Have Baseball Card Values Risen in 20 Years? Actually …

"By the '80s, baseball card values were rising beyond the average hobbyist's means. As prices continued to climb, baseball cards were touted as a legitimate investment alternative to stocks, with The Wall Street Journal referring to them as sound 'inflation hedges' and 'nostalgia futures.' Newspapers started running feature stories with headlines such as 'Turning Cardboard Into Cash (The Washington Post), 'A Grand Slam Profit May Be in the Cards' (The New York Times), and "Cards Put Gold, Stocks to Shame as Investment" (The Orange County Register)."
-- Dave Jamieson, Author of Mint Condition (2010)

The great baseball card value bubble of the late 1980s and early 1990s burst in spectacular fashion. By 1993, vast oversupply created by a combination of an influx of new competition (Score in 1988 and Upper Deck in 1989 would join Topps, Fleer, and Donruss to make the "Big 3" a "Big 5"), multiple manufacturers with multiple baseball card products (too many to name), and print runs thought to be in the millions would render all but the new high-end issues such as 1989 Upper Deck, 1990 Leaf, 1992 Bowman, 1993 Topps Finest, and 1993 Upper Deck SP worthless.

With single-pack prices of such high-end issues in the multiple-dollar range and everything else worthless, the casual mass-market collector (i.e., kids) would be chased from the baseball card market, pushed toward more practical hobbies such as video games, pogs, and AOL. Of those collectors who stuck around, many were finished off by the 1994 baseball strike.

And by the time the dust settled from the great home run chases of 1998 (Mark McGwire and Sammy Sosa) and 2001 (Barry Bonds' 73-home-run season) through 2007 (the year Bonds passed Hank Aaron for the career home run record) -- along with the ensuing steroid scandals -- baseball card industry sales had dropped from $1.5 billion in 1992 down to $200 million by 2008, where it reportedly still sat as of April 2012.

Where there were once an estimated 10,000-plus baseball card shops in America, the latest issue of Beckett Baseball magazine lists fewer than 200 such hobby dealers with baseball cards for sale in its directory. Hobby sales of new sealed boxes or whole cases are now dominated by a few such dealers with a large online presence and competitive prices -- most notably Blowout Cards, whose online site also includes the largest online forum dedicated to sports and baseball cards -- and dealers who operate on eBay or Amazon.com.

Meanwhile, where baseball cards were once readily available at drugstores, grocery stores, and Kay Bee Toys stores (remember those?) across America, brick-and-mortar retail sales are now restricted largely to big-box retailers Wal-Mart and Target.

The price of unopened boxes of baseball cards from the late 1980s and early 1990s has fallen dramatically over the past 20 to 25 years or so, reflecting a general widespread devaluation of cards printed in that time period. Nowadays, unopened wax boxes of 1988 Donruss can be had for $6 or $7 a box on eBay, or about half what a box would have cost at retail back in 1988 -- well less than half if you account for inflation. And where packs of 1990 Leaf Series II once went for $12 a pack in search of Frank Thomas rookie cards, or RCs, worth $70 each back in early 1993 , whole sealed boxes with 36 unopened packs and an average of about two $20 1990 Leaf Frank Thomas RCs per box can now be had for $70 to $80 per box on eBay.

Not surprisingly, going back to a Feb. 6, 1993, article in The Economist titled "Throw in the Cards," virtually every article that has been written about baseball cards over the past two decades has focused on these very details. And in the past 20 years, few -- if any -- industry outsiders have dared to relate baseball cards as investments.

But these articles tend to overlook at least three key details:

  1. Graded baseball cards. High-grade examples of professionally graded cards from Beckett Grading Services, or BGS, and Professional Sports Authenticator, or PSA, warrant premium valuations, often well in excess of ungraded book value. That said, Gem Mint condition (BGS 9.5 or PSA 10) graded rookie cards of premium players from the 1980s and early 1990s have largely either held up well or in some cases have actually appreciated considerably, maintaining valuations far beyond those ever achieved by ungraded examples of the same cards.
  2. A card removal effect caused by the presence of graded baseball cards. The presence of graded cards means that the highest-quality cards have been removed from the pool of ungraded cards on the market, thus resulting in lower overall values of ungraded cards. Consequently, focusing exclusively on ungraded values will understate card values by default.
  3. The dramatic improvement over the past 20 years of the investment profile of newer issues. In addition to the premiums afforded to Gem Mint condition graded cards, the presence of a clear best product every year, smaller print runs, short-printed rookie cards and serialized parallels, autographed rookie cards, and an enhanced baseball prospect game lead to a more exciting hobby with a better product and better economics. Meanwhile, graded cards and eBay have brought enhanced liquidity to the cardboard stock market.

