Thursday, February 08, 2001
Market analysis, of another kind - trading cards
LOOKING AHEAD by Wally Dobelis
NASDAQ investors, don't worry, your prices will come back. One upturn, and the traders will rush in, looking for bargains, lack of economic value and earnings notwithstanding.
This is what I'm learning from the speculator, excuse me, collector market in trading cards. A friend asked me: "Want to see a $500 baseball card?" It was a special one, produced by the card maker Upper Deck, with a chip of the baseball bat Michael Jordan used while in minors. Yes, the basketball immortal.
This is big business, Upper Deck trading cards have 34,000 listings on Yahoo! Auctions. Topps, the original Bazooka Joe chewing gum maker (from a factory in Brooklyn, started in 1938), has annual revenues of $374 million. It owns Bowman, the earliest modern card company. Fleer, the privately owned Double Bubble gum company started trading cards in 1923 (120 baseball players; so rare that no one knows all the players in this W515 set, Derek Jeeter is the company spokesman) and has never looked back. They now have card contracts with MLB(aseball), NBA, NFL and WNBA.
But the biggest gorilla is Beckett.com, a monthly price guide publisher, with seven magazines for 900,000 readers, covering baseball, football, basketball, hockey, sports collectibles, motorsports, and the latest, Pokemon (300,000 copies). Published by Dr. James Beckett, a statistics professor, it also has a card grading service, an on-line price guide, card auctions and a book publishing house (its annual baseball price guide lists 450,000 items).
The price magazines do not go back to the days of the great Pittsburgh shortstop Honus Wagner, who hated nicotine and in 1909 forbade the card maker of the day to insert his picture in packs of cigarettes (about 50 cards survive, and a mint copy sold for $1.1 million on eBay). Beckett monthly price lists for baseball and football cards start with 1948 Bowman, Leaf and Topps issues, later joined by Fleer (in 1961), Donruss, Upper Deck (1990), Pinnacle, Studio, Stadium Club (1992), Score, Select, Ultra (1993),Finest, Flair, Pacific, Leaf, Pinnacle, Sportflics (1994), Collector's Choice SE, Emotion (1995), Zenith (1996), Sp, Sports Illustrated, SPX, UD3 (1997), Crown Royale, E-X2001, Paramount (1998), and so it goes on.
One would certainly question the rarity and desirability of such masses of cards, but the sports fandom, infused with the thought of making a profit in a market-based environment on non-value items, has no limits. However, the makers have to be inventive, as in the case of Upper Deck and Michael Jordan, who sells whatever he touches (his name should be Magic). After his last game, the floor of the gym was torn up and sawn in small pieces, each included with packs of trading cards sold to the faithful. Everybody made money, and Utah got a new floor .
Old stadiums are valuable, and not only as real estate. On January 6 an auction of Three Rivers Stadium of Pittsburgh fetched over $1 million: home plate was $3,100, bases $1,550, turf pieces $200, stadium seats $875.
Not all souvenirs succeed. Card maker Pacific, sliced up a bat formerly owned by Manny Ramirez the Cleveland outfielder, for added value. When fans found illegal cork particles in the chips inserted in the trading cards, Ramirez claimed that the bat was not his, and Pacific may have lost both the fans' money and faith, depending on whom they believe. Interesting ethics vs. bux problem. Why are Nazi swords valued?
Trading card speculation is fed by stories of speculator successes. Tiger Woods routinely won tounaments in 1999, and his cards climbed to $ 490 range. But, just like equity shares, in the face of some losses they dropped to $427.50. This drop, since the golfer’s card is part of the pit-40 Market Index (the Dow-Jones of trading cards), depressed the entire market. Sounds like stock market analysis? It is meant to be, except that the intrinsic value of a baseball, football etc. card is even less than that of Amazon.com. selling at $16 in January 2001. This action, in a way , shows that there is a floor of the credulousness of the American speculator, er, investor, working on the Greater Fool theory.
Is there a present value of future earnings theory that governs the sports investors? There certainly is. If the athlete is expected to surpass others in earnings, his fan interest increases and therefore the cigarette card value should rise. And vice versa. Tiger Woods beware, the fans have downgraded you by 10.9 percent. Your endorsement fees will curtail. Better save your money. Similarly, an Alex Rodriguez also lost by going to the Rangers, his cards would have really surged if he had accepted the Big Apple job.
