Card prices skyrocketing

[rats60]

Originally Posted by Exhibitman

Econ 101, right: the demand raises prices until owners decide to sell and the supply increases enough to achieve equilibrium.

Econ 102: the speculators then bail out, prices drop, and many people who jumped on the FOMO bandwagon are left holding their...cards.

Econ 103: eventually, they capitulate and get out for whatever they can. People who've waited out the run up now buy.

Econ 104: ten years later another bubble inflates.

You know you are getting older when you can recall three or four of these card price cycles. The bizarro world part of this latest one is that the boom is driven by boredom and is taking place despite the economy and the bust likely will result from a return to more normal economic activity.

Why is this bizarro? The hobby originally took off during the second worst economic crisis in our country's history after the great depression? We had double digit unemployment, double digit inflation and double digit interest rates yet there were enough people with money to buy baseball cards that everything rose dramatically in price.

Now we have the government sending everyone 3200.00 and people are locked in their homes with little to spend it on. Why wouldn't you expect some of it to go into cards when the government gives out free money to people who don't need it? After the stock market crash last year, why shouldn't people diversify into this hobby which has a 40 year history of solid growth?

I agree with your 4 points, but what we don't know is how many of these new investors will leave when we have the correction. That will determine if the drop will be minor or prices will correct back to close to where they were a year ago.

[Kutcher55]

Meanwhile a 1952 Topps Mays PSA 2 sells for $5,951 on eBay yesterday. Another PSA 2 closing out in 12 hours already at $3,400.

[CharleyBrown]

Originally Posted by rats60

Why is this bizarro? The hobby originally took off during the second worst economic crisis in our country's history after the great depression? We had double digit unemployment, double digit inflation and double digit interest rates yet there were enough people with money to buy baseball cards that everything rose dramatically in price.

Now we have the government sending everyone 3200.00 and people are locked in their homes with little to spend it on. Why wouldn't you expect some of it to go into cards when the government gives out free money to people who don't need it? After the stock market crash last year, why shouldn't people diversify into this hobby which has a 40 year history of solid growth?

I agree with your 4 points, but what we don't know is how many of these new investors will leave when we have the correction. That will determine if the drop will be minor or prices will correct back to close to where they were a year ago.

While I agree with most of your post, I think it should be noted that the gov't giving people $600 or $1400 stimulus checks is definitely not driving the price of Jordan rookies to $700k or Kobe refractors to $500k, or even cards that are now selling in the 5 figure range.

[Directly]

I attended a small 40 dealer sports card Saturday. I know two gentlemen who were there had at least 150,000 in cash buying, one was usually on the phone for the buyer. They both left broke--Ha!

[bobbyw8469]

Originally Posted by Directly

I attended a small 40 dealer sports card Saturday. I know two gentlemen who were there had at least 150,000 in cash buying, one was usually on the phone for the buyer. They both left broke--Ha!

LOL!! Card rich, cash poor. After they flip the cards, they will have a lot more than $150k, guaranteed.

[packs]

The gap between museum dealer table prices and market prices is getting closer. Maybe some day soon there will be an actual deal at a show.

[Arazi4442]

Originally Posted by bobbyw8469

LOL!! Card rich, cash poor. After they flip the cards, they will have a lot more than $150k, guaranteed.

Never sold $150k worth of cards but don’t you owe income tax on sales like that?

[Tabe]

I'm seeing lots of people talking about this being a bubble, unsustainable, and so forth. So my question is this:

Has there ever been a time when vintage cards have dropped in price? For more than 6 months? Not talking about the cratering of modern nonsense in the early 90s but vintage - Mantle, Ruth, Cobb, and so on.

???

[glchen]

Originally Posted by Tabe

I'm seeing lots of people talking about this being a bubble, unsustainable, and so forth. So my question is this:

Has there ever been a time when vintage cards have dropped in price? For more than 6 months? Not talking about the cratering of modern nonsense in the early 90s but vintage - Mantle, Ruth, Cobb, and so on.

???

Chris, this is what folks said in 2008 before the real estate crash. Has anyone ever seen housing prices go down, especially in the big markets like California? Just because it never happened before doesn't mean we're not in a bubble now.

As others in this thread have said, I fully believe the reason for the card prices to skyrocket is that we are awash in money supply looking for a place to land when interest rates are basically 0. And that is exacerbated by the pandemic where families who have jobs are saving a lot of money because they are not going on vacations or eating out as much, so there is even more money looking for a place to be spent. Therefore, I don't really expect the bubble to pop until we start seeing inflation and rising interest rates.

Also, I don't think the bubble is as bad in prewar as it is in modern. I somewhat justified the prices of modern in the past because hey, if you wanted to get an autograph of Michael Jordan, how much are you going to have to pay for it? MJ is a billionaire so he doesn't need to go to card shows to sign, so it's never going to be easy to get one of the autos of the big stars like him or Lebron, etc. You might was well buy a card with his auto on it, so that adds to the premium there. However, prices these days have just gotten completely out of hand given the supply out there.

