Why has market gone crazy? And outlook?
 

Hello again. Some may recognize my name from awhile back when I was a regular poster here and solid (I believe) buyer and seller....Starting two years ago I decided to sell off about 90% of my pre-war cards, and almost all the pricier ones. I had reached a certain age, the market seemed flat and Covid had arrived, and baseball obsessed baby boomers about to (maybe) fade out....Anyway, for the next year I sold at auction and did pretty well, no complaints....But imagine my shock when, not long ago, I noticed the rather sudden surge in prices starting in 2021, and still accelerating (see: REA this week), where many of the better cards had doubled or even quadrupled in price (Ruths, Gehrigs, Cobbs, even a 1953 Mays, and some t206 etc.)....I had sold at exactly the "wrong" time...

So what happened? Just investment craziness in a time of uncertainty and NFTs etc.? Other factors? I am out of touch with any past analysis on this board. And what happens next? For example, that big climb in t206s prices--does that linger now or does the reality of many examples for most cards in the set arrive and we see a major fall back? And even true with more rare Ruth and Gehrig cards? Thanks for any reply, even if just guessing....

Murphy's Law

Yes. And I am just guessing.

If I knew the future I wouldn't be pondering it so much. But I do ponder it a lot more now than before. The numbers are just so crazy compared with the 'good ol' days'. If it wasn't for the tax hit, I'd sell off and start again.

Greg, great questions.

For why, personally, I think a whole lot of money has been diverted into cards and card services over the past 5 years. Just another investment avenue.

For future, unknown and I hate to speculate. But imagine this scenario:

You bought a vintage card three years ago for 10k
You can sell it now for 50k
OR you can possibly sell it in one year for 100k

Years ago, this scenario would have been farfetched. Nowadays, it is reality.

It's been truly remarkable to see, particularly the $15-$20 commons now selling for $50. That's one area that I think might soften a bit - I know that demand is high (I'm a buyer myself!), but poor condition SC and Piedmont T206 commons are not scarce. If anything, I see them settling at a price a little lower than they are now, but still quite a bit higher than pre-pandemic.

T206 Hall of Famers (particularly those with name recognition), though? I just can't see them dropping much absent a generational financial crisis or an event that leads to people leaving the hobby en masse.

The Rich Got Richer....ie the people spending 6 six figures at ease in auctions on slabbed higher end cards. The middle class got a little richer... drove up middle grade 4-7 graded cards and raw cards in VG-EMXT Shape...the poor got poorer but they still bought an occasional beatter poor to good shape card.

Notice now the off grade stuff has flatlined not talking rare or key graded stars talking the average. It's going to be interesting to see how this plays out. I think middle late next year things could be interesting. Meanwhile for this year and early next year i see ZERO signs of a recessions. The market will be higher then it started Jan 01 2021.

Been noticing the increase on commons for the last year and especially the last several months.

Many of you know that I have started down the T206 route but prior to that - I had been a 1950s collector for a long long time.

Just pull up eBay Search - "1955 Topps PSA" and look at the double digit (and lately triple digit) ASK on common Cards and absolutely ridiculous ask on stars and semi stars.

Extremely disgustipatin............sigh

Lets put it this way - I am not selling any nice vintage to then drop the coin into the stock market. Nope.

Cobb, Ruth, Etc. value
 

With 2022 HRO DC - BATMAN Mythic- Physical Hybrid Card - Unredeemed selling in the $2,000 range, I wouldn't worry to much about vintage sports cards prices collapsing anytime soon--MOO

LOL - Don't even have a clue as to WHAT THAT IS

LOL, I read the first 8 words of your post and thought it was another Bitcoin scammer! :D

I continue to live by my statement:
"Overpaying yesterday is simply underpaying tomorrow."

People buying cards with Pandemic protection funds

I heard of people using food stamps to buy E93s and 55 Bowmans at a show in NJ.

