Quote:
Originally Posted by NYBBFAN
Something very important that hasn’t been mentioned: negative interest rates.
Investors have to park their money somewhere. Sports cards are the best way to do that, especially compared to art, where everything is a 1/1 and is subjective.
Wealthy individuals and investor groups have to make a return on their capital, so what better way to do it at the present time? If you feel stock valuations are stretched beyond what’s reasonable, how else do you make money in today’s environment?
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This is where I double down on my “this is going to end bad and abruptly” thinking.
Sports cards (namely modern) are highly volatile. They were long before modern cards became a serious investment option. Since the 2018 rapid rise and definitely since the Luka, Giannis, Mahomes, etc money started pouring in, everything is going up. The big names haven’t seen any real dip.
We all know that is not normal and not sustainable in the hobby. We know Tork has a small chance of becoming Trout. We know Andrew Luck had an incredibly bright future. Losing money is a part of collecting cards. This new wave of money hasn’t seen or experienced that normalcy yet. What happens when there is a normal, but expected drop for one of these big money guys? How does this new wave of $$$ focused investors react? Will that trigger a huge sell off, will investors decide that they don’t really are a grasp of sports cards and pull out?
Modern sports cards are not comparable to art. It’s a completely different dynamic that is namely dependent on a players performance, health, team market and achievements. Where we see so much new money being pumped into players whose careers are just starting, we know that only a small percentage of those players maintain that early trajectory long term. That is not comparable to art in any way.