Good Times; Bad Times: Have we now had our share?

BrookIsland

BrookIsland

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With 20-21 SPA now finally being released in the next few weeks, I'm again wondering whether we're getting close to some form of major correction in wax...

My pre-order price is up nearly 350% from 19-20 as offered from some of my favorite CDDs while the contents per box have changed to include not one of the /999 FWA but one of EITHER a /999 and/or one /99 or /399 Retro FW (which, at least in my view, is an inferior card on its face to the /999).

I don't know how you feel, but this feels like a materially worse value proposition for sealed wax buyers year-on-year.

I totally understand UD's perspective in this - skyrocketing distribution costs, inflation, labor costs, other fixed cost increases, securing scarce printing capacity, (materially?) increased licensing costs, etc. - so in no way whatsoever is this a gripe about UD. They almost certainly have no choice in the matter to avoid prices getting even higher per box...

That said, I don't know how a rational person can justify a 350% increase in cost where the box value is almost certainly lower.

Given the CPI changes, the Fed's 75 bps move from earlier this week in rates, what's happened in crypto (i.e., devastation!), what I fear may happen in other asset classes etc. (aside from some of the petro-commodity markets), it would seem like there are many, many macro-economic forces which should really be pushing prices down.

But that's not what we're seeing.

I would expect that 20-21 Cup when it does release will see similar staggering increases in cost with a similar (and totally understandable) reduction in value.

For me at least, this doesn't feel sustainable and ultimately worries me about macro trends in the hobby market which could result in a bit longer of boom times followed by some real hard times. Whether another version of the 1990s or something altogether different, hard to see how there might not be some form of (maybe major) correction.

Btw - I totally get the role that breakers and a changing distribution paradigm are doing in contributing to this, but that too doesn't feel sustainable (at least not to me).

Interested to hear what you all think.

On a personal note, this really bums me out as I *love* cracking sealed wax and making sets but the value proposition just is not there - my cards aren't worth 3.5X what they were (with some crazy - probably short-lived - exceptions).

(Finally--Just to state again: this is in no shape or form intended to be, nor should it devolve into, any form of assault/condemnation of UD. I honestly think they are doing their very best.)
 
The apprehension was definitely in the air at expo. I also heard from more than a few wax dealers gobsmacked by the current prices of wax, followed by declamations of the lack of a sterling prospect class to support those prices: Zegras, while impressive, is not McDavid.

I think we're in for a massive correction on multiple fronts. I suspect blue-chip players will see more modest pullback - perhaps 10-15% - while the more speculative class of players will see much more severe price drops.

Just my thoughts. This is entirely unsupported by hard data as such.
 
UD did at least one thing right, so far, the quality seems much better in UD2 than in UD1.

For products like SPA, in my opinion, it was a big gamble at 160Cad, at 300+ it's an easy pass.

There are still some products offering decent value, like OPC. Also, OPC Platinum blasters from the black friday sale were very fun. I'm not a big fan of the price increase and increased production for OPC Platinum hobby. Also, every year I open at least one box of SP retail, it's affordable, the cards are nice and I love the SPs /1199.

For me, hockey cards are a hobby, not an investment. In the past couple of years, I bought close to zero singles, and I've been very picky on my boxes purchases. A downturn in wax prices would be welcomed for me.
 
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Hockey will see a delay in what every other sport is going through since it was pretty much last to blow up. I have given up on wax LOOOOONG ago. Doubling the price of a box and making the odds longer isn't something I'm interested in.

That being said, anyone that has bought into other people's BULLSH*T and bought into high pop cards of star players, get rid of those while you can. Anyone else here that has asked me for advice have MINIMALLY gotten that from me...don't buy high pop. Those are already tanking on the baseball side (Ronald Acuna's flagship Update is sitting at 20,829 with people having paid as high as $300 for that card and is now selling for as low as $70 and he's one of the hottest players in baseball right now).

Lots of market correction coming, folks. Don't get left holding the bag.
 
SP Authentic at a dollar over $125 US is a blatant crime.yeah.i get all the hubbub of 'supply chain issues',short handed factories,inflation etc. bottom line is as a consumer i wouldn't touch it with free money.
i break alot of wax,for my personal hobby desires. this past year or so stretch of blatant crime family tactics used by the distribution sector of the hobby has not and will not get my wallet open.i haven't touched Black Diamond,Ultimate,Premier or Metal(save for the odd retail blasters) at all,and being a Rangers fan i was truly looking forward to this years offerings, being a well seasoned hobby veteran i just knew better.
i take pride in being a Hockey collector. i always felt that our community were the outliers,we don't buy into the 'shiny" aspect of gotta have it now and flip it instantaneously mindset that permeated the other three Sports.it crept into our neck of the hobby woods this year, personally i held it out.i binged on O Pee Chee and MVP at its non inflated prices.i held out for the flagship Series 1&2to come down from obvious gouging of $150 to a reasonable $95 per box and then began my purchasing. we all have the power to say no.let the "noobs" from the other sports who came into our sport with deep pockets buy all the over priced wax they want,when the day is done i'll be just fine sorting through my MVP Mascots set.
the market correction is already starting in my neck of the woods.i can get Metal for $150 a hobby box now,down from $375.Stature hit the shelves at $180 and within a week it was $150,i waited for $130 and then i bought.the National is in Atlantic City in about a month.i'll be going for the first time in 20 years.i am curious to see what the hobby looks like a month from now.
 
