Proof that the market value for PSA and 'conserved' cards have dropped

[drcy]

Originally Posted by Promethius88

Who said that outed cards have/will hold their value? I've read where some people believe that PSA cards, in general, will hold their value but nowhere did I read that outed cars would..... except for the T206 Wagner which is an anomaly in and of itself.

Considering they are representatives of the PSA's grading abilities and what currently resides in PSA holders, the outed cards and their values are representatives of the values of cards currently in PSA holders/labels.

If, for a completely arbitrary example, 50 percent of PSA cards are misgraded, you don't calculate the value of cards per label grade by removing the misgraded cards and calculating only the cards that are correctly graded, but calculating the value of all the cards. The margin of error in grading and authenticating isn't removed from financial calculations but an integral part of it.

As an admittedly very extreme example, you don't calculate the values of autographs with Coaches Corners COAs by calculating the values as if they were correctly authenticated or only by the ones they got correct. You calculate the values based on what they COAed and their worth. Thus, the misauthenticated PSA cards and the realization of the true market value are market examples of the values of cards in PSA holders and at that label grade.

If representative of the accuracy/reliability/true identities and grades of the cards currently in PSA holders (and I'll let others on this and other boards debate that point), a "$1000" PSA 9 card that turns out the be altered and is really worth $30 that is an example or data point where the PSA is worth $30. Many $1000 PSA9 cards out there and currently being bought and sold are actually worth $30, so you cannot say the average value of a PSA 9 is $1000. And as it's realized that more and more PSA9 cards out there are really worth $30, the known value of a PSA9 moves further and further down from the $1,000 and closer to the $30.

If PSA can get accurate at grading and alteration detection, then this will change. And maybe they will. But if they can't or don't or won't, the mistakes and BO outed cards are to be calculated into the market values of cards that are currently in PSA holders at a certain labeled grade.

In fact, it's right now a nonsensical exercise on its face to try to calculate the condition value of cards in PSA holders because no one knows what are the condition grades of the cards. One certainly can't go by the number on the labels. One might as well try to calculate the condition values of cards in black boxes. However, it is a logically objective, financial and mathematical fact that the average value of the cards themselves are worth less than the values of the grades on the labels. That we know with certainty.

[perezfan]

Great points, David...

But considering how difficult it is to “out” these cards, and the amount of time/research involved... we won’t know the true scope (or the real effect on pricing) for a very long time. God only knows how many more altered cards are yet to be uncovered, and how many are currently mired in collections.

If a given collector has no intention of selling, it could be decades before the altered card hits the market and becomes visible again. Perhaps by then, the PSA Slab will be rendered meaningless (or even seen as a detriment).

[drcy]

Correct.

The problem for the label investor is that the card comes with it

[hysell]

Also, keep in mind it's not just PSA ? Others {GRADING companies } have these over graded cards out there in the market , also ! PSA , might be taking the the hit for now, but they are NOT alone ? Thanks to all , that have keep up on this problem .

[Runscott]

Originally Posted by perezfan

Perhaps by then, the PSA Slab will be rendered meaningless (or even seen as a detriment).

They should always maintain their meaning: simple and attractive plastic slabs that allow you to collect cards that are different sizes and designs and stack them neatly on top of one another. You can even put an altered card in one of these and its plastic casing allows it to conform nicely to the standards of your set. I always liked this about PSA, and that their slabs are nice and thin.

[GeoPoto]

Originally Posted by drcy

In fact, it's right now a nonsensical exercise on its face to try to calculate the condition value of cards in PSA holders because no one knows what are the condition grades of the cards. One certainly can't go by the number on the labels. One might as well try to calculate the condition values of cards in black boxes..

You are losing me here. I think the market "trusts" PSA to assign a reasonable grade to each card presented to it. (The kind of corruption that is routinely alleged by posters is very hard to sustain in a public company). It is true that we don't know whether the card was doctored and if so how; but, we are reasonably confident that the card now presents at the cited grade level. Your overall point is a good one -- the Blowout saga has surely been a negative for the value of high-grade cards.

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[drcy]

If a card is altered, any number grade, except debatably 1, is incorrect, and the card is less valuable than an unaltered card in that number grade.

Humorously, PSA's own website states "Cards that have been trimmed have very little value." (link if you want to read for yourself, or copy for posterity) However, as was suggested in other thread, that line may be quietly removed at some point in the near future.

[seanofjapan]

I would expect that the value of most high dollar slabbed cards, altered or not, would take a hit for this. Every buyer now has to factor in the risk that every card at that end they buy might turn out to be altered. I would be curious after a couple of years of auction data post scandal becomes available to see how much that “We don’t trust PSA like we used to” discount is going to be.

