The card grading question. PSA-SGC-GAI
gaspipe26
Posts: 1,614 ✭✭✭
I as a collector and seller feel that because of card grading the price of the hobby has risen dramatically. I also feel that if there was no card grading the Low Pop cards that bring huge and sometime crazy $'s would never take place. I also feel the star cards have had a huge jump in price too because of grading. I truly feel that if card grading went by the wayside, alot of our money would go with it. Whats your opinion?
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<< <i>I truly feel that if card grading went by the wayside, alot of our money would go with it >>
This may be very true! But with the exceptance & collectability of slabbed cards, it appears that grading is here to stay.
I do not forsee the scenerio of all the top grading companies vanishing...jay
Website: http://www.qualitycards.com
I think the registry and graded set "competition" have driven prices more so than grading in itself. I don't see SGC and GAI getting the same benefit from all of the low pop frenzy.
If grading went away, the investment grade material would be impacted more severely than the collector grade material. I'm not sure that the collector grade (I will define collector grade as PSA 7 and below) material would be affected at all. I still believe that average collectors would see the value in knowing that the cards they buy are authentic and untampered. The question becomes...what if these same collectors lose confidence in independent graders?
I look forward to catching up with you at the National.
Regards,
Alan
I dont think there going anywhere either.
Al,
I agree, collector grade wont change but investment will drastically.
with 90% of the hobby transactions now taking place via the internet, I don't think grading companies will fall by the way-side anytime soon...........no matter how many times you click your heels together.
edited to ask: have you bought raws cards on e-bay lately ?
the cards themselves have some value regardless of the slab or grade (vintage of course). so while a mjor loss would happen ...it wouldnt be a 100 % loss.
at the end of the day the value of a person's collection should be only around 5% of their total worth. if anyone is spending more than that ...then i hope they are a dealer like JAY.
also, almost all hobbies are money losing. i used to work in a marine shop a few years ago and i would see people spend tons of money on boats, gas for the boats, $500 reels for fishing, just parking the boat would be hundreds if not thousands every year.
this hobby should be fun, to me getting home and seeing a padded envelope with some cards that i won on ebay makes me forget for a while about work, girlfriend, even the CC bill that also came in the mail.
that has got to be worth something.
Groucho Marx
Used to working on HOF SS Baseballs--Now just '67 Sox Stickers and anything Boston related.
1) Grading had given many collectors, especially novices like myself, a false sense of security with regards to a graded card being authentic and unaltered. Because I jumped back into collecting just as PSA was taking off, I've never properly learned how to spot a card that has been trimmed, bleached, recolored, or otherwise altered. I just assume that because it's in a reputable holder, the card is ok. That is why some of these recent issues have been troubling. That's also why the more informative posts by some of the veterans on the boards are so valuable, because a lot of that knowledge isn't getting passed down the way it used to.
2) If grading went away tomorrow, the internet as a medium for buying and selling would still thrive! All grading has done to a certain extent is substitute for dealer reputation. Many alleged card doctors are already known, as are the honest raw card dealers (and those who accurately and fairly grade their raw material). The disappearance of grading wouldn't alter that one bit - it fact, it may even help further distinguish the good apples from the bad.
3) Grading has not had much of an impact on who the "big players" in the field are - now some of them just have their cards in slabs. I bring this up only because, prior to the grading boom, it seems like it was well-known who the collectors with huge collections of top-end key cards were. Many of those cards ended up in PSA 9/10 holders, which surely enhanced their "value" but didn't change the fact that they still had one of the nicest examples of XXX card around. If grading went away, the Fogels etc. of the world would still be viewed the same.
Grading has really been essential in sparking the card collecting resurgence of the mid-late 1990s, but if it went away tomorrow, I guess I really don't think the hobby would suffer much. Perhaps the biggest loss would be the concept of the Registry, but a lot of that is just ego-stoking anyway ... we can stroke our egos without it too
Robert
The last few years of a classic bubble are dominated by big players who influence greatly, if not control the market. Prices are bid up way beyond reasonable value and once the big boys exit, the balloon deflates (or implodes).
Anyone putting more than 5-10% of their net worth in cards expecting huge gains are foolish.
On the other hand, there is some sentimental, perhaps intrinsic value to owning high grade pieces of cardboard that is no longer being manufactured (vintage). That's worth something to me, but probably not what I paid for it when it all comes crashing down.
Early '80s - Big shows, SCD and other hobby papers provide new medium - price points go from low to high. Fleer and Donruss enter; prices go even higher, and then significantly drop because now you have a "junk" element in your selection pool.