Seriously???

future
 

This hobby has one advantage over many other types of investments: it can be an investment that is fun as well. Our Helmar cards have been more popular than ever and retired cards show good returns. Charles Mandel

With oncoming recession, I think many people are placing vintage in the basket of precious metals as a place to sit their investment capital. I would have told you this was heresy in the past, however “the times they are a changing”.

Sad that a dealer was openly flaunting food stamp exchange laws for such a stupid sale. Also, I thought most states have switched to a debit card format to help prevent these issues.

My opinion:

(1) Record prices of sports cards and memorabilia published on highly trafficked sites such as ESPN
(2) Pandemic, stimulus, gov't policies, fed easy money putting a lot of cash in people's pockets that they wouldn't spend on travelling, restaurants
(3) Once card prices start rising significantly, FOMO
(4) Inflation / fear of stagflation leading folks to think cards may be a safer investment better than stocks or other traditional asset classes

BTW, this doesn't mean that I believe card prices will continue to go up, far from it. There are no fundamentals behind it, and it's just manufactured cardboard. You'll never get dividends from it or be able to fashion it into jewelry.

Definitely agree about fomo. This card sold for x, now I can get y. Or on the flip side, now I have to pay z.

It still blows my mind when I hear people talk about cards as retirement vehicles.

For me the Best way to use as a retirement hedge/side/retirement is try to stick with cards under 5,000 for ease of liquidity in selling for cash. Many can pull that off at a big show, higher then that they won’t spend at shows unless the National. Do you want multiple big checks coming in from auction houses ? I don’t. I wanna sell for cash at shows when retirement comes.

Please clarify your preference for cash sales over big checks from auction houses. What is the difference between $5K in cash or $5k in checks?

the new beckett vintage prices for star cards are insane .i mean crazy

I prefer cash for the purchasing power it gives me via private sales in person from collectors or at shows from dealers. Over the years it’s been one of the only few ways I’ve been able to purchase big collections or single cards from private collectors. They want cash.

The key word is “crazy”
 

And its my recent experience that there are some really crazy people in the hobby these days.

Angyale

translation...no one likes/wants to pay taxes!

or little buyer recourse, or no bad checks.

There are two reasons card demand can increase: either there are more collectors or existing collectors are buying more cards. I think it's a bit of both and mostly driven by covid.

There were a lot of people sitting at home with nothing to do that decided to clean out their closets, and when they did they found half-completed baseball card collections. Many ended up organizing and adding to their cards.

At the same time a lot of people stopped commuting to work, eating out, and going on trips, so they had extra cash to spend. One outlet for that money, new and existing collectors, was buying more cards.

The big question is what will happen now, now that we all have more choices on spending our money. I am skeptical that the level of new collectors will continue, especially with the steady decline in interest in baseball.

And without new collectors, that just leaves all of us buying each other's cards.

Sent from my SM-G955U using Tapatalk

It appears, judging from latest REA, that the (probably) new, "investment" driven, collectors are truly buying by PSA grade, at least for good t206s and maybe in some other cases, without close attention to "scarcity." Myself and I'm sure many others who bought such cards in the past would usually research at least "how many/how many higher" and disparities in recent prices etc. but now it seems that if it's a star card at PSA 5 or greater, or a common at, say, PSA 6 or 7, the offers in most cases are the same, no matter how (relatively) scarce or common a card might be....

They DO seem to value centering, at least....

Speaking as a new T206 collector who has been completely out of baseball cards since the early 1990s, here is my personal take. I collected baseball cards as a kid starting around 1986. I couldn't get enough 1987 Topps. A 1989 UD Ken Griffey Jr. rookie card was going to pay for my retirement. Topps Stadium Club cards looked like the Mona Lisa. I knew of the T206 Wagner (who didn't!) but literally nothing more about the set nor where to get them nor did I care. It was all about the the next new thing!

