Card prices skyrocketing

[JohnnyKilroy]

Originally Posted by CharleyBrown

While I agree with most of your post, I think it should be noted that the gov't giving people $600 or $1400 stimulus checks is definitely not driving the price of Jordan rookies to $700k or Kobe refractors to $500k, or even cards that are now selling in the 5 figure range.

True. I think the stimulus plays very little part in this. I definitely agree with the basic rules of economics posted earlier though and they are absolutely in play here. My take.... modern is already starting to decline. The big money is shifting from 5-6 figure purchases on semi-unproven players and moving towards the GOATS. Hence what Jordan, Lebron, Kobe, Trout, Brady, and some others are doing. From there, it will continue to pump into safe vintage... Mays, Mantle, Ruth, Cobb, Jackie, etc... So I think vintage still has some more rising to go. It’s trickling down from 80s/90s GOATS because that’s the generation predominantly driving this bus. Those were the players they grew up with.

Now the question becomes money. Where does it all come from and how much is someone wiling to “invest”. As was said earlier, lack of trust in stock market, or asset allocation / diversify, Hedge funds, yadda yadda. More big money is coming into the industry for their portfolio. No question. I would say a large chunk of that money is from young 20-40 year olds who don’t believe in history repeating itself. They hit it big with crypto, GME, Tesla, or flipping modern over the last year. They now have no problem moving 6 figures around in baseball cards. And yes... we all have had an incredible amount of free time these days. All while not spending as much as we did pre-covid (generalizing here...). Lack of eating out, vacations, doing something other than sitting in front of a device.... Once that shifts, there will definitely be a slow down in demand. I’d almost guarantee that. The question is how long until that effects this wild market.

[packs]

I think I'm a relatively young collector (early 30s) and I have a group of friends who are similarly young people. No one other than myself is interested even vaguely in cards, never mind considering investing in them. None of them have a history in the hobby and I still remain convinced there is very little interest from normal every day people in cards.

[JohnnyKilroy]

Originally Posted by packs

I think I'm a relatively young collector (early 30s) and I have a group of friends who are similarly young people. No one other than myself is interested even vaguely in cards, never mind considering investing in them. None of them have a history in the hobby and I still remain convinced there is very little interest from normal every day people in cards.

I use this as another indicator that there’s still growth. I have similar experiences when I mention spending big money on cards... I get the weird look like “you spend 15K on a piece of cardboard??”. The everyday people may not want to invest in cards, but until the day comes where I mention baseball cards and they answer with “oh yeah, I’ve heard a lot of people doing that”.. I think there’s still time. We aren’t quite at the “Stock tips from the shoeshine boy” yet.

[packs]

I could see that happening for a card like the Wagner or 52 mantle the same way the uninitiated invest in Picasso when they decide to turn to art. But the all important question to ask is what would make someone interested in anything but the marquee cards who otherwise doesn't care about baseball cards.

[JohnnyKilroy]

Originally Posted by packs

I could see that happening for a card like the Wagner or 52 mantle the same way the uninitiated invest in Picasso when they decide to turn to art. But the all important question to ask is what would make someone interested in anything but the marquee cards who otherwise doesn't care about baseball cards.

Good point! I suppose my answer would be using myself as the example. Collected as a kid for fun, obviously not as investments. Stopped collecting when life started. Fast forward to last year and the whispers of card industry booming start. You now have a group of people re-kindling childhood memories with an investment twist. The example I gave above that mentioned getting looks from friends who thought I was nuts... most of those friends collected cards as a kid. My thoughts are they are in somewhat of “uninitiated” when it comes to investing in cards or even a lack of knowledge on big cards even though they had 1000 Chris Sabo rookies. There might be enough spark to get them to realize they can combine sports, childhood memories, and investing all together.

[cardsagain74]

Originally Posted by JohnnyKilroy

The example I gave above that mentioned getting looks from friends who thought I was nuts... most of those friends collected cards as a kid

I still get those looks whenever I bring up getting back into cards.

Because regardless of the articles in SI or on ESPN in the last year, the vast majority of every day people don't have any idea what's going on in the card market (and still assume that it's just a childish hobby). Even though there's obviously the segment who have gotten newly covid-involved, it's still nowhere near the "oh it's so mainstream now" situation that some claim.

[packs]

I can only speak for myself of course but I don't know very many guys who haven't bought a pack of cards in their life. Unless you were an addict when you were a kid I don't see you becoming one suddenly as an adult.

I of course agree that a return to childhood is a major motivator for adults to collect anything. But you would have had to have been passionate about whatever it is you're returning to. Not just casually participated. I casually collected Pokemon cards when they came out for one summer as a kid. Do I have any interest in investing in a Charizard? No. Do I have any interest in buying a common instead? Also no.

[packs]

double post

[DanP]

Originally Posted by JohnnyKilroy

I use this as another indicator that there’s still growth. I have similar experiences when I mention spending big money on cards... I get the weird look like “you spend 15K on a piece of cardboard??”. The everyday people may not want to invest in cards, but until the day comes where I mention baseball cards and they answer with “oh yeah, I’ve heard a lot of people doing that”.. I think there’s still time. We aren’t quite at the “Stock tips from the shoeshine boy” yet.

