Taking My Hacks

Weathering the Storm

Joe Orlando


As consumers continue to wrestle with economic fears and the government tries to avoid disaster, the hobby keeps plugging along. While there's no question that a poor economy of this magnitude will impact the collectibles business, there's also no question that our market has performed relatively well in comparison to most other traditional forms of investment.

As an example, my 401(k) has been annihilated in the last few months. I continue to hear from friends and acquaintances, each of them telling me how their stock portfolio has been destroyed. In addition, we all know how bad the real estate market has been. I know my home isn't worth nearly as much as it was just a year or so ago. I am sure many of your investments have suffered a similar fate.

Beyond the sheer decrease in value, the current volatility has made things even worse. One day, the Dow is up 300 points, then it's down 500 points, then it's up again only to crash the next day. It's like the entire stock market is on roller skates, no solid footing whatsoever. This does not help to soothe the fragile minds of people who have lost confidence in the system.

With all of this going on, how drastically has the collectibles market been affected?

At the high-end of the market, you would hardly know we were in a recession. Tangibles tend to perform very well during times like these and high-end memorabilia is no exception. There have been several major auctions that have closed during the last few months and, overall, great items continue to generate great prices.

The middle of the market has shown some signs of softening but... and here's the key... it's nothing compared to what's happening elsewhere. On items that are solid but attainable like a Mickey Mantle signed baseball or cards from the 1960s graded PSA NM-MT 8, you may have seen a slight decline. Compare that with losing 50% of your 401(k). There is no question that it would have been safer to have my 401(k) funds invested in Babe Ruth autographs or vintage football rookies in PSA 8s than in stocks before things went south.

The bottom of the market is probably affected most because, as they say, junk is junk. Items that are mass produced, have limited appeal or ones that are a product of a fad are extremely vulnerable in both good and bad markets. They also say that one man's trash is another man's treasure but I think you get the point.

People can laugh at our hobby and financial advisors may scoff at the idea of taking this seriously but the reality is that quality collectibles have shown the ability to weather economic storms better than many of the so-called traditional forms of investment. All you have to do is check historical data to see the evidence.

I have said it before and I will say it again. The advantage certain collectibles have versus stocks, real estate and such is the emotional attachment. Collecting is a vice for many people and, while the average person may have to curtail their spending, that vice is an escape that these same people use to forget about the world around them. It's hard to simply shut that desire down.

So, maybe a 1956 Topps Mickey Mantle in PSA 8 sold for $2,500 instead of $2,800 in recent months.

So what? Let's get real. So far, things aren't so bad. The hobby will weather the storm and, hopefully, come back stronger than ever.

Never get cheated,

Joe Orlando

Joe Orlando
Editor In Chief