What's more important, Supply or Demand?

[mintacular]

I've always favored vintage for many reasons, one of them being that the "supply" was limited so the cards were a safer investment. Yet, recent trends suggest that when I got back into the hobby 15 or so years ago had I bought MJ rookies, PSA 10 UD Griffey's, any Lebron's, etc, I would have done much better (from a financial standpoint) compared with various Clemente, Mantle's, other rookies from the vintage years....

While these mainstay classics have ticked up over the years, never have they exploded like the aforementioned..... That said, from a collecting perspective, I have no regrets-- let me be clear... But were my assumptions all wrong? Did I focus too much on supply and minimize the demand portion? Or is the current frenzy of high grade base rookies a passing faze?

The catalyst to challenging my original mindset is the PSA 7 Jordan RC I own that has gone from $850 when I bought it in 2017? to 4K?-ish or so now while my other vintage stars have just crept up slowly in value. Mind you, the Jordan card is a VAST exception in a narrow window of excitement (due to the "Last Dance") perhaps, or is it? And also, should come back to earth....or will it?

[ALBB]

Im going to say - Demand

If every ball card in existence was avail or incredibly rare, or crazy expensive or dirt cheap.... ..there still has to be the demand

[Chicosbailbonds]

I see both sides of the argument, the demand can change fast though. When the economy turns sour, the money tends to turn to the blue chippers.

Personally I see the market getting soft for earlier Topps sets (pre 70). People die off and the families sell the sets off for whatever. People are buying more stars and fewer sets. Good news for pre 70's set collectors, singles are pretty resonable right now.

[steve B]

Demand is the single most important thing that contributes to price.

If it was simply supply, I'd be doing really well. But even the cards that I believe to be unique aren't particularly valuable.

I think there are three things that lead to something being really expensive.

Demand, especially for sportscards it almost has to be demand for a particular player.
It has to be slightly rare, but not so rare that most collectors don't even know it exists. There are loads of cards that are harder to find than the Wagner T206, Same for the 52 Topps Mantle. Most of them never get close to the price of either.
If there's a good story about why it's rare - wagner didn't want to advertise to kids, the 52 topps Highs were dumped in the ocean.... Even if it isn't true, that's what puts it over the top.

[nat]

Price is where supply and demand curves meet. By definition neither can be more important than the other.

[toppcat]

Originally Posted by nat

Price is where supply and demand curves meet. By definition neither can be more important than the other.

Not sure about that-the curves don't measure "amplitude", just trajectory based upon independent inputs.

[Exhibitman]

The latest run-up is just the latest market manipulation. Watch where the prices are in a year.

[GasHouseGang]

I have always thought like you, that the low supply of vintage cards would mean they would be worth more. But I haven't always seen that play out in the market. So, I guess it's been a bit of an education for me about how economics can fool you.

[seanofjapan]

I think supply is only a relevant consideration if demand is greater than it.

Consider this comparison.

There are only 100 copies of card A. But only 20 collectors want card A in their collections. Since demand is much lower than the supply, the card's price remains low because all 20 collectors can easily find a copy of it without needing to competetively bid against each other.

On the other hand, there are 1,000 copies of card B. But 2,000 collectors want card B. Since demand far outstrips supply, the price will go through the roof since the people looking for it will bid it up whenever one comes to auction.

There are 10 times more copies of B than A, but A is worth less than B.

This is an oversimplified example since there are a lot of real life things that prevent these two examples from ever playing out like this (even when there are 100 cards but only 20 collectors after it, if one guy has 95 copies of it leaving only 5 to freely circulate the price can still go way up for example). But it demonstrates why demand is the main driver of price rather than supply. Jordan rookies look more like Card Bs right now while vintage stuff is more like Card As.

[Phil68]

The one thing I know is ANYTIME I want a card--the demand instantly skyrockets. It becomes THE card everybody chases. What typically sells for 300 bucks, I can't touch for under a grand, Lol.
If I go to sell it, 12 of them suddenly appear on eBay and I end up with a really expensive coaster to place my drink on.

In the end, it's probably more demand, but every post I read in this thread makes sense. A lot of good insights.

I guess we should just collect what we like without breaking our budgets. Everyone should definitely stay away from all high-end 1950's cards. Those are pure crap.

[bnorth]

Originally Posted by Phil68

The one thing I know is ANYTIME I want a card--the demand instantly skyrockets. It becomes THE card everybody chases. What typically sells for 300 bucks, I can't touch for under a grand, Lol.
If I go to sell it, 12 of them suddenly appear on eBay and I end up with a really expensive coaster to place my drink on.

In the end, it's probably more demand, but every post I read in this thread makes sense. A lot of good insights.

I guess we should just collect what we like without breaking our budgets. Everyone should definitely stay away from all high-end 1950's cards. Those are pure crap.

LOL, glad I am not the only one that happens to. Want to see an instant spike, post on a few forums you are looking for a specific card.