More anon, as I learn. This has more market fundamentals than the Beanie Baby rave.
NASDAQ investors, don't worry, your prices will come back. One upturn, and the traders will rush in, looking for bargains, lack of economic value and earnings notwithstanding.
This is what I'm learning from the speculator, excuse me, collector market in trading cards. A friend asked me: "Want to see a $500 baseball card?" It was a special one, produced by the card maker Upper Deck, with a chip of the baseball bat Michael Jordan used while in minors. Yes, the basketball immortal.
This is big business, Upper Deck trading cards have 34,000 listings on Yahoo! Auctions. Topps, the original Bazooka Joe chewing gum maker (from a factory in Brooklyn, started in 1938), has annual revenues of $374 million. It owns Bowman, the earliest modern card company. Fleer, the privately owned Double Bubble gum company started trading cards in 1923 (120 baseball players; so rare that no one knows all the players in this W515 set, Derek Jeeter is the company spokesman) and has never looked back. They now have card contracts with MLB(aseball), NBA, NFL and WNBA.
But the biggest gorilla is Beckett.com, a monthly price guide publisher, with seven magazines for 900,000 readers, covering baseball, football, basketball, hockey, sports collectibles, motorsports, and the latest, Pokemon (300,000 copies). Published by Dr. James Beckett, a statistics professor, it also has a card grading service, an on-line price guide, card auctions and a book publishing house (its annual baseball price guide lists 450,000 items).
The price magazines do not go back to the days of the great Pittsburgh shortstop Honus Wagner, who hated nicotine and in 1909 forbade the card maker of the day to insert his picture in packs of cigarettes (about 50 cards survive, and a mint copy sold for $1.1 million on eBay). Beckett monthly price lists for baseball and football cards start with 1948 Bowman, Leaf and Topps issues, later joined by Fleer (in 1961), Donruss, Upper Deck (1990), Pinnacle, Studio, Stadium Club (1992), Score, Select, Ultra (1993),Finest, Flair, Pacific, Leaf, Pinnacle, Sportflics (1994), Collector's Choice SE, Emotion (1995), Zenith (1996), Sp, Sports Illustrated, SPX, UD3 (1997), Crown Royale, E-X2001, Paramount (1998), and so it goes on.
One would certainly question the rarity and desirability of such masses of cards, but the sports fandom, infused with the thought of making a profit in a market-based environment on non-value items, has no limits. However, the makers have to be inventive, as in the case of Upper Deck and Michael Jordan, who sells whatever he touches (his name should be Magic). After his last game, the floor of the gym was torn up and sawn in small pieces, each included with packs of trading cards sold to the faithful. Everybody made money, and Utah got a new floor .
Old stadiums are valuable, and not only as real estate. On January 6 an auction of Three Rivers Stadium of Pittsburgh fetched over $1 million: home plate was $3,100, bases $1,550, turf pieces $200, stadium seats $875.
Not all souvenirs succeed. Card maker Pacific, sliced up a bat formerly owned by Manny Ramirez the Cleveland outfielder, for added value. When fans found illegal cork particles in the chips inserted in the trading cards, Ramirez claimed that the bat was not his, and Pacific may have lost both the fans' money and faith, depending on whom they believe. Interesting ethics vs. bux problem. Why are Nazi swords valued?
Trading card speculation is fed by stories of speculator successes. Tiger Woods routinely won tounaments in 1999, and his cards climbed to $ 490 range. But, just like equity shares, in the face of some losses they dropped to $427.50. This drop, since the golfer’s card is part of the pit-40 Market Index (the Dow-Jones of trading cards), depressed the entire market. Sounds like stock market analysis? It is meant to be, except that the intrinsic value of a baseball, football etc. card is even less than that of Amazon.com. selling at $16 in January 2001. This action, in a way , shows that there is a floor of the credulousness of the American speculator, er, investor, working on the Greater Fool theory.
Is there a present value of future earnings theory that governs the sports investors? There certainly is. If the athlete is expected to surpass others in earnings, his fan interest increases and therefore the cigarette card value should rise. And vice versa. Tiger Woods beware, the fans have downgraded you by 10.9 percent. Your endorsement fees will curtail. Better save your money. Similarly, an Alex Rodriguez also lost by going to the Rangers, his cards would have really surged if he had accepted the Big Apple job.
