Money in the hobby
 

While sitting there Sunday night watching REA, it was just crazy watching the amount of money that was being spent left and right. I know that is relative, but prices on sooo many cards have just soared. How many $100,000 cards now exist? How many collections exceed $250,000 now? Billions of dollars in the "industry" as its coined on another thread.

So my question/point is this...

If money = fraudsters, and I would say this is true in all walks of life, isn't it just a matter of time before this whole thing collapses when the cockroaches are exposed? I have heard so many guys from the 70s and 80s talk about how all these high grade pre war cards just weren't around back then...back when the hobby was at its peak mind you. But now? How many crisp t206s Cobbs and CJ Jacksons really survived all this time?

We also seem to have a different vibe to the "hobby" now than years ago. I hear the term investment so much now and it seemed like that word use to be taboo. So much new money in the vintage card game...

It seems to me like its a perfect storm with all this. So much money seems like the potential for fraud would escalate tremendously. It also seems like there are more problems now than I ever remember and eventually these problems will lead people away from cards. I guess its just the amount now that makes me so nervous...my gut is starting to bother me about how expensive everything is getting. What would happen if PSA was found to be corrupt tomorrow and theyre name became worthless?

I know, collect what you like and don't spend more than you have, blah, blah blah. Its not about that, I don't need my cards to be able to retire or anything. But the whole thing makes me somewhat uncomfortable and I started collecting in 1985.

I don't know about the term "investment" being used more. Honestly the whole overprinting thing was created by speculators. I remember "investing" in a lot of 800 Tommy Gregg rookies in 1988 and tons of others. I was fortunate to have also been picking up vintage. I don't think the bubble will burst on the cards most folks are investing in like they did on the cards of the 80s and 90s because the supply really isn't there. Of course virtually everyone isn't collecting any more.

I think there are some cards that sell for big dollars that have thin markets...I remember someone saying years ago that the market for cards from the late 1800s was very profitable but only a few people were playing. It may be more so now.

Third party authenticating is a fluid concept. You now see people talking about old vs. new PSA slabs, REA had multiple autograph authenticators, with Steve Grad now at Beckett, and James Spence on his own, and SGC it's own brand. I don't know off the top of my head who is at PSA/DNA anymore. To think in 10 years that all of this will be status quo is obviously not a bet anyone would make. So if you are "investing" in a baseball card with the expectation of that status quo, you should just be eyes wide open about this stuff:

Your goods are only as valuable as the market credibility of the authenticator at the time of sale.

I do think this is one reason why REA double-certified a lot of its autographs. Take this signed T206 Marquard, which was encapsulated as authentic by SGC.

http://bid.robertedwardauctions.com/...e?itemid=44742

Note how they didn't just rely on SGC's word. They also provided an Auction LOA from James Spence/JSA, and pre-certification by Steve Grad and Brian Sobrero/Beckett Authentication.
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I was thinking the same thing Todd. Everyone was "investing" in the 1980's. It was kind of like the housing bubble, everyone thought things would just keep going up forever. The card market seems to ebb and flow over the years, and some cards are up while others are down, so it makes it a very difficult market to invest in unless you really know what you are doing.

Alright, I see the 80s thing. Buying 500 Bo Jackson rookies, yeah, I could have worded that differently. So my post would be in strict regards to pre war cards.

I am not financially equipped to chase pricey vintage cards but also shake my head at some of the prices these auctions realize. Then again when I tool up and down the Garden State Parkway in my Ford and get passed by literally hundreds of automobiles priced at $100k or so I say different people like to do different things with their cash - so be it.

My worry on the whole vintage card front is the increasing sophistication level of technology. I really believe that the day is not far off when a counterfeit of - name your iconic card - will be produced and be undetectable even by the most "trusted" authorities at grading companies. What happens if that scenario eventuates?

What happens when they counterfeit money as well. The one thing going on cards from 100+ years ago is the paper stock i assume will be tough but I am not a professional so who knows..

Whenever I see one of these crisp cards graded an authentic, I can't help but think how it was trimmed to deceive and how many others like it made it past the graders. Beaters are the best.

I believe that the technology is already available and has probably been used already. You have guys that can rebuild cards and make it seamless. Guys that can doctor colors and have them be flawless also. So what is stopping them from creating one? Could easily do a common in high grade since the big guys would be scrutinized.

