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www.AAWOW.com's SPORTS
COLLECTIBLES INSIDER REPORT vol. 23
Hello Everyone!
If you did not receive our prior newsletters and would like them
please
email us at aawow@aol.com and we
will get them right to you.
HERE's THE LATEST
C 2001 JON B PEARLSTONE CONSULTING, Inc--ALL RIGHTS RESERVED
NOTE: This information is for educational purposes only and
SHOULD NOT BE
USED AS A BASIS for an investment of ANY kind. Readers are
encouraged to
verify all information contained herein and for their own conclusions
after
thorough analysis on their own! This information is copyrighted
and HIGHLY
confidential and any copying or verbal representations of this
information
is STRICTLY PROHIBITED!
HERE'S WHAT'S IN THIS YEAR END ISSUE
1. WHERE HAVE WE BEEN?
2. WHAT'S GOING ON IN SPORTSCARDS
3. TIGER WOODS - DEAD?
4. WHAT YOU SHOULD DO NOW-DO YOU EVEN CARE?
1) WHERE HAVE WE BEEN?
We really haven't gone anywhre is the short answer. However, we did
step back from writing so frequently in a very volatile marketplace
because we were not convinced our input would be meaningful
(translated: we had no idea what to expect in this market either).
That's part of the story, we have also been REALLY really
busy, and not having much fun either. We opened our retail store in
late August. This is generally a slow time of year but we were
looking forward to a pick up in business when everyone returned from
their Summer Vacations. Well, Summer vacations certainly ended but
needless to say with the events of September business has not been
booming.
Meanwhile, we have watched as the sportscard market has been turned
upside down and the tremendous cash flow needs we have forced us to
spend a LOT of time moving large lots of cards to dealers and through
the internet auction curcuit in the hopes of covering our ever growing
overhead expenses.
We think you can agree that could keep most large companies busy for a
few months and needless to say, AAWOW is no Microsoft, but here we are
again hoping to close out the year with a report that puts the last
few months of this year into some perspective for our readers! Or
for those who disagree it provides a few more pieces of kindling for
the Christmas fire. In either case please read on!
2) WHAT'S GOING ON IN SPORTSCARDS
As the great song goes--- "What a long, strange trip it's
been". When we last wrote to our readers a few months ago,
There was still a World Trade Center, The Yankees were still World
Champions every year, and Tiger Woods was still expected to win every
tournament.
Things have changed.
And while we could easily justify it, it would be the easy way out to
say only outside and economic influences have changed the
sportscard market. MAJOR changes in the production of Golf cards via
Upper Deck, changes in the marketing philosophy of major distributors
and some activities that border on fraud (to put it nicely) have
dramatically effected the values of high end sportscards.
Here's our take on the situation.
First of all, we truly believe there are a LOT of people out there who
LIKE to spend a LOT of money on sportscards. It is a way of investing
in our idols, it can be profitable if you choose the right card(s),
and it's a heck of a lot more fun when your card shows up for you to
enjoy and display than any stock certificate you might have received
in the mail.
We say this because we believe a MAJOR fundamental shift in the market
that had an impact on card values was the issuance of the Upper Deck
Golf Card Set. We feel this effected not only Golf and Tiger Woods
Cards, but ALL cards. It's a long explanation and we are not
going to go through all of it but in a few words the Upper Deck Set:
1) Was marketed to dealers as a limited production set that would
legitimize a Tiger Woods Rookie card once and for all.
2) Confused collecctors who had invested a LOT of money in earlier and
far more rare but less "legitimate" (according to Upper Deck
anyhow) Tiger Woods rookies
3) When UD issued the set, it was SO OVERPRODUCED that it allowed Home
Television Shopping Networks to use it as a way to change their
marketing practices to lower priced, higher volume ways of selling
which made everything else they sold for 10's of THOUSANDS of dollars
a card look like it was completely overpriced. This is
important because TV networks were for the last several years a
Driving force to bringing in new collectors who had money to invest,
and therefore in a sense, drove the market. This also had
the effect of eliminating smaller dealers from selling to TV as the TV
networks could buy directly from Upper Deck in QUANTITY, rather than
having to search out and find items to sell that could be far more
rare.
4) It caused MASSIVE scrutiny of all other Tiger Woods rookies which
has exposed potential fraud and
Misrepresentation especially in the case of the 1997-99 Tiger Woods
Grand Slam Rookie (which we wrote about endlessly in the past to keep
people away from).
