THEORY: Card Grading SLOWS appreciation of value!
jrinck
Posts: 1,321 ✭✭
One of the reasons why an item becomes valuable over time is because, generally, the number of said items in circulation decreases over time. One of the main reasons why a population of an item decreases is due to years of handling. Items get lost, destroyed, or just handled to the point of being not as desirable as when they were in their "mint" state.
This logic applies perfectly to sportscards. Why is a raw 1952 Topps Mickey Mantle in MINT condition worth many, many thousands of dollars? Not only is the item rare, but most of the samples in existence are in far lesser of a condition. As time goes on, one could expect the general population of MINT 1952 Topps Mantles to only get lower, and thus the value of any MINT Mantles to go ever higher. UNLESS...
Unless there was a way to preserve these cards in such a way that normal, and even somewhat below normal treatment will still preserve the card in the state it was at the time of preservation. Preserving a card not only keeps it's condition, but also makes it less likely to be lost or destroyed.
Well, we all know that there IS a way to preserve such cards, and that is because of companies like PSA who, in addition to judging the condition, also protect the card in a small, plastic case. These companies give peace of mind for buying and selling, and just the act of grading can increase the value of the card at first. HOWEVER...
Once a card is slabbed, and others like it, the population of the card becomes stagnant. If, in 2004, there are 100 1952 Topps Mickey Mantle cards in existence with a grade of a PSA 9, then one could argue that in 2104 there will STILL be 100 1952 Topps Mickey Mantle cards in existence with a PSA 9 grade. So the rarity of the PSA 9 does not change, even after 100 years! In fact, the population might even INCREASE due to samples being discovered. In the case of the '52 Mantle, the amount of new cards worthy of PSA 9 discovered in a 100 year period, at this point, however, is probably equal to the amount of existing '52 Mantle PSA 9's that will be lost to catastrophe in the next 100 years.
So what will drive the future appreciation in value for not only the Mantle PSA 9, but ALL high grade vintage cards? In 100 years they'll be just as plentiful as they are today, and the effects of time are no longer as serious a factor as they would be if the card remained raw. In other words, will someone appreciate a 1952 Topps Mickey Mantle PSA 9 any more in 100 years than they do today? If so, why?
This logic applies perfectly to sportscards. Why is a raw 1952 Topps Mickey Mantle in MINT condition worth many, many thousands of dollars? Not only is the item rare, but most of the samples in existence are in far lesser of a condition. As time goes on, one could expect the general population of MINT 1952 Topps Mantles to only get lower, and thus the value of any MINT Mantles to go ever higher. UNLESS...
Unless there was a way to preserve these cards in such a way that normal, and even somewhat below normal treatment will still preserve the card in the state it was at the time of preservation. Preserving a card not only keeps it's condition, but also makes it less likely to be lost or destroyed.
Well, we all know that there IS a way to preserve such cards, and that is because of companies like PSA who, in addition to judging the condition, also protect the card in a small, plastic case. These companies give peace of mind for buying and selling, and just the act of grading can increase the value of the card at first. HOWEVER...
Once a card is slabbed, and others like it, the population of the card becomes stagnant. If, in 2004, there are 100 1952 Topps Mickey Mantle cards in existence with a grade of a PSA 9, then one could argue that in 2104 there will STILL be 100 1952 Topps Mickey Mantle cards in existence with a PSA 9 grade. So the rarity of the PSA 9 does not change, even after 100 years! In fact, the population might even INCREASE due to samples being discovered. In the case of the '52 Mantle, the amount of new cards worthy of PSA 9 discovered in a 100 year period, at this point, however, is probably equal to the amount of existing '52 Mantle PSA 9's that will be lost to catastrophe in the next 100 years.
So what will drive the future appreciation in value for not only the Mantle PSA 9, but ALL high grade vintage cards? In 100 years they'll be just as plentiful as they are today, and the effects of time are no longer as serious a factor as they would be if the card remained raw. In other words, will someone appreciate a 1952 Topps Mickey Mantle PSA 9 any more in 100 years than they do today? If so, why?
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I think you're right about supply changes no longer effecting card values. But you're forgetting 2 things. 1) Inflation - at 3.5% a year today's $25,000 Mantle is 2024's $50,000 card. 2) Demand changes - as more and more baby boomers retire demand could rise even further - guys using their pensions to recapture their childhoods, at least until they die off or social security goes bankrupt. It will be interesting to see what happens when the generation that collected cards in the 1950s disappears...
Chris
Your theory is interesting. I would assume you are correct for what we consider vintage as of today. Since the population of ungraded modern (mid 1970's up to mid 1980's) which are presently finacially not feasible except for set-collectors would definitely increase over time. Late 1980's on though, with some exceptions, would barely move due to the massive pops of reg. issues and the great number of off-shoot issues.
