The Rise of Sports Cards
Mike Trout, the star MLB player, is regarded as the best current player and has many years to become possibly the best baseball player of all time. His performance on the field has led to expensive sales of his baseball cards, highlighted by the record-breaking sale of an autographed rookie card for nearly 4 million at an auction in August. This sale has caught the attention of major news outlets which has brought new attention to sports cards.
Many people associate sports cards as pieces of cardboard that barely hold any monetary value. The so-called “Junk Wax Era,” which occurred in the mid-80s till the early 90s, was a time during which sports cards were overproduced. With the card collecting market being extremely popular during the Junk Wax Era, card companies began to print way more cards than previous years. Nevertheless, despite this increased production, people believed that these cards would go up in value. In 1988, The New York Times published an article titled “A Grand-Slam Profit May Be in the Cards,” which suggested that sports cards were great investments due to their values increasing on average nearly 32% every year since 1978. Now, cards from that era hold little to no value, and collectors from that era are left with only memories.
Now, every sport has their own single card manufacturer that is allowed to produce official sports cards, which limits the supply. This new approach to printing cards has made it easier for collectors to identify which cards to buy as well as which ones will have the best chance of becoming worth more in the future. In addition, some sports cards come autographed, and some cards only have few copies made. For example, the autographed Mike Trout card that sold for nearly four million dollars only had one copy printed. Aesthetically, modern cards are higher quality, and some even contain patches from game-worn jerseys of that player. Compared to the dull, cardboard finish on cards from the Junk Wax Era, cards now have glossier, “refractor” finishes which make them more appealing.
One of the most popular strategies for investing in sports cards is “prospecting.” Prospecting is when someone buys a card of a little known player hoping that the player will become great in the future causing the card to go up in value. Information on prospects can be found from companies dedicated to scouting prospects such as Fangraphs and Baseball America. These companies put out yearly rankings of the top prospects in baseball. Trout, for example, was the number one prospect in 2011, at which point his autographed card was worth around $100. Another prospecting success story is Franciso Lindor. Lindor is a multiple time all-star for the Cleveland Indians and a superstar in the MLB. At first, one of his autographed cards could be had for around $50. Now, that card sells for more than $800 with plenty of room to grow.
It can be quite overwhelming to find information on where to start collecting cards. The consensus for the most return when buying a baseball card is to buy the player’s Bowman Chrome autographed card. These Bowman chrome cards have multiple variations that are all numbered differently. The best card being a 1 of 1 superfractor is one that not everyone can afford or get, so the safest for new collectors is to start with a base autograph bowman chrome card. The “base” bowman chrome autograph card is not numbered, but they still do not have unlimited copies in existence causing the value to go up if the player does well.
Over the past couple of years, even before the record-breaking sale of Trout’s card, baseball cards have seen major attention. A likely cause of cards selling for more than ever is the idea of Fear of Missing Out (FOMO). When players are identified as up and coming, collectors are willing to pay a lot for these players’ cards because they do not want to miss out on the next 6- or 7-figure profit. This FOMO effect has driven up prices of even lower tier prospects compared to previous years. However, not everyone can be Mike Trout. Data from the past 10 years of the top 5 up-and-coming players from each year show that no one is even close to touching the prices of Mike Trout. Out of 38 players (some players are repeated on the top 5 lists), only 18 are worth more. That is less than 50%, and none of those 18 players' base autograph cards are worth more than $1,000 whereas Mike Trout's base autograph card is over $10,000.
In addition, high profile investors and athletes alike have started to collect sports cards and openly state their interest in the hobby. Gary Vaynerchuk (“Gary Vee” to his legions of followers) has recently joined the hobby and makes it known that he believes sports cards are great investments for the future. Gary Vee is known for his work in digital marketing and social media as the chairman VaynerX and as CEO of VaynerMedia. In 2019, Gary Vee wrote “in the next 24 – 36 months, we are going to see enormous growth in the sports card market. Even more than what we’ve seen in the past 2 – 3 years.” A year later, this prediction has already begun to come true. In the past few months we have seen record sales for sports cards occur such as a Lebron James card selling for nearly 2 million dollars. In addition to Gary Vee, athletes such as Giannis Antetokounmpo and Phil Hughes have showcased their collections which attracts new collectors.
As cards go up, people often can get greedy and hold the cards for too long. The hard question is when is it time to take the profits and run. The safest way is to not get overly attached to a card. It is very possible that the card may go up, but at the same time, there is the possibility that the card goes down. It is safest to take profits when you can, and with the profits, one can reinvest back into the sports card market. When collecting or investing, it is great to have a short term memory so that one does not get caught up in all the times they missed on more profit. Often, collectors only remember the time they sold a card too early, but they never remember the time when they “cashed” out at the perfect time.
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