Investors are plunging large sums of cash into football, basketball and baseball cards. Jeff Eisenberg from Yahoo Sports breaks down what's behind the phenonemon with Alexis Christoforous and Brian Sozzi on Yahoo Finance's The First Trade.
BRIAN SOZZI: The world of sports cards is definitely having a moment, and right now investors are plunging large sums of cash into football, basketball, and baseball cards. Joining us now to talk about this kind of investing is Jeff Eisenberg from our friends at Yahoo Sports. Jeff, good to, good to see you this morning. Heck of a story here by you. You looked into how some investors are leaving stocks and real estate as traditional investments and plowing it into cards. What's the return here?
JEFF EISENBERG: The return is pretty crazy, especially for those of us who had baseball cards of the '80s and '90s that were completely worthless now, but with modern cards in particular and even some vintage baseball cards from way back in the day, they're outperforming the S&P 500. You know, people are seeing three times, four times, five times their value, getting back in rapid fashion. So you know, it sounds very strange for people to be plunging six and seven figure amounts of money into pieces of cardboard, but at the same time, you can't argue with some of the returns that they're seeing, too.
ALEXIS CHRISTOFOROUS: You know, Jeff, what's sort of the sweet spot right now for people who are investing in these cards? Are these cards-- I know that you looked in your story, which is very comprehensive, by the way, you found the top 500 performing cards printed before the year 2000 had the greatest return on investment. Why is that?
JEFF EISENBERG: Yeah, I think there's a couple different sweet spots, actually. If you're trying to make it a long term play, where you invest in something over 10 years and you're looking to guarantee that you get money back, the best bet is a retired athlete-- Michael Jordan, maybe, you know, a Mickey Mantle, a Willie Mays, someone who's career and Hall of Fame accolades are already set in stone.
If you're trying to make money really quickly, maybe you try to speculate on a prospect, who has a lot of upside, but at the same time, there's a lot of risk, because that player could go bust. And then maybe the sweet spot is, you know, finding somebody like a Luka Doncic, or you know, somebody who is a current star, but still has some upside and some room for growth, and that way you're betting on that player's career continuing to go up and up.
BRIAN SOZZI: Jeff, what about, in your story you talk about Clayton Kershaw, and now the Dodgers are champions. What, what might happen to that card?
JEFF EISENBERG: Yeah, there was a investor I talked to who had $40,000 invested in Clay Kershaw rookie cards. He thought it was worth about $150,000 going into the World Series, and he was counting on Clayton Kershaw shedding the reputation of postseason underachiever and winning a World Series and hoping that that investment could almost double, could be worth $250,000 by the time that that World Series was over and that he had won it. And so, you know, he's now looking to sell off as many of those cards as he can, because he thinks that this is the high point in the market for Kershaw, and those cards have gone up dramatically just over the last two weeks.
ALEXIS CHRISTOFOROUS: And quickly with the 30 seconds we have left, explain to folks how a card like the Mike Trout rookie card can fetch $4 million. How does that happen?
JEFF EISENBERG: It's pretty insane, right? It's basically a Wonka ticket. The card company put it as one of a kind card, and it was just randomly in a pack or a box somewhere, and because Mike Trout is such a hot commodity, and because there's only one of them, it was able to fetch that kind of money at auction.
BRIAN SOZZI: Well, I'm still going to hang on to my Don Mattingly rookie card. To me, it's worth a heck of a lot of money. Maybe not $4 million, but a heck of a lot. Jeff Eisenberg from Yahoo Sports. Great story. We'll talk to you soon.