Interesting Investments: Sports Cards

Avery-Taylor Phillips  |


The Sultan of Swat. The Titan of Terror. The Colossus of Clout. The King of Crash. The Great Bambino. As anyone who has seen The Sandlot knows, all of those are nicknames of Babe Ruth. One of the greatest baseball players to ever live, and undoubtedly one of the most valuable baseball cards. But what other cards are worth investing in? What other sports? Should you go vintage or new? We’ve looked at eSports and Magic: The Gathering cards, so it’s time to combine the two.

Vintage Cards

We’ll start with the old. If you’re a student who is just out of college and still figuring out how to budget for investments, skip to the section on newer cards. Only those who already have money to play around with should bother with vintage cards.

To get them out of the way, let’s look at the big three: The 1952 Mickey Mantle, the 1954 Hank Aaron, and, of course, the 1933 Babe Ruth. Ironically, the Ruth card has appreciated the least of the three, while the Aaron is the most. However, they are listed in order of value as of March 2018.

According to PWCC, a card index site, a ‘52 Mantle, grade 8/10, sold for about $486,000 in November 2015. A 1.5 in fair condition went for $10,300 in May 2018. A 1954 Aaron, grade 8.5, sold for about $88,400 in July 2016. There are a few different Ruth cards from ‘33, all fairly valuable. A Goudey Sports No. 2, rated at 8, sold for $55,622 in july 2016. A No. 181, also rated 8, went for $55,045 in October of 2017. The exact same card sold in September of 2016 for $50,100 — meaning a year’s difference raised the selling price by $5,000.

In the past decade, cards on the PWCC index (one of about 10 major card trading sites) showed an appreciation of double the average of the S&P 500. The ‘52 Mantle appreciated by 311 percent, the ‘54 Aaron by 820 percent, and the Ruth by 305 percent in the last decade.

Newer Cards

Newer cards can have investment value, as well. Michael Pruser, a collector, likens vintage cards to mutual funds, while newer players are akin to higher-risk individual stocks. Newer cards are more volatile, gaining and losing value much faster than vintage cards.

Why? Vintage cards are of players who have long since retired — and many have since died. They already have a legacy. That will not change. A 1909 Ty Cobb, 8/10, worth $35,000, isn’t likely to lose its value quickly. Cobb is known as one of the best players in the game, and that legacy is highly unlikely to change.

Meanwhile, current players, because they are still playing, could have a sudden downturn. General public sentiment against a player could affect prices. A sudden downturn in ability, or a scandal, and prices could fluctuate.

For example, Pruser invested in Oscar Teveras’ 2012 cards. He poured $75,000 in the Cardinals player, who was posed to be an excellent player. He hit the game-winning home run in a championship game, triggering Pruser’s investment. A week later, Teveras died in a drunk driving crash. The investment was liquidated for $6,000.

Rookies

Generally, rookie cards are the best performers. The exception is vintage cards before 1980, when card production peaked. Hall of Famers do well, but are also the highest-priced. As such, if you are considering investing, you should aim for rookies for newer players.

With that said, don’t count out second-year cards. While they might not be worth as much, they can still be valuable. For that matter, any card from the 1930s era is likely to be worth a few hundred dollars, as collectors aim to complete sets. Plus, non-rookie cards might be found at higher grades, which are always worth an investment if you can’t afford the more famous rookie cards.

There’s one other major component to investing, however, and it’s counter to many investment-worthy collectibles.

Rarity

As mentioned, there was overproduction in the ‘80s. Earlier, rarer cards are worth more, but don’t see trade often. When they are traded, everyone can see the price; a one-of-a-kind card is unlikely to appreciate well, as the price is out in the open.

On the opposite end is volume. A LeBron James rookie card from Topps may not be incredibly rare, but the card is popular. In good condition, a 2003-04 Topps Chrome Rookie card can go between $600 and $1,600. Holding on to a fair amount of copies means profit.

Meanwhile, a signed high school card for Derek Jeter is limited to 250 copies. They are much harder to invest in, and likely won’t see a ton of movement until his is elected to the Hall of Fame, probably in 2020. When that happens, the price will likely double.

To go back to a previous example, the ‘52 Mantle is not the most valuable card; instead, it’s the most valuable with the best liquidity. There are only 33 examples of the card, and the Grade 8 is the highest on the PWCC index because of this combination. There are three examples of the Grade 10, worth around $10 million compared to the $400,000 of the Grade 8, but they are traded so infrequently that it’s nearly a moot point.

PSA, one of the grading agencies, offers a population count of graded cards, which can be extremely beneficial for investing.

The Future

Sports cards, and baseball in particular, have seen rising prices in the past decade. Sports themselves are changing. Football, thanks to politics and concussions, is volatile. With advancements in prosthetics, there may be a new type of athlete, posits Adelphi University. The first double amputee to play a major sport, on a major team, will likely have a valuable rookie card. Meanwhile, the player found on designer drugs that are still being discovered could see a sharp decline in value.

Given that sports cards not only held their value through the 2008 financial crash, but increased in value, it’s fair to say cards will be around at least for a little while longer. Whether they outlast the millennial generation, however, is anyone’s guess.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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