The Process I Use to Find Undervalued Cards (And the 4-Month Hunt I Walked Away From)

 This is the first time I've walked through the full Slabnomics process from start to finish. Post-mortem to pattern recognition to filter to hunt to execution decision. End to end, with one real trade as the worked example. 

I talk about:

• Post-mortem methodology and tag-based pattern recognition
• The four-tag rule for win-rate stacking
• MLD framework applied to a current superstar's valuation
• Supply structure analysis on Prizm World Cup Silver parallels
• Alpha decay and the half-life of an information edge

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Transcript

SPEAKER_00 0:14

Last week an auction closed. I've been staking out this one card for more than four months. The card ended up selling for 275% what it had sold for only four months ago. And it was still only one third what it should have been. I didn't bid. This episode is about why. It's not so much about this one trade or about one specific market, but it's really about using math to find data-backed opportunities. The patterns you find in your own data after you stop telling yourself stories about why you bought things, the hunt that follows, and the conviction it takes to read the math and make a market. Using this example today, I'm going to walk you through the entire process for the first time ever, from discovering proper market forces to finding undervalued assets in those markets, to then translating the pattern that shows up into an opportunity to be ahead of that market wisdom. This process ends with the hunt and the final trigger pull, and it ends with a horizon for your investment. So for the first time ever, join me for the entire Slabnomics process, start to finish in sports cards. At the end of last year, 2025, I sat down with the spreadsheet and every card I had bought or sold over the prior 12 months. Every single one. Wins, losses, break evens, the ones I held too long, the ones I sold too early. This is the unglamorous part of trading. Nobody posts about their postmortem. Nobody's making carousels about going through losing positions and asking what they all had in common. But this is where you can find actual edge. Edge that doesn't live in next year's prediction, but it lives in what you've done and the data you've compiled yourself. I tagged every position, not just by player and set, but by characteristic. Rookie card, Hall of Fame player, was this from a flagship or a sidewalk set? Was the player at peak performance, a goat, a performing star? Was the parallel rare? Was the print run small? Was the jum rate viable? And by the time I had done this, I had 15 or 20 tags. And then I asked a simple question. Which combination made me money and which combination didn't? The answer was almost embarrassing in its clarity, guys. The cards where four or more of these tags lined up positive had a hundred percent win rate. A hundred percent. The cards where two or fewer tags lined up lost money more often than not. And at the three tag mark, the result was a coin flip. Four positive tags or more. That was the clear rule. Now there was a second pattern that I saw. Certain sets dominated that wing column. Prism World Cup, specifically in the soccer realm. The combination of flagship set, recognizable design, controlled supply, and the looming 2026 World Cup catalyst create a setup where the math was already tilted in my favor before I even bought the cards. This is what data can help you to do. It can tell you what you actually do well, not what you think you do well, but what you actually do well. And there's a big difference. Now, most people are not going to do this. I'm going to tell you this right now. Maybe 1% of people, maybe. They're probably not even going to look at data. They might look at pop counts, they might have some kind of idea of where they're at, but they're not going to be tagging their assets. They're not going to be looking at the good, the bad, and the ugly. This was not a vague intention that I was going to do. This took a lot of effort and it was really hard for me to actually go through, I'm going to be honest. So why did I end up doing it? To answer that, we're going to go back to basics, and for that, we're going to take a short winding tangent. Now many of you have reached out to me in DMs and asked me if this or that card is undervalued. My response to every single one of you has been undervalued compared to what? See, undervalued in a vacuum is meaningless as an adjective. It's a purely relative term. Every single card is overvalued because they're all objectively value less. So understanding that value is relative is the key foundation in hunting for opportunity. To find opportunity is really to find missbalance that the market hasn't realized yet. And to understand this, you need to see which assets are tilting on each end of the seesaw, and just as crucially, you must understand how that seesaw operates. Let's get practical here for a second. Is Shohei Otani overvalued? To answer that question, you have to break down what Shoheo Tani