I addressed that concern in a SABR post:

My guess is a lot of entombed high grade cards have been altered, or 'prepped,' but that's a different issue.

The only answer I have to this is yes.

The term "investment" to me is still taboo and a house of cards...but that's my opinion. I would like big dollar cards, but even if I felt that was budgetary I would stay away in this market. It reminds me too much of when I steadfastly refused to buy a home in 2004. Eventually there is no room for growth as the demand is outpaced by cost and the buyers are shut out.

I think a select group are grabbing the big cards now anticipating further growth but this is in my belief a very finite crowd. If those (on the high estimate for me) 20 or 30 big buyers stop trying to swap or horde among themselves what happens to the growth?

That's what I thought too, but it is far from the truth. Restorers can take fibers, analyze them and get the identical compounds that were originally used in the card stock and just make "new" stock and do whatever they want to with it. Micro-weave of these "parts" are also possible so creating a new card would seem kinda easy...

I think "outside" money is pushing the prices to influence rising prices. A few million bucks spread here and there is nothing. Probably like shooting fish in a barrel, where many of us (not me) view the last record price as actual value. Bottom line is we are adults paying big money for cardboard produced for children. It use to be you were embarrassed to tell adult friends you collected baseball cards. Now we can say we invest in cards which makes us feel grown up.
I collect and still have fun doing it. Sooner or later most collectors will be gone leaving "money" guys passing cards back and forth.

Or the signed beckett 40 PB wagner which JSA wouldn't pass

This is a pure guess from my experience the high priced vintage market (say items that sell for $25k+) have a handful of different buyers chasing them.

*Those with the means to accumulate anything they want at any price.
*Those that overextend themselves financially for their hobby.
*Those that move from one item to another, buying and selling as a break even throughout the years.
*Those that bought in so early 30-40 years ago they can now move their items to mold their collection in what ever shape they want.
*Those that accumulate then minimize. Building quantity and moving for quality in a repeated process.

No.

If you wanted, you could radiometric date a baseball card. The most commonly known form of radiometric dating is carbon dating, but they test different chemicals to detect items from different time periods. For example, they do lead dating for paintings. They have confirmed the date of famous paintings (Vermeers, Rembrandts, etc) and identified forgeries by lead dating the paint. Radiometric dating is based on the known half-life of chemicals and is explained in the following article: (The Science of Forgery Detection).

But, it's all much easier than that. At the printing level, it's virtually impossible to counterfeit a known baseball card that both looks good at the naked eye level and at the microscopic level. And, further, there are microscopy tests that identify when cards were made from the same printing plate-- so a card that wasn't made from the original printing plate would be easily identified.

I think many of those who are worried about future undetectable counterfeits are applying Doctor Who theories to the real world.

Ok,, maybe I got a little a head of myself as reproducing those micro printing marks would be pretty tough and art restorers wouldn't be able to replicate that as part of their job description. But the same compounds are available today as were 100 years ago, they would still be able to reproduce the stock.

Where is the printing plate material located?

My belief is that even though detection technology is readily available, it is not economically sensible for most pieces. In other words, I'm not gonna spend $1000 to verify a $500 card. At some point it would, but that market is likely very small. BTW, I, of course, used up made up numbers for the example. I have no idea what the costs would be, but you get the idea.

Counterfeits are easy to identify, because not only to they have to use the original printing technology, but there are tens and tens of things and details they have to exactly duplicate. A forgery of a brand new (made up/fantasy) item could be different, because it doesn't have to perfectly match anything and there's no original for direct comparison.

The future perfect counterfeit of a T206 Wagner or Plank is of no concern to me, because I don't think it can happen. When I think of a hard to identify as fake future forgery, it would be of something like an '1800s' ad poster or trade card, where they forger used the original lithography techniques to make it.

But, beyond that they usually look bad to the seasoned collector, i can say that 99.9% of counterfeits, reprints and forgeries of Pre-WWI cards and baseball memorabilia are definitely identified because they are printed with the wrong (modern) printing.

This reminds me of how we like conspiracy theories or CSI super technical explanations. In fact, simple, straightforward anomalies are the easiest to detect. Thanks.

