How to Invest in Basketball Cards: A Beginner’s Guide

Introduction

In no small part due to the covid-19 pandemic, the trading card hobby has boomed over the past year.

In February 2021, a Luka Doncic rookie card sold for $4.6 million, then the highest price ever fetched for a basketball card. Just two months later, a LeBron James rookie card snatched the crown away (as the King rightfully should) in a historic $5.2 million sale.

Indeed, 23 out of the 24 most expensive sports card sales of all time have come since February 2020.

But while the market for the ultra high-end has stayed strong in recent months, prices for low- and middle-end cards have actually fallen.

Could that be an indication that the sports card bubble is bursting? Some certainly see it that way.

For others, though, the recent dip in prices represents little more than a market correction for an asset class with proven longevity and potential for long-term growth—in other words, a perfect buying opportunity.

If you're a complete newbie looking to dip your toes into the exciting world of basketball cards—whether to turn a profit or perhaps just to indulge in the thrill of collecting—this article has you covered.

Before we start: a quick note on investing vs. collecting

With interest in sports cards soaring, the past year has seen a massive influx of newcomers to the hobby looking to make a quick buck.

Unsurprisingly, not every veteran in the card game is happy with this sudden surge in popularity. As the number of hobbyists entering the space with a purely money-making mindset have risen, so have the grumblings of disillusioned old heads despairing at the diminishing appreciation for the heart and soul of the hobby.

Basketball cards are—first and foremost—collectibles designed to be enjoyed in their own right. For decades, passionate NBA fans have collected and traded while sparing little thought for profit. These people found fulfillment in the hobby itself: the satisfaction of adding to one's personal collection of favourite players; the excitement of pulling a rare, numbered parallel from a retail fat pack. They found gratification in the little things that make trading cards so popular to begin with.

I won't lie: I came into the hobby because of the money. But I stayed because I loved basketball, and I quickly grew to love the little things about card collecting. My hope is that any beginner reading this article will come to adopt this mindset as well. There's nothing wrong with looking to make money in this hobby (indeed, that's what this article is about), but I promise you that you won't be here long if that's all you care about. Collecting and investing aren't mutually incompatible; learn to love both and you'll make money while having a great time doing so.

So without further ado, let's get right into it.

Brands

In the early days of the hobby, several companies—including Topps, Bowman, Fleer and Upper Deck—manufactured basketball cards. Starting in 2009, however, Panini America obtained exclusive rights to produce NBA trading cards and is today the mother company behind dozens of different brands.

Due to the sheer number of these brands, it can be a daunting task for beginners to figure out what to buy. Luckily, these brands vary tremendously in price, allowing fledgling collectors and investors to narrow down their options based on budget.

Though far from an exhaustive list, here are some of the most popular brands, broadly categorized into low-, middle- and high-end tiers:

Low-end

• NBA Hoops
• Donruss

Middle-end

• Prizm
• Mosaic
• Optic
• Select
• Revolution

High-end

• National Treasures
• Immaculate
• Flawless
• Opulence

Yearly sets for each brand are released sequentially throughout the NBA season, with lower end brands generally coming first. Panini also produces several college sets prior to their NBA releases, but these cards typically fail to hold value long-term.

Here's a handy calendar to keep track of release dates.

Products, Card Types and Set Lists

Basketball products are split into what are known as retail and hobby boxes. Retail boxes, as the name implies, are sold at big box retailers like Walmart and Target, while hobby boxes can be found at your local card shop or online at sites like Blowout Cards or Panini's official website.

The cards found inside these products can be split into the following types:

• Base set: generic player cards, including rookies, denoted by a unique number.
• Parallels: variations of base set cards, the rarest of which are denoted by a serial number (e.g. a parallel labelled /49 means that only 49 copies of that card were produced. Serial numbers can be as low as 1/1, meaning that that card is the only one of its kind in existence).
• Inserts: themed cards distinct from the base set. These cards can also come in serial numbered parallels.
• Autographs: cards autographed by the featured player. These cards are usually serial numbered and may also come in parallels.
• Memorabilia: cards containing a patch of the player's jersey, often game-worn. Patches featuring the NBA logo are known as a Logoman, and are usually the most sought-after. These cards are usually serial numbered and may also come in parallels.

Besides being sold in different places, retail and hobby boxes differ in the types of cards that can be found inside. While both carry the same base set, hobby boxes offer better odds for hits (rare cards) and contain guaranteed autograph and/or memorabilia cards. Both retail and hobby boxes contain exclusive parallels and inserts that cannot be found in its counterpart product.

For comprehensive overviews of every available card in a set, refer to set checklists by Beckett or Cardboard Connection (here's one for 2020-21 Donruss).

