Will this stock market madness affect cards?

[darwinbulldog]

Originally Posted by Shoeless Moe

Coronavirus - 4,300 dead

WWII - 75 million dead

The World seemed to recover fine from that.

Take advantage of the over-reactors. Now is the time.

There was also a time in the late 30s when WWII had a death toll of 4,300. If you don't recognize that the toll from the virus is likely to be in the millions before the end of the year then you maybe haven't run the numbers. It appears to be lethal in at least 1% of cases and is likely to infect over 1 billion people.

More to the point, people as a species recover from anything shy of extinction, but my understanding is that WWII actually was bad, recovery notwithstanding.

[Dpeck100]

Originally Posted by darwinbulldog

There was also a time in the late 30s when WWII had a death toll of 4,300. If you don't recognize that the toll from the virus is likely to be in the millions before the end of the year then you maybe haven't run the numbers. It appears to be lethal in at least 1% of cases and is likely to infect over 1 billion people.

More to the point, people as a species recover from anything shy of extinction, but my understanding is that WWII actually was bad, recovery notwithstanding.

I am not an expert on health but infecting nearly 15% of the global population seems pretty extreme. Ohio is trying to suggest that 100,000 people have it and those numbers are wildly inflated according to many medical experts so I am hopeful your estimates are too. By the way so far 13 have tested positive so that is a long way from 100,000.

[Dpeck100]

This doesn't exactly look like a give away.

https://www.ebay.com/itm/1955-Topps-...AAAOSwGg5eXaOd

This sale makes me sick because I remember when this card was just breaking a grand.

https://www.ebay.com/itm/11413708634...p2471758.m4704

A BGS 9.5 Jordan brings 21k

https://www.ebay.com/itm/1986-1987-F...gAAOSwKFNeG9oG

PSA 2 Mantle goes for over 20k

https://www.ebay.com/itm/1952-Topps-...MAAOSwz2VeXZu1

The hobby isn't slowing down. There are so many collectors that aren't worried about the stock market and it doesn't influence their purchase decisions. I have long argued that hard assets are very attractive to many because regardless of price you still own it.

The wrestling card niche that I am involved in saw explosive auction prices on the last batch of cards that were auctioned off this week. Shockingly high prices. They aren't multi thousand dollar cards but some up 400% or more from prior comps.

Not everyone gets killed when the market falls. I had my biggest trade ever last week and I am kicking myself for not making the same trade yesterday that would have been incredible today. If I want to go hard after a card I am in my best position ever financially and there will be no impact from this virus on my bidding.

Cash flow is king so the issue will be employment trends and in my view this is a multi month issue and the country will come roaring back.

Most of the best cards don't come available frequently and so it is doubtful they will be offered during this time and so even if prices were to dip they won't on the best stuff.

I posted a handful of higher profile cards and I don't see any issues with their prices.

[Goudey77]

David, I agree the good stuff will hold strong. It’s the modern basketball flippers I’m worried about. That Clemente and Mantle were good buys. Thought they’d go slightly higher but still within range.

[drcy]

i was told that the virus can live on hard surfaces, but not cardboard.

[Exhibitman]

FWIW, which admittedly is not much, my eBay sales are still about average.

[Dpeck100]

Originally Posted by Goudey77

David, I agree the good stuff will hold strong. It’s the modern basketball flippers I’m worried about. That Clemente and Mantle were good buys. Thought they’d go slightly higher but still within range.

These modern flippers have bid cards up six fold in many cases. When something goes parabolic and finds itself on the other side it can be viscous on the downside.

I think we need to look at cards in the aggregate and the game is far from over.

My little niche is not indicative of the overall card market but there are zero deals to be had. Every item that has any perceived value is highly contested.

When I see Jordan PSA 9's in some cases going for 10k it is hard to suggest the market is soft.

My largest client has a lot of business in China. It died for two months and has come roaring back overnight. If this is the case as most expect in the US it isn't long enough of a slump to hurt the market.

