How Baseball Cards Became a Financial Bubble

The 90s were a simpler time. No global war on terrorism. No looming debt panic. Hanson.

When I think back to the halcyon days of that decade, I can't help but recall the rush of walking into my local baseball card store, perfectly named "The Dugout," in McLean, VA. My friends and I would press our little fingers against the glass cases and point out the small glossy paper treasures within. We tore through packs of Upper Decks with the thrill of an oenophile opening a case of '82 Lafite. Frank Thomas cards were a cause for celebration. Ken Griffey, Jr. special editions elicited dizzying euphoria. Beckett's card price guide for us was something between a Bible, a security blanket, and an addict's stash. Ah, youth...

Little did I know that we was participating in a financial bubble on par with Nasdaq and credit default swaps -- with admittedly less dire consequences. Slate's Dave Jamieson has the story:

By the '80s, baseball card values were rising beyond the average hobbyist's means. As prices continued to climb, baseball cards were touted as a legitimate investment alternative to stocks, with the Wall Street Journal referring to them as sound "inflation hedges" and "nostalgia futures." Newspapers started running feature stories with headlines such as "Turning Cardboard Into Cash" (the Washington Post), "A Grand Slam Profit May Be in the Cards" (the New York Times), and "Cards Put Gold, Stocks to Shame as Investment" (the Orange County Register). A hobby bulletin called the Ball Street Journal, claiming entrée to a network of scouts and coaches, promised collectors "insider scouting information" that would help them invest in the cards of rising big-league prospects. Collectors bought bundles of rookie cards as a way to gamble legally on a player's future...

In 1989, the Upper Deck Co. would transform the industry with flashy, high-priced cards aimed at investment-minded collectors. As the sales of new sports cards swelled to more than $1 billion a year, children began to flee the hobby, turned off by the pricey packs and confounding number of sets. The baseball strike of 1994 ushered in an industrywide hangover that still hasn't ended. Revenues from new sports cards have fallen to around $200 million a year, roughly one-seventh of what they were at their peak. While vintage cards like the T206 Honus Wagner and the 1952 Topps Mickey Mantle have continued to soar in value, baseball card's boom times produced no such valuable merchandise. Those 1988 Donruss cards, once considered a savvy investment, can now be bought in bulk for around 1 cent apiece.

Read the whole thing. 

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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