those players cards I prize over more recent stars (including the ones I saw play.) I think it's human nature to revere the idols of our parents; sometimes even over your own.

Agree with this thought. Certainly has held true with me.

[Exhibitman]

Prices will eventually reach an equilibrium; always does. If I had the money I'd not be pursuing the big ticket modern cards for my collection simply because I believe they are mostly overpriced right now in higher grades. That said, we had a heck of a low market for a while in the wake of the Great Recession, so some increase was appropriate and will stick. $1000-$1500 for a near mint Aaron RC was too low; $6000-$7000 for the same card today seems high to me, but I could see $3000-$4000.

One thing I have done is try to target cards I want that slab out lower than the 'investor' grades but with strong eye appeal. I think that is where real value can be found for people without a champagne budget.

I am kicking myself for not grabbing some of the recent high flyers when I could have. I figured with an abundant supply and a long time stable price why bother. I know that if I had purchased some of these cards I would be sorely tempted to cash them out now. Fortunately the crap I own isn't worth cashing out.