In my first column on baseball cards in February, we noted that the baseball card industry has fallen from $1.5 billion in 1992 down to its present level around $200 million, due to a combination of three things:
1. Declining values for cards on the secondary market due to vast oversupply.
2. Rising pack prices for the few new issues with non-zero values.
3. The 1994 baseball strike from which the industry has never fully recovered.
But we also established that, despite the widespread devaluation on the secondary market of baseball cards from the 1980s and early 1990s, the values of the key rookie cards (RCs) of baseball’s biggest stars have, in fact, increased in value over the past 20 years — and sometimes, considerably so — once you factor professionally graded, Gem Mint condition cards graded by Beckett Grading Services (BGS) and Professional Sports Authenticator (PSA), a division of Collectors Universe, Inc. (NASDAQ:CLCT) .
While the latter fact is interesting in its own right, perhaps far more intriguing is what it says about the potential value of more recent baseball card issues.
Because, in the past 20 years, the investment profile of newer baseball card issues has improved dramatically, and for at least seven good reasons:
1. Graded cards and multiple expansion
2. Smaller print runs yielding upside leverage
3. Short-printed RCs, limited print serialized parallels, and autographed prospect and rookie cards’
4. An enhanced baseball prospecting game
5. Enhanced liquidity due to the presence of eBay Inc (NASDAQ:EBAY) and graded cards, as well as the presence of new online trading sites like COMC.com
6. A half-generation of current untapped potential demand
7. Fantasy sports, sports betting, and untapped re-demand
Graded cards and multiple expansion
As with the older cards from the 1980s and early 1990s that were discussed last time, professionally graded cards of more recent issues in Gem Mint condition (BGS 9.5 or PSA 10) carry premiums over ungraded cards. Below is a table with current ungraded and graded BGS 9.5 values of some of the key Bowman Chrome RC or Prospect autographed cards from 2001-2011, along with their adjusted multiples (which, as we discussed in the previous article, represents the graded value premium over an ungraded value, adjusted for the cost of getting a card graded, which is assumed to be $10).
Key Bowman Chrome Prospect/RC Autos: 2001-2011
|BGS 9.5||Adj. Multiple|
|2001 Bowman Chrome Albert Pujols Auto RC||340||$4,000||$8,500||2.1x|
|2002 Bowman Chrome Joe Mauer Auto RC||391||$200||$400||1.9x|
|2002 Bowman Chrome David Wright Auto RC||385||$100||$250||2.3x|
|2003 Bowman Chrome Hanley Ramirez Auto RC||334||$60||$250||3.6x|
|2004 Bowman Chrome Felix Hernandez Auto RC||345||$120||$250||1.9x|
|2005 Bowman Chrome Justin Verlander Auto RC||331||$150||$250||1.6x|
|2005 Bowman Chrome Matt Kemp Auto RC||349||$150||$300||1.9x|
|2005 Bowman Chrome Draft Ryan Braun Auto RC||168||$150||$300||1.9x|
|2006 Bowman Chrome Prospects Justin Upton Auto||BC223||$120||$200||1.5x|
|2006 Bowman Chrome Draft Draft Picks Evan Longoria Auto||66||$120||$250||1.9x|
|2006 Bowman Chrome Draft Draft Picks Clayton Kershaw Auto||84||$120||$200||1.5x|
|2007 Bowman Chrome Prospects Tim Lincecum Auto||BC238||$150||$200||1.3x|
|2008 Bowman Chrome Draft Prospects Michael Stanton Auto||BDPP115||$200||$250||1.2x|
|2008 Bowman Chrome Draft Prospects Buster Posey Auto||BDPP128||$200||$250||1.2x|
|2009 Bowman Chrome Draft Prospects Mike Trout Auto||BDPP89||$500||$600||1.2x|
|2010 Bowman Chrome Stephen Strasburg Auto RC||205B||$150||$350||2.2x|
|2011 Bowman Chrome Prospects Bryce Harper Auto||BCP111B||$400||$500||1.2x|