Market for Pre War Cards -How far down is down?

[nolemmings]

On the contrary Cat, you will not find me implying that you or anyone else is not a real American or a patriot, whatever your political views. You will scarcely find such rhetoric uttered from the left. You will find it, however, repeatedly gargled from the right, especially the Palin and tea party followers who don't miss an opportunity to invoke their "real american values" and preach to the rest of us what must be done to prevent this country from becoming communist, nazi, and/or whatever vile name of the week gains popularity.

[nolemmings]

Sorry Bruce to have spun off topic. Cards that are bucking the downward pricing trend seem to include some sets in which I have an interest, namely the m1014s, m1015s, and Worch Cigars. T202s certainly have dropped, as have t201s. Rare types seem to stay steady in all grades, in my view, although you seem to disagree and I can't say I've charted it with any accuracy.

This subject was discussed not that long ago, as I recall. One theory is that some of the more mainstream sets have been completed by collectors, who then move to other things. Types from these sets, even high grade, are not difficult to find, so some may be waiting until their overall finances are more favorable to buy what will likely still be there.

[Cat]

Originally Posted by nolemmings

On the contrary Cat, you will not find me implying that you or anyone else is not a real American or a patriot, whatever your political views. You will scarcely find such rhetoric uttered from the left. You will find it, however, repeatedly gargled from the right, especially the Palin and tea party followers who don't miss an opportunity to invoke their "real american values" and preach to the rest of us what must be done to prevent this country from becoming communist, nazi, and/or whatever vile name of the week gains popularity.

You do know that Carville's poll indicated 55% of likely voters think that "Socialist" was an accurate way to describe our President right? Fifty-five percent is a lot more than just "The Right." There are a lot of moderates/independents and some democrats to get to that number.

Before Leon takes me to the woodshed, I will declare that my last political post.

[botn]

I don't think the FBI's "presence" is having an adverse impact on the market--one could argue that it should have a positive impact, if anything, as it at the very least gives the perception that someone is looking out for those who buy sports cards.

I do not track the super high grade (post war 9s and 10s) or low population post war cards but watch most other aspects of the market and agree with Bruce's research. Prices are down across the board, some areas have been harder hit than others, simply from a lack of credit, lack of liquidity, lack of confidence in an economic recovery and the basic realization that what most of us were worth in 2008 is not what we are worth now.

Pricing is somewhat unpredictable at this time due to limited resources. There are fewer people willing or able to be significant under bidders at this time. So while the winners of these cards maybe willing to spend more, there are not enough real bidders underneath them to drive up the prices. Most people are being much more cautious.

I see much of the same continuing through 2011 and just hoping it does not get much worse. Unlike the US stock market, the card market is accurately reflecting the economic landscape.

[benjulmag]

Bruce asked an interesting question, one that I asked a prominent dealer who has been in the hobby for over 30 years. That person told me that in his opinion, the current market is the softest he's seen it since the early 80s (though to put that in perspective, even in this soft market cards values are exponentially higher than they were then). He believes the main reason for it is that the whales, who were largely responsible for driving the prices though the roof to complete/upgrade their registry sets, are for the most part out of the market now. And they have not been replaced by the next generation of whales. He does not believe the current FBI investigations are a major factor.

I think that what this dealer says is certainly a credible explanation for the soft market. But I also think another big reason is the sorry state of the economy. I'm in commercial real estate and business is the worst I can remember since the recession of the early 80s. People I know in other fields report similarly dismal activity, some shockingly below previous years.

Like all business cycles, in time we will come out of this one. Though given its depth, I believe it will take a lot longer than any previous downturn since the Great Depression. But as to baseball cards, even when the economy strengthens, it is unclear how robust the rebound will be, even if a new generation of whales enters the hobby. Part of my caution is that I do believe the current FBI investigations could have a major impact, especially if there are indictments and some major players are criminally convicted. I believe a significant reason card prices got as high as they did was because of fraudulent activity - shilling (which includes the act of suggesting to investor clients that they bid on certain lots the auctioneer knows another collector will bid very high on) and the reporting of "sales" that never took place. I believe part of the reason some recent high profile auctions did not do nearly as well as in the past, as measured by price realized per lot (as opposed to overall auction gross), is because of the auction houses' concerns that too many investigative eyes might be watching, and therefore this might be a good time to start running a clean(er) auction.

