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Has the Graded Baseball Card Bubble Burst?

Will prices ever return to anywhere near their high water mark?

What will the price point for having a card graded be in three years from now? or a better way of asking: What is the difference in cost of having one's cards graded now as opposed to three years ago?

If we are moving to a lower price point to entice more subbing, what will the long term effect be with much higher pop reports?

Are more collectors entering or leaving the hobby?

At what point does the supply of graded cards exceed the demand for them?

If a tipping point is reached; i.e. more cards are graded than the demand for them, how would that effect the stock price of CLCT?

Does the long term stock price of CLCT have any effect upon the cards that they have graded?

collecting Dale Murphy and OPC

Comments

  • gameusedhoopgameusedhoop Posts: 3,535 ✭✭✭
    Can't really answer many of the questions, but these two:




    << <i>If a tipping point is reached; i.e. more cards are graded than the demand for them, how would that effect the stock price of CLCT? >>




    << <i>Does the long term stock price of CLCT have any effect upon the cards that they have graded? >>



    It's been said over and over by a few people that PSA is just a drop in the bucket for CLCT. Most of the $$ comes from coin grading I hear. It may/may not have some effect, but not as much as you would think.
  • itzagoneritzagoner Posts: 8,753 ✭✭
    you're not allowed to use the word "hobby" in the same context as "bubble", they don't match.

    there are more collectors than ever involved in the "hobby" because there is more material available to them than ever before.

    as for this bursting bubble, i would think of it more as a sponge......when you need to dry out the sponge a bit, you just squeeze it and the excess goes down the drain.
  • chaz43chaz43 Posts: 2,128 ✭✭✭


    << <i>Will prices ever return to anywhere near their high water mark?

    What will the price point for having a card graded be in three years from now? or a better way of asking: What is the difference in cost of having one's cards graded now as opposed to three years ago?

    If we are moving to a lower price point to entice more subbing, what will the long term effect be with much higher pop reports?

    Are more collectors entering or leaving the hobby?

    At what point does the supply of graded cards exceed the demand for them?

    If a tipping point is reached; i.e. more cards are graded than the demand for them, how would that effect the stock price of CLCT?

    Does the long term stock price of CLCT have any effect upon the cards that they have graded? >>

  • chaz43chaz43 Posts: 2,128 ✭✭✭


    << <i>Will prices ever return to anywhere near their high water mark?

    What will the price point for having a card graded be in three years from now? or a better way of asking: What is the difference in cost of having one's cards graded now as opposed to three years ago?

    If we are moving to a lower price point to entice more subbing, what will the long term effect be with much higher pop reports?

    Are more collectors entering or leaving the hobby?

    At what point does the supply of graded cards exceed the demand for them?

    If a tipping point is reached; i.e. more cards are graded than the demand for them, how would that effect the stock price of CLCT?

    Does the long term stock price of CLCT have any effect upon the cards that they have graded? >>




    Cards are like the stock market, they will never go away. chaz
  • Dpeck100Dpeck100 Posts: 10,910 ✭✭✭✭✭
    I really don't think the price of CLCT is going to have a major impact on the graded card market. I looked through their last earnings report and the sports memorabilla piece of their business at this moment is fairly soft and really from a total revenue and earnings stand point makes very little difference currently. There coin business is where the money is for CLCT. Not that Joe Orlando is not important but he is not even listed in their executive profile and is not listed as an insider in terms of stock. These two components mean that this division is clearly not what is driving their overall business. The CEO only makes $210,000 in salary not including any stock compensation which is really not much.

    I think a bigger risk would be a slow down in the metals markets as this might force the company to make adjustments in other segments that could materially impact PSA. The other issue with the metals markets is as long as alternative investments remain strong so will certain items from sports memorabilla. Many on here collect nice cards but not necessarily investment cards. When you look at the auctions from the big houses these are not always collectors buying them in the true sense of the word. Many of the buyers have very small collections and view sports memorabilla as a store of value and an alternative investment. Many others are hard core collectors driven by the set registry and many other factors.

    I consider an investment card an item where the owner believes it is going to appreciate over the long run. There are plenty of cards that will but even more that won't.

    Relatively common sports items are extremely impacted by the economy as they are in more hands and as the economic climate changes so does the needs of the owners. At the high end this is currently not the case and therefore many of those items continue to sell for record prices.

    It is very clear the bubble burst in 2001 and we are operating in a post bubble market that really is in a true secular bear market. The advent of so many products obviously swamped the market with more choices and this leads to less of a premium placed on items. I can recall seeing 1989 Upper Deck PSA 10 Ken Griffey Jr's at $2800 in 2001 so if we want to use the comparison of stock markets this is just like NASDAQ 5000 and both esentially occured at the same time. You will never see prices that high ever for modern cards with plenty available.