conceptually is, and then use that human brain for what it's best for pattern recognition and comparison. To help with the breakdown, I have my MLD framework, market, legacy, and design, which are the three pillars of player valuation in Slabnomics. So let's start there. Market is the first crucial component because just like in stocks, your total addressable market defines the scope of your customer base. Think of it like this: a mechanic shop in your city only has the possible customer base of those in your city who have cars. Contrast that to Ford, who has a possible customer base of any people in places where people drive cars all around the world. So back to sports cards and market, we can break it down in the card market, which is kind of like the industry in stocks. Baseball is the oldest and most liquid card market in the world. Now the second piece of market is for this card the team. OHE is on the Los Angeles Dodgers, which is the second biggest MLB market after the New York Yankees, according to Forbes. It's valued at$7.8 billion. For comparison's sake, the average MLB market is$2.6 billion. So domestically, the Dodgers are three times bigger than the average MLB market. Now, when you expand this concept and check out where the international market is, that's where Shohei's market rating gets insane. Asia Pacific region holds 20 to percent of global baseball market share, which is a far cry from North America's 55% dominance, but it is the fastest growing segment for baseball fandom. In fact, 89% of fans in Japan report at least some interest in baseball. Now, a good rule of thumb method for valuing a superstar's market is by taking a look at off-field earnings from endorsements and memorabilia. Shohei is projected to reach$125 million in such earnings this year, which is set to surpass the single-year endorsement record set in 2009 of$105 million. Can you guess who it was set by? The answer is Tiger Woods. Johei doesn't just have a big market. He has the biggest market value of any athlete that's ever lived. Now, side note, if any of you are thinking 2009 was a long time ago, and asking what the inflation-adjusted comparison is, that makes me more proud than you would ever know. 105 million in 2009 for Tiger Woods is roughly equivalent to$161 million today. So Shohei doesn't actually get the record if you take inflation into account, which we always should. The fact remains that the only one that beats Tiger is Tiger when he's behind the wheel. The next valuation leg of MLD is the L, or legacy. This is the tricky one because there's some projection necessarily involved here. Shohei is a four-time MVP with three straight and two unanimous MVPs, back-to-back World Series championships, and he founded the 50-50 club. And he also has arguably the greatest single-game postseason performance in history. Some might say he's behind only Babe Ruth and Willie Mays as a two-way player in historical value, and you can point to hardware and concurrent peak to put him over Ruth. He's clearly Rushmore tier. Now the last pillar of MLD is design, which is more card specific when we talk about valuation. This looks at sets relevance and longevity, so we don't need to get into it for this. The point of going back to the basics for valuation is to show you that saying, is Shohei Otani overvalued? You have to first understand the underlying valuation metrics. If I'm going to answer that question, I would start by looking at this. Shohei's 2018 Bowman Chrome Rookie Gold Auto in a 10 is worth roughly 500K with a pop of 14. That's$7 million of market cap. Billy May's 1951 Bowman Rookie doesn't have any PSA 10s, but it does have eight copies in a PSA 9 worth about 833K each. That's about 7.5 million in market cap. So you could look at this and say that Shohei's ultra high end is about where it should be. But also remember that this is the only rookie card for Willie Mays, whereas Shohei has all the different parallels and all the different variations. Definitely something to think about when you're looking at vintage. Now back to the problem at hand, finding where to focus your hunt after you've crunched the numbers. I've talked a lot recently about cascading demand. When people first get into a new market, they start at the top, and as the top gets crowded, demand starts filtering down into new opportunities. Now in soccer, it's a tiny market with only about 7% of the trading volume of baseball every day. Demand just doesn't cascade down very far. You can keep to Messi, Ronaldo, Holland, Mbappe, and Yamal, and you're covering 90% of average daily volume. If you want the numbers, which you're a slabnomics listener, so you should, that's 51% of the volume being Messi, 16% Ronaldo, 14% Lamin Yamal, 7% Mbappe, and 2% Erling Holland. From there, you can start looking at population reports, you can look at gem rates, you can look at recent sales velocity, you can look at parallels in the same sets with different players, you can look at the same player across different sets. You can build a grid in your head or on paper or in a database, and you can wait for asymmetry to