We'll talk about the card removal effect and get to the newer issues another time. But first, let's examine card values of key rookie cards from the 1980s and early 1990s.

Historical ungraded card values
If you look only at the prices of ungraded cards -- as most casual onlookers tend to do -- you'd get the impression that baseball card values have taken a nosedive over the past two decades (and, of course, they have). Moreover, you'd get the impression that even the best rookie cards of the best players would have made horrible investments.

Let's take a look at historical ungraded prices of the key rookie cards from the 1980s and early 1990s. Prices are taken from the April issues of Beckett Baseball and Beckett Baseball Card Monthly magazines in five-year intervals starting in 1990, plus April 1993 to give us our 20-year reference point. Current pricing for February 2013 is taken from Beckett.com (with permission).

Notable RCs, 1982-1994: Historical Ungraded Pricing

Card

Card No.

April
1990

April
1993

April
1995

April
2000

April
2005

April
2010

February
2013

1982 Topps Traded Cal Ripken Jr. RC

98T

$12.50

$275

$225

$200

$120

$150

$120

1983 Topps Tony Gwynn RC

482

$20

$40

$32

$60

$25

$20

$25

1983 Topps Wade Boggs RC

498

$35

$35

$20

$25

$15

$15

$15

1983 Topps Ryne Sandberg RC

83

$12

$60

$32

$20

$15

$20

$20

1984 Donruss Don Mattingly RC*

248

$65

$45

$55

$30

$40

$25

$40

1984 Donruss Joe Carter RC

41

$15

$45

$70

$12

$8

$8

$8

1984 Donruss Darryl Strawberry RC

68

$36

$45

$10

$8

$8

$8

$8

1984 Fleer Update Roger Clemens XRC**

27

$85

$450

$300

$200

$225

$120

$120

1984 Fleer Update Kirby Puckett XRC**

92

$120

$375

$325

$80

$60

$80

$80

1985 Topps Mark McGwire RC

401

$18

$30

$8

$175

$40

$30

$15

1986 Donruss Jose Canseco RC*

38

$50

$60

$30

$30

$10

$10

$10

1986 Donruss Fred McGriff RC

28

$15

$28

$30

$8

$8

$8

$8

1987 Fleer Barry Bonds RC

604

$1.50

$20

$35

$40

$60

$15

$12

1987 Fleer Barry Larkin RC

204

$3.50

$7

$4

$5

$3

$3

$8

1987 Donruss Greg Maddux RC

36

$1.50

$6

$8

$20

$10

$10

$10

1989 Upper Deck Ken Griffey Jr. RC

1

$9

$55

$75

$150

$50

$40

$40

1990 Leaf Frank Thomas RC

300

--

$60

$85

$40

$20

$12

$20

1990 Leaf Sammy Sosa RC

220

--

$0.90

$5

$80

$40

$12

$12

1992 Bowman Mariano Rivera RC

302

--

$0.20

$0.30

$8

$15

$40

$60

1992 Bowman Mike Piazza RC

461

--

$1.50

$35

$60

$40

$20

$20

1993 SP Derek Jeter RC

279

--

--

$7.50

$100

$60

$100

$150

1994 SP Alex Rodriguez RC

15

--

--

$12

$85

$80

$80

$50


Sources: Beckett Baseball Card Monthly/Beckett Baseball magazines dated April 1990, 1993, 1995, 2000, 2005, and 2010; Beckett.com, with permission.
*The 1986 Donruss Jose Canseco RC hit $105 in April 1991 and $75 in April 1992, while the 1984 Donruss Don Mattingly reached $85 in April 1991.
**XRC = extended rookie card. Refers to a card released in an extended set, as opposed to the card company's standard set for that year.