Given what I just said, why don't I just sell out if I believe the market is going to crumble? It's that collector part of me that has a hard time doing that. I have cards in my possession that I've wanted for a very long time, and some of them have pops that are very low, that if I sell, I may never be able to buy back again even if the market goes down. For the other cards with higher pops, it's still back to my collector possessiveness. I just love having that card in my collection even if I could get a bundle by selling it. I don't need the money right now, so there is no urge to let it go. Of course, I will probably regret this all if the card market crashes.

[DanP]

Originally Posted by CharleyBrown

While I agree with most of your post, I think it should be noted that the gov't giving people $600 or $1400 stimulus checks is definitely not driving the price of Jordan rookies to $700k or Kobe refractors to $500k, or even cards that are now selling in the 5 figure range.

Shaun, you got that right! I never could understand how anyone could think that the stimulus checks have anything to do with the crazy prices we are seeing now. Cards that sold for $1k in Nov are going for $10k now (look at Brady's Bowman Chrome, Magic/Bird RC, etc.) I think this is 90% about people with money being bored and entering the market. Once that happened they and others see prices rising and don't want to miss out.

[jchcollins]

Originally Posted by DanP

Shaun, you got that right! I never could understand how anyone could think that the stimulus checks have anything to do with the crazy prices we are seeing now. Cards that sold for $1k in Nov are going for $10k now (look at Brady's Bowman Chrome, Magic/Bird RC, etc.) I think this is 90% about people with money being bored and entering the market. Once that happened they and others see prices rising and don't want to miss out.

Absolutely. Those people buying 6-figure cards aren't doing so because of any stimulus check. People have to realize that those playing at that level are an incredibly small slice of the pie on the whole, though.

[JohnnyKilroy]

Originally Posted by CharleyBrown

While I agree with most of your post, I think it should be noted that the gov't giving people $600 or $1400 stimulus checks is definitely not driving the price of Jordan rookies to $700k or Kobe refractors to $500k, or even cards that are now selling in the 5 figure range.

True. I think the stimulus plays very little part in this. I definitely agree with the basic rules of economics posted earlier though and they are absolutely in play here. My take.... modern is already starting to decline. The big money is shifting from 5-6 figure purchases on semi-unproven players and moving towards the GOATS. Hence what Jordan, Lebron, Kobe, Trout, Brady, and some others are doing. From there, it will continue to pump into safe vintage... Mays, Mantle, Ruth, Cobb, Jackie, etc... So I think vintage still has some more rising to go. It’s trickling down from 80s/90s GOATS because that’s the generation predominantly driving this bus. Those were the players they grew up with.

Now the question becomes money. Where does it all come from and how much is someone wiling to “invest”. As was said earlier, lack of trust in stock market, or asset allocation / diversify, Hedge funds, yadda yadda. More big money is coming into the industry for their portfolio. No question. I would say a large chunk of that money is from young 20-40 year olds who don’t believe in history repeating itself. They hit it big with crypto, GME, Tesla, or flipping modern over the last year. They now have no problem moving 6 figures around in baseball cards. And yes... we all have had an incredible amount of free time these days. All while not spending as much as we did pre-covid (generalizing here...). Lack of eating out, vacations, doing something other than sitting in front of a device.... Once that shifts, there will definitely be a slow down in demand. I’d almost guarantee that. The question is how long until that effects this wild market.

[packs]

I think I'm a relatively young collector (early 30s) and I have a group of friends who are similarly young people. No one other than myself is interested even vaguely in cards, never mind considering investing in them. None of them have a history in the hobby and I still remain convinced there is very little interest from normal every day people in cards.

[JohnnyKilroy]

Originally Posted by packs

I think I'm a relatively young collector (early 30s) and I have a group of friends who are similarly young people. No one other than myself is interested even vaguely in cards, never mind considering investing in them. None of them have a history in the hobby and I still remain convinced there is very little interest from normal every day people in cards.

I use this as another indicator that there’s still growth. I have similar experiences when I mention spending big money on cards... I get the weird look like “you spend 15K on a piece of cardboard??”. The everyday people may not want to invest in cards, but until the day comes where I mention baseball cards and they answer with “oh yeah, I’ve heard a lot of people doing that”.. I think there’s still time. We aren’t quite at the “Stock tips from the shoeshine boy” yet.

[packs]

I could see that happening for a card like the Wagner or 52 mantle the same way the uninitiated invest in Picasso when they decide to turn to art. But the all important question to ask is what would make someone interested in anything but the marquee cards who otherwise doesn't care about baseball cards.

[JohnnyKilroy]

Originally Posted by packs

I could see that happening for a card like the Wagner or 52 mantle the same way the uninitiated invest in Picasso when they decide to turn to art. But the all important question to ask is what would make someone interested in anything but the marquee cards who otherwise doesn't care about baseball cards.

