Interesting read

[cubman1941]

I subscribe to Adam's Card Blog and this was his entry for today - in line with other discussions in other Net54 Forums -

"What got me thinking was a very interesting piece that ran on Sports Collectors Daily recently, an interview with Chris McGill, the Co-Founder of Card Ladder. In case you don’t know it, Card Ladder is a data aggregating service that scrapes prices on select cards from eBay, auctioneers and so on, and produces recent sales reports for its members. What caught my eye was this quote from the article:
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Card Ladder’s 3,946 card vintage index (comprised of cards issued between 1946 and 1983) is down 5% over the last year. …. In the context of Card Ladder’s 24 other indexes, vintage has performed 6th best over the last year, trailing only Pre-War Vintage (+29%), Tennis (+19%), Outlier (+16%), Hockey (+7%), and Baseball (-1%).”
I quibble with calling anything post-1980 vintage, but I digress.
Where is modern? According to the article, modern is down over 30% for the year. One reason McGill suggested in the article:
“…my anecdotal observation is that the Modern and Ultra-Modern markets became overheated by a subset of folks focused on speculation and flipping over the last few years. Many of them seem to have left the industry this year, causing prices to fall.”
He then went on to point out that modern has outperformed vintage over the last five years by a substantial margin:
Ultra-Modern: +639%
Modern: +744%
Vintage: +270%
Pre-War Vintage: 340%
In other words, modern is a bubble, and it is deflating fast. Bubbles pop and when they do, you lose the most valuable commodity you have: time. Lose a decade on the growth of an investment and you can never make it up. I think it has a long way to go before the modern market bottoms out. Judging from the lessons of the junk wax era, I think when it bottoms it will be there for a good, long time.
This is a cycle we’ve seen before, so why do people keep falling for it?
One potential reason is that the modern card production and sales mechanism, while different than the past mechanism, has inherent flaws that allow the middlemen to systemically screw retail participants and actual collectors. I think they shed light on why modern is a giant sucker bet right now.
The first issue is marketing. The modern card world is driven by unopened material breaks and moves through social media, where influencers are the kings of hype. These spastically energetic live streams and videos feature obnoxious modern card cheerleaders opening packs and boxes and cases on air and going batshit crazy when a valuable insert card is uncovered. Many of them also sell cards, unopened material, and slots to customers in breaks. You either pay a fee for a random slot assigned at the time of the break or you bid competitively to win all cards from a team that emerge in the break. The idea of the latter is that if you buy, say, the Lakers, you may get a valuable LeBron James insert card.
What has become apparent now that there is a track record is that publicity breaks often feature a stunning array of ‘golden ticket” cards. It has been observed (there is a thread on Blowout about this) that certain very popular breakers pull very valuable inserts so often that it is all but mathematically impossible. Very suspicious, but no hard evidence of wrongdoing. But think about this: if these guys pull the 1/1 Logoman and the other big cards, then the top prizes aren’t out there for the average box purchaser to find. Take those top prizes off the table and the value equation on unopened modern unopened changes dramatically for the worse. With so many of the super-limited cards ending up in the hands of professionals, it makes me wonder how legitimate the retail modern unopened market is.
The other issue of note is that there is a scandal brewing on Panini cards that is either intentionally created or that resulted from genuinely stupid planning. This one is empirically proven. Apparently, the holographic authenticity stickers on the fronts of Panini basketball product boxes (and perhaps other products too) are coded differently if the boxes have the very expensive Kaboom inserts in them. Breakers who have cracked the code can open a case, remove the box(es) with the hot inserts, and sell the rest as box breaks knowing that the customers who buy into these remaining box breaks have no chance of receiving the valuable insert cards. How widespread this situation is depends entirely on how many people can crack the code.
One thing is clear: paid breaks are economically terrible for almost everyone. Dealers sell unopened and do breaks because the odds favor the dealers; it is far more profitable to a dealer to sell boxes or break slots than to actually shuck the cards out of the packs themselves and sell the good ones at retail. If the opposite was true, the dealers would just do the latter. Yet people still spend a ton on breaks, despite empirically bad outcomes. Another example of magical thinking in the hobby.
In my view, these issues are part of what has gradually poisoned the modern market and is part of the decline in that market. In my view, the only safe choice is to not buy unopened modern, and especially stay out of breaks. If you just have to scratch that itch, buy a case from a legitimate retailer, not a box, because boxes are suspect for the reasons noted above.
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