[mechanicalman]

Originally Posted by drcy

If a card is altered, any number grade, except debatably 1, is incorrect, and the card is less valuable than an unaltered card in that number grade.

Humorously, PSA's own website states "Cards that have been trimmed have very little value." (link if you want to read for yourself, or copy for posterity) However, as was suggested in other thread, that line may be quietly removed at some point in the near future.

You’re eloquently stating the obvious.

[brob28]

Originally Posted by GeoPoto

You are losing me here. I think the market "trusts" PSA to assign a reasonable grade to each card presented to it. (The kind of corruption that is routinely alleged by posters is very hard to sustain in a public company). It is true that we don't know whether the card was doctored and if so how; but, we are reasonably confident that the card now presents at the cited grade level. Your overall point is a good one -- the Blowout saga has surely been a negative for the value of high-grade cards.

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George, I may be missing the point of your post, but I'd counter that while we can be reasonably confident that the card "presents" at the cited grade, it presents due to alteration and deception and thus is no where near the assigned grade. With or without corruption the market trust erodes.

[ullmandds]

i'd really like to know what's happening to the altered cards pwcc/psa is buying back as well.

THIS SHOULDNT BE A BIG SECRET...especially if they want we consumers to have any confidence that anything positive is happening.

[frankbmd]

A high grade altered card bonfire seems unlikely. Perhaps a moderate sentence of incarceration in the vault before hitting the auction block again will occur.

If the market gradually heads south in terms of return, the cards may get a reduced sentence for good behavior.

[drcy]

Originally Posted by ullmandds

i'd really like to know what's happening to the altered cards pwcc/psa is buying back as well.

THIS SHOULDNT BE A BIG SECRET...especially if they want we consumers to have any confidence that anything positive is happening.

I thought someone said that they're being passed on to the FBI. If that's the case, it would be up to the FBI what to do with the cards. It was law enforcement that destroyed the autographs and stamped the early Pete Rose counterfeits.

[ullmandds]

Originally Posted by drcy

I thought someone said that they're being passed on to the FBI. If that's the case, it would be up to the FBI what to do with the cards. It was law enforcement that destroyed the autographs and stamped the early Pete Rose counterfeits.

if this is the case I'd bet some end up going home with the agents!!!

[Bigdaddy]

Originally Posted by drcy

I thought someone said that they're being passed on to the FBI. If that's the case, it would be up to the FBI what to do with the cards.

If the cards are being sent to the FBI, then there is very little likleyhood they will enter the hobby again, or if they do, they will be permanently marked somehow. The FBI does not care about the cards except the fact that they were used to commit fraud.

And that will reduce supply and leave holes in registry sets.

[GeoPoto]

Originally Posted by brob28

George, I may be missing the point of your post, but I'd counter that while we can be reasonably confident that the card "presents" at the cited grade, it presents due to alteration and deception and thus is no where near the assigned grade. With or without corruption the market trust erodes.

Drcy (and you, I think) is addressing the case where a card is determined to be doctored in an unacceptable way. I'm trying to address the other graded cards that haven't been determined to be "altered", and probably never will. Taking doctoring in it's broadest sense to mean helping the card present as well as possible, we have to assume every graded card was doctored (at least soaked and cleaned). What we don't know is whether the doctoring is inside or outside the vaguely defined boundaries that affect it's legitimacy, and ultimately it's value. That uncertainty will weigh on values, but won't make the cards (near) worthless. The key driver of prices is (perceived) scarcity.

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[drcy]

In these discussions, I often use the words worth less, but not worthless.

And, yes, there are uncertainties, unknowns, gray areas and matters of opinion and different viewpoints in this topic, including when trying to devise a market valuation system (which I am not doing-- in the current environment I don't think it can be done).

Here and elsewhere in my life, I often point out that things, systems and calculations are inaccurate, and leave it at that.

I've long railed against the PSA Registry because, for many reasons, it presents a false certainty, a false representation of reality and the statistical calculation methodology is incorrect. It's long offended my sense of logic and common sense . . . As an online game or fun showcase of collections webpage, that is fine. However, so much of the hobby and pricing and grading methods (and ethics) are influenced by the registry.

With the current scandal, people are realizing that the Registry numbers and calculation totals can't be more accurate and precise than the margin of error in grading and especially alteration detection. No doubt, to some people and due to the prevalence of as yet unknown number of mislabelled altered cards, the Registry numbers mean nothing now. All they know is that the numbers can't be correct. In this very thread, someone pointed out cards in the Registry with wrong numbers (number graded cards that have been shown to be altered).

