Money in the hobby

[calvindog]

It's always the guys with no money telling the rest of us how dumb we are to spend big money on high grade cards. They have yet to figure out that no one listens to investment advice from guys with no money.

Originally Posted by Dpeck100

Third party grading makes a card a certified collectible. Anyone can agree or disagree with the grade but when it comes time to buy or sell the marketplace treats it as such. I recall a 1974 Topps Dave Winfield rookie that was graded a PSA 10 and even the most die hard PSA supporter couldn't in any circumstances look at the card and say Gem Mint. Well guess what it went for over $7,400 at the time and the buyer got a Dave Winfield encapsulated in a PSA 10 holder. Cards in graded cases have become commodities and the ease in which many can change hands has led to more money coming into the marketplace. One of the primary reasons the publicly traded stock and bond markets are so active is because they are liquid. The card market obviously isn't as liquid with the bid ask spread being wider and trading costs being higher but without third party grading that spread would be so wide it wouldn't allow for what has happened.


It is glaringly obvious from reading Net 54 that there are a ton of bitter collectors or haters that are so upset that they didn't jump on the graded card bandwagon in high grade. Many constantly throw insults at the people buying these cards and yet they are the one's laughing all the way to the bank. Anyone who thinks that you can't consistently tell the difference between a EX-MT card and a NM-MT or a NM and a Mint is just fooling themselves. In recent years there has been a movement towards mid grade cards with great eye appeal. These are obviously perfect cards for collectors wanting to enjoy the cards and have a reasonably nice card to look at but make no mistake about it the investment potential is in higher grades. It is really that simple. This topic has been discussed many times and at the core of collecting is ego. Whether you simply want to appease yourself for fun or you want to have the best that others can't it is a self interest motive and that is the core of one's ego. There is no doubt that many of the top cards in the hobby are bragging rights pieces. No different than any other high end collectibles or works of art.



The trend in the hobby is higher and while many sit and watch in amazement, happiness or bitterness it is what it is. I chose to collect a genre that I could afford the top level pieces. When you deal in the major sports you are competing against some of the wealthiest people in the world. All it takes is two very well off individuals to want an item and the sky is the limit. As the prices rise they become more intriguing. You can show someone a trading card that is worth $50 and they might say that is pretty cool. You show the same person a card that is worth $100,000 and their eyes light up and they say oh my God that is incredible. Taking that a step further showing someone a 7 figure card and they are in complete astonishment. This is one of the primary things that fuel high end prices. I can recall as a kid not being able to afford the 1986 Donruss Jose Canseco or the 1984 Fleer Update Roger Clemens. Imagine the same being true for someone who grew up watching Mickey Mantle or Nolan Ryan or another top star. This same person has gone on to great success and finds out that the same cards they wanted and couldn't afford can now be bought in differentiating condition like diamonds and are encapsulated for safety and handling with the grade proudly displayed on top. It doesn't take a genius to figure out that if they become interested they will get hooked.


Just this past week a 1958 Topps Bobby Hull in a PSA 8 went for $102,000. The wave is spreading to all of the top cards from various sports and genres. It is going to take a very serious economic contraction for this to come to an end. Even then there will be vultures looking to pick of weak prey and the cycle will start again. Humans love to collect things of sentiment and value and trading cards offer this. The card market is like the income distribution and the spread between the haves and have nots continues to widen. There is nothing wrong with being average or owning average cards but the desire to be the best or own the best isn't going anywhere. When you add the element of past performance and true scarcity it is the perfect storm.

[SMPEP]

Wow! Somebody sure did a nice job doctoring that card Jeff!

Cheers,
Patrick

[Dpeck100]

There is no doubt that there are cards out there that are so rare that the card in any condition can perform quite well. That said of those examples once again the higher you go up the grading scale the better the performance will be. Human behavior in many cases is very easy to predict and when it comes to things of value the higher up the food chain you go, they want collectibles that could impress others who share their level of wealth. For years on the CU board I have discussed the 1952 Topps Mickey Mantle in a PSA 10. I believe that if one comes available it is very likely to land in the hands of a non card collector. Someone with roots to the 1950's and 60's Yankees who has vast wealth and would love to showcase such a rare specimen in their 60th floor penthouse. Quite frankly the higher the price goes the more they will want it as the bragging rights associated with such a card only go up as the price does.