Good point! I suppose my answer would be using myself as the example. Collected as a kid for fun, obviously not as investments. Stopped collecting when life started. Fast forward to last year and the whispers of card industry booming start. You now have a group of people re-kindling childhood memories with an investment twist. The example I gave above that mentioned getting looks from friends who thought I was nuts... most of those friends collected cards as a kid. My thoughts are they are in somewhat of “uninitiated” when it comes to investing in cards or even a lack of knowledge on big cards even though they had 1000 Chris Sabo rookies. There might be enough spark to get them to realize they can combine sports, childhood memories, and investing all together.

[packs]

double post

[DanP]

Originally Posted by JohnnyKilroy

I use this as another indicator that there’s still growth. I have similar experiences when I mention spending big money on cards... I get the weird look like “you spend 15K on a piece of cardboard??”. The everyday people may not want to invest in cards, but until the day comes where I mention baseball cards and they answer with “oh yeah, I’ve heard a lot of people doing that”.. I think there’s still time. We aren’t quite at the “Stock tips from the shoeshine boy” yet.

I have a friend who says the same thing. I reminded him he spent $30k on a rock (ancient gold coin) but WHAT IS THE DIFFERENCE? Neither will feed you if you are starving. Both are only worth what someone is willing to pay. I could argue that it's easier to liquidate my card collection than for him to sell his coin (I think, guessing since his coin is not graded).

[cardsagain74]

Originally Posted by DanP

I could argue that it's easier to liquidate my card collection than for him to sell his coin

The liquidity of the new digital marketplace benefits collectibles so, so much. Back in the junk wax era and before, a dealer could have stuff like a 1961 Topps Al Kaline sit in his display forever unless it was highly discounted (especially at small town card shows).

Now, you just auction it off on ebay and get paid what it's worth whenever you want.

Originally Posted by packs

I think I'm a relatively young collector (early 30s) and I have a group of friends who are similarly young people. No one other than myself is interested even vaguely in cards, never mind considering investing in them. None of them have a history in the hobby and I still remain convinced there is very little interest from normal every day people in cards.

Then you aren't doing your job!

[troutbum97]

Who said iconic vintage is expensive?

This 1933 Goudey Ruth is 1/2-off ... literally.

https://www.ebay.com/itm/Freshly-Gra...kAAOSwAgFgJGVp

[Oscar_Stanage]

Originally Posted by troutbum97

Who said iconic vintage is expensive?

This 1933 Goudey Ruth is 1/2-off ... literally.

https://www.ebay.com/itm/Freshly-Gra...kAAOSwAgFgJGVp

Ha. Classic

[egri]

Originally Posted by JohnnyKilroy

True. I think the stimulus plays very little part in this. I definitely agree with the basic rules of economics posted earlier though and they are absolutely in play here. My take.... modern is already starting to decline. The big money is shifting from 5-6 figure purchases on semi-unproven players and moving towards the GOATS. Hence what Jordan, Lebron, Kobe, Trout, Brady, and some others are doing. From there, it will continue to pump into safe vintage... Mays, Mantle, Ruth, Cobb, Jackie, etc... So I think vintage still has some more rising to go. It’s trickling down from 80s/90s GOATS because that’s the generation predominantly driving this bus. Those were the players they grew up with.

Now the question becomes money. Where does it all come from and how much is someone wiling to “invest”. As was said earlier, lack of trust in stock market, or asset allocation / diversify, Hedge funds, yadda yadda. More big money is coming into the industry for their portfolio. No question. I would say a large chunk of that money is from young 20-40 year olds who don’t believe in history repeating itself. They hit it big with crypto, GME, Tesla, or flipping modern over the last year. They now have no problem moving 6 figures around in baseball cards. And yes... we all have had an incredible amount of free time these days. All while not spending as much as we did pre-covid (generalizing here...). Lack of eating out, vacations, doing something other than sitting in front of a device.... Once that shifts, there will definitely be a slow down in demand. I’d almost guarantee that. The question is how long until that effects this wild market.

Also with interest rates being this low, debt is cheap. Not a whole lot of incentive to pay off loans early or keep money parked in bonds and savings accounts. Thus far, stocks, real estate and alternative investments (cards, crypto, etc) have been benefiting, but I think when interest rates rise again, we’ll see money get pulled out of here and prices start to recede. Maybe not to where they were before, but below these levels.

[Seven]

I think the part of the Hobby that sees a bit of the drop off is the lower end vintage. What I mean is your Graded A-3 Cards, will probably dip back a bit. I think your high end vintage won't necessarily rise but certainly maintain its value. Unless some sort of Major market correction happens.

As a side note I'm even more upset that the Jordan RC I have, turned out to be a fake. As I would've sold it off by now and made a healthy amount of money.