However, the practice of looking only at ungraded values produces flawed arguments by excluding the values of the highest-quality, highest-value cards -- the mint condition ones -- by default.

Grading baseball cards
PSA, a division of Collector's Universe (NASDAQ: CLCT  ) , launched in 1991, applying its experience as an authentication/grading service in the coin market to establish the first relatively objective third-party authentication and grading service for trading cards.

Beckett, the established market leader with its monthly price guide magazines, would later follow with its own BGS. These two companies are the established leaders in this space, and while there are other competitors, PSA- and BGS-graded cards warrant by far the highest premiums because of these companies' strong brands and tough grading standards.

PSA grades cards with a single grade on a 10-point scale in whole-number increments, with the highest grade being PSA10 Gem Mint -- a basically perfect, well-centered card with sharp corners and edges and a clean surface. BGS similarly grades on a 10-point scale but in half-point increments, and with a final grade that is a composite of four separate subgrades for centering, corners, edges, and surface. A BGS 9.5 Gem Mint is essentially a perfect card and effectively equivalent to a PSA 10 Gem Mint, though BGS technically does have another level in the rare BGS 10 Pristine grade. In addition, for autographed cards, Beckett includes an additional, separate grade for the autograph, where PSA does not.

For the most part, a BGS 9.5 Gem Mint card and PSA 10 Gem Mint example of the same card will carry the same valuation.

Here's a look at the current graded book values for each of the cards in the previous table, along with the adjusted multiple -- the graded book value multiple to ungraded book value, adjusted for the cost of getting a card graded, which for our purposes is assumed to be $10 (the actual cost may vary by order size and desired turnaround time, but $10 is a good proxy). In other words:

Adjusted Multiple = Graded BV / (Ungraded BV + $10)

Notable RCs, 1982-1994: Current Graded Card Pricing and Adjusted Multiples

Card

Card No.

Ungraded BV

BGS 9.5

Adj. Multiple*

BGS 10

Adj. Multiple*

1982 Topps Traded Cal Ripken Jr. RC

98T

$120

$1,200

9.2

   

1983 Topps Tony Gwynn RC

482

$25

$800

22.9

   

1983 Topps Wade Boggs RC

498

$15

$400

16.0

   

1983 Topps Ryne Sandberg RC

83

$20

$300

10.0

   

1984 Donruss Don Mattingly RC

248

$40

$400

8.0

   

1984 Donruss Joe Carter RC

41

$8

$250

13.9

   

1984 Donruss Darryl Strawberry RC

68

$8

$80

4.4

   

1984 Fleer Update Roger Clemens XRC

27

$120

$600

4.6

   

1984 Fleer Update Kirby Puckett XRC

92

$80

$600

6.7

   

1985 Topps Mark McGwire RC

401

$15

$550

22.0

   

1986 Donruss Jose Canseco RC

38

$10

$100

5.0

   

1986 Donruss Fred McGriff RC

28

$8

$60

3.3

   

1987 Fleer Barry Bonds RC

604

$12

$80

3.6

   

1987 Fleer Barry Larkin RC

204

$8

$120

6.7

   

1987 Donruss Greg Maddux RC

36

$10

$100

5.0

   

1989 Upper Deck Ken Griffey Jr. RC

1

$40

$300

6.0

$1,400

28.0

1990 Leaf Frank Thomas RC

300

$20

$100

3.3

   

1990 Leaf Sammy Sosa RC

220

$12

$30

1.4

   

1992 Bowman Mariano Rivera RC

302

$60

$200

2.9

   

1992 Bowman Mike Piazza RC

461

$20

$80

2.7

   

1993 SP Derek Jeter RC

279

$150

$2,000

12.5

   

1994 SP Alex Rodriguez RC

15

$50

$2,500

41.7

   

Source: Beckett.com, with permission.
*Adjusted multiple represents the value of a graded card of a given grade divided by the ungraded book value, adjusted for the cost of having a card graded, assumed to be $10.

The first thing you'll notice is that the BGS 9.5 graded cards in the table warrant healthy and sometimes massive premiums to ungraded book value. For example, a BGS 9.5 1993 SP Derek Jeter RC carries a book value of $2,000, for an adjusted multiple of 12.5 times ungraded book value -- well beyond its current peak ungraded valuation -- while a BGS 9.5 1983 Topps Tony Gwynn RC carries a book value of $800, or a whopping 22.9 times adjusted multiple to ungraded book, and also well in excess of peak ungraded value, which has never reached triple digits.

