At the start of 2019, I re-evaluated my collecting habits. I made the decision to start selling off a large portion. My plan was to take a portion of profits and re-invest in high-end cards. I targeted vintage rookies of all-time greats like Hank Aaron and Wayne Gretzky. In addition, I purchased modern era refractor rookies of players like Peyton Manning. Ultimately, my goal was to get all of them autographed. For decades, the conventional wisdom has been; do not get rookie cards autographed. Below, I will explain why this is concept is outdated and why autographed rookie cards are one of the best ways to grow long-term value.
The Current State Of The Card Collecting Hobby
Currently, the hobby is experiencing tremendous growth. It has gained pop culture relevancy as influencers, celebrities and athletes themselves are getting involved. In addition, it has gained relevancy as an alternative financial investment as companies like Collectable have emerged. While some collectors worry that we will experience a similar collapse that occurred as a result of the “Junk Wax” era, I believe the hobby will continue to see growth. It has too much momentum in terms of both new collectors and the amount of money invested into the hobby.
However, there are too many collectors/flippers that are speculating on the future value of prospects. It has created a situation where PSA has a backlog of over 1 million cards waiting to be slabbed. A large portion of these cards are ultra-modern rookie cards of unestablished players. Collectors are hoping their cards grade high so the moment the player performs well, they can flip them for profit. This can be extremely profitable but carries significant risk. I believe that most of these cards will significantly drop in value over time.
To illustrate this point, the video below is excellent.
To summarize: each year the top NBA prospects all see the value of their Prizm rookie cards exceed $100. However, the following year, 1-2 of those prospects see the value of their cards drop. In most cases, to dollar bin levels. This pattern continues until there are 1-2 players from that draft class who lived up to their potential. The value of those players that reach all-star levels, grow significantly.
What Factors Determine The Long-Term Value Of Sports Cards
It is my belief that the long-term value of trading cards are driven by several factors:
- Player popularity/relevancy: an active player with a large fan base results in greater demand but post career relevancy is also a factor. Case in point, Michael Jordan cards saw an increase in demand following the conclusion of the documentary, “The Last Dance”.
- Player performance/accomplishments: not all Hall of Famers are created equal. For example, Hall of Famer Harold Baines will never be worth more than Rickey Henderson, who is not only a Hall of Famer but also considered one of the Top 50 baseball players of all-time.
- Supply/demand: card values will not grow if the supply exceeds demand. This means that high end cards of all-time greats with low card populations are safe investments.
- Visual/art appeal: this is a little harder to calculate as beauty is in the eye of the beholder. However, there is no denying that there is a growing number of collectors that are treating cards like works of art. Certain sets have reached icon status such as 1986 Fleer Basketball.
While card values will fluctuate over time, there is less risk involved if you understand the principles above. To illustrate this point, the PWCC 500 tracks the value of the top trading cards against the S&P 500. Over the last five years, trading cards have yielded a higher return than the stock market.
Why Autographed High-End Rookie Cards Are A Safe Bet
Nearly 20 years ago, PSA explored the “controversy” of collecting autographed rookie cards. To summarize: hobby purists view autographed rookie cards as defacing a valuable collectible. However, interests change over time and autographed rookie cards are one of the hottest segments in the hobby. Last year, an autographed Mike Trout 2009 Bowman Chrome Superfractor sold for a record $3.936 million. Currently collectors place a higher value on pack pulled autographs, however I think this will change over time. In most cases, pack pulled autographs lack visual appeal as manufactures like Topps and Panini use stickers like in the example below.
In cases, where the autograph is on card, I think cards from paid signings have greater visual appeal when signed boldly and/or include inscriptions.
If I had to choose one card to purchase, I think the card (above) autographed at a paid signing has greater visual appeal. Eventually, I think other collectors will feel the same and it will drive up demand and card values.
Case Study: Aaron Rodgers 2005 Topps Chrome Refractor
For example, I purchased an Aaron Rodgers PSA 9 slabbed rookie card for $400 at the start of 2020. Since then, recent comps for his 2005 Topps Chrome Refractor are approaching $4,000. This card has a total PSA population of 184. 127 were graded a 9 and only 13 were graded a 10. Overall, the card has a very low population. I am confident that if I did nothing and simply locked this card in a safety deposit box for 10 years, it would be worth more than it is today.
However, there are currently only 3 examples of this card autographed and slabbed by PSA. I decided to crack my slabbed card open and send it in to an upcoming paid signing. Personally, I will enjoy the card more after it is autographed and I think long term it will be worth more than an unsigned version.
There are pack pulled autographed copies of Aaron Rodger’s rookie refractor card (below). The current comps on this card are around $9,000. Based on this comp, I would estimate that after paying $500 to get my card autographed that it will be worth $7,500+. I feel confident that by the time Aaron Rodgers retires and is inducted into the Hall of Fame that it will command a value of $10,000+ (not bad for a $900 investment).
I think most collectors would agree that in the example above, the sticker autograph takes away from the visual appeal of the card design.
Conclusion
If you had to choose one, which would you rather have in your collection: a pack pulled autograph or an autograph from a paid signing?
I would love to hear your thoughts in the comment section below.