I have a friend who says the same thing. I reminded him he spent $30k on a rock (ancient gold coin) but WHAT IS THE DIFFERENCE? Neither will feed you if you are starving. Both are only worth what someone is willing to pay. I could argue that it's easier to liquidate my card collection than for him to sell his coin (I think, guessing since his coin is not graded).

[cardsagain74]

Originally Posted by DanP

I could argue that it's easier to liquidate my card collection than for him to sell his coin

The liquidity of the new digital marketplace benefits collectibles so, so much. Back in the junk wax era and before, a dealer could have stuff like a 1961 Topps Al Kaline sit in his display forever unless it was highly discounted (especially at small town card shows).

Now, you just auction it off on ebay and get paid what it's worth whenever you want.

[joshuanip]

Originally Posted by cardsagain74

The liquidity of the new digital marketplace benefits collectibles so, so much. Back in the junk wax era and before, a dealer could have stuff like a 1961 Topps Al Kaline sit in his display forever unless it was highly discounted (especially at small town card shows).

Now, you just auction it off on ebay and get paid what it's worth whenever you want.

The digital marketplace helps, but to take it to the next level, we need to reduce transaction costs. This will never happen and a little crazy talk, but a page from the stock market, if we can get critical mass in a central repository, then we can reduce storage/transaction costs as a whole, and with a card depository, you don’t have the escrow issues we have right now, which will bypass the 10-20% juice we give to auction houses.

Basically it would be the pwcc vault, with a significantly reduced maintenance fees to scale up, and when an investor wants to sell his card, he can sell it in a marketplace or auction format for a much smaller nominal fee. Say flat fee instead of percentage. The buyer has the right to demand settlement upon purchase and pay shipping, or keep the card in the repository fee free for a year...

[Exhibitman]

BST the bitch and save the vig.

The price rises are fueling the momentum in a true FOMO cycle. The cards I am tracking are not the five and six figure headliners but they are setting price records every day. A card I thought of as a reasonable buy at $500 in October is a steal at $1500 today.

[cardsagain74]

Originally Posted by joshuanip

The digital marketplace helps, but to take it to the next level, we need to reduce transaction costs. This will never happen and a little crazy talk, but a page from the stock market, if we can get critical mass in a central repository, then we can reduce storage/transaction costs as a whole, and with a card depository, you don’t have the escrow issues we have right now, which will bypass the 10-20% juice we give to auction houses.

Basically it would be the pwcc vault, with a significantly reduced maintenance fees to scale up, and when an investor wants to sell his card, he can sell it in a marketplace or auction format for a much smaller nominal fee. Say flat fee instead of percentage. The buyer has the right to demand settlement upon purchase and pay shipping, or keep the card in the repository fee free for a year...

The transaction costs are a major issue and often really overlooked (especially during a raging markets), but I can't imagine the logistics of a central depository being feasible for cards. And even if it were, most people like to have big parts of their collection in hand to look at.

I always thought the best chance of solving the problem was simply forums like this becoming huge. If the traffic at places like this got anywhere near even 1/3 to 1/2 of ebay levels, we'd really have something.

[jchcollins]

Originally Posted by cardsagain74

The liquidity of the new digital marketplace benefits collectibles so, so much. Back in the junk wax era and before, a dealer could have stuff like a 1961 Topps Al Kaline sit in his display forever unless it was highly discounted (especially at small town card shows).

Now, you just auction it off on ebay and get paid what it's worth whenever you want.

Exactly. In the 21st century we finally have the technology to make hobby markets work efficiently. Very similar to my example of being a kid in 1987 - I'd see some card I wanted (maybe even if it was just a cool looking common...) in Beckett or Baseball Cards Magazine. Then I'd have to wait months to go to a show near me. Then at the show, 50/50 chance if it was something slightly nobody there would have the card anyway.

With the advent of eBay, not only can I find that card - I can decide I want it at 10 pm, then go online and there are likely a dozen or more of them at my fingertips that can be here next Tuesday. Trust me as an introverted kid growing up the late 80's and early 90's - for all it's problems - eBay and online selling is quite literally a dream come true. Oh! And then there were all those old MAD magazines I could never find...

[kailes2872]

True. I think the stimulus plays very little part in this.

I am not an economist and every time I try to play one on TV, I get smacked down by someone who actually knows what they are talking about, so forgive me...

But, it seems like QE and the money printing is a stimulus for the (semi)wealthy. My investment portfolio was down 42% on March 23rd last year. Since then, my investments (and net worth) have more than doubled. Based on income, I don't qualify for the $2,000. But it seems that I get the a 10x factor of that benefit every time they juice the economy with more money. This could be just coincidental, but that money feeds the market and it feeds corporate earnings and that drives valuations.