More anon, as I learn. This has more market fundamentals than the Beanie Baby rave.
Thursday, February 01, 2001
Scavenging the riches of New York's streets
LOOKING AHEAD by Wally Dobelis
A bunch of us part-time expatriates were sitting on the enclosed deck of a friend's upstate New York house, sipping after-dinner drinks and admiring the room, with its tastefully assembled eclectic furniture. It reminded me of any number of hideaway bistros, most recently Danal, a little French restaurant on E. 10th Street, with its homely atmosphere, where diners sit on 19th century wicker, bentwood and turned wood chairs and equally unmatched tables, facing wall shelves filled with sets of earthenware and porcelan dishes. Our friend's rooms were likewise dripping with charm, all that he was missing were the restaurant's branches of cherry blossoms and the dressmaker's wire mannequin that autheticates its Frenchitude.
Guess what, it turned out that our host had assembled a lot of the artfully arranged furniture and objects directly from the streets of New York, with only a little help from country auctioneers and garage sales. The talk naturally turned to scavenging, the method by which many of us, on one occasion or another, equipped our post-collegiate living quarters. New Yorkers, with their fat pay envelopes and fickle tastes, are notorious discarders of what the rest of the world would consider good gear. Someone remembered a story of assembling a matching set of discarded imitation Marcel Breuer chrome tube chairs, which had notoriously fragile caned seats, replacing the latter with petitpoint over wood-base cushions, and creating a personal style that was snubbed by a visiting critic, in print, either in the New York Times or New York magazine. That reminded someone else of having picked up student art - canvasses, note books, sketches - on a Soho street. The latter, mounted in cheap Kulicke frames, elicited a number of inquiries about the unidentified artist. "You're all now thinking, how come I did not sign some kind of false name to them. Well, I did not, not because I'm too honest for such a prank. I might have enjoyed tricking the world into chasing up a false trail, but I am an accountant, not an arts person, and I have to protect my reputation." The art was eventually lost in storage, depriving the bunch of us amateur detectives of an opportunity for idle speculation.
That brought on my Andy Warhol story. Soon after the artist's death, in 1987, I passed the Union Square block where his latest factory was located, to find a mixed media painting, framed with wooden mouldings and a solid back, leaning against a building. It was a woods scene, in ink over white clay relief, and weighed a ton.
I dragged it home, the white clay ruining a suit in the process, to find that it was not acceptable as decoration, regardless of the prominence of the artist whose name was signed in the corner. Arguing was useless, so I called Christie's auction house, and they agreed, after viewing (this time I took a taxi), to put it into a Post-Impressionist sale. Well, it attracted no bidders, and I had to store it, pending disposal. By this time I was sick of the whole thing, and decided to offer it to museums, as a gift, circulating a photograph. Guess what again, no takers.
Finally, I paid an art gallery $100 to authenticate it and a small institution needing wall art accepted it. I I lugged it over there, to be hung in an obscure spot. When I last visited the location, it was gone, another blow, and I did not have the heart to inquire. So much for gold on the streets.
That was enough for a younger participant, who had listened respectfully until now. He had his new tech contributions to impart, on a more positive note. New York might be a good place for art, but for scavenging computers, video and audio equipment nothing beats a class college town, like New Haven or Cambridge, we were advised. Graduating students, who have to free up their dorm rooms (lower classpeople can put stuff into storage), leave behind not only futon couches, chairs and shelving but also most desirable, high quality stereo sets with heavy speakers, the weightier the better. Books are also easily acquired. We also heard the sad tale of the graduating scholarship student who refused to leave, locked himself in, and the hose master and the resident scholar had to come and gently pry him out of his cherished home away from home.
"How about CDs," the storyteller was challenged, breaking the reverie. The challenger had a story: "This graduating kid was a Kuwaiti, son of a sheik, and did not dare bring back home his collection of degenerate Western music, mostly good rock. He hesitated until it was too late to do anything about the records, except to discard them. I know the guy who picked them up, he ended up with a better rock collection than the campus radio station."
We fell silent, in respect, ther was no topping that story.
As an aside, licensed cartmen and scavengers were the growing 17th century New York City's sanitation system's operators. First sewer was installed in 1703; dumping of non-salvageable refuse in the harbor was curbed in mid 19th century (stopped by the US Supreme Court in 1934!), a Board of Health was created in 1866. There is a whole fascinating story. Later.