A lot of simple, easy to look for qualities helps identify counterfeits. For just one example, one of the hardest things to duplicate on a reprint or counterfeit is the original gloss.

How did tobacco companies, over 100 years ago, create cards that cannot be duplicated today (with our modern technology)? What did they do then, that we can't do now?

No doubt fraud follows money around, but I imagine most of the perception that these [NM-MT pre-war] cards just weren't around in the 70s and 80s is because people were looking at all of the cards that could fit on the tables in a hotel ballroom or the counter of a 500 square foot card shop as opposed to all of the cards that can fit on the internet. I'm sure it was different for some of you guys, but I think I saw maybe one T206 a year in the 80s, compared to hundreds of thousands of Topps, Donruss, and Fleer cards. Now I can easily view 1000 or more T206s every day. If 0.1% of them survived in NM or better condition into the 80s then I would probably have encountered none of them at that time (and I didn't) but would see them quite often now (and I do).

I can't think of a good analogy, but modern and antique printing technology are mutually exclusive, just as the words modern and antique are mutually exclusive.

You identify and date the printing technology by looking at the printing at the microscopic level, not the naked eye level. So a digital printing technology (say a laser printer) can make a great reproduction at the naked eye level, but is identified as modern printing under the microscope.

"accumulate then minimize. Building quantity and moving for quality in a repeated process"

Steve, can I use that with my wife? It sounds so much better than "buying a lot of stuff I like"?

PSA's type collection?
 

While we're talking about authentication, here's something I've been wondering about:

Does PSA have the world's greatest type collection? You can check that a card's printing is period with a microscope, but to check to see if the card stock is right for a particular issue you'd need to compare it to an example that you know belongs to that set. So if you send them something from a super-obscure set, does the grader have access to a known-authentic example from that set that he can compare your card to?

For the conspiracy theorists, there was a Doctor Who episode where a time-travelling chameleonic alien went back in time as Leonardo da Vinci in order to make multiple Mona Lisas for the future.

Hopefully my first use of the quote function is correct.

I linked into your SABR article. Fascinating and obviously very informed. Light years ahead of my own level of expertise. I have no quibble with any of the points you made. I was, however, drawn to your use of the non-linear concept in your opening. That is where my concern lies in the future regarding counterfeiting, in this case specifically sports cards, but in other areas as well.

While I don't refer to the current technological advances as exponential they are not linear. I don't think it's an unrealistic stretch to visualize a time in the near future when the WTF moment hits and the cat is out of the bag as far as the sudden ineffectiveness of traditional counter fraud measures.

Pleasure to read your article.

As others have said, the printing technologies are different now. Back then, they used lithographic printing techniques and now it's more laser printing. Therefore, under magnification, you can see the print dots are different. A counterfeiter would need to bring back lithographic printing which is much easier said than done. In addition, paper stock right now fluoresces, and it did not for prewar cards. This is why using the black light test is a standard test now to determine authenticity. A counterfeiter would basically have to be able to create paper stock like they did back then or find a bunch of unused paper stock from the prewar days that is nearly identical to the card they are trying to forge. Both of these things put together make it extremely hard to counterfeit prewar cards, which is why I doubt there are virtually any that are out there. In addition, many of the veterans of the hobby do not slab their cards, and keep their collection raw. Therefore, they are used to feeling the texture of paper stock and the look of the ink, they'd catch most fakes quickly. I think people see the Black Swamp or Lucky 7 find, and they are concerned about loads of fake prewar cards being reprinted, and I just don't think that is happening.

It's much easier for counterfeiters to focus on the old style TPG slabs and flips which are much simpler to replicate. Then you could put a fake card inside one of those slabs or an altered or overgraded genuine card.

And of course, restoring, altering, trimmed cards are a problem in the hobby. I don't doubt that. However, I don't see the absolute population of the cards increasing due to counterfeiting techniques.

About the comment that in the 70s/80s, these cards just weren't seen, I think a lot of that is due to the internet now. Back then, you had no idea what was out there, and now you can just go to ebay and google the card, and you can see many instances of it immediately. Folks are more likely now to know what they have and not throw it out since they can quickly check the internet and know it is actually worth $$$$. Also with all of the auctions always going on, it may seem like there is a Ruth rookie on auction all of the time. However, the total population is still only around 100-200, which is really not a lot when you consider there are over 300 million people in the US, and even if it's only the 1%'ers that can afford these cards, that's still a lot more people than cards out there.

