Collecting Sports Cards: Hobby or Investment?



It only makes sense that the highest paid athlete would be depicted on the most valuable sports card. That is to say, Angels outfielder Mike Trout, who has the largest contract in all of professional sports, recently had one of his rookie cards break a money record of its own. On August 22, 2020 a Mike Trout autographed rookie card sold for nearly $4 million dollars at auction. That makes it the most valuable sports card in history, supplanting the 1909 Honus Wagner card that sold for 3.12 million in 2016 (*Note: since the original writing of this article, the most expensive card became a first place tie between a 1952 Topps Mickey Mantle and 2003-2004 Lebron James rookie which each brought in $5.2 million). The point I am trying to make here is that the sports card market is red hot, so if you are looking for a new hobby, or perhaps even a new investment opportunity, collecting cards may be the way to go. It is not only a good way to pass the time, but it also has the potential to be well worth your time as well.


Gary Vaynerchuk (a.k.a. Gary Vee) has become a household name over the past few years as the king of social media. He is a marketing genius who is basically the Tony Robbins for millennials and gen Z-ers (but with a lot more cussing). Vaynerchuk recently posted a video to his eight million followers on Instagram praising the world of sports card collecting. The video shows a clip from April 2019 where Vaynerchuk was talking about the potential value of a 2013 Giannis Antetokounmpo Panini Prizm card, which was selling on eBay at the time for $200. Vaynerchuk points out that that same card is worth $6500 today, just 16 months later. For all of you mathematicians out there, that is a 3150 percent return on investment. If a stock portfolio manager had even one percent of that, which is to say 31.5 percent annual return on his investment, he would do nearly 12 percent better than Warren Buffett does each year. Keep in mind: Buffett is widely considered the greatest investor of all time. So as you can see, the kind of return on investment that some sports cards can potentially have is astronomical.


Take the $4 million Mike Trout rookie card for example. In 2018 that card was purchased for $400k. At the time I am sure many people thought that it was crazy to pay that much for a sports card, but here we are just two years later and that card has already returned ten times that value.


According to Geoff Wilson on sportscardinvestor.com, there are two major reasons why sports cards are currently so valuable: scarcity is purposely built into the market and a diehard sports culture cannot get enough.


Some of you may question the idea of sports cards as a legitimate investment, claiming that most old cards from the 80’s and 90’s are not worth much today. You are correct. In the past, sports card companies destroyed their own business by overproducing their cards and thus watering down the market. As we know, if you have too much supply, then demand falls off sharply, and without demand there is no value. Nowadays however, card brands and grading companies have made cards much harder to get, and thus made them much more valuable as a result.


Fantasy Sports and Sports Betting Culture


Moreover, the culture of sports in this country has added fuel to the card collecting fire, so to speak. This is the age of fantasy sports and legal sports betting, and not only that, sports cards today are nothing like sports cards of the bygone era. Today, cards are made with much better quality. As Gary Vee says, “They are this generation’s art.” For those of you unfamiliar with today’s card quality, I implore you to look for yourself. There are actually cards that hold within them actual material used in games like material from a baseball base, patches of leather from the ball, and even small pieces of a player's jersey.

If you are into fantasy sports, it stands to reason that you would enjoy collecting cards as well, because each sports based pastime has the same underlying premise - you see a player’s value and you try to acquire them. It’s that simple. And for those of you into sports betting, sports cards can provide you with a similar financial thrill (but without the immediate downside risk). Nowadays you can go on eBay, and bid hundreds of dollars on a Luka Doncic rookie card that could come down to the final seconds, and then you could turn around and sell it a few months later (or sometimes even a few days later) and potentially make hundreds (if not thousands) in profit. That is not to say, however, that there is not potential downside risk of sports cards as an investment (e.g. a player getting injured or the interest falling off), but most of the professionally graded, big name cards have held (or increased) their value over the past decade.


Collector = Owner


To conclude, no one would deny that investing in the stock market, although risky, is a great way to increase your wealth. The value of investing in sports cards, however, seems to be up for debate. Let us compare these two investment vehicles.


Before investing in a particular stock, one should study the balance sheet of that particular company. In so doing, one can assess the current state of the business, as well as the likelihood of future returns. Likewise, to make card collecting more of an investment than a hobby, one should study stat sheets and monitor ever-fluctuating card values which correspond closely to player popularity and/or talent. Some stock investors may get lucky, but a good stock picker has a unique awareness of the bigger picture. Similarly, some novice card collectors may purchase a pack of cards and pull a valuable rare card, but a true sports card collector knows the real value of what they are collecting, because of how it fits into the larger card market. When you buy stock you become an owner of a particular company, and when you collect cards you must also think in terms of ownership.


I began this post by pointing out how it made sense that the highest paid player would be depicted on the most expensive card. As a collector, you are like a team owner or GM seeking out talent to see where future potential (i.e. a future return on investment) lies. Your collection is your team and you are trying to put together a lineup of the most valuable players.