Then the bottom dropped out and I stopped collecting and life went on. From school, to getting a job, to getting married and having kids, 30 years flew by in the blink of an eye. At some point, though, things settled down - job was steady, kids were a bit older and were at school all day and the desire for a hobby resurfaced as my son and I would watch more and more baseball games together.

New baseball cards were of no interest to me. They were now TOO premium, TOO gimmicky and everything was left to too much chance. To spend multiple hundreds of dollars or more on modern day card seemed insane. But to spend multiple hundreds of dollars on a card from 1909 seemed incredibly reasonable to me! Stuff I could never afford before (or I has assumed I could never afford) was all now within reach.

And if that was what I desired, how could I start anywhere other than with T206?

The final catch is this - given when I started collecting I had NO IDEA that prices has spiked. For all I knew it could have been a steady growth, flatline or decline over the last few decades. I am completely missing that part of history so paying $50 for a 100+ year old card of some guy nobody has ever heard of from a team that barely ever existed seemed exactly 0% crazy to me.

So for me the price increase is a result of two things:

- People of my age who collected in the 1980s/90s as kids who had to get through "life" first before getting back into collecting (including having the disposable income to do so)

- Those same people having absolutely no idea about what prices "should" be

Now I can't get enough. I love baseball cards again!

Bingo!!!!!!!!

How does one balance the feeling of seeing their existing collection's value grow but putting future cards out of reach?

I really hate to say this, but it sucks. Sure it is great some cards shot up in value but it ends up being net-net pretty terrible for people actively building a collection.

I have struggled with this myself. Especially with certain cards. I don't want to feel like I have to sell some of my other cards to afford ones with the current markets prices. The end result is me picking and choosing my spots and where and what I collect.

I also know that I'll be able to prioritize collecting eventually, but it's going to take decades at this point.

..... but if you do sell any nice vintage, maybe Bitcoin?

Bingo!! I resemble this remark!! A foot in my love of 70's and 80's cards (mostly unopened cases and boxes at this point) and a love of the e90's caramel cards.....

Welcome back!

My brother and I have been saying this for the last couple of years to each other whenever we talk cards. We'd much rather our collections be worth way less if the cards we want to add to them also cost way less.

I really don't get excited about the rising value of things I never want to sell, but I do get bummed by the rising value of things I want to buy. Plus, when things reach a certain level of value, one almost feels obligated to be "responsible" and keep at least one eye on value, if a sale could move the quality of life needle even a little bit.

Absolutely agree. I always remind myself that it's better for my financial future for card prices to go down rather than up, since I intend to buy but not to sell.

Q1 GDP was negative 1.4%. I believe we are in for some interesting times - QE winding down, 7-8 interest rate hikes, wild inflation. Card market is already contracting (broadly, doesn't mean what you collect is).

Personally I won't be making any big card or other consumer purchases, highly suspect there be many folks caught naked (over leveraged) when this tide goes out. Toys will be going on sale soon.

I have been thinking this way for 2 years and have been dead wrong.

Middle and low grade cards have pulled back because this inflation is affecting the middle class ..... conversely inflation has little to no affect on 5 and 6 figure buyers on Mile High, REA, and just wait till Memory Lane. Higher Higher and Higher a 53 Mantle PSA 7 sold for 47k along with a SGC 7.5 Mantle selling for over 15k in REA's last auction.

The rich get richer...the poor get poorer... and the middle class pay more and will spend less. Cards are still bullish IMO just not low and middle grade.

Lots of high value cards are WAY off ATH's. Mostly modern, mostly BKB, but upwards of 80% declines.

Recency bias says says that assets like cards, homes, art, vehicles will go up forever but we know that isn't true. Can't think of an asset class that doesn't correct periodically, and the correction is typically in proportion to the run up. We are way overdue for a big reset.

Correction yes...big reset I do not see in higher grade vintage. To much big money is hedged in this now...idk I could be wrong. LoL either way very cool having this conversation, I like your thinking.

