Modern Card Appreciation Potential

[consultant]

I'm not a collector but I'm interested in the state of baseball card collecting in general.

It seems there are some rare cards typically more than 40 years old, that can fetch hundreds of thousands of dollars.

It seems the price of a card from what I've gathered is predicated on four main criteria: A) the player's achievements, B) the production size of the card, C) the age of the card, and D) the condition of the card. I'm guessing but maybe I'm wrong, that the market is much much more flooded with baseball cards today than it was 50,60,70 years ago (thanks to all the greedy US corporations we have these days). I could be wrong, maybe the number of collectors has directly increased proportionally to the number of cards being release but I highly doubt it.

It seems back in the 40's and 50's there were a lot of people, including my Dad, that collected baseball cards, and then there collection at some point got tossed. My Dad things he would have had several cards with in excess of $100K by today's prices (he's kicking himself of course). Now that enough history has passed, it is plain for everyone to see these rare old cards fetching huge prices. Heck for most people a card fetching $5K or more is quite a chunk of change and I imagine there are A LOT of those out there? So then I would imaging over the past, what, 25 years, the number of collectors has grown dramatically, sort of like people buying lottery tickets, many hoping that 30 or 40 years later, when they reach retirement age, they'll have a couple cards worth a couple hundred grand by today's dollars. I'm of course just guessing but I think these are pretty reasonable guesses.

So I've got a couple questions for you season collectors:

1) What are people's predictions regarding the volume of baseball cards with high appreciation potential compared to the high appreciation cards of the 30's,40's,50's? Is baseball card collection too mainsteam and too much product on the market so it will be much more rare to see a card released in the 90's fetch $500K (in today's dollars) 30 or 40 years from now? I would guess with so many more collectors and so many more cards out there, and most importantly with so many more collectors being careful to not get rid of their collection and keep everything mint, the market 30 or 40 years from now will be much more saturated with "rare" mega-value cards. Now I realize where this may break down is if card companies today release limited production cards of key players, players who have already done great things or are destined to do great things. (I imagine everyone is stock piling Barry Bonds cards.) What is a typical exclusive limited product card run these days, 1000 cards? But what are the chances these types of cards turn into Million Dollar cards like some of the Babe Ruth and similar cards selling today? Obviously someone put a lot of time and money into card collecting will be biased on these questions, but I'm curious to here what the general consensus is among card experts?

2) Out of curiosity, what are some of the most valuable cards released in the last 20 years, how many were produced, and what are they selling for today?

[consultant]

Well I know many of you are thinking this newbie needs to read up more. :)

I did just that, on E-bay, the marketplace collectors love to hate. The place where everyone finds out their stuff isn't worth as much as they thought.

I studied all the completed listings for the past 2 weeks for the higher priced cards for all eras. I drew the following general conclusions:

1. Most collectors on E-bay with the older, $10K and up cards, think they are worth more than they really are as very few listed auctions end up selling for stuff prior to the 80's and especially prior to the 50's.

2. The 50's seem to be a 'sweet spot' I'm guessing because it has some of the most famous names. (ya, I know, duh.)

3. As far as modern day cards, the rookie cards are by far the most in demand. (again, duh.) Griffey seems to be in especially high demand (I posted a question about that in another thread)

4. If there are quite a few $100K+ cards out there, they sure don't sell very often or there really isn't as many as collectors would like to think. Ebay is so huge, you would expect to see at least a few in a 2 week period.

So it seems if I were to start collecting today, the way to go would be limited production (numbered even) rookie cards. I'm guessing brand new rookie cards are a hot commodity as you are sort of betting on the player since they have no MLB history. So the appreciation potential, and yes I say potential, is much higher than non-rookie cards because you are sort of betting you'll be able to say, ya I bought this guy back when no one knew he would do this and this.

So I'm assuming, if I had $20K to start a collection, most collectors would recommend (from an investment standpoint) buying a bunch of new rookie cards with very limited production over buying just a a few vintage cards from the 50's or before? It seems with a lot of these records being broken, the older vintage cards have already passed the window of where their value runs up the most. Not to say they won't appreciate further. This is all just my guess of course.

