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What I Don't Understand about Baseball Card Economics
I admit I am no more than a novice when it comes to understanding the general economy and the stock market, but here is one thing I have learned: The stock market rises and falls by processing information. When an interest rate cut is anticipated, the market goes up. If a tariff is instituted on China, for example, the market tanks. These are just two examples, but I recognize how information determines how markets move.
But in the baseball card hobby, the market appears to be absolutely tone deaf. We know grading is subjective and inconsistent; we know altered cards consistently get upgraded and slabbed; we know the card we buy as an 8 might have been resubmitted half a dozen times as a 7 until we find a grader willing to bump. Yet despite all this information that should be a giant warning sign to anyone thinking of investing in baseball cards, the money comes pouring in like an avalanche, and world records keep getting set. We see 7's turn into 8's and increase fivefold in value. We see 8's become 9's and increase tenfold. And we all know it's all smoke and mirrors. Yet buyers don't seem to be processing this information. They can't throw big money at this garbage fast enough. So what am I missing? |
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That the vast majority of people - even the "smart" ones with degrees etc. are quite often stupid.
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Being well educated in one or more areas doesn't mean someone isn't uneducated or under educated in others - the problem is self realizing this!
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Bottom line is - baseball card collectors "hear what they want to hear and disregard the rest"....
Rob M
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Turd Ferguson "it’s a funny name" |
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__________________
My avatar is a sketch by my son who is an art school graduate. Some of his sketches and paintings are at https://www.jamesspaethartwork.com/ He is available to do custom drawings in graphite, charcoal and other media. He also sells some of his works as note cards/greeting cards on Etsy under JamesSpaethArt. |
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Not completely Peter. I do understand that the collector who pieces together a VG T205 set one card at a time is passionate about what he is doing, and doesn't care about all this background noise about card doctors.
But we know that recently a whole wave of investors has entered the hobby and is putting big money in high grade cards. Those people are looking for one thing only: making a profit. And given the rickety state of the high end hobby, why aren't they fleeing it? If you bought 100 shares of Apple and then discovered that instead of using computer chips in their smartphones they were filling it with jello, you would bail out in a heartbeat. You would have no emotional attachment with the stock. But these high end players seem to sense that nothing is wrong. No, I don't entirely understand it. |
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__________________
My avatar is a sketch by my son who is an art school graduate. Some of his sketches and paintings are at https://www.jamesspaethartwork.com/ He is available to do custom drawings in graphite, charcoal and other media. He also sells some of his works as note cards/greeting cards on Etsy under JamesSpaethArt. Last edited by Peter_Spaeth; 06-10-2019 at 09:37 AM. |
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I'd bet there are a whole lot less "investors" that previously thought or shown through auctions, Ebay and the like. Most likely people who jumped on the bandwagon due to fear of missing out, are now holding the bag of high graded cards. Albeit not necessarily altered, but comp sales were skewed. I'd assume collectors wont mind, and it would be silly to sell now.
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"Trolling Ebay right now" © Always looking for signed 1952 topps as well as variations and errors |
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#10
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In light of all the recent happenings in the hobby I still want to further my collection. Maybe at the National this year I will be able to find something.
The large AH's with their BPs, taxes and high shipping costs are drawn out affairs. Too slow for me. Some times 2 to 3 weeks before shipping. I don't understand. Why so long? The straight Ebay auctions are usually shilled. Why don't sellers start the listings with the minimum they are willing to take? I don't understand. Why shill? The Ebay BINS are usually 50 to 300 percent overpriced. I rarely find a card I can use at a reasonable price. I don't understand. Why the "Museum" concept? So Chicago here I come. Last edited by leaflover; 06-10-2019 at 10:31 AM. |
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Why aren’t pricing tanking? Some possible reasons:
1. I doubt most “high-end” collectors are aware of this issue. 2. If tainted cards are being removed from the hobby, PSA populations will theoretically drop. Prices might increase because of this fiasco. 3. It’s too soon. PWCC hasn’t had an auction since this issue hit. Last edited by jhs5120; 06-10-2019 at 09:42 AM. |
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The saying isn't..."There's a genius born every minute".