[Stampsfan]

Great angle to proceed with, David. I like the way you are thinking.

I'd like to propose an alternative. First, let me say I have no skin in the registry, nor do I have six figures to buy the best of the best. Just an alternate theory:

What if, by exposing the altered cards, it actually increases the value of the remaining cards?

Now, this theory assumes the remaining graded cards are indeed unaltered and legitimate.

Let's assume there are 15 PSA 9's of a certain card, and using your values they are "worth" $1000. Now 7 of them are deemed altered, and they are removed. They are now "worth" $30, but further, by definition they are not PSA 9's. Therefore the value of a PSA 9 remains the same, and all altered cards continue to be worth $30.

Finally, there are now only 8 PSA 9's of this particular card. Does that now mean the PSA 9's are actually worth more, because there is less supply of them?

[toledo_mudhen]

Originally Posted by Stampsfan

Great angle to proceed with, David. I like the way you are thinking.

I'd like to propose an alternative. First, let me say I have no skin in the registry, nor do I have six figures to buy the best of the best. Just an alternate theory:

What if, by exposing the altered cards, it actually increases the value of the remaining cards?

Now, this theory assumes the remaining graded cards are indeed unaltered and legitimate.

Let's assume there are 15 PSA 9's of a certain card, and using your values they are "worth" $1000. Now 7 of them are deemed altered, and they are removed. They are now "worth" $30, but further, by definition they are not PSA 9's. Therefore the value of a PSA 9 remains the same, and all altered cards continue to be worth $30.

Finally, there are now only 8 PSA 9's of this particular card. Does that now mean the PSA 9's are actually worth more, because there is less supply of them?

This for instance -

https://www.ebay.com/itm/1955-Topps-...gAAOSwlOVdgowK

I would estimate value right around $33K - Seems to be no lack of higher than that "investors"

[perezfan]

Originally Posted by Stampsfan

Great angle to proceed with, David. I like the way you are thinking.

I'd like to propose an alternative. First, let me say I have no skin in the registry, nor do I have six figures to buy the best of the best. Just an alternate theory:

What if, by exposing the altered cards, it actually increases the value of the remaining cards?

Now, this theory assumes the remaining graded cards are indeed unaltered and legitimate.

Let's assume there are 15 PSA 9's of a certain card, and using your values they are "worth" $1000. Now 7 of them are deemed altered, and they are removed. They are now "worth" $30, but further, by definition they are not PSA 9's. Therefore the value of a PSA 9 remains the same, and all altered cards continue to be worth $30.

Finally, there are now only 8 PSA 9's of this particular card. Does that now mean the PSA 9's are actually worth more, because there is less supply of them?

NM

[Robbie]

@drcy

David...

Please correct me if I am wrong... but to your credit, I believe that this is what you have anticipated regarding market pricing of cards, and have referred to in several prior posts.

I am no longer a card guy, however I believe as "alteration" definitions are clarified there will be a fairly dramatic change from how cards are currently valued.

Originally Posted by Stampsfan

Great angle to proceed with, David. I like the way you are thinking.

I'd like to propose an alternative. First, let me say I have no skin in the registry, nor do I have six figures to buy the best of the best. Just an alternate theory:

What if, by exposing the altered cards, it actually increases the value of the remaining cards?

Now, this theory assumes the remaining graded cards are indeed unaltered and legitimate.

Let's assume there are 15 PSA 9's of a certain card, and using your values they are "worth" $1000. Now 7 of them are deemed altered, and they are removed. They are now "worth" $30, but further, by definition they are not PSA 9's. Therefore the value of a PSA 9 remains the same, and all altered cards continue to be worth $30.

Finally, there are now only 8 PSA 9's of this particular card. Does that now mean the PSA 9's are actually worth more, because there is less supply of them?

[Bigdaddy]

Originally Posted by Stampsfan

Great angle to proceed with, David. I like the way you are thinking.

I'd like to propose an alternative. First, let me say I have no skin in the registry, nor do I have six figures to buy the best of the best. Just an alternate theory:

What if, by exposing the altered cards, it actually increases the value of the remaining cards?

Now, this theory assumes the remaining graded cards are indeed unaltered and legitimate.

Let's assume there are 15 PSA 9's of a certain card, and using your values they are "worth" $1000. Now 7 of them are deemed altered, and they are removed. They are now "worth" $30, but further, by definition they are not PSA 9's. Therefore the value of a PSA 9 remains the same, and all altered cards continue to be worth $30.

Finally, there are now only 8 PSA 9's of this particular card. Does that now mean the PSA 9's are actually worth more, because there is less supply of them?

Yep.