Why Do Sports Card Values Rise and Fall?

Understanding why sports card values rise and fall will help us interpret market trends more effectively and become better investors. There are many factors that impact card values. You could think of these factors as the energy that helps build (or take away) momentum for a player’s card values. Let’s dig into the big ones.

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Performance

Let’s start with one of the most important influencers on card values: player performance. Everyone knows performance impacts values, but exactly how is actually commonly misunderstood.

Most people think if a player performs at a high level, values will rise. Makes sense, right? This is actually not how it works.

If we want values to rise, performance has to exceed expectations. Likewise, one of the most common reasons values fall is because performance fails to meet expectations.

This is because a certain level of performance expectations is already factored into card values.

If Patrick Mahomes throws for 35 TDs and 4500 yards this season, he’ll be one of the top QBs in the league, and may even be All Pro or an MVP candidate. But because we already expect those kinds of numbers from him, the stats alone will not change his values. If the market collectively expects him to throw for 35 TDs and 4500 yards and he throws for 45 TDs and 5000 yards, he will have exceeded expectations and usually we’ll see values will rise accordingly.

Key takeaway: A certain expectation of performance is always factored into card values. Because of this, it’s not performance alone that moves card values, it’s performance against expectations.

Becoming a Star

In his first three seasons in the NBA, Jaylen Brown averaged 6.6, 14.5, and 13.0 points per game. Cards like the Starburst Prizm RC pictured above could be purchased for about $30 for a PSA 10. The following season, Brown broke out to the tune of 20.3 ppg and 6.4 rpg. Suddenly, we were seeing a side of him that we hadn’t seen before. His cards responded, and as he put up a second big season, that same Starbust Prizm PSA 10 jumped to $200, then $300, then $500, and peaked a little over $600.

Initially he looked like an athletic role player who could play strong defense and get his 10-15 ppg. That’s a player who is valuable to their franchise, but not someone who draws much attention to their cards. When Brown made the leap to the 20-25 ppg range, suddenly he looked like a star.

He exceeded expectations, and that’s why values climbed. The new values factored in the level of performance the general public now had confirmation he was capable of. They also factored in excitement around an upward trending player who looked like he might continue to get better and better.

Values ultimately peaked and then pulled back in ’21 and ’22 with the rest of the card market, but still remain 5-10x higher than they were before he established his stardom.

Values can also fall

When a young player is surrounded with hype and looks like a potential star, their card values are often relatively high in anticipation of what they can do when they step on the field – sometimes even before they’ve made their debut. When a player does not quickly meet or exceed expectations, values often will fall quickly. Flippers and investors don’t want to get stuck holding cards of a bust, so many will jump ship at the first sign of trouble.

Think of this as the opposite of what we just covered about players exceeding expectations. This is an important consideration when deciding whether to buy or sell or even how long to hold cards.

This is why baseball prospects quickly fall in value if they don’t immediately perform when they debut. Prospect cards can still be an extremely lucrative investment, but it’s important to understand how, when, and why they rise and fall so you can maximize potential reward while limiting risk on your investment.

Slow and Consistent Rise

The more we know about a player, the more stable their values will be. The less we know about a player, the more unstable their cards will be.

We can use the instability to our advantage early in a player’s career as explained above. Buying into a good player before they are well-known may offer us a quick path to profit once they start producing.

Likewise, if we want a safer investment, we can consider a more established player. As a player establishes himself as great, he attracts more buyers and raises the floor for his cards. The potential for big and fast value jumps may not be there for an established player, but they can be really strong investments.

At minimum, the best players’ cards are usually excellent at holding value. For many on a HOF trajectory, we’ll see a slow and steady rise over time even after their hype and potential to exceed expectations have dissipated. Their sustained strong performance consistently reminds collectors and investors of the player’s greatness. It also generates emotion, as people think back to a big game, a wild play, or how the player helped them win a bet or their fantasy league. Emotion causes people to take action (more on this below).

Where do the rare cards go when a player is consistently great?

On top of the consistent exposure to a great player throughout their career, we often will see the top cards of these types of players disappear from the market with time. The cards settle into collections or investment portfolios and it becomes extremely difficult to find low numbered cards from a player’s key rookie year sets. As these types of cards occasionally reappear, buyers are often forced to pay a premium for the card.