    That being said just like the stock market there are different sectors. If you simply owned the SP 500 since 2000 you have lost money but if you broadened your horizons and looked at other asset classes and sectors you could have made great returns.

    The only thing that will potentially turn the majority of the market around is lower unemployment and this is going to take some time so if you are a bull you wil be grazing in the pasture for a while.
  • Graded cards will never go away and will always carry a premium for top condition cards. The main reasons are (1) there are always sleaze bags selling replica cards that are "aged" and "do not have reprint" anywhere are on the card, and (2) people who sell raw cards always overstate their condition. Too many collectors have gotten burned by these things where for their cards that have any value, they prefer graded. Again, I would say this only holds true for cards > $50, so most modern cards don't need to be graded.

    I don't think modern cards will never return to their high watermark. There is simply just too much supply still. The modern market these days is just summed up with chase cards. 99% of what comes out of packs no one wants. However, every one is looking for the low pop rookies, game used, autos and so forth. Those cards will still hold value, but the rest is just firewood.

    Higher pop reports will probably affect only those cards that are very low pop right now. For example if there are only 5 examples of a particular card (or a card at a high grade of say PSA10), and that number moves to 50, that card value will go down. However, on the flip side, if most cards are going up in pop, but some cards are staying the same and continue to be rare, those card values will go up.

    I think right now, the number of collectors in the hobby is around the same or just decreasing slightly. The economy is forcing people to sell their collections or get out of the hobby. However, at the same time, people are also getting into the hobby because of the economy because they think it will hold more value than say CD's, houses, or even stocks.

    I think in general the value of vintage cards will still go up long term. Many people get into the hobby because of modern cards, but are drawn into vintage b/c of the history and also lower pops. I think there's still a bubble in many of the higher value modern cards esp when you look at the total pops. Even in vintage, there are pockets of bubbles in some areas, so if you are looking to increase value for your collection, you have to navigate very carefully.

    In the end, collecting is a hobby. You want to collect knowledgeably because you don't want to throw all of your money away. However, you also do it for fun, so you can't get too caught up in all of the financial aspects of it.
  • I also think that a significant part of the market was driven by the baby boomer segment with an abundance of discretionary income that were attracted to the hobby in a large part becuase they could collect the cards that they had collected as a child or players that they had followed as a child. Those cards held a significance for them from a personal standpoint as baseball was a large part of their life. I am not sure where the next surge of collectors/investors is going to come from. The nostalgia aspect of the cards are gone as the 80s and 90s saw a glut of product come to the market, much of what has been kept in near new condition, some unopened as they were going to be great investments. The stuff is crap by and large. I think it is going to be interesting to see how this plays out. I think that demand going forward is much more in question than the supply.
    Collecting Pre-War, Pre-War HOF Types, Pre-War Postcards
  • jimradjimrad Posts: 2,777 ✭✭✭
    "Has the Graded Baseball Card Bubble Burst?"


    Yes with the exception of vintage and when I say vintage I mean pre 1960 high grade
    Positive transactions with: Bkritz,Bosox1976,Brick,captainthreeputt,cpettimd,craigger,cwazzy,DES1984,Dboneesq,daddymc,Downtown1974,EAsports,EagleEyeKid,fattymacs,gameusedhoop,godblessUSA,goose3,KatsCards,mike22y2k,
    MULLINS5,1966CUDA,nam812,nightcrawler,OAKESY25,PowderedH2O,relaxed,RonBurgundy,samsgirl214,shagrotn77,swartz1,slantycouch,Statman,Wabittwax
  • itzagoneritzagoner Posts: 8,753 ✭✭
    image
  • MULLINS5MULLINS5 Posts: 4,517 ✭✭✭


    << <i>"Has the Graded Baseball Card Bubble Burst?"


    Yes with the exception of vintage and when I say vintage I mean pre 1960 high grade >>



    image

    And let me add, once again, the purpose of card grading is to assist the customer in their purchase.

    Some cards are meant to be graded, others are not.

    Anything pre 1960 in high grade should be graded.

    Select cards from each year after 1960 (rookies, HOF members, et cetera) can be graded.

    Commons should not be graded.

    I will pay money for a raw Gretzky rookie because I know enough about the card to feel comfortable that it is real. If I agree with the dealer on condition - everything is good.

    I will not buy a raw Mantle Bowman rookie because I know very little about the card. In this case, I need a professional company to come in and authenticate it as well as give me a grade.

