Anyone hesitant to buy now?

[seanofjapan]

I think a lot of this is explicable by people re-allocating money they would have spent on other stuff like holidays to sedentary hobbies like ours which you can do at home by yourself.

The interesting question is what happens when the pandemic ends. Do people just snap back to their previous spending habits and stop pouring money into cards like they are now? Or has some of this changed behavior become permanent - people having been turned into hardcore collectors staying that way?

Either way, I would “hold” on any major purchases now since its obviously a seller’s market.

[Leon]

Originally Posted by seanofjapan

I think a lot of this is explicable by people re-allocating money they would have spent on other stuff like holidays to sedentary hobbies like ours which you can do at home by yourself.

The interesting question is what happens when the pandemic ends. Do people just snap back to their previous spending habits and stop pouring money into cards like they are now? Or has some of this changed behavior become permanent - people having been turned into hardcore collectors staying that way?

Either way, I would “hold” on any major purchases now since its obviously a seller’s market.

Current auctions = hard to hold, especially when some of the cards won't come up again for years, and in some cases, it could be 10s of years or ever

.

[chuckw]

I’ve been assessing the significant rise in card prices over the past year (and especially the past 4-6 months) so I’ve spent some time understanding what is influencing the market and what are the biggest risks. Here are some quick observations on the market drivers:
1. Social Media Influencers – there are some very popular people on social media who have helped recruit a massive number of new buyers to our industry over the past couple of years, and especially in 2020. An investment-oriented social media influencer is someone who has a big following for their investment guidance. People follow these people for their investment ideas, and many have been telling people about specifics of good investments to make in sports cards. I can’t give you a number, but a guess would be that these influencers have brought tens of thousands of new investors to our industry. These social media influencers give people specifics of what sports cards they invested in, how much it appreciated in a short time, and what is the next hottest item. Most of the new investors have seen good results, but some investment ideas didn’t work as well (Topps Project 2020).
2. Asia Pacific and International Market – over the last couple of years I’ve watched the Asia Pacific and other international areas increase purchases and investments. This is especially the case for basketball and soccer cards. Panini has made increased amounts of “China exclusive” products and I remember Beckett commented on the increase in submissions for grading from Asia Pacific.
3. Day Traders and Stock Market Investors – this is one of the groups that the social media influencers has helped bring to our industry. It’s then a trickle-down effect on social media. They discuss specifics of purchases they make and how they have increased. This is a big movement for newer cards, especially as a player gets hot in any sport. Even the recent basketball restart was a bit crazy, as guys like Bol Bol and Gary Trent Jr. had a couple good games and their cards skyrocketed overnight. Underappreciated stars like Damian Lilliard also saw their cards spike, and any Lebron or Kobe PSA 10 card seems to increase by the week, even if it was somewhat mass produced. In summary, many of the investors in this group is looking for a quick return like a day trader in the stock market, and others are betting on good annual appreciation. In football, the increase in value in rookies such as Patrick Mahomes and Lamar Jackson has been staggering. Young baseball stars such as Acuna, Soto, Tatis, Luis Robert and others have increased in value like crazy.
4. Gamblers – similar to day traders shifting to our industry during the pandemic, the on-line gamblers had limited sporting events to bet on. They have found success investing in players as they are heating up and sharing with others the rise in eBay sale prices.
5. Sneaker Collectors – also brought over from the social media influence, the "sneaker heads" are apparently people who always invested in rare sneakers for investments. Since a big part of their investments were basketball sneakers, they are very active in newer basketball cards.
6. The Pandemic Itself – you can’t ignore the fact that more people were home, and most investors in our industry have done well in the past few months.
7. Prospecting – I’ve noted several examples above on the influence on the newer cards that essentially are related to prospecting the next great star or prospecting that rookie and rare superstars like Lebron, Kobe, Jeter, Griffey, Mantle, Jordan, or whatever iconic great will continue to rise in value.
8. Vintage Impact – some of the investors have been looking at good investments in vintage cards, as we’ve seen the vintage high-grade and rookie card values increase considerably. One social media influencer of note has shifted a lot of focus from newer to vintage cards.
9. Retail distribution by Panini and Topps – there is a craze of mass-produced retail sports card boxes at Walmart and Target, as fairly hard to get hobby boxes are showing up at Walmarts and Targets across the US, and buyers can almost instantly more than quadruple their investment by selling the products on-line. Personally, I wish Panini and Topps cared more about hobby stores. A Walmart manager recently told me that the people who deliver sports cards to Walmarts in Pennsylvania are now bringing security people with them to restock shelves, and some restocking employees (which is an outside vendor), are stalked in parking lots and followed home. One concern I have for this movement is the massive amount of cards being produced that are expected to be more common. For example, 2019-20 Chronicles basketball came out in hobby boxes 2-3 weeks ago and some of the rookies were getting great prices on eBay, but now I can’t fathom a guess how many of the same cards are easily available in retail boxes.
10. Four Sports at the Same Time – once the NFL starts up, the 4 primary sports leagues (MLB, NFL, NBA, and NHL) will all be playing at the same time and the prospecting of who will be hot is occurring for each primary sport at the same time.
11. GEM MINT Graded Cards – PSA, Beckett, and SGC have all experienced not only an all-time high in graded submissions, but the increase of that volume is increasing at non-manageable levels. One grading company told me their weekly submissions has more than tripled since pre-pandemic and the percent increase of submissions is increasing week after week. Beckett and SGC are now charging $100 for 5-day turn around. We always talk supply and demand in business. In this case demand is two-fold – increased number of buyers of cards, and the increased number of cards to be graded. Supply of newer cards took a hit during the spring in the heart of the pandemic, which also was a market driver. You can buy a newer rookie card for $5-$10 that may have a 50% chance of being a gem mint grade, and the gem mint grade may sell for 10 times more than the purchase price. At those numbers, it’s been a good investment for many.
12. The Money Reinvested Back in the Industry. So more people making money in cards, means a lot of that money is getting reinvested back into the industry.
Just noticed I’m rambling too much. Consider the long-term supply and demand when you are investing. I think the vintage market will stay very strong for top cards. Newer cards will stay strong if buyers will keep paying 5-10 times more for Gem Mint rookies and the many new buyers stay in the game (but the bubble can easily break if the buyers move out, or the supply of newer cards increases too much). I think the backlog at the grading companies is helping prices (less gem mints of newer stuff than if they could keep up with the volume). My overall thoughts are to enjoy this bubble while it lasts and that a $100k investment is better made in a signed 1933 Goudey Babe Ruth than a 2019-20 Zion Williamson 1/1 autograph 😊. Since I’m not spending $100k, I’d rather spend $100 on a rare Michael Jordan or Mike Trout card or a vintage HOFer card than Bol Bol.