I truly feel that the over-heated market is in for a big correction - cheap / free money fueled this huge uptick - and the correction with be larger than the stock markets.

Too many kids / adults walking around the Expo with cards that they think have a value of $10K and more.

Wax prices will not be sustainable, and distributors are likely not going to be able to with-hold the quantity they have been, hoping to get retail prices for the second round.

The hobby has been removed from the hobby - everyone thinks they are in it as a business - which has fueled a a tremendous expansion of the underground economy. Note that in Canada - CRA has forged an new reporting relationship with eBay, something the IRS did several years ago in the USA. Going to force a whole lot of people who claim that they sell to support their collection - into being set up as a business, or stop selling on online platforms. Would not be surprised to see show promoters being required to ensure that dealers have HST registration #'s before being allowed in (something that back in the day the Province of Ontario did when they walked the room and asked for your vendors permit - and if you didn't have one - they gave you the paperwork to fill out and remit). Oh - what a level playing field would look like LOL.

What has happened to the collector being a collector who collects what they like for the sake of collecting, not trying to cash in on the next hot thing.

And to top it all off - let's have the discussion about the subjective value of grading (totally unregulated) and one of the most inconsistent industries around - whose fees are based on grade / value - wow - is that not a conflict of interest - higher the grade - higher the fee. Anyone every wonder about the rarity of a 10 - not rare anymore. And value - how can a young gun for example with 3,000 plus PSA 10's be considered rare and command such a premium. So much hype - one has to wonder how these prices will be sustainable as money becomes more expensive, loans are called, and the crypto and stock markets go through major corrections. Needless to say - I do not sell graded cards - sell them as they come out of the pack - and fully believe in risk transference - if you buy a card from me and you get a 10 - you hit a home run - then you deserve the increase in perceived value for your investment in grading

Wax prices will have to fall, as well as that of graded cards - expect to see a smaller decline in the ungraded rookie market (BTW - this only applies to non-vintage - pre 1980 as these older items are likely to maintain their value) - just my thoughts.

Thanks for reading my rant. Hope everyone has a great day - and lets see collecting come back for the sake of collecting.
 
The boom was fun. I did a ton of consolidating into nicer cards and cashed out thousands along the way for home improvements and necessities for the kids. There are some cards I wish I didn’t sell but others I’m glad I got when I did. On the whole the quality of my collection improved and I was able to pull some money out for the family so I’m happy.

I also gained a ton of new perspective from the quality hobby content that’s out there now and it’ll influence my collecting moving forward. But on the flip side there is a lot of crappy investor/influencer driven content out there now that only cares about buy/sell/flip and gives a lot of bad advice that sets people up to fail (see Ryan’s comments about pumping high pop base crap that had no chance of sustaining). It’s sad to see and will only end up causing followers to lose piles of money and leave the hobby.

Long term I think the hobby will be very strong. Stronger than pre-boom but also not at the peak boom 2021 type level. Somewhere in the middle. Fanatics plans to market the hobby bigtime in the coming years and that should help a lot. We’re also sliding into an economic recession that is playing a role in this correction. It may look like card markets are crashing because the hobby is losing steam but I don’t think it’s the only factor. All sorts of markets are plummeting right now and cards will be no exception. But it doesn’t mean the hobby isn’t strong or won’t be strong once we come out of it. Just another ebb and flow situation. Things that need to correct will correct (high wax prices, values of cards with pops that are way too high, etc) and the actual rare and desirable stuff (high end patch autos, low numbered copies of popular inserts that are very hard to find, and so on) will hold value much better.

If anything I want to see prices come down even more on the cards I want but so far it seems like they’re still going up. I guess that could mean I’m chasing the “right” cards? lol. But whatever happens I’m perfectly fine collecting cheap jersey cards and autos like I always have. Boom or bust I’m not going anywhere.
 
Massive amounts of pandemic stimulus fuelled price booms across ALL asset classes:stocks, bonds, real estate, crypto — but especially among trading cards, where higher incomes, combined with more leisure time, caused an explosion in demand, resulting in much higher prices.

You know we were living through extraordinary times when the unemployment rate more than doubled, yet overall household income continued to RISE thanks to overly generous fiscal support.

In the past we’d see one or two asset classes become overvalued (let’s just call it a “bubble”), and when the bubble burst the money would flow towards an undervalued asset class. For example, when the tech stock bubble burst in 2000, we started to see a lot of money flow to real estate.

Now, however, there’s no obvious undervalued asset class out there, so we’re seeing a lot of funds taken out of markets and being held as cash. This explains record-high savings.