Does one paticular brand line have the corner on the market as far as limited production rookie cards?

[bbfirebird]

I really don't think any modern cards (with a few possible exceptions) would be worth much of anything in the future. Older cards (40s, 50s, 60s) were produced in MUCH fewer quantities, plus no one thought they were worth anything, so they were put in wallets, tacked up on walls, put in bike spokes, etc. In lots of cases, as kids moved out, they were thrown away. So there are few examples of older cards in decent condition nowadays. In the 80s, as the popularity of cards exploded, people began looking at baseball cards from an investment potential. Cards were produced in much higher quantities (due to the higher popularity and demand), and once they were pulled from packs they went straight into plastic protectors. Go on ebay and do a search for a Hank Aaron rookie card and see how many examples you get. Then do a search for a Griffey rookie and see how many examples you get. Not only are there a lot more, but there are quite a few gem mint examples.

When I was about 10-12 and collecting cards, my favorite player was Jose Canseco. His 86 Donruss rookie card was consistently $120-150 (out of reach when you're 12 years old). A few months ago I bought a perfectly mint example (BGS 9.5) on ebay for $50 just for nostalgia. You can buy a loose one for just a few dollars.
Another example of a high demand card is the 89 Upper Deck Griffey RC. At its height it was valued at well over $100. Now the book value for it is $40, and you can buy one on ebay for $20.

[consultant]

So what's your theory on why the cards lost value. I've eluded on the Griffey cards that it was because he started out with an incredible career and then kind of fissled a bit. Was it about the time he started to get injured for a couple seasons his stock went down or is there a more general reason why these things lose value such as just general initial excitement for the release of the card, everyone scared they won't get the card so they pay a premium first then a bunch of people decide they aren't worth keeping and flood the market with resales?

I've seen this 'initial' excitement factor happy with some of the Disney collectibles I've bought. The initial release brings premium prices, but unless it is an extremely limited item (like only 50 made) and it's appealing/cool, then if you're patient you can wait a few months and wait for a resale and get a better deal on it when the person realizes they can't get what they paid for it in the short term and it was an impulse buy in the first place.

I would suspect however that the card companies do release very limited cards such as only 100 made, numbered, etc. Do they not do this at all or very often for rookies since no one knows how well the rookie will fair? Or do even the modern limited cards like cards issued in the 90's until now that are 100 or fewer lose value too after the initial excitement?

I see a lot of these brand new, recently released box cases going for like $2K-$3K. I would suspect the buyers are betting they will be getting some high demand cards in them that will pay for the investment in the case. But I doubt any of the high-demand cards they are looking for in the case are rookie cards are they. Unless of course the box comes out late in the season and the player is destined to probably be rookie of the year. Do they release rookie cards late in the season or even after the season is over the same year?

I really don't think any modern cards (with a few possible exceptions) would be worth much of anything in the future. Older cards (40s, 50s, 60s) were produced in MUCH fewer quantities, plus no one thought they were worth anything, so they were put in wallets, tacked up on walls, put in bike spokes, etc. In lots of cases, as kids moved out, they were thrown away. So there are few examples of older cards in decent condition nowadays. In the 80s, as the popularity of cards exploded, people began looking at baseball cards from an investment potential. Cards were produced in much higher quantities (due to the higher popularity and demand), and once they were pulled from packs they went straight into plastic protectors. Go on ebay and do a search for a Hank Aaron rookie card and see how many examples you get. Then do a search for a Griffey rookie and see how many examples you get. Not only are there a lot more, but there are quite a few gem mint examples.

When I was about 10-12 and collecting cards, my favorite player was Jose Canseco. His 86 Donruss rookie card was consistently $120-150 (out of reach when you're 12 years old). A few months ago I bought a perfectly mint example (BGS 9.5) on ebay for $50 just for nostalgia. You can buy a loose one for just a few dollars.
Another example of a high demand card is the 89 Upper Deck Griffey RC. At its height it was valued at well over $100. Now the book value for it is $40, and you can buy one on ebay for $20.