appear. But I wouldn't recommend that. That sounds like a lot of work. So what we really want to do is find a card that nobody wants for a reason we haven't figured out yet. The market isn't always efficient, but it's really as stupid as it looks, it's sometimes just a little slow. So the first thing I do when I find what looks like an obvious mispricing, by the way, I try and talk myself out of it. Find the reason it should be cheap. If you can't, you might have something. Going back to my results that I actually found. Prism being my far and away biggest alpha driver, particularly World Cup Prism, I went through all the Prism soccer sets for those five players I mentioned earlier. There's only three of them in terms of the sets, so it was pretty quick work. Now for the parallels, I've talked a lot about how we don't know which parallels will hold value long term. In fact, most, I believe, are going to lose value the minute they start hitting the market. But what I do know is that human beings love and will always love silver and gold. And now let's just say if I went after golds for these sets for these players, my full fun portfolio you can view on slabnomics.com would have been a lot shorter. Would have been a lot less work to put up, but not as fun to look at. So instead I looked at silvers. And across those three World Cup Prism sets, Holland and Yamal don't show at all, and Mbappe is in 2018 as a pseudo rookie and 2022 only. And then Ronaldo and Messi are in all three. So we're only looking at eight different silvers to compare. There was one card that stuck out like a nugget of gold flashing in the riverbed. Now, before I tell you what it is, let me lay the groundwork here. For most of my childhood, I didn't pay much attention to soccer, but even I, a Packer fan growing up in Cheeseland, knew that Messi and Ronaldo were the guys. For ten years straight, one of the two won the Ballon d'Or for the best player in soccer. In nine of those ten years, they finished first and second. Complete dominance. With his limitless confidence and cultivated image, bad boy Ronaldo was the perfect yang to the yin of the otherworldly technically gifted, yet humble, wizard of Messi. Now, in terms of accomplishments, tearing the two against each other, people today put Messi on a clear pedestal a full tier above Ronaldo, with some not even claiming Ronaldo on their Mount Rushmore. People forget that the what have you done for me lately attitude can be a real blind spot. At the beginning of their rise to dominance from 2006 to 2009, they were neck and neck. Now from 2009 to 2014, Messi pulled away. He won the Ballon d'Or four times to Ronaldo's one, and he won the Treble, which is the three biggest trophies, twice in that span, scoring an inhuman 116 goals and assists in the 2011 to 2012 campaign. Everyone thought the debate was over. But people today forget what happened next. From 2014 to 2018, Ronaldo went to Real Madrid and he dominated. He won four of five Ballon d'Or in this stretch and four of five Champions League titles over that span, adding on winning the Euro in 2016, which is kind of like the World Cup, but only for European nations. So Ronaldo and Messi are now tied in five Ballondors each, but Ronaldo has the second biggest international tournament hardware to break that tie. Since then, though, Messi has taken back the reins emphatically, winning three more Ballon d'Or's to Ronaldo's nun, and most importantly, winning the World Cup with Argentina in 2022. Messi now has more senior major trophies internationally, almost double the assists of Ronaldo, and 903 goals to Ronaldo's 967. Ronaldo thus has more goals and won more Champion Leagues titles, but at the end of the day, Messi is the legitimate GOAT, and Ronaldo deserves to be on the Mount Rushmore of top four players of all time, in my opinion. Now that we've had a little jaunt down memory lane and seen how the historical legacies have shaped themselves over the past two decades, the question is, how do we fairly value cards for Messi vs. Ronaldo? In MLD, and I'm gonna keep this short for you guys, Ronaldo has a bigger market based primarily on him being at the two biggest glamour clubs in the world at his peak, Manchester United and Real Madrid. He also has more Instagram followers, the most in the entire world, by the way, which reinforces this win for market. In legacy, though, this is where we can give the nod to Messi. In design, they played in the same era, so by and large, they're in the same sets with a few exceptions. So comparing the market and legacy for the two, even though Ronaldo's market is bigger, even though both of these two are in the top four of all-time players, Messi being the absolute goat in legacy, puts his value at maybe 2x Ronaldo's. I would say that's pretty fair. But the card markets disagree. I went through an exercise where I added up the value of all the gem and mint populations for the messy rookie cards and sticker, and did the same for the Ronaldo rookie card and sticker. What I found was the messy top-tier rookie pool is worth four times what Ronaldo's is. This