Sports Card Market Report: SlabStox October 2022

High Population (POP) Comparison

• Connor McDavid 2015 Young Guns RC PSA 10 (since 6/4/22): +2%
• Leon Draisaitl 2014 Young Guns RC PSA 10 (since 6/4/22): -21%

High POP Comparison

• Tom Brady 2000 Bowman Chrome RC PSA 10 (since 7/21/22): -33%

High POP Comparison

• Lewis Hamilton 2020 Topps Chrome Refractor PSA 10 (since 7/16/22): -14%

High POP Comparison

• Anthony Edwards 2020 Prizm Silver RC PSA 10 (since 1/8/22): -14%

High POP Comparison

• Khabib Nurmagomedov 2017 Topps Chrome Base PSA 10 (since 6/4/22): -10%

All these high-end “rare” cards declined 40% to 70% in just months. The biggest question is: “How does that happen?” It’s pretty simple. The velocity these cards were listed and resold (on auction!) hurt the values immensely.

What should we learn from October’s auctions?

Why have these particular rare cards performed FAR WORSE than the high population cards being sold on auction?

• When a grail is purchased at auction, the buyer is fighting against a group of collectors who also want the card. 
• Often it results in a bidding war between two people willing to pay a high price for the card. Here’s one scenario that can play out:  
  • If you are willing to pay $15,000, the next buyer is willing to pay $14,000, but a third person is only willing to pay $7,000, that creates a huge risk when trying to flip it months later in another auction.
  • Here’s why: 
    • You are now removed from the bidding pool
    • The likelihood the same collectors are “excited'' about the card again months later to cause a bidding war decreases due to short attention spans and/or not even seeing the card get listed for sale again
    • Even if the exact same bidding pool exists, the card would sell for $8,000 the second time at auction because the third person was only willing to pay up to $7,000
• A fundamental principle and the allure of grail cards is they are not available often. And once they do pop up for sale, the assumption is they will be bought by a collector that wants to hold the card. Not someone who buys it and NEEDS to flip it within months. 
• Typically, a card that appears on public auction for the first time creates a rush to “lock the card up.” If that same card appears shortly after the first sale, it rarely creates the same excitement and the perception of immense rarity wanes.

Is it time to avoid grail cards? 

Not so fast. Looking for rare grails in a down sports card market is actually a great idea. But, follow these principles:

• Purchase within your financial means 
• Buy only cards you believe in
• Intend to hold the card until there is a shift in the player’s market or overall card market

Here are two recent examples where buying grails and selling them in an 18 month window worked: 

Why did these two work out? Two major reasons:

1. They were held for ~1.5 years and enough “demand”  was built up in that amount of time.
2. They were bought when each players’ high-end market wasn’t overinflated and were sold after each players’ market perception increased (a.k.a. market hype on performance). Erling Haaland is on pace to smash the Premier League goal scoring record. Alexander Ovechkin (784 career goals) scored 50 goals last season at age 36 and is legitimately chasing Wayne Gretzky (894) for the most goals in history.
   1. Ovechkin CL Player Index (6/25/21 - 10/22/22): +53%

SlabStox Bottom Line: When buying rare or grail cards, use sound principles to your strategy.

1. Buy within your means
2. Consider when you would HAVE to sell before purchasing. Have a strategy.
3. Buy with an expectation to hold at least a year or more, but stay alert. If something changes in a players market and the hype machine accelerates, be willing to sell at any time unless it is a card for your PC (personal collection). 

Within the last month, Judge’s 2013 Bowman Chrome 1st Auto PSA 10 lost 63% of its value. Six months ago, you could’ve bought this card for $900. At the peak you could’ve nearly 10x’d your money if you bought it for $900. Even now, you could still net ~120% ROI. The lesson here for card collectors: Always sell on HUGE hype, don’t buy.

In his 38 postseason plate appearances, he hit .138 with 3 RBI, 15 strikeouts and 0 home runs. That clunker of a performance cratered his mythical season, with the last October sale coming in at $1,980 (10/30/22). This graph should be used as a lesson for future record-chasers, any sport, any time. 

Return to Glory: Bryce Harper

They say the postseason is a brand new season and Harper clearly took that to heart. By all measures he had a disappointing season (largely due to injuries) compared to his 2021 NL MVP performance. However, he turned that around in the postseason with the Phillies squeaking in as a wildcard team that took down the St. Louis Cardinals, the defending World Series Champions Atlanta Braves and the San Diego Padres. In the 11 games prior to the World Series, Harper had a slash line (AVG/OBP/SLG) of .421/.450/.895.

