These days, baseball cards are looked at as more and more of an investment than in the past. Cards obviously are still collected by many people that do not necessarily care about their value just as there were investors in cards back in the 1970s and 1980s. But as cards have become more and more valuable, collectors are taking them a bit more seriously from a financial perspective. It’s true that in some instances, vintage baseball cards have outperformed the stock market.
Pre-war and vintage cards (particularly well-graded ones) have mostly led the charge as many of those cards have increased in value exponentially over the last couple of decades. At one time, Honus Wagner was the only six-figure card in the hobby. But these days, there are even a few modern cards selling for that much. However, like any investing opportunity, chances for wild fluctuations exist, particularly among the more expensive cards.
It’s not possible to pigeon-hole this sort of characteristic entirely but, generally, the more valuable cards will have the most fluctuation. The answer for that is pretty simple, really. When you’re talking about five-figure and six-figure cards, there are a very limited number of collectors that can afford to jump in. And if you have fewer potential bidders, as a whole, you have less ‘action.’
High-dollar collectors can be missing in action from a particular auction for any number of reasons. But many may pass on an auction in part, because, there are so many auction houses in the current climate.
Traditional auction houses are really the key here because, in general, that’s where the most expensive cards are usually sold. We’re not only seeing more of them stick around, but many new ones are entering the market. Sure, some of the startups can’t find ways to make it work and bow out without much of a ripple in the hobby waters. But in general, collectors have all sorts of options for high-dollar cards these days and there is more access to auction houses these days than ever before. There are big auctions happening on a monthly basis and when you throw in things like eBay and card shows, high-dollar buyers have all sorts of sellers pulling them in various directions.
Now, if you take away a few sellers from a $100 card in an eBay auction that has 50 bidders, it’s not really a big deal. Chances are that, most times, it will reach that amount or come very close to it. But if you take away one or two serious bidders for a six-figure card, that can cause dramatic shifts in the final selling prices of cards.
Good examples of wild price swings can be found all over the place. For instance, I was recently checking out sales of Babe Ruth 1933 Goudey cards. Fortunately, this sort of stuff is easy to do with PSA’s help. PSA 6s have sold in the past year alone for as little as $14,000 to nearly double that as one sold for over $26,000. Obviously, collectors seeking to avoid specific flaws may pass on one card in a certain grade and buy another in that same grade. Still, a nearly 100% difference in price is startling.
This same thing happens with more expensive cards as well, obviously. For the sake of ease, let’s stick with the same Ruth card No. 53 from the 1933 Goudey set and use it to make a different kind of point. A pair of PSA 8 cards sold at auction for about $200,000 in 2016 – one a little less and one a little more. By the next year, the market for that particular grade plummeted with two sales of PSA 8s tallying only a little more than half of that price, selling for $114,000 and $120,000. Unlike the other example where prices have been up and down, this particular card, for now, anyway, has simply been deemed as much less valuable than it was a year ago. Same card as the PSA 6, just two grades higher.
So what gives?
Any number of things could have happened in either case. But the second case of the PSA 8 cards is interesting because it shows that, even in a healthy market, very expensive cards can have their values slashed virtually overnight. And, even scarier, we see that while particular grades of the same cards can experience big gains, others can see sizable losses. In order to come out on top, collectors not only need the right cards, but need to determine which grades of that card present the greatest chance for upside.
Yikes.
Now, it should be noted that fluctuating prices is hardly only a problem for expensive cards. The same kind of crazy percentage swings occur everyday in low-dollar eBay auctions, too. One day a card will sell for $10 and another, $20. The difference, though, is that a seller taking a $10 hit on a common, low-grade T206 card isn’t going to be harmed nearly as much as one taking a $100,000 hit on a highly graded Ruth.
Investing in high-dollar cards can result in big short-term gains or, in some cases, big losses – even in a very strong market where the overall trend is sharply pointed upward.
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