    The invention of the registry gave people a reason to sub cards that don't belong in holders.

    The competition of the registry drove prices high. This is a premium which will drop when: a) pop reports rise b) collectors fill their wantlists c) collectors stop collecting d) grading prices drop (which has already happened -- for many collectors it is now cheaper to find the card and sub it for $4.50 to $5.00 than to pay the premium to somebody else. It is also more rewarding to send the card in.

    If you're a collector and not an investor, throw everything out that I said and buy what you want, pay what you want, sub what you want -- just don't complain about prices if you ever sell.
  • MULLINS5MULLINS5 Posts: 4,517 ✭✭✭
    Will prices ever return to anywhere near their high water mark?
    probably not.

    What will the price point for having a card graded be in three years from now? or a better way of asking: What is the difference in cost of having one's cards graded now as opposed to three years ago?
    $4.50 to $5.00 for the card to be graded -- older cards I do not know. I can't see it going much lower than this. Three years ago is about the time these big "specials" were taking off -- before that (about five years ago) I remember paying $10-15 per card.

    If we are moving to a lower price point to entice more subbing, what will the long term effect be with much higher pop reports?
    higher pops = readily available cards = premiums lost.

    Are more collectors entering or leaving the hobby?
    IDK but I think more people are subbing not to build sets but to make a quick buck...too bad for them the prices they saw a card sell for a few moths ago probably will not bring the same amount.

    At what point does the supply of graded cards exceed the demand for them?

    If you have 10 people building a registry set and there is a card on everybody's list that nobody has -- then that card gets put up on eBay -- you will have 10 people interested.

    The one with the deepest pockets will win.

    Say another shows up four months down the road. You now have nine interested, and your guy with the deepest pockets is out of the pool.

    Say a third shows up a two month later. Now you have eight people interested and the guy with the deepest pockets from the previous auction is out of the pool.

    Say a fourth shows up a week later. It is now safe to say "investors/dealers" have picked up on this card's selling activity and you can bet more will follow. This fourth card may be purchased by someone outside of the group of 10 building the set who saw it sell for a lot a few months ago and they think they are getting a deal and have a card worth X amount of money. But they don't.

    If a tipping point is reached; i.e. more cards are graded than the demand for them, how would that effect the stock price of CLCT?
    There will always be cards that need to be graded (vintage finds, modern HOF and Rcs) But I have no idea about CLCT stock prices.

    Does the long term stock price of CLCT have any effect upon the cards that they have graded?
    IDK
  • SidePocketSidePocket Posts: 2,901 ✭✭✭
    Why did someone have to coin the phrase "price point"?

    "Molon Labe"

  • Dpeck100Dpeck100 Posts: 10,910 ✭✭✭✭✭
    Mullins,

    Your post makes some interesting points. The only problem I see is that people over simplify markets. Your assumption that the person with the deepest pockets wins is not entirely true. Many times the person with the deepest pockets drops out and allows the emotional buyer to win. In many cases though you are right that they will win.

    In the biger picture the available supply of an item drives the demand. That is why in economics you draw a supply curve first and why it is upward sloping as at higher prices more supply comes if available. If not that is how prices move out of a trading range.

    There are plenty of examples of cards that simply do not exist for sale in high grade and when they come for sale they sell at prices many can't explain. A perfect example would be a Robin Yount 1975 Topps. There are over 4,000 graded and two with a PSA 10 grade. This is an example of where the supply is quite large but becuase there are only two to choose from in PSA 10 form, the price is dramatically higher. If they were readily available the sellers would see the high price and move them out hence reducing overall demand and you have falling prices.

    If a card like this keeps a low population then the price is only going higher over the long term. Becuase cards like this don't trade every day, week, month or year it is really not possible to acuraterly predict it's price. That is why many times in auctions cards sell for much more or less then the estimate. In this case I would suspect if no other cards surface and one of these trades it wil be at a higher price then the prior sale.

    The other reason with rare items you can not simply use your example is becuase there are simply to many people in the world. The ability to predict who will show up is to big of an unknown. With wealth being created all over the globe what if someone from Russia wants the item, or Korea etc. There is a booming market in high end Scotch Whiskey and the highest priced fifth sold for $460,000. This is a primary example of an alternative asset class where global buyers set the price. There are certain cards that simply have appeal to the masses and there is someone out there that has the resources to win it at any price.

    You are a very informed hockey collector. I am fairly confident the total population of Wayne Gretzky O-pee-chee cards in PSA 10 is not going to increase by much if any. What is to stop someone from paying $500,000 for that card? Nothing if they want it bad enough.

