Why most logic i have seen here is flawed....
fandango
Posts: 2,622 ✭
most people are stating that a PSA 8 will go down because a PSA 8.5 now exists....
that is flawed logic....
first, has PSA 8 dropped in value because PSA9 and PSA 10 exist? the answer is no....any PSA 8 has cards that exist that are higher graded, its just that the higher graded ones are broken up more accurately now....
most cards that will be resubmitted are valuable cards that have rrom to grow from a bump...this implies that there is a significant difference froma psa8 to 9, meaning the psa8.5 can easily sell for somewhere in between without influencing a PSA 8 or PSA 9..
also as time goes on,there will be a descrease (proportionantely) inPSA 8's (more 7.5s and 8.5) so the SUPPLY will go down, demand should stay the same ( or drop a bit) but the decreased supply should keep the price the same (and increase over time)....
to Assume value will drop because more specific grades are available is flawed logic......sorry but it is...
that is flawed logic....
first, has PSA 8 dropped in value because PSA9 and PSA 10 exist? the answer is no....any PSA 8 has cards that exist that are higher graded, its just that the higher graded ones are broken up more accurately now....
most cards that will be resubmitted are valuable cards that have rrom to grow from a bump...this implies that there is a significant difference froma psa8 to 9, meaning the psa8.5 can easily sell for somewhere in between without influencing a PSA 8 or PSA 9..
also as time goes on,there will be a descrease (proportionantely) inPSA 8's (more 7.5s and 8.5) so the SUPPLY will go down, demand should stay the same ( or drop a bit) but the decreased supply should keep the price the same (and increase over time)....
to Assume value will drop because more specific grades are available is flawed logic......sorry but it is...
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Let's say the PSA 8 price (under the old system) of a card was $100. The sliders would get $75, high end would be $125, and it would average to the $100. Now, the straight 8 will only include the sliders up to average, meaning a price around $82.50 on average, whereas the 8.5 will be average to high end meaning around $112.50 on average.
This analysis also impacts the decision whether having new flips (for example, listing the grade as 8.0 rather than 8) will help or hurt. If no new flip is used, then the buyer will not be able to tell if the 8 was graded under the old system or the new system. However, the buyer will probably assume that if the card would grade 8.5, the seller would have resubmitted. As a result, the buyer will think the 8 is somewhere from slider to average. Even if the new flip is used, I am assuming that PSA would not reholder an 8 to an 8.0 but would simply leave the card in the old 8 holder. So the same problem would exist, and might even be worse because the buyer might assume that the card was resubmitted and didn't make the 8.5 Only if PSA reholdered the card regardless of whether it received the bump would the situation improve. Then the buyer would know if the card was resubmitted and would be less likely to try for the bump. Of course, this would reduce resubmissions, so I'm guessing this would not be PSA's choice (in addition to the fact that it would impose additional costs for the time and material used to reholder all of the resubmissions rather than just the cards receiving the bump).
A few more related observations. Who does the new system benefit? As for dealers, it will provide a benefit, at least in the short term. They can now get 7.5 and 8.5 of valuable cards, and will receive a healthy premium for 8.5's on cards that have no or few 9's. Over time, the outlook for dealers will be cloudy for reasons I will discuss later.
High end collectors will benefit since they will receive a big gain on the bumps, making it cost effective to resubmit, although they will take small losses on each card that doesn't get a bump since those cards will be devalued. Whether a lot of small losses will outweigh the big gains on some cards remains to be seen. On average, it should be breakeven unless the collection is heavily weighted with high end for grade cards or with sliders.
Registry collectors of mid-60's and up sets stand to lose the most. On some sets, a common 8 will go for $10, and a common 9 for $30. If an 8.5 goes for $15 (or even $20), it probably isn't cost effective to resubmit. Unfortunately, the value of the 8's will decrease for the reasons already discussed. If new participants begin to get 8.5's and overtake the former participants, those participants may get discouraged and give up on PSA.
This leads to the big point. The big profits are on the big dollar cards, but there is a finite number of these cards to grade (or to resubmit). PSA's profit comes from the registry participants, the set collectors who submit a lot of cards, say mid-60's forward, the guys (and a few gals) that make up what I would guess is the vast percentage of users of these boards. My guess is that Joe is probably correct that the members of this Board only account for 1% of the submissions, but I would guess they hold a much higher percentage of the total graded cards. Although the biggest dealers may account for 90%+ of the submissions, they are not submitting to keep the cards, but for resale. If that market dries up due to the change, the dealers will lose in the long run.
Another possibility is that some registry participants might consider switching to, for example, SGC. Before, there were switching costs to moving to SGC or another company, namely, the cost of regrading all of the cards. Now, the collector may feel that, since resubmission will be necessary even if he stays with PSA, a switch should be in order.