When has that EVER happened with blue chip cards...flattening and some pull back yes, but no one has ever taken a bath on T206 cobb or 33 Goudey Ruth.

Correct me if I am wrong.

Never wrong, just early.

Being early is the same as being wrong.

I can call a card from a deck and if you keep flipping them, eventually I'll be right. Was I just "early" saying I could predict the card?

My theory is that prices escalated because I was getting to the point where I could afford to responsibly buy some of the nicer cards. The market realized this was unacceptable and so everything doubled.

That is a funny post. :D

To me it is not about grade (high grade, low grade, mid grade) — there are plenty of cards that are quite expensive in low or mid grade.

Exactly!

Not a good analogy. Buying an asset before it takes off is investing. Buying an asset when it is down is a contrarian strategy that has been around for hundreds of years. If Ruth cards cratered I'd buy more. Besides, they're fun!

https://photos.imageevent.com/exhibi...ize/Ruth_2.jpg

All you said was "never wrong just early." I wasn't sure if that was tongue in cheek but was merely pointing out that being early is just a form of being incorrect.

As far as cards go, I agree with you. I don't really like analogies between card collecting and investing because when investing, my sole interest is making money on X instrument. I don't sit around and look at my short position in the health care sector with the kids.

That's not why I collect cards. I buy cards I like and they go up as a byproduct.

So many great points and thoughts here.

I see the spikes tied to people having more time working remotely to get a hobby, then having extra funds from not vacationing in lockdown and not commuting to work, possibly having even more expendable money after receiving stimulus checks, an increased interest when they see mainstream news and sports sites reporting on huge sale prices of vintage cards from Wagner and Ruth down to newer cards from Trout and Tom Brady.

It does seem we're due for a correction, but it might be like the art world. The artists who are kind of famous in the art world but not known to the man on the street do flatten or drop in price, but Van Gogh and Da Vinci keep spiking.

The blue chip cards, especially in decent condition, are now forever out of reach of most people, and those with deeper pockets will chase them and compete and drive up the price. Even with inflation raging and a recession staring us down I'm surprised to see how much cards are going for, especially for the big names. I'm also surprised to see on eBay how many people are buying cards at the "Buy it Now" price, which is often 25% or more higher than at auction (except for Dean's Cards who prices everything at like 50000% above the going rate).

In 2014 I bought a PSA 7 Babe Ruth Sanella for $189. According to PSA one just sold for $1622. An 850% increase in eight years? Ridiculous. And most of that increase has happened in the past two years! I then went through my email to check out a 1933 red Goudey Ruth that I recalled just losing out on at auction. I found the email and saw it was a PSA 4 and that the sale price was $2,750 in 2014. Earlier this year the same card at the same grade went for $25K at auction on eBay.

I'm a white collar guy in my late 40s who makes a decent buck and is a millionaire on paper (though clearly not one in liquid funds!) but I just can't be plunking down $25K for a card. The $2,750 was a stretch for me back in 2014 but do-able and I just lost on when someone outbid me at the gun. Unless I win Mega Millions, I'll never come that close again to owning a PSA 4 of a 1933 Goudey of Ruth.

No matter the market, historically we have seen people pay huge figures for T206 Wagners and those prices only go up. It seems this will happen now with the vintage cards, and special modern cards, of the big name players.

It's good to see more people get hooked into collecting in the past two years, and I hope many will stick with it to some degree over time, but I think the mid to higher end HOFer vintage cards and going to be out of range for most of us from now on.

As such, I'm tempted to sell that Ruth card, as well as a nice T206 Cy Young portrait, a high-end N28 of Charlie Comiskey and a few more, but I'll hold on to them as I suspect the prices will only go higher. On the other hand, I wouldn't argue with anyone selling their common vintage cards now.

been buying a ton of vintage hockey wish me well

It does. 5-10 years ago so much I could have bought that is likely out of reach forever. Goudey Ruths PSA 7s and 8s. 1921 Exhibit Ruths. So much amazing stuff. I just can't bring myself to buy a poor bashed up version of something for the same price tag that I could have gotten it near mint 5 years ago.