[bbfirebird]

I'll admit, I don't know much about newer (1996 and newer) cards, although I'm familiar with them to an extent.

When it comes to something that has true investment value, it's usually something that people don't expect to have value in the future. Three prime examples of this would be early muscle cars, vintage baseball cards, and early GI Joe, Barbie, Star Wars figure, or other toys. For example, people bought 69 Camaros by the thousands, and drove them hard, modified them, etc. When these people who used to own these cars or wanted these carts in their youth got older and decided to want one, good condition examples were few and far between, which drove the price up.
You can't "force" something to be collectible. Just by making a card with a print run of 100 or so doesn't guarantee it's going to have any investment potential- especially if people are taking good care of them and treating them as investments.
There are much better investment vehicles than baseball cards.

[consultant]

Those are good examples. I think on a larger perspective one thing I'm getting at here is that now that people have seen these things appreciate, especially old baseball cards, companies are trying to capitalize by producing more of this stuff. I'm sure the new Ford Thunderbird, or the new Dodge Charger will not end up being collectibles 30 or 40 years from now (I could be wrong.) They are produced in so much larger quantities these days.

I wonder if the same 'saturation' phenomena is true with coins and stamps as it is has been with baseball cards?

As far as collectibles, what DO you think are the better long investments right now if not certain baseball cards? Obviously you can predict anything for sure but you must have a gut feel about some things.

[TigersFanB406]

You can collect my posts. After I'm gone they will be valuable. :shrug:

On a serious note, I don't think much of anything that people collect today will ever be worth much. Just too much product and too many people that have them. Good luck though.

[bbfirebird]

As far as collectibles, what DO you think are the better long investments right now if not certain baseball cards? Obviously you can predict anything for sure but you must have a gut feel about some things.

Thats a good question, but a tough one to answer. Most things that become collectible are due to nostalgia. For example, the current musclecar craze is due to baby boomers wanting to recapture a piece of their youth. It's the basic principles of supply and demand. So thinking like that, what will be valuable 20 or 30 years from now is probably something that is popular today with 15-25 year old people.

The problem with modern baseball cards in my mind (as far as collectability goes), is that there's nothing special about them. Yeah, there are short print runs, but each company is printing 30 different cards with any given player's autograph, or jersey, or whatever. There isn't that ONE big card nowadays that there was back then. In other words, today there isn't the 1952 Topps Mickey Mantle. There is an autograph card of a certain player, then a parallel autograph/jersey, then a parallel different color version, etc etc. Then there's essentially the same thing from 3 or 4 different manufacturers. There isn't that one card that stands out among the rest. If there is, it's so ridiculously rare that it's too hard to find (and then you run the risk of not being able to sell it for as much as you paid for it down the road). Baseball cards companies today are purposely making cards to be collectible. But you can't MAKE something be collectible.

I personally think collectibles are best left to collect for yourself, and investments are best left to stocks, bonds, real estate, etc.

[Dalkowski110]

"But you can't MAKE something be collectible."

This is a topic of some controversy, but I think there are a handful of markets where everything goes just right that a created collectible indeed becomes collectible. Although I can't think of one in the baseball card market, there's two prime examples in the firearms market (which I'm well in tune with) and one in the model train market (also very well in tune with) I can think of that are VERY collectible.

The first is the Winchester Model 94 "Trail's End" rifle. When these came out, most gun collectors avoided them like the plague BECAUSE they were created collectibles. Many went unsold, and most of these were returned to Winchester/USRAC, where they were stripped and sold as parts. Those that had sold were taken out and fired, with the assumption that Winchester would just make more. But wait! USRAC, which was producing the "Trail's End," went bankrupt and was forced to sell the Winchester brandname to a company that discontinued the entire Model 94 line. Over the past two years, because the "Trail's End" failed to sell, it's become a TRUE collectible and its value has absolutely soared, especially for those that are new in box. After all, it's an incredibly high-quality rifle. A few were rediscovered when USRAC liquidated their inventory and sold for incredibly high prices. While I'm sure Winchester/USRAC never intended to make its "Trail's End" edition Model 94 a collectible in this way, it sure turned out that way!