is why this is important. Rookie cards are the smartest pools of capital in illiquid markets. Remember that demand cascading down from top players first? The same action is consistent in players' cards. Rookie cards hold the majority of the value. In fact, second-year cards for top-tier players only constitute 3-5% of the value of the rookie pool value from the same set. For more findings in this vein, go check out my Instagram timeline at Slabnomics, and you'll see the rookie tax posts. And make sure you're following me while you're there. So now that we've deduced that the most accurate data set we can find puts Messi's valuation at 4x Ronaldo, what we're looking for is cards that are far away from this ratio of four to one in those three Prism sets that I mentioned before. And let me tell you, I found it. The card is the 2022 Prism Silver Cristiano Ronaldo PSA 10. This isn't like your modern basketball card, like a Wemby Silver rookie with 5,000 PSA 10s selling for$2,700 each. There are 19 2022 Ronaldo Silver PSA 10s in the entire world. In early January, when I was hunting through all this, the card ladder price was$180 for that Ronaldo card. Think about this for a second. Ronaldo is a top four player of all time for the most popular sport in the world, and you could buy out his third World Cup Prism Silver PSA 10 population for$3,420. Or at least you could have on paper. Now, having a low pop report alone is not really an edge. Lots of cards have low pop reports. The question is always pop relative to demand. So what I want to do was compare it to the 2022 Messi Silver. I pulled up the 2022 Prism Silver, larger pop, same set, same year, same parallel. Messi Silver from the same year was selling for$850 in a gem with$130 on the pop. Remember, Ronaldo's numbers were$180 with 19 on the pop. That puts his gem market cap for this card for Messi at$110,500, 33 times more expensive than Ronaldo. So if the efficient market pool says Ronaldo should be one quarter the value of Messi, that means fair value for this Ronaldo silver gem should be at$1,453. Now, I didn't post about it. I didn't come tell you guys. I only told one person that I was hunting this. The point of edge is that it stops being edge the moment the market knows about it. And here I am telling all of you, so there it goes. So once I had figured this out, the hard part comes. Finding the card. I set up save searches everywhere, eBay, Fanatics, Golden, Card Hobby, Alt, every auction site I could think of, every spelling variation, PSA 10, Prism, Silver, Ronaldo, CR7. And I looked at it every single day. For weeks there was nothing. For months there was nothing. What I got instead was simply noise. Global Reach Silver Ronaldo. A different parallel entirely, like the hyper parallel. The signal versus noise ratio in card hunting can be brutal when you're looking for specific things. You can scan thousands of listings to find one that actually matches your spec. This is the part people underestimate. The discipline of patience. The last copy that I'd seen for this card had sold in January for$216. I'd missed this, and it had already been 20% higher than another sale just a few weeks before. So cards this rare obviously don't appear often, so I was set to wait. Last week, an auction finally appeared on Card Hobby. 2022 Prism Silver Cristiano Ronaldo PSA 10. It's an auction format, which I prefer for cards like this because price discovery is honest. I was so happy when I saw this, guys. The satisfaction of hunting for something is what really drives me. Plus, I'd kept a lid on it and not run my mouth, so I was looking forward to swiping it and prepared myself to pay$300 for it. 39% more than the last comp, just to make sure I could grab it. My last podcast episode was about everyone trying to pay 80% comps on things. So you can see me paying 139% shows you that that's not always the way to go. I checked on the auction every day. First few days were pretty quiet. Then the morning of the auction end came. The price was already over my three hundred dollar bid when I woke up with only an hour left. Man, I was flummoxed. Where's this buying pressure coming from? I'd done the math beforehand, so I talked myself into raising my bid, something I strongly recommend against. As a side tangent, this is the moment that does define whether you're a disciplined trader or a gambler with a thesis. A gambler's going to bid anyways, he tells himself the catalyst will push it higher, tells himself that they're still upside, and he convinces himself that the original Edge is still there because his ego needs the trade after four months of hunting. I definitely felt this. A disciplined trader, on the other hand, does the math one more time, and he asks whether the remaining upside justifies the entry. He asks whether he is buying because he wants to be right or because the trade is good. The real answer for me was that my alpha was gone at that moment. The comp was too far ahead of where the other comp had been in too short of a span. The market doesn't like that, it doesn't trust it, so it's really hard for that