REA bids - health of the hobby

[ajjohnsonsoxfan]

Had a chance today to go through the truly amazing REA catalog and compare bids (with 20 days to go btw) to VCP on 50+ cards and many were at or above historical highs. I was collecting vintage in the 2000's to around 2004, sold everything and then got back into it in 2014. So my question is for everyone that collected through the great recession of 2008 does this feel like we're in a bubble based on what you're seeing? Is big investor money coming into the hobby at greater rates like in 2006/2007? Would love to hear some perspectives from the pros...

[glynparson]

entering the hobby over the last couple years. It is not just wall street types either, several athletes and team owners have jumped into collecting and they obviously have passion and loads of money.

[iowadoc77]

I am relatively new, just back into collecting since 2012 but I follow the big auctions fairly closely. The prices seem ridiculous and unsustainable until the next auction comes and they increase even more. I acquire more "collector grade" cards, so the huge numbers don't affect me as much, but I am still blown away by the cash that is being thrown around in the bigger items. Or I guess instead of thrown around, you could say invested based on recent performance.

[Bored5000]

I think the hobby is in decent shape right now, but there is also a difference between REA and the hobby as a whole. The collector that buys $100 cards or $300 cards (which is a much larger pool of collectors) isn't reflected by what happens at REA or other high-end auction houses.

[GregMitch34]

As I've noted previously, not just the mega-cards in some cases--for example, huge surge in prices for 1915 Cracker Jacks in the $600 to $900 range....

[Jewish-collector]

The REA separates the men from the boys. If you're thinking of bidding for that high end card, sometimes you gotta say "WTF" and do it.

[sjim8660]

One of the things to considered and I may be off a little in saying this. Serious collectors seem more inclined to spend big dollars on REA compared to eBay because it is a LOT easier to shill on eBay. I personally am always cautious to spend over $1K on eBay because of shilling. eBay is great because no buyer premium, so that helps. As far as high prices, Baseball season just got under way, its also tax season so people have extra cash. So those things could play a factor in the higher prices. I personally am bidding on a few things for some sets I am working on and I don't mind spending more on a few cards that I have been waiting months to pop up. It makes me happy to see the vintage Baseball market healthy and growing. Cards like that 14' CJ Joe Jackson should be going for big money for several reasons. I think what people are willing to spend is finally catching up with the rarity of some of these cards.

-James Steele

[Pilot172000]

If you take a long look at hobbies across the board you will see that all are at record highs. A lot of that has to do with the fact that the investment value of a top tier card has better growth potential than a 5 year CD worth the same amount of money. I also collect Colt Revolvers and the price and value of a Colt Python was around $350 to $400 prior to 2008. Today it hovers anywhere from $1800 for a rough specimen to $15,0000 for a LNIB. Folks with money aren't gonna sit around and wait for the Fed to raise interest rates. They are gong to pour their cash into investments like what the REA is auctioning off.

[ls7plus]

Originally Posted by glynparson

THERE IS TONS OF BIG MONEY entering the hobby over the last couple years. It is not just wall street types either, several athletes and team owners have jumped into collecting and they obviously have passion and loads of money.

This is exactly what is happening, and the internet and increase in the number and quality of auction houses is making it much easier to find even the toughest items you may desire. In the '90's, you were pretty much relegated to Sports Collector's Digest and hoping to be the first to call and reserve such an item, or going to tons of major regional shows, including the National, the Rosemont shows twice per year in Chicago, Strongsville in Ohio, the Pittsburgh show and a few others in the midwest. As truly rare and significant items are purchased and stowed away by these new, well-heeled collectors (and they are collectors, not speculators, by and large--this is not a bubble!), prices rise accordingly for the fewer and fewer examples available. Remember, the supply part of the supply/demand part of the equation relating to value IS THE AVAILABLE SUPPLY, NOT THE TOTAL NUMBER IN EXISTENCE! Many of the key pieces now being purchased will not surface again for many, many years.

All the more reason for trying to think outside of the box re rare, significant and in the best condition you can find or afford, and being on the cutting edge of demand re the future, rather than on the trailing edge of the present--the latter will require a much larger bankroll!

