Sports Card Investors! | How to SURVIVE The CRAZY Price Swings and Make Money
October 29, 20207 min read
If you have been following the sports card market, you know how volatile it has been:
A player has a good game and pricing jumps 100%.
A player gets knocked out of the playoffs and pricing does down 30%.
Sometimes there seems to be no rhyme or reason for why pricing goes up and down. The autograph market isn't this volatile and don't have big swings up and down.
And that is what today’s video is about, why this happens and how you can protect yourself from these big swings (if that is even possible).
EXAMPLES OF BIG CARD SWINGS
Before we get into the why, let’s take a look at a few examples of recent big card swings. (Note:All this data comes from Market Movers who pulls their data from eBay)
Luka Doncic 2018 Panini Prizm Card #280 PSA 10
Last 90 day stats.
1,384 sold. Highest sale $3,350, average sale $1,457. Up 43% over this time. PSA pop report of 13,822. 60% chance of getting a PSA 10.
One week it is up to $2,200, next week it is down to $1,700, then all the way down to $1,185, then up to $1,253.
Damian Lillard 2012 Panini Prizm Card #245 PSA 10
158 sold. Highest sale $2,970, average sale $1,779. Up 10% over this time. PSA pop report of 591. 60% chance of getting a PSA 10.
Big rise when Damian was crushing the playoffs. Then big dip after he loses to $850, then back up to $1,350, then back down again to $700.
Imagine buying the card on 8/14 for $2,970, only to find out you could have had it for $700 on 10/7. Not even 2 months later.
Michael Jordan 1986 Fleer Card #57 PSA 9
57 sold. Highest sale $20,000, average sale $15,249. Up 48% over this time. PSA pop report of 2,728. 15% chance of getting a PSA 9.
As you can see by the chart, it has its ups and downs, but nowhere near the big swings that Luka and Damian have had. Has a random 5K sale in there, but that could be just an error in the data or card mismarked.
LeBron James 2003 Topps Card #221 PSA 10
113 sold. Highest sale $7,000, average sale $4641. Up 53% over this time. PSA pop report of 1,755. 25% chance of getting a PSA 10.
Big jump of course right after LeBron won the NBA title. Be curious what this pricing looks like in another 90 days after the Xmas season sales.
It has its usually eb and flows. But I think you are going to see that on a more expensive card. $500 or $1,000 swings every now and then.
But when you see that on a $700 card, example: Damian Lillard, that is a big concern.
Joe Montana 1981 Topps Card #216 PSA 9
73 sold. Highest sale $3,497, average sale $1,908. Up 249% over this time. PSA pop report of 1,880. 11% chance of getting a 9 with PSA.
Does anyone doubt Joe Montana is a top 5 QB of all time? If not best ever? Besides Brady and Mahomes, name one guy currently playing that has a chance to be better than him?
Sound like a safe bet? Plus, only a 11% chance of PSA 9. Big demand for this cards. Huge fan following in San Francisco and league wide. Pretty solid card to buy.
This is the type of chart you want to see. Consistent growth. Minimal downs.
WHY IS THIS HAPPENING?
Let’s talk about the top 6 reasons about why this is happening.
These are just my thoughts so take it as you wish.
Yes, there is market manipulation going on. When someone has their buddies bid up or buy a card at a very high price and then not pay for it. Goal being to increase the price of that card and sometimes other cards. eBay hasn’t done a good job of pulling that data out of their system (also when someone returns a card). I did hear a rumor that in the future eBay might be pulling its sales data so you cannot see it, or possibly have to pay for it. Something to keep in mind. This is always hard to quantify, but it definitely is going on. You would have to be blind to not see it.
Taking this from my buddy Darren Rovell. The type of people who have been getting into the card market are your younger, 20-30 range who don’t necessarily have the capital means to sit on a card for 1-5 years and see it appreciate. They see a card going down in value after buying it at a high price, then panic and sell it because they don’t want to lose anymore money or they need the money for something else. You see a ton of selling that you normally would not. When a player gets knocked out of the playoffs and demand goes down, many are selling because they potentially need the money for other cards or something in personal life.