comp to stay up. So really the alpha was gone. The window between my discovery and the market's correction had closed. I could still buy the card and maybe I could make some money on it if the World Cup catalyst played out, but I'd really be buying it at fair value, not at a big discount. That means I'd be more of a participant, not an investor with an edge. But, anyways, I said to myself, I want this card and I know where fair value is with the math. So I bumped it up to$400. Mind you, that's 85% more than the last comp three months previous. I'm like, there's no way someone is going to pop it over that. And I told myself, it's still undervalued at that level by 363% with a couple months before the World Cup. And since I was breaking my big rule for auctions, which is raising my bid over what I had previously decided on, I decided, hey, I'll put in and I'll go do something else so I'm not tempted to raise the price anymore. Distract myself. I still expected to come back an hour later and pay for the card. Because who's paying 85% over last comp three months ago for just a random card? A couple hours later, I remember the auction and I come back, looking forward to my well-fought win. Finally, the taste of victory. The auction had finished at$469.27 versus the$216 price January 4th, 117% increase in four months. The market, sluggishly moving for many cards, moved all at once. I was crushed. Here is what this episode is actually about. The work I did at the end of last year, the postmortem on all of my sales, the tagging, the pattern recognition. That was the source of the edge. That was the hard work that I put in that people don't do. The math I did to identify the Ronaldo silver was one application of that edge. The hunt was the cost of the edge. And the closing of the window was the reality of the situation. A big lesson that I learned here is you don't get to keep alpha forever. The market is not stationary. Other people do run their own analysis, word gets out, people talk about it. I'm sure other people noticed the same supply structure I noticed. The question was never whether the market would catch up. I truly believe the question was whether I could capture that gap before the market did. This time I didn't. The window closed before I could find the card, and that happens. But the big thing to always remember is that these aren't failures of process. I correctly identified the undervalued asset. The math was right, the catalyst is still real forthcoming. And having done this work and seen it play out in such a quick period of time gives me a lot of lift, a lot of confidence in that what I'm doing is right. And at the end of the day, after the catalyst calms down, it's almost assured that I'm going to come back and buy this card afterwards. Still a good card. I just lost the race this time. Here's the part where people get wrong. They confuse the trade not happening with the analysis being wrong. The analysis was correct, the market confirmed it. This is really the system working, not failing. Buying at fair value when your edge was a discount is what the failure would have been. Pretending that the original thesis still applied after the conditions that made it a thesis had mostly evaporated. That's how disciplined investors become undisciplined risk takers. They mistake the destination for the route. They ignore the nuance of timing. It's highly unlikely this card has much room to run in the next two months after such a massive jump of valuation. Then again, Ronaldo is Ronaldo. There's a real chance the price I walked away from looks really cheap by next summer. That's fine. I can be wrong about the upside and still be right about the discipline. And those are the two different evaluations in this. The thing nobody tells you about Edge is that it's mostly invisible work. It's sitting at your home desk going through last year's losers. It's making spreadsheets nobody's going to see. It's checking the same save searches every morning for months on end. And it's talking yourself out of trades that you might want to make. The visible part that people see is small. The invisible part is everything. If you want to take one takeaway from this episode, here it is. Run your own data. That's your own IP. Don't trust your memory because memory is a press release written by your ego sometimes. The spreadsheet, on contrast, doesn't care how the trade felt. It only cares what happened. Only cares about the results. Find the pattern, build the filter. Once you have the filter, find the data. Once you have the data, find the asymmetry, then hunt. And when the market catches up to you before you can pull the trigger, sometimes you just gotta walk away. The next setup is already forming. You just might not have found it yet. If you enjoyed this episode of Slabnomics, please recommend it to a friend that can benefit from it. And if you're looking for more resources, head over to Slabnomics.com. I add more tools, frameworks, and practical data for sports cards enthusiasts on a weekly basis there. Until next time, keep building, and I will talk to you later.