Inside the Pack: The Perils of Investing in Modern Players
The past few weeks have seen multiple events in the sports world rock the sports card industry. First, news broke that Angels centerfielder Mike Trout may have a back condition he’ll have to manage the rest of his career, which left some folks wondering if he would ever play again. Then, Padres phenom Fernando Tatis Jr., who hasn’t played this season due to a self-inflicted motorcycle injury, was suspended 80 games for violating the MLB drug protocols. Finally, Jets quarterback Zach Wilson suffered a meniscus tear in the first game of preseason.
These real-life problems all reverberated through the hobby for the same reason: the amount of money invested in these players. Trout, Tatis, and Wilson have been among the hottest commodity in sports the past few years. Investors have pumped tons of money into these young stars, and in an instant, they’ve seen values drop drastically.
Not all hope is lost, however. Trout has put together a first-ballot Hall of Fame career even if he never plays another game — which he will. The price of some Trout cards, like his graded base rookie, were already a bit inflated, and the knowledge that he isn’t going to end up with video game numbers for his career likely deflates those prices. But he should stay high regardless, and likely rebound when he recovers from his injury.
That last sentence is also true of Wilson. The Jets appear to think it will be a matter of weeks until Wilson returns from his injury. If that’s the case, the small slide in prices he is experiencing should rebound fairly quickly, assuming he continues to show the skill that he showed last season.
The more troubling news was Tatis. His 80-game suspension ensures he won’t play again until May of next season, meaning he will have played just 273 games entering his fifth year in the majors at age 24. His allure for a long time was the young age at which he debuted and succeeded, allowing investors to dream about the career statistics he could put up.
The real problem for investors is that short of dominating baseball for the next decade and winning a few championships, Tatis is unlikely to be able to fully rehabilitate his image. His missed season is squarely on his shoulders — no freak injuries on the base paths, for example.
People have been quick to compare his situation to Alex Rodriguez’s. Like Tatis, ARod was a young shortstop who burst onto the scene and put up incredible numbers. The difference between Rodriguez and Tatis is that Rodriguez had a fully-cemented legacy before he self-imploded with steroids and positive tests. Tatis has fewer than two full seasons of games under his belt. By virtue of being one of the greatest hitters who’s ever lived, Rodriguez cards still carry a nice premium, albeit certainly not what they would command if he didn’t get busted on drug tests.
Tatis’s case is much more similar to Ryan Braun’s, another youngster who set the baseball world on fire. Braun was a little older (23) when he premiered for the Brewers and won the Rookie of the Year award. The next season he led the Brewers to the playoffs. In his fifth season he won the MVP, and placed second in his sixth season. Then he failed a steroid test, made a horrible excuse (much like Tatis), and values of his cards plummeted. Though he continued to enjoy productive seasons after that, his star dimmed quickly and he’s little more than an afterthought now.
Unlike Tatis, Braun had a much more established record of success when he got suspended. Unlike Braun, however, Tatis still has much more time to rehab his image and put up huge numbers.
Such are the perils of investing in modern players. It’s impossible to tell when someone will suffer a freak injury or fail a steroid test or get a DUI or commit domestic assault. The best advice for someone investing modern players is The best advice for someone investing modern players is to follow the stage words of some of the best investors in history:
“I made a fortune selling too early.” — JP Morgan
“I never invest at the bottom, and I always sell too soon.” — Nathan Rothschild
Selling early may leave you with regret. but you’ll never see you the floor, and you will end up ahead because of it.
