Collecting vs. Investing in Basketball Cards - Market Insights & Details on Market Manipulation
Posted by Basketball Card Guy on
In this episode I talk about the differences between collecting and investing in basketball cards. The sports card market has been exploding lately and an inflow of investors has dramatically changed the values of many modern basketball cards. I walk you through what's going on currently, while providing details about eBay price manipulation and how values are being distorted.
Simply put, collectors and investors have different reasons for being involved in the industry. Some collectors are investors, and vise versa. It is some new techniques that investors have employed that have changed the market dramatically in the last few months. Most of what's being done has been done under the radar, and I wanted to provide some insight as to what's going on.
Key Terms talked about in this video:
1. Collector: Someone who picks up a card because they love it and want to hold onto it.
2. Investor: Someone who picks up a card at a lower price than they expect to sell it for in the future.
3. Grading: Getting a third party opinion on the condition of your card (and having it encapsulated in a plastic tamper-proof case).
4. Pop Report: Total number of cards graded (by a certain grading card company), and how many of each grade exist to date.
5. Market Manipulation: Using techniques in order to alter a card's perceived value in the marketplace.
6. Purpose of Manipulation: To force prices higher on cards that the manipulators have multiples of themselves– in order to raise the "value" of them, before selling their own.
I hope that the video helps to clarify how the manipulation is taking place and the kind of domino-effect it has on the entire industry. As always my core advice to all collectors is to collect what you love. Never pay more for a card than it's worth to you, even if people are telling you it's worth more to them.
PLEASE NOTE: While I detail some cards specifically in this video, many others are also affected. I also am not attempting to make false equivalents. When showing things like rookie cards of Shaquille O'Neal and comparing them to ones of Zion Williamson, I fully understand why Zion is more popular to collect at this moment and will fetch higher prices. It's not that his cards shouldn't be selling for more right now, rather, it's the factor by which his cards have greater value that does not make sense, and will not hold for the long term as people become wise to what's going on.