Mangos, Messi, and Market Cap: The Hidden Math of Card Prices

 Sports card investing through a Wall Street lens. Matthew Worley breaks down supply, demand, and market cap mechanics using three Messi Prizm World Cup Silvers (2014, 2018, 2022). Learn float vs pop report, gem rate math, why hypermodern oversupply breaks and vintage tightens, and how to time entry points. Data-driven card investing from Slabnomics. 

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Imagine that you've been shipwrecked on an island with two other people. It's a small island and it only has one tree growing there, a mango tree. It's the only thing that the three of you can eat. And if the mangoes run short, all of you are going to go hungry. If the mangoes are plentiful, the people are fed. Everything on this island, every conversation about value and how to prepare for the future is about the mangoes. This island is going to be simple from the start, but with those three people and that one tree, let's say it bears one mango per day for each of you. That's three mangoes for three people. Plenty for everyone for a time. Now, if you were to value this mango, the value of that is pretty much everything. But the price on it is pretty much non existent because there's no goods to trade for it. But now imagine that a child is born, and maybe another child is born, and all of a sudden your supply of mangoes is no longer sufficient. You're going to have to plant more mangoes. What was once sufficient is now clearly not going to be sufficient. Now, with the price of things, we can't really put that into dollars because you're on a deserted island, but we can say that the dearness of it, how much those are valued, has gone up because now there's less mango per person. So this isn't because the mango itself changed, right? It's because the demand shifted. So what do people do in this case on this desert island? Hopefully, you're going to grab some seeds from that mango and you're going to plant some more trees. In this way, the harvest is going to expand. And for a stretch, after having mangoes be so dear, so precious that you could never waste a single part of it, now there's going to be more to go around. Now you're in abundance. Now, this analogy could keep going for only so long because your desert island only has so much soil to plant in, and you're only going to have so many babies at once until hopefully you get rescued. Let's say you've capped out how many mangoes you can grow, but yet you have more and more babies on this island. This is what's going to long term determine what the value of those mangoes are on your island, because that supply is going to be stretched more and more, and demand can never keep up. This little framework, this little example is what supply and demand looks like in a closed loop. And also in a very disguised way, this is the sports card market. So today we're going to talk about sports card supply and demand, a deep dive, and we're going to talk a little bit more about mangoes. By the end of this episode, what I want is so that you can speak more intelligently with people about how supply and demand forces actually affect the hobby that we know and love, and how you can actually foresee how demand or supply might be changed in the future. There's going to be some things that you're not going to hear on other podcasts. I promise you that. So buckle up, I'm going to make this short, but it's also going to have so much information that is going to make you a better card trader and investor. Let's get into it. Most market commentary on cards is about demand. Who's hot? Who got hurt? Who might be the MVP? Who crashed his car? Who signed a big deal? Who is trending? Who might get traded? All of that is very real, and all of that matters for the card markets. But it's all only half the equation. This is where all the focuses and all the camera lights are on. But let's talk about the stuff that's just as important. This other half is those mango trees. It's supply. And in the card market, supply has a couple different faces that aren't usually dealt with. Now I'm sure the first thing you think of when we talk about supply is pop counts. How many copies of a card exist at a given grade? The second that we're going to talk about today, which might be a little bit more new to you, is the concept of float. In the stock market, this means how many shares are out there trading on the markets. In the card world, this is how many copies are actually offered for sale at any given moment. So the first, that pop report, is what PSA or Beckett measure. The second is what the market actually transacts on live. And that's where you see supply and demand interact on the playing field. Now, this float is something that we don't talk about a lot. And when we talk about supply, we talk about available supply and real supply. That real supply is that pop report. But the available supply is what I can go get if I decide I want that card. Little tangent here, but if you go try and find high value, high grade 1996 Tops Chrome refractors for football markets, you will find very quickly that there are almost none. This is the critical point that most people don't think about until they're faced with the hunt. In my case, when I'm looking at 1996 Tops Chrome for football all of the time, I am every day on eBay or Fanatics or Alt trying to see what new copies are for sale. But if you're not looking for that, you wouldn't understand how hard it is to find them. You wouldn't understand until you look at the pop report, then it makes sense. Many of these cards have a gem rate that's under 10, which means the value of those PSA 10s is astronomically lifted. Even more than that, a PSA 9 is not the PSA 9 of today in 2020 or later. PSA 9 is a very good grade for those. And as I've talked about before my PSA 9 is dead segment, having that gem rate at under 10% means that PSA 9 is incredibly valuable. That holds true no matter what era we're in. Gem rate paints that story for you. Anyhow, back to the thoughts about supply here. When you're looking for available supply, that means how you can actually go and practically get a hold of carts. And you're going to find for a lot of those cards that that number might be different than the number that you see for the total available supply on the pop report. And one more thing that people don't think about a lot, but market cap and what that means for return in the stock market is much different than how it is for cards. But we'll come back to that in a second. Now, the