[barrysloate]

No question prices are way down across the board, despite the fact that some key rare cards are still performing well. There are a number of factors for this. The biggest of course is the terrible state of our economy. Not much you can do about that. Also, as cited by Corey, many of the whales are now selling their collections, and that has a huge impact on prices from top to bottom.

Also, don't underestimate that the baby boomers are getting older, and are now realizing that they don't have enough money for retirement. I heard a statistic on the radio recently, don't know where it came from but I will share it. According to a survey, 46% of baby boomers will run out of money in their lifetime. Have no idea if it's true, but if it is that is one of the scariest things I've ever heard.

Finally, this hobby has matured. It's not the "New" hobby of the 80's that was getting all this media attention and bringing in new collectors by droves. If anything, the media regards the hobby as infested with fraud, so it's not bringing in as many new collectors.

I think we have a confluence of many things happening at once. But if I had to pick the most important one, I would go with the bad economy.

[calvindog]

Corey, I agree. Fake prices are still rolling in and shill bidding is still going on, all impacting pricing. The crooks in our hobby don't even care that the FBI is watching half the time. It will take incarceration in a cell with no internet access for some of the fraudsters to stop.

[bbcard1]

I collect pretty pedestrian stuff (low grade t206s...collector grade other stuff) and haven't really seen a huge drop. A low grade t card is still around $10-$20 just like it has been forever. I have been surprised at some to the 30's weaknesses, esp the Diamond Stars which are a classically beautiful set. I actually think the 3s and 4s will have more softness than the 1s and 2s and the 7s +. I have not seen many bargain prices on the top shelf players from most any era...Mantle, Ruth, DiMaggio, Cobb, Gehrig...when it comes to retailing.

I saw a Lipset quote from years ago that I think explains a lot...he was talking about the pre-1900 stuff...he said that the market was strong but thin...meaning that there was big money being thrown at it but only by a few people are playing. I think the combination of the economy and people already obtaining what they were looking for (I no longer need a 1967 Brooks Robinson because I have bought a 1967 Brooks Robinson therefore while I once was a potential buyer, I am no longer one) is the reason for the problems in the market...especially in auctions.

[T206Collector]

I concur that T206 prices on low-grade cardboard has been relatively stable over the decade or so that I've been participating. They are the bonds, if you will, of the baseball card industry. No risk and the market will always be there.

[jeffmohler]

I tend to think that the market is soft. I primarily collect 20's and 30's material with some Dietsche postcards and E93s thrown in occasionally.

I just bought two SGC 60 Gold Medal Flour common cards for $13.00-15.00 each and an SGC 70 Rogell (horizontal) for $40.00. Two years ago, I think I would have paid at least 2x-3x as much for the commons.

Like nolemmings said, Worch Cigars are hot, but I can't think of much else in my collecting timeframes.

As far as the cause, I think it is the economy. On many of the cards I collect all it takes is the absence on one bidder to lower the price substantially. In the Gold Medal Flour example, I think it was just one additional bidder that made the Rogell go from less than $20.00 to $40.00.

[Ladder7]

Kids (and adults) have so many entertainment options today. The money is there, just misdirected. If we displayed our items and didn't lock 'em away, I believe it'd serve us in a couple of ways.

I've displayed some stuff several times and the interest was highly positive. I'm planning on setting up another display at the community ctr around Playoff time. It's only takes a couple of hours, but goes a long way.

I was at work last year and a LL game was going on in the field behind the station. One of the coaches is a good friend, so I asked him to see if the kids would like to see some old cards after the game. A few did, and were awestruck by my low-end collection. Sadly, only one LL'r collected cards -because his dad was active in it.

We should be ambassadors, not reclusive. Crack your safes once in a while, it could pay dividends. And they couldn't care if a Cobb is Poor or Mint. You can see it in their smiles, like magic, people soak this stuff up. They're just rarely exposed to it.