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R0b G0u13t |
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PWCC has 8,282 listings running right now.
From what I can tell it appears it is 100% business as usual. There is no doubt there is something to this recent scandal and even those wearing the most rose collared glasses will see that but it is going to take much more I believe to derail the hobby. I read someone say that many collectors live by the ignorance is bliss moto and that may very well be true. There are quite a few people out there that have dealt with infidelity in a relationship. Probably said to their friends if that bit++ ever cheats on me she is gone. It happens and just a few months later they are explaining to their friends she made a mistake and we all make mistakes and she is sorry. Humans are very complex that is for sure. I watched the entire Brent interview. He made it out to be like conservation was common knowledge and everyone knows it. Many of the examples we see popping up fit his description and have simply been improved. I think there is a very real chance that many of these cards will be reviewed by PSA and they will deem them to be good because they are grading the card in front of them not the card that used to exist. Brent also indicated he was going to bring in an expert and offer this as a service and if they alter cards where there is no discernible evidence upon inspection this crisis of confidence could easily subside. I don't think all parties will be happy but the market will move forward. |
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The market is so easily manipulated that there's very little disincentive to a deep pocket investor with, shall we say, moral flexibility.
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Check out https://www.thecollectorconnection.com Always looking for consignments 717.327.8915 We sell your less expensive pre-war cards individually instead of in bulk lots to make YOU the most money possible! and Facebook: https://www.facebook.com/thecollectorconnectionauctions |
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I figure the same will happen to PWCC...more and more collectors will lose confidence in their business, and their business will suffer, even if no criminal charges are levied upon them. BrianP(arker)-beme |
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Zero emotional attachment when investing, all emotional when collection on low end trashed out cards :-) Last edited by Johnny630; 06-10-2019 at 09:52 AM. |
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What if you already bought a PSA 10 of a card at $25k that you suspect. The guarantee you bought is based on current market value. If another PSA 10 example of said card is sitting at $15k, do you feel pressure to push the price up, assuming you feel good about the company behind the guarantee?
Sent from my SM-G950U using Tapatalk Last edited by jburl; 06-10-2019 at 10:31 AM. |
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Barry, I'm not an economist, but I believe that you are comparing macroeconomic effects with microeconomics. For many individual stocks, it the same thing in that it can be all smoke and mirrors for all we know. We don't know if the insiders are buying or selling; the companies put forward different metrics like # of clicks, who their social evangelizers are, when they are losing money hand over foot, that you really don't know what the company is doing. You never have all of the information. It's the same thing here. You have a bunch of cards that were submitted by Gary Moser. You don't know if they were altered or not. There's a good chance they were altered, but maybe not. Is the entire market going to tank because of this group of cards, probably not. Probably only this group is tainted. Are these cards worth 0? No, they are still authentic, but likely altered. So the floor to the price is the price of authentic/altered. However, the card might not be altered, so it probably won't reach that floor, but will likely just sell at a discount to another card at that grade. Why just a discount rather than the floor? Because where many buyers won't stand to have a card in their collection that may be altered/tainted, there's another buyer who's optimistic/naïve, whatever you want to call it, who thinks this card is completely fine after looking at it themselves, and are happy to get the card for cheaper than they would otherwise. I'm not saying that I agree with this mentality, but just trying to explain it. |
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So here is something that still troubles me. If the hobby has reached the point where the slightly altered cards are almost impossible to distinguish from the unaltered ones, then what use does the hobby have for third party graders? We pay them a lot of money to make determinations that many of us don't feel qualified to make ourselves. But it appears that as graders and authenticators they are no more skilled than we are. So it's starting to look like (and truth be told it's been going on for a long time), all of these machinations are reduced down to one thing: getting the number we want on the slab. The whole hobby is really about that number. Sorry folks, but it's a sad state of affairs. And I don't like it one bit. Last edited by barrysloate; 06-10-2019 at 05:50 PM. |
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Of course, the grading companies don't that. |
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One of the things you have to keep in perspective is that many cards just simply mirror the income distribution and their price is driven by basic supply and demand forces.
