State of the Post War Market

[AGuinness]

Originally Posted by David W

With the stock market returning almost 20% last year why would you invest in cards?

Playing a bit of Devil's Advocate here, but one can't invest in last year's stock market today, right? So if somebody with an educated opinion prefers investing in cards over the market today, it's certainly possible that it's the better choice.

[Exhibitman]

Everyone's assessment of how the card market is doing depends on your measuring points and your measurement choices.

On the one hand, I am picking up really nice raw 1960s-1970s and I am replacing my PSA 8-9 cards as quickly as I can with those raw picks because there is a ton of inventory. 4SC has opened a ton of raw stuff and has simultaneously bloated the market for raw (via its liquidator NESC) and collapsed the market for PSA cards in the 6-8 range from that era. I've all but stopped my PSA submissions because I literally lose money whenever I send in a card from that era unless it scores a 9 or 10, or is one of a handful of select rookies: 4SC offers them up slabbed at less than my peon-level grading cost. It is akin to a Wal-Mart opening in a small town and destroying the mom and pop stores. I'm dumping my PSA graded cards on eBay because I can replace them with raw cards in just as nice shape for a fraction of the price. I can see where the market would look really, really bad if your inventory was postwar mainstream 6-8 PSA cards, especially if you self-submitted. The sunk costs of slabbing alone would kill you.

On the other hand (my father once said he'd love to see a one-handed lawyer), I see a great opportunity for collectors who want to move into areas where there is a glut/depressed market. I've got a giant want list for the National but it is almost all cards that I expect to shop for and find very cheaply. I plan to shlep* home a big box of additions to my PC, more cards than ever before, with no plastic cases in sight.

*For the Yiddish-challenged, "to carry a burden"

[David W]

Originally Posted by AGuinness

Playing a bit of Devil's Advocate here, but one can't invest in last year's stock market today, right? So if somebody with an educated opinion prefers investing in cards over the market today, it's certainly possible that it's the better choice.

You may be correct. But if you are investing in high end graded cards of top players, you do not know how many high end cards are still out there waiting to be graded.

So you do not know the supply side of the equation, nor necessarily even the demand side.

But people have and will make money speculating on baseball cards.

[AGuinness]

Originally Posted by David W

You may be correct. But if you are investing in high end graded cards of top players, you do not know how many high end cards are still out there waiting to be graded.

So you do not know the supply side of the equation, nor necessarily even the demand side.

But people have and will make money speculating on baseball cards.

Very true, and in particular the population of ungraded cards likely increases the more modern the card is, creating more risk for modern and recent star cards.

But continuing as a Devil's Advocate, I think the unknowns and speculation in the stock market are also very prevalent. Speculation has been cited as at least one of the reasons behind each of the major stock market crashes. And while market cap and other statistics on stocks are widely available to shareholders, there are many examples of companies deceiving the public and their shareholders by using loopholes and accounting tricks ("cooking the books") to hide debt, etc. (such as Enron). I think there's likely a certain amount of unknown risk in EVERY investment.

[jchcollins]

I'm not experienced enough to comment on the true high-end of the market, or what real rarities or highly desired pre-war sells for, or anything like that. But, in the wheelhouse of what I do collect and am familiar with (1950-70's mid-grade stars - whether graded or not) I think on the whole the cards remain very affordable and also don't seem to lose a ton of value. I think a PSA 5 '63 Topps Willie Mays (to use an example from my collection) if you do the math and see what a comparable (albeit before grading) version of that same card sold for in say 1989 - I think you would find things haven't changed all that much.

Again, this obviously doesn't speak to the rather large changes in the high end of the vintage market that have happened since 1989 - but it works for me.

[JustinD]

Originally Posted by AGuinness

Very true, and in particular the population of ungraded cards likely increases the more modern the card is, creating more risk for modern and recent star cards.

I would actually doubt that hypothesis.

The production numbers are lower and the collecting base are adult due to the immense cost of anything other than base sets. It is also a collecting group that has fully embraced TPGs.

Anyone that is sitting on a childhood collection or has not been avid in collecting in the past 20 years is unlikely to have used a TPG and thus the cards are unaccounted for. As the boomers and older pass on, their children may look to move those inheritances and will be adding to the pop numbers for sale.

