An Analysis of the Yorktown Heights T 206 PSA 8 E-Bay Auction

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Posted By: MVSNYC

a REALLY important fact i failed to mention is this...it is a huge goal of mine to have a complete T206 set someday, BUT not in 8's & 9's (unless i hit the lottery)...this will be achieved by eventually selling the limited number of high grade cards (which will perform better for me), and "parlaying" those profits into 500+ mid-grade cards, something i was not able to do a few years ago, before i restructed the collection & only had low-mid cards...the higher grade cards will ultimately allow me the oppertunity to achieve the life-long goal of owning the monster...

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Posted By: Lee Behrens

Fif the buyers ever think that with so few people interested and able to afford these PSA 8 that there is a very good chance that you would not get as much when you tried to sell your card. A few things can happen, for one you have now eliminated a bidder by having the card yourself and you were willing to pay more than anyone else and the good chance that more of this card will become graded the same or higher. You have to hope that more people become interested in spending there money on high grade high dollar cards.

Also, IMHO there will be a day when buyers and collectors become wise to the amount of PSA high grade cards that have been altered and thus will shy away from PSA high grade cards no matter how nice they look.

By the way I also think that there is the same rate of return if not higher on lower grade cards, just not the fancy price tags attached to them. I would never have been able to accumulate my collcection without buying and selling for a profit and I have rarely paid over $500 for a card.

Lee

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Posted By: JimCrandell

Extremely well said! You hit on my main point--that in my experience the guys who are the most passionate and informed about graded cards are the ones collecting the high-end material.

I would point out that the number of collectors willing to pay several thousand for a low-pop psa 8 common(even post-war) is expanding significantly and it is my view that the prices between low grade and high grade vintage cards will widen further--perhaps substantially.

My main concern is card alteration--if card alteration spreads further then collectors bcould lose their confidence they are buying unaltered material.

Now I am really looking forward to meeting you guys tomorrow.

Jim

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Posted By: MVSNYC

i totally agree that the number of people willing to spend the money on 8's is growing rapidly...i mean look at me for instance, jan. 1 i only had one 8, that i bought 2 years ago for $450, now i have run wild with them...and it is an important point to make here that it seems that most people on the board think only rich people can get into the high grade market, but this is not true, people with limited funds can do this too, IF they make the right moves, it is all about knowing what you already have and trying to find ways to parlay that into as much value as possible in order to make smart trades, hunt and find great deals, etc...

we are also looking forward to meeting you tomorrow night as well.

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Posted By: martindl

MVS,
Your Egan 9 is up for sale on Ebay and its only $2900 - doesn't sound like you're selling it, so did someone steal the scan?

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Posted By: jay behrens

I taught my brother well. On a percentage basis, low grade cards are going to give you a better rate of return than high grade cards will. A $7700 card will have sell for $8470 in order to see a 10% return. A $100 low grade common only needs to go to $110 to get that same 10% return. Take a guess at which one will go up 10% first. You also run the risk in the thin high grade-low pop market of taking a huge loss. I remember a few years somene pointing out a PSA9 or 10 t206 from MAstro that sold for a huge amout less than its previous sale price. You will enver see that with low grade cards becuase there are too many people in that market to let a card go for significantly less than current market.

Dorkskin, WE (as in everyone on this board) are still waiting to hear why you refer to yourself as "we" instead of "I". This is really bad grammar, unless you are refering to the voices in your head. Or do you have another explaination, Mr Grammar?

Jay

I love pinatas. You get to beat the crap of something and get rewarded with candy.

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Posted By: MVSNYC

someone stole scan...card is safe with me.

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Posted By: JimCrandell

No--high grade cards will give a better return.

The number of vintage collectors who are seeking top condition vintage cards is growing substantially and the supply is low and not growing much.

If you look at T206s, the majority of the T206 PSA 8 commons I have bought have been under $200 and were bought 7-9 years ago. Lets say the average price of those today is $4,000(?). Have psa 5 commons grown 20-fold over this period of time--of course not. Off-condition cards are much more prevalent and generally speaking those collectors that buy vg-ex or ex cards are not willing to pay huge premiums to get them--those that collecrt psa 8 and better are.

Might $7,700 be the peak for a T-206 common for awhile in psa 8--sure. But the market will turn its attention again to goudeys, play balls, cracker jacks, sporting life etc. and we will see big prices paid for the low pops in those issues.

If returns are important to you and you have the financial ability to do so--stick with the high grade cards.

Jim

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Posted By: cmoking

MVSNYC - welcome to the board. Here's an unsolicited piece of advice for you:

Try to get an understanding of what people here think. Many of us (me included probably) will spew the same opinion in post after post, thread after thread. Sometimes it becomes so obvious what someone will post even before they post! I think many of us could save some time by simply copying/pasting previous statements rather than write the same thing in a milliion different ways.

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Posted By: Al C.risafulli

I try really hard not to write about cards like an investor, but in the spirit of this thread...

If we're going to talk about this as an investment, then a big part of any investment involves WHEN you get in. Jim got into T206s in 8 at $200 a pop years ago, which is sort of like getting into Microsoft in the late 80s. The rate of return is huge. A home run for anyone who got in at that time. There's still a lot of upside to getting into Microsoft today, but the exponential growth will take longer, and likely be less.

Still a lot of upside to high-grade prewar cards, of course. There will always be new collectors who prefer this stuff, who have the cash, and who are willing to pay a premium for condition.

