Financial Poise
Baseball card investing, as shown by this baseball stamp, is a great example of tangible assets.

Home Run Hobby? Baseball Card Investing Still Brings Cash for Collectors

Baseball Card Investing by Livestream? Analog Investments Show Virtual Appeal

Can you imagine making a small $20 investment in a case of baseball cards, watching a livestream of someone else unwrapping each packet, and hoping your number comes up? “Breaking,” the term for collectively witnessing the opening of baseball card packs, is the post-modern method of baseball card investing. Flimsy and cheap to produce, baseball cards have always been a fascinating collectible in that their only value lies in scarcity, as noted in The Atlantic’s “How Baseball Cards Got Weird.”

What was it about the humble baseball card that captured the attention of Americans who simply loved the thrill of the game?

The Rise and Fall of the Baseball Card Market

Baseball card investments, called a “classic financial mania” by The Economist, swept many formerly casual baseball card enthusiasts up into a legitimate and potentially lucrative collectors-level hunt for the next, great card. The Economist author summed it up best:

“Every now and then a particular craze sweeps across the swingsters. The allowance money chasing the suddenly hot trinkets grows. If the frenzy builds for long enough it can attract much bigger fish: adults, yes, but also Wall Street itself. There is no better illustration of how the seductive power of the fast buck stretches from the schoolyard to high finance than the madness that swept the world of baseball cards in the 1980s and 1990s.”

While it’s interesting to note the history of baseball card-collecting as The Economist did, it is even more significant to note how this “past time” grew into a financial bubble so big it eventually burst. Although prices have made somewhat of a comeback, many cards haven’t achieved the values they saw earlier.

Prices for baseball card investments increased dramatically through the 1980s and into the 1990s until, as The Economist explains, a string of events caused the bubble to burst in the mid-1990s. Why? There were three primary reasons:

  1. Interest rate increases squeezed the broader economy and made extra money for hobbies – like collecting baseball cards – harder to come by.
  2. Negotiations between MLB owners and the players union collapsed, culminating in the cancellation of the 1994 World Series.
  3. Eager cardmakers pumped up production in response to previous higher demand, which resulted in oversupply.

Although prices have made somewhat of a comeback, many cards haven’t achieved the values they saw earlier.

A Look at Other Nontraditional Investments

Those interested in how hobbies and collections are valued can compare Beckett’s approach to pricing to that of Robert Overstreet, who, in 1970, published the first edition of what became and remains the “blue book” for comic book prices. When it comes to stamps, the wealthy can still afford to call themselves philatelists, though the overall stamp collecting market is on the decline. Similarly those of you looking to score the latest Star Wars action figures as a future investment might want to think again.

In terms of baseball cards, it appears that, although the mania is gone, there is still a legitimate and viable market for both older and new specimens. So you may want to consider revisiting those dusty boxes jammed with cards from Topps and Upper Deck hiding in your attic. It appears that, although the mania is gone, there is still a legitimate and viable market for both older and new baseball cards – and you can still make huge gains.

By the way, in October 2016, a Honus Wagner card broke the record for a baseball card, coming in at a value of $3.12 million. Michael Pruser, of DoughRoller, offers some heartening personal experience and tips. It appears that, in spite of losses following the baseball card bubble, Berger’s legacy of collectible baseball cards as a tangible asset of real value lives on in these nostalgic nontraditional investments.

[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinar: All About Asset Allocation. This is a revised version of an article that first appeared October 9, 2017.]

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