Card Prices During Recessions

[Peter_Spaeth]

My crystal ball is broken. But so is everyone else's. Stay tuned, we'll see what happens.

[perezfan]

As far as recession... we are already in one.

As far as card prices... only time will tell. My guess is that low-mid range cards will flounder while high-end/expensive cards will hold firm. Just a guess, based on historical trends.

[raulus]

They'll go up. And if they don't go up, they'll go down.

Or maybe they'll do a little of both at the same time.

Might also depend on how severe the recession is.

Not to mention what else is going on with other asset prices.

Certainly if enough things go wrong with the broader economy, then we could see cardboard demand wane, the number of sellers could wax, and prices would therefore fall, no more exciting than a simple flip of supply and demand.

Naturally, right now, due to our recency bias, it's hard to imagine this ever happening. But I understand that it's happened in the past, and could always happen again in the future.

If you're dying to really look at historical results, go back and check out prices for a handful of items for 2006, 2007, 2008, 2009, and 2010. Check out a single item at a specific grade. Nothing too exotic - make sure there's a lot of transactions so that you can get a good feel for the market from year to year before the recession, into the recession, and then coming out of it. Do it for a few different items for different players and different years, different sets, just so you don't get weird results by focusing on only one player, only one set, only one year. Since the great recession is our last recession (ignoring the COVID 2020 quickie recession), that's probably going to be your best bet for trying to assess the action during a recession, simply because good data on cardboard prices during the 2001 recession is hard to come by, and before that it's even harder.

[Exhibitman]

My prediction:



That said, remember this:

[G1911]

We’ve been over this a bit lately, they can only go up. YOLO every dollar, and empty your 401K, and take out loans for money you don’t even have to invest in this can’t miss win. That’s what if I’ve been told.

[90feetaway]

Unemployment is still fairly reasonable so potentially can't just look at recession, in and of itself, IMO. The previous post about looking at card values during the circa 2010 period seems like a good answer to the OP's question.

[jefferyepayne]

I got back into the hobby during the housing crisis and quickly figured out that card prices were about 50% of what they had been earlier in the 2000s.

Having said that, I don't believe recessions are all the same so you can't predict that this will happen again.

jeff

[Rhotchkiss]

I have been collecting on and off for 4 decades. In my experience, over time the good stuff has always appreciated. It may go up and/or down over shorter periods, but in the long run, the good stuff is a good investment.

I have said this before, cards as an investment is a long game (like real estate). Buy good stuff, make sure you can hold (i.e., don’t over extend), and hold. You should make money. If you try to time the market, then it depends on your luck.

Now, what constitutes “good stuff” is the subject of a zillion other threads

[MailboxBaseball]

Originally Posted by Exhibitman

My prediction:



That said, remember this:

The Mr. T pic made me laugh haha thanks for posting

[pokerplyr80]

Originally Posted by perezfan

As far as recession... we are already in one.

As far as card prices... only time will tell. My guess is that low-mid range cards will flounder while high-end/expensive cards will hold firm. Just a guess, based on historical trends.

Agreed. The most sought after cards have enough interest that if prices even dropped 10-20% people would be lined up to buy them. Ruth, Gehrig Cobb, Mantle, etc. And the recession is here. Hopefully the fed will stop raising rates by Q2 2023 and things will settle down. But as Peter said my crystal ball is broken as well.

[EddieP]

I can tell you who doesn’t think there’s a recession: The Fed.

[Exhibitman]

Ryan's right, long term, the blue chip stuff holds and gains. Look at Paleo's tables. You could knock 50% out of the current price on the Speaker and still have a hell of a return over 10 years.

What's really confounding everyone is that this isn't 1977's stagflation it is 1947's inflation, and nobody who isn't sitting in a home gumming their oatmeal experienced the economy as an adult in 1947, but plenty of the septuagenarians and octogenarians who are in power vividly remember the 1970s. What's missing from the 1970s analogies is the "stag" part of "stagflation". Employment is tight and we had real growth last quarter. The simple fact is that inflation was inevitable once the COVID shock wore off. We have a couple of years of pent-up demand due to the plague that is expressing itself in ways that the economy wasn't geared to expect, causing both the supply chain to snarl and the core rate of inflation to rise. The latter is what the Fed is going after hard. But interest rates are an oddly focused brick to the head. They hit factored industries, housing and construction very hard, don't affect the information businesses much unless they have variable loans or bonds, which is rare. On the consumer level, it is a mixed bag. It basically tanks the home selling business but current homeowners who refi'd to fixed loans at 2%-3% are loving life right now; they might even see nominal returns on their savings top their mortgage rates, which is nuts. The gas and food price increases are completely different, essentially they are bets on the war in Europe and its impact on energy and food supply, plus some incredible profiteering by the oil companies (look at the crazy profits they made last quarter) and the usual terrorist tactics from the OPECkers, who yet again kneed us in the nuts right when we needed to get prices to come down (next time we invade can we just kill them all and take the oil instead of pretending we care about anything else? Too much? I can never tell). I kid our great and loyal friends in the Middle East...

[Seven]

I'm going to echo some of the other statements made in the thread; by and large the Stars will remain the same, maybe ever so slightly dip. Commons will go down a a little bit, modern will probably take a hit.

At the end of the day the prices of Ruth, Gehrig, Cobb, Wagner, Mantle, Mays, etc are not going anywhere.

As a side note, if you see multiple high dollar pickups from me in the coming days, it's because I hit the Powerball

[Johnny630]

REA’ Big fall auction is coming up. They’re going to have record high-price sales numbers again. I see no signs of a recession in the high and vintage market.

[raulus]

Originally Posted by Exhibitman

But interest rates are an oddly focused brick to the head. They hit factored industries, housing and construction very hard, don't affect the information businesses much unless they have variable loans or bonds, which is rare. :

It seems like this summary is missing the broader business impact, because real estate isn’t the only industry under fire.

Headline from yesterday’s WSJ:

“Raising money on Wall Street is hardest in a decade”

If the layoffs and/or hiring freezes at many of the tech startups and even established tech shops are any indication, the impact of higher rates spreads deeper than just leveraged companies with variable loans and bonds.

Rising rates means that the cost of capital for just about every business is higher than it was a year ago.

I suspect that we are closer to the top than to the bottom. How much further we have to go before we hit the bottom is where most of the debate seems to lie.

[Exhibitman]

Originally Posted by raulus

It seems like this summary is missing the broader business impact, because real estate isn’t the only industry under fire.

Headline from yesterday’s WSJ:

“Raising money on Wall Street is hardest in a decade”

If the layoffs and/or hiring freezes at many of the tech startups and even established tech shops are any indication, the impact of higher rates spreads deeper than just leveraged companies with variable loans and bonds.

Rising rates means that the cost of capital for just about every business is higher than it was a year ago.

I suspect that we are closer to the top than to the bottom. How much further we have to go before we hit the bottom is where most of the debate seems to lie.

Separate the 'must' from the 'can'. The cost of capital is an externality. The need for capital is highly variable across industries and businesses. Many of the large multinational tech companies are hoarding cash overseas and opting for financing here to evade US taxes:

https://fortune.com/2022/08/05/us-co...ax-incentives/

Those companies do not 'need' capital, they use it as a tool when it is cheaper than paying their taxes. There are many businesses and industries that exploit situations like interest rate hikes and recessions or fears of recessions to justify wage freezes, wage reductions, firings and so forth. They shift from capital to those tools when capital costs rise.