In the short-term especially, markets can be fickle. You might think you've spotted an unassailable opportunity based on rigorous months of research...and even then, your investment still zigs when you expected a zag.

For sports collectors - there is a mix of motivations to participating in The Hobby. Much of our community purchases trading cards for the nostalgic/intrinsic value; while many fans purchase as an investment vehicle/alternative asset class (similar to Art Collecting) - where value appreciation is a primary goal.

At WeTheHobby (helped by our friends over at Collectors and their business intelligence tools like "CardLadder"), we spend a lot of time evaluating industry trends and how those trends affect the sports collectibles market. For both types of customers (Fanhood/Collector, Value/Investor), it's helpful to have the right context.

When looking at the rapid growth in the last 4 years especially, it's easy to get swayed by market volatility. This can lead some to maybe see patterns that might not actually be there.

How Recent Valuation Trends Can Be Misleading

Many people look at this chart and see steady two-year aggregate ~50% decline in index value. Now, take a quick scan again at the chart at the top of the article. In the 20 years of data since ~2003, the basketball index is up 866.27% (for detailed explanations on CardLadder's Index Methodology, see here).

Which number is more "true", and what should that lead us to believe about future sports collectibles market growth?

Introducing The Hierarchy of Evidence

In Science/Statistics, the best way to resolve conflicting claims is through a concept known as "Meta-Analyses". In essence, Meta-Analyses are the combination of the results of multiple studies addressing a similar research question. What that really means is the more data points/studies there are address a particular question, the higher the accuracy/precision of conclusions will be.

When it comes to sports trading cards, it might surprise some to know that the market is a century-and-a-half old. That is a lot of data points!

So after a historically meteoric rise of asset appreciation during first two years of Covid, we have seen the market cool across most leagues into a more sustainable valuation trajectory. That correction needed to happen.

However, trading/sales volume as a potential leading indicator portends a Summer '24 Playoff Valuation Boost for NBA/NHL cards especially.

In technical analysis within capital markets, falling prices with rising volume is a usually bullish signal, as a rally off the bottom becomes more likely to occur.

Whether your time horizon is 3 weeks, 3 months or 3 decades - if you're into participating in The Hobby...knowledge is power. In a H/T to the late, great, Charlie Munger..."The big money is not in the buying and selling, but in the waiting."

Enjoy the wait!