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WorthPoint – Discover Your Hidden Wealth

WorthPoint – Discover Your Hidden Wealth

The grading of sports cards has become a widely accepted method for verifying a card’s condition and authenticity. Grading was first introduced to the hobby in 1991 by Professional Sports Authenticator (PSA) of Newport Beach, Calif. PSA is a company spun off from Professional Coin Grading Service. It was first thought having an independent firm grading sports cards would do more damage to the hobby than help. However, by now, many have found it to be the basis for trading all sports cards of value.

To grade a card, you send it to a third-party company for authentication and state its condition. This company does not buy or sell cards as a business and is independent and credible.

Grading has many aspects. If any type of alteration to a card is evident, the card will be either rejected or placed in a holder without a number grade. In the second case, it will be noted that while authentic, there is “evidence of trimming,” that it has been “altered” or something similar. Unlike other hobbies, where cleaning or restoration of the collectible is widely accepted, in the sports card area, there is no allowance for any type of modification to a card. It must be exactly as issued to be graded.

The sports card industry has four accepted grading companies and in order of recognition, are usually ranked PSA first, then Sportscard Guaranty (SGC), Global Authentication Inc. (GAI) and Beckett. All are independent companies that strictly grade and authenticate sports cards, other types of cards and sports memorabilia. PSA is the oldest and most widely known. They are experts in all areas of the field, but it is SGC that is widely recognized for its special expertise in 19th-century cards and collectibles. This isn’t saying the other companies aren’t good, but SGC is considered by many to be the most knowledgeable in 19th-century material. Beckett is popular for grading newer (1980-present) sports cards, and GAI is very reputable in all areas.

These companies vary in their philosophy, history and approach. PSA was the first on the market. Many people collect just PSA cards, so the company has that edge. Beckett was the first to use true half-point grading ranging from 1-10 and is one of the last to enter the grading market. New card collectors seem to like the half-point grading. SGC uses a 1-100 scale that is equal to the half-point system, though I just feel it took people a while to get use to that system, thus giving Beckett the edge in new-card gradings. PSA, because of its longevity, and GAI have strong expertise in pre-1969 cards. To go one further, if choosing 19th-century cards, SGC would be first, PSA second, GAI third and Beckett fourth.

Grading a card can add great value to your collectible. At first, most people assume that one would grade just the star players, such as Mickey Mantle, Babe Ruth, Ty Cobb and so on, but there is great potential for grading the common players in each set, too. Each of these companies have what they call a set registry. Collectors can register their sets and compete against others for top spots (highest-graded cards) in each year. Card sets have been produced since the late 1800s, so collecting everything would be extremely expensive. Some collectors pick a year and set out to get the best card in that set.

How does grading increase sports card value?

You may ask how can a card increase significantly if graded? Well, with all the online auctions, major auction houses and very strong prices of rare sports memorabilia and cards, third-party grading gives buyers confidence that they are getting what they are paying for. I notice a significant difference in prices realized when selling a graded card in comparison to a similar ungraded card. The reason, I think, for grading midgrade cards is that cards on a 1-10 scale will grade 3-6 because a buyer doesn’t have the card in front of him or her when bidding. But if the card is graded a 5 by a reputable company, the bidder would know what to expect condition wise and be confident there are no hidden faults with the card. In other words, peace of mind is usually why cards in these grades bring higher money at auction.

Meanwhile, for cards graded 7-9, especially 8s and 9s of cards pre-1969, the card grade adds value in that the buyers know they are not only getting a high-quality card, they are also buying cards that are considered investment grade and have potential to increase in value.

Cards graded 9 and 10 bring top prices because they are usually the best of the best and the population (another factor in prices) is very low. The population is the number of cards in a particular grade in comparison to all the cards being graded. One example is if there are 2,000 of a certain card graded, and there are 3 graded 9 and 2 graded 10 and the rest are 8.5 and lower. When a 9 goes up for auction, it is not only being sought after by investors, but by people seeking to get the highest graded for their set in that year.

Ultimately, though, it comes down to supply and demand. I have seen common players from 1955 (and many other years) that would have a value of $15 if not graded, sell for as high as $4,000 graded as a 9 or 10. It isn’t because the producer made fewer such cards, it is just because getting one in a high grade is very difficult.

The most popular example of this I can use is a 1952 Topps Andy Pafko, card #1. Usually cards #1 and the last card of a set are tough to find in good condition because they are damaged from being on the top or bottom of a pile, have rubber-band marks and so forth. This particular card is worth about $500 in midgrade condition, and if graded up to the equivalent of a 4.5 grade, would sell for about the same price of $500. It’s when you get into high-grade examples that the price soars. Recently, this particular card graded an 8 sold for $81,000. It is a tough card in high grade, and set collectors along with investors are aggressively after it.

There are many cards that sell for 20-100 times their value when graded and in high grade. I could list hundreds of cards, but the main factors in determining high values for cards of players that aren’t major stars is the population of the card in the grade desired, along with the number of people collecting that set or player. You can have a very low-population card in high grade that won’t necessarily get a very high price if the set the card is from is one that is not popular with collectors. In that case, even though there is a low supply, there is just as low, if not lower, demand for it.

Again, while many star players in high grade bring high prices, it isn’t just the major stars that are increased in value by grading. The same is true for many common player cards. As with all hobbies and investments, investing in sports cards should be thoroughly researched before jumping in with two feet. Pick the areas of collecting and having your cards graded that suit your needs and desires.

Grading has many variables

To sum it all up, grading has many variables—the card, population of the card once graded and credibility of the grading company. I am not saying any one company is better than any other. Still, overall results show that if you take a pre-1970 card in the same grade but in the four different holders, chances are the PSA would get the highest price, SGC second highest, GAI third and Beckett fourth. Meanwhile, on post-1970 cards, it would be a close call between PSA and Beckett for top prices, SGC would be next and GAI last. I think this is just a matter of grader preference.

