The world is hurting and people are dying due to COVID-19. Jobs are being lost everyday and many can’t find food for their families nor have the funds to purchase it.
Consumer behavior has clearly shifted (digital first) and many goods and services will remain in the forefront of consumers’ as we get to the other side of this pandemic.
During the financial crisis of 2008-2009, people flocked to tangible assets like gold, silver, and trading cards. The same holds true today during this pandemic. Gold prices are at record highs and so are trading cards (all sports). In fact, the SVP of ebay just posted today that the month of July 2020 was the first time in the company’s history that NBA Trading Cards have surpassed MLB in GMV.
Prices are up an insane amount…for just about everything. There has been NO better return on investment than trading cards in these past few years, but especially past few months.
We have seen a LBJ card sell for $1.8 million, Mike Trout sell for $922,000, and countless other record sales.
A 2003 Topps Chrome rookie of Lebron James in February 2020 was $5000. In August of 2020 it’s $15,000. A 1948 Leaf Jackie Robinson PSA 3 was $6,000 in February 2020, now it’s $10,000. I could go on and on.
What is causing this intense price appreciation? Very simply, supply and demand. Lots of new buyers from outside the US are seeing basketball cards as an asset class. Private equity companies have called me to better understand this “immature” market. Many cards are going into personal collections and never to be seen again for 10-20 years. The younger generation sees this market as “retirement assets” and they plan to hold for many years. You already have a limited number of many series or specific card runs. Then, these collectors buy these cards and label them NFS (Not for Sale). The supply dwindles even further.
For many, this market represents “gambling” in an age of closed casinos, riverboats, and other venues. Many are trying to make a buck by “flipping” these cards. I have no problem with this. However, you need to be educated and informed. Eventually, prices will start to plateau and possibly decline. (Similar to stock market).
It has been fun to watch new people enter the hobby and prices rapidly increase. For many years, I would wonder about this market. Could it excel? Will people be interested in cardboard in 10 years? Are sports collectibles an appreciating asset that would return double digits every year? During these last few months, my questions have all been answered.
