Money Matters

How The Dow’s Dip Affects The Baseball Card Market

(Source: www.forbes.com)

Photo by Heritage Auction

If baseball card and memorabilia collectors and speculators have seen their 401Ks shrink since the stock market’s record highs last month, will they be less apt to spend money on ephemera with no intrinsic value? It turns out that the answer is not simple.

I first asked Steve Gadziala, co-owner of Champion Sports Cards & Collectibles, whether cards and memorabilia dropped during the biggest downfall in recent history, the Great Recession. “The short answer is yes,” he replied. “While it varied depending on the card and the condition, in the big picture, it was easier to acquire cards and at a lower price. Cards are a commodity and their price is a function of supply and demand. Generally speaking, less disposable income leads to card prices going down overall.”

On the other hand, Don Hontz, a full-time dealer for the past 40 years, remains as bullish as ever. “I have never seen a down period with cards,” he told me.  “In the 80s everything was always going up. In the 90s, which some called a slow period, I had no problem. And since then, cards have shot up. The 50s and 60s rookies that went up so much a few years ago have since settled and come down a bit. But I think the hobby is still healthy.”

Hontz’s point is key. The post-war market for rookie Hall of Famers—from Willie Mays to Tom Seaver— has mostly softened over the past two years, as I’ve previously reported.  (See Mint $432,000 Ty Cobb Baseball Card Sets Record, But Beware.)

Photo Illustration by @Dpeck100 (PSA)

Even the iconic 1952 Topps Mickey Mantle has fallen. All you need to do is to look at its performance in Vintage Card Prices (VCP). Almost all the arrows for PSA and SGC graded cards are red and pointing down.

To dig deeper into VCP, you’ll need a $17.99 monthly membership (worth every penny and then some).  Looking up the ’52 Mantle graded near-mint or 7 (on a scale of one to 10), I found that the PSA 7s now average about $140,000. From 2015 through 2016, three cards in this condition exceeded $200,000.

On the other hand, the truly rare and high-end Mantles are expected to hold their own because these buyers have the deepest pockets. In 2016, a PSA 8.5 sold for $1,135,250 in a Heritage Auction. (There are 33 8s and six 9s.)

At last year’s National Sports Collectors Convention, I asked two longtime dealers what one of the three PSA 10 gem mint Mantles would command. They both said $10 million.

The best market discussion—“Price of cards coming back down to earth…”— occurred on PSA’s forum following the biggest stock market dip:

“Some couldn’t care less what their retirement savings is doing and others look at it every minute. What is funny is many parts of the card market fell last year, and the belief was that couldn’t happen unless a big economic setback occurred. At the same time the stock market skyrocketed. All of this stuff is impossible to predict.”

Graph by Vintage Card Prices

“I think it is also safe to say the truly rare and highly desirable collectibles will be the last to lose value”

“Nice thing about cards is they can’t go to zero.”

“Let’s face it, if you are spending over $100 on a piece of cardboard stuck between two pieces of plastic or a box of cardboard pieces wrapped in foil, you are not returning [soda] cans to buy gas. It would have to be a worldwide recession event to really impact the hobby.”

“It sounds like a few forget that the economy can be impacted significantly by the performance of the market and falling stock prices generally lead to people losing their jobs.”

“The great thing about this hobby is that you don’t need a lot of money to enjoy it. My interests are all over the place in terms of sport, era, rarity, player, but I definitely have a few niches that I could have fun with on just $50 per month. The operative word there is fun. Enjoy what you collect, collect how you want to collect. In my experience, people admire the passion and the stories much more than they admire the price tag.”

More Info: www.forbes.com

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