reason most people get supply and demand wrong is that supply moves on a much different time scale than demand. Demand can come roaring in in a week and be gone within three to four weeks. You see a breakout game, a trending name that is everywhere, a meme suddenly catches fire. Supply in the card world ratchets, though. Cards get printed, cards get graded. So the graded population grows in one direction slowly, whereas the demand can come all at once when a player gets hot. At the end of the day, as we all know, you can't unprint last year's print run. That asymmetry between supply and demand forces is the heart of everything. What determines the path of an asset's price over time is the interaction of those two forces. Now, what does all this mean practically? I ran a thorough graded market cap analysis on three different reference cards. One was from 2014, one from 2018, and one from 2022. Now, caveat, these are all soccer cards. But what I'm going to go over here is very important no matter if you're in the basketball market or the football market or the hockey market or in Pokemon. So the reason that I use the 2014, 18, and 2022 cards is because they are the three Prism World Cup cards for Lionel Messi. Messi is considered to be the greatest soccer player of all time. And the fact that he only has three silver prisms makes this comparison very apt and very easy for us to do. It makes the math a lot simpler than going through a whole bunch of cards that LeBron has. So when I talk about market cap, market cap is the idea that if you wanted to get all of the cards for a specific player in a specific grade, how much would it cost you? And that number is exactly like the market cap number of stocks. If I want to go buy all of the Apple stock that exists out there, I would have to pay, I think it's $4 trillion plus dollars. Same way, if I wanted to go get all the 2014 Prism silvers for messy in a PSA 10, there are 39 of them. How much would I have to pay? That's the market cap. And if we compare that number for the 2014 versus the 2018 versus the 2022, it gives us a nice indicator of how these cards are truly valued overall compared to one another. How we get to that number is simply graded population times average sale price. That's what we call the market cap. If you track it over time, you can get a growth rate. If you track sales over time, you can get sales velocity. Now, why am I throwing all these terms at you, you might ask? Because these have crucial relevance to figuring out how we can get risk-adjusted return, which is something that I'm going to go over a lot for my Slabnomics investor tier guys on slabnomics.com. But today we're going to deal just with market cap growth and give you something that might be super surprising when you're looking at cards and trying to figure out how the heck you can value them. The problem when comparing cards against each other, everybody looks up the population and everyone looks at what the current price is. When they look at past prices in order to see where the highest price has been for that card and where the lowest price has been, they don't remember to also look at where the supply was at that time. And to complicate it further, we don't really have good data as to the available supply that was present when that purchase was made. So it gets a little bit complicated when we're trying to look at supply and demand. But key thing to keep in mind, whenever you go back and look at a prior price for a card, you also have to understand what the population was for that card at that time. So to give an example for that, I broke out the 2014, 18, and 2022 silvers for Messi, and I looked at different windows for them. And I want to talk through what that looks like today. So the 2014 Prism, which is the first Prism card for soccer, Messi Silver PSA 10. Over a one-year window, the supply change has not changed at all. In the past year, we have not had any more PSA 10s added. The price change, however, has been plus 396%. So the market cap that we've seen over that timeframe of one year is 396% added. Thinking back to those mangoes, the harvest didn't grow at all. The price did all of the work, and they've become more dear in this case by 396%. Now, let's zoom back out and look at five years ago in 2021. The supply has changed in those past five years plus 77%. So we've had 77% more gems come through. The price change has actually gone down 42%. And you might be saying, Matt, that's crazy. How has the price gone down in the past five years for that messy silver, especially with how crazy the prices have been recently? We saw a good $11,200 sale for a PSA 10. How can you be saying it's down over five years? Because in 2021, things were pretty bonkers for the soccer market, and we had a sale at about 17K. So that was the height of the market that we're using as our five-year window look into. Underneath the flat headline, two things are going on at the same time. The graded population nearly doubled, but the price per card fell by almost half. The market cap looks stable because more cards arrived to make up for falling prices. The market actually got bigger by adding more cardboard to the pool, not by adding value. Now, I'm going to take a little break here, and maybe you're thinking to yourself, does that mean the 2014 Messi Prism PSA 10 gem, the first prism that came out in all of soccer for a World Cup year, does that mean that that was a bad investment to make? I wouldn't say so, because I think some things have longer hold periods. But what I would say is that what that tells me compared to other cards that I'm going to talk about, is that we might start thinking about how it might not have been fully valued in those five years compared to the other two cards. Something to think about. If the whole market cap in five years has only become 2% more valuable, does that mean that soccer hasn't grown that much? Does it mean that more people haven't come into the market to boost demand? Or is it just that prices haven't caught up to where they really should be yet? Crazy thing is, I'm sure that person that bought five years ago at 17,000 thought there's no way this card is down in five years. It's Leonel Messi, it's his first prism. Back then, I think there were only 20-some gems. How could that card not hold value? But sometimes that time frame just isn't long enough and we don't think about that second thing, that population growth that's going to come with that card. That person is down 42% in the past five years. If he was able to