Investment Thesis

History of Trading Cards

Modern Trading Card Market

The current trading card industry attracts more money, has a wider collector/investor base, operates more efficiently, and has provided returns greater than those unfamiliar with it realize.

The following elements of the current market and the modern product has fuelled the growth of the industry.

Manufactured Scarcity

Having learned the lessons from the junk wax era, manufacturers now realize that in order to create a healthy, long, sustaining market the answer is not just increasing supply. Packs of cards no longer cost a quarter and it is not uncommon for the MSRP of a box of cards to be in the thousands.

On some of the most limited product, every card in the set may be serial-numbered. And even in the higher-produced product, there are always some serial-numbered or parallel cards included, with the odds of finding these cards stated on the product.

By utilizing the publicly-available odds, collectors/investors are able to back into the total number of cards produced for each product, eliminating the chance a manufacturer will just continue to run the presses.

Increase in Quality of Cards

Manufacturers have not just used improved paper stock and printing technology but the most valuable products in today’s market include:
  • Autographed Cards
  • Cards with Game Used Material Embedded
  • Serial-Numbered Parallel Cards.

Graded Cards

Third-party grading companies now encapsulate and assign a grade to cards based on conditions, similar to the grading of coins that previously existed. While these grades are objective and assigned by a human, they provide a way for a buyer to gain confidence in the authenticity and quality of a card which can be critical when the buyer is unable to inspect the card in person. This has also created a tiered market for a specific card. The higher-graded cards often sell for multiples of what a lower-graded or ungraded version of the same card sells for.

Modern Trading Card Market

Below are some of the more recent elements of the trading card market.

Serial-Numbered and Parallel Cards

The examples of variations/parallels below can all possibly be pulled from the unopened product in the Fund. Some are numbered to as low as 1/1. As unopened supply decreases, the chase for these variations/parallels is a key reason for the sustainability of a product price and price growth. The parallels also help to maintain and grow the value of the unopened products because player-collectors still desire them, even when they are not rookie cards.

Graded Cards

Below is an example of how the grade a card is assigned can greatly impact value. Many covet unopened product because of the likelihood that the condition of cards will be high since the only defects would be manufacturing rather than handling of the card on the secondary market.