Yes, this is a bubble. No, it's not the 90s again

[imbluestreak23]

Calgary and Banff are just a few of the things I like from Canada. K13s takes are not.

[auctionjmm]

Originally Posted by MoreToppsPlease

This is misinformation, and is quite ignorant. It can only be said to make people think the card market is expanding when in fact it’s contracting.

The $100 card you bought last November and sold for $106 two weeks ago netted you a loss.

Edit: if buying in volume it’s affecting you now each and every month. It also erodes market cap to a substantial extent.

Originally Posted by NatsSBR

It's unhelpful to analyze the implications of inflation on real ROI for a given transaction without considering alternatives. Let's assume a 6.0% flat inflation rate for ease of calculation. If I hadn't bought the $100 card that's worth $106 today, and instead I just saved the cash, my cash would still be subject to inflation that reduces its real value in December 2020 terms to about $94.34. That means that if I bought a card for $100 net in December 2020 and sold it for $106 net ($100 in December 2020), I am still up by almost $6 in real terms as compared to holding cash. Inflation's effect on my real purchasing power in your example is trivial.

We have seen pretty much constant inflation in America since a brief, very mild deflationary period at the height of the Great Recession. The inflation we're feeling right now is worse than normal but will most likely subside as the Fed tightens monetary policy, people burn through their pandemic cash hoards, and supply chain restrictions ease. How long this will take is hard to say. In any case, owning tangible property is generally better than holding cash during an inflationary period, so the real question you want to be asking is whether cards are the best real asset to hold.

If you want to analyze the impact of inflation, don't do it in a vacuum.


Signed,
Your neighborhood friendly econonerd

Bingo. MoreToppsPlease is the ignorant one for thinking the entire world plays according to inflation rules. You know what didn't increase by 6% since November? My salary. How many of us received a 6% raise or higher in the past year? I'm guessing not many. So setting cards aside, most of us are theoretically worse off than we were a year ago. "Theoretically" only because we had options, like buying cards or stocks to preserve what money we did have. Which brings back my original point that inflation is a moot point altogether. I didn't lose money if I sold a $100 card for $106. I preserved money that I otherwise would have lost since my job did not offer me a raise this year and I didn't want to just leave my savings in a bank account.

For arguments sake, if inflation is up 6%, and the card market is up 6%, and the average wage increase in America was 4%, cards still win. I'm not saying these are real numbers but it's a decent estimate considering the average wage is projected to increase by 4% next year. I do not know the 2021 stats but I'm guessing it was far less than 4% since we were in Covid recovery. Many people took pay cuts during Covid which only made it worse. The smart people were into tangibles this year.

[vegetable]

Originally Posted by premium1981

I'm buying all the Gavin Lux base rookie cards I can and super-expressing them to PSA. No where to go but up from here.

I have some mint panini cards for you.

[KhalDrogo]

S&P 500 is up 27.3% YTD. That’s my measuring stick since that’s where my card money would be otherwise.

[NatsSBR]

Originally Posted by KhalDrogo

S&P 500 is up 27.3% YTD. That’s my measuring stick since that’s where my card money would be otherwise.

And this makes a ton of sense -- part of the reason people advise to invest in the S&P is that it consistently and effortlessly beats inflation -- but inflation erodes that 27.3% gain, too. I'm sure you realize this, but it's probably important to say in the context of the conversation.

Having said that, this is a perfect illustration of the fact that the opportunity costs of investment choices are a much, much bigger factor than inflation if someone is trying to figure out whether he should buy or sell a trading card (or any other piece of property). With the risks involved and the cost of my time, I wouldn't put any money into cards as a purely financial decision unless I thought I'd be able to double my money.

[auctionjmm]

Originally Posted by NatsSBR

And this makes a ton of sense -- part of the reason people advise to invest in the S&P is that it consistently and effortlessly beats inflation -- but inflation erodes that 27.3% gain, too. I'm sure you realize this, but it's probably important to say in the context of the conversation.