So as central banks continue to increase interest rates to fight inflation — thereby increasing the probability of a recession — we can expect investors to remain cautious in the coming months. Looking into my crystal ball, we have about 6 more months of rising interest rates followed by a “standard” recession in 2023 (i.e. one without a credit crisis) — although it could be worse in Canada than the U.S., since Canadian housing prices will likely suffer a relatively higher correction.

Markets will start seeing through this, so expect asset prices to start rebounding before the recession hits. Central bank language will provide markets the proper cues for a rebound.

So how does this impact trading cards?

At the macro level, many “investors” will be spooked as prices drop due to more cards flooding the secondary market. So expect a correction, which is already underway. Those investors will not necessarily return to the trading card market — they’ll just put their money in whatever market offers the potential for highest returns, which could be tulip bulbs for all we know.

At the micro level, the price correction hasn’t yet hit new releases, since these tend to lag the secondary market by a year or two. As many have noted, prices of new products this year have gone up a lot, but I would fully expect them to cool down in 2023.

We might also see some sets permanently discontinued as overall demand slows. There are just too many high-end sets out there relative to the number of collectors with the resources to buy them (i.e. boomers and the 50+ crowd, who are hitting the point in their lives where they are likely to unload large chunks of their collections.) There are only so many people willing to pay $500 for a box of cards that has an expected value of only $100.

But unlike some other markets (hello, crypto) the trading card market is supported by hardcore collectors, so the good news is that cards do have a price floor. The Beckett price guide is actually pretty reasonable in that regard, so that card you think is worth $200 may only fetch a price of $40 once all the speculators leave the market.

Other piece of good news: Don’t expect the cards market to collapse as much as it did in the 1990s. There is (thankfully) some scarcity built into many cards (i.e. they’re numbered to 30 instead of 3,000), and as an asset class cards are more liquid today than they were 30 years ago (thank you, Internet). Both of these features will prevent a total price collapse.
 
I went from buying 2 cases of SPA 5 years ago to not even buying a single box last year. And the only S1 and S2 I buy now is from epack where the release price is reasonable and the price per box never increases.

I will never forget when a LCS raised the box price while I was standing at the register to pay for it. This type of greed is sickening.
 
junyab said:
I will never forget when a LCS raised the box price while I was standing at the register to pay for it. This type of greed is sickening.
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Had this exact experience with an unnamed shop on Long Island after I'd called first and confirmed the price. Definitely a sell signal and this was four years ago for 16-17 SPA!

Things are definitely in a tenuous spot -

ssinger, the point you raise about tax fairness and grading conflicts are very good ones. There's also the grey market around non sanctioned breakers who seem to have an unending supply of unopened wax when the CDDs cannot get any...all of which feels like shenanigans (and another sell signal).

Really interesting to read your views, all - thank you for your posts and insights.
 
Yet product is still being broken en masse and great cards can still be found on eBay and COMC for two bucks.

Yes Trevor Zegras is no McDavid but he's very skilled and will sell tickets and is building a fan base. Can someone explain to me the prices being asked/paid for Cole Caufield rookies?
 
odjickfan said:
The FWA auto checklist was much shorter back in the days. The SOTTs were 1 per box, there were many solid veteran pulls.
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It must be getting harder to fill out an autograph set with big name players. A lot of the young superstar caliber players don’t sign nearly as much as they used to. When Sid and Ovie and that generation were younger you’d see them in tons of sets signing print runs up to a 100 and maybe more. The McDavid, Matthews tier stars of today you’d be lucky to see a print run of 25 on something. And when they’re in unnumbered sets they’re almost always Group A short prints with the longest odds to pull. And now it seems Ovie doesn’t sign much at all anymore and Crosby has cut back to the short print runs as well. Either their prices are getting too high per auto to be worthwhile or its just not worth their time to sign thousands of cards anymore. Either way I feel it’s only going to get tougher to get autos of the real top tier players.
 
Hata said:
Montreal Canadiens prospect and 1st round pick.
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So were Alex Galchenyuk and Jesperi Kotkaniemi :|

Not saying he's not a great young player. But is he a franchise guy worthy of current prices? Trying to trade for Caufield on e-pack right now is near impossible. Collectors are holding on to them hoping for ....?

I relate this to the OPs point of skyrocketing wax prices ... collectors are paying those prices for 21-22 products because they think they're getting value with rookies like Caufield, Zegras, Raymond, Seider, Knight, Drysdale, etc.) Great players. But like Quincy says, no McDavids in that group. (or Matthews or Makar or Kaprizov for that matter)
 
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For a lot of cards, the landing will be hard.. This will spook a lot of "investor" types away from cards.

But, as always, collectors will come out on the other side better than ever.
 
BrookIsland said:
Can you explain a bit more why you feel that way? I tend to think the opposite but wondering why just to understand the other side here.
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I think he means “true” collectors will find cards coming back into an affordable price range once the investors have bailed
 

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