And that's my 75 cents worth,

Larry

[ls7plus]

Originally Posted by Pilot172000

If you take a long look at hobbies across the board you will see that all are at record highs. A lot of that has to do with the fact that the investment value of a top tier card has better growth potential than a 5 year CD worth the same amount of money. I also collect Colt Revolvers and the price and value of a Colt Python was around $350 to $400 prior to 2008. Today it hovers anywhere from $1800 for a rough specimen to $15,0000 for a LNIB. Folks with money aren't gonna sit around and wait for the Fed to raise interest rates. They are gong to pour their cash into investments like what the REA is auctioning off.

You are exactly right, David. Rare, significant cars and coins are seeing similar substantial increases in value!

Regards,

Larry

[Pilot172000]

Originally Posted by ls7plus

You are exactly right, David. Rare, significant cars and coins are seeing similar substantial increases in value!

Regards,

Larry

I was able to snag a few Pre-33 Gold coins before they got crazy and am thankful for it. You have to spend money to make money and Return on Investment on Quality Cards far exceeds inflation and other more traditional portfolios.

[BeanTown]

+1 and well put Larry. I will add TeleTrade to your list of the 90s. I think I built half a Cracker Jack set from them!

Originally Posted by ls7plus

This is exactly what is happening, and the internet and increase in the number and quality of auction houses is making it much easier to find even the toughest items you may desire. In the '90's, you were pretty much relegated to Sports Collector's Digest and hoping to be the first to call and reserve such an item, or going to tons of major regional shows, including the National, the Rosemont shows twice per year in Chicago, Strongsville in Ohio, the Pittsburgh show and a few others in the midwest. As truly rare and significant items are purchased and stowed away by these new, well-heeled collectors (and they are collectors, not speculators, by and large--this is not a bubble!), prices rise accordingly for the fewer and fewer examples available. Remember, the supply part of the supply/demand part of the equation relating to value IS THE AVAILABLE SUPPLY, NOT THE TOTAL NUMBER IN EXISTENCE! Many of the key pieces now being purchased will not surface again for many, many years.

All the more reason for trying to think outside of the box re rare, significant and in the best condition you can find or afford, and being on the cutting edge of demand re the future, rather than on the trailing edge of the present--the latter will require a much larger bankroll!

And that's my 75 cents worth,

Larry

[BobbyVCP]

Glad I only collect values because prices are just going up. Last night someone shelled out $65K for a Koufax rookie PSA 8.5, that's insane.

[pokerplyr80]

Originally Posted by BobbyVCP

Glad I only collect values because prices are just going up. Last night someone shelled out $65K for a Koufax rookie PSA 8.5, that's insane.

Thats crazy. It wasn't that long ago that I remember 8s sitting on ebay at 4k and 9s at 20k.

[BobbyVCP]

Originally Posted by pokerplyr80

Thats crazy. It wasn't that long ago that I remember 8s sitting on ebay at 4k and 9s at 20k.

The seller bought the cards about 3 years prior for 6K and sold it for a very nice profit.

[William Todd]

Its bubble city...

[pokerplyr80]

Originally Posted by BobbyVCP

The seller bought the cards about 3 years prior for 6K and sold it for a very nice profit.

An awesome return obviously. Anyone who bought big cards PSA 8 and up more than two years ago did very well. Whether this is a bubble or just the new norm remains to be seen. My money is on the latter. There are only so many of these cards to go around and plenty of new guys in the market who want them.

[Republicaninmass]

Originally Posted by BobbyVCP

Glad I only collect values because prices are just going up. Last night someone shilled out $65K for a Koufax rookie PSA 8.5, that's insane.

Fixed

[sjim8660]

Anyone have any ideas as to where that 14' CJ Joe Jackson will end? They don't surface a lot even though the grade is low seems to be going pretty strong. Any chance it breaks $20K (not counting buyers premium)?

[Joshwesley]

When you guys say it mention "bubble" you don't mean this pre-war stuff is going to peak at all time high prices and then end up like my 80's-90's collection, right?