Values would vary along economic and inflationary lines.....look no further than star cards of the '50's which have flattened out since the initial grading craze.
JIM
Joe
That will even out any percieved slowness of price rise. Also the fact that the cards you speak of are now encapsulated could very well help in their rise in value as opposed to flattening it.
The best thing that has happened to this hobby is 3rd party authentication/grading/encapsulating. my 2 cents
edited to say: great thread btw
<< <i>If, in 2004, there are 100 1952 Topps Mickey Mantle cards in existence with a grade of a PSA 9, then one could argue that in 2104 there will STILL be 100 1952 Topps Mickey Mantle cards in existence with a PSA 9 grade. >>
But you forgot to include natural disasters. We all know that PSA slabs WILL burn if ignited in a Fire, I'm pretty sure (not proven though) they wouldn't hold up in a flood, hurricane or tornado. I hear a bitter ex-wife is a disaster in the making too.
I am not saying it would drastically affect the quantity in a 10 year period, but there are still options for the Mint examples to be destroyed.
Demand may actually diminsh -- I grew up watching Mike Schmidt, not Richie AShburn. I have little desire for Whitey, but I want Schmidt stuff.
Today's collector wants Arod and Jeter rather than Mantle and Maris.
Collecting Bowman Chrome Phillies Rookie Cards and Mike Schmidt certified auto cards.
Actually, I did think of that. Look up there!
Another issue is whether BASEBALL cards maintain value as the sport itself whithers on the vine. Most people 35 and under hardly regard baseball as an athletic endeavour, much less a sport. Football is the national pastime now. What does this mean for vintage baseball?
Beats me,
Chris
<< <i>If, in 2004, there are 100 1952 Topps Mickey Mantle cards in existence with a grade of a PSA 9, then one could argue that in 2104 there will STILL be 100 1952 Topps Mickey Mantle cards in existence with a PSA 9 grade. >>
Jrink - some really good thought provoking ideas.
Let's assume that the amount of truly good 52T Mantles remain finite at 100, e.g., however, the population of people is not finite, in fact, it is increasing - and thus, potentially, the amount of people seeking collectibles 25 yrs. from now may increase - which means more people are chasing less items.
What do ya think?
<< <i>In other words, will someone appreciate a 1952 Topps Mickey Mantle PSA 9 any more in 100 years than they do today? If so, why? >>
Your question here seems to be more directed at taste than statistical demand in the next century - who knows what will get someone excited - if we use todays model, I can say that 19th century baseball collectibility has gone up, IMO. Around '87, I didn't hear a lot about that stuff, but now, in the big auctions, it is in greater demand for many reasons. My guess, if baseball survives as we know it, they will be talking about Ruth, Mantle, Bonds etc. forever.
So, at least with regard to supply and demand, yes the supply is large and "protected" better than before - the demand may go up as the population increases or may stagnate if the sport becomes less popular. Great questions - NO easy answers - NO crystal ball - thanx for bringing it up.
<< <i>Demand may actually diminsh -- I grew up watching Mike Schmidt, not Richie AShburn. I have little desire for Whitey, but I want Schmidt stuff. >>
Great point - but again hard to truly predict - because the older stuff is actually more scarce, I believe that there will always be inveterate vintage collectors who will be chasing these items into the next century - obviously these types will have little use for modern or late vintage/modern of their time - there will always be a 'class' of highend advanced collectors. I have nothing to base these ideas on other than my humble opinion. Great thread - for those who like a challenge.
Thanx, Mike
I gave the example of the 1998 SP Vince Carter rookie card as an example. I remember just about three years ago this card in a PSA 10 was selling in excess of $3,000 and now it doesn't sell for 10% of that amount. You can pick up one now for right around $200. In my opinion, I just don't see the long term investment in some of these modern cards. Carter is still one of the top 10 stars in the NBA and I know he has had some injuries as of late, but c'mon a $2,700 drop in value in just three years. Only 20% of the 2,384 cards have reached the PSA 10 grade. 70% of all the SP Carter rookies manufactured are slabbed in PSA holders. If you take into consideration of the other grading companies, especially Beckett I would bet that number would probably climb to 90-95% that are now resting in slabs. I am sure glad I dumped my PSA 9 for almost 4 times what a 10 brings now. Sure you will always have your short printed #'d cards, but how many of those are slabbed in high grade holders. Supply and demand will come into effect with the extremely short printed cards where under 50 or 100 were printed but even the Carter rookie there were only 3,500 printed.
The supply has to be reduced or the demand has to be increased for value to be achieved. Do you think the value of these high grade vintage cards would be what they are today without the follwing happening;
1) The cards were purcased for the most part with no investment value intended. Kids played with the cards by trading them, putting them in the spokes of their bikes, card flipping games and writing on them.