Find myself now more picking around for cool memorabilia and photos that are more meaningful to me anyway.

This is it in a nutshell:

I see the spikes tied to people having more time working remotely to get a hobby, then having extra funds from not vacationing in lockdown and not commuting to work, possibly having even more expendable money after receiving stimulus checks, an increased interest when they see mainstream news and sports sites reporting on huge sale prices of vintage cards from Wagner and Ruth down to newer cards from Trout and Tom Brady.

The rich get richer...the poor get poorer... and the middle class pay more and will spend less. Cards are still bullish IMO just not low and middle grade.

Welcome back Greg. I would say that the price increase on cards in general and especially on vintage is due to keep up with inflation. Everyone is buying hard assets these days since your money is worth less today than a few years back. From Real estate to anything hard asset has been the way to go if you want to keep up.

As far as commons also rising in price, it’s simply supply on demand. With a $50 minimum price to grade a card at PSA, I rather go buy the card already graded since very little new inventory has come to the open market as of late on vintage common cards for us set collectors.

For those of us that collect rather than speculate, it’s a bummer of a time but it is also nice to see our collection appreciate in value as most other things have these past few years.

I don’t follow those cards but there are lots of cards like 86 Jordan, DR J rook that are more then 50% off ATH’s. Broadly, the card market is way off ATH’s.

+1 Agree. The future buys for a collection become less often and less than i would have bought
Also now trying to look at other items related to my collection focus they are more affordable(for now although those items like ticket stubs, photos, scorecards are all exploding in price also)

Obviously no one can predict with any certainty but my thought - and I hope I’m right here - is that the high grades continuing to climb helps the lower grades too. Pulls them up along for the ride.

As they should be IMO. Crazy

The memorabilia market did exactly the opposite of what I thought it would do when the pandemic started and then the stock market cratered. Why would people want to buy assets that are not income-generating and are not necessities (like food, lodging, medicine, etc.)? I really thought there would be a major drop in price because people would start to question the underlying concept of "this piece of cardboard is worth a lot of money because of who is on it and how sharp the corners are". Because when you stop and think about it, it doesn't make any sense (shhhh....don't tell anybody).

I guess stimulus checks helped but these were not enough for multi-thousand dollar purchases and (I thought) went to people making less than a certain annual income. And saving a vacation payment or commuting costs doesn't translate into the major increases on high-end cards (although I guess on lower-end cards it may have).

Since supply did not go up, demand obviously increased...a lot. I have no idea why. I'm not a card millionaire on paper but the value of my collection has increased based on VCP while my ability to buy cards has decreased. So I am caught (like most of us are) between "glad I have what I have" and "I need to lower my standards if I want to add anything else" (or part with some of my collection to fund future purchases).

Demand on everything increased due to easy access to cheap money. The stimulus cheques were great but how many people saw their house appreciate by 100k? Lots, and people leveraged up. Literally everything ran hot. So hot that we can expect money to get significantly more expensive and if the Fed ian’t careful a possible recession.

Not a doomer take but money was cheap and east and folks blew their brains out on debt. That debt is about to get significantly more expensive. Asset prices will follow.

Okay, I hear that. The value of my house went up as well, but that didn't affect my spending. I guess in theory I could have taken out a home equity loan to buy cards or bought cards using my credit card. I didn't, but maybe others did. I am trying very hard to stay away from politics and economic theory because I am not interested in discussing the former on the board and don't know anything about the latter.

So I guess I am left with: I don't know why it happened and don't know what will happen next. But I still love collecting! I just have to collect differently than I used to.

Sounds good, but It doesn't look like the Fed data supports that theory in relation to taking on debt to finance cards.

