card price trend by grades/condition

[Econteachert205]

Ok, I have been thinking about this and I'm sure I'm late to the party but it seems to me the greatest volatility with regards to condition affecting price occur in the vg and ex markets. The low grade gets dragged up with the market, but slowly and with less profitability. The high grade sets trends and informs the lower grade. It is where the best pure alpha is and therefore the direction most "investment grade" collectors go. (note I am not one). With regards to prewar (which is my focus in this discussion) I think this has already been discussed in the zeenut threads and is being discussed in relation to 1914 CJ's. This is interesting because if 1914 Cj commons would follow the zee nut trend then there is a chance to track prices for leading indicators (i.e. when to stop buying and start selling). So my instinct would be to say the the most volatile grades (I hypothesized vg and ex) would be the leading indicator of a trend. So my question is basically with the zeenut, what started going down first? Was it mid grade ebay/small auction lots, ebay low grade beaters, or a major auction high grade beauties?

[Econteachert205]

The high and low grade/condition form a price channel with the high grade being steeper than the low, the channel generally points up and to the right with the mid grade bouncing the whole time in between high and low.

[ullmandds]

your assumption may prove true in a market where all grades of a given card are available in the marketplace...like any topps set...or maybe even t206...BUT...does not hold water in a discussion of zeenuts...or even CJ's where a card(independent of condition) will sell for big bucks just because of increased demand for that particular card...regardless of condition.

[Econteachert205]

It was discussed though on another thread that low grade zeenut commons dropped from 300 to 50 dollars. I don't know how accurate that drop is but looking on ebay I do notice them more toward the lower end of that range I understand the relative scarcity of the cards but if that sort of drop occurred with lower grade I'm just wondering if a proportional drop occurred at the higher end. I would think the higher end, if it did drop, would do so in a much less dramatic way, causing mid grade to still be tugged in those two directions. Obviously though you are right, the validity of the argument is difficult with such a small sample size that could cause a single card to not obey a trend based on scarcity. How about the Titus bubble? What condition card will first show its hand? Low middle or high?

[Leon]

With the Registries and collectors mindsets I am not sure these correlations can easily be made. One day we see a set up and the next day it's down. A lot of it has to do with market timing. The more thinly collected the card or set the more volatility there can be. In type collecting, as I do, even one player leaving can drastically affect "a" card price. I paid around 3500 for this one, then a bunch more came out. I would be lucky to get 1000 for it today. On other cards I have done opposite.

[Econteachert205]

Thanks for the replies. If I use this scenario in a classroom setting I'll be sure to discuss only widely available, common items like 1970's-80's topps base sets.

[glchen]

I think pricing w/ baseball cards, especially prewar, is very volatile because of low volume. That is, there is very low supply, but there is also very low demand. (That is, it's not like there are 10,000 people actively collecting zeenuts. There are probably less than 50 people actively trying to set build w/ most collectors just trying to pick up one for a type set or if it's a big card like a HOFer.) Therefore if just 5-10 new collectors start collecting the set actively, this can really swing prices. However, if 5-10 existing collectors drop out and decide to sell their sets w/o any new ones coming in, the drops can be substantial as well. I think this is true w/ a lot of prewar sets which can explain some of the huge volatility that can go on some time.