Collectors vs. Speculators; When Fights Break Out

On Wednesday of this week, a fight broke out over trading cards in a Milwaukee, Target parking lot. The police came. People were arrested. Target is no longer carrying trading cards.

As Washington Post writer David Bogage puts it in his article, “‘Collectibles versus commodities’: “As Target halts sales of trading cards, collectors reckon with fast-changing hobby:”

The baseball card industry — a blanket term for all trading cards, including popular game and collection brands Pokémon and Yu-Gi-Oh — has exploded during the pandemic, according to aficionados, as people reengage with old habits, and many face financial pressures…Demand at retail establishments, especially big-box stores, has swelled, collectors say, as enterprising card “flippers” descend on stores, purchase their inventories and resell them at sometimes four or five times their retail price online,

It creates a sense of nostalgia and wonder that in this time of NFT’s, a 2 1/2″ x 3 1/2″ piece of cardboard can wreak havoc and create mayhem. I guess its just another day in the time of Covid.

Many of us remember the baseball card bubble and subsequent crash of the 1990s. Some collectors realized that collector cards had value and began buying and selling for profit. Speculators finally jumped in, and prices went through the roof. And then, of course, with collector crazes of this nature, true collectors and kids slowly got priced out of the market, and values ultimately crashed. People who invested in baseball cards as a way of paying for a child’s college education found themselves holding on to cardboard that was worth pennies.

What happened? As an answer, I like this quote from “The Great Baseball Card Bubble” by Dave Jamieson:”

“Try to make a living in this hobby and you’ll learn about … deceit, unfair business practices, the lack of truth in advertising, price manipulation, collusion, restraint of trade, insider trading, patronage, extortion, payoffs and bribes, graft, plagiarism and, last but not least, hype.”

Read the above, and you can understand why true collectors hate speculators. Speculators distort their hobby and price them out of their enjoyment

I am, however, surprised that Target chose to cease carrying the cards. After all, many of us can recall people getting into fistfights over Cabbage Patch dolls, and the retailers just bought more.

Things will calm down, the bubble will burst, and collector cards will go back to being just another product category. In the meantime, lock them up (the cards and the people who fight over them.)

2 thoughts

  1. Supply and demand. While modern card companies like Panini are suspected of increasing runs of their most popular product to meet demand, even taking their hobby-only brand Select and making a retail version (HUGE mistake in the eyes of most collectors and dealers), they balance it with “color” cards in fixed print runs, which was not done in the early 90s when the market crashed. So while the market for base cards may be at some risk of shrinking due to the supply, there will always be a strong market for these limited run cards.

    Next the advent of card grading, namely by PSA and BGS, has created a platform which all collectors agree drive value of individual cards, parsing the supply into categories of condition and corresponding value. With a PSA 10 commanding 3-5x value of a PSA 9, and the number of PSA 9s to PSA 10s on an average card running at about an equal multiplier, this is instantly impactful to helping control the supply.

    Additionally, the entrance of investors, funds, frational ownership platforms and a more pervasive, educated position of cards as a legitimate alternative investment will support the higher-end market. Those who flip, speculate on rookies and buy base cards in bulk are risking the most. Those buying vintage all-stars, modern blue chip players, super-short-print numbered cards and cards which are known to be harder to grade high will see their investments stand and grow. This is not the 90s – we’re not going back there.

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