Hobby Musings: Vintage Cards Continue Epic Rise – Over the past few years, especially at card shows, I’ve noticed vintage trading cards tend to make up a rather large amount of inventory up for sale. Coupled with the recent sale of multiple high-profile cards at auctions, this has fueled incredible interest in the hobby from more mainstream circles. To get some perspective on the rise of the vintage card market, I had the chance to catch up with Director of Acquisitions for Baseball Card Exchange, Reed Kasaoka. The following interview was conducted via email.
KS: How long has the market for vintage cards had this heightened sense of interest and sales?
RK: There’s been a strong buzz over the last couple of years for vintage cards. It may be directly tied to some of the crazy finds that have introduced new cards and collectors into the hobby, like the Black Swamp Find and the Lucky Seven T206 Cobb Find. When these finds get the kind of mainstream press our hobby desperately needs, we get an influx of new collectors and investors and the buying power they represent.
KS: Why is the market so strong for vintage cards right now?
RK: Many collectors feel vintage cards are simply more stable than modern cards. Even if someone collects with no regard for financial gain but for the pure fun of it, nobody wants to see their purchases go down in value. With modern cards, you’re subject to the whims of the athlete’s life and career – injury, arrests, or even just an off-year of production. Objective viewers would argue this has been the case all along, but as the hobby continues to grow into a high-stakes, high-dollar industry where making smart investments is key, everyone is looking to minimize risk.
Another thing to consider is as the baby boomers retire, the elite of the Gen X are starting to really hit their stride in their careers, and for the most successful, they have large amounts of disposable income. Those who collected cards as a kid are coming back to the hobby and buying up all the stuff they wish the could have had as kids. If you had to ask me what the average age of a person who sells their collection to us, I’d say it’s around 65-70. The average age of our clientele who buys from us is probably closer to 40-45.
KS: Is it mostly collectors who are chasing down these vintage cards, especially the high-end stuff, or have you seen a lot of people who don’t necessarily collect but are rather looking for a different type of investment item?
RK: It’s almost impossible to size up the buyer over the phone or a user ID, so we only get one chance a year (at the National Convention) to see people buy in person. The distinctions between collector and investor are becoming more blurred. Many who fancy themselves as a collector can’t ignore some of the gains their least desirable cards (as it pertains to their own collection) have made in recent years. Why not become a seller and cash in on the unexpected windfall and put that money into items you really want? Do that successfully a few times, and you start thinking to yourself, “I might be able to do this to make some extra money on the side.” Now you’re no longer a collector, you’re a part-time dealer/investor.
I’m not so sure people are entering this hobby with the sole purpose of diversifying their investments. Stocks are very liquid, and real estate can generate rental income. You truly have to enjoy the cards you are collecting, or at least the challenge of collecting, because our industry doesn’t have the same ease in liquidity as stocks. Nobody I know has been able to generate any sort of dividends just from owning cards as an investment.
KS: What is the level of interest and sales of vintage cards compared to that of other categories of the hobby right now?
RK: I’d say vintage cards is the strongest part of the hobby right now, because the other categories all have their own issues.
Modern cards, both unopened and single cards, seem to be suffering due to a lack of competition as many of the leagues are down to exclusive trading card manufacturers. Competition pushes manufacturers to keep trying to make the best products that return good value; I think many collectors feel like they aren’t getting either of them.
Vintage unopened has had such an incredible run up in prices, that the market is currently taking a breather, even though interest remains extremely high. A couple of years ago, even though prices were strong, many collectors would still open packs and boxes for the thrill of pulling an awesome card or to grade the high-end examples for profit; now there are very few products that even the most addicted pack busters can justify opening anymore.
Autographed memorabilia seems to have fully embraced third-party authentication like PSA/DNA, and this has made the category much stronger in recent years. However, with athletes being handsomely paid for their on-field performance, it has made their accessibility off the field much more expensive. Highly touted rookies, before they play in a single professional game, are demanding six figure appearance fees to sign autographs. This has turned off many to collecting autographs.
KS: Which years and sports are generating the most interest?