Anyway, I'm not saying the card market can't collapse, because it definitely can even for rare prewar cards. You can look at some of the card prices from 2007/08, and there are still some cards that have not returned to those prices that they sold back then. However, if the overall card market does collapse, I think it'd more be due to macroeconomic effects of the economy such as if we go into another strong recession as opposed to a TPG like PSA going under. Because even if the slab is now worthless, people still want the card inside it.

A couple of caveats: I make no comment on high grade cards or vintage/modern cards which have populations in the thousands or much higher. I also can't understand the current market prices there at all, so can't say where those will go.

Here is something I simply do not understand regarding the large sums spent on baseball cards. Let's take two lots in the recent REA Auction: Lot 12, a PSA 9 Hank Aaron rookie which sold for 216K; and lot 13, a PSA 9 Sandy Koufax rookie which sold for 156K. We all know those are both very common cards, and only attained those lofty bids because they were graded Mint 9. For someone willing to pay such an extraordinary amount of money for them, there had to be a strong belief that what they were buying is exactly what it says on the label. But here is what we also know:

1) A card submitted for grading that comes back "Evidence of Trimming" can be resubmitted a month later and come back NR MT 7.

2) The same card can be submitted three times and come back with three different grades.

3) Countless trimmed and altered cards make it into holders with numerical grades with alarming frequency.

So can somebody tell me why there is such a blind faith in that little white label? To me there is a disconnect here that makes no sense. Why is something so subjective and so inconsistent treated with such absolute trust? You don't spend a quarter of a million dollars on something if you are not completely confident you are getting what you are paying for.

I have Always Referred to David's Knowledge of Ink Processing & Photography. His explanation of radiometric & carbon dating is sound teaching.
And even if it were possible ta somehow get by or around this major issue,
You still have the Papar Problem!

Ovar the Years From What I have found, We Simply Don't Know How the Papar was produced.
To think that someone in todays techno world could easily figure this out is Truly an immense project.
And iN Reality... No one would spend the Time, Effort & Money ta do So!
Only to Come uP Short of Victory!!!

I have looked at and discuss the material that is comprised within T206's, E90-1's & T205's wit a friend of mine(Who's Family own's one of the Largest Printin Co.'s in New York, His Great Grand Father start'd the Co. RiGHT Around 1901), And wit All His Knowledge, antique museum material, along wit his family past antique equipment, The whole bunch of'em are Clueless to how the papar was process'd/made!

Sure there are those wit well educated theory's...
Howevar, has Anyone replicated their theory inta a product & proved it can be done?

Kinda like Buildin a Viking longship or even replicatin their steel...
The World's Best have tried and fail'd!

LookiN at the Side view of a T206, under a 50x optic can be Truly FasinatiN...
If You havn't tried it as of yet, Giv'er a Go... :)

Because the flip is the commodity, not the card. Flips sell, and nobody scrutinizes what's in the holder very much, at certain strata anyhow. I've seen cards posted here that I would bet my life are altered, but many just see the flip and ooh and aah.

"What we said of it, became a part of what it is." -- Wallace Stevens.

All of the things you talk about involve human decisions/opinions. Take the human out of the equation and you won't have those issues. It's coming.........

Gary - This is what I propose and can be done:

In addition, paper stock right now fluoresces, and it did not for prewar cards. This is why using the black light test is a standard test now to determine authenticity. A counterfeiter would basically have to be able to create paper stock like they did back then or find a bunch of unused paper stock from the prewar days that is nearly identical to the card they are trying to forge.

Why not just recreate the stock? Todays stock only glows b/c of its compounds. How hard would it be to recreate edges and corners? This is standard restoration in other fields. Its just accepted and disclosed.

My while point is this: with the ever increasing prices, we ill see ever increasing fraud and attempts to deceive. At what point do people just say enough is enough? The amounts of money are just rather large.