[Exhibitman]

Lots of good points but here is what I think is the most salient one:

I am watching the savings rate. The U.S. personal saving rate (personal saving as a percentage of disposable personal income) has spiked:

June 2020 19.0%
May 2020 23.2 %
April 2020 32.2 %
March 2020 12.6 %

The spike in card prices started after 2-3 months of savings. Those who are still employed and not sick were socking away money at a record pace. Add that to boredom and flatlined leisure spending and you have a perfect condition for a price spike. No doubt that spike has been fueled by social media (like that Gary V character) and people with a financial interest in stoking a FOMO response.

So the question is what to do. To me it is like a housing bubble: if you are OK with taking the profit and moving into an apartment, sell the house and hang onto the money until the inevitable correction. If you like your house and don't need to cash in, forget about it. I am in the middle. I've sold a handful of highly appreciated cards that I liked but that were just too attractively priced to keep (I replaced one with a lower grade copy that cost me a tiny fraction of the sale price because I like the card). If the July data continues the move closer to the American historical average of 7% I would expect the acceleration of prices to halt and the drops to start. I will probably list most of the highly appreciated cards at that point, cash them in, and wait to repurchase them lower. If that doesn't happen, well, OK, I have the cash. If does happen, then even better. I effectively rented my card to someone for a period.

[Frank A]

All is well in the sports card market. People are buying and people are selling. With the pathetic interest rates for savings, who would not take a chance. I have ben following this for the last 5 months and every time I think it might collapse it goes higher. Covid is going to be around for a long time. There is no vaccine and may not be one for quite a while. The whole world is being hit again with no cure in sight. Shopping the internet for cards is fun and keeps your mind off this troubled world.

[Exhibitman]

Originally Posted by Frank A

Shopping the internet for cards is fun and keeps your mind off this troubled world.

“A Card Collection is a magic carpet that takes you away from work-a-day cares to havens of relaxing quietude where you can relive the pleasures and adventures of a past day — brought to life in vivid picture and prose,” Jefferson Burdick, introduction to the 1960 edition of the American Card Catalog

[vintagewhitesox]

I'm holding off on some cards that I think will come back down to earth. Then there are some cards that a previous poster said, you may not see for decades. Im ok with paying a "higher" price, because when it comes back up for sale, that card will be even higher.

Ive been fortunate that the shutdown hasn't hurt me that much. but then again, not all of us have checks coming in from the Super Terrific Happy Hour.

[Exhibitman]

I was kicking this around with other collectors recently and it seems like the rising tide on the marquee cards is lifting the lower grade specimens as well as other cards from the same era. I posted a good but not marquee basketball card for sale on eBay and I am surprised how fast and high it has gone up in competitive bidding. I am going to list all the other slabbed stuff; may as well since they are readily replaced with raw cards.