I have also noticed that EVERY spike in prices is someone(multiple people) manipulating the market. Never buy the "in" hot card because it is all smoke and mirrors to con people. Demand is very easy to create, supply is WAY harder to manipulate.

[hcv123]

Not so simple a question or answer, but both are relevant.

1) Textbook economics teaches that Price is determined where supply meets demand. Further there is a concept of "elasticity" of either that looks at the affect on price of a specific item or commodity based on changes in supply or demand. In other words how significantly does price change in response to a spike or decrease in supply or demand. ( To illustrate - In the case of a 1/1 A potential seller can try to "hold out" for any price he wants as he is the only one with the supply - if there are multiple potential buyers they likely know they are competing for a single in supply and the one who is willing to pay the most sets the price. If that 1/1 has no one that cares or wants it - the seller then must entice people by dropping his price as there is no demand and hopes to reach a point where someone will pay him for it) - very oversimplified, but hope it helps.

2) Some factors that are variables that come into play in our hobby world that in theory factor in to the above, but can cause significant variation are; 1) Current owners of cards I would argue have a wide range of prices paid and therefore more or less of a tolerance to sell at a higher or lower price. 2) inefficiency of markets/arbitrage/perceived supply and demand - best by example perhaps - I participate in numerous auctions across a handful of categories - just yesterday I was in a coin and jewelry auction - there was a Rolex watch that sold for $6700 against a house defined $8300-$10600 estimate. Was that a good price? I'm sure the buyer thought it was. A simple google search showed that I could buy the same watch in the same condition from 3 different vendors for about $5600. This is the definition of what I mean by inefficiency of markets. A potential buyer almost always is clueless about the availability of the item they want in all places where it is possibly available - which information would give them the ability to find the best price. There is also a time value and of course the desire factor which are other variables.

Probably already said too much. At the end of the day - buy what you enjoy!

[Republicaninmass]

Originally Posted by Exhibitman

The latest run-up is just the latest market manipulation. Watch where the prices are in a year.

Didnt they say the same about the double printed mantle in 1976?

[jchcollins]

Supply and demand with vintage cards can be a funny animal. There are far fewer presentable T206 cards on the open market today than 1950’s cards in much better shape - but yet the demand for postwar stars still means that Mantle, Aaron, Williams, Clemente, et al in nice shape are hundreds of dollars per card if not more, depending on the issue. Some of these cards, indeed likely most of them are not what you would consider rare or scarce by any definition of the words. Similarly, the demand side of the equation for modern cards like the ‘86 Jordan, the ‘89 UD Griffey, the SP Jeter, etc. is still just huge. It’s interesting to compare to junk era rookies...why is Chipper Jones worth a comparative pittance to some later 90’s rookies? Was the overproduction ramp-up that dramatic?

All told, I would still be very surprised if anything short of a huge world event (this pandemic so far would not seem to qualify...) significantly damages the vintage market long term - even for postwar HOF’ers. It would take quite a lot for everyone everywhere not to be able to afford stuff to the point where ‘52 Mantles and Rose and Ryan rookies just started falling off the map and wind up with bargain bin price tags.

I digress. Demand is not necessarily less of a factor than supply - witness junk era cards...but I’m just more interested in the demand side of it, at least for the moment.


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[mintacular]

Originally Posted by hcv123

Not so simple a question or answer, but both are relevant.

1) Textbook economics teaches that Price is determined where supply meets demand. Further there is a concept of "elasticity" of either that looks at the affect on price of a specific item or commodity based on changes in supply or demand. In other words how significantly does price change in response to a spike or decrease in supply or demand. ( To illustrate - In the case of a 1/1 A potential seller can try to "hold out" for any price he wants as he is the only one with the supply - if there are multiple potential buyers they likely know they are competing for a single in supply and the one who is willing to pay the most sets the price. If that 1/1 has no one that cares or wants it - the seller then must entice people by dropping his price as there is no demand and hopes to reach a point where someone will pay him for it) - very oversimplified, but hope it helps.

2) Some factors that are variables that come into play in our hobby world that in theory factor in to the above, but can cause significant variation are; 1) Current owners of cards I would argue have a wide range of prices paid and therefore more or less of a tolerance to sell at a higher or lower price. 2) inefficiency of markets/arbitrage/perceived supply and demand - best by example perhaps - I participate in numerous auctions across a handful of categories - just yesterday I was in a coin and jewelry auction - there was a Rolex watch that sold for $6700 against a house defined $8300-$10600 estimate. Was that a good price? I'm sure the buyer thought it was. A simple google search showed that I could buy the same watch in the same condition from 3 different vendors for about $5600. This is the definition of what I mean by inefficiency of markets. A potential buyer almost always is clueless about the availability of the item they want in all places where it is possibly available - which information would give them the ability to find the best price. There is also a time value and of course the desire factor which are other variables.

Probably already said too much. At the end of the day - buy what you enjoy!

