Will this stock market madness affect cards?

[japhi]

Great, wrestling cards, 0.0016% of the hobby are going up. Mantle RC’s are selling well.

Neither of these are a good proxy for the overall hobby. Well maybe the mantle, but wrestling card collectors probably number in the hundreds so with all due respect who cares what an OC hogan sells for.

If you believe the PWCC index, the majority of cards have been relatively flat since 2016 and that was in the best of times - free money and full employment . No way we go into recession, millions lose their jobs, and the mid market/ overall card market holds up.

Guys like Gary V are catalysts in good times, but when you lose your job, or your 401k takes a 120k hit, you put a hold on your 56th Acuna or Soto PSA 10 “investment”. And that appears to be happening, guys on BO are reporting that some of these flagship cards are down 30-40%. Returns are increasing.

Personally I couldn’t care less what happens to my collection price wise. But I suspect to your point Dpeck, that most do, and I am predicting some panic selling. I mean look at PM’s- they are down when traditionally they provide a hedge against equities. The general consensus is that they are being used to cover calls, generate cash. We as a society are awash in debt, I would love to know the number of collectors that have built their collection with debt. Speculators are about to get wiped out.

[JeremyW]

Originally Posted by japhi

Great, wrestling cards, 0.0016% of the hobby are going up. Mantle RC’s are selling well.

Neither of these are a good proxy for the overall hobby. Well maybe the mantle, but wrestling card collectors probably number in the hundreds so with all due respect who cares what an OC hogan sells for.

If you believe the PWCC index, the majority of cards have been relatively flat since 2016 and that was in the best of times - free money and full employment . No way we go into recession, millions lose their jobs, and the mid market/ overall card market holds up.

Guys like Gary V are catalysts in good times, but when you lose your job, or your 401k takes a 120k hit, you put a hold on your 56th Acuna or Soto PSA 10 “investment”. And that appears to be happening, guys on BO are reporting that some of these flagship cards are down 30-40%. Returns are increasing.

Personally I couldn’t care less what happens to my collection price wise. But I suspect to your point Dpeck, that most do, and I am predicting some panic selling. I mean look at PM’s- they are down when traditionally they provide a hedge against equities. The general consensus is that they are being used to cover calls, generate cash. We as a society are awash in debt, I would love to know the number of collectors that have built their collection with debt. Speculators are about to get wiped out.

I always wondered how dealers could win auctions & pay as much as collectors on the BST & still be in business.

[Dpeck100]

Originally Posted by japhi

Great, wrestling cards, 0.0016% of the hobby are going up. Mantle RC’s are selling well.

Neither of these are a good proxy for the overall hobby. Well maybe the mantle, but wrestling card collectors probably number in the hundreds so with all due respect who cares what an OC hogan sells for.

If you believe the PWCC index, the majority of cards have been relatively flat since 2016 and that was in the best of times - free money and full employment . No way we go into recession, millions lose their jobs, and the mid market/ overall card market holds up.

Guys like Gary V are catalysts in good times, but when you lose your job, or your 401k takes a 120k hit, you put a hold on your 56th Acuna or Soto PSA 10 “investment”. And that appears to be happening, guys on BO are reporting that some of these flagship cards are down 30-40%. Returns are increasing.

Personally I couldn’t care less what happens to my collection price wise. But I suspect to your point Dpeck, that most do, and I am predicting some panic selling. I mean look at PM’s- they are down when traditionally they provide a hedge against equities. The general consensus is that they are being used to cover calls, generate cash. We as a society are awash in debt, I would love to know the number of collectors that have built their collection with debt. Speculators are about to get wiped out.

Obviously wrestling cards mean nothing in the aggregate but it shows that the card market has broadened significantly. Pokemon and Magic The Gathering have been the best performing segment over the past five years and just about every post I have ever read on online sports card message boards made fun of them and the people who collect them. Yet they saw unprecedented price performance. The card market is global so Asia saw a slow down and there is evidence they are coming out of it and cards like this and basketball are heavily collected there and you might have some person who is a software tycoon who wants all of these cards and drives them to the moon. I have no clue how they have fared the past few months but clearly The Black Lotus is a monster card and will be forever.

I use the 1986 Fleer Jordan and the 1989 Upper Deck Ken Griffey Jr. as the two proxy cards for the hobby. If they are going up than many other cards are too. Kind of like FANG with the stock market.

There are a few cards I regret not buying but I have always funded my collection through cash flow and there have been certain times where I just had to say no. This may not be the case for others and I think it is fair to say in certain segments you could see what you would consider forced selling. That said there are some very deep pocketed collectors out there and so they will sop up the supply and the market will move forward.

The PWCC index I argued was a poor representation for the hobby because of the weighting structure and the amount of those cards that turn over. If you take the 52 Topps Mantle in a PSA 8 it has clearly pulled back in public auction over the past few years. Those that are interested in its prices going up argued that they were poor centered copies and that the prices weren't indicative of better centered copies. They might be right. They might be wrong but the index doesn't take into consideration eye appeal and so it artificially inflates on the way up and artificially deflates on the way down. Because the weighting structure is so high it helped drive the index up significantly as the card ran from $78,000 to over $525,000. You also saw the 55 Clemente and the 63 Rose see insane increase during the "buyers group bubble" and as they came back down to planet earth so did the index.

The debt situation in this country is so much different than when we were in 2008 and into 09. People can actually refinance debt. I bought my condo in 2005 and did the typical pull out equity to remodel and then did some real stupid sh++ and lost it in the market trading options. I said enough is enough and went to a fixed rate mortgage in 2006 and then when the bottom fell out I was stuck in a high interest (6.25%) mortgage and had I stuck with the risky arm I would have been dramatically better off. It took me a few years of aggressively paying it down to be able to refinance and I did and was able to lower the rate significantly. Unlike most in finance I had no desire to create arbitrage and worked my ass off to pay it off even though the rate was only 3.50%. Today people have been given a gift with the ten year under 1% and so refinance applications have exploded. This coupled with the gas prices will be great stimulus eventually for the economy.

I think everyone is just freaked out right now. All of us will probably end up spending more time at home not by choice and so you will see some supply show up as people have time to list cards but you will also see lots of people bored and so buying something will give them pleasure.

In time this will pass and the sports fans will be sports fans and the people collecting cards will still be collecting. I can't stress enough how much of an impact watching money evaporate trading options had on my card purchases. Stock market declines in many cases lead to more people being interested in tangible assets because watching numbers vanish on a computer screen is no fun and it is much more fun to lose if that is the outcome and still have the same item you bought.

[seanofjapan]

This does kind of feel like a debate about where the deck chairs should be placed on the Titanic.

A few auction results that happened this week are pretty irrelevant. There is a massive sword hanging over the head of the world economy right now and that is what is going to determine card values are by the end of this year.

The problem is that we don't know how long the economically disruptive countermeasures to control the Coronavirus are going to be necessary.

Most major companies can withstand a shutdown of a few weeks at most. So if this thing improves significantly by next month we might get out of this OK and your cards might not take much of a hit. But if it drags on into the summer like some are now suggesting it will, most businesses can't survive that long and bankruptcies will explode, making the economic chaos we are witnessing now seem relatively mild.

The entire airline industry is already teetering on the edge of bankruptcy and will probably be wiped out completely in a few weeks if governments worldwide don't bail them out. There are a lot of other sectors out there similarily vulnerable lined up to follow, way too many for governments to be able to keep them all afloat with bailouts.

If that happens card values are going to be destroyed just like the value of every other kind of investment.

So lets hope it doesn't come to that.