Mid '80s - the spotlight on the investment potential of memorabilia/cards drive prices way up, e.g., buy 500 ct. lots of Kirby Puckett rookies because it's the same as buying the next MCI or MSFT. However, the overabundance of more junk issues, hoards of limited edition stuff, etc. has big contrary effect. Stocks have a limited number of shares outstanding, but most cards have production numbers so high that it’s not about supply and demand, but hype.
Early '90s-mid '90s - new company offerings glut the market, but price points are already low. Internet medium helps unite collectors/hobbyists thereby creating demand driving prices up.
Late '90s - auction houses attract big money, and new wave of interest is again reborn, prices naturally go up further.
Where's there's big money, there's deception. Thus, card grading provides the answer and dollars flock to it. Price points become too high and values drop (think back to circa 1999-2001 regarding PSA 8-10 values.) Also, think back to Beenie Babies, Poke-mon, etc., hype, not scarcity once again was the driver.
Set Registries contribute to price up trend. New grading card companies have a effect similar to Fleer, Donruss and 1990s new companies did: glut, suspicion, price depreciation. Low Pops are not the same as Van Gogh's as many (not all) pop numbers can keep rising. Probability says that there will be no case find of Rembrant's or Silver Eagles.
Yes, this is a crude chronology. If you treat this as a hobby you’ll be fine. There certainly is investment potential, but most cards are in the category of speculation and emerging markets. If you cite Wagner, Ruth, etc. realized auction prices, then you’re referring to the small number of Blue Chips. Want to buy some Vince Carter rookies at yesteryear prices? The people who have made money didn’t follow the herd, the as the herd are the suckers. And no, the real smart ones didn’t invest in OPCs and Venezuelans. The money makers pushed trends and created the hype.
In the worst case scenerio where cards (be it graded and/or raw) come crashing down in value.
There will be a lot of us that will pick up alot more cards at a much cheaper level...jay
Website: http://www.qualitycards.com
There will be a lot of us that will pick up alot more cards at a much cheaper level..." jay
Tell that to the gold bugs in 1981-2001. Twenty years is a long time to hold a non-producing asset.
How long will (would) you hold Cisco, Amazon.com, Juniper Networks? And those are the ones that simply survived!!
Also, when do you buy? It's like trying to catch falling knife.
Bottom line, you better really, really like what you're buying, 'cuz you'll be looking at 'em for a long, long time.
I don't think collectors will shy away from grading cards, i think the real test will be if grading companies can perfect their business model to be long term profitable companies. after all , even if we want graded cards, they won't be around forever if they are losing money
added : as far as low pops, the cards that are going for crazy money are usually bought by people that can afford it and do not worry about the cost of the card. i don't think they are losing sleep thyinking "oh my god, the pop just went from 2 to 6 on Jim Huckleberry"
As I've said before -- and some took issue with -- I really don't see the rise of the internet and eBay as having all that much impact on the hobby. It simply provided a new venue for buying and selling. To be sure, professionally graded cards "found their niche" in the new horizon of the internet, and so did fraud. But both were natural extensions of the "sight unseen" basis of the internet. With or without the internet, that new "top tier" of high-dollar collectors/investors in professionally graded cards would have appeared. Why? Because of the mid 1990's economy. Reaganomics may have sucked for many during Reagan's presidency, but Reaganomics is the #1 reason why the mid 1990's boom happened. People were awash with cash and looking for places to invest it, and to hide it. Professionally graded star cards WAS that place for many.
In regard to common cards, I foresaw what's happening now way back in the mid 1990's -- the attempts to collect/invest not only in the professionally graded star cards, but to put together complete sets of profesionally graded cards. Though I think I underestimated the impact of "low pop commons" I knew it would be a factor. Certain common cards were hard to find back when they were produced due to Topps destroying mass quantities of specific cards as they came off the cutter, just to get kids in MLB cities to keep buying cards looking to get all of the Tigers or Dodgers or Yankees or Red Sox of each year. These, of course, were never star cards -- they didn't have to be and Topps wanted as many star cards out there as possible. That's why there are no "low pop stars." You'll note that all the "low pop" cards are -- and always will be -- common cards. Of course, lesser developed printing and cutting technology only added to the situation with these "low pop" commons (and some stars too, for that matter).
The future? Who knows? But I can tell you there have been plenty of times between 1969 and now when a "dire future" was predicted for sports card collecting. And as you can see, disaster never happened. Sure, there have been ups and downs, as with anything, and most times in line with the economy as a whole. But sports card collecting remains as strong in 2004 as it was in 1974, 1984, and 1994. What I find hilarious are the people who today lament the disappearance of "kids" from the hobby. If you went to card shows back in 1974, do you think you'd have seen lots of "kids" there buying lots of cards? If you said yes, you'd be wrong. Back then, just as today, the hobby was dominated by adult males spending their discretionary (or investment) income on sports cards and other memorabilia. The same was true in 1984 and 1994. That has never changed and never will.