But Jay's point is a good one as well. I think for every big-money buyer of high-grade prewar, there is some multiple of that buying low-to-mid grade prewar. While the dollars are smaller, the upside potential in terms of percentage growth is probably a bit higher in the shorter term. A $100 investment in a lower-grade E-card HOFer two years ago is probably double or triple that today. As more people gravitate to prewar (because it is an infinitely cool niche in the hobby), this market will continue to thrive.

Ultimately in my mind there's a point somewhere in the prewar arena where "scarcity" and "condition" meet and create a perfect investment. For my money, if I had any, I'd always opt for scarcity over condition, because I do think that "condition" as a concept is a little dicey, for three reasons:

1) People improve the condition of cards, which increases the pops of higher-grade cards (the lower-grade ones, too, but the impact of one additional 8 is much greater than the impact of one additional 4)
2) People resubmit cards over and over until they wind up in the highest possible holder, which also increases pops.
3) There are still ungraded cards out there, even higher-grade ones, and while the finds are getting fewer and further between, they're still out there.

Cards that are scarce will remain so (with some exceptions, like George C Millers, which were mentioned elsewhere in this thread), and are thus, in my opinion, a better "investment" than higher-grade cards.

The best "investment", though, in my opinion, is in those cards where "scarcity" and "condition" meet - the highest-grade example of a scarce card.


Either way, in my opinion, two basic concepts in this thread are obvious:

1) Prewar cards are a good "investment", whether they be high-grade, off-grade, common, scarce, popular, unpopular, whatever.
2) There are lots of different people who collect in lots of different ways, and they're all equally relevant and important to the hobby. It's just as much of a thrill for me to read about Jim's latest PSA 8 conquest as it is for me to read about Jay's latest beater, Hal's latest HOF rookie card, Leon's latest 19th century scarcity, and someone's love for 2006 Topps Allen & Ginter. It's all cards, it's all good, and it's a pleasure to have a board like this where I can learn about all these different styles of collecting that shape the way I choose to collect.

Exhale.

-Al

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Posted By: Rich Klein

1) As an investment you should always buy the best condition you can afford. If you can afford PSA 8 or better T206's, then by all means purchase those cards. If you can only afford beaters, then buy those cards. There is enough room in this hobby for both collectors of means and collectors who can afford $10 a year on this hobby.

2) While we are at it, there is nothing to be gained in belittling anyone for their collecting habits. When I was growing up we had an expression "Horses for courses". Not all of us can run in the Kentucky Derby; some of us run in claiming stakes in the mud in December.

3) One of the great parts of this hobby is that there is room for everyone. On a message board we are all even to some degree -- those people who run multi-million dollar companies and those individuals who are bicycle messengers in NY. We all post -- we all have the same passions -- although in different ways and we should all appreciate each other.

Rich

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Posted By: JimCrandell

Al,

Great post--excellent points!!!!

What message board did you say you headed up again(ha ha).

Jim

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Posted By: Keith O'Leary

Thanks for distilling the opinions and giving us yours. Yes it was a good post Al.

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Posted By: warshawlaw

Rich, somehow I figured you for a mudder

I know lots of people here made lots of money buying and holding commons from popular sets at the start of the grading thing. Congratulations. However, if you really want to talk investment, you have to admit that timing and luck in choosing which cards to get into were your real keys to success. Anyone who bought truly high grade cards at the beginning of the slabbing thing is rich today if he happened to buy the right cards that happened to be truly high grade and happen to be demanded today by the set registry collectors. If you put your ducats into 1950s or 1960s PSA 8 cards instead, you didn't make 20x your money. As I recall, the grading emphasis shifted on those cards from 7 to 8 to 9 and 10 as the lower grade cards came to the market with greater frequency. I saw lots and lots of those 8's rotting at the National; anyone wanna argue that they were making nice money for their owners?

The other issue is rate of return versus risk, which is where Jay's point comes into play. If I was investing in cards like stocks I would look for deals that I could get into and out of within 6 months with a return of at least 200% because I would prefer not to tie up my money for the long term in things as illiquid as cards and I would also prefer to spread my risks across a lot of solid material instead of one super premium item dependent on finding a niche market to sell. If you cannot be into something for years on end, you can only be into it with play money. Ditto if you have to gamble on 1 or 2 items going through the roof. If you happen to be rich and have lots of play money, you can pay a then-unheard-of price for a card and hold it for years, sell it or whatever because it isn't a painful impact on your finances if it flames out. If not, you have to spread your risks by not tying up all your money into a few ultra-high-grade cards, especially commons from a common set that happen to be desired by a small group of collectors. I'd buy solid examples of high demand players at good prices instead of taking a flyer on a few commons that happen to be in nice plastic because I don't have the bankroll to handle the latter.

I also agree with the poster who remarked that rarity should be a benchmark of purchases. Something really scarce is always going to have a market and in my view is a safer card to own than a condition rarity from a common set.

If you are taking investment advice from this motley crew (your humble writer included), good heavens, don't buy cards. We'd all collect even if we were back in the church basements at a dime a card. Put your money in a nice, safe mutual fund that won't allow elite hedge funds to buy after hours...er, stock in companies that don't have to restate their earnings...er, spec houses in San Diego...er....

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Posted By: barrysloate

Adam- if you find any good investment opportunities in the near future where you can make 200% in 6 months, please let me know. There will be a generous finders fee heading your way.

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Posted By: Rich Klein

At this point of my life; I probably would finish sixth in a five-horse race in the December Mud.

Rich