Too many cards out there. Look at the pop report for Luka 2018 Prizm. 13,822 have been graded a PSA 10! That means in order to sustain a certain price, there has to be a minimum of 13,822 people who not only want this card, but can afford the current price. If people cant afford the current price, the price drops. Imagine if this card only had a pop report of 1,000 how expensive this card might be? On the flip side, look at the Michael Jordan 1986 Fleer PSA 9. 2,728 pop report. Sounds like a lot. But how many people out there want this card and of those how many can afford this price? Probably a decent amount. Jordan has a HUGE following compared to Luka of course. Look at what Jordan collector shoes and autographs go for. People pay BIG money for Jordan.
PSA backlog. It is well known that PSA has a big backlog of cards that need to be graded. How many cards there are Luka 2018 Prizm that could potentially be a PSA 10? Probably a lot. This card has a 60% chance of getting a PSA 10. How many Jordan 1986 fleer cards are there that have a chance at a 9? Not many. Chances of getting a PSA 9? 15%. Chances of getting a 10? 7%. What that means is if you have a Luka Prizm PSA 10, there are some cards coming down the pipeline that are going to flood the market and unless the demand increases, drop the price.
Ebay return policy. With ebay’s 14 or 30 day return policy (depending on the seller), you technically could buy a card, wait the 14 or 30 days, if you don’t sell it for a profit or see it go way down in value, return it. Of course, I wouldn’t recommend this. Not only is it wrong, but it will damage your eBay account if you do too many returns. Definitely something eBay needs to fix.
My last one and I think this is highly underrated is COGs, meaning what dollar amount someone actually has into the card. With the autograph industry, most everyone pays the same amount for a Patrick Mahomes autograph. There isn’t a lot of a fluctuation. If you look at recent jersey sales of his, Nike ones with JSA, pricing is all around $100 of each sale. However, with cards, you could have bought a Luka card raw for $10 back in the day and had it grade a 10, or you could have found one it in a pack that you paid $50 for, or you could have bought it as a PSA 10 for $1,500. Everyone’s COGs is just all over the map. That creates a lot of price instability. There is always that guy that is going to come to the party that bought the card raw, got it graded, and is happy to take a $100 profit and move on. Especially with cards that have a high PSA pop report and a high PSA 10 rate such as the Luka 2018 Prizm.
HOW CAN YOU PROTECT YOURSELF FROM THESE CRAZY UPS AND DOWNS?
Many ways to invest in cards, here are just some of my thoughts.
Always buy a card you like. That way, worse case scenario, pricing absolutely goes south on it, you at least have a card you enjoy.
Buy the superstars. I am talking about guys like Michael Jordan, LeBron James, Kobe Bryant, Mike Trout, Mickey Mantle, Tom Brady. Guys who are well established and are considered superstars. Even Patrick Mahomes falls into that category. No doubt he is the best player in the NFL. These types of players will always have the most amount of fans and chances for championships, hall of fame, etc. which always raise prices. Yes, we all have fun speculating with prospects, but 99% of those guys will never pane out to the guys I just mentioned. Imagine the amount of money you have wasted on those guys when you could have just bought a LeBron James rookie card instead? Very small chance the rookie cards of those guys go down in value over the next 5-10 years.
Buy cards that look cool. Yes, Luka 2018 Prizm might be a decent seller, but is that a stunning looking card compared to the design of the Jordan 1986 fleer? Up to you to decide.
ALWAYS check the PSA pop reports. Buying a card with a PSA pop report of 13,000 is almost always guaranteed to be volatile. Getting a card with a low PSA pop report as a PSA 10, that is a tough grade, has a good chance of holding its value.
Buying limited edition cards. Obviously, only a certain amount have been made. Easy way to protect yourself.
Buying PSA over Beckett graded cards. Yes, certain Beckett cards do sell well, but almost always, a PSA 10 card will outsell a Beckett graded card. A Beckett 10 Black label is awesome, but you have a very slim chance of getting a card with that grade. Plus, I think PSA slabs just look better. Much thinner, love the color scheme.
Buy cards you can afford. Just because some guy you follow on Instagram or YouTube says to investing in card X and he just bought one for $1,000 and he thinks it is going to go up to $1,500 in the next month or so doesn’t mean you should buy one. Especially if all you have in your bank account is $1,000. NEVER go into debt buying this stuff. Well, you should never go into debt any way, but especially for cards.
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