Baseball has always been the bellwether of sports card collecting. And though we continue to hear how baseball's popularity has fallen, and continues to fall, can you really see it in terms of MLB's success and attendance? Nope. Why might that be? Its actually easy to answer if you take off your historical blinders. Its because baseball is -- and always will be -- an American institution. Fewer "kids" may be playing it these days -- but they still grow up to love it as adults. Looking at MLB's financial situation, you cannot even begin to dispute that unyielding truth. As long as baseball is healthy, baseball card collecting/investing will be healthy. And that will continue for a long time.
Scott
<< <i>Bottom line, you better really, really like what you're buying, 'cuz you'll be looking at 'em for a long, long time. >>
TG - But these are cards of Mantle, Ruth, Cobb etc.. we can enjoy them for a long time, w/ a stock or some other proclamation, its just a # on a piece of paper, cards are a wee bit more then that...jay
Website: http://www.qualitycards.com
Grading: stay or go? – stay
Prices: up or down? – up, down, up, down…
Cards as collectibles: stay
Cards as an investment? – the herd will lose money, the smart ones will not (not sure yet where I fit)
Vintage or modern? – whatever makes you happy as collectible, but only a fraction of either will be a good investment
PSA, SGC, GAI, etc? – discussed ad nauseum, choosing one is not like choosing a country or religion. Don't take it so seriously
Also, we all have (except for me) huge amounts of money tied up in PSA plastic and paper strips. Thus, we are PSA's greatest guarantee of a future. We can't afford, literally, to have PSA fall by the wayside. We bought into the illusion. Now, we must keep spending to fuel that illusion. Golden handcuffs are on. PSA really does do a good job considering the amount of submissions and their need to avoid escalating grader salaries. The set registry has sealed our fate. GAI and SGC may continue to exist, but they do not matter. Every card is measured by its crossover potential. GAI and SGC are services that help us assess the risk of purchasing a card to crossover. PSA actually needs them to provide some balance. They can never threaten. Instead, they act as leased apartments until the cards find their home in a PSA plastic house.
Thank you for reading my version of Gone With The Wind. The film rights are availabe if the documentary guy is interested.
Gotta go file some scabs,
Scumbi
<< <i>GAI and SGC may continue to exist, but they do not matter. Every card is measured by its crossover potential. GAI and SGC are services that help us assess the risk of purchasing a card to crossover >>
This is certainly the ways things are today. Who knows what will happen down the road?
<< <i>Some great responses. I would only like to add 1 minor thing. If I have a low pop and it gets 1 added, I do worry!! >>
While another "low pop" card getting graded would/should cause a drop in the value of the existing ones, it shouldn't be by much -- at least in relative terms. Contrary to popular belief, there is no "pot of gold" filled with raw "low pop" commons waiting to be graded. They're out there, to a certain extent, but they're only out there in quantities consistent with their "high pop" common counterparts. The old adage is, "A rising tide raises all boats" and such is precisely the situation with commons. More of the "low pops" may appear, but the same cards will ALWAYS be "low pops."
Scott
<< <i>without betting there's no horseracing >>
.....without betting their just aren't jockeys cracking you with a stick.
edited to add : Giddy-up
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die Bart, die.
Not true.
Just ask 1965 #496-Cunningham or #54-Gibbon.
Or ask those who joined the registry early and completed their sets, paying huge prices for commons, then sold them in Superior's auction for SMR or less. Ask some of the guys today who are breaking up sets, if they are getting what they paid for some of these commons.
High prices bring out the commons such as 1963-Fornieles. I've owned 3 in PSA 8, all submitted raw. I sold my first Fornieles-8 two years ago for $200. My next one sold last month for $22.
Think about it. A pop 20 PSA 8 common from 1975 sells for almost nothing. That only 20 out of 300 million people. On a good side note, if all those collectors return from the 1980's collecting world, we will all be sitting on a fortune in cards. Pop 200 will be a tough to find card.
<< <i>Not true. Just ask 1965 #496-Cunningham or #54-Gibbon. >>
Toppsgun -- OK, but the main problem with this type of "evidence" is that its the exception, not the rule. Besides, if one or two cards do happen to move up drastically in population, all others will move down in relative sequence. Most of the "washing out" has probably already occurred but I'm sure its not 100%. Indeed, some "low pop" commons -- as perhaps the ones you mentioned -- are artificially low. But I'd bet that the vast majority of "low pop" commons will always remain the lowest in their respective sets.
Scott