The 3B GOAT?

Usually we want to target the top tier players. They’re the safest plays with the highest upside most of the time. But this can also apply to players who are consistently great without being viewed as the top player.

A nice example of this in baseball is Nolan Arenado. In 2022 he is putting up his best season of his career by almost all advanced metrics. He’s going to be a Hall of Famer and may go down as the greatest third baseman of all time. His annual averages are over .290 AVG/ 35 HR/ 110 RBI with a Gold Glove award at 3B. Those are monster numbers that place him among the best players in the game.

Consistent Greatness vs Undisputed Best

Unfortunately for his cards, he’s only been consistently great, without ever being the undisputed best player in the league. Because of this, his cards have never seen a giant sudden jump the way we might expect for one of the game’s top players.

The good news is he has still provided more than a 10x return on many of his key cards for anyone holding longer term. This trend will continue as he continues to stack Gold Glove awards and add to his career offensive numbers. His key cards will likely continue to steadily climb, with relatively low risk since he’s already established.

You can see his trend of consistently rising on his index below. The spike from 2020-2021 is from the card market as a whole exploding across the board during that time.

Comparable players follow similar trends. Naturally there will still be ebbs and flows as they get hot or cold or miss time for injury. But usually we’ll see a steady rise each year for players building HOF resumes, especially going into the season. Despite the excitement surrounding young players, investing in the top established veterans can still be an extremely lucrative play, especially in the long run.

Awards

One of the biggest misconceptions in the entire card community is that winning an award or receiving an accolade (MVP, Cy Young, ROY, HOF election, etc) will make values jump.

This common belief is wrong.

By the time an award ceremony happens, the award itself is almost always a complete formality. In other words, rarely is it a surprise who wins MVP or that an elite retired player makes the HOF. And if it’s not a surprise, then the award or accolade has already been factored into card values.

It’s the performance that leads to the award that makes values rise. The award itself has little to do with values.

Even in scenarios where an MVP race is really close, the top two candidates have just completed MVP-caliber seasons, and values have already adjusted accordingly.

While awards do not cause card values to suddenly jump, they can serve as a good way to put a media spotlight on the player for a short period of time. This is especially true for HOF inductions because the player has typically been out of the spotlight for multiple years prior to induction. An award can temporarily raise liquidity in the same way a big performance during a game can. But if an active player is finishing an MVP season, they’ve commanded the media spotlight for months already. Those who wanted cards have already bought them.

In short, don’t count on awards to push card values higher. So many people make the mistake of thinking an award is the time to sell that sometimes the market can flood and actually push values lower (supply increases while demand stays the same = prices fall).

Hype

One of the more powerful reasons why card values rise and fall is hype. In the context of sports cards, hype is the excitement surrounding a player, which is usually driven by a combination of positive media reports, praise from the general public, and a fast moving card market.

The interesting thing about hype is there does not have to be on-field evidence (performance) to support the hype. It fuels hype even more if a player is on fire on the field, but it’s not required. Because of this, hype often exceeds the player’s actual ability and potential. Hype is also fragile because it’s not necessarily based on anything tangible. It can come and go quickly, and sometimes without much warning.

Its power should not be underestimated, though. Hype can exponentially drive values higher and higher, offering quick opportunities to lock in big profits.

This helps explain why prospects sometimes outsell all star caliber players already playing at the MLB/NBA/NFL level. The anticipation can create huge buzz around a player, which can sharply raise values.

Preseason Hype

A lot of times, spring training or the preseason is where a lot of the hype builds. Why? Two main reasons:

1) People get excited about what the player could do this year. Will they take the next leap? Will they contend for an MVP? They were awesome down the stretch last year, so surely they’ll build on that this year!

2) Since games haven’t started yet, there’s no accountability for the (sometimes wild) statements being thrown around about a player. For example, it’s much harder to predict a player will win MVP in the middle of the season if he’s had a bad first half. Before the season, we can find a way to cherry pick stats and make an argument that virtually any player is going to have a monster year because of XYZ reasons. But during the season, if he’s not playing well, you’ll get laughed out of the room saying he’s going to win MVP.

