Can Trading Cards Be a Genuine Investment?
Investing in trading cards is possible to do with a minimum of risk; however, past performance is no indication, guarantee or promise of future results.
Past performance is no indication, guarantee or promise of future results. This concept is paramount to answering the question, can trading cards be a genuine investment? It’s also important in understanding how to safely invest in trading cards. In addition, this article is not meant to serve as investment advice. Instead, this is simply a primer on some of the tools and resources available to people interested in using trading cards as an investment vehicle.
Whether one’s goals are to utilize hard assets to hedge against inflation and the volatility of the stock market, diversify a portfolio, or simply realize childhood dreams, investing in trading cards is possible to do with a minimum of risk. However, and it cannot be repeated enough, past performance is no indication, guarantee or promise of future results.
The vintage baseball card market, particularly pre-war cards from the early 1900’s and high grade, star rookie cards from the early 1950s, are in the midst of a bull market–one the likes of which has never been seen in the sports collectibles marketplace. Numerous records and near records have been set in the past 18 months. There is seemingly no ceiling for the value of high demand baseball cards. These are your “blue chip” trading cards: 1951 Bowman Mickey Mantle and Willie Mays; 1952 Topps Mickey Mantle and Willie Mays; and, 1954 Hank Aaron, just to name a few.
Even the well-known financial publication, Forbes, has a dedicated contributor, by the name of David Seideman, covering the financial aspects of the sports collectibles market. While many of the stories he covers capitalize on the hyperbole of the ultra-rare or super-expensive, they do provide insight into the magnitude of which some cards can trade for today.
Since 2008, PWCC has tracked sales data and proven that the investment-caliber trading card marketplace offers more than mere collecting.
Several individuals and companies have been very influential in turning the pursuit of baseball card collecting from a mere hobby to a legitimate investment vehicle. One such company is Oregon based PWCC, who is a market leader in the consignment and sale of graded vintage cards. The company offers detailed analytic tools through unique Market Indices and an expansive database of historical auction sales. In addition, since 2008, PWCC has tracked sales data and proven that the investment-caliber trading card marketplace offers more than mere collecting.
According to PWCC, all of this comprehensive tracking and the sales metrics demonstrate that baseball cards have outperformed the S&P 500 by more than 200%, with an ROI of 153% over 10 years.
All of this comprehensive tracking and the sales metrics demonstrate that baseball cards have outperformed the S&P 500 by more than 200%, with a Return on Investment (ROI) of 153% over 10 years. As a result, the company recently developed the PWCC Top 500 Card Index which tracks the sales performance of the 500 most valuable trading cards in the market today. These aren’t limited strictly to baseball cards but also include cards like the 1986-87 Fleer Michael Jordan, 1979 O-Pee-Chee Wayne Gretzky and the 1965 Topps Joe Namath. With this level of confidence in the trading card market, big dollars follow.
This 1952 Topps Mickey Mantle card, with a final price of $2,880,000 set a world record as the most expensive price ever paid at auction for a post-war baseball card.
Just this past week, Heritage Auctions facilitated the sale of a 1952 Topps Mickey Mantle card, graded in a PSA 9 (out of 10). The final price of $2,880,000 set a world record as the most expensive price ever paid at auction for a post-war baseball card. Chris Ivy, Director of Sports Auctions, was quoted as saying, “The 1952 Topps Mickey Mantle card captures the attention of baseball fans, serious collectors, and investors alike, and this auction made it one of the most valuable sports collectibles in existence. It’s a phenomenal price, a world record, but it’s also the natural progression of a trend we’ve seen building for years. More and more investors understand that elite collectibles are an asset with that rare tandem of low risk and high reward. As more investment capital has entered the market, record prices have self-perpetuated.”
Seven Ty Cobb T206 Red Back Portraits with a Ty Cobb advertising on the back sold collectively for $3M.
Last year, the sports collectibles industry was captivated by the discovery of what was dubbed “The Lucky 7 Find.” Seven Ty Cobb T206 Red Back Portraits with a Ty Cobb advertising on the back sold collectively for $3M. Prior to their discovery, only 15 other examples were known to exist. Remarkably, the owners found one additional card (The Legacy Find) earlier this year. As a result of the publicity the story received in the mainstream press, another example has been located. After reading about the newly discovered card, a 63-year old retired IBM computer systems employee in New Jersey, thinking the card looked familiar, checked his father’s old tobacco card collection and sure enough, discovered the 24th card known to exist.
Rick Snyder the owner of MINT State, a PSA-authorized card dealer, who handled the Lucky 7 and Legacy Find, when asked about the chances of finding additional examples, said “I am convinced that there are more Cobbs out there. There are collections unknown to the hobby because they were put together a long time ago. The owners may have been sitting on the collections for many years before they went to the children or grandchildren. I believe that we’ll see more of these types of finds.”
Even modern trading cards are not immune to the curious pursuit of speculators. In the Golden Age of baseball cards in the 1950s and 60s, children played games with cards. One of the most commonly practiced was the physical art of card flipping. In today’s hobby, flipping has a whole new meaning. It refers to the acquisition and quick sale of a trading card at a profit.
Noted baseball card expert, Chris Steuber, has even developed a detailed set of value models to track a player’s real-time performance with the value of their baseball cards.
Noted baseball card expert, Chris Steuber, has even developed a detailed set of value models to track a player’s real-time performance with the value of their baseball cards. The math correlates to both pitchers with the 20 Game Winner formula and position players with the Perfect 10 formula. In addition, Steuber publishes player-specific investment advice with his daily #cardStock on Twitter @bbcardsdaily.
Already in this young MLB season, seven players have had four value increases of their trading cards based on their performances and on Steuber’s value models. They include: Javier Báez, Bryce Harper & Mike Trout (#Perfect10) and Carlos Carrasco, Max Scherzer, Luis Severino, Justin Verlander (#20GameWinner).
So whether your interest lies with vintage cardboard from the tobacco era, gum-stained cardboard from the 1950s and 60s, or the more modern cards of this era, there are most definitely ways to leverage your love of cardboard into a profitable investment vehicle.
Rob Bertrand has been an active collector of sports cards and memorabilia for more than 25 years. His involvement in the hobby community is well documented, having been involved with multi-media content development for several sports collectibles websites. Currently the Senior Marketing Manager for Sports & Entertainment at the hobby distributor GTS Distribution, he is also the co-host of the sports collectibles hobby’s only live streaming and nationally broadcast web show, Go GTS Live – The Hobby’s Web Show. He is the author of the highly respected and trafficked blog, Voice of the Collector and you can follow him on Twitter @VOTC. A dealer himself, Rob runs an online business through eBay, and is frequently asked to consign collections.
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