A Troubling Hobby Developement

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Posted By: Charlie Barokas

This is a much-needed post but I think that it has gotten too negative. The stock market analogy was made earlier and since I ran a Hedge Fund for many years, I will try to contest, the draconian parallel. In my opinion, the entire universe of sports cards is extremely self-correcting and not in need of a federal reserve to influence speculation and the lack thereof. I think all of us who ever bought a card produced after 1980 know what I am talking about. With regard to the high-grade or PSA 9 market, these cards have been in decline for a while now. Most post-war PSA 9 non-rookie cards are falling precipitously. Some will point to low-pop commons as an inflated market and there I agree with them but in many cases, those prices are a function of one or two individuals dueling it out.

Back to the stock market analogy and March 2000, many people bought blind into stock analyst's strong buy recommendations and were decimated but those who did their own research were able to avoid the Info space’s. I think the same due diligence is prudent in this business. When a collector forks out large amounts of money for a piece of cardboard, homework is necessary. What is homework? Its all been said before, following realized prices, buying the card not the holder, avoiding low pop high-grade cards that are more susceptible to volatility. Many board members have gone to the low to mid grade to hedge against buying significantly altered cards, which might be the reason many of the 2-5 HOF pre-war market is so red-hot, and the aforementioned post-war 9 market is dying. Which proves the point that, as is the case with the stock market, money does not leave but rather if rotates from sector to sector or sports card issue.

With regard to the % of trimmed slabbed cards, I have had many cards that are fresh from a one-owner collection that will never grade with PSA. These are beautiful mint condition cards that are of all sizes that have provenance. Sometimes its the "kiss of death" to have a mint condition card because the automatic assumption is that it is trimmed. I would much rather have cards that have wear on them consistent to handling opposed to un-circulated ones.

Just as individual stock investors now have accounts at Schwab or Ameritrade, baseball card investors must research the cards they buy and use the slab only to limit downside. Once a card is in a holder the owner is much better off because their will be a buyer of a graded card at % of SMR. Therefore, graded baseball cards are not going away and are not all soiled cardboard but rather a stop loss.

A little non sequitur but hopefully it lightens the mood a tad.

Charlie