RK: 1950s baseball continues to be the leader in vintage. This is the era the baby boomers grew up in, and many are still collecting and possess significant buying power in their retirement years. Some are speculating the 1970s in all sports will be the next big thing, but I feel there’s simply too big of a supply from that era to go around. Moms may have thrown away their kid’s collections in the 50s and 60s – severely decreasing supply – but I don’t think this was happening by the 70s, all while Topps kept increasing their production numbers.
Pre-war (essentially WWII and before) has grown significantly in the card grading era. There are hundreds of issues from 1887 through 1945 that many of us weren’t alive to experience, and in a graded card holder, collectors can feel confident of the identification of the card, condition of the card, and that it hasn’t been altered in any way. This area of the hobby might generate the biggest headlines in the mainstream press, but the overwhelming amount of collectors can’t identify with the athletes they’ve only read about, with the exception of the brightest of stars, like Babe Ruth and Lou Gehrig.
Other than baseball, football has shown an increase in demand as it has positioned itself as America’s favorite sport. Save for a few cities, basketball simply didn’t exist before Bird and Magic arrived on the scene. Hockey is the same way, unless you live in Canada.
KS: Is there a particular card or cards that you’ve seen a large amount of interest in?
RK: If you are a serious collector, there are just some cards in every sport you have to have for your collection to be truly complete. This group of cards really hasn’t changed much over time, and whenever we get them in, they sell fast. In no particular order:
- 1952 Topps Mickey Mantle First Topps Card
- 1954 Topps Hank Aaron RC
- 1955 Topps Roberto Clemente RC
- 1955 Topps Sandy Koufax RC
- 1963 Topps Pete Rose RC
- 1968 Topps Nolan Ryan RC
- 1957 Topps Johnny Unitas RC
- 1958 Topps Jim Brown RC
- 1965 Topps Joe Namath RC
- 1976 Topps Walter Payton RC
- 1966/67 Topps Bobby Orr RC
- 1979/80 OPC Wayne Gretzky RC
- 1980/81 Topps Larry Bird/Magic Johnson RC
- 1984/85 Star Company Michael Jordan RC
- 1986/87 Fleer Michael Jordan RC
KS: In your job, you have to go out on the road and try and find these treasures for your company. Out of everything you’re having people ask you to come out and see and what you’re buying, how much of it is vintage compared against other hobby items?
RK: I think I do a pretty good job of screening all the calls and emails we receive, because if a seller’s collection consists of mostly product we don’t want to buy, I’d be simply wasting their time and mine to travel any sort of distance only to leave empty handed. We focus on three major sectors of the hobby – vintage cards (pre-1970), unopened product, and autographed memorabilia. Over the past couple of years, vintage cards are the items I get offered the least. There are a few reasons why I think this is the case. Despite some of the large deals we’ve made in the vintage market, the hobby as a whole doesn’t recognize us yet as a vintage dealer. We also have a reputation of buying everything – no matter how big the collection is – and those deals seem to always find us. When they do, naturally unopened or autographed memorabilia make up the “size” part of it. Most people’s vintage collections can fit in the trunk of a car. And, because of the space issue, collectors may feel better off passing down their collection to heirs rather than selling, since it doesn’t take up much space.
KS: What are some of the coolest and craziest items you’ve come across in your travels?
- RK: I bought the most recent unopened case of 1986/87 Fleer Basketball to surface – back in 2005. I truly believe that another unopened case doesn’t exist.
- A truckload of 1977-87 unopened stuck behind the walk-in freezer of an IGA store in central Illinois. Two years later, I went back and bought over 100,000 high grade singles from the ’50s and ’60s. Guess what – they still have more to sell to me!
- I’ve seen a 1952 Topps Baseball Box. Predictably, it was not for sale.
- An in-person and mail-away autograph collection that surpassed 100,000+ signatures which was started in the 1960s, with a 99.9% PSA/DNA pass rate. It took me four trips to buy it all.
- A collection of 67 Old Judge cards, never before seen in the hobby, from a person who inherited it from a family friend, who themselves, wasn’t a collector. Over half of them graded EX or better and many are the highest graded examples known.
KS: Graded vintage has been especially popular, in part because of the amount of fakes out there. How much of a difference does it make in the value between graded and ungraded vintage?