So the bottom line in our view is that Upper Deck did a brilliant
marketing job, then wound up screwing the collector community (they
did nothing illegal, just selfish in our view) by flooding the market
with more cards (and now different sets) than the current collector
community could ever want. Even the "impossible" to get
Tiger Woods Autograph now appears to be relatively easy to get and it
appears Tiger will be signing more stuff for UD every year -so where's
the rarity in that??????
We DO believe this whole golf card/Tiger Rookie fiasco has effected
the entire sportscard market. That whole TV thing we just mentioned
expanded to all sportscards being offered on TV so now you can find
great VALUES on "rare" items on TV that compete with some of
the lowest internet auctions-but speaking as a collector/investor we
don't want to buy the RAREST Tiger Woods or Michael Jordan rookie for
$99.95 unless it's uncovered at a garage sale. If I see
that on TV I KNOW that everyone else can get it to or they wouldn't
waste the TV time to sell only a handful of them-THEREFORE they can't
be RARE!!
However, if a TV shopping channel was offering an item for $10,000 and
honestly represented it's rarity this would be believable as just a
few sales would more than justify the air time---get it??? In
any case here is more info to confuse you even more!
So as TV prices fell, billions of UD cards flooded the market and
skepticism rose dramatically prices for just about ALL sportscards
have fallen.
Still make some sense?? Well, this highlights our view on
this issue without writing tens of pages. Write us if you want
more info or have further questions.
3) TIGER WOODS - DEAD?
This is the question of the year as far as we are concerned, and there
is no easy answer---one thing is certain-HE IS KILLING COLLECTORS AND
DEALERS ALIKE (including us!).
As we have written in the past, there are several key issues to
evaluating the value of Tiger Woods cards. The first is Tiger's
performance, and based upon the amazing achievements in 2000 that
caused Tiger cards to become so valuable in the first place, it is
clear that 2001 has been very harmful to the amount of money people
are willing to spend on Tiger Woods items.
The second issue is the sportscard market in general and how
Tiger's cards are perceived by collectors and industry insiders. 2001
has been absolutely horrible in almost every way in terms of effecting
Tiger's cards values. We have already reviewed some of the impact of
Upper Deck's entry into golf cards and the related changes in TV
marketing and distribution, but add to that the appearance of endless
reprints on some of Tiger's earliest and rarest cards (SI for Kids and
Amateur Champion to name two but there are others), the apparent
constant manipulations of the "industry" price guides
picking and choosing what they are willing to "book" in
price guides and the manipulations of "high end" Tiger Woods
auctions, (we have no proof of this but we believe it
to be true).to the point where real bidders are afraid to bid
and no one knows what anything is worth.
Add to that the general chaos and confusion over which Tiger Woods
items are the best investment and you can easily see why Tiger's card
prices are WAY below their highs.
The third issue is the economy in general. We suspect no one will ever
use the phrase "this investment should do fine unless the WORLD
BLOWS UP" in quite the same way again. There is just no doubt
that things have changed dramatically in our world. However, we
don't believe the events of 9/11 would have caused the level of
decline in Tiger Woods card prices without the other factors mentioned
above. Tiger's values were already down well before 9/11, and neither
he nor the card industry was doing anything to show any sign of that
turning around.
OK SO THERE'S SOME BACKGROUND BUT AGAIN WE ASK IS TIGER
WOODS DEAD AS A COLLECTIBLE?
We don't think so at all.
We are continually ASTOUNDED to watch collectors flock like
sheep to whatever's hot and then bail as soon as everyone else bails.
This motivates dealers to dump whatever product they have as quickly
as possible which in every case we have seen (ESPECIALLY with Tiger
being so new to collectors) has resulted in supply FAR ahead of demand
and this of course leads to prices falling dramatically.
But, as business people are fond of saying-IT DOESN'T CHANGE THE
FUNDAMENTALS
Tiger Woods has THE BEST potential to perform at levels that will
continue to make collectors want to own his items of ANY ATHLETE IN
ANY SPORT----PERIOD.
That means as we have said countless times that new collectors will
continue to show up and desire his Rookie Items. And for
those of you who doubt the power of new collectors into the market
driving prices up, we just got a call THIS WEEK asking if we had any
of Tiger's LEGENDS ROOKIES remaining in GEM MINT 10 for $3000 for the
set -YOU READ THAT RIGHT $3,000 not $300 which was a typical
recent ebay closing price. You folks who continue to live in an
ebay vacuum don't have a clue what goes on in the REAL WORLD where
there is little concern for what the last bid on someone else's
auction was.