Setting those kinds of records and being the driving force behind the Phillies making it back to the postseason for the first time in 11 years and the World Series in 13 years has ignited Harper’s card market. His 2011 Bowman Chrome 1st Auto BGS 9.5, like most of his cards, increased 39% over the last month. While it’s possible this card could go higher if Harper and the Phillies do damage in the World Series, and potentially win it, there could be a step drop off if they don’t. There likely will be a drop in the off-season regardless of the World Series outcome.

The hype had never been greater for Judge and yet the predictable price drop came. The hype for Harper has currently never been greater. This is seen as the culmination of what Sports Illustrated started 14 years ago when they put Harper on the cover as a 16-year-old wunderkind.   

SlabStox Flash Quiz: Is Bryce Harper a buy or sell? (Reread Take 2 for the answer).

Who is dropping? Much like last season, the names are familiar: James Harden, Ben Simmons and Anthony Davis. James Harden started the season hot, but the production dropped off significantly and so has his card values. Simmons has been abysmal on the Nets, averaging 6 PPG and not being effective enough in other facets of the game. Anthony Davis is putting up solid numbers on the surface (24 PPG/11 RPG), but his jump shooting is still among the worst as he’s hitting only 18% of his three pointers. That’s the exact same percentage he shot in the 40 games he played last year. In the end, as long as their teams underperform, so will their cards.

Budget Risers. Three big “wins” for budget buyers lie in top statistical performers that don’t have the “superstar” tag.

1. Caris LeVert—scored 41 points in an OT win against the Celtics
2. Keldon Johnson—averaging 24 PPG on 44% 3PT shooting as the #1 option on a surprising 5-2 Spurs team (preseason was tied for the worst odds to win the NBA Finals)
3. Anfernee Simons—making nearly 4 threes a game as Damian Lillard’s co-star, helping the Blazers get off to a 5-1 best of the West start.

And now to the ice: Let’s pick up where we left off a season ago. Some of the hot names last season continue to dominate. 

• Can’t be ignored—Connor McDavid: He’s off to a blazing start for the Oilers this season, leading the NHL in points (18) and goals (9). But really… who’s surprised?
• Wingman—Leon Draisaitl: McDavid’s teammate and tied for second in points with 16.
• The other guy—David Pastrnak: tied with Draisaitl and Panarin in points (16) and is powering the Boston Bruins to the best record in the NHL (8-1).

SlabStox bottom line: If you’re happy with the profit available, sell your cards of players like Caris LeVert when you can. Early season excitement is rarely seen again until a player is proving it in the playoffs.

What does this mean? As predicted last month, the CL50 often “lags behind” other markets, sometimes by a month or more due to the time it takes for transactions to occur. Last month we wrote: “When we update these numbers after October, there is a good chance we might see some of the [September] stock market drops take effect in the card market.” What we saw play out proved our hypothesis.

Diving deeper into the individual sports card categories: 

• Hockey moment: It’s happening. Hockey spiked prior to the season and some outstanding individual performances by favorites in the NHL led to the best category performance of October, albeit negative overall.
• Football drops. The Football category peaked on 2/20/22, and has steadily declined. The biggest decline of the year was in October after the close of high-end auctions with early season football excitement evaporating. (See Take 1)
• Basketball and Soccer. We’re far enough into the year to know the categories have taken big hits—20% declines year to date. Overall, October’s NBA opener and the anticipation of November’s World Cup kept these categories from the bottom of the list.
• Racing. As a category, Racing has been falling in 2022 with the F1 Driver and Constructors Championships being decided and dominated by Max Verstappen and Team Red Bull. NASCAR caught the most attention with last weekend’s heart-stopping, barrier-riding, video-game move finish from Ross Chastain, earning him the third spot in next weekend’s NASCAR Championship in Phoenix. Will we see some of that excitement spill over into the card market?

While it’s only six games, Bridges is averaging career highs across the board. 15.3 PPG, 5.8 RPG and shooting 63% from the field. Expect the FG% to regress a bit as time goes on, but it’s a hot start for Bridges and the Suns (5-1).

Lamar Jackson in September: 12 total TD, 2 INT and a 119 passer rating. Lamar Jackson in October: 5 total TD, 4 INT and a 79.4 passer rating. The reason behind the dropoff is clear.