Retail boxes are further broken down into the following products, in ascending size order:

• Gravity packs: small packs of 4-8 cards
• Fat packs: larger packs of around 30 cards; exclusive to low-end brands
• Cello packs: several gravity packs wrapped in cellophane packaging
• Hanger boxes: small box including either one large pack or several gravity packs
• Blaster boxes: medium box of gravity packs
• Mega boxes: large box of gravity packs

Determining Value & Tracking the Market

So what determines a card's value in the eyes of collectors? Let's break it down.

• Rookie card

All other factors held equal, cards released during a player's rookie year will always be the most valuable. After that, second year cards will generally be more valuable than third year cards and so forth, with some notable exceptions (e.g. Kobe Bryant's 2012-13 Panini Crusade card, which features an angel wing design, exploded in value following Bryant's tragic passing).

• Rarity

As with any collectible, rarity is highly valued. With basketball cards, this can be easily ascertained thanks to serial numbers.

• Patches & autos

Cards with jersey patches and player autographs are both highly sought after. The holy grail for most basketball card collectors are rookie patch autos (or RPAs), which feature both a patch and an autograph on a single rookie card. The record-breaking Luka Doncic card that sold for $4.6 million was a one-of-one Logoman RPA from National Treasures.

• Condition / grade

Card condition is another extremely important determinant of value. Because condition is often in the eye of the beholder, collectors look to professional grading companies to act as an objective arbiter of condition—and thus value (I'll go into more detail on grading later).

There are lots of grading companies out there, with PSA, BGS and SGC generally considered the most well-regarded. The following graph depicts auction sales for graded 1986 Fleer Michael Jordan cards (easily the most iconic basketball card of all time) at each PSA grade.

In addition to specifying grades, grading companies also maintain publicly available records of the number of each grade they've awarded to any given card, known as a population report. Highly-graded cards with a low pop count (i.e. more rare) will generally fetch higher prices.

• Player performance, health & accolades

Much like how stock prices reflect the success and health of a company, basketball card prices usually reflect a player’s performance. Naturally, a star player will garner more demand than a 15th man. But if a star player starts to slump—or, worse yet, gets injured—expect his value to decline. On the flip side, if a rotation player starts showing glimpses of breaking out, his value will rise.

Accolades, hype and team success are all factors that also play into a player’s card value. Winning one of the league’s major annual awards (Most Valuable Player, Most Improved Player, etc.) is almost guaranteed to spike a player’s prices, at least in the short-term. And if you’re bullish on a lowly-seeded team’s chances to make some noise in the playoffs on the backs of their underrated superstar, it might not be a bad idea to invest in his cards early before everyone else catches on.

This is where it pays—literally—to be a fan of the game. If you’ve got a good pulse on the league and a sharp intuition for these kinds of things, there’s a lot of money to be made.

• Legacy, public perception & cultural significance

A great player will almost always fetch higher prices than a scrub, but greatness alone does not guarantee massive long-term growth in value; public perception matters too.

To illustrate this point, let’s take a look at Kobe Bryant. Most basketball purists wouldn’t include the Black Mamba in their top 5 greatest players of all time. But if I were to hedge my bets on any player’s cards to retain and grow in value long-term, I wouldn’t take anyone except maybe Jordan and LeBron over Kobe.

That’s because very few other legends hold a candle to the Mamba in terms of cultural significance. Everyone and their grandma has heard of Kobe Bryant. Two entire generations grew up yelling “Kobe!” when tossing trash into the bin. Especially in the aftermath of his passing, Kobe is revered and adored in a way that almost no other superstar even comes close to—and his card prices will reflect that.

Bar some kind of unprecedented scandal, all signs point towards LeBron James leaving behind a similar legacy. Michael Jordan, of course, is self-explanatory. After them, I’d single out Stephen Curry as the only other player with potentially-transcendent cultural significance; “Curry!” is the new “Kobe!”, after all. Finally, I wouldn’t underestimate the demand of alternative markets: in China, Yao is as relevant as Kobe and Jordan, and significantly more so than LeBron. In a similar vein, I would argue that guys like Hakeem, Mutombo and Embiid are great investments for the potential influx of African collectors over the next few decades.

• Release timing

The basketball card market is volatile, and no one can truly predict where prices are going to go. However, there are some general cyclical trends that you can follow if you’re looking to liquidate your investments sooner rather than later.

Firstly, prices tend to dip in the offseason and peak during the playoffs.

Secondly, college sets tend to dip in value after the first NBA sets are released, which in turn dip in value when more expensive sets are released later on in the year. In practice, then, if you pull a slick parallel from a college set, you’d likely make the most money selling it before Hoops is released. Likewise, you’d be best off flipping your Hoops rookie cards before Prizm comes out.

• Tracking the market

The easiest way to determine the current value of a card is to simply search for it on eBay (“set name and year”, “player”, “card number”, “parallel”/“serial number”/“patch”/“auto” [if applicable]) and sort by “Sold Listings”.

