State of the Post War Market

[David W]

With the stock market returning almost 20% last year why would you invest in cards?

[Johnny630]

Originally Posted by David W

With the stock market returning almost 20% last year why would you invest in cards?

Agree +1

[Nunzio11]

Originally Posted by darkhorse9

I never looked at my collection as an investment for me. I consider it a gift for my son.

My collection has been assembled for my enjoyment. When I die that enjoyment goes with me. I got my value out of it. My son has explicit directions to sell my collection for as much as he can and then spend that money on something he would enjoy.

Whatever money my son gets from it will have no relevance to what I paid for it. It's all free money for him to enjoy.

I see that as a huge win/win for my collection.

I’m looking at it the same way. I do hope I’m making decisions now that will appreciate or at least still hold some value many years from now.

Just to add another wrinkle and make it more interesting I tell my family and friends not to worry about what’s in those boxes in the closet. If my health ever starts to fail everything will be hidden and everyone will get a list of clues and a map. Whoever finds it gets to keep it.

[AGuinness]

Originally Posted by David W

With the stock market returning almost 20% last year why would you invest in cards?

Playing a bit of Devil's Advocate here, but one can't invest in last year's stock market today, right? So if somebody with an educated opinion prefers investing in cards over the market today, it's certainly possible that it's the better choice.

[Exhibitman]

Everyone's assessment of how the card market is doing depends on your measuring points and your measurement choices.

On the one hand, I am picking up really nice raw 1960s-1970s and I am replacing my PSA 8-9 cards as quickly as I can with those raw picks because there is a ton of inventory. 4SC has opened a ton of raw stuff and has simultaneously bloated the market for raw (via its liquidator NESC) and collapsed the market for PSA cards in the 6-8 range from that era. I've all but stopped my PSA submissions because I literally lose money whenever I send in a card from that era unless it scores a 9 or 10, or is one of a handful of select rookies: 4SC offers them up slabbed at less than my peon-level grading cost. It is akin to a Wal-Mart opening in a small town and destroying the mom and pop stores. I'm dumping my PSA graded cards on eBay because I can replace them with raw cards in just as nice shape for a fraction of the price. I can see where the market would look really, really bad if your inventory was postwar mainstream 6-8 PSA cards, especially if you self-submitted. The sunk costs of slabbing alone would kill you.

On the other hand (my father once said he'd love to see a one-handed lawyer), I see a great opportunity for collectors who want to move into areas where there is a glut/depressed market. I've got a giant want list for the National but it is almost all cards that I expect to shop for and find very cheaply. I plan to shlep* home a big box of additions to my PC, more cards than ever before, with no plastic cases in sight.

*For the Yiddish-challenged, "to carry a burden"

[David W]

Originally Posted by AGuinness

Playing a bit of Devil's Advocate here, but one can't invest in last year's stock market today, right? So if somebody with an educated opinion prefers investing in cards over the market today, it's certainly possible that it's the better choice.

You may be correct. But if you are investing in high end graded cards of top players, you do not know how many high end cards are still out there waiting to be graded.

So you do not know the supply side of the equation, nor necessarily even the demand side.

But people have and will make money speculating on baseball cards.

[AGuinness]

Originally Posted by David W

You may be correct. But if you are investing in high end graded cards of top players, you do not know how many high end cards are still out there waiting to be graded.

So you do not know the supply side of the equation, nor necessarily even the demand side.

But people have and will make money speculating on baseball cards.

Very true, and in particular the population of ungraded cards likely increases the more modern the card is, creating more risk for modern and recent star cards.

But continuing as a Devil's Advocate, I think the unknowns and speculation in the stock market are also very prevalent. Speculation has been cited as at least one of the reasons behind each of the major stock market crashes. And while market cap and other statistics on stocks are widely available to shareholders, there are many examples of companies deceiving the public and their shareholders by using loopholes and accounting tricks ("cooking the books") to hide debt, etc. (such as Enron). I think there's likely a certain amount of unknown risk in EVERY investment.

[jchcollins]

I'm not experienced enough to comment on the true high-end of the market, or what real rarities or highly desired pre-war sells for, or anything like that. But, in the wheelhouse of what I do collect and am familiar with (1950-70's mid-grade stars - whether graded or not) I think on the whole the cards remain very affordable and also don't seem to lose a ton of value. I think a PSA 5 '63 Topps Willie Mays (to use an example from my collection) if you do the math and see what a comparable (albeit before grading) version of that same card sold for in say 1989 - I think you would find things haven't changed all that much.

Again, this obviously doesn't speak to the rather large changes in the high end of the vintage market that have happened since 1989 - but it works for me.

[JustinD]

Originally Posted by AGuinness

Very true, and in particular the population of ungraded cards likely increases the more modern the card is, creating more risk for modern and recent star cards.

I would actually doubt that hypothesis.

The production numbers are lower and the collecting base are adult due to the immense cost of anything other than base sets. It is also a collecting group that has fully embraced TPGs.

Anyone that is sitting on a childhood collection or has not been avid in collecting in the past 20 years is unlikely to have used a TPG and thus the cards are unaccounted for. As the boomers and older pass on, their children may look to move those inheritances and will be adding to the pop numbers for sale.

The first thing modern collectors do is sleeve cards from the pack and ship off anything to the TPGs.