I make a nice living with a paid off house and college saved, so I should be one of those people that are being described that are buying into the market. However, I bought one card in 2020 and just track auctions and prices so far this year. I have a memory of 2012-2015 prices and my mind won't seem to ever let me pull the trigger anymore. So the person buying the PSA 7 Mantle must be playing in a different stratosphere and considers it an asset class. I have a tough enough time leaving my collection in cards versus converting to equities. When you factor in the risk of fire and theft as well as the eventual costs with estate taxes at 28% and auction house fees, it just doesn't seem to make sense long term. The fact that someone would have several hundred grand in liquid cash to add to a safe or safe deposit box somewhere just seems hard to believe. It is not like they aren't getting good returns in equities right now. But there is some crazy money out there, I guess.

Originally Posted by packs

I think I'm a relatively young collector (early 30s) and I have a group of friends who are similarly young people. No one other than myself is interested even vaguely in cards, never mind considering investing in them. None of them have a history in the hobby and I still remain convinced there is very little interest from normal every day people in cards.

Then you aren't doing your job!

[troutbum97]

Who said iconic vintage is expensive?

This 1933 Goudey Ruth is 1/2-off ... literally.

https://www.ebay.com/itm/Freshly-Gra...kAAOSwAgFgJGVp

[Oscar_Stanage]

Originally Posted by troutbum97

Who said iconic vintage is expensive?

This 1933 Goudey Ruth is 1/2-off ... literally.

https://www.ebay.com/itm/Freshly-Gra...kAAOSwAgFgJGVp

Ha. Classic

[jbbama]

i thought the Jordan market had topped out, but i was way wrong...crazy prices for his second, third and fourth year graded cards also.... I cant hold any longer, i am moving some of mine now, yes, they may go higher, but anytime i can sell for 5,6,7,8X what i paid i cant be unhappy. These are not rare or low pop at all...... This is INSANE!!

[Kutcher55]

Never a bad thing to take a profit and it's tough to time the market. I bought an '81 Topps Larry Bird PSA 9 in July of 2019 for $60. A year later I saw it was trading for over $500 and my eyes damn near popped out of my head, so I sold it this past summer and made a huge ROI.

I took a peak and the card is now selling for something like 6x what I sold it for. Ouch, but like I said, hard to time the market.

[Exhibitman]

Originally Posted by jbbama

i thought the Jordan market had topped out, but i was way wrong...crazy prices for his second, third and fourth year graded cards also.... I cant hold any longer, i am moving some of mine now, yes, they may go higher, but anytime i can sell for 5,6,7,8X what i paid i cant be unhappy. These are not rare or low pop at all...... This is INSANE!!

I sold two early Jordans into the first wave and took the profit never thinking it would go up from there but they tripled. I then bought another last October that quintupled, so I will probably list it for sale too. Underprice the last sale by 10% and move it out. Getting hard to find things to flip, though.

[egri]

Originally Posted by JohnnyKilroy

True. I think the stimulus plays very little part in this. I definitely agree with the basic rules of economics posted earlier though and they are absolutely in play here. My take.... modern is already starting to decline. The big money is shifting from 5-6 figure purchases on semi-unproven players and moving towards the GOATS. Hence what Jordan, Lebron, Kobe, Trout, Brady, and some others are doing. From there, it will continue to pump into safe vintage... Mays, Mantle, Ruth, Cobb, Jackie, etc... So I think vintage still has some more rising to go. It’s trickling down from 80s/90s GOATS because that’s the generation predominantly driving this bus. Those were the players they grew up with.

Now the question becomes money. Where does it all come from and how much is someone wiling to “invest”. As was said earlier, lack of trust in stock market, or asset allocation / diversify, Hedge funds, yadda yadda. More big money is coming into the industry for their portfolio. No question. I would say a large chunk of that money is from young 20-40 year olds who don’t believe in history repeating itself. They hit it big with crypto, GME, Tesla, or flipping modern over the last year. They now have no problem moving 6 figures around in baseball cards. And yes... we all have had an incredible amount of free time these days. All while not spending as much as we did pre-covid (generalizing here...). Lack of eating out, vacations, doing something other than sitting in front of a device.... Once that shifts, there will definitely be a slow down in demand. I’d almost guarantee that. The question is how long until that effects this wild market.

Also with interest rates being this low, debt is cheap. Not a whole lot of incentive to pay off loans early or keep money parked in bonds and savings accounts. Thus far, stocks, real estate and alternative investments (cards, crypto, etc) have been benefiting, but I think when interest rates rise again, we’ll see money get pulled out of here and prices start to recede. Maybe not to where they were before, but below these levels.

[Seven]

I think the part of the Hobby that sees a bit of the drop off is the lower end vintage. What I mean is your Graded A-3 Cards, will probably dip back a bit. I think your high end vintage won't necessarily rise but certainly maintain its value. Unless some sort of Major market correction happens.

As a side note I'm even more upset that the Jordan RC I have, turned out to be a fake. As I would've sold it off by now and made a healthy amount of money.