I would assume the shear lack of numbers of these pre-war cards (comparatively speaking) would keep that from happening?


Thanks

[Pilot172000]

What percent is the buyers premium? I have an eye on some of the Hindu Browns but don't want to spend too much.

[kickitup]

Prices for the rarest and the best have only begun to rise.

Invest in quality for the grade and don't leverage yourself and you will do fine long term. You only get burned when you 'have to' sell.

Cracker jacks will likely go next, after goudeys take off. Then my hunch is t206 cards rocket ship. There aren't enough good cards to go around.

Plus..... The biggest factor causing the rise in prices is PSA's grading standards have changed. People bitch and complain about how hard it is to get a bump now, but their new strict policies are exactly what has caused the hobby prices to sky rocket. Supply is perceived to be capped now with increasing demand.

I like being long cards with those fundamentals.

Kick it up!

[uniship]

For the past 35 years I have been wondering when cards will come back to earth. They just keep doing well for the most part. It seems now cards might be going "mainstream" to outside investors. If this is indeed true, fasten your seatbelts - we may one day long to be able to buy at 2015 prices.

Then again who the hell knows.

[sjim8660]

Originally Posted by uniship

For the past 35 years I have been wondering when cards will come back to earth. They just keep doing well for the most part. It seems now cards might be going "mainstream" to outside investors. If this is indeed true, fasten your seatbelts - we may one day long to be able to buy at 2015 prices.

Then again who the hell knows.

Tell me about it. I remember 10 years ago not wanting to buy a PSA 10 Elway RC because it was "too much" lol. Now they are what $5-$6K a pop lol. Same can be said for the obvious 52' Mantle that is going into uncharted water in terms of price. A PSA 10 52' Mantle is being rumored at $2 Mil. The fact is, its more fun to invest in vintage cards than buying stock or even gold and right now its more profitable lol.

[uniship]

honestly with the way things have been going - I bet that card would sell for even more - perhaps MUCH more - than $2m

[T206Collector]

It is hard to ignore the market, but every once in awhile it gives me nausea to consider the irrationality of a market for little pieces of cardboard with baseball players on them that carry little to no value in any other part of the world, and are not directly correlated to any form of universal currency like gold. It's like art, I guess, and I seem to calm down more when I think of it as so. Picasso may be hot today, but maybe in 50 years people will think he is crap - another totally irrational market.

[goudey1933]

I'm just throwing this scenario out there....PSA goes out of business....what would happen?I know there not but lets pretend.
Scott

[glchen]

Originally Posted by goudey1933

I'm just throwing this scenario out there....PSA goes out of business....what would happen?I know there not but lets pretend.
Scott

Discussed before here: Link

[pokerplyr80]

Originally Posted by uniship

honestly with the way things have been going - I bet that card would sell for even more - perhaps MUCH more - than $2m

You're right about that. A 9 would sell for more than 2 mil right now. A 10 who knows? I would guess 5 or 6.

[AGuinness]

Originally Posted by kickitup

Plus..... The biggest factor causing the rise in prices is PSA's grading standards have changed. People bitch and complain about how hard it is to get a bump now, but their new strict policies are exactly what has caused the hobby prices to sky rocket. Supply is perceived to be capped now with increasing demand.

I like being long cards with those fundamentals.

Kick it up!

Isn't this shift in PSA standards fairly recent? I can't see that as the biggest factor in rising prices, because as others have noted elsewhere, prices have been rising fast for many years - even 10 or 15 years.

I wonder if the shift in PSA standards could potentially create a split market, where cards with new flips (graded with new standards) are basically in a different ballpark than old flips, which would make their grade unreliable (although perhaps not entirely irrelevant).

This is more of an open question in my mind...

[Econteachert205]

Wall Street cards: high grade rookies, registry building, prewar mid to high-doing fine


Main Street cards: everything else: mediocre.

[DeanH3]

Originally Posted by AGuinness

Isn't this shift in PSA standards fairly recent? I can't see that as the biggest factor in rising prices, because as others have noted elsewhere, prices have been rising fast for many years - even 10 or 15 years.