Having said that, this is a perfect illustration of the fact that the opportunity costs of investment choices are a much, much bigger factor than inflation if someone is trying to figure out whether he should buy or sell a trading card (or any other piece of property). With the risks involved and the cost of my time, I wouldn't put any money into cards as a purely financial decision unless I thought I'd be able to double my money.

I can understand this perspective. In my case I am a short term seller so I don't hold cards very long. So If I can make a 20% profit and repeat 5 times, that's the same as doubling my money, albeit with more work involved.

[SearchPatrol]

The "inflation" in cards is that every year, more and more cards are printed. Lets say right now 1 Billion cards are currently in circulation. What will that number be in 5 years, ten years or 20 years. Where will the money to buy these cards come from? New money or will people sell current cards for cards not made yet. Only so much money for cards. When the money stays the same but more cards are made, overall prices will go down. That's the problem with all the High end products. Will new money be able to cover all these newer high end products?

[discodanman45]

Originally Posted by SearchPatrol

The "inflation" in cards is that every year, more and more cards are printed. Lets say right now 1 Billion cards are currently in circulation. What will that number be in 5 years, ten years or 20 years. Where will the money to buy these cards come from? New money or will people sell current cards for cards not made yet. Only so much money for cards. When the money stays the same but more cards are made, overall prices will go down. That's the problem with all the High end products. Will new money be able to cover all these newer high end products?

Collectors constantly spend and add money to their collections every year. Not everyone sells. Plus, the majority of cards right now won't be worth much in 5 years. The majority of prospects and people think are HOF worthy type players will have declines and lose collectability. Only a very small percentage of cards from each year will actually be worth anything in 20 years.

[ScooterMcRibs]

Sports cards are an attractive investment because their returns are not closely correlated to stocks and other assets, and they have shown over time to be a good store of wealth. The downside is that the total market size is relatively small and transaction costs are very high. One of those problems is slowly being solved over time by asset appreciation. If / when Griffey Star Rookie hits six figures, it will be a more attractive investment to those managing billions of dollars in capital.

The other problem will be solved by securitization, both by fund managers and by the blockchain. Imagine if you had an NFT that you could transfer to someone across the world in seconds, that represented a specific gem mint Griffey, that could be redeemed on demand for a nominal handling + shipping cost. That reduces transaction cost to nearly nil.

The potential for sports cards is so huge in the next few years that I predict everyone seriously involved in the hobby today will be extremely wealthy by the year 2030. We're talking multi-billion dollar funds, 401k's, pensions, there is so much money that wants a piece of the sports card market. Nowhere to go but up.

As for inflation, it all depends on your perspective. If you hold USD then yes, you are getting inflated away, it sucks. But if you hold BTC or ETH then you have experienced massive deflation, not inflation. The lesson is to hold the right currencies.

[MoreToppsPlease]

Originally Posted by NatsSBR

It's unhelpful to analyze the implications of inflation on real ROI for a given transaction without considering alternatives. Let's assume a 6.0% flat inflation rate for ease of calculation. If I hadn't bought the $100 card that's worth $106 today, and instead I just saved the cash, my cash would still be subject to inflation that reduces its real value in December 2020 terms to about $94.34. That means that if I bought a card for $100 net in December 2020 and sold it for $106 net ($100 in December 2020), I am still up by almost $6 in real terms as compared to holding cash. Inflation's effect on my real purchasing power in your example is trivial.

We have seen pretty much constant inflation in America since a brief, very mild deflationary period at the height of the Great Recession. The inflation we're feeling right now is worse than normal but will most likely subside as the Fed tightens monetary policy, people burn through their pandemic cash hoards, and supply chain restrictions ease. How long this will take is hard to say. In any case, owning tangible property is generally better than holding cash during an inflationary period, so the real question you want to be asking is whether cards are the best real asset to hold.

If you want to analyze the impact of inflation, don't do it in a vacuum.