Another scenario involves the Colt Single-Action Army Model 1873 Commemoratives produced by Colt Firearms Company in the 1970's (actually, 1969-1982, but hey, who's counting?). Many were made, most went unfired, and yet these guns seemingly defy the market for created collectibles. That is, they inflate in value for a short time after their release and discontinuation, and then rapidly deflate. But the Colt SAA Model 1873 Commemorative never did that. Although their sale price stopped skyrocketing in the early 1990's, they've still been slowly gaining value ever since. Some market observers have suggested that because Colt, the maker of the original Model 1873's, produced the guns, they'll carry a premium over other reproductions no matter what. But Colt has also produced regular Model 1873 reproductions since the mid-1990's, and these aren't any slouch in quality either. Perhaps it's just the mystique of "the gun that won the west," or maybe that there's simply no competition and nothing comparable, but the gun defies the created collectibles market.

In the model train market, Lionel has produced an O Gauge Christmas set every year since some time in the mid-1980's. These are dated for their year, and styled uniquely; they're clearly created collectibles. However, due to the nature of the sets, and the tradition of trains running around the Christmas Tree, they do defy the market and command a premium over their more realistically-styled cousins. Strangely, hobbyists (i.e. people like me who build permanent layouts, run trains daily, and stick to specifc road names like New York Central, Pennsylvania Railroad, Erie-Lackawanna/DL&W, and the occassional New Haven Line) generally avoid the "Christmas Tree Specials"...but those just looking for a train to run around the tree always pay the premium for one of the Christmas sets. They're good quality, they last for years, and they're built to be run, not left in the box.

Another possibility I've talked with market analysts over is the Hogwarts Express train set, scheduled to be released in Christmas 2007 as a promotional release by Lionel for the Harry Potter books and movies. Basically, it's a London-Midland-Scottish Railways "Flying Scotsman" pulling a rake of 4 typical LMS coaches in O Gauge. Thing is, no American company produces a Flying Scotsman OR coaches. There's certainly demand enough for people willing to pay over 10 times for brass scale models in O Gauge that you KNOW most of these are going to be sent into repair shops (or just tinkered with by home entrepeneurs), given proper LMS color schemes, and run as the famed Flying Scotsman. But where does that leave the NON-repainted/recolored/tinkered-with Hogwarts Express sets in terms of value? While one can only speculate, it's probably a safe bet that they'll sell for quite a bit.

[mtbomb]

I don't believe you'll see much appreciation of modern cards. As pointed out before even the special edition cards which have limited quantities are going to be surrounded by their non-limited versions reducing the rarity. There is only one version of a Mickey Mantle rookie card. Pretty much only Topps was manufacturing cards at that point.

In general I think its a bad idea to speculate on something becoming a collectible and more valuable. A better idea would be to buy collectibles which have already been appreciating for a long time. Then you reduce the risk that you are buying at the peak of popularity, like the $100 Griffey rookie cards mentioned earlier. Buying something like a Mickey Mantle card would be a better investment I believe.

Another thing to watch out for in collectibles market is waning popularity. There is no intrinsic value to most collectibles. A lot of the reason that they are collectible at all is because they were at some point considered trash increasing their scarcity. The only value of a collectible comes from nostalgia. People are nostalgic about the fun items of their youth. This can hurt a collectibles value though in the future. What happens when all the old Mickey Mantle fans start dying? Will today's youth place such a premium value on Mickey Mantle cards? They may be more enamored with Mark McGwire or Barry Bonds cards. The Mantle card will still be worth something, but how much will the price be increasing if his biggest fans who harbor the most nostalgia are dying off?