Barry, I completely see what you are saying here, and I agree with a lot of it. However, there are a lot of different ways that I could answer this question. However, to focus on the cards that are going for 6 figures, I'll put it this way. The people who are buying these cards go to shows or events like the PSA luncheons and see other collectors like them, and they trust that other rich people like them (e.g., Ken Kendrick, etc) are buying cards, so they know that it's not just them in this market. When they sell their cards, they get paid real cash, real money with no restrictions like you can't sell for 2 years. They see the card prices going up based upon VCP, past auction sales, or other ways that are easily accessible. And which cards are going up the fastest? The ones with the highest number on the flips, which makes perfect sense to them because rich people collect the highest quality collectibles.

Card doctoring has been rampant for the two decades since I got back into collecting. In my opinion, as witnessed by the continued strength of the market, not many people care.

I understand herd mentality, and everyone assumes the card they buy will be just as desirable when it comes time to sell. But I still have trouble with how much faith is put on that label.

If you have 1952 Topps Mantle that grades PSA 8, and you are able to convince the grader that it deserves an extra ".5" on the label- not a full grade, but a half grade- that grader has just created a half a million dollars of wealth out of thin area. How did such a market evolve? Something about this simply escapes me.

And Peter S. is correct that the label, and not the card, is the commodity (and I love Wallace Stevens).

For 10 points Barry name the poem, no cheating.

IMHO, Barry (and good to hear from you, by the way), a lot of these guys paying huge, enormous premiums for "9's" vs "8's" and "10's" vs "9's" are quite literally paying for the holder/flip inside. There simply is no way that the difference in the quality of the card can match the price differential, so what are they getting for their money? A holder with a piece of paper in it, for which they have paid tens or even hundreds of thousands of dollars more than they would have for a beautiful card graded just one level lower. Far better to invest in something like the 1907 Seamless Steel Ty Cobb rookie Orlando Rodriguez of this board won in the REA auction ($24,000?), where both grading services have slabbed a total of four examples, and both Orly and I believe that that number is not going to increase much at all over the next few decades. Same with cards like the 1914 Baltimore News Ruth (11 total graded?), the Dietsche Fielding Pose and Wolverine News Cobb rookies, etc., etc.

I have studied the coin hobby extensively, as it has followed essentially the same path as that of cards, only with a 120 year head start. In that context, where there is a vast difference in the price of a coin, for example, in Mint State 67 vs Mint State 64 or 63, but little substantive difference of any real note between the quality of the two, and the item at issue is not all that rare, the values of the higher numerically graded items have tended to be cyclical, ebbing and flowing with the ingress and egress of investor types. On the other hand, truly rare and significant items tend to keep appreciating in virtually linear fashion (although those gaining the most in value over time among that group are those in better condition). And while on the subject, coins have also been the target of many counterfeiting attempts, with very little real success over the years. Items made through different methods always tend to leave different footprints, so I don't think we will be seeing a few hundred undetectable, newly manufactured Baltimore News Ruths in the next decade, century or even millenium! Same case scenario with Orly's Seamless Steel Cobb rookie (and presumably my own Wolverine Portrait and Dietsche Fielding Pose Cobbs).

Regards,

Larry

Some people put 100 percent certainty in something with 15 percent margin of error. But, really, their concern is financial value. The owner may be well aware of the margin of error in grading and the possibility of alterations, but all that matters is the financial value-- and if others invest in the label, then the label is what matters.

Barry, I don't disagree with you at all in regards to the flips, but for collectibles, people often defer to these so called experts in those fields even when buying extremely expensive things. When someone says that a wine receives a certain rating or the vintage that year was particularly excellent, do most of us have any idea what they are talking about? When some "expert" says this modern art painting is part of the new avant garde in the field right now and is worth hundreds of thousands of dollars, do those people who buy those paintings really have any idea what they are buying? And many collectors may come from collecting coins, where these same issues have been rehashed over and over again. I'm not saying I agree with it but just trying to explain how we got here.

Barry- the word "ego" comes to mind in all this. It's not aesthetics. It's not a love of baseball history. It's not rekindling childhood dreams. It's just "ego."

none of this matters unless TPG's want to find fakes. And based on some previous threads, it appears some TPG's are enabling forgeries. PSA can't even tell if a card has been chemically treated for gosh sakes. Let me clarify, PSA may not care that a card has been chemically treated; or counterfeited.

I have thought about this a lot. First, I think 1950s-1960s is exploding because a ton of baby boomers are aging and capturing their history. I am much younger but still get excited opening a 1986 Donruss pack and hitting a worthless Canseco. So in that scenario a rising tide lifts all boats.