I continue to be puzzled by the notion that some suggest that cards aren't investments. You may not view your collection as an investment but in the real world anything that can be called a store of value is an investment. In 1985 when I began first purchasing cards Dwight Gooden was all of the rage. A pack of 1985 Topps was $0.35 and the goal as a kid was to buy a pack and get cards that were worth more than your $0.35. If you did your investment made money. If it didn't you lost and felt sorry for yourself and had to scrounge up some more funds to play the lottery again. All of the kids in my neighborhood couldn't wait for that months Beckett to come out and see if our collections were gaining value.

The card market is very much like the stock market. You have a huge number of choices and varying degrees of risk. On one hand you have long term winners that using history as a guide have done well over time all the way to registry cards that are more like penny stocks with some paying off but most going down overtime as the populations increase. The modern market would be considered very high risk but with that risk level, some will produce massive gains while most will fizzle out and be worth a fraction of their value in the future.

People buying cards that are $5,000 or perhaps $10,000 or higher are definitely in almost all cases concerned about the value. It may not be their primary motive for purchase but if one thinks that someone is interested in buying a card for that sum and watching it dwindle down to a few hundred bucks they are simply mistaken. The run that many cards have had since I got back into cards in 2009 is staggering. As the prices have risen it has given many more resources to use for other purchases and confidence in their ability to invest in the card market. The term investment shouldn't be considered a bad word when it comes to cards. It takes real resources to purchase them and unless ones funds are simply unlimited it isn't even rational to not want them to hold their price and hopefully increase.

I started sending cards to PSA in early 2010 and I have never participated in anything where the upside is so much greater than the downside. It is incredible that you can send cards to a grading company and simply pay a fee and instantaneously have the potential to wildly increase their value. There are countless collectors and dealers who have 100 baggers on cards. Find me a stock that you can buy and have this happen. I am in the stock business and trust me it is incredibly difficult to pick big winners but even more difficult to hold them and ride them for long periods because at some point you buckle and sell. The other feature that cards offer is they can't go to zero. Even players like Barry Bonds who was on the perennial cold list have seen their higher graded cards make a huge resurgence.

Combining fun, nostalgia, competition and investing in one hobby is incredible and one of the primary reasons that more people are entering the hobby and that people are willing to pony up larger sums to participate. It is true that most cards aren't what you would classify as safe investments but those making very strategic bets on marque pieces have done extremely well over time and that isn't going to change.

[steve B]

Originally Posted by calvindog

It's always the guys with no money telling the rest of us how dumb we are to spend big money on high grade cards. They have yet to figure out that no one listens to investment advice from guys with no money.

Nice card!

I don't usually say people spending big on high grade cards are dumb. In some situations I'm not sure it's a good investment. Of course, I've had that same opinion of those cards, in some cases since they were new. (86 Fleer Jordan ) So you're probably right about some of my investment ideas.

On the original topic of money in the hobby.
It's one of those love/hate things. I've collected long enough that the prices between when I started and now are worlds apart. T206 Wagners were under 20K for sure, 52 Mantles were under 1000 even for a nice one.
Would I like to return to that?
Yes and no. Now that I've got "some money", at least the Mantle would be within reach, probably not the Wagner. (I could buy one at say 10K, but me and the card would be kicked out of the house shortly after ) And I'd love to get common T206s for $2 each with no regard for backs and not much for condition.
But then, back then I hung out at a dealers a LOT. Sort of worked for them, and got to see a lot of collections come in. And saw a lot of those go back out because what the cards were worth to a dealer wasn't enough to overcome the "these were granddads cards".

Yes, money has shut me out of some of the hobby, my own cheapness from a bit more. But if it wasn't for the money, a lot of that stuff would still be in attics and drawers, or would have been thrown out.
Would the Black Swamp find have been sold into the hobby if the cards were worth a dollar each? Maybe maybe not.

And yes, wherever there's money there are crooks.

But overall, I think the hobby has benefitted from the money.

Steve B

[mark evans]

"Bamboozling the wife" appears to be a theme that runs through many threads. My wife and I have avoided money issues over 30+ years by never combining our finances. Thus, she never complains about my purchases, nor I about hers (I once came home to find a new Cadillac SUV in the driveway.).