hold on that long, if he was able to hodl. So let's see what the decomposition of the 2018 card looks like. This is Messi's second World Cup card in the Prism line. It's from 2018, silver, PSA 10. In one year, supply has gone up only 3%. If you remember that 2014 had 0%, no new tens. But in one year, we've gotten a few cards up in the 2018. The price has gone up 294%. Nice. The market cap is thus up 305%. Pretty clean. Now, the five-year window is where we ran into problems on that 2014 prism for Messi. Let's see what happens in 2018. Since then, the supply has been up 92%. So much more than that 2014 prism. The price is down 47%. So very similar to that 2014 story, the market cap is only up 1%. The five-year holder, just like the 2014 Messi Prism Silver holder, is down by nearly a half if you bought at the top. In the stock market world, we call this dilution. This is when they put out stock shares. And then over the years, to raise more money with debt, they put out more and more shares. That dilutes the value of the shares that the shareholders originally had. So 2014 and 2018 not looking like great investments for the past five years. Let's look at the newest one, the 2022 Messi Silver Prism in a PSA 10. Now, this is a special card. 2022 World Cup is when Messi won his World Cup. So it has a near and dear place to a lot of collectors' arts. Let's look at that one-year window. The supply is up 11%. So 11 versus 3% that we had in the 2018 versus 0% in the 2014. Much more supply still coming up on this. The price is up 350%. And so the market cap is up 398%. So pretty close, all things considered, to the other two. Now in a three-year window, the supply is up 232, 232%. Now, of course, this card came out in 2023, but from 2023 through 2025 is when you expect to see all the supply come out for the graded. The price is up 198%. So the market cap is up 888%. That's the kind of number that you're going to see on a thumbnail. And when you compare that to those long-term 2014 and 2018 returns that were at 2%, we have to take so much context in looking at these things. This is why I want to call to mind a couple different factors that makes everything make sense. Number one, five years ago is when the market was at an all-time high with COVID. Secondly, five years ago, there were only two World Cup Prism messy silvers in existence. Third, so these were at the top of the market for that 2014 and 2018. Third thing, that 2022 came to the market in 2023 when demand was certainly muted everywhere. We are in the middle of a bull market for cards after the whole COVID bull market. So it started from a much lower place, whereas we were looking at the highest places of the other two cards. Those windows that we look at things matter because it matters when you buy into something. When you are able to zoom out and look at how returns actually are generated, a lot of it has to do if you bought in at the right time. Buy and hold isn't always the way to go. It matters when you buy. And what also matters is looking at how those supply and demand numbers moved in those past three years. Looking at the 2022 and seeing it as an outlier, seeing 888% over three years, you might think to yourself, that's unsustainable. And if that hit your mind, I 100% agree with you. Out of all the messy prisms, I don't care that he won the World Cup during that year. And in fact, I found most cards don't actually bear that out long term. A lot of LeBron's championship years or Brady's MVP years don't really matter in terms of the valuations. But if you see 888% value added in three years on something, and the other two, which in my opinion are better cards, they're older. I think the pictures are better on both of them, their design is more crisp, more iconic, and they have less parallels, there is no reason to think that that 2022 is just going to keep going rocketing up. I think a lot of that money that's in that 2022, when we cycle into vintage, when we start going more into people being choosy about where they put their money, I think that's all going to roll back into 2014 Prism. If you're looking at things and seeing this market cap only increased 2% in five years, whereas soccer's market has gone through the roof, that's gonna break. Those 2014 silvers, there are only 39 tens of them, remember, those should probably be worth at least double. So if it's me, I'm holding that. I'm holding that until the supply and demand catch up to each other and the numbers make sense. Let's go back to the island for a second. Let's say the population is growing, the trees are planted to the surface living, and the harvest is at its physical maximum. Imagine one person on the island decides to build a storage hut, locks it up, nobody can get into it. The person is not going to eat their mangoes. They're just going to hoard all of the mangoes in there, hoard as many mangoes as they could possibly get their grubby little paws on. In terms of supply and demand, the harvest isn't really going to change. The demand isn't really going to change out there. But the number of mangoes available for trading and for people's demand, the number circulating the market goes down. The price of the circulating mango thus has to go up. Not because the harvest shrank, but because the float, the available supply, goes down. This is the second phase of supply. And this is an important reason when looking at the 2014, 2018, 2022 prisms to call out how many more tens are coming onto the market. If you recall what I was saying before, on the 2014, we had zero PSA tens over the past year. Then the 18, we had 3%. And then on the 2022, we had 11%. When that new supply becomes zero, the price has to keep going up because more people become more and more into cards. They come in, they start looking around, they start finding out about soccer, they find out who the GOAT is, and they start trying to buy those cards. There are no more coming to the market. For each new person coming in that desperately wants that 2014 silver prism of Messies in a PSA 10, that price for all of that float goes up. Unless in the 2022 case, you have 10% coming more per year. That's going to eat into that demand. Think of population like the total number of mangoes that are harvested and float as those are actually available for people to eat. Another good analogy for this in the card market is that's the difference between the graded population on the PSA pop report and the number of copies actually listed on eBay, Golden, or Fanatics over the certain space of time. Population can