HELOC loans dropped by $45B from Q3 2020 to Q3 2021. Credit card debt dropped by $3B. Autos up $80B.
New mortgages (not cash out refi) jumped as people took advantage of the low rates and jump in equity to sell and move up. Here, I believe you are right. The piper is coming.

Once people that didn't 'need' the money realized such, most paid off debt or saved it. Those who needed it, used it for those needs.

*Opinion* The people who used "cheap money" to purchase cards (and meme stocks and crypto) are the same who would use a payday loan to go to a casino.

There aren't many, and they surely could not move the market.

'86 to '88 Fleer Hoops has done much worse than just about any other segment of the market since the Feb '21 peak. A 70-75% drop across the board.

But they'd also had some of the biggest gains beforehand.

I think the overall card market has held up pretty well since the pandemic boom. Basketball, hockey, and modern everything corrected the most...but again, those are where the most incredible gains were first.

Blue chip baseball and football hasn't corrected nearly as much. 20-30% after some big gains. And while I don't follow pre-war much, aren't plenty of T206s selling higher than ever at the moment?

That's not what happened. Basically, a lot of big money investors saw the card market as an opportunity to manipulate things and cash in. This led to other big money investors coming in. HELOCs aren't driving the purchase of Jordan rookies - fake purchases at $800k (or whatever those two were) are. And so on.

I'd think youre mistaken. Look at Gamestop and AMC stock compared to the losses by the hedge funds shorting it.


People were bribing the target suppliers to buy retail boxes to resell on ebay minutes later for double or more.


Panini begin "dutch auctions" where wax boxes sell out at 1k within minutes. Paying on your credit card is a short term loan since just about any card inside, or the box itself, would bring a profit as soon as it gets to your door.

PSA inundated with modern cards, literally out of the box, since 9s and 10s bring a huge multiple because they will just be "worth more" graded or next month.


Long time psa dealer stole/lost 1 million worth of grading fees as turnaround times slowed as the modern market sank.

Just like biotech and qqq they are the first to get hit, then the mega caps start falling, while people start buying to find a middle ground.

Most dangerous words in any market "this time it will be different". However, if you dont need to sell, and make good buys, historically you will be fine.

1986 fleer jordan psa 1s, not so sure


People certainly used pandemic loans to buy cards. If they never had these funds, the card wouldnt have sold at that price, or at all.

I stand by these very strong opinions!

All I know is I don't wanna bet against non oddball examples of
RUTH
COBB
JACKIE
MICKEY AND WILLIE
in the long run especially higher end these are NOT GOING DOWN. Stick with these 5 names non oddball preferably higher grade and you're going to be very happy.

Prove to me the above statement is not true?????

This definitely has to be factored into the equation.

I'd think youre mistaken. Look at Gamestop and AMC stock compared to the losses by the hedge funds shorting it.
A relatively small # of 'influencers' doing a viral pump and dump play to stick it to the man. On a game interface to boot. What do you think would happen if they decided to mess with a sector short?

People were bribing the target suppliers to buy retail boxes to resell on ebay minutes later for double or more.
This is accurately describing the investor sharks. Day traders, same as for 86/87D and 89UD, except the interface environment allows to flip in minutes rather than days.

Panini begin "dutch auctions" where wax boxes sell out at 1k within minutes. Paying on your credit card is a short term loan since just about any card inside, or the box itself, would bring a profit as soon as it gets to your door.

YES, yes, yes. BUT buying enough vintage cards to move the market in the way that it has?


People certainly used pandemic loans to buy cards. If they never had these funds, the card wouldnt have sold at that price, or at all.

Technically, this is true. But that is also true for any other purchase I make in the future, sort of a 'But for' scenario.

The FOMO is OVERO

1955 clemente psa 8

6/30/2016 $150,391.00

11/16/2018 $26,400.00

5/23/2021 $59,040.00

4/2/2022. $79,198.80


This time it wont be different. I just hope it cycles back up when I sell!