Why I'm (Mostly) Bullish on Sports Cards in the Age of AI

Today I want to share the biggest reasons I think sports cards are primed for continued success, as well as a couple of warning signs.

The more automated life gets, the more valuable tangible things become

As AI continues to develop and more of life moves online and gets automated, I think it only puts more emphasis on real-life experiences and tangible goods.

I didn't always see it this way. I was big on NFTs for a while, and for rational reasons at the time: lower transaction fees, no risk of fakes, the ability to produce things faster and in new formats that physical collectibles can't match, etc. However, times have changed and I've moved back to physical collectibles now. More than ever, people are craving things they can hold and experience in person. You can already see it in the surge around concert tickets and live sporting events; as everything moves online, the urge to do things offline grows with it.

Sports cards are a key way people stay attached to an event, a player, or a team. That connection is the product nowadays.

Agents will commoditize almost everything

As agents get better at understanding your shopping preferences, booking errands, handling disputes, etc., commodities will become a race to the bottom: lowest price, best offer, no emotion involved. That's exactly the kind of purchasing an agent should handle.

Buying cards is the exact opposite of this. Cards are diverse and difficult to pigeonhole into a single spec, and nobody actually wants to outsource the decision. The spend is all discretionary, with people buying based on their own feelings and intuition. An agent could theoretically go buy the card for you, but a lot of the joy is in hunting it down yourself and figuring out what you want, whether that's on eBay, face-to-face at a card show, in a card shop, etc.. It's one of the few types of commerce that's well suited for the modern age without getting disinter-mediated by new technology.

And as live sporting events continue to get more popular, I think cards are a natural fit to rise alongside them; they're the tangible piece of those experiences that you get to keep.

Next, I want to lay out some counterpoints and things I'd be wary of.

New money and the current hype cycle.

Billions of dollars and private capital have started coming into what has recently become an industry. New money drives a hype cycle, and we've seen prices on both singles and wax climb a lot over the past couple of years as new players enter. I don't think there's too much to worry about in the long term, but after a big run-up, some sort of correction is usually part of the story. The sustainability of current prices is a fair question.

Overproduction.

Topps is releasing a lot of new parallels and inserts to account for the increase in demand. Some of these cards will stay fairly rare and desirable in the long run; others are bound to become commoditized, and by the same logic as above, commoditized cards are exactly the ones exposed to a race to the bottom. A random base card graded a PSA 10 may not stand the test of time compared to an autograph card, a rookie card, or something with real significance.

Trust.

At the core of everything is trust that the system works: that the companies are producing the cards they say they are, that grading standards are doing what they set out to do, etc.. PSA may be king for now, but AI-enabled grading from companies like TAG and Arena Club is already here, and whether today's grading hierarchy keeps its popularity is up for debate. On the other side, forgery keeps getting more sophisticated — there are extremely talented people replicating fake cards and fake autographs, and technology keeps improving. If it reaches the point where we can't tell what's real from what's fake, that's a really important junction for the hobby, because trust is the foundation everything else is priced on.

Where that leaves me

I'm bullish on sports cards for the most part, but there are some things I am cautious about. The cards I believe in long term are the ones tied to real experiences and real significance, not the commodities that any agent will be able to buy you. And the things that will decide how this plays out are how the money flows, how much gets produced, and whether trust holds.

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Disclaimer: This is not financial advice. I'm a collector sharing my own opinions — nothing here is a recommendation to buy or sell anything. Do your own research.