Saturation Point

[veloce]

Originally Posted by Peter_Spaeth

That has been true forever. There is a ton of arbitrariness and inconsistency in grading and everybody knows it already, there is no need for any revelations. But the market keeps rolling along. People will still shell out huge premiums for a 9 over an 8, or a 10 over a 9, knowing damn well the card might not regrade at the same level -- or at all. The flip is now the commodity, not the card.

People put up with shenanigans for a while and then it stops being fun and the market crashes. In 1990 everyone knew that card companies were intentionally printing error cards, but they kept paying for them because it was fun... for a couple years anyway. Right now people believe the grading system is a bit sloppy and arbitrary, but that it is fundamentally honest. Unfortunately graded cards are very vulnerable to a big scandal. Either good fake slabs will make it into the market or else there will be a scheme of organized bribery/kick backs for grade bumps. Given that there are millions of dollars at stake, I think it isn't a matter of if, but rather when this will happen. I don't think there is a business model that can both grade cards for a rate that collectors are willing to pay, and also guarantee security and competence. $100,000 cards are slabbed in the same plastic as $5 cards... and they are assigned grades by people who probably aren't making a high hourly wage. There is a lot of potential for someone to exploit the current grading system for big money and given that this hobby has had more than its share of people willing to rip off collectors I'm surprised it hasn't happened yet. When it does, the market will crash.

[Peter_Spaeth]

Originally Posted by veloce

People put up with shenanigans for a while and then it stops being fun and the market crashes. In 1990 everyone knew that card companies were intentionally printing error cards, but they kept paying for them because it was fun... for a couple years anyway. Right now people believe the grading system is a bit sloppy and arbitrary, but that it is fundamentally honest. Unfortunately graded cards are very vulnerable to a big scandal. Either good fake slabs will make it into the market or else there will be a scheme of organized bribery/kick backs for grade bumps. Given that there are millions of dollars at stake, I think it isn't a matter of if, but rather when this will happen. I don't think there is a business model that can both grade cards for a rate that collectors are willing to pay, and also guarantee security and competence. $100,000 cards are slabbed in the same plastic as $5 cards... and they are assigned grades by people who probably aren't making a high hourly wage. There is a lot of potential for someone to exploit the current grading system for big money and given that this hobby has had more than its share of people willing to rip off collectors I'm surprised it hasn't happened yet. When it does, the market will crash.

Good fake slabs have already made it into the market in force. There are many threads about this. Preferential bumps have been a fact of life since shows in the 1990s. Preferential grading is essentially a given, look at the biggest ebay store and tell me anyone thinks he could have submitted these same cards and received 20,000 or whatever the number is PSA 10s. The hobby didn't even blink when Mastro admitted he trimmed the Wagner, and Allen admitted he rebacked a T206 Plank. This is all old, old news. Respectfully, your assessment seems somewhat behind the times. You sound like Dennis Purdy writing in 1994 or maybe it was 1996. 20 years later, PSA and card values are doing just fine, thank you.

Hyper inflated values always will correct, but I don't see a major crash on the horizon. One of the great things about this hobby is that everyone thinks HIS cards are immune from the shenanigans.

[veloce]

Originally Posted by Peter_Spaeth

Good fake slabs have already made it into the market in force. There are many threads about this. Preferential bumps have been a fact of life since shows in the 1990s. Preferential grading is essentially a given, look at the biggest ebay store and tell me anyone thinks he could have submitted these same cards and received 20,000 or whatever the number is PSA 10s. This is all old, old news. Respectfully, your assessment seems somewhat behind the times.

Hyper inflated values always will correct, but I don't see a major crash on the horizon. One of the great things about this hobby is that everyone thinks HIS cards are immune from the shenanigans.

I'm not claiming these are revelations, I'm just pointing out that we are in the part of the bubble where people know these things are happening, but still having fun, because it doesn't seem to have gotten out of hand yet. I do think that the majority of collectors believe fake flips will go through Craigslist or ebay, but not the major auction houses or believe that preferential bumps are given to a few collectors, but not enough to substantially alter the equilibrium of supply and demand. It's easy to imagine that perception lasting a few more years, but also easy to imagine a larger scandal that causes that perception to change quickly. Markets are unpredictable, I just believe that this bubble is very vulnerable to scandal/loss of faith. I concede that ten years ago I would have bet against 2016 graded postwar prices being higher than 2006 prices and I would have been wrong, but the fact that the bubble has lasted 20 years, doesn't mean it will last 30. Of course, we don't even need a scandal to correct the market for high end Yaz/Bradshaw/Gretzky/Montana RCs. The rate that raw cards are graded or that 8s become 9s and 9s become 10s is necessarily greater than cards getting cracked out or 10s becoming 9s or 9s becoming 8s, so supply is ever increasing and eventually people may lose faith that these cards are rare.

