Money in the Hobby

[joshuanip]

[In the short term (next year or two) the tax cuts and good employment situation will probably lead to a bump in prices, but in the long term its hard to find any indicators which don't look negative.]

Except for the global coordination in economic improvement, when was the last time we were ALL firing on all cylinders? Its gone longer than anyone expected, and likely to go longer than anyone expected. But that's the optimist in me.

[The baby boomer's reaching their predicted life expectancy is a big one. All the comments I've read here point to that as a demand problem (these people will stop buying cards when they die) but the bigger problem is on the supply side.]

We are not all going to die in the same time, I expect a transitory orderly process. On the demand side, there are new collectors coming in the market, thanks to the modern cards.

[I think its safe to say that the majority (in terms of value) of vintage cards out there are in the hands of baby boomers. When that generation passes away, most of those cards are going to become part of their estates.]

I believe in an orderly distribution and consolidation. I probably will hold my cards for my son, and I will just turn 40 this year.From channel checks (facebook groups) there are many vintage collectors our there younger than me.

[Those estates will pass to their heirs. Probably some will decide to keep them but I would guess that the majority wouldn't be interested in or financially able to sit on valuable cards.]

This I agree, but not material.

So you're probably going to see a flood of estate sales full of baseball card collections.

This hasn't really happened to the baseball card hobby before because the boomers were the first generation to collect en masse. But if you look at other, older, hobbies like stamp collecting this has been an issue for a while and prices there reflect that (the relationship between catalog prices and actual prices for stamps is so fictitious it makes Beckett or PSA's prices look like they were made with laser like precision).

[Some people have said that younger people do collect, which is true, but the problem is that in order for prices to be maintained over the long term you need each subsequent generation of collectors to be at least the same size as, or larger than, the one that precedes it.]

I think their ability to buy cards will grow along with their income. So they will "fit" into our shoes. Give it time.

[So when all those Boomer collections show up in estate sales, there just aren't going to be enough buyers around to keep prices what they are now.]

Valid headwind, like stocks when there is distribution, there will also be consolidation into stronger hands.

[Another thing worth noting is that the baseball card market is one in which marginal swings in demand can have disproportionate effects on price. Like a 5% increase in the number of collectors chasing a given card won't lead to a 5% increase in price but more like a 50% or even 500% increase (I'm pulling these numbers out of a hat to illustrate the point and not because they are accurate) because just adding one or two determined bidders to an auction often causes them (the auctions, not the bidders) to explode.]

I disagree, prices in all assets move on a random walk, not linearly.

That also works the other way though. Just take 5% of the demand away from a given card ( or set or whatever) and it won't just cause the price to go down 5%, it will cause it to collapse. So these generational changes pose a risk of really causing a disproportionate effect on prices.

[You also have a ton of cultural and other shifts that don't look good. Baseball isn't as popular as it once was, people spend more of their time in the digital world and have less time and interest in collecting physical objects, cards in particular have lost their function as a source of information sharing, etc etc.]

Baseball is in decline, but its still part of history and will still be relevant after we die.

Just my one cent.