High grade cards are undervalued

[Archive]

Posted By: T206Collector

I agree that the market will become more efficient as more cards are graded. I do not think that efficiency equates to rising prices. When Score issued its 1990 set, it did it in dribs and drabs, raising price because demand was higher than supply ...and then dumped a billion cards on the market. When collectors got wind of the surplus, the market became efficient but prices plummeted (and a short time later Score went out of business). Indeed, the market for 1990 Score cards continues to be very efficient, but prices will always be about a nickel a set.

I will also concede that prices on T206 cards, at all grades, have risen substantially over the past 5 years. I was kicking myself at the East Coast National last week because an SGC 4 Cobb that I wanted was well over $1,000. Had I been more diligent a few years back, I could have nabbed one for $700 or $800. And I do not have much confidence that the Cobb market will cool off significantly over the next few years, though I remain slightly hopeful that it will.

But, I do not share in the overbroad statements about the safety and security people feel in paying thousands of dollars for PSA 8 and higher commons. It is market price dictated by irrational actors in the market. When you see price jumping up and down a lot at the upper end it is because -- as has been acknowledged by the true believers -- only a few actors are participating in the market at that end. That is why you see volatility and that is why such investments are irrational. You're making purchases in the hopes that when you sell at least two people are going to wet their beds coming up with the money to pay for it. It makes a lot more sense financially to stick with cards that have a broader market base. If you are just purchasing PSA 8 commons because you need the sharp corners at any cost, be my guest. Just do not fool yourself into thinking there will always (or even likely) be any takers at that price if and when you finally decide to sell.

Finally, I own an SGC 80 T206 Mathewson portrait. I love it, will never sell it, and paid only $800 for it about 5 years ago (then in a PSA 6 holder). In February 2004, a PSA 6 Mathewson portrait sold on eBay for $3,500. I was ecstatic, of course, because it meant I owned a $3,500 card. Only, that is the only time I have ever seen one sell that high. Ever since, the same condition Mathewson portrait has been selling at about $1,500 to $2,000 tops each time it comes up on eBay. Now, will it get back up there in the future? Who knows. But I do know that of the two bidders who forced the Matty up to $3,500 on that February evening back in '04, the one sitting pretty is the underbidder.