I realize this system would not work for all couples and, in particular, those where the wife works at home at child-rearing. Nevertheless, I mention it for the benefit of those collectors who may find it worthy of consideration.

[obcbobd]

Interesting article about what happened to the Elvis Presley collectable market as the original Elvis fans start dying of old age. Will BB Cards see a similar depression in 20-30 years when people, like me, from the 70/80s boom start dying off?

https://www.theguardian.com/music/sh...eting-in-price

[aconte]

Originally Posted by obcbobd

Interesting article about what happened to the Elvis Presley collectable market as the original Elvis fans start dying of old age. Will BB Cards see a similar depression in 20-30 years when people, like me, from the 70/80s boom start dying off?

https://www.theguardian.com/music/sh...eting-in-price

Unless it is a top line HOFER, for the most part the answer is yes. It will
probably be more evident in 40-50 years when most of us will be gone.

[Snapolit1]

Elvis fans are aging out clearly. I'd also argue that Elvis hasn't held up particularly well over the decades. What he did doesn't seem quite so spectacular anymore. Ditto people like Bing Crosby. Sure it will be a good long while before people stop collecting Beatles stuff.

[Peter_Spaeth]

Originally Posted by Snapolit1

Elvis fans are aging out clearly. I'd also argue that Elvis hasn't held up particularly well over the decades. What he did doesn't seem quite so spectacular anymore. Ditto people like Bing Crosby. Sure it will be a good long while before people stop collecting Beatles stuff.

Elvis was #3 on Rolling Stone's most recent top 100 singers list. And #3 on its top 100 artists list. So there.

[wondo]

Originally Posted by Snapolit1

Elvis fans are aging out clearly. I'd also argue that Elvis hasn't held up particularly well over the decades. What he did doesn't seem quite so spectacular anymore. Ditto people like Bing Crosby. Sure it will be a good long while before people stop collecting Beatles stuff.

Bring it back to baseball cards. Not many folks left alive that saw Gehrig or Ruth play. Many less that saw Cobb and WaJo play. Ain't nobody alive that saw Matty play (well, maybe a handful who dont remember). Yet, those players' cards continue to rise and it seems their collector base expands.

[1952boyntoncollector]

Originally Posted by aconte

Unless it is a top line HOFER, for the most part the answer is yes. It will
probably be more evident in 40-50 years when most of us will be gone.

Basically, any card where a beater of a beater is still going for $1000+/- gives you a hint on what the top of the line HOFer can stay afloat when everything else goes down

A beater 1974 topps Dave Winfield rookie is a dollar etc.

A beater Beater 1914 Cracker Jack Cobb still has real value..

[ls7plus]

Originally Posted by obcbobd

Interesting article about what happened to the Elvis Presley collectable market as the original Elvis fans start dying of old age. Will BB Cards see a similar depression in 20-30 years when people, like me, from the 70/80s boom start dying off?

https://www.theguardian.com/music/sh...eting-in-price

Perhaps you haven't been paying attention to rare and significant Ruth, Cobb, Jackson, etc. cards. They've been doing quite well, and virtually none of the buyers of their cards were there to see them play. Baseball and its history are truly Americana at its finest, and I believe the sport itself is so deep in its tradition that this isn't going to change any time soon, certainly not before all of us are long gone.

Good luck in your collecting,

Larry

Originally Posted by calvindog

It's always the guys with no money telling the rest of us how dumb we are to spend big money on high grade cards. They have yet to figure out that no one listens to investment advice from guys with no money.

I seriously doubt anyone in their right mind would argue the investment potential of that card, (not to mention the awesomeness), even a peasant like myself who could never legitimately afford the same card in poor condition. Congrats on your success in life and for putting us poor people in our proper place.

[GasHouseGang]

Originally Posted by Gobucsmagic74

I seriously doubt anyone in their right mind would argue the investment potential of that card, (not to mention the awesomeness), even a peasant like myself who could never legitimately afford the same card in poor condition. Congrats on your success in life and for putting us poor people in our proper place.

..

[ls7plus]

Originally Posted by calvindog

It's always the guys with no money telling the rest of us how dumb we are to spend big money on high grade cards. They have yet to figure out that no one listens to investment advice from guys with no money.

Totally agree with that sentiment, Jeff--and let us hear from you more often!

Highest regards,

Larry