Home Run Hobby: Collecting Baseball Cards for Fun and Profit?

Baseball Card Investing in the 21st Century

Can you imagine making a $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. Though flimsy and cheap to produce, baseball cards have always been a fascinating collectible because, as noted in The Atlantic’s “How Baseball Cards Got Weird,” their only value lies in scarcity.

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 sums 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 noting the history of baseball card-collecting is interesting, it is even more significant to note how this ‘pastime’ grew into a financial bubble so big it eventually burst.

Prices for baseball card investments increased dramatically throughout the 1980s and 1990s until, as The Economist explains, a string of events caused the bubble to burst in the mid-1990s:

• Interest rate increases squeezed the broader economy and made extra money for hobbies – like collecting baseball cards – harder to come by
• Negotiations between MLB owners and the Players Association collapsed, culminating in the cancellation of the 1994 World Series
• Eager card manufacturers increased production in response to previous higher demand, resulting in oversupply

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

The Comeback of Baseball Cards

In terms of baseball cards, it appears that there is still a viable market for both older and new specimens. So you may want to consider revisiting those dusty boxes of Topps and Upper Deck cards stowed away in your attic. Although the mania is gone, the market for both old and new baseball cards still seems to be promising– and you can make huge gains.

One of the outcomes of the COVID-19 pandemic appears to be a renewed interest in card trading and collecting. In 2020, there was a 142% increase in sales for trading cards. With more down time at home, people had the opportunity to more actively participate in making these kinds of investments and sorting through old cards they had stowed away. This upward trend and revived appeal is expected to continue throughout 2021.

The comeback of baseball card collecting is also quite noticeable when looking at the top selling baseball cards of all time. In August 2021, a Honus Wagner card broke the record for a baseball card, coming in at a value of $6.6 million. This marks the fourth time this record was broken in the past five years; the Honus Wagner card broke the record in October 2016 as it was sold for $3.12 million, followed by a Mike Trout card that sold for $3.93 million in August 2020. The record was broken yet again in January 2021 by a Mickey Mantle card that sold for $5.2 million, until finally the Honus Wagner card regained the record for highest selling baseball card last month. Michael Pruser of DoughRoller offers some heartening personal experiences and tips. It appears that in spite of losses following the baseball card bubble’s burst, Berger’s legacy of collectible baseball cards as a tangible asset with real value lives on in these nostalgic nontraditional investments.

Pricing Guides and Understanding A Card’s Value

Understanding the value of a card is vital, as is knowing what factors influence the value of cards. It is important for a collector to be certain that the cards they purchase are worth what they are paying.

With the variety of different types of baseball cards (e.g., base cards, digital cards, rookie cards, etc.) and brands (e.g., Topps, Upper Deck Company, Panini Group, etc.), it can be overwhelming for a new collector. Fortunately, James Beckett created one of the well known price guides for card collecting in 1984, Beckett Baseball Card Monthly. Overall, pricing information has become much more accessible because it can be found online (Beckett’s pricing guide is now available online as well).

Additionally, the value of a card depends on its condition. PSA is one of the most reliable grading services for baseball cards, and rates a card’s value on a 10-point scale. Cards rated 9-10 are in the best condition and hold more value than those rated less.

A Look at Other “Hobby” 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’ equivalent 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 a decline. Similarly, those of you looking to score the latest Star Wars action figures as a future investment might want to think again. However, there certainly are other tangible assets that make good nontraditional investments.

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[Editors’ Note: To learn more about this and related topics, you may want to listen to the following webinars:

• All About Asset Allocation
• Personal Finance & Investing Fundamentals 1.0
• Personal Finance & Investing Fundamentals 2.0

This is an updated version of an article originally published on February 28, 2020.]

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