    I think the top end cards are in a bull market and if a PSA 10 Mantle 52 Topps for example surfaced it would blow people's minds what is goes for. On the other hand a PSA 7 will be in a trading range for some time until the overall economic outlook improves.

  • BoopottsBoopotts Posts: 6,784 ✭✭


    << <i>Why did someone have to coin the phrase "price point"? >>



    Because, like the term 'price realized', it makes people who know nothing about market dynamics feel like they're part of the in-crowd.
  • DeutscherGeistDeutscherGeist Posts: 2,990 ✭✭✭✭
    Like others have mentioned, graded cards make the hobby possible to begin with. Now one can buy a Mint card from anywhere in the USA and not worry about getting a card with rounded corners in the mail.

    In the beginning graded cards were so expensive than their raw counterparts. I recall PSA 10 Frank Thomas Leaf rookies were selling for $175-$250. Now you can get them easily for below $50... probably a lot lower. The market is more saturated, that's all.

    Because grading fees are so low, even more lower dollar cards are submitted. That is nice because I do want a Gem Mint 1988 Topps Traded Tiffany Jim Abbott card. I just don't like buying overgraded raw cards....
    "So many of our DREAMS at first seem impossible, then they seem improbable, and then, when we SUMMON THE WILL they soon become INEVITABLE "- Christopher Reeve

    BST: Tennessebanker, Downtown1974, LarkinCollector, nendee
  • cadets68cadets68 Posts: 596 ✭✭✭
    Global asset deflation.

    Has a nice ring to it. Pretty sure nearly everything I own is worth less than 4 years ago. With the exception of gold/silver.

    Lucky for me my cards were never an investment. I do not collect for the money, so I kinda like being able to purchase at a lower price.

    Shawn
    After those four National League games, Gorman Thomas was never the same, and neither were the Brewers, and come to think of it neither was I.

    Josh Wilker - Cardboard Gods
  • I have to wonder if some of you actually buy graded cards. The bubble burst in PSA cards, and graded in general, happened about 3 years ago.
    Collecting PSA graded Steve Young, Marcus Allen, Bret Saberhagen and 1980s Topps Cards.
    Raw: Tony Gonzalez (low #'d cards, and especially 1/1's) and Steve Young.
  • Mickey71Mickey71 Posts: 4,224 ✭✭✭✭
    Interesting read. Alot of you make some very good points. Actually, a great thread with good points and no arguments.

    Mickey71image
  • Ive spent alot of money on cards in my life. And while Ive bought, sold, traded, swapped, flipped and gave away lots of cards over the years to help achive my collecting needs. For me it's always been about the cards and what they meant to me as a kid and how
    those cardboard sports images help define our youth that moves me to build my collection.

    Ive never looked at my cards as an "Financial Investment" , THE CARDS and what they represent to me more than pays for any dollar amount I have involved in them, everytime I open them binders and escape to my youth, Which is always well worth the initial cover charge in my book. In this sense weather or not the cards hold any dollar value is really meaningless to me as they have already more than paid dividens for themselves from the joy I have gained just from being able to escape to them.

    I feel that with each generation comes the lack of more and more true sentimental young collectors to drive real interest.
    With the exception of the rarest of the rare (turn of century- 1950) The ever shrinking and absence of the true "Sentimetal Collector"
    will leave the hobby with only the "Whats it worth" "Price Guide" and "Label Collectors" who will eventually move on to parasite some other hobby once they find it a losing cause trying to parasite a profit from each other. Thus rendering most all cards virtually void of any $$$
    amount!!!
    Whew!Hew!!!!
    we can now get back to trading some cards and chewing some gum on the front steps and backyard!!!
    I'll give ya the Yaz & Fisk for the Rose & Bench


    Just my conspiracy therory...






  • AlbertdiditAlbertdidit Posts: 560 ✭✭✭
    Sorry ill have to pass on your offer. Ill give you a Bench and a Perez instead
  • itzagoneritzagoner Posts: 8,753 ✭✭
    image
  • CrimsonTiderCrimsonTider Posts: 1,381 ✭✭✭
    Allow me to narrow the scope of my questions. Since I collect mainly cards from my youth and that just so happens to coincide with the mass production era of the 80's, What would lower grading fees do to the value of 1980's PSA 10s?

    Will there be a point that no matter how low the grading fees are, no one will be subbing anymore material from this era?

    If the value of this era of cards drop, could the lower price incent newer collectors to enter into the market?
    collecting Dale Murphy and OPC
  • Dpeck100Dpeck100 Posts: 10,910 ✭✭✭✭✭
    Can you give some specific sets from the 80's baseball you are refering to?