I wonder if the shift in PSA standards could potentially create a split market, where cards with new flips (graded with new standards) are basically in a different ballpark than old flips, which would make their grade unreliable (although perhaps not entirely irrelevant).

This is more of an open question in my mind...

Keep in mind older graded cards will be re-holdered so you can't always rely on a newer flip = newly graded.

[kailes2872]

Originally Posted by pokerplyr80

You're right about that. A 9 would sell for more than 2 mil right now. A 10 who knows? I would guess 5 or 6.

So is the PSA 10 #311 the most valuable card in Ken Kendrick's collection on the trimmed T206 Wagner?

[pokerplyr80]

Originally Posted by kailes2872

So is the PSA 10 #311 the most valuable card in Ken Kendrick's collection on the trimmed T206 Wagner?

It would be interesting to find out. I think they would be pretty close right now. It doesn't sound like he will ever sell either but maybe some day. It wouldn't surprise me if some private collector with a lot of money offered 10m for either of those cards privately.

[glchen]

I thought Kendrick owned two of the PSA 10 1952 Topps #311 Mantles...

[4815162342]

Originally Posted by T206Collector

It is hard to ignore the market, but every once in awhile it gives me nausea to consider the irrationality of a market for little pieces of cardboard with baseball players on them that carry little to no value in any other part of the world, and are not directly correlated to any form of universal currency like gold. It's like art, I guess, and I seem to calm down more when I think of it as so. Picasso may be hot today, but maybe in 50 years people will think he is crap - another totally irrational market.

If the card market crashes, it'll just mean I can buy more cards.

[bobfreedman]

Retracted

[pokerplyr80]

Originally Posted by bobfreedman

i know of two recent transactions for a PSA 9 Mantle, one was for $3 million and the other for $3.75 million

I hadn't heard about the 3.75m sale. I guess 5 or 6 would be on the low side of an estimate for a 10 today then. If people with that kind of money are investing in cards the recent run up we've seen could just be the beginning.

[Republicaninmass]

There inevitably comes a point where people decide enough is enough. I can't be the only one skeptical about some of these 'private' or even public sales both posted here, and with regard to the recent Cobb/Cobb backs. Again only time will tell, and I hope when I go to sell, these same people are still buying without hesitation.

[AGuinness]

Originally Posted by DeanH3

Keep in mind older graded cards will be re-holdered so you can't always rely on a newer flip = newly graded.

I guess I figured there might be some sort of review possible when submitting for a new holder (which might be useful to a TPG who may have graded a card and later information about alterations came to light, but just hypothetically speaking - that couldn't happen, right?).

[nat]

I'm just thinking out loud here, so don't construe any of this as investment advice. But it's worth asking why the prices of high-end cards have gone through the roof (and, as noted up thread, that of lower end cards haven't). One possible explanation is that it's driven by increasing wealth inequality. Sure, correlation isn't causation, but the two have been increasing in tandem. Concentrating money in fewer hands means that those with the money can afford to drop larger sums on baseball cards. If that's what's doing it, then, at least in the long run, high-end baseball card prices are in trouble.

That's because, for prices to continue to rise would require further consolidation of wealth (so that there's somebody out there who can afford to spend even more on cards), but, at some point, this process will backfire. At some point, this will require shrinking the pool of wealthy people (so that the remaining wealthy people have enough money to afford the very expensive cards), but as you do that you increase the risk that the remaining wealthy people (who are interested in baseball cards, it's not like all the wealthy people are buying cards) already have the cards that they want. Kendrick probably isn't the market for another t206 Wagner, for example. And at that point the price of high-end cards collapses.

In short the problem is that increasing prices requires two things: a population of people who have ever increasing amounts of money, and a population of people who are willing to compete against each other to buy the cards. But if the first part of this equation is growing because of increasing wealth inequality, it means that the second part is shrinking. And if the number of people who can spend huge amounts of money on cards shrinks far enough, it doesn't matter how much money they have, there won't be the competition for cards that supports card prices.