If someone has to sell during this environment perhaps it is soft but the reality is most of the high profile cards from every genre are in strong hands. I get constant emails asking me to sell cards but the reality is I have no interest. This means higher prices not lower prices. When you control such a large amount of the available inventory it means even higher prices.

The people shouting for lower prices don't own the cards. It is that simple.

[Republicaninmass]

The ebayers have begun trying to strike a chord

"Due to the world's condition, I really shouldn't be buying cards, but I'd offer you half of you asking price"

[seanofjapan]

I predict that the market for junk wax is going to take off once their absorptive qualities become better known.

[Tyruscobb]

Originally Posted by Dpeck100

I get constant emails asking me to sell cards but the reality is I have no interest. This means higher prices not lower prices. When you control such a large amount of the available inventory it means even higher prices.

The people shouting for lower prices don't own the cards. It is that simple.

Simple economics control card prices. Supply and demand set the market price. We’ve had a bull market for over a decade. This prosperity time has increased 401k values and disposable income. Investors and collectors have used this disposable income to purchase cards. This strong demand for cards has increased prices.

If we are entering a recession, 401k values will fall. Moreover, some people will lose their jobs. Those that do not have jobs will not have disposable income to spend on cards. Those that do not lose their jobs will save for a rainy day in case they lose their jobs. They will choose not to spend their disposable income on cards.

The demand will significantly decrease. When this occurs, the prices will fall. Those that have large inventories (supply) have two options. One: they can stop selling and try to ride out the storm. However, who knows how long the recession could last. It could take years for a recession to play out and then years for the prices to return to pre-recession levels. Two: they can sell into the weak demand at lower prices.

Basic economic laws disagree with your premise that higher prices will prevail. Good luck.

[Dpeck100]

Originally Posted by Tyruscobb

Simple economics control card prices. Supply and demand set the market price. We’ve had a bull market for over a decade. This prosperity time has increased 401k values and disposable income. Investors and collectors have used this disposable income to purchase cards. This strong demand for cards has increased prices.

If we are entering a recession, 401k values will fall. Moreover, some people will lose their jobs. Those that do not have jobs will not have disposable income to spend on cards. Those that do not lose their jobs will save for a rainy day in case they lose their jobs. They will choose not to spend their disposable income on cards.

The demand will significantly decrease. When this occurs, the prices will fall. Those that have large inventories (supply) have two options. One: they can stop selling and try to ride out the storm. However, who knows how long the recession could last. It could take years for a recession to play out and then years for the prices to return to pre-recession levels. Two: they can sell into the weak demand at lower prices.

Basic economic laws disagree with your premise that higher prices will prevail. Good luck.

If one thinks this destroys the economy and it takes us years to get back on track then in that scenario it certainly could hurt card values.

So much of card values depends on who is buying and who owns the cards. Using only macro trends to predict these micro trends are impossible.

I have only been active online since 2010 and there has been no shortage of reasons as to why the card market was going to get hit. It has somehow prevailed and third party graders are backed up as far as the eye can see.

I am in finance and I am seeing first hand the damage that is being done to asset prices in real time. Then I flip over to EBAY and look at the nearly 8,000 auctions that PWCC has running right now and I can't see a similar scenario in real time.

What got me more interested in cards and diverting a large percentage of my disposable income in late 2009 and in subsequent years was how quickly I watched money evaporate trading options then. I liked the concept that even if I was wrong it wasn't going to zero.

There are many of us who have been working on our collections for a long time and quite frankly during environments like this it makes me happy I own it even more.

[drcy]

Originally Posted by Dpeck100

If someone has to sell during this environment perhaps it is soft but the reality is most of the high profile cards from every genre are in strong hands. I get constant emails asking me to sell cards but the reality is I have no interest. This means higher prices not lower prices. When you control such a large amount of the available inventory it means even higher prices.

The people shouting for lower prices don't own the cards. It is that simple.