[jchcollins]

Originally Posted by JustinD

I would actually doubt that hypothesis.
The production numbers are lower and the collecting base are adult due to the immense cost of anything other than base sets. It is also a collecting group that has fully embraced TPGs.
.

Agreed. As costly for the hobby as the fallout of the "junk era" was, the manufacturers learned their lesson well. Instead of a wide hobby base now and collecting being wildly popular at all age ranges, you have a narrowed range that is increasingly about wealthy adults. I suppose the manufacturers chose this as a safer route rather than go to extra effort to ensure the hobby remained affordable for a wider range of collectors. As for TPG's, I'm personally surprised that the marked embraced them so completely so quickly, but the handwriting was clearly on the wall decades earlier over in the coin hobby.

[AGuinness]

Originally Posted by JustinD

I would actually doubt that hypothesis.

The production numbers are lower and the collecting base are adult due to the immense cost of anything other than base sets. It is also a collecting group that has fully embraced TPGs.

Anyone that is sitting on a childhood collection or has not been avid in collecting in the past 20 years is unlikely to have used a TPG and thus the cards are unaccounted for. As the boomers and older pass on, their children may look to move those inheritances and will be adding to the pop numbers for sale.

The first thing modern collectors do is sleeve cards from the pack and ship off anything to the TPGs.

Agreed that modern collectors are likely to perceive investment value in their cards and treat them accordingly. But I would, as a Devil's Advocate, also say that despite lower production numbers, this perception would lead to a higher chance of more investment grade examples of a card. There are likely baby boomers sitting on ungraded collections, but how many of those cards are actually investment grade?

For example, there is a single example of the Nolan Ryan rookie at PSA 10, while there are 22 examples of the Derek Jeter 1993 SP at PSA 10. Despite the lower production numbers on the Jeter, I would contend that there is a greater likelihood that more possible PSA 10 examples of the Jeter are in collections and currently ungraded than there are ungraded of the Ryans (there are, of course, many more ungraded Ryan rookies out there, but I'm thinking there are very few investment grade examples).

Another example could be the 2000 Playoff Contenders Tom Brady rookie auto, which in my limited research appears to have a print run of 3,000 (saw that number on the Blowout forum). PSA looks to have graded 14/148 at 10, while BGS has 15/643 at 9.5 (Beckett's site is a bit confusing for me on this card, but I think I've read that right). That leaves (approximately) 2,209 ungraded examples of the card, and with the modern preservation logic, most would have been well protected by their owners. If the 3.6 percent of the current population at 10 PSA/9.5 BGS holds, thats an additional 81 Gem Mint Tom Brady auto rookies that could enter the market. Of course, it could be argued that demand would still exceed that supply, but I'm playing Devil's Advocate about the RISK of investment grade cards when it comes to the modern market. These numbers would indicate that it is more likely the market will see a number of these investment grade Gem Mint Brady rookies (or of the Jeter SP rookie) become available through new grading than the Gem Mint Ryan rookie.

[Johnny630]

What vintage card collector ever thought that in 2018 people would be buying or bidding on teams or players in box/case breaks ? The new guys that do this don’t collect it’s all about the Gamble not the love of Team or Player. I equate this to team/player loyalty being blown away by the Fantasy Player. To me it’s just like going into a casino. This is why I stick to Vintage.

[ruth_rookie]

Originally Posted by AGuinness

Playing a bit of Devil's Advocate here, but one can't invest in last year's stock market today, right? So if somebody with an educated opinion prefers investing in cards over the market today, it's certainly possible that it's the better choice.

I’m not afraid to say that I am definitely one of those who prefers buying vintage sports memorabilia (particularly cards) over the stock market, especially after weeks like this where equities got absolutely slammed. Besides, owning Apple, Amazon, Exxon Mobil, nor Google could ever bring even a remote taste of the joy I get while holding my ‘33 Goudey Ruths, gazing at them in amazement, wondering about the provenance and how in the world they survived bicycle spokes, several wars, and an overzealous mom who threw away anything that wasn’t tied down or hidden between my mattresses (Playboys included!!). While I do believe diversification is key, baseball cards are by far my favorite “investment”.

[Leon]

The market got killed this week. Diversification and long term are key points to take away. Personally, I just do what Buffet says (in the market) with quite a few less 0s at the end of my investments. We have Apple and Vanguard 500 Index, are long term and doing just fine. (knock on wood). And cards can absolutely be a part of anyone's investment and be ok. Cards are more fun than stocks that is for sure.

Originally Posted by ruth_rookie

I’m not afraid to say that I am definitely one of those who prefers buying vintage sports memorabilia (particularly cards) over the stock market, especially after weeks like this where equities got absolutely slammed. Besides, owning Apple, Amazon, Exxon Mobil, nor Google could ever bring even a remote taste of the joy I get while holding my ‘33 Goudey Ruths, gazing at them in amazement, wondering about the provenance and how in the world they survived bicycle spokes, several wars, and an overzealous mom who threw away anything that wasn’t tied down or hidden between my mattresses (Playboys included!!). While I do believe diversification is key, baseball cards are by far my favorite “investment”.

[the 'stache]

Originally Posted by David W

With the stock market returning almost 20% last year why would you invest in cards?

And you think that trend is going to continue?