RK: When I started selling cards at the age of 14 in 1988, there were two things the buyer and I would argue over (It wasn’t negotiating back then; especially when one of us is a teenager) – condition and price. With grading, there’s only one thing to negotiate – the price. The subjectivity is removed from the equation, as an objective third-party assigns the grade. Transactions are so much easier. Even when I’m buying vintage collections, I can make a deal for graded cards often sight-unseen. With ungraded cards, I’m truly in the dark as to how nice the cards really are until I see them in-person, and therefore my confidence level for making a deal remains low until we start talking price.
When it comes to graded vintage, the blanket statement is if you get your cards graded, it will be worth more. That is 100% incorrect. The correct statement is grading your cards gives them increased liquidity, as graded cards can be bought and sold almost sight-unseen, as illustrated by my previous comments. For low grade cards, once you factor in the expense of having a card graded (grading fees, shipping and insurance, time it takes to have your cards returned), it’s debatable whether or not you actually will recover these additional costs.
A good example, though not quite vintage, is the 1985 Donruss Roger Clemens RC. You think you have a few of them that look perfect, so you send them to PSA for grading. If you get a PSA 9, they sell for about $15. The costs of having the card graded probably run close to $15, and that doesn’t include the value of the ungraded card! If you get a PSA 10, they sell for about $75, making the submission worthwhile. Still think it’s worth it? If so, bear in mind that only 4.4% of all 1985 Donruss Roger Clemens RCs have graded PSA 10.
KS: Looking to the future a little bit, the trading card market tends to be a rather volatile one. Do you have any concern the vintage bubble will burst?
RK: There is a slight correction going on right now, and it started right after the National ended. This is being caused by those coming late to the party, trying to cash in on the incredible run on high-grade vintage has had over the past several months. The market becomes flooded with too many examples of the same card, and it can’t handle the volume. I say those sellers were late because many were trying to do the impossible – predict the absolute top of the market – to maximize their profits. Investors have been trying to do this in the stock market ever since it was established a couple hundred years ago, and nobody has been able to figure out how to do it. Not too worry though; smart buyers will take advantage of the values out there and when the market settles down, they will be in the position to sell at a profit.
KS: There is speculation that hard assets like vintage blue chip baseball card values are over-inflated as a result of years of record-low interest rates. How does your company protect itself from such a potentially drastic market correction?
RK: I read that article you are referring to. I think that writer was reaching quite a bit when looking for a way to compare investing in cards to investing in the stock market. A big pet peeve of those who make their livelihood from the sports collectibles industry is when writers fail to accurately portray what our hobby is really about, and publish stories filled with inaccuracies and half-truths. The majority of collectors who are buying and selling cards are doing so based on their desire to collect, and are driven by emotion, not over/under valued assets and how it relates to the Fed setting the interest rates. This writer was simply trying too hard to find the statement to support his conclusion.
With regards to hedging against a market correction, it’s pretty simple – we buy to sell, not to hold or speculate on. We buy product, sell it at a fair price in a reasonable amount of time, then go out and buy some more, so we can sell some more. With the exception of some choice, eye-catching product to bring to the National Convention each summer, we don’t hold back anything we acquire. Unlike collectors, we don’t fall in love with our inventory, because there’s a collector out there that will appreciate the item much more than we will!
KS: We’ve already seen some vintage cards receive seven-figure sums at auction. If a bubble burst for the vintage market does not come to pass, what kind of ceiling do you think we could see on the pricing for a single card down the road?
RK: Once a card reaches six figure status, we pretty much figure that card is going to end up in an auction. For that reason, I’m resigned to the fact that nobody is ever going to offer us a T206 Wagner or a 1952 Topps Mantle PSA 8, so I really don’t pay much attention to what goes on at that level. If you were to ask me what the ceiling is for the top cards in the hobby, I’d say there really isn’t one. There are more high net worth people than ever, and at any given time, a few of them might consider dabbling in the sports collectibles market. We already have several who regularly make waves in the industry, bidding up cards to record high prices. As long as new buyers keep entering the hobby, prices for the high end products will continue to rise.
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