I like the new half grades, and it was a good decision to avoid the 9.5 grade. However, as a registry participant with thousands of PSA graded cards (and who has submitted a few thousand cards), I'm not happy with the idea of having to resubmit my 8's or else they will be devalued (rightly or wrongly) as lower end 8's unless they are resubmitted. Nor do I relish the idea of spending the time and loss of eyesight going through all of the 8's to cherry pick cards with the best chance to receive the bump.
I will wait and see whether PSA has any plans to help collectors through the transition who have been loyal to PSA over the years. By this, I don't mean a $5 special. It should, be much better than that. Since PSA states they will not be reviewing the card except to see if it gets a bump (that is, the card is not receiving a complete regrade, but will simply be reviewed in the holder), and assuming that 50% or less get the bump (meaning no material or labor costs to reholder, relabel, etc. the 50%+ that don't get the bump), a much better rate should be offered, at least for bulk reviews of 100+ cards.
It will be interesting to see how sales of straight 8's go over the next few months. One possibility is that the prices go down because people will be waiting for 8.5's. Another possibility is that demand will go up as people buy high end 8's to shoot for an 8.5. My guess is the former since it is rational to expect that the sellers will not be putting high end 8's up for sale but will be resubmitting those cards.
Sorry for the long response, but there have been a lot of thought provoking threads on this issue and it was easier to gather the thoughts in one place than to respond to the dozen or more threads on this issue.
John
The letter specifically says that .5's will NOT represent the midway point between grades, but will only be cards of "premium quality." If you want to quantify it, 8.5's would probably be closer to 8.8's and up.
Also, not many people were selling truly high-end 8's of expensive vintage cards on ebay. Collectors tended to hold on to these cards if they were lucky enough to get them, or they crossed them over to one of the competitors to get a half grade bump before selling them. Most dealers would either sell them in person or keep trying until they reached their desired holder. Even the ones that looked like borderline 9's almost always had significant flaws that made them average to slightly above average 8's, so I doubt the quality of 8's for these cards goes down much at all.
most cards that will be resubmitted are valuable cards that have rrom to grow from a bump...this implies that there is a significant difference froma psa8 to 9, meaning the psa8.5 can easily sell for somewhere in between without influencing a PSA 8 or PSA 9..
Finally, someone gets it.
And it can happen to any card in any series too.
Steve
Registry collectors of mid-60's and up sets stand to lose the most. On some sets, a common 8 will go for $10, and a common 9 for $30.
John that's already happening. No one can predict what the market will do. It all sounds nice and clean. High end 8's graded under the old system (and not bumped) will still fetch better dollars then the dog 8 counterpart. Sellers will adjust.
Steve
<< <i>The letter specifically says that .5's will NOT represent the midway point between grades, but will only be cards of "premium quality." If you want to quantify it, 8.5's would probably be closer to 8.8's and up. >>
SDavid:
You make a good point about what PSA has stated, although I'm not sure how premium the card will need to be to get an 8.5. Let's use your example of the standard being 8.8. That would make the premium for the 8.5 much higher (closer to a 9) and cause less of a diminution of the straight 8's. Going forward with new ungraded submissions, will the 8.5 be coming from the former 8's or will 9's become tougher because the slider 9's become 8.5's? If the latter, then 9's will get a price boost. However, there are so many complaints about 8's that should be 9's and vice versa, it will only get worse as people argue between the 8, 8.5 and 9. Assuming a 8.5 must really be a 8.8 or higher, there are going to be a lot of crack and resubmits of 8.5's in the hope of getting 9's.
<< <i>John that's already happening. No one can predict what the market will do. It all sounds nice and clean. High end 8's graded under the old system (and not bumped) will still fetch better dollars then the dog 8 counterpart. Sellers will adjust. >>
Steve:
I agree that it is already happening, but it is happening because 8's and 9's and plentiful in many of those sets, not because the new 8.5 causes buyers to question the old 8's. Other than centering, it is often difficult to judge the difference between an 8 and a 9 from a scan, let alone the difference between an 8 and an 8.5, and an 8.5 and a 9. I agree that sellers will adjust, but it becomes a nightmare for submitters who are not dealers. On many sets, such as the OPC hockey sets I collect, there just aren't that many graded cards available for purchase so the only way to go is to submit. At this point, a submitter breaks even on an 8 factoring the cost of the raw card plus the grading fee plus shipping. If the 8's go down further, then even an 8 will be a loss. Finding raw 9's to submit is very difficult, so the choice is to start losing money even on the 8's (I am referring to market value not a sale since I keep them for my collection), or to never complete the set as most sets don't have enough 9's to complete the set. I don't collect to make a profit, but given the cost of raw and graded cards today, I don't want to be taking a huge loss by merely submitting.