    I think for example 1980 Topps has a much better chance of retaining value then say 1984 Topps.

  • jimradjimrad Posts: 2,777 ✭✭✭


    << <i>I think for example 1980 Topps has a much better chance of retaining value then say 1984 Topps. >>



    I hope you are kidding.
    Cards from the 80's will not retain value. No chance No how No way.

    If you collect them - do it for fun, because you will lose value.
    Positive transactions with: Bkritz,Bosox1976,Brick,captainthreeputt,cpettimd,craigger,cwazzy,DES1984,Dboneesq,daddymc,Downtown1974,EAsports,EagleEyeKid,fattymacs,gameusedhoop,godblessUSA,goose3,KatsCards,mike22y2k,
    MULLINS5,1966CUDA,nam812,nightcrawler,OAKESY25,PowderedH2O,relaxed,RonBurgundy,samsgirl214,shagrotn77,swartz1,slantycouch,Statman,Wabittwax
  • Dpeck100Dpeck100 Posts: 10,910 ✭✭✭✭✭
    I don't collect anything currently other then Wrestling All Stars.

    The 1980 Topps set just so happens to have the most expensive 1980's card left in the Rickey Henderson rookie.

    You simply can't compare the 1980 Topps set and the 1984 Topps set is simply what I was indicating.

    I do agree that most if not all of these cards are in a slow bleed and I can't think of to many things that could change that.



  • CrimsonTiderCrimsonTider Posts: 1,381 ✭✭✭
    I mainly collect Dale Murphy cards.

    I have qualms what so ever with the fact that most will lose value. As a collector, I do it for enjoyment.

    Lower value = lower prices = me with more Gem Mint Murphs!

    What do you guys see as the absolute bottom?

    If grading fees drop to around the $3 range, will PSA 10s be available on Ebay for .99?

    If that happens would dealers stop subbing cards from the 80's?
    collecting Dale Murphy and OPC
  • Dpeck100Dpeck100 Posts: 10,910 ✭✭✭✭✭
    I don't think any of the things you have mentioned will impact the value of Dale Murphy cards much.

    I just checked the population on the 1980 Topps and there have been 315 graded and 56 Gem Mint 10's. In comparison there have been over 10,000 Henderson's graded and only 10 to achieve a PSA 10.


    While I am in no way suggesting collecting Dale Murphy is a bad thing but I really don't see anything on the horizon that is going to make his cards move much either way. The adjustment in grading fees is not going to make a mad rush of people go out and sub his cards so that may work in your favor.

    If there are any of his cards from the 1980's that I can recall being worth money was his 1989 Upper Deck error card. I just checked and there are 33 of those in Gem Mint 10. This is a card I would think would at worst hold up at the current SMR of $75. This is a rare card and one of the bigger error cards of the 1980's.

    Overall I don't think you have much to worry about as his cards are not heavily subbed and in general really not the valuable so the downside risk I would say is probably limited.


  • << <i>Ive spent alot of money on cards in my life. And while Ive bought, sold, traded, swapped, flipped and gave away lots of cards over the years to help achive my collecting needs. For me it's always been about the cards and what they meant to me as a kid and how
    those cardboard sports images help define our youth that moves me to build my collection.

    Ive never looked at my cards as an "Financial Investment" , THE CARDS and what they represent to me more than pays for any dollar amount I have involved in them, everytime I open them binders and escape to my youth, Which is always well worth the initial cover charge in my book. In this sense weather or not the cards hold any dollar value is really meaningless to me as they have already more than paid dividens for themselves from the joy I have gained just from being able to escape to them.

    I feel that with each generation comes the lack of more and more true sentimental young collectors to drive real interest.
    With the exception of the rarest of the rare (turn of century- 1950) The ever shrinking and absence of the true "Sentimetal Collector"
    will leave the hobby with only the "Whats it worth" "Price Guide" and "Label Collectors" who will eventually move on to parasite some other hobby once they find it a losing cause trying to parasite a profit from each other. Thus rendering most all cards virtually void of any $$$
    amount!!!
    Whew!Hew!!!!
    we can now get back to trading some cards and chewing some gum on the front steps and backyard!!!
    I'll give ya the Yaz & Fisk for the Rose & Bench


    Just my conspiracy therory... >>



    PERFECT POST!

    as a slab COLLECTOR myself, i hope the prices continue to fall!
    Big Fan of: HOF Post War RC, Graded RCs
    WTB: PSA 1 - PSA 3 Centered, High Eye Appeal 1950's Mantle
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