You can imagine how quickly this can drive up values in an environment where you have a community of card people all saying the same things about the player, often feeding off each other’s excitement. And when the excitement is there, people don’t want to miss out, so they jump into the player’s market.

Zero Hype

When a player has zero hype, it’s generally difficult for their card values to rise. Demand falls and makes it hard to sell anything. It’s the excitement and emotion surrounding a player that drives values. Trying to move card values of a player with no hype is like starting a stopped train. It takes a ton of time, fuel, or both. Every scenario is different, but sometimes it’s easier to make money by getting in on a player who is already rising, and ride the wave of hype rather than picking a player with stagnant values who is cheaper but has no hype.

Potential

Most people want nice things. This goes beyond the card market. People want nice cars, nice houses, quality clothes, the best phone, the newest technology, etc. Why would cards be any different?

They’re not! People want the best cards of the best players. There’s a constant hunger for players who are the best of their generation or among a sport’s all-time greats. This is why guys like Brady, Mantle, and Jordan sell so well.

It’s also what drives people to buy the next wave of perceived GOAT contenders. This is why Mahomes, Trout, and LeBron also sell for huge money.

This trickles down all the way into rookie and prospect markets, which brings us to the topic at hand: potential.

Potential has a major influence on card values. It’s so powerful that – believe it or not – a player who is perceived to have massive potential but hasn’t proven it yet can dramatically outsell another player who is actually performing on the field. Some of the top baseball prospects outsell current Major League All Stars.

It could even be a boat!

It seems wrong, doesn’t it? Why not take the player who is already proving he can do what the prospect might be able to do? Feels a lot like the boat/mystery box debacle from an old Family Guy episode.

A boat’s a boat, but the mystery box could be anything! It could even be a boat!

Peter Griffin, Family Guy

If we break this down, we can start to understand why this happens. In the Performance section above, we talked about how performance alone isn’t enough to move values. Instead, it’s performance that exceeds expectations that can move values. So if a player is perceived to have peaked, public perception will be that “this guy is who he is.” And if we know who he is, it’s hard to get as excited about his card potential since investors don’t see a logical path for him to exceed expectations to help values rise.

It still seems wonky to pay more for a prospect who isn’t as good as the current all star (and may never be), but it makes a little more sense when we think about it this way. If a player is perceived to have big enough potential, it’s the small, outside chance of the prospect becoming even better than the all star that boosts values.

Does it make sense to pay for potential?

Absolutely it does. It gives us a chance to buy into a future superstar for significantly less than they’ll cost in the future when they’re proven. But we have to be careful that we’re paying for potential and not hype.

They’re similar concepts, so to help differentiate: Hype is excitement surrounding a player that may or may not be based on anything tangible. Potential is a logical estimate of projected actual ability, considering all available evidence (past performance, physical tools, etc). Both are related to the perception of things a player hasn’t done yet, but only potential is based on real evidence.

We can make money by riding a wave of hype and selling before it disappears. However, if values are based on hype alone and the hype disappears, values often crumble.

If values are based on potential, or a combination of hype and potential, then we at least have the player’s actual potential to fall back on once the hype is gone. And if the player develops into a star, card values can still flourish.

When should we avoid paying for potential?

While we do believe paying for potential in the right scenarios can pay off, we also need to be careful that values aren’t overly inflated. CJ Abrams was a high draft pick and hit around .400 in the Arizona Fall League in 2019. His tools project him to be a good baseball player.

The problem is he doesn’t hit for power and the sample size against good pitching is limited. That’s not a good combination for card values even though he’ll likely be a good baseball player. Nevertheless, his cards were selling for enormous sums relative to his potential leading into the 2022 season.

This is a great example of a time to avoid paying for potential. His cards were highly valued because people thought he’d be good, but the values exceeded his potential ability. In other words, his cards were selling for more than they would even if he reached his absolute ceiling as a baseball player. Additionally, his skillset as a low-power, defense-first infielder simply isn’t what people pay for.

As expected, we saw comps over $5000 for a gem mint copy of his Bowman Chrome Gold Refractor Auto going into the season, but recent sales on eBay haven’t been anywhere close in the past few months.