2) Mothers pitching these cards in the trash when most went away to college or to summer camp.
3) I am sure that the 1952 Topps Mantle or other high numbers would not be as scarce or valuable today if the remaining left over stock of several thousand cases had not been dumped into the Atlantic ocean.
The supply of these vintage card in high grade form was reduced over the last 40 -50 years before grading become popular, something I don't see happening with todays cards.
Todd
<< <i>Demand may actually diminsh -- I grew up watching Mike Schmidt, not Richie AShburn >>
Try buying some 19th century, T or E cards right now (even Poor/Fair cards are in demand). A great majority of people buying/collecting these cards didn't bust Tobacco packs in their youth. Demand for pre WWI cards is increasing, yet nearly all collectors were born after WWI. I doubt any collectors were alive when Billy Sunday, Cap Anson, King Kelly or Buck Ewing was playing, yet their cards remain in demand.
Will this continue? Who knows...
CU turns its lonely eyes to you
What's the you say, Mrs Robinson
Vargha bucks have left and gone away?
hey hey hey
hey hey hey
you are correct and I believe the demand for 19th century material will only increase.
A big reason is the internet, which has allowed the "30 and 40 somethings" with large disposable incomes to enter the hobby and "advance" at an unprecedented rate.
Sure, these(us) guys might start with 1971 and 1975 topps, but pretty soon they get bored recollecting cards of their youth and realize that those sets are a dime a dozen, and soon begin to explore cards they never owned and never knew existed.....for some, the quest for discovery and thrill of the hunt takes over.... further and further back in time they(we) seem to go.... and less and less reasoned are our purchases.
If anyone thinks "old" cards will fall from favor, then check out the steady price rise in antique furniture and fine art over the years, as demand outstrips supply.
The internet has turned this hobby on it's ear in my opinion. Information at your fingertips and a 24/7/365 card show known as e-bay makes it something anybody, anywhere can enjoy and have access to.
Demand will likely always be high, imo, which will keep appreciation viable.
As observed by those pointing to pre-war sets, it won't matter that older collectors who saw these guys plays are dying off. However, I would say that if baseball falls from favor as a national pastime, and the link from generation to generation erodes (no more memories of dad and grandpa and hot dogs), the interest and demand will wane. I think this point is crucial. It seems so far-fetched that baseball would ever leave the national spotlight, but bit by bit, I see this happening (not trying to play cchicken little-just my observation). So, it is possible that the hobby itself will lose steam. I look at the non-sports card market---many of those are collected by people who were alive when the cards were issued, and most are ignored by those who do not share the memories. I don't see much linkage from generation to generation--I know I never really cared which actresses and westerns were popular with my parents. If the connection with baseball erodes, I would expect the same effect, and the new money to go into other places, which I guess means I should modify my prior statement about demand always staying high. For you sellers and investors, let's hope so
Finally, I agree with the poster who said that adequate card preservation has been around long before encapsulation. At least as far as the example goes, I can't believe that there have been alot of raw 52 Mantles exposed to dings for the past 25 years. If anything, I believe that many collectors holding such beauties are reluctant to risk damage by a grading company or the post office--not everyone is so gung-ho as to drive to a show with on-site grading. In that respect, I believe using only pop reports significantly understates the true supply.
ebay id: nolemmings
you made some great points. baseball popularity is a factor and I'm such a die-hard fan that I often overlook that. I do think that the vintage market would be more stable but slowly decline if MLB ground itself into the dirt.........all that said, I for one can't wait for the weekend and a chance to look at The Greenwood collection in Mastro's catalog, some great regionals on the menu.
<< <i>baseball popularity is a factor and I'm such a die-hard fan that I often overlook that >>
I know many top notch collectors and dealers that couldn't tell you 3 players from each current MLB team, but could recite the starting lineups of all the teams in the 50's. So while there is a natural tie-in to the popularity of todays Baseball to fans collecting cards. There are many that could care less for the over priced millionaires of today but take solace in their collections viewing Ty Cobb, Christy Mathewson, Tris Speaker, Nap Lajoie and the like...jay
Website: http://www.qualitycards.com
that's what I meant to say
1) the number of cards may stay the same but as collectors place them in private collections the circulation numbers decrease.
2) The older the cards get the higher demand for new collectors to find these cards wil drive up the lower graded cards i.e. 5's and 6's. vs 7's and 8's.
lets look at one example...Marshall fogel in a thread that was reposted stated that the mantle he owns (which he paid 121,000) was originally sold for 8500.00 a few years earlier. And most recently a gem mt 10 mantle sold for 250,000 the same grade marshall purchased for 1/2 of that a few years earlier...So it is clear that as years pass and cards become older the number "pop" may stay the same but demand drives price. As long as there is demand there will be price elevation.