Vintage: perhaps there is some foreign laundering going on? I learned a ton about Macau and getting onshore money offshore. Throw into that some other country money that needs to be parked and that could explain some of the rise in value.

That said, some of these auctions from late 2015/early 2016 prices look a little inflated. We will see, but if they are inflated and you pay 10% to 15% to launder money, that's ok, right?

You are seeing foreign money that needs a home in a ton of urban real estate markets on the high end. Why not baseball cards if they meet an ultimate need which may not be a collector need?

Agree 100%. Ever increasing prices raised the same concerns in the coin market, and truly rare, significant items are still appreciating in value (check some of the better coin books issued in the last decade or less, giving real auction values for truly rare coins sold during that time period). The same has held true in cars, where there are many examples of rare and significant vehicles passing through the 7-figure "barrier" as if it was made of very soft butter! Don't believe it? How about a 1967 Corvette, selling for more than $3 million (1967 L-88 427 model; 20 made). A 1971 Hemi Cuda convertible for $2 million plus (11 or 12 in existence). 1962 Ferrari 250 GT's selling well into 8 figures. Very limited production Jaguar XKE lightweights, produced exclusively for racing (somewhere around 12 made, and selling for around $7 million, if memory serves correctly). Fakes have also frequently been attempted in both coins and cards, with little success. Q. David Bowers, an elite expert in the coin field, has been asked how high prices can go, and his answer has usually referred to what some works of art have sold and are selling for ($100 million plus). Perhaps not so unrealistic in the somewhat distant future even in the card hobby, when you consider that the 1903 E107 Mathewson in the REA auction, which went for $144,000, was a $900- $1000 item in 1995--thus increasing in value around 150 times in just over 20 years. Amazing, or just rare and significant to the extreme in an ever growing field?

Tremendously rising prices simply make some of us nervous (as well perhaps they should, as many will inevitably be priced out of the market for the best of the best items--learn to identify those which are yet undervalued now, as John J. Pittman did in coins, eventually putting together a $40 million collection, even though never able to afford the great rarities, or "trophy" coins!), but it's just hobby growth for the most part (pure speculator/"investor" types aside). I have an early to mid '90's REA auction catalog which is just several pages of newsprint in black and white on yellow stock (an insert to SCD, as I recall). Compare that to the most recent edition, with 700+ pages of the best glossy stock available. That, my fellow collectors, simply signifies growth, and growth on a very large scale. If that growth is largely attributable to true collectors who actually really like buying pieces of the history of the game, it will not only be sustainable but continue.

I guess you can see that I am most definitively not a "the sky is falling" type.

Highest regards,

Larry

For what it's worth, the ones paying vast sums for the Mint and Gem Mint HOF rookies at least have PSA's insurance policy that will reimburse them if the card is found to a forgery or altered, presuming the card was truly graded by PSA and the slab is still intact (not fake flip/switched out card/fake holder).
Plus, if you really have a PSA 9 Aaron RC, are you going to remove it from the holder and send it in again raw? If not, it doesn't matter as the PSA flip is staying with the card. And if you for some reason think the card could become a 10, you're going to leave it with a min grade of 9, so PSA doesn't reconsider the grade they've already given it.

Gary, exactly. It can't be the cards, because the minute differences in the corners (even assuming the cards are actually graded accurately and consistently and that's a huge assumption) are not even visible to most eyes without a loupe.

Is it "The Emperor of Ice Cream"? It's just a guess.

"when you consider that the 1903 E107 Mathewson in the REA auction, which went for $144,000, was a $900- $1000 item in 1995--thus increasing in value around 150 times in just over ....."

Larry-I'm not sure where you are getting your 1995 number from. In the mid-1990s I won a beat to hell Mathewson E107 in a David Festberg auction for $2000. When I got it I found that the condition was even worse than described and I called David to say I was returning it. His response? No problem--the under bidder was Larry Fritsch and he'll take it.

Depending on the set, the "plate" would be the easy part. Lithographic stones are still available for art printers, and there are enough vintage ones out there that I wouldn't say they're hard to find.

Stuff produced after the change to aluminum might be marginally harder, but there isn't much difference between the 30's and 80's.


Steve B