Why Stephen Strasburg's $40,000 Rookie Card Is a Bad Investment
Strasburg was the No. 1 overall pick in the 2009 MLB draft, and his first major league start with the Washington Nationals on June 8 might well have been the most anticipated debut since that of the immortal Todd Van Poppel in 1991. OK, so sometimes the hype doesn't pan out. But in the case of Strasburg, it certainly has so far.
Through his first eight starts, Strasburg has posted an ERA of 2.03 and a WHIP of 1.03. He's struck out 68 batters in 48 and 2/3 innings. If that's all meaningless jargon to you, just trust me: He's been really, really good.
So in a way it's not surprising that the special edition autographed rookie card, which really is one of a kind, is generating so much attention -- or that the auction being conducted by Huggins and Scott is expected to generate so much cash. And say what you want about the childlike passion that big money collectors have for the game, the fact is that there's not a single person on the planet who will bid tens of thousands of dollars on a baseball card without some eye toward its future value.
And in terms of future value, no matter how outstanding of a career Strasburg has, whoever ends up buying this card is likely to end up disappointed.
Great Players, Cheap Collectibles
That's because the long-term success of a player doesn't guarantee the future value of his rookie card -- especially if that rookie card emerged in a cloud of hype during the player's first season. In 1991, three seasons into his sure to be first-ballot Hall of Fame career, Ken Griffey Jr.'s famous 1989 Upper Deck rookie card sold for $45. Close to 600 additional home runs later, that card can be had on eBay for less than $20. Of course that's better than Mark McGwire: Performance-enhancing drug scandals have knocked his rookie card's value down from as high as $200 to the sub-$5 range.
Of course, the value of this Strasburg card stems from the fact that it is in fact one of a kind. It is not merely a rookie card. But that kind of manufactured rarity rarely leads to long-term value. Red Sox starter Clay Bucholz is having a possibly Cy Young Award-caliber season: but a 2008 Clay Buchholz card limited to 199 copies was listed on eBay for $11.11 and failed to attract a buyer.
The idea of much-hyped, limited edition insert cards emerged in the early 1990s, Dave Jamieson, author of Mint Condition: How Baseball Cards Became an American Obsession, told DailyFinance in an interview. "Things started to go downhill around the time these gimmicks started popping up," he says. "It sent this hobby down this path toward really expensive packs, which really alienates kids, so they now have this problem of trying to lure children back into this industry."
"One big issue is people attaching this kind of vintage card mentality to new cards. Vintage cards are special because they earned the prices that they have," he says. "They're time-tested in a way that these contemporary, gimmicky cards are not. The great investments in collectibles are the ones you scoop up when no one else sees value. This is the exact opposite."
Real Value Lies in Items Made to Be Used
One of the surest signs that an object is unlikely to appreciate in value is that it's created and marketed as a "collector's item" with an artificially constrained edition size. That's been true of collectible plates, Thomas Kinkade prints, and just about every other much-marketed collectible in history.
The biggest reason that the Strasburg rookie is unlikely to hold its value can be summed up in one word: demographics. While baseball remains popular, few young people collect baseball cards the way that their parents did. When the probably middle-aged collector who ends up winning the Strasburg card passes on and his heirs look to find a buyer, they may well find that none exists.
A better bet? Antiques and collectibles experts I've interviewed in the past have suggested that collectors focus instead on acquiring items that originally were created for purposes of utility. For instance, a pair of unused club-level tickets for Strasburg's major league debut recently sold on eBay for just $35.61 and the line-up card from the Cleveland Indians dugout -- signed by the team's manager -- from Strasburg's second game sold for $585.37.