The only point we try to make with that example is that Tiger has a
LONG way to go, and he should have his hot streaks again (many times
we suspect) and ultimately wind up as the best golfer in history by a
wide margin. THERE ARE NO GUARANTEES that this will
happen, but we like Tiger's chances compared to almost any other
alternative we can think of.
SO AS FAR AS WE'RE CONCERNED TIGER LIVES!
4) WHAT YOU SHOULD DO NOW-DO YOU EVEN CARE?
Let's say you buy our arguments in the last section of this report-are
you running out and stocking up on Tiger Woods rookies at the current
lower prices? And while we are on the subject did you know
Barry Bonds SMASHED McGwires HR record? Still very hard to
believe but it's true. His cards are worth more than when the season
started that's for SURE but are still ridiculously cheap for what his
performance justifies. Should we pause for a moment while you go
buy some high end Bonds cards? Oh, and did you hear that MJ is
playing again in the NBA? Well certainly you dropped a couple of
grand on his rarest rookie items because if he does well they are
gonna skyrocket!…..right????
We are guessing your answer to all of the above questions was either
NO or PROBABLY NOT. Collectors are just not buying on potential
or performance like they once were, and we believe this trend will
continue for some time-in fact we could go so far as to say many
collectors JUST DON'T CARE any more. There are many reasons for this
(assuming we are right) including many we have already discussed
above. We believe there is now a strong "wait and see"
mentality out there which means that collectors are gonna watch
prices for a while before investing significant sums of money in what
has proven to be a very speculative market.
We can state with CERTAINTY that this is a terrific time to buy into
the sportscard market-dealers have overbought (not just us!) and are
selling TOP quality items for less than we have seen in our 4 years of
active involvement in the business. What to buy is a bit trickier
but we think that items with the best chance of standing the
test of time are the ones to focus on moving forward.
Another point that is interesting is most collectors we
have spoken with are not selling the items they have the most
confidence in, irrelevant of how high or low current auctions may be
selling for. There is a fairly sizable group of long term
collectors/investors out there, and many of them will be rewarded down
the road when they sell their collectibles. We still feel as
strongly as ever that those people will be the ones who have focused
on RARITY and CONDITION.
We freely admit that some amazingly powerful political factors can
influence the market more than we ever thought possible, but in the
end, if you have the right item from the right athlete and the right
buyer, you WILL get your price. That being said, sportscard
collecting is NOT an activity for day traders unless you have an IRON
stomach and TONS of time to invest---of that much we are sure.
So, we suggest our readers continue to do their own research, ask more
questions than ever, and buy what THEY believe they would want in
their collections 20 years from now-even if their intention is to make
a quick buck, because if the item doesn't have a GREAT story for the
long term-in today's uncertain world it could be worthless VERY
quickly-no matter WHO the athlete is. Most importantly, no one
should be investing money they can't afford to lose and no one
should expect to retire from their sportscard purchases-if it happens
you are one of the LUCKY few, but to depend on it is unwise to say the
least.
FINAL THOUGHTS FOR 2001
Crazy year. Not sure 2002 can get any crazier but we wouldn't
bet against it-in any case don't hide under a rock but don't stick
your neck out very far either. Find some relatively LOW COST items
with some potential that you can HAVE FUN OWNING (for example, many
collectors turned to bobble heads-the high end ones are very cool and
could easily become quite valuable)-this approach will help you stay
patient with your larger investments while the various messes in the
market and in the world sort themselves out. One more point,
DON'T DUMP ANYTHING YOU DON'T ABSOLUTELY HAVE TO-believe us, things
can change in a hurry.
Finally, we here at aawow.com want to thank you for letting us be a
part of your world in 2001 and we wish you a happy safe holiday season
and the best of luck in the coming year!
THAT'S ALL FOR NOW---PLEASE WRITE US WITH YOUR QUESTIONS AND COMMENTS
AT AAWOW@AOL.com!
C 2001 JON B PEARLSTONE CONSULTING, Inc--ALL RIGHTS RESERVED
NOTE: This information is for educational purposes only and
SHOULD NOT BE
USED AS A BASIS for an investment of ANY kind. Readers are
encouraged to
verify all information contained herein and for their own conclusions
after
thorough analysis on their own! This information is copyrighted
and HIGHLY
confidential and any copying or verbal representations of this
information
is STRICTLY PROHIBITED!
(this means we'll be REALLY MAD and take you off the list at least!)
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