What I Don't Understand about Baseball Card Economics

[Dpeck100]

Originally Posted by barrysloate

If we reach the point that a baseball card can be restored with such skill that an alteration cannot be detected, then we should all agree that third party grading will become obsolete.

We can then accept that any baseball card that looks Mint is Mint. It won't matter if it was restored, because nobody will know the difference. Maybe this will be the future look of the hobby.

The reason I always point to the ego driven nature of high grade cards is in my view that is what drives the spread. If you can solve for a humans desire to "have the best" or have something someone else can't then it will change. I just think that human behavior is pretty well established and grading differentiates what started out as very similar items.

There is a big difference between a PSA 8 and a PSA 10. There are much smaller differences between a 9 and a 10. Probably the most liquid card that exists is the 86 Fleer Michael Jordan and under no circumstances will you ever see a card that is an 8 that looks as good as a 10. You easily could see one that is a 9 that does and I am sure some of the 10's started out as a 9. That said there are far too many collectors that get a thrill out of saying they have a 10. This isn't going to change.

[steve B]

Originally Posted by Dpeck100

The reason I always point to the ego driven nature of high grade cards is in my view that is what drives the spread. If you can solve for a humans desire to "have the best" or have something someone else can't then it will change. I just think that human behavior is pretty well established and grading differentiates what started out as very similar items.

There is a big difference between a PSA 8 and a PSA 10. There are much smaller differences between a 9 and a 10. Probably the most liquid card that exists is the 86 Fleer Michael Jordan and under no circumstances will you ever see a card that is an 8 that looks as good as a 10. You easily could see one that is a 9 that does and I am sure some of the 10's started out as a 9. That said there are far too many collectors that get a thrill out of saying they have a 10. This isn't going to change.

This is pretty much it. And exactly what the registry capitalizes on.

And I must say that I'm not immune. I initially sent cards out for grading so they'd be easier to sell someday. (Maybe a good decision, maybe not... )
Along the way I ended up with a couple that are either the highest graded, or really close. I was a bit surprised that it mattered to me once I was there.

[Exhibitman]

As long as there are people out there who will pay a multiple for each grade increment, we have the existing economic model. That's why this scandal won't have an impact broadly across the hobby but will have a deep impact : people who collect lesser condition cards, collect on a budget, etc., have no skin in this game.

[drcy]

Originally Posted by Exhibitman

As long as there are people out there who will pay a multiple for each grade increment, we have the existing economic model. That's why this scandal won't have an impact broadly across the hobby but will have a deep impact : people who collect lesser condition cards, collect on a budget, etc., have no skin in this game.

I agree. I've often considered the exorbitant prices paid for numbers on a label to be a different hobby. A world outside of my collecting world.

[Mdmtx]

I actually believe the trimming/alterations could be a major factor in the price escalation. Suppose the trimmer is buying a psa 4 card that he is pretty confidant that he can make a psa 6, will he care what VCP says the value of the 4 is? I doubt it. It becomes a matter of his business model that he win that particular card. I will admit I haven’t looked to see how the prices paid for the pre-altered cards compared to the then market price of the card. My gut tells me they purchased for whatever it took within reason.

Mark

[Rhotchkiss]

Originally Posted by Mdmtx

I actually believe the trimming/alterations could be a major factor in the price escalation. Suppose the trimmer is buying a psa 4 card that he is pretty confidant that he can make a psa 6, will he care what VCP says the value of the 4 is? I doubt it. It becomes a matter of his business model that he win that particular card. I will admit I haven’t looked to see how the prices paid for the pre-altered cards compared to the then market price of the card. My gut tells me they purchased for whatever it took within reason.

Mark

Mark, this is a very interesting point, namely that card doctors are pushing prices bc they are buying cards at high prices thinking they can crack, alter, submit and achieve higher grades which will bring even still higher prices.

For example,
Dr. A sees a great looking 33 Goudey Ruth in a PSA 4 flip. According to VCP, the card is worth approximately $Y. Dr. A feels he could take that PSA 4, crack it, remove a few stains and straighten up one border and get a PSA 6-7, which will make the card worth 4 x $Y. So, Dr. A is willing to 1.5 x VCP pricing on the PSA 4, thereby forever changing the value of a PSA 4 Goudey Ruth.

I am sure this happens. Mark, thanks for providing an angle I have not thought of -- nice to read something new.

Ryan

[Peter_Spaeth]

Originally Posted by Rhotchkiss

Mark, this is a very interesting point, namely that card doctors are pushing prices bc they are buying cards at high prices thinking they can crack, alter, submit and achieve higher grades which will bring even still higher prices.

For example,
Dr. A sees a great looking 33 Goudey Ruth in a PSA 4 flip. According to VCP, the card is worth approximately $Y. Dr. A feels he could take that PSA 4, crack it, remove a few stains and straighten up one border and get a PSA 6-7, which will make the card worth 4 x $Y. So, Dr. A is willing to 1.5 x VCP pricing on the PSA 4, thereby forever changing the value of a PSA 4 Goudey Ruth.

I am sure this happens. Mark, thanks for providing an angle I have not thought of -- nice to read something new.

Ryan

We've discussed this before in explaining some insane prices for cards that look great for the grade with only a trivial flaw. I think clearly you have some card doctor competition for such cards.

[drcy]

If all cards are altered, it also makes one wonder how important the TPA grades will be. If two cards are largely alike and both known to be altered, will it make such a big difference it is graded a 9 or 10. The price valuations may change significantly.

Of course, then, if the cards are altered, they are all "AUTH" the traditional 1-10 grades won't apply.

I'm no lawyer, but it makes me wonder how liable people can be for the general artificial prices across the board in the hobby. I.e. if undiagnosed altered cards, shilling and other illegal trickery inflated prices across the board, how legally responsible those people can be held for contributing to the general fall in prices not just the specific instances the directly participated in. Just a ponderment.