In addition to demand, the biggest reason these cards warrant such premiums is condition/grade scarcity: Of the 10,333 1993 SP Derek Jeter RCs submitted to BGS for grading, for example, only 126 have been graded BGS 9.5.

Likewise, of the 11,859 1994 SP Alex Rodriguez RC submitted to BGS for grading, only 126 have been graded BGS 9.5. However, the 41.7 multiple is overstated in this case, for a couple of reasons: (1) The card's ungraded value has taken a hit over the past few months -- dropping from $60 to $50 -- probably because of both Rodriguez's pitiful performance in the playoffs and more recent headlines related to performance-enhancing drugs (again), and (2) actual graded values are down, as the last three sales of the BGS 9.5 Rodriguez card on eBay in February have been in the $610-$650 range.

In other words, the drop in ungraded book value has increased the spread between BGS 9.5 and ungraded values (at least for the time being), while the three sales in February suggest that the graded book value is due for a drop, and probably to the $700-$800 range, which would result in an adjusted multiple of about 11.7 to 13.3 times ungraded book, or in line with the Jeter RC.

It's apparent that Beckett's pricings are not presumptive or predictive in nature but are rather adaptive and reactionary and may require some interpretation to be used to properly.

The graded values of the Steroid Bunch -- Mark McGwire, Roger Clemens, Barry Bonds, Jose Canseco, and Sammy Sosa -- have for the most part held up well compared with their ungraded book values (though not previous graded values, which I don't have citable data for but were probably all much higher than they are today), with the exception of Sammy Sosa, whose 1990 Leaf rookie card's current graded value of $30 is well below its April 2000 peak ungraded value of $80. A BGS 9.5 1985 Topps Mark McGwire RC carries a 22.0 adjusted multiple and a valuation well in excess of peak ungraded book value, while the $600 graded book value of the 1984 Fleer Update Roger Clemens XRC still trumps its peak 1993 ungraded value of $450.

And while the 1987 Fleer Barry Larkin RC might seem like an odd inclusion, considering its ungraded pricing has never reached double digits, a BGS 9.5 example carries a book value of $120.

The other thing you'll notice is the 1989 Upper Deck Ken Griffey Jr. RC, which is the only one that has pricing for a BGS 10 Pristine grade, with a $1,400 book value and a 28.0 adjusted multiple. And the reason it's the only card in this group to have pricing is that BGS 10 Pristine examples of the other cards either don't exist, or are otherwise too rare to price because of a lack of trading data.

Out of the 29,568 Upper Deck Griffey RCs submitted to BGS, 1,783 have been graded BGS 9.5 Gem Mint, while 76 have gotten the BGS 10 Pristine grade. In contrast, there are exactly zero 1993 SP Derek Jeter BGS 10s, and zero 1994 SP Alex Rodriguez BGS 10s.

So have baseball card values risen in the last 20 years?
If you're wondering about the worth of baseball cards from the 1980s and early '90s that you have stuffed in binders or shoeboxes, you could probably throw them away and not lose much in terms of monetary value. Only the sharpest examples can attain a BGS 9.5 or PSA 10 grade; moreover, these cards need to be well centered to achieve such grades, and that's a hard hurdle to clear for the cards that were printed in 2012, much less 1983.

But if you're asking whether the values of the key rookie cards of baseball's biggest stars have risen in the past 20 years or so, the answer is clearly yes, once you factor the Gem Mint condition, professionally graded cards by BGS and PSA.

Certainly there have been disappointments -- Darryl Strawberry's career fell off a cliff during his age 30 season in 1992, and he served a cocaine-related suspension in 1995; while Jose Canseco, Roger Clemens, Barry Bonds, Mark McGwire, and Sammy Sosa have seen their stocks hammered for steroid-related reasons. And clearly, valuation is always a valid concern, as it is with stocks: You can't overpay and expect to generate a sufficient return on investment.