John
John correct me if i am wrong. Is that not the market at work? If the set you collect does not have the demand that could explain it. No 2 sets or 2 cards for that matter are equal. Your points above are well thought out and make a lot of sense (mathmatically) however, since card grading is subjective in nature and not a science it does not (IMO) fit. Maybe now the grading fee will finally get a built in value that it always deserved for those cards that most just break even on when they get an 8.
Each set and series is different no one can just make blanket statements as to what will or will not happen. The market will tell us. It always has.
As for the straight 8 being low end now for the grade. They too will have there low ends and hi ends as well. And I can say that we will see cards that have been graded 8.5 not look as nice or will look as nice as the straight 8 counterpart. Why? grading is subjective.
Steve
<< <i>The new Beckett Graded card price guide already lists 8.5's for late 60's and 70's cards. The price gap between the 8's and 8.5's is very small. There is a big gap between an 8.5 and a 9. >>
they priced PSA 8.5's already?
Ron
Buying Vintage, all sports.
Buying Woody Hayes, Les Horvath, Vic Janowicz, and Jesse Owens autographed items
<< <i>Registry collectors of mid-60's and up sets stand to lose the most. On some sets, a common 8 will go for $10, and a common 9 for $30.
John that's already happening. No one can predict what the market will do. It all sounds nice and clean. High end 8's graded under the old system (and not bumped) will still fetch better dollars then the dog 8 counterpart. Sellers will adjust.
Steve >>
I agree. The most unfair thing of this change is that those of us holding high end registry sets from the mid-60s or newer get hit hardest. It doesn't make sense for us to pay again to submit our sets for review because the bump to an 8.5 isn't worth all that much. However, someone starting now and submitting their cards the first time under the new system will get the benefit of having their cards graded under the 0.5 point scale from the beginning. So they only have to pay once to get their cards graded under the new system. It's the same old story of screwing your existing customers while benefiting new ones (like the cable companies do all the time).
So let's say you take a late 60's/early 70's set and put the same set through two scenarios. The first scenario is someone who graded the set years ago under the old system. The set grades out 8.20. The second scenario is someone takes that same set and submits it under the new system. They pay the same grading fees (maybe even less) than the first scenario. They get a set grade of 8.40. Now send both sets through an auction house. The same set from scenario two will sell for more than the same set from scenario one unless the owner of the set in scenario one pays a few thousand bucks to have it reviewed again.
<< <i>
<< <i>Registry collectors of mid-60's and up sets stand to lose the most. On some sets, a common 8 will go for $10, and a common 9 for $30.
John that's already happening. No one can predict what the market will do. It all sounds nice and clean. High end 8's graded under the old system (and not bumped) will still fetch better dollars then the dog 8 counterpart. Sellers will adjust.
Steve >>
I agree. The most unfair thing of this change is that those of us holding high end registry sets from the mid-60s or newer get hit hardest. It doesn't make sense for us to pay again to submit our sets for review because the bump to an 8.5 isn't worth all that much. However, someone starting now and submitting their cards the first time under the new system will get the benefit of having their cards graded under the 0.5 point scale from the beginning. So they only have to pay once to get their cards graded under the new system. It's the same old story of screwing your existing customers while benefiting new ones (like the cable companies do all the time).
So let's say you take a late 60's/early 70's set and put the same set through two scenarios. The first scenario is someone who graded the set years ago under the old system. The set grades out 8.20. The second scenario is someone takes that same set and submits it under the new system. They pay the same grading fees (maybe even less) than the first scenario. They get a set grade of 8.40. Now send both sets through an auction house. The same set from scenario two will sell for more than the same set from scenario one unless the owner of the set in scenario one pays a few thousand bucks to have it reviewed again. >>
But isn't the new collector paying more for the RAW cards now than the old collector paid? Tell me you are collecting a set that has increased in value of the last 4-5 years and not one that is CHEAPER to buy raw now than before the Registry got popular? Especially an entire raw card set nice enough to get up to 8.40 from PSA.
Jason
according to my values and my needs. Nothing holds dominion over me, I stand alone as the ruler of my life.
<< <i>
<< <i>The new Beckett Graded card price guide already lists 8.5's for late 60's and 70's cards. The price gap between the 8's and 8.5's is very small. There is a big gap between an 8.5 and a 9. >>
they priced PSA 8.5's already? >>
They are just pricing the cards at 8.5's since they do grade them. There prices on the 8's and 9's are almost the same as SMR.
Especially on the commons from the late 60's through the 70's, the price for the 8.5's is just slightly higher than the 8's.
example:
A 1970 Topps baseball common graded 8. SMR lists for $10. The Beckett graded guide lists it at $10. The 8.5 in Beckett lists for $12.
The 9's list for $42 in SMR and the Beckett guide has them at $25.
Always looking for Topps Salesman Samples, pre '51 unopened packs, E90-2, E91a, N690 Kalamazoo Bats, and T204 Square Frame Ramly's
Just include the date the card was last graded in the cert check.