Getting Crushed
I looked, and beheld a bear market, and Hell followed with it
When the worm turns and prices drop, nothing is immune. We are getting a first-hand look at that now that the COVID market mania is over and prices are dropping across the board. Accordingly, I present to you a case study of the 1925-31 Postcard-Back Babe Ruth Exhibit. This is a marquee Ruth Exhibit card and not abundant, but it does sell regularly enough to be useful. With the April 2024 REA we had an opportunity to see the exact same example of the card, an SGC 3, sell after it had been sold right about at the height of the market and sold into its decline. I’ll end the suspense—the seller got creamed:
04/02/22: $10,800.00 [Love Of The Game]
04/21/24: $ 6,000.00 [Robert Edward Auctions]
Here are more comps, in chronological order:
04/02/17 SGC 2 $1,560.00 [Love Of The Game]
10/29/17 PSA 5 $3,300.00 [Robert Edward Auctions]
07/20/18 PSA 3 $1,800.00 [Heritage]
11/25/18 SGG 6 $3,900.00 [Love Of The Game]
04/19/20 SGC 4 $3,960.00 [Robert Edward Auctions]
05/11/20 PSA 5 $6,200.00 [eBay]
08/16/20 PSA 4 $5,400.00 [Robert Edward Auctions]
03/20/21 PSA 5 $9,765.60 [Memory Lane]
04/02/22 SGC 3 $10,800.00 [Love Of The Game]
06/02/22 PSA 5 $33,720.00 [Goldin]
08/20/22 SGC 1.5 $9,600.00 [Love Of The Game]
12/04/22 SGC 6 $22,800.00 [Robert Edward Auctions]
07/19/23 PSA 3 $14,400.00 [Goldin]
04/21/24 SGC 3 $ 6,000.00 [Robert Edward Auctions]’
The trend is a good approximation of what happened with the vintage market. A peak in mid-2022, a decline from there, modestly, with continued strength into 2023, and a real decline starting in later 2023. A PSA 3 sold on 07/19/23 for $14,400.00 in Goldin. The REA consignor wasn’t irrational to think he could profit, just late to try it. Vintage is not immune to a downturn, even for a top-notch player like Ruth. The card held value well as money fled from modern and postwar into vintage, but it got hit too once that flight subsided.
Since market timing is impossible, the open questions are what part of the price increase will stick and where the market bottom is. The value gains over the last several years remain strong. The guy who paid $1800 for the PSA 3 in 2018 has more than tripled his money even with the roughly 40% decline since the peak price.
My takeaways from this are: (1) if you bought a card really well, you have to watch for anomalous price spikes and when an anomalous price spike occurs, you have to sell into it, and (2) if you made the mistake of buying into a card at or near the top of a price spike, consider getting out if the comps keep dropping. Most important of all, if you want to feel like way less of an idiot with your losses, just think of the guy with more money than brains who paid $738,000.00 for a PSA 10 Jordan that sells for about $160,000.00 now. I might have lost a downpayment on a condo in Kona on one card purchase in the pandemic, but he lost the whole friggin’ building on the Jordan.