Abrams will probably have a successful baseball career, but his skillset doesn’t sell cards. People were paying for potential that didn’t exist heading into 2022. Skip players whose card values are inflated beyond their true potential.

Summary

This is the impact potential can have on the market. It’s imperative to consider where a player is today vs where people perceive his peak to be. Is he already there? Will he ever get there? How likely is it for him to reach his full potential? Potential is more powerful than performance. As long as a player is perceived to have huge potential, he will likely be a top seller.

Perception and Context

There are a few different layers to perception and context. The overarching theme is that the way the public views the player matters, and so does situational context.

Perception

The way people think about certain players – whether fair or not – impacts values. Here is an example of good perception helping card values and bad perception hurting them:

Derek Jeter was perceived by many to be a great role model on top of being a great player. His “Turn 2” foundation helps steer young people away from drugs & alcohol. He stayed out of negative headlines. He constantly took a humble, team first approach in media interviews. If you don’t know him, he genuinely seems like a good person. This helped make him a fan favorite not just in New York but across the country. He is still one of the highest selling modern players even a few years after his retirement.

Manny Machado is an outstanding baseball player on a Hall of Fame trajectory. Because of on field incidents and things he’s said to the media, the general public doesn’t like him. He’s perceived to be arrogant, a poor sport, and even a dirty player. Maybe these things are true, or maybe things were taken out of context and he gets a bad rap. Either way, the public has decided his character (or lack thereof) is unappealing. Because of this, his cards sell for less than they probably should.

Context

Closely related to public perception is the way context is applied to what a player does on the field. Depending on the circumstances surrounding the player, perception and card values can be positively or negatively impacted.

Flu Game

Michael Jordan scored 38 points during his famous “flu game” in game 5 of the 1997 NBA Finals. Dropping 38 in the Finals is impressive on its own, but doing it while badly sick made it heroic. MJ’s unmatched will to win is still something that gets talked about 25 years later. It’s also part of the appeal of collecting or investing in Jordan’s cards.

Steroids

Barry Bonds is baseball’s all time home run leader, but he cheated to break the record. If you look at the raw numbers, he’s one of the best players ever. But considering the context and knowing he cheated, many people don’t even recognize him as the true home run king. His cards have a following, but it’s not nearly as big as it would be if he had cleanly broken the record.

Similarly, Fernando Tatis Jr., one of the game’s brightest young stars, got popped with an 80 game suspension in August 2022 for using performance enhancing drugs. His card values were previously among the highest in baseball, and they plunged almost instantly when the news broke.

Coors Field

The Colorado Rockies play half their games in the most hitter-friendly park in baseball. While it’s well-documented that this also negatively impacts their away numbers, most people consider their season stats to be inflated. As a prime example, Larry Walker put up dominant numbers in Colorado, but had to wait until his 10th and final time on the HOF ballot to be elected.

Super Bowl #2 for Peyton

When the Broncos won Super Bowl #50, it wasn’t because of Peyton Manning. One of the greatest QBs ever, Manning was a shell of his peak self that season. But because he got that second ring, he’s now viewed in a different category than a guy like Drew Brees, who was just as good or better statistically, but only ended his career with one Super Bowl ring.

In summary, both context and perception can influence card values and both need to be considered before investing.

Supply & Demand

Next let’s address the foundational economic law of supply & demand.

Generally speaking, as the price of X increases, supply will increase (meaning sellers will put more of X up for sale now that they can sell for a higher price) and demand will decrease (meaning buyers are less interested in buying as much at the higher price). In the same way, as price decreases, demand increases and supply decreases. Where supply meets demand is called market clearing price, or equilibrium.

See the following graph for an illustration:

We can also look at it the other direction by changing any of the variables. If demand increases and supply stays the same, price will increase. If supply increases and demand stays the same, price will decrease. The following table breaks down 4 scenarios:

For more on supply & demand, wallstreetmojo.com does a nice job of explaining in greater depth.

Application of Supply & Demand in the Card World

In the card world, the law of supply and demand can be loosely applied to understand why certain cards do or don’t sell for more or less, and certainly why sports card values rise and fall. It’s also a good reason to pay attention to things like rarity and pop report.