The first thing modern collectors do is sleeve cards from the pack and ship off anything to the TPGs.

[jchcollins]

Originally Posted by JustinD

I would actually doubt that hypothesis.
The production numbers are lower and the collecting base are adult due to the immense cost of anything other than base sets. It is also a collecting group that has fully embraced TPGs.
.

Agreed. As costly for the hobby as the fallout of the "junk era" was, the manufacturers learned their lesson well. Instead of a wide hobby base now and collecting being wildly popular at all age ranges, you have a narrowed range that is increasingly about wealthy adults. I suppose the manufacturers chose this as a safer route rather than go to extra effort to ensure the hobby remained affordable for a wider range of collectors. As for TPG's, I'm personally surprised that the marked embraced them so completely so quickly, but the handwriting was clearly on the wall decades earlier over in the coin hobby.

[AGuinness]

Originally Posted by JustinD

I would actually doubt that hypothesis.

The production numbers are lower and the collecting base are adult due to the immense cost of anything other than base sets. It is also a collecting group that has fully embraced TPGs.

Anyone that is sitting on a childhood collection or has not been avid in collecting in the past 20 years is unlikely to have used a TPG and thus the cards are unaccounted for. As the boomers and older pass on, their children may look to move those inheritances and will be adding to the pop numbers for sale.

The first thing modern collectors do is sleeve cards from the pack and ship off anything to the TPGs.

Agreed that modern collectors are likely to perceive investment value in their cards and treat them accordingly. But I would, as a Devil's Advocate, also say that despite lower production numbers, this perception would lead to a higher chance of more investment grade examples of a card. There are likely baby boomers sitting on ungraded collections, but how many of those cards are actually investment grade?

For example, there is a single example of the Nolan Ryan rookie at PSA 10, while there are 22 examples of the Derek Jeter 1993 SP at PSA 10. Despite the lower production numbers on the Jeter, I would contend that there is a greater likelihood that more possible PSA 10 examples of the Jeter are in collections and currently ungraded than there are ungraded of the Ryans (there are, of course, many more ungraded Ryan rookies out there, but I'm thinking there are very few investment grade examples).

Another example could be the 2000 Playoff Contenders Tom Brady rookie auto, which in my limited research appears to have a print run of 3,000 (saw that number on the Blowout forum). PSA looks to have graded 14/148 at 10, while BGS has 15/643 at 9.5 (Beckett's site is a bit confusing for me on this card, but I think I've read that right). That leaves (approximately) 2,209 ungraded examples of the card, and with the modern preservation logic, most would have been well protected by their owners. If the 3.6 percent of the current population at 10 PSA/9.5 BGS holds, thats an additional 81 Gem Mint Tom Brady auto rookies that could enter the market. Of course, it could be argued that demand would still exceed that supply, but I'm playing Devil's Advocate about the RISK of investment grade cards when it comes to the modern market. These numbers would indicate that it is more likely the market will see a number of these investment grade Gem Mint Brady rookies (or of the Jeter SP rookie) become available through new grading than the Gem Mint Ryan rookie.

[Johnny630]

What vintage card collector ever thought that in 2018 people would be buying or bidding on teams or players in box/case breaks ? The new guys that do this don’t collect it’s all about the Gamble not the love of Team or Player. I equate this to team/player loyalty being blown away by the Fantasy Player. To me it’s just like going into a casino. This is why I stick to Vintage.

[AGuinness]

Originally Posted by Johnny630

What vintage card collector ever thought that in 2018 people would be buying or bidding on teams or players in box/case breaks ? The new guys that do this don’t collect it’s all about the Gamble not the love of Team or Player. I equate this to team/player loyalty being blown away by the Fantasy Player. To me it’s just like going into a casino. This is why I stick to Vintage.

Very true, all about the speculation.

I'd be interested in hearing from somebody who is involved with or follows other collectibles/investments about the phases and how things mature. We're all familiar with the arc of baseball (and sports) cards evolving from trifles with little monetary value to what some now consider an investment vehicle. Are they behind in that arc compared to stamps, coins or something else? What happened after stamps, coins, etc. moved on to their next phase?

