Factors for the Current Sports Card Boom
Today, there is a sports card boom like no other. Many collectors, dealers, and show promoters with decades of hobby experience, myself included, will attest that they have never seen anything like it before. The demand and prices are soaring to record levels. But why is this happening? There have to be factors for this current sports card boom but what are they?
The Dawn of a New Era
In the late eighties and early nineties, there was a sports card boom that swept the nation. The belief was we’d be able to send our kids to college or establish our retirement funds with the money we make from sports cards. So many people bought sports cards by the trunkload and stored them with the hopes of a better tomorrow.
However, the more we purchased the more were printed. Supply not only met demand but superseded it. The result? No college tuitions or padded retirement funds as card values plummeted.
As of the date of this post just about every sports card podcast, YouTube channel, sports card forums and the like is wondering what the heck is going on? What is causing this current sports card boom? Why are prices going 3, 4, 10x in value?
Well, I want to share with you an explanation I heard from Mike Moynihan from Bench Clear Media on YouTube. It’s the best explanation I’ve heard so far, it’s a theory with some validity.
Mike Moynihan has an Economics Major in college and he currently works as a Financial Planner. He works with money on a daily basis and feels this life experience can in many ways transfer over to the sports card market.
Mike had what he excitedly described as an epiphany moment. He states that there are three factors that have created this perfect storm in the sports card market.
1) The Wealth Effect
Defined it means – a behavioral economic theory suggesting that people spend more as the value of their assets rises.
I know this holds true for me. In the past year, my 401k investments have gone up, the equity in my home has gone up substantially, my savings account has gone up, and my sports card values have gone through the roof.
This financial security has given me a lot of consumer confidence even though my income and monthly budget have remained the same. Mike explains further, “financial assets like home and 401k are typically tied up, meaning we can’t get to it. But if we feel wealthier the wealth effect theory says we will spend more.”
Also, due to Covid-19, people have more disposable income. There are no vacations being planned, a lot less eating out, and this leads to more discretionary income as well. It’s a huge factor for the current sports card boom and its psychological.
2) Newfound Money Concept
We tend to be a lot more careful and deliberate with earned money, these finances are typically what runs our budget, and although our sportscard collecting can and should be included in our budget it’s a lot more fun when we can add some play money or newfound money to it.
There are two sources of newfound money for sportscard collectors that are contributing to the current sports card boom.
First, stimulus checks, true there are many who have been affected by this pandemic. The unemployment issues were relevant for many Americans. But for the majority, we just kept right on working and have not been affected whatsoever.
Secondly, selling cards from our own personal collections at huge profits equates to newfound money. We are willing to spend more with this type of money. Stimulus checks, selling of sports cards, and monthly budgeted card allowance!? WooHoo, let’s go eBay shopping!
3) Big Money Investors
In the year 2020, celebrities came out of the closet. Influenced by marketing guru’s like GaryVee, YouTube sensation Patrick Bet-David, and others. It’s no longer a secret you don’t have to be ashamed of being a sportscard investor.
LeBron James, Kevin Durant, Giannis the Greek Freak too. From Hip-Hop artists to Wall Street Bankers all have raised their hands to proclaim I am a sportscard investor. Yes, friends! A primary factor in the current sportscard boom is that sportscard investing has gone mainstream!
Love that idea or hate it this is a stark reality. Billionaires are white-hot when it comes to buying key cards in high grades, and money is not an issue! Billionaires outbidding billionaires is a reason why we are seeing unprecedented prices on blue-chip cards of blue-chip players.
The good news, the rising tide raises all boats. So if you have been a collector for many years you’ll see your collection raise in value substantially. The bad news, if you didn’t pick up those blue-chip players by now, well your gonna have to pay the price or take a step aside.
The reality is pools of money are being created by investors. Millions of dollars are being poured into the hobby market.
It’s Bigger Then You Think
In his day to day duties as a Financial Advisor, Mike received an email that gives us a glimpse of what’s really happening in the current sports card boom. This email one can say is what ignited his epiphany of this perfect storm.
The email will remain anonymous to protect the innocent, but it said, “I’ve been a collector for a few years now but this past year I started selling a lot more and realized the business potential of the hobby and recently started managing a sports card portfolio for a few investors. An added wrinkle to my situation, though I’m a US Citizen I now work and live in China and my investors are Chinese.”
So here’s what’s happening friends. Our innocent hobby of sportscard collecting has not only gone mainstream it’s also gone International. As of the date of this post, more money is coming in, and prices keep going higher and higher.
When will it end? No one knows. To try and speculate that question is vanity, like chasing the wind. One thing is certain, it’s a different game today. As collectors/investors we need to be more calculated and strategic, rather than just winging it.
Happy Collecting Collectors,
Learn. Collect. Enjoy.