[RuthMayBond]

A better idea would be to buy collectibles which have already been appreciating for a long time. Then you reduce the risk that you are buying at the peak of popularity, like the $100 Griffey rookie cards mentioned earlier. Buying something like a Mickey Mantle card would be a better investment I believe.Then you wrote

<Another thing to watch out for in collectibles market is waning popularity. There is no intrinsic value to most collectibles. A lot of the reason that they are collectible at all is because they were at some point considered trash increasing their scarcity. The only value of a collectible comes from nostalgia. People are nostalgic about the fun items of their youth. This can hurt a collectibles value though in the future. What happens when all the old Mickey Mantle fans start dying? Will today's youth place such a premium value on Mickey Mantle cards? They may be more enamored with Mark McGwire or Barry Bonds cards. The Mantle card will still be worth something, but how much will the price be increasing if his biggest fans who harbor the most nostalgia are dying off?>

Which is it?

[Dalkowski110]

"Will today's youth place such a premium value on Mickey Mantle cards?"

Hmm, considering that cards of Ty Cobb, Honus Wagner, Christy Mathewson, Walter Johnson, and Cy Young are all in the mid thousands (to say nothing of Cap Anson, King Kelly, Mickey Welch, Hoss Radbourne, Kid Nichols, and the like), I would give a very definite "yes" on that answer. None of us were alive to see these guys play.

[mtbomb]

RuthMayBond,

I think that its a combination of the two. Don't own any of the new cards, unless you can buy them before they peak in popularity. Also concentrating on established collectibles should be better however, baseball cards may not be the best since certain players will fall out of the collective mind of fans.



Dalkowski,

You are correct, prices on those players seem to hold up fairly well in light of the fact that many of their collectors have never seen their games. But who do you think places the most value on these collectibles, the fans who actually saw them play or collectors who never saw them?

I bet if you tracked price appreciation of some of those players cards, the greatest rate of appreciation occurs at the time when fans who remember them from their youths are retiring. These guys are at the point in their lives when they have the most income, and will probably pay a premium for the cards they remember from their youths. The older cards are collectible for their rarity and players place in history, but may not receive this nostalgia premium. I expect they are appreciating less rapidly compared to something like a Mantle rookie card.

This is all speculation of course, and I could be wrong about everything. :)

[Dalkowski110]

"I bet if you tracked price appreciation of some of those players cards, the greatest rate of appreciation occurs at the time when fans who remember them from their youths are retiring."

Not quite. For example, in recent years, for some reason, Christy Mathewson's cards have been gaining value steadily, at a rate faster than even Cobb. Perhaps it was Christy's persona; the polar opposite of the steroid-ridden, money-grubbing image of ballplayers today, though that's only a guess on my part. Another part of it has to do with fathers, grandfathers, great grandfathers, and so on passing down stories of their boyhood idols to their children. I've always been enamored by my Dad's stories of the 1950's New York Giants, and I buy New York Giants cards whenever possible. My grandfather, in turn, told Dad about the 1920's-1930's Giants...of Carl Hubbell, Bill Terry, Freddie Fitzsimmons, Hal Schumacher, Travis Jackson, Dave Bancroft, etc. And he recounted tales from his father to Dad of Christy Mathewson, John McGraw, Rube Marquard, Joe McGinnity, Dan McGann, Art Devlin, Rube Benton, Shufflin' Phil Douglas, and even Arlie Latham.

I have cards of all these guys, and seek out even more. I've heard the tales, the truths, the myths, and to me these guys are more than just a stat line. I have the same appreciation (and more importantly, the same TYPE of appreciation) for Matty, Bill Terry, Walker Cooper, Willie Mays, etc., etc., so on and so forth that I have for Mike Piazza, Jose Reyes, and David Wright; players who I actually saw.

And that, IMO, is why the market for older cards will never die. So long as there are stories passed down, these men will continue to live on in them, and their baseball cards a small reminder of the greatness they once showed on the baseball diamond. Just my :twocents: .

[DaClyde]

Also, don't underestimate the power of things like Ken Burns' Baseball to both bring new and renewed attention to the names of the past. Anytime someone like Burns or even ESPN can put together some new documentary that digs up some new footage or information about these players, their place in the minds of the collecting world is raised, and along with that the interest in their memorablia. No doubt Jackie Robinson memorabilia will hit an all-time high this year; both the old AND the new stuff.