[thatkidfromjerrymaguire]

This is a great discussion...and I think about it a lot recently.

I think that the question as to whether to buy now probably depends on what you are buying.

If you are in the market for a blue chip card (as mentioned above....Cobb, Ruth, Mantle) I'd think you're safe to purchase now if you are looking for longer term ownership. Even though they have spiked considerably, and even if the prices level or even dip a little, I have little doubt they will continue to climb in price/value, slow and steady. You may not be able to flip it right now for a profit, but you'll be OK long term. I think the new collectors that are coming in to the hobby now will ensure that.

The one area I would hesitate to buy now, would be highly graded PSA slabbed cards. Even more so with modern cards. While you could still probably be OK with those blue chip cards, I feel like the premium paid for PSA slabs is increasingly artificially high. As I research mid grade vintage hall of famers, I feel like you can save HUNDREDS of dollars by buying identically conditioned cards in SGC holders instead of PSA. Part of that might be because of modern collectors coming in to vintage. As far as I can tell in modern, it is all about the PSA 10 Gem Mint card. Those are the gold standard. So even though modern collectors might be surprised to find out that PSA 10 cards are almost non-existent in vintage, that PSA label likely still looks more appealing to them. In my opinion, nice condition cards in SGC slabs are likely a good buy right now...as I would guess collectors will someday figure out that the card in the holder is what's important, not the slab. I'm sure there are people right now exploiting this by buying nice SGC cards and making a profit by reslabbing them in PSA holders...even after the grading fee.

[fkm_bky]

Great topic. I'm in active pursuit for my T206 HOF type set right now and sold off some others to help fund it. So far those funds are sitting largely untapped b/c of two reasons.

1. Some of the prices for even VG examples are ridiculous and I'll wait it out.

2. More than anything, there just isn't a lot of options for what I'm looking for. I could do Ebay (but I won't). I almost exclusively use Net54 for my transactions. I trust the people and I'd rather help out a fellow forum member than some anonymous jerkwad on Ebay (although I know many of you sell on Ebay and are NOT jerkwads ).

I'm not in a big rush and will wait for the right opp, but it does lead to overpaying when you cant scratch that itch as often as you like.

I hope you are all doing well and staying safe and healthy!

Regards,

Bill

[Oscar_Stanage]

Originally Posted by thatkidfromjerrymaguire

This is a great discussion...and I think about it a lot recently.

I think that the question as to whether to buy now probably depends on what you are buying.

If you are in the market for a blue chip card (as mentioned above....Cobb, Ruth, Mantle) I'd think you're safe to purchase now if you are looking for longer term ownership. Even though they have spiked considerably, and even if the prices level or even dip a little, I have little doubt they will continue to climb in price/value, slow and steady. You may not be able to flip it right now for a profit, but you'll be OK long term. I think the new collectors that are coming in to the hobby now will ensure that.

The one area I would hesitate to buy now, would be highly graded PSA slabbed cards. Even more so with modern cards. While you could still probably be OK with those blue chip cards, I feel like the premium paid for PSA slabs is increasingly artificially high. As I research mid grade vintage hall of famers, I feel like you can save HUNDREDS of dollars by buying identically conditioned cards in SGC holders instead of PSA. Part of that might be because of modern collectors coming in to vintage. As far as I can tell in modern, it is all about the PSA 10 Gem Mint card. Those are the gold standard. So even though modern collectors might be surprised to find out that PSA 10 cards are almost non-existent in vintage, that PSA label likely still looks more appealing to them. In my opinion, nice condition cards in SGC slabs are likely a good buy right now...as I would guess collectors will someday figure out that the card in the holder is what's important, not the slab. I'm sure there are people right now exploiting this by buying nice SGC cards and making a profit by reslabbing them in PSA holders...even after the grading fee.

Thank you for bringing up grading....as a new collector back after 30 years (posted above), I have done my homework on the big-3. I have not had anything slabbed yet, but will eventually. I believe the "PSA premium" is artificial and won't last in the long run. Too inconsistent and biased, which is the basic task that I pay a grader to perform. As a collector who likely won't sell, I am going another direction. I think that over time other providers will prove to be better at the job, and the premium will fade.

On the card market in general, I do not think the recent influx of buyers is as fickle as assumed. I believe most are like me, who are now back in the hobby for the long-term. For this reason, I think the prices on key cards will be sustainable. But of course, any economic shock will still have an impact.

[jbsports33]

There is certainly a combination of everything, and I do not see it stopping anything soon. I have stopped buying a little and have focused on lower end items to sell at flea markets. We already had a lot in storage, so this summer we added onto it. I will get back to the better stuff soon (buying and selling) just too much uncertainty right now and I cannot setup at indoor shows.

and yes, prices are very high! but did not stop me from buying T206 cards last week

Everyone made some really good points and I enjoyed reading.

Thanks Jimmy