I have included pictures of miscellaneous cards that have been graded by the top four grading companies so that you can see what they look like in the various holders. There are more than these four companies, but the value of other companies’ high grades in comparison to these vary greatly. These four are considered the most credible companies in the industry. So saving a couple bucks and getting cards graded elsewhere will reflect greatly on the prices you can realize.

I noted the ratings by era not to confuse people but to show the different types of collectors and their preferences. This is an arbitrary rating, but I feel most would agree with the order I placed them by era.

While grading your cards can greatly increase your collection value and give it much more appeal to a potential buyer, it can also be very costly if you don’t get the grades you expect. So as noted above, proceed with caution, and always consult a professional for assistance so you don’t end up spending money on grading and not get any benefit from the service.

1. Most everybody wants perfection, but few have the bucks to pursue it.

2. There are grading guides for almost anything a person collects.

3. Things change and with it so does desirability and demand.

Beginning in 1993, I witnessed a rapid escalation of prices for collectible American-made fishing lures, which lasted approximately nine years. The more perfect the lure, the higher the price paid. With the escalating prices came the dark side. People tried to “create” perfection, to improve on what they wanted to sell the unsuspecting by altering the lure, or creating it by outright forgery. I guess that is inevitable with all collecting. Even though there are a few narrow levels of collectibles that still may have not peaked, in general, the bottom slowly fell out of the fishing collectible basket towards the end of 2001.

When you have a marketplace that isn’t as robust as it once was, a whole new spin on what constitutes value for condition comes alive. With lures, the grading standards that were used by most of us broke down everything into specific grades including: Mint, Excellent, Very Good, Good, Average, Fair, and Poor. These were effective and may still be, but I think they are primarily, though not exclusively, used for dealers when purchasing.

The more choices, the more chances of a buyer to nit pick. Furthermore, because there are so many “common” (low in value and in condition) lures out there, most dealers and advanced collectors just aren’t that interested. It is just too costly and unprofitable to inventory, catalog, and sell these items.

Even though the economy was beginning to change before 9/11(the Japanese had major economic problems and we had our fair share begin too), after that day the deterioration of the fishing collectible market intensified. People just weren’t as anxious to spend stupid money on just any item. I mention the Japanese, since they were very much involved in American made fishing collectibles beginning in the mid 90’s, as their economy declined so did their purchasing power, which negatively affected prices.

At the same time as prices were escalating, many U.S. collectors were willing to pay ridiculous amounts for items that weren’t in the best of shape. These folks probably weren’t concerned with (or weren’t aware of ) adulterations. At fishing tackle conventions, dealers would stock pile “stuff” and price it outrageously knowing that the Japanese, or those of us “who just had to have that special lure”, would buy it. With escalating prices, the influence of E-bay, and later even the Antique Road Show phenomena, fishing tackle began to come out of the woodwork.

There was more reference materials available to everyone and consequently everyone, theoretically, could become an “expert” The adage, ”a little bit of knowledge is dangerous,” became a reality. At garage sales, antique malls and flea markets there were more and more tackle collectors and sellers plus there were always the new converts. Well, the “Perfect Storm” was born. All of a sudden, in a changing economy, there was way to much supply and way to little demand at those high prices. Those dealers and collectors who didn’t adjust prices to the marketplace were left with the same items show after show or list after list. Ah, and, what items were they left with? Tons of the over graded ”middle” ground product and especially junk. What do I mean “middle ground”?

The “middle ground” is a lure in no better than Excellent condition and valued under $1,000. What do I mean by “junk”? Junk, common baits (lures), in horrible condition. What do I mean by over graded? Well, in a rapidly rising market, people aren’t as particular or as critical with the condition, they just “have to have it”, but in a falling market, everyone is more critical and grades tighten up; nothing seems to “slide on by” Looking at auctions prices realized (prices actually paid) I just don’t see that pricing differentials matter much when dealing with lower graded items. Those items aren’t going to sell unless they are sold inexpensively.

I think the following represents a more practical way to look at grading lures:

1.) When I sell an item, I never use the mint word, even if it is. I like to generalize it as Excellent to Excellent Plus (EX/EX+), which means it is new, apparently un-fished, and may approach perfection, or even be there; or then again it may have a tiny imperfection that someone may detect.

2.) Excellent (EX), would still mean an item with very minor flaws or defects and still an attractive item.

3.) Excellent to Excellent Minus (EX/EX-), a ‘tweener grade, it is neither good enough to be EX nor bad enough to be VG. The lure would have a few more problems such as more prominent age lines, pointers, varnish flakes, or other minor flaws.

4.) Very Good to Good (VG/G), it has age lines, minor problems, some minor paint chipping or paint cracking, minor hardware problems but better than just an example and could even have a minor paint touch up.

5.) Fair/Poor (F/P), would imply substantial problems with paint loss, chipping and defects. There also may be some parts loss, paint touch ups, and worm burns (the chemicals in plastic worms will dissolve the paint on lures).

6.) Finally, Example, a grade that includes major paint loss and hardware replacement or the lure could have been completely repainted.

All these grades are affected to the positive side with the addition of an original box and/or paperwork (box inserts). In some cases the box or paperwork can be more valuable than the lure since most were thrown away. The condition of the original box and paperwork are as equally important as the condition of the lure. Today there seems to be a lot of demand for this combination of lure in the correct box with the original paperwork, especially if all these elements are in EX/EX+.

My advice, be careful and know what you are buying or selling. Things change and with it so does desirability and demand. Just because a lure is rare, it doesn’t mean that it is valuable; it’s the condition!