Signed,
Your neighborhood friendly econonerd

I’m assuming you live in South America if you don’t think 7% annual inflation is high. What’s the target inflation rate? What was the inflation rate in the late ‘70s and early ‘80s? It puts todays inflation to shame. And yes it is necessary to always consider it while making purchasing OR investment decisions.

No, I wasn’t analyzing the impact of inflation in a vacuum. Rather rperu and others know I was addressing his price index. Being his analysis is not conducted in real dollars it is not useful except to make it seem like cards in his index are a good investment. Which is also what you’re trying to do by saying 7% is trivial when its obviously not.

Originally Posted by auctionjmm

Bingo. MoreToppsPlease is the ignorant one for thinking the entire world plays according to inflation rules. You know what didn't increase by 6% since November? My salary. How many of us received a 6% raise or higher in the past year? I'm guessing not many. So setting cards aside, most of us are theoretically worse off than we were a year ago. "Theoretically" only because we had options, like buying cards or stocks to preserve what money we did have. Which brings back my original point that inflation is a moot point altogether. I didn't lose money if I sold a $100 card for $106. I preserved money that I otherwise would have lost since my job did not offer me a raise this year and I didn't want to just leave my savings in a bank account.

For arguments sake, if inflation is up 6%, and the card market is up 6%, and the average wage increase in America was 4%, cards still win. I'm not saying these are real numbers but it's a decent estimate considering the average wage is projected to increase by 4% next year. I do not know the 2021 stats but I'm guessing it was far less than 4% since we were in Covid recovery. Many people took pay cuts during Covid which only made it worse. The smart people were into tangibles this year.

I’m not sure you knew what inflation was before this thread as you already assigned it to the domain of “dorks”. What you’re trying to talk about in this thread is beyond the scope of discussion.

And inflation is now at about 7% per year. To help you out, since you have to flip so quickly you don’t have to worry about inflation too much, you have to worry much more about making poor investment choices and about the market declining because of people choosing more prudent purchasing options than cards.

[mfw13]

Originally Posted by ScooterMcRibs

Sports cards are an attractive investment because their returns are not closely correlated to stocks and other assets, and they have shown over time to be a good store of wealth.

I don't think it's quite that simple.

A huge percentage of the value in today's investment-grade cards are tied up in the number on the front of the slab. If attitudes towards grading change, there could be a very sharp correction.

Consider the following hypothetical:

PSA 10 = 10x PSA 9.

Something happens and that premium shrinks....now

PSA 10 = 3x PSA 9

Hypothetically, you've lost 70% of the value of your investment....

Not saying it's gonna happen.....but it is a risk to consider....

There's nothing that says that the premiums currently being paid for PSA 10 cards will remain at current levels.

[rwperu34]

Originally Posted by premium1981

I'm buying all the Gavin Lux base rookie cards I can and super-expressing them to PSA. No where to go but up from here.

I originally thought you might be joking, but somebody is buying up Gavin Lux. He's the biggest gainer since September.

[NatsSBR]

Originally Posted by MoreToppsPlease

Which is also what you’re trying to do by saying 7% is trivial when its obviously not.

This is misconstruing my point. We are not experiencing trivial levels of inflation; rather, inflation is something you deal with regardless of whether you choose to save your cash or to trade in goods/property. This means the real effect of inflation on a slim profit margin is much, much less than you make it out to be when you also apply the inflation rate to the alternatives. I'm fairly sure you're not taking that into consideration.

[rwperu34]

Originally Posted by MoreToppsPlease

I’m assuming you live in South America if you don’t think 7% annual inflation is high. What’s the target inflation rate? What was the inflation rate in the late ‘70s and early ‘80s? It puts todays inflation to shame. And yes it is necessary to always consider it while making purchasing OR investment decisions.

No, I wasn’t analyzing the impact of inflation in a vacuum. Rather rperu and others know I was addressing his price index. Being his analysis is not conducted in real dollars it is not useful except to make it seem like cards in his index are a good investment. Which is also what you’re trying to do by saying 7% is trivial when its obviously not.