The most popular baseball card is the 1952 Topps Mickey Mantle. A copy that has been run over by a car might still go for 10k and a PSA 10 would bring 10 million. What this tells you is there is far too much demand for the number of copies that exist and then the cards are allocated across the income distribution and land in the hands of those who want them most. What motives they have to purchase are irrelevant and all that matters is if they can complete the transaction. Looking forward the hands they land in can certainly play a role in the long term prices but as long as collectors still covet the card it will hold fairly strong. You are going to need to see a significant shift in the demand for the card for prices to come tumbling down significantly. Buyers just accept the fact that you buy one graded and that isn't going to change. All of the reasons to want to own this historic baseball card still exist. It is still one of the ultimate symbols of Americana. He is still arguably the most popular baseball player ever. The 1952 Topps is still one of if not the most popular baseball card sets ever produced. All of these demand drivers create the environment where this is considered a prized collectible and so the animal spirits aren't going to go away and the rewards of ownership and the bragging rights associated still exist. There are a lot of people who just simply hate grading and so they are always going to have an issue with graded cards but the overwhelming majority have accepted it as a principle of the card market. I can remember it like it was yesterday going into a short lived card shop in the Fashion Square mall in Orlando during the home run chase and seeing the eye popping print of the 1985 Topps Mark McGwire going for $7,500 in a PSA 10 in the Beckett. As much as I wanted to think my copy was just as good it wasn't. It was obvious it wasn't. It looked nothing like a 10. It is hard to diminish the fact that it is quite frankly a better card and it is visible and the red flip reminds you of the fact that it is nicer than yours and when you go to look up the selling prices it sells for more than yours by a wide margin too every time. All of this isn't going away. The movement to try and turn cards into assets and make them legitimate financial investments isn't going to stop. Brent in many ways just has taken the bull by the horns but there are clearly others under the surface trying to do the exact same thing. As long as there is money that needs to find a home and humans are living collectibles of some form will be sought after and trading cards have a long history of collection and it is only natural with the supply constraints many have that prices have risen significantly. There is never going to be an environment where a card like a Mantle isn't differentiated in price by grade and the spreads are going to stay very wide. Just the other day we saw the report of the Honus Wagner PSA 2 that was reported to have sold privately for 1.2 million. People take these cards seriously and when you have a market where people will pay these kinds of prices for relics of history this saga we are going through isn't going to change it. Last edited by Dpeck100; 06-10-2019 at 06:30 PM. |
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Barry, I think there are a couple of categories of collectors here. First is the type that is on this board (and similar ones like blowout) who try to understand as much as possible about cards, including grading, alterations, shilling, etc. These folks can usually do a better job authenticating and grading cards than the TPG's can. Then there are the folks who just like to collect/invest in cards, and don't care about the other stuff. They know TPG's make mistakes, but don't care because they trust they can still do a better job than they can. For example, I'm not much of a handyman. If something breaks, I look on yelp for a service person with good reviews, and hire that person to fix that thing the broke. I could do the research myself on how to fix that thing, and learn how to fix it, so that I can save money and do it myself in the future. I'm just not interested in that stuff, and don't trust that I can fix it better than someone who does it for a living. For people in the latter camp, I think that TPG's are still useful and better than them. And the other part of TPG's is the safety factor. Some people may not care about the grade actually, but just want the card holdered because it's less prone to being damaged that way. Or if they left the cards to a loved one in their will, that person will know those cards are worth something rather than 80s junk. So although I completely agree when the cards are really valuable, it's buyer beware for what's on the flip, I think that there are other things useful for TPGs rather than to just filtering out these frauds which are getting harder and harder to do. |
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I've said this before and will repeat: I have no problem with a company that examines cards for alterations, and then assigns them an unbiased grade. The problem is the ones we have must do a much, much better job than they are now. They have to figure out a better way to catch these cards being submitted by card doctors. If not, then I have no faith in the product. End of story.
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#28
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Only if they are held accountable for their 'mistakes'. Otherwise, BAU.
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#30
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Last edited by benjulmag; 06-11-2019 at 08:37 AM. |
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