[albrshbr]

Originally Posted by Johnny630

What vintage card collector ever thought that in 2018 people would be buying or bidding on teams or players in box/case breaks ? The new guys that do this don’t collect it’s all about the Gamble not the love of Team or Player. I equate this to team/player loyalty being blown away by the Fantasy Player. To me it’s just like going into a casino. This is why I stick to Vintage.

I have to somewhat disagree. My 9 y/o does quite a few case breaks and he certainly is not trying to get the big hit.

Although he is primarily football, the example still relates. Even some of the lower end sets are too expensive for him to put together. The base Donruss football set is 400 cards, 300 veterans and 100 rookies that come 1 per pack. 24 packs per box at $65 a box. If we get extremely lucky (astronomical odds actually) and every rookie is different, we're $260 invested and still a couple of cards short of finishing the set. Sorry, but a 9 y/o really is not capable of "selling" the various inserts to recoup some of the money spent. There are some inserts he likes, and will keep for his personal collection, but most don't mean anything to him.

So the typical set building that most of us remember from our younger days really isn't feasible for the typical youngster today.

Since set building is out, most will collect players or teams. We do case breaks and purchase our local football team. If we were to buy boxes of let's say Donruss Optic, it would cost in the neighborhood of $120 a box. We might get 10 cards for his team, and if we get really lucky maybe he'll get a rookie or insert. Not exactly getting our monies worth. But if we buy into a case break we can get all of the cards for his team for maybe $50 (of course if you have some big/hot rookies on your team it will cost more). Yes, we get quite a few of the same base cards, but that's not a bad thing. We also get a good number of inserts and rookies. He's able to trade his duplicates to friends of his for some of the other players he likes (his friends get the boxes from Walmart/Target). I haven't done it in just over a year, but we were able to take our other duplicates to our LCS for trade credit also.

Anyways, not everyone who does the case breaks does it for the gamble. Actually I think for some it has strengthened team loyalty to a whole new level. It allows team/player collectors to focus their limited collecting budgets on only their primary interests.

If you're going to the National this year, you'll be able to find the 2 of us in the case break pavilion, as well as walking the floor.

[Leon]

I agree. From what I have seen, collecting today's cards is close to being 100% gambling. I am not saying it's bad or good but it is what it is.

Originally Posted by Johnny630

What vintage card collector ever thought that in 2018 people would be buying or bidding on teams or players in box/case breaks ? The new guys that do this don’t collect it’s all about the Gamble not the love of Team or Player. I equate this to team/player loyalty being blown away by the Fantasy Player. To me it’s just like going into a casino. This is why I stick to Vintage.

[ruth_rookie]

Originally Posted by AGuinness

Playing a bit of Devil's Advocate here, but one can't invest in last year's stock market today, right? So if somebody with an educated opinion prefers investing in cards over the market today, it's certainly possible that it's the better choice.

I’m not afraid to say that I am definitely one of those who prefers buying vintage sports memorabilia (particularly cards) over the stock market, especially after weeks like this where equities got absolutely slammed. Besides, owning Apple, Amazon, Exxon Mobil, nor Google could ever bring even a remote taste of the joy I get while holding my ‘33 Goudey Ruths, gazing at them in amazement, wondering about the provenance and how in the world they survived bicycle spokes, several wars, and an overzealous mom who threw away anything that wasn’t tied down or hidden between my mattresses (Playboys included!!). While I do believe diversification is key, baseball cards are by far my favorite “investment”.

[Leon]

The market got killed this week. Diversification and long term are key points to take away. Personally, I just do what Buffet says (in the market) with quite a few less 0s at the end of my investments. We have Apple and Vanguard 500 Index, are long term and doing just fine. (knock on wood). And cards can absolutely be a part of anyone's investment and be ok. Cards are more fun than stocks that is for sure.

Originally Posted by ruth_rookie

I’m not afraid to say that I am definitely one of those who prefers buying vintage sports memorabilia (particularly cards) over the stock market, especially after weeks like this where equities got absolutely slammed. Besides, owning Apple, Amazon, Exxon Mobil, nor Google could ever bring even a remote taste of the joy I get while holding my ‘33 Goudey Ruths, gazing at them in amazement, wondering about the provenance and how in the world they survived bicycle spokes, several wars, and an overzealous mom who threw away anything that wasn’t tied down or hidden between my mattresses (Playboys included!!). While I do believe diversification is key, baseball cards are by far my favorite “investment”.