I’m not sure you knew what inflation was before this thread as you already assigned it to the domain of “dorks”. What you’re trying to talk about in this thread is beyond the scope of discussion.

And inflation is now at about 7% per year. To help you out, since you have to flip so quickly you don’t have to worry about inflation too much, you have to worry much more about making poor investment choices and about the market declining because of people choosing more prudent purchasing options than cards.

Your first point is total hogwash. When they talk about the Dow or the S&P they say "it is up (or down) by X". Hardy ever do they mention inflation and even then it's only in a deep analysis and over a long time frame.

As for your second point, inflation is not 7%. You are taking the highly volatile month over month inflation rate and extrapolating it out over a year. The actual rise in the price level over the last year is 5%. If you go back two years the inflation rate is a whopping :checks notes: 2.6%.

So the Fed had a miss low in 2020 and a slightly bigger miss high in 2021...over a window of time when productivity was way down. What you are constantly harping about is textbook macro policy.

[rwperu34]

Originally Posted by NatsSBR

This is misconstruing my point. We are not experiencing trivial levels of inflation; rather, inflation is something you deal with regardless of whether you choose to save your cash or to trade in goods/property. This means the real effect of inflation on a slim profit margin is much, much less than you make it out to be when you also apply the inflation rate to the alternatives. I'm fairly sure you're not taking that into consideration.

I don't want to take anything away from your quality point, but I want to get this on record. Inflation of 7% for one year (if that were ever to actually come to fruition) is absolutely trivial and in our current situation is quite beneficial.

In the 21st Century United States inflation itself is never the problem. It is a symptom of the problem. In this case the problem is once in a century pandemic that is crushing the supply chain.

Here's the chart that will let us know when inflation is becoming a problem. Focus on the columns on right hand side;

https://www.treasury.gov/resource-ce...spx?data=yield

[NatsSBR]

Originally Posted by rwperu34

I don't want to take anything away from your quality point, but I want to get this on record. Inflation of 7% for one year (if that were ever to actually come to fruition) is absolutely trivial and in our current situation is quite beneficial.

In the 21st Century United States inflation itself is never the problem. It is a symptom of the problem. In this case the problem is once in a century pandemic that is crushing the supply chain.

Here's the chart that will let us know when inflation is becoming a problem. Focus on the columns on right hand side;

https://www.treasury.gov/resource-ce...spx?data=yield

Fair! I think people can reasonably differ on the question of whether annualized 7% inflation would be trivial, partly because the word is itself open to interpretation, but I fully agree that the inflation we're experiencing is a symptom of the pandemic and has little if anything to do with other factors.

Whatever minor disagreement you and I might have, though, is nothing compared to the analytical error of applying any inflation rate to the price of goods but not the value of the cash spent on them.

[auctionjmm]

Originally Posted by NatsSBR

Fair! I think people can reasonably differ on the question of whether annualized 7% inflation would be trivial, partly because the word is itself open to interpretation, but I fully agree that the inflation we're experiencing is a symptom of the pandemic and has little if anything to do with other factors.

Whatever minor disagreement you and I might have, though, is nothing compared to the analytical error of applying any inflation rate to the price of goods but not the value of the cash spent on them.

It is "beyond the scope of discussion" according to MTP. Wonder why??? Is it the massive holes it puts in his argument?

[lawrencedc1]

Originally Posted by auctionjmm

Bingo. MoreToppsPlease is the ignorant one for thinking the entire world plays according to inflation rules. You know what didn't increase by 6% since November? My salary. How many of us received a 6% raise or higher in the past year? I'm guessing not many. So setting cards aside, most of us are theoretically worse off than we were a year ago. "Theoretically" only because we had options, like buying cards or stocks to preserve what money we did have. Which brings back my original point that inflation is a moot point altogether. I didn't lose money if I sold a $100 card for $106. I preserved money that I otherwise would have lost since my job did not offer me a raise this year and I didn't want to just leave my savings in a bank account.