If you’d like to view prices over time, check out SportsCardPro for free sales charts. For more comprehensive data, Sports Card Investor offers a paid service called Market Movers.

Strategies

Now that we have a solid grasp of what drives value, what should you be doing to turn a profit in this hobby?

Well, let’s first talk about what you shouldn’t be doing: buying and ripping boxes in hopes of landing big hits (this includes participating in breaks).

We’re in a bull market right now. The frenzied demand for basketball cards has led to a massive influx of scalpers entering the hobby looking to make a quick buck by flipping sealed product. These opportunists are camping outside of Targets and Walmarts overnight, clearing the shelves and re-selling product at up to 4x manufacture suggested retail price (MSRP). Things aren’t looking much better on the hobby side of things, as Panini themselves have marked up boxes significantly in response to increased demand.

But even if you luck out and manage to stumble upon a re-stock before the scalpers get there, it still wouldn’t be a good idea to be ripping boxes regularly. That’s gambling, not investing.

Of course, that doesn’t mean you shouldn’t do it at all. The best part of the hobby is pulling hits from a pack. Indulge yourself in that experience every now and then; just don’t make it your primary strategy if you’re looking to make money.

In my eyes, then, smart basketball card investment strategies fall broadly into long-term and short-term categories. The former is akin to throwing money into an index fund while the latter is more analogous to stock trading.

Long-term strategies:

• Investing in sealed wax

So long as we aren’t in another junk wax era of sports cards, buying and holding onto unopened boxes (known as “sealed wax” in hobby parlance) should be a relatively safe long-term investment. Since most people tend to rip boxes as soon as they get them, supply will gradually diminish over time, driving its value up. Additionally, as people get priced out of purchasing valuable high-end cards, more will turn to sealed wax for the chance of pulling them instead.

The main downside to this strategy is fighting the collector’s itch to rip those boxes yourself. But if will-power and delayed gratification are strong suits of yours, I’d definitely recommend picking up a few boxes and setting them aside for a few years (or even decades).

• Investing in the GOATs

In my mind, there are three players whose cards have close-to guaranteed potential for long-term growth: Michael Jordan, LeBron James and Kobe Bryant. No one else comes close in terms of player calibre, cultural significance and popularity. If you have the capital at hand, there’s almost no reason why you shouldn’t pick up a graded 2003 Topps Chrome LeBron James and set it aside for a few decades; it’s as safe an investment as there is in the basketball card world.

If you’re something of a risk taker, you might also consider investing long-term in younger, unproven talent. Do you think Luka and Zion will become all-time greats? Then you might want to hold on that numbered rookie parallel for just a little longer; it might be going for an exorbitant amount right now, but it might go for even more in a few decades.

And that segues us quite nicely into our first short-term strategy...

Short-term strategies:

• Prospecting

Prospecting involves investing in younger players with star potential while their cards are still (relatively) undervalued. Right now, this includes guys like Jayson Tatum, Donovan Mitchell, Michael Porter Jr., De’Aaron Fox, Shai Gilgeous-Alexander and many, many more. As a fan, this can add a whole new level of excitement when cheering on your favourite players and teams, too.

Of course, this strategy runs the risk of players not panning out the way we expect or hope. Remember when Brandon Jennings dropped 55 points in 2009 and everyone thought he’d be the next great point guard? Or how about when Tyreke Evans took home Rookie of the Year honours that same year? Both dudes are now out of the league at 31. The NBA is a brutal business, and no one—not even professional scouts or advanced statistical models—can confidently predict a player’s career trajectory.

• Flipping based on market trends, hype and events

This strategy is similar to prospecting but generally involves hedging your bets on well-established players.

For example, it could entail stocking up on a star player’s cards during the offseason and selling when he carries his team deep into the playoffs next season, knowing that prices tend to go up in the post-season.

It could involve buying the dip when a player gets injured in the hopes that he’ll come back stronger than ever (Klay Thompson, anyone?).

It could also involve forecasting awards, championships and other events (e.g. Hall of Fame induction) well in advance. Were you on the Jokic MVP hype train way earlier than everyone else this year? If so, you could’ve made a lot of money on his base Prizm rookie cards.

Short-term and long-term investing strategies can be synergistic, too. Because not everyone can afford to dole out hundreds of thousands on GOAT rookie cards, flipping and prospecting can be fun ways to slowly roll up your investment towards more valuable cards.

Buying & Selling

Alright, so you’ve figured out your strategy and you’re looking to buy some singles. Where do you look?

If you’re lucky enough to have a local card shop (LCS) in your area, that’s a fantastic place to start. Aside from supporting local businesses, frequenting your LCS is a great way to meet fellow hobbyists and maybe even strike some nice deals after you’ve built up rapport with the shop owners.