A bunch of us part-time expatriates were sitting on the enclosed deck of a friend's upstate New York house, sipping after-dinner drinks and admiring the room, with its tastefully assembled eclectic furniture. It reminded me of any number of hideaway bistros, most recently Danal, a little French restaurant on E. 10th Street, with its homely atmosphere, where diners sit on 19th century wicker, bentwood and turned wood chairs and equally unmatched tables, facing wall shelves filled with sets of earthenware and porcelan dishes. Our friend's rooms were likewise dripping with charm, all that he was missing were the restaurant's branches of cherry blossoms and the dressmaker's wire mannequin that autheticates its Frenchitude.
Guess what, it turned out that our host had assembled a lot of the artfully arranged furniture and objects directly from the streets of New York, with only a little help from country auctioneers and garage sales. The talk naturally turned to scavenging, the method by which many of us, on one occasion or another, equipped our post-collegiate living quarters. New Yorkers, with their fat pay envelopes and fickle tastes, are notorious discarders of what the rest of the world would consider good gear. Someone remembered a story of assembling a matching set of discarded imitation Marcel Breuer chrome tube chairs, which had notoriously fragile caned seats, replacing the latter with petitpoint over wood-base cushions, and creating a personal style that was snubbed by a visiting critic, in print, either in the New York Times or New York magazine. That reminded someone else of having picked up student art - canvasses, note books, sketches - on a Soho street. The latter, mounted in cheap Kulicke frames, elicited a number of inquiries about the unidentified artist. "You're all now thinking, how come I did not sign some kind of false name to them. Well, I did not, not because I'm too honest for such a prank. I might have enjoyed tricking the world into chasing up a false trail, but I am an accountant, not an arts person, and I have to protect my reputation." The art was eventually lost in storage, depriving the bunch of us amateur detectives of an opportunity for idle speculation.
That brought on my Andy Warhol story. Soon after the artist's death, in 1987, I passed the Union Square block where his latest factory was located, to find a mixed media painting, framed with wooden mouldings and a solid back, leaning against a building. It was a woods scene, in ink over white clay relief, and weighed a ton.
I dragged it home, the white clay ruining a suit in the process, to find that it was not acceptable as decoration, regardless of the prominence of the artist whose name was signed in the corner. Arguing was useless, so I called Christie's auction house, and they agreed, after viewing (this time I took a taxi), to put it into a Post-Impressionist sale. Well, it attracted no bidders, and I had to store it, pending disposal. By this time I was sick of the whole thing, and decided to offer it to museums, as a gift, circulating a photograph. Guess what again, no takers.
Finally, I paid an art gallery $100 to authenticate it and a small institution needing wall art accepted it. I I lugged it over there, to be hung in an obscure spot. When I last visited the location, it was gone, another blow, and I did not have the heart to inquire. So much for gold on the streets.
That was enough for a younger participant, who had listened respectfully until now. He had his new tech contributions to impart, on a more positive note. New York might be a good place for art, but for scavenging computers, video and audio equipment nothing beats a class college town, like New Haven or Cambridge, we were advised. Graduating students, who have to free up their dorm rooms (lower classpeople can put stuff into storage), leave behind not only futon couches, chairs and shelving but also most desirable, high quality stereo sets with heavy speakers, the weightier the better. Books are also easily acquired. We also heard the sad tale of the graduating scholarship student who refused to leave, locked himself in, and the hose master and the resident scholar had to come and gently pry him out of his cherished home away from home.
"How about CDs," the storyteller was challenged, breaking the reverie. The challenger had a story: "This graduating kid was a Kuwaiti, son of a sheik, and did not dare bring back home his collection of degenerate Western music, mostly good rock. He hesitated until it was too late to do anything about the records, except to discard them. I know the guy who picked them up, he ended up with a better rock collection than the campus radio station."
We fell silent, in respect, ther was no topping that story.
As an aside, licensed cartmen and scavengers were the growing 17th century New York City's sanitation system's operators. First sewer was installed in 1703; dumping of non-salvageable refuse in the harbor was curbed in mid 19th century (stopped by the US Supreme Court in 1934!), a Board of Health was created in 1866. There is a whole fascinating story. Later.