For arguments sake, if inflation is up 6%, and the card market is up 6%, and the average wage increase in America was 4%, cards still win. I'm not saying these are real numbers but it's a decent estimate considering the average wage is projected to increase by 4% next year. I do not know the 2021 stats but I'm guessing it was far less than 4% since we were in Covid recovery. Many people took pay cuts during Covid which only made it worse. The smart people were into tangibles this year.

Just as an FYI, inflation is not up 6%. The 6% your referencing is based off the CPI numbers that are by most educated economist a farce. Real monetary inflation is running around 14%. The S&P is your best leading indicator for monetary inflation. With that said, if your not beating or keeping up with 14% inflation you are losing, period.

[Thor34]

Originally Posted by tconte

I think Sirius is one of the worst auction houses out there. There customer
service is the worst. I stopped consigning and bidding with them and
hopefully others do to. They have no business being in business imho.
They should step aside for those who put the effort to do things right!

Tell us how you really feel tconte.
For the record, dealing withy Sirius has been a pleasurable experience both on the consigning end and the buying side. Bargains to be had especially on modern.
On the consignment side, the cards are listed in the next bi weekly auction shortly after they are received, my consignments tend to outperform comps, and the payment (by check; unusual but preferred in todays electronic world) is prompt.
Highly recommend.
tconte obviously has an axe to grind. Sirius obviously doesn't fit into his narrow minded view of what suits him.

Back to the thread about a bubble.
Continue.

[pewe]

Originally Posted by lawrencedc1

Just as an FYI, inflation is not up 6%. The 6% your referencing is based off the CPI numbers that are by most educated economist a farce. Real monetary inflation is running around 14%. The S&P is your best leading indicator for monetary inflation. With that said, if your not beating or keeping up with 14% inflation you are losing, period.

Are you recommending an evaluation vs. equity cost of capital? Ie to generate an IRR hurdle for deployment of your sports card investment $$$? If so, academics might argue you’d need more than S&P rate of return… you’d need risk free rate and an asset beta. Or if you are funding through debt, you’d need your after tax interest rate.

Certainly this evaluation is probably influenced by inflation, but only indirectly through its effect on risk free rate and cost of debt.


Sent from my iPhone using Tapatalk

[MiamiMarlinsFan]

The Blowout Tax Professionals are getting feisty here. I love it. I’m pretty sure they’re about to affix bayonets to their calculators!

[k13]

Originally Posted by SearchPatrol

The "inflation" in cards is that every year, more and more cards are printed. Lets say right now 1 Billion cards are currently in circulation. What will that number be in 5 years, ten years or 20 years. Where will the money to buy these cards come from? New money or will people sell current cards for cards not made yet. Only so much money for cards. When the money stays the same but more cards are made, overall prices will go down. That's the problem with all the High end products. Will new money be able to cover all these newer high end products?

99.999% are or will be worthless.

Open a box and see what sells...

[k13]

Originally Posted by Chris P

"If you've been around sports" LOL...not even gonna touch that one. Of course you believe everyone in every sport uses..because you assume the worst i everyone..so everyone gets blanket trearment from you

Everyone in NFL is on steroids including punters yet how many are testing positive?



People are so gullible.

Steroids start in HS and % used gets higher at each level.

[Chris P]

Originally Posted by k13

Everyone in NFL is on steroids including punters yet how many are testing positive?



People are so gullible.

Steroids start in HS and % used gets higher at each level.

Yup there you are throwing out the gullible and sheep insults since that's all you got..you're just the last person I'd believe anything from..you have zero credibility on these forums no matter how much you claim to know about every sport in the world

[JRX]

Originally Posted by Chris P

Yup there you are throwing out the gullible and sheep insults since that's all you got..you're just the last person I'd believe anything from..you have zero credibility on these forums no matter how much you claim to know about every sport in the world

High School kids are most certainly using steroids. Not all, but the use of them is much more mainstream than say 30 years ago. There are whole youtube channels dedicated to this kind of stuff.