What fundamentals am I missing about this market that should make me optimistic? The fact that people are aware of some shenanigans and the market is still increasing, just seems like every other bubble to me.

~R1CK ST3PH3N

[Peter_Spaeth]

Originally Posted by veloce

I'm not claiming these are revelations, I'm just pointing out that we are in the part of the bubble where people know these things are happening, but still having fun, because it doesn't seem to have gotten out of hand yet. I do think that the majority of collectors believe fake flips will go through Craigslist or ebay, but not the major auction houses or believe that preferential bumps are given to a few collectors, but not enough to substantially alter the equilibrium of supply and demand. It's easy to imagine that perception lasting a few more years, but also easy to imagine a larger scandal that causes that perception to change quickly. Markets are unpredictable, I just believe that this bubble is very vulnerable to scandal/loss of faith. I concede that ten years ago I would have bet against 2016 graded postwar prices being higher than 2006 prices and I would have been wrong, but the fact that the bubble has lasted 20 years, doesn't mean it will last 30. Of course, we don't even need a scandal to correct the market for high end Yaz/Bradshaw/Gretzky/Montana RCs. The rate that raw cards are graded or that 8s become 9s and 9s become 10s is necessarily greater than cards getting cracked out or 10s becoming 9s or 9s becoming 8s, so supply is ever increasing and eventually people may lose faith that these cards are rare.

What fundamentals am I missing about this market that should make me optimistic? The fact that people are aware of some shenanigans and the market is still increasing, just seems like every other bubble to me.

~R1CK ST3PH3N

I hear you and of course it could happen. But don't you think the Wagner already should have resulted in a major loss of faith? I think what you may be missing are first, ego and wishful thinking outweighing common sense. As a major card doctor was overheard saying, I give these guys what they want (referring to high end cards that otherwise don't really exist). I believe large numbers of people are buying/investing in flips not really caring about the integrity of the card. Second, the ability of PSA to limit pop growth.

[veloce]

Originally Posted by Peter_Spaeth

I hear you and of course it could happen. But don't you think the Wagner already should have resulted in a major loss of faith? I think what you may be missing are first, ego and wishful thinking outweighing common sense. As a major card doctor was overheard saying, I give these guys what they want (referring to high end cards that otherwise don't really exist). I believe large numbers of people are buying/investing in flips not really caring about the integrity of the card. Second, the ability of PSA to limit pop growth.

I think that the Wagner could have caused a major loss of faith if it had been more publicized outside the hobby and invited more criticism into the hobby. As it stands, I think the Wagner may be contributing to the impression that the market will tolerate any and all fraud. I think collectors are reasonable to believe that the supply of Wagners is limited and that notoriety can offset grading errors when valuing Wagners. I think collectors will eventually realize this isn't true for the endless supply of postwar RCs mentioned by OP.

I understand that this hobby is surprisingly tolerant. You've pointed out shilling and photoshopping by major ebay stores and they still do great business. You have noted fraud at Legendary and collectors kept bidding in their auction long after the fraud was substantiated. I still think it is reasonable to believe there is a tipping point and it should be repeated that the market for postwar cards is fundamentally different from the fine art and waterfront real estate examples mentioned earlier in the thread.

[bnorth]

Originally Posted by Peter_Spaeth

Good fake slabs have already made it into the market in force. There are many threads about this. Preferential bumps have been a fact of life since shows in the 1990s. Preferential grading is essentially a given, look at the biggest ebay store and tell me anyone thinks he could have submitted these same cards and received 20,000 or whatever the number is PSA 10s. The hobby didn't even blink when Mastro admitted he trimmed the Wagner, and Allen admitted he rebacked a T206 Plank. This is all old, old news. Respectfully, your assessment seems somewhat behind the times. You sound like Dennis Purdy writing in 1994 or maybe it was 1996. 20 years later, PSA and card values are doing just fine, thank you.

Hyper inflated values always will correct, but I don't see a major crash on the horizon. One of the great things about this hobby is that everyone thinks HIS cards are immune from the shenanigans.

I will admit that with all that and way more slimy stuff happening in the hobby constantly it amazes me beyond belief everyday that cards have any value.