Thank you for this, very insightful

[Mike D.]

If it was all supply, wouldn’t all these 1/1’s being produced today all be worth big bucks? Some stars are, but an awful lot of lesser known are dirt cheap.

[brian1961]

Supply and demand are both important; however, demand trumps supply in the long run. There are other very important considerations, of course, when determining the extent of "demand".

If we are talking about a particular set or a player, how many collectors collect the set or the player? If there's substantial number of collectors for that set or player, then we turn to supply. Within supply comes the matter of examining the number of examples for each grade. One of the key factors with the demand will be how beautiful was the set's design and for a player, how does his card look---stunning, amazing, breathtaking OR humdrum, raunchy, or flat-out ugly.

The brother that mentioned the addition of having an enthralling story to go with the set, and therefore a player from the set, is thinking wisely and offers striking examples that back his claim of its importance.

Distilling all of this, when you have a set or player that collectors love, and the supply of high-end graded examples are few, or the supply of collector-grade examples seem to take months and months to locate, the price point will keep rising.

Many regional / food cards and team-issue items are sleepers, for their supply is disturbingly low; however, the far majority of collectors seem to gravitate to the tried and true gum cards. Their design is usually appealing; their availability is easy to locate; and they don't have to think too hard or deeply whether or not they're worth collecting.

Whereas, the attractive regional / food items, with their built-in scarcity, rarity, and a paucity of a pop report, often seem over-looked and under-appreciated, for the collector bandwagon does not enjoy having to think for themselves, work hard at researching, and works even less still at tracking down the elusive.

Then again, the little secret is that the few collectors who long ago got their gum card fix, and then decided to launch out and go after better game or white whales, entering the narrow path full of obstacles to get to the gorgeous, tough-to-get regional / food cards would prefer, and I mean adamantly, that the gum card collectors who constitute the far majority of today's collector base, would just remain happy and content with their gummies----FOR THEY DON'T WANT ANY MORE COMPETITION FOR THOSE ITEMS; LIFE'S TOUGH ENOUGH COLLECTING THE BLUE DIAMOND REGIONALS!!!

Just some "food for thought"......

Oh yes, since other companies are forbidden to release regional / food cards today, and have been so for decades, that is why the current legal sport card makers have produced their manufactured rarities, or "chase cards", to replicate in their own way the original, all natural chase cards---those same aforementioned difficult to get regional / food items----tough to get back in the day; often tougher to get today.

Supply or demand. I say both, but mention demand first.

Stay safe. Drive carefully, as many seem to have had their driving skills affected by the Coronavirus and its accompanying fear factor.

--- Brian Powell

[JollyElm]

When i think of supply and demand with baseball cards, my thoughts immediately turn to the 1973 Topps #615 Mike Schmidt rookie card. It's part of the high series, so the number of copies 'should' be limited, but check ebay any time, night or day, and there are too many cards available to count. Check the sold listings, and the numbers continually grow. Many sales are completed day after day (and this is an expensive card whether it's graded or not). Supply truly isn't low at all, but the demand (probably due to it being the key to the 1973 set) has always been through the roof. Take from this whatever you may.

[brian1961]

Darren, you're right-on with the example you give us. Mike Schmidt is one of the most beloved baseball players of all time, with an extra-strong (large) collector base. Gum card collectors relish rookies like no other, and even though Schmidty's is a 3 on 1 design, as they all were that year, that is his rookie, and the gum card bandwagon want it real bad. I'm sincerely glad for them the card may be easily had. Instant gratification, even though the card, as you mention, is not cheap.

Please, I have nothing strong against gum cards. Growing up as a kid, I would not have had much of a collection without them. I'll leave it at that, as I've already expressed my strong inclinations to pursue other items after I entered the growing adult hobby in 1972. However, while I was especially drawn to the regional / food and Topps test issues, I also was finally able to see and buy some 1952 Topps, both 1934 Goudey Lou Gehrigs, and a mass of different Ted Williams gum cards. I loved them all, but simply regarded as extra special the regional / food, and in particular among the Topps test their 1969 Super Baseball.

--- Brian Powell

[mrmopar]

It would seem that the 1/1 example could potentially settle the argument, at least in the small confined of the world of sports collectibles.

Every player in a set has a 1/1 card made of them, all equally scarce in supply. However, the price for each will be determined by the players popularity (or perceived potential). Lacking any real demand otherwise, any given common 1/1 card with no interest or potential might sell or even sit unsold for under $10. Well below what you have to pay for almost any copy of the previously mentioned 73 Topps Schmidt rookie card with possibly millions of copies to choose from, but great demand.

I guess anything could be wiped out value wise if enough supply was to be introduced though. Unrealistic examples, but interesting to consider. Would the discovery of 1 billion previously unknown, mint Schmidt rookies make this card equal to a Von Joshua card from the same set eventually? How many newly discovered T206 Wagner cards would it take to make it just another "common" T206 HOF card and not the holy grail of cards?