We’re in it now.
With the wild card games over and the division series starting up tonight… the nights alternating between crisp and chilly, and warm and muggy… and fans across the nation collectively losing their sanity as they pull for the Yanks or Astros or Dodgers or Braves…
We are in the heart of baseball season.
It’s been a rough season for me. As a lifelong Orioles fan — now suffering a second straight 100-loss season with no hope in sight — baseball has taken on a slightly more removed, philosophical bent.
Luckily, though, when it comes to nostalgia, there may be no greater pastime.
So many remember their first game of catch in the backyard with Dad… their first Little League home run… the first time they went to a Major League park…
And, of course, their baseball card collection.
When I was growing up, it seemed like just about everyone went through a baseball card phase.
Some of us were completists — trying to collect every single card issued from any given year.
Others were star chasers — trying to get all the cards of their favorite players.
Others still were value gatherers — constantly checking card catalogs and willing to trade any card or pack of cards if the numbers said what they were getting in return was worth more.
While most people don’t retain the same fanatic dedication to their collection that they had in their youth, the nostalgia factor increases with age.
Indeed — there’s a personal blog, Cardboard Gods, entirely dedicated to baseball cards and the memories and emotions they call forth.
The demand for that sort of thing is so great that the blog got the author a book deal — with one published and another on the way. (It doesn’t hurt that he can write circles around most folk.)
But I think the biggest factor in his success is the love folk still have for baseball and baseball cards.
Football may have taken over as America’s favorite sport — and basketball may be more popular with younger generations — but baseball still holds a special place in America’s heart.
As do baseball cards.
The Rise and Fall — and Rise Again
Nearly 30 years ago, baseball cards had quite a moment. Too much of one, in fact.
While baseball cards have long held value — especially rare cards of beloved players — in the ’90s, things got a little ridiculous…
Some cards could double or triple in value in a year’s time — then do the same again within six months.
The bubble was on.
Baseball card valuations got silly… prices skyrocketed… people who had no interest in baseball started buying up all they could… and, unsurprisingly, when the bubble burst, a lot of people wound up very disappointed in their investments.
This brings up an important lesson: Even established collectibles and assets can suffer massive bubbles that distort the market and make it difficult to predict prices even a few months out.
So — how can you spot a bubble? Well, there are three main markers:
1. Prices rise too fast. As a general rule, if an overall asset class is jumping by over 20–50% for an extended time, you’re probably looking at a bubble.
There are exceptions. Chinese stamps, for instance, jumped nearly 100% per year for many years because so many newly rich Chinese buyers were entering the market. While Chinese stamp prices have stabilized, they haven’t fallen the way they would if a bubble had burst.
Likewise, any individual item can outpace the market. It really only takes one obsessed collector to rachet up prices in any particular niche.
But as a general rule — if prices are rising too fast, look out for a bubble. Who knows how long it can go for? And the mere fact that a market is experiencing a bubble doesn’t mean the underlying asset isn’t valuable…
But buying into a bubble is risky — be aware.
2. New, oddly matched buyers are entering the market. When you’re looking at baseball cards, baseball fans are the natural audience.
For art, you expect art lovers. Wine should attract oenophiles, and so on.
If a market is suddenly attracting buyers that don’t logically fit, odds are good you’re seeing speculators pouring into a bubble.
Like if sports haters are suddenly buying baseball cards — the way they did in the ’90s.
That’s a sign you should stay far away from the madding crowd.
3. Collectors are more interested in returns than collections. We love rare, tangible assets because they have built-in value escalators — an inherent advantage you just don’t see in other sectors.
Nearly all collectibles, for instance, have dwindling supplies. As long as demand remains stable — or, even better, increases — prices will go up.
That said, most value is driven by collectors interested in the underlying asset — the happy byproduct of mass appeal and obsession.
If, suddenly, all anyone is talking about is the financial aspect of a collectibles market, watch out below.
This is the equivalent of your taxi driver recommending stocks — a sure sign that we’re entering the manic part of a bubble. One that will likely burst soon.
Baseball cards have been collectible for decades — and they’ll continue to be so.
The market has been ignored for years now, after the bubble burst. But the crazy valuations have all worked their way through the system at this point.
If you like baseball — and have fond memories of collecting baseball cards — you should feel fine reigniting your collection.
You won’t see prices double overnight. But you will see a slow, steady appreciation of value.
And that’s the safest kind of return you can find.
Editor-in-chief, Unconventional Wealth
P.S. Interested in exploring a new baseball card collection? Or whatever collection floats your boat? You can get started at JustCollecting, no matter what your passion is. Their forums are full of enthusiastic collectors just like you.
Ryan Cole is the editor-in-chief of Unconventional Wealth. He’s been covering the alternative investment space for nearly a decade and writing about finance and investment for almost 20 years.
Ryan has walked the walk for years, living a very unconventional life. He’s led snowmobile tours through the mountains of Colorado, settled in Japan for five...