If we buy a common base rookie card of a player and there are 10,000 of the card available for sale, it’s going to be really difficult for price to increase because supply is so high. Demand would need to exceed supply in order to drive value higher. That would require a lot of buyers!

If we buy a parallel of the same card serial numbered to 50, the supply is lower from the start. As demand for a player increases, if supply is already low, we will likely see a notable jump in value for the card quicker. The base version may also jump in value, but it may take longer since the available supply is much higher.

Depending on value, it’s worth noting there may also be fewer potential buyers willing to spend enough money to buy the #/50 version than there are the more affordable base version.

We’ll cover this further in the section below, but grading can also help by differentiating your card against all the other copies. If you buy a PSA 10 of that same card numbered to 50 and there are only 5 PSA 10s in existence (aka pop 5), you’re now working in a sub-market where the supply is only 5 instead of 50. Because of this, when demand increases for that player, you may see value of your PSA 10 rise a disproportionately high amount compared to the 45 non-PSA 10s.

The Junk Era (1986-1993)

If you stick around the card world long enough, you’ll inevitably hear about the infamous “Junk Era” of sports cards, which spanned from 1986-1993 and was defined by card manufacturers trying to take advantage of a hot market and producing exponentially more cards than years prior. This serves as another great example of supply & demand in the card world.

The rookie cards of some iconic players fall in this era, but perhaps the most notable is Ken Griffey Jr. Normally the key rookie cards of a beloved player who put up inner circle HOF numbers like Griffey would sell for quite a bit more than his do. This is because there are so many of them that price is driven down by the ridiculously high supply despite strong demand.

PSA’s pop report shows over 89,000 copies of Griffey’s famous 1989 Upper Deck Rookie Card have been graded. That doesn’t include copies graded by other grading companies or raw copies, so it’s safe to assume there are likely multiple hundreds of thousands of these cards in existence. This means there are thousands of them readily available on eBay at any time.

This is also why many of the cards from this era are virtually worthless. There are hundreds of most cards from this era for sale on the internet sitting untouched.

From 1994 through present, the number of cards printed has been much more reasonable, and the invention of serial numbered cards has allowed manufacturers to create rare parallels even if they print tens of thousands of each player’s base card. In short, the market is in a much healthier place now than during the junk era.

Grading

Speaking of supply & demand, we can help our cause proactively by grading sports cards. Grading can add immediate value to a card. Usually high grades of a card are regarded as more valuable because their condition is confirmed and preserved.

People also want nice things, so naturally we gravitate toward the copy of the card with the high grade. Demand is higher on high grade cards, and at the same time, supply is typically lower since not all copies of the card will be in Gem Mint condition. When demand is high and supply is low, price rises!

Cardboard Profit offers a complete guide to grading sports cards, so we won’t spend as much time on it here.

Team Market

This one is simple, but we need to be aware of it.

It’s harder for card values to rise for players who play in smaller markets.
It’s easier for card values to rise for players who play in bigger markets.

A big market means more fans, more money, and more media attention going toward the player. A small market is the opposite. Thanks to the internet, it’s not hard to find talented small market players anymore if you search for them. But bigger market media will do the work for us by promoting their best players constantly. More attention means more awareness, and more awareness means more potential buyers. This is a good recipe for card values.

Trades

If a player is traded from a big market team to a small market team, it may hurt their card values. If they’re traded from a small market team to a big market team, it may help card values.

Trades are often a surprise to the general public. We may know a player is going to be moved, but rarely do we know where. Because of this, there’s not much reason to try to predict trades before they happen.

Instead, the best application of the big market/ small market knowledge is to consider free agency. If we look at potential free agent landing spots, sometimes we can identify an easy quick flip scenario. Who plays for a small market team this year and is testing free agency this offseason? Are they more likely to sign with the Yankees or the Marlins? Would you rather see your favorite college basketball prospect get drafted by the Sacramento Kings or the Lakers?

Leaning into team markets is not a full investing strategy, but being aware of it can help us identify opportunities.

Economy

The economy can also impact sports card values. Generally when people have a positive financial outlook, they’re more willing to spend disposable income on sports cards. When the economy is in decline, often times we’ll see casual collectors & investors take a break. Either way, values can follow.