That doesn't make much sense. At best, you don't sell the cards at the price you want because no one is willing to pay that much. Which means your "prices/values" are imaginary. eBay "museum sellers" have a similar philosophy: "My card is worth $10,000. No one's willing to pay half that much, but it's worth $10,000 because I say so." Market values are identified prices realized, which means buyers and what they are willing to pay most definitely are part of the value equation.

[Dpeck100]

Originally Posted by drcy

That doesn't make much sense. At best, you don't sell the cards at the price you want because no one is willing to pay that much. Which means your "prices/values" are imaginary. eBay "museum sellers" have a similar philosophy: "My card is worth $10,000. No one's willing to pay half that much, but it's worth $10,000 because I say so." Market values are identified prices realized, which means buyers and what they are willing to pay most definitely are part of the value equation.

I get the feeling most of this board doesn't actually watch EBAY completed sales or follow active auctions.

Right now there is a Jeter at 140k, a Kobe Bryant insert at 111k, and numerous other cards getting major action.

In a different thread someone asked about a Lebron that is from a year ago and I watched the final action and it went for over 11k.

The stock market and the card market are so much different in the way they trade. I believe we will hear about some high profile hedge funds that were over leveraged going into this and there could be some actual blow ups. Those that own cards unless they are forced to use those assets for liquidity can simple sit on them.

Two months from now or six months from now people will still want to own tangible assets and enjoy collecting. If this hurts the economy for a much longer period of time then yes it will create demand issues. China got back to work in two months and if that is the road map here I just don't see the catastrophic outlook for cards.

There are plenty of people like me that own cards that you can't simply get on EBAY and buy. Unless those same people who want the cards exit the market their interest doesn't wane but it grows. Over time that means higher prices.

I have lived through a number of corrections in the markets since 1998 when I began investing and trading. This is clearly the strangest one because it came out of no where. Comparing this decline to 2008 and 2009 in my view is not a good comparison. We had a two and half year slow down brewing where there were millions of people not paying their mortgages and upside down on home equity values. The stock market is important but so is the real estate market. I live in a pocket of Orlando and all through this so far homes listed are being snapped up at the same prices. This means at the moment that perceived equity is still in place for folks. In 2008 and 2009 that wasn't the case. The stock market collapsed, unemployment trends had been on the rise for quite awhile and homes values were decimated.

I only talk directly to a handful of collectors but none of them are heavy in the stock market and have plenty of resources and cards. I think you will find that there are lots of collectors who have positioned a larger percentage of their net worth in cards and aren't seeing drastic hits to their balance sheets in real time. My largest asset is my 401k and it is in cash.

Time will tell how this plays out and I know I will be checking EBAY daily looking for things to buy and hopefully some supply shows up that I want.

[Huysmans]

Originally Posted by drcy

That doesn't make much sense. At best, you don't sell the cards at the price you want because no one is willing to pay that much. Which means your "prices/values" are imaginary. eBay "museum sellers" have a similar philosophy: "My card is worth $10,000. No one's willing to pay half that much, but it's worth $10,000 because I say so." Market values are identified prices realized, which means buyers and what they are willing to pay most definitely are part of the value equation.

+1

[MULLINS5]

Originally Posted by Dpeck100

This doesn't exactly look like a give away.

https://www.ebay.com/itm/1955-Topps-...AAAOSwGg5eXaOd

This sale makes me sick because I remember when this card was just breaking a grand.

https://www.ebay.com/itm/11413708634...p2471758.m4704

A BGS 9.5 Jordan brings 21k

https://www.ebay.com/itm/1986-1987-F...gAAOSwKFNeG9oG

PSA 2 Mantle goes for over 20k

https://www.ebay.com/itm/1952-Topps-...MAAOSwz2VeXZu1

Two of the four of those are PWCC and their data cannot be trusted. The other two were a one bid and a BIN, which too are not very good examples.

[Dpeck100]

Originally Posted by MULLINS5

Two of the four of those are PWCC and their data cannot be trusted. The other two were a one bid and a BIN, which too are not very good examples.

You have been a sky is falling guy for the ten years I have been online.