[insidethewrapper]

As always : demand vs supply. The next generation just will not demand the way the "baby boomers" did. We grew up in the 50's and 60's and baseball was all that mattered to most of us. It only matters to a few of the kids now. Just check and see if you see any kids playing ball in your neighborhood. My kids ( now in there 20's) did not collect cards. There will always be enough demand for the low supply cards, but the regular produced cards etc will continue to fill auction catalogs as guys like me entering age 60 range get rid of their collections because no one in the family wants it .
When the "baby boomers" are all dead in 20-30 years, I predict the cards will be at all time lows.

We appreciate everyone's thoughtful response.

And we especially appreciate the fine effort to stop this thread from turning into political debate. It would be great if the people in office stopped the politics and remembered that their job was to serve the people who elected them (regardless of party) and not to spend 50% of their time attempting to get reelected or bashing the other side. From our perspective it is like watching a war where all the generals spend their time trying to gain influence with C&C and stop focusing on the enemy.

Back to Prices

Corey and Barry brought up a wide range of issues. We agree with them. What surprises us is that "last minute - last half-hour rush" has not happened. Of the last ten cards we won in major auctions- our winning bid was placed one or two days before the auction closed, in all but one case.

As for the thinness of the market, Lew Lipset was correct then and in many, many cases correct today. There are probably only 10 collectors who would pay a strong price for a rare but relatively obscure piece of memorabilia or a high grade (non HOF) type card. There were number of items in the Heritage and Legendary auctions which are truly rare but sold at surprisingly low levels- i.e. the unopened Darby Chocolate box.

In fact the best advice we ever received was from Billy Mastro in 1981 when we had lost every card in a sale that he and Don Steinbach were running. Bill said...." Don't worry Bruce- remember it is only a piece of old cardboard."

Regardless of short time price variations, we have had a 35 year love affair with the hobby. and we never forget our vows- for better or for worse for richer or for poorer. While values will change our love for great memorabilia will be with us as long as we live.

Bruce Dorskind
America's Toughest Want List
bdorskind@dorskindgroup.com

[iggyman]

The card market is soft right now, no denying that. For the variety of reasons discussed so far and in the past (economy, FBI, eBay fees, end of summer vacations, too many auction houses, etc...), collectors, flippers, & whales are holding back and I believe that is impacting prices. However, if you approach the current market with a five to ten year horizon, then it is a fantastic time to be a buyer. That is the approach I'm taking right now and I strongly believe I will do just fine. I've never bought into the theory that once all the baby boomers retire prewar card prices will plummet. As long as baseball is thriving and the population in the U.S. is growing, new collectors will take the boomers place.

Lovely Day...

We appreciate everyone's thoughtful response.

And we especially appreciate the fine effort to stop this thread from turning into political debate. It would be great if the people in office stopped the politics and remembered that their job was to serve the people who elected them (regardless of party) and not to spend 50% of their time attempting to get reelected or bashing the other side. From our perspective it is like watching a war where all the generals spend their time trying to gain influence with C&C and stop focusing on the enemy.

Back to Prices

Corey and Barry brought up a wide range of issues. We agree with them. What surprises us is that "last minute - last half-hour rush" has not happened. Of the last ten cards we won in major auctions- our winning bid was placed one or two days before the auction closed, in all but one case.

As for the thinness of the market, Lew Lipset was correct then and in many, many cases correct today. There are probably only 10 collectors who would pay a strong price for a rare but relatively obscure piece of memorabilia or
a high grade (non HOF) type card. There were number of items in the Heritage and Legendary auctions which are truly rare but sold at surprisingly low levels- i.e. the unopened Darby Chocolate box.

In fact the best advice we ever received was from Billy Mastro in 1981 when we had lost every card in a sale that he and Don Steinbach were running. Bill said...." Don't worry Bruce- remember is only a piece of old cardboard."

Regardless of short time price variations, we have had a 35 year love affair with the hobby. and we never forget our vows- for better or for worse for richer or for poorer. While values will change our love for great memorabilia will be with us as long as we live

Bruce Dorskind
America's Toughest Want List
bdorskind@dorskindgroup.com