Now I don't know that this is what's driving the value of the high-end cards. But it might be. If their price is increasing faster than the growth of the economy as a whole, or faster than the real growth rate of the top end of the economy, then something has got to explain it. And I don't have any better guesses as to what it might be.

[Gradedcardman]

So how about those bids ?

[MVSNYC]

Question...Just to confirm something posted above...

Two 52 Mantles (PSA 9) sold recently, each for $3M+?

[1952boyntoncollector]

Originally Posted by nat

I'm just thinking out loud here, so don't construe any of this as investment advice. But it's worth asking why the prices of high-end cards have gone through the roof (and, as noted up thread, that of lower end cards haven't). One possible explanation is that it's driven by increasing wealth inequality. Sure, correlation isn't causation, but the two have been increasing in tandem. Concentrating money in fewer hands means that those with the money can afford to drop larger sums on baseball cards. If that's what's doing it, then, at least in the long run, high-end baseball card prices are in trouble.

That's because, for prices to continue to rise would require further consolidation of wealth (so that there's somebody out there who can afford to spend even more on cards), but, at some point, this process will backfire. At some point, this will require shrinking the pool of wealthy people (so that the remaining wealthy people have enough money to afford the very expensive cards), but as you do that you increase the risk that the remaining wealthy people (who are interested in baseball cards, it's not like all the wealthy people are buying cards) already have the cards that they want. Kendrick probably isn't the market for another t206 Wagner, for example. And at that point the price of high-end cards collapses.

In short the problem is that increasing prices requires two things: a population of people who have ever increasing amounts of money, and a population of people who are willing to compete against each other to buy the cards. But if the first part of this equation is growing because of increasing wealth inequality, it means that the second part is shrinking. And if the number of people who can spend huge amounts of money on cards shrinks far enough, it doesn't matter how much money they have, there won't be the competition for cards that supports card prices.

Now I don't know that this is what's driving the value of the high-end cards. But it might be. If their price is increasing faster than the growth of the economy as a whole, or faster than the real growth rate of the top end of the economy, then something has got to explain it. And I don't have any better guesses as to what it might be.

its really about now and meaningful life...of course nothing goes up for forever..but tell that to the guy that bought a psa 5 RC Mantle for 25k 3 years ago and sold for 70k...

can speculate all we want.....my canary is how much classic high end commons go for...like psa 8 1952 topps or low POP cards..........its the commons high grade which sort of tells us the hobby as a whole.....many have said whether its artwork, coins or stamps...there usually is a market for holy grail things.......

[bobfreedman]

Originally Posted by MVSNYC

Question...Just to confirm something posted above...

Two 52 Mantles (PSA 9) sold recently, each for $3M+?

Yes, that is what I was told from a very reliable source.

[Dpeck100]

Looking at the liner notes in the SMR there has to be some collectors that just cringe looking at current prices.

From SMR


Mantle PSA NM-MT 8's sold for $62,338/$56,670 in 2004, $63,693 in 2005, $66,887 and $72,057 in 2006 and $112,800/$98,177 in 2008


Ouch.


I do see they raised the Mantle in a PSA 9 to 1.3 million.

[irv]

Originally Posted by T206Collector

It is hard to ignore the market, but every once in awhile it gives me nausea to consider the irrationality of a market for little pieces of cardboard with baseball players on them that carry little to no value in any other part of the world, and are not directly correlated to any form of universal currency like gold. It's like art, I guess, and I seem to calm down more when I think of it as so. Picasso may be hot today, but maybe in 50 years people will think he is crap - another totally irrational market.

Back 20+ years ago I heard the Japanese were big time collectors of American BB cards.

Not sure if that was true then but with their love for BB as well, I can't help but to think, maybe there was some truth to it?

Not sure today, (if the story was true) if they still are, but if they are not, then what happened?

[bobfreedman]

I have been told that I reported inaccurate numbers, so therefore, I am retracting my last post and I apologize for my inaccuracies

[MVSNYC]

Yeah, sounded a little high to me.

[Republicaninmass]

Makes wags seen like a steal, and it hasn't moved in a while