If you don’t have a LCS near you, eBay is your best option for buying and selling low- to middle-end singles. Here’s a great video on how to scope out great deals on eBay and here’s one on best practices for packaging and shipping cards.

Two platforms that make it incredibly convenient to flip cards are COMC and StarStock. As a seller, both sites act as consignment services that will list your cards for a small fee. When you buy a card, you have the option to immediately re-list the card for sale (or keep it stored in your inventory until you wish to list it), cutting out the time and hassle of waiting for your delivery, creating your own item listing and shipping out your card. Of course, you also have the option to have your cards shipped to you whenever you’d like.

The downside of selling on all of these sites, however, are the fees. For example, in addition to COMC’s $0.50 per card listing fee and 5% cut of every sale, they also slice off a whopping 10% every time you decide to cash out your money. If the idea of pesky fees eating away at your profit margins irks you, you can try social media instead: both Instagram and Facebook have bustling marketplaces for sports cards.

For super high-end graded cards, you can check out consignment auction sites like PWCC and Goldin Auctions.

And then there’s the new guy in town: Alt. Alt’s mission is to make alternative asset investing as transparent and liquid as stock trading. By signing up for their “exchange”, you can purchase cards (and, in the future, other collectibles!) from their vault and track your portfolio value in real time—something that no other service provides. As a seller, they also offer the lowest fees of any service.

Finally, there’s card shows. These events are a great opportunity to actually deal cards in person while having a good time with fellow hobbyists.

Supplies

Condition is the name of the card game. This means that before you even think about buying cards, you need to stock up on the proper supplies—both for personal storage and to ensure that your cards will be shipped safely when you decide to sell.

Before we get into these supplies, it should be noted that basketball cards come in varying thicknesses, with higher-end cards typically being thicker. The unit of measurement for card thickness is a “point”; 1,000 points equal one inch. Keep that in mind when buying the following supplies:

• Penny sleeves

Penny sleeves are thin, transparent plastic sleeves that serve to protect your cards from surface damage. They're pretty cheap, especially if you buy them in bulk, so there's no reason why any semi-valuable card shouldn’t go straight into one of these.

• Top loaders

Top loaders are semi-rigid plastic cases that protect your cards from bending, creasing and corner/edge wear. Valuable cards should, at the very least, be sleeved and stored in a top loader.

• Magnet (One-Touch) Storage Case

For higher-end cards, one-touch cases are a pricey but worthwhile investment. These rigid plastic containers snap your card into place, ensuring maximum protection against bending, creasing, corner/edge wear and even UV light.

• Cardboard storage boxes

The inescapable reality of ripping boxes is that you’re going to be swamped with a lot of bulk (i.e. low-value cards). These cardboard boxes are the perfect solution for storing bulk.

• Binders

Though not a necessity for pure investors stockpiling only valuable cards, no true hobbyist is complete without a binder to showcase their precious collection.

Grading

Should you get your card graded?

If it’s rare, highly sought-after and in mint to near mint condition, the answer is a resounding yes.

If it’s one or two of those qualifiers, it’s probably still a yes. Case in point: a LaMelo Ball base Prizm rookie isn’t particularly rare, but its demand is high enough where a highly-graded copy will still substantially increase its value over its raw counterpart. Conversely, a 1986 Fleer Michael Jordan is so highly sought-after that even a poorly graded copy will fetch over $1,000.

If it meets none of those qualifiers, you’d likely actually lose money on the grading fee. PSA currently charges from $20 per card for low-value cards all the way up to $10,000 per card for cards worth over $250,000.

It should also be noted that turnaround times for grading can be excruciatingly long for non-express services. This is important to keep in mind if you’re looking to sell within a certain timeframe. For example, let’s say you bought a card in December that you’re looking to flip come playoff time. To ensure that it gets back to you in time, you’d need to pay for PSA's Express or Super Express service, which costs $150 and $300, respectively. Will your profit margin be large enough to make that worthwhile? Maybe you’ve decided that it will be—as long as you strike a 10. But 10s are fairly tough to come by, even for cards pulled straight from a pack and immediately tucked away inside a one-touch case. Are you willing to take that risk?

If you are, make sure that your card is up to par on these four criteria: corners, edges, surfaces, centering. Here’s a detailed overview of PSA’s grading standards.

Conclusion & Useful Links

And there you have it—everything you need to know to get started with basketball card investing.

This probably goes without saying, but I am not a financial advisor and this is not financial advice. Invest only what you can afford to lose. Collect only what you want to collect. And most importantly, have fun doing it!

Here are some useful links to help you delve deeper into the hobby:

Blowout Cards forum

reddit.com/r/basketballcards

TRIKE415SportsCards (YouTube channel)

Sports Card Investor (YouTube channel)