The important takeaway is that sports cards have withstood the test of time. Card values may be influenced by the ebbs and flows in the economy, but the card market has always endured. It also operates independently enough to provide money-making opportunities even in times of economic downturn.

Usually when the card market as a whole dips, it’s the middle-tier cards and players who suffer the most. The high end names and cards typically hold value. The low end cards and names weren’t very valuable to begin with. Be aware of how market shifts may impact your inventory (or potential inventory) and act accordingly.

Emotion

Above everything else, the number one factor that makes card values rise and fall is emotion.

Emotion drives people to take action. People buy things because they want to feel a certain kind of way. With zero emotion, it’s hard to get someone to buy anything. Emotion is the backbone of virtually every purchase decision ever made. There’s still an element of logic or common sense that can be applied, but it starts with emotion.

People buy sports cards because they want either more money, more status, or to feel closer to a team, player, or the game itself. More money provides a feeling of security. More status makes a person feel cooler or more important socially. All of these reasons for making a purchase are tied to a feeling.

Fomo

People also buy sports cards to avoid negative feelings. One such common feeling is FOMO – Fear Of Missing Out. Nobody wants to feel like they missed out. It feels lousy knowing you could have invested in something early, but didn’t, and then to watch the value of that asset soar. Oh, what could have been!

Sometimes people get so worried about missing out that they let emotion completely control their decision-making. Logic gets thrown out the window, and they end up buying something they probably shouldn’t.

Kobe

Kobe Bryant cards soared when the news broke of his fatal helicopter crash. He had already retired, his career numbers didn’t change, and he didn’t get traded. The news made people feel like something important had been taken from them. So to help fill that void, many people rushed to the eBay to buy a Kobe card. It helped them feel better about losing one of the NBA’s icons and potentially one of their personal heroes.

The point isn’t to try to sell cards to profit when someone dies. That’s not a strategy and we can save the ethics discussion for another day. It’s simply an example to illustrate that nothing drives purchases more than emotion.

Monster Performance

What’s your reaction when you see a football player throw for 6 TDs in a game? How about a basketball player dropping 50 or throwing down a posterizing dunk over a defender? Or when a baseball player has been on fire for two weeks straight and they hit two more homers in a game?

When someone does something incredible on the field, it makes people feel impressed, wowed, amazed. That feeling drives action. It’s what leads to hype building, demand increasing, and values rising. All of this is because an athlete made us feel a certain way and we decided to get in on his “stock” as result.

Using Emotion to Your Advantage

Let’s get to what matters most: How do we leverage emotion to help us become better sports card investors?

Here are some tips:

– Be aware of your emotions. Specifically you need to be aware of what they make you want to buy or sell. Without awareness of how your emotions invade your brain and influence your decisions, you won’t be able to control your emotions. Recognize when you might be making an emotion-driven decision rather than a rational one.

– Use your own emotions as a guide. Trust your gut! Often times, you feel the same emotions other people feel. Everyone has their own biases, favorite teams, players they love to hate, etc. But most of the time, an impressive performance is an impressive performance. Know that if you are starting to feel inclined to buy a certain player, other people probably feel that too. Sometimes it’s best to zag when everyone else is zigging. Sometimes the people who can stay logical when emotions tempt us to make illogical decisions are the ones who end up winning biggest.

Putting It Together: Improving Inventory & Improving Timing

The two factors we need to improve to become better investors:

– Acquiring better inventory.
– Improve timing of purchases and sales.

Understanding the above influencers on values can help you determine what and when to buy/sell/hold to maximize gains. Know how emotion impacts all decisions. And know there are patterns in this market that you can use to your advantage.

For more sports card strategy and market breakdowns, take a look at Cardboard Philosophy.

Disclaimer

Cardboard Profit LLC operates this site and offers the content of this site for informational purposes only. The content of this website is not financial advice, investment advice, or any kind of advice. Cardboard Profit is in no way responsible for any kind of loss you may endure, financial or otherwise. Cardboard Profit has a strong track record of success, but past performance does not guarantee future results. The sports card market can be volatile, which means there is risk associated with buying cards. You are 100% responsible for your own finances, decisions, and actions. You are also fully responsible for any possible loss that results from your decisions or actions. Please act responsibly.