But much as the stocks of premium companies warrant premium valuations and tend to outperform their peers, the key rookie cards of baseball's biggest stars have tended to outperform the rookie cards of their peers, while the highest-quality, BGS 9.5 and PSA 10 Gem Mint graded examples of these cards have vastly outperformed the lesser-quality, ungraded versions of the same cards, and in some cases they've appreciated considerably over the past 20 years or so.

Here's the key: If this is true of the key cards from a period of extreme oversupply, what does it say about the investment potential of more recently issued cards featuring better product printed in smaller numbers?

Stay tuned.


Read/Post Comments (9) | Recommend This Article (41)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 26, 2013, at 4:57 AM, badq45t wrote:

    I would be curious to see an analysis of vintage baseball cards. Your analysis is extremely interesting, I have a BOATLOAD of what you describe (correctly) or nearly worthless 1987-1991 cards. I didn't take the time or $$ to grade many of the star cards, but could at some point, but as you point out getting only an 8 is a crusher. I switched to only buying and collecting vintage cards 15 years ago. I only buy cards from either dead or old guys who cannot get busted for steriods, rape, and there is a very set amount of the products in market (1951 to say 1975).

    I would be love to repeat this type of analysis with set prices of say 1960 to 1970 sets over the same period of time and take cards like 1952 Mickey Mantle RC, 1955 Sandy Koufax RC, and 1968 Nolan Ryan RC. If I had access to the Beckett Guides (I probably have them salted away with those old cards but way too much work to find them) I would do it for you :). But I personally belive that investments made directly after the market crashed and through the end of the 1990's have already paid off in spades

  • Report this Comment On February 26, 2013, at 9:32 AM, MarylandJoel wrote:

    I love that you were able to take a poker term, "card removal effect," and apply it to this article. Did you think that no one would cross pollinate from your Omaha expertise into fooldom?

    Nice article.

  • Report this Comment On February 26, 2013, at 11:36 AM, TMFSpiffyPop wrote:

    Nice job, Jeff -- it's great to get kind of a macro-overview of an industry that rarely gets much public evaluation -- and from a smart investor's perspective, as well. --David

  • Report this Comment On February 26, 2013, at 1:28 PM, seattle1115 wrote:

    This is perhaps the nerdiest article ever. I loved it. Thanks!

  • Report this Comment On February 26, 2013, at 2:59 PM, matunos wrote:

    BGS 9.5 GEM Mint Alpha Black Lotus from 1994: $25,000.

    BGS 10 you're probably looking somewhere around $100,000.

    Sorry baseball card geeks, but the Magic card geeks have taken over.

  • Report this Comment On February 27, 2013, at 10:23 AM, dbtuner wrote:

    nice article but a few major errors from an investment standpoint and as a large shareholder of CLCT, the owner of PSA and a public company, I take offense. Beckett is a private company. CLCT claims 75% market share in their public SEC filings and public presentations that they make. Your article makes it seem that Beckett is the leader. Not even close.

    The other major error is you claim that only Beckett has 1/2 point grades. Starting in 2008 (so like 5 years ago) PSA did the same. So you could have compared BGS 9.5 to PSA 9.5 if you wanted.

    PSA also has a large online archive of prices and cards for their subscribers. CLCT also has a division that authenticates autographs. You made it seem that only Beckett does this as well.

  • Report this Comment On March 03, 2013, at 8:59 AM, dbtuner wrote:

    one correction to my reply: PSA does do 1/2 point grades but does NOT do 9.5. They only go up to 8.5.

    A quick search of Ebay and their baseball cards today and looking for PSA or BGS cards showed that PSA graded cards outnumbered BGS cards 10:1. It is not even close that BGS is in the game.

    Doing the same for coins, PCGS is only slightly ahead of NGC (50:45) which also checks with what CLCT reports.

  • Report this Comment On April 20, 2013, at 3:47 PM, TMFRoyal wrote:

    Hey, Jeff,

    Thanks for the interesting and in-depth article on cards. I was a former collector in the late 80s/early 90s -- it was my gateway to stocks. I really haven't looked at the hobby much since then.

    The Jamieson book is a good read for those interested in a history of cards and collecting.

    Thanks again.

    Jim

  • Report this Comment On June 11, 2014, at 1:09 PM, dbtuner wrote:

    Since this article was written, CLCT now claims 90%+ of the card market share

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