I have been very bullish on cards and I am quite comfortable with my track record.

[Frank A]

Gold and silver have been thought to be a great investment for years. Gold and silver have not moved in price for many years. Up a few dollars, down a few dollars. Baseball cards however have continued to climb. I'll stay with cards. Frank

[MULLINS5]

Originally Posted by Dpeck100

You have been a sky is falling guy for the ten years I have been online.

I have been very bullish on cards and I am quite comfortable with my track record.

My words may have been misconstrued, but I've never been a sky is falling kind of person (not that there's anything wrong with people like that). Not in hobbies or life in general. Trading cards for me is a hobby. I am a collector. Not an investor, meaning I don't go into a sale hoping the card goes up in value. Future prices have no impact in my buying.

Given all that's come out in the past couple years (been out there longer, but really coming to light thanks to BODA) regarding illegal shilling and fraudulent grading, why pay (fake) premiums for manufactured (low pop) rarity?

[Goudey77]

All the negative energy contributes very little to these forums. Please don't be a hobby justice warrior. This is not about taking a stance on either side. This is a hobby not politics. We are all adults and can make our own decisions. If you are a true collector you could understand that perspective.

Originally Posted by MULLINS5

My words may have been misconstrued, but I've never been a sky is falling kind of person (not that there's anything wrong with people like that). Not in hobbies or life in general. Trading cards for me is a hobby. I am a collector. Not an investor, meaning I don't go into a sale hoping the card goes up in value. Future prices have no impact in my buying.

Given all that's come out in the past couple years (been out there longer, but really coming to light thanks to BODA) regarding illegal shilling and fraudulent grading, why pay (fake) premiums for manufactured (low pop) rarity?

[japhi]

Originally Posted by Dpeck100

You have been a sky is falling guy for the ten years I have been online.

I have been very bullish on cards and I am quite comfortable with my track record.

Well ya, an 11 year bull run fuelled by QE and debt has made most bulls look good. Let’s see how all assets perform when cash dries up and people start losing their jobs.

Fwiw I think the underlying fundamentals are decent. And that when demand comes back, the recovery will be dramatic. I am in buy mode myself ( not cards, equities). But this summer is going to be brutal and recession is a guaranty. Don’t underestimate how much of consumer spending is debt financed - HELOCS, credit cards. People are soon to find out they are not as rich as they thought.

[Dpeck100]

Originally Posted by japhi

Well ya, an 11 year bull run fuelled by QE and debt has made most bulls look good. Let’s see how all assets perform when cash dries up and people start losing their jobs.

Fwiw I think the underlying fundamentals are decent. And that when demand comes back, the recovery will be dramatic. I am in buy mode myself ( not cards, equities). But this summer is going to be brutal and recession is a guaranty. Don’t underestimate how much of consumer spending is debt financed - HELOCS, credit cards. People are soon to find out they are not as rich as they thought.

My two major calls were that wrestling cards and specifically the Wrestling All Stars would explode and Mike Tyson cards would too. I bet significantly on this and in both cases good ole Patrick suggested I was crazy.

I agree that a long term run in markets has helped pump up lots of things but the move is far from over longer term in my view. There are loads of people like me in their 40's that will continue to want to own things they like and that remind them of their childhood.

It has been nice to see Gary V speaking so highly of the wrestling cards of late and they have taken another big leg up in many cases. There isn't enough supply in general and certainly not in high grades. I remain optimistic and my finances don't revolve around them at all so I am fine either way.

[Goudey77]

What data cannot be trusted? You mean the sale results?
Because I can confirm as the buyer that one of those sales is the real deal.

Originally Posted by MULLINS5

Two of the four of those are PWCC and their data cannot be trusted. The other two were a one bid and a BIN, which too are not very good examples.

[Dpeck100]

Originally Posted by Goudey77

What data cannot be trusted? You mean the sale results?
Because I can confirm as the buyer that one of those sales is the real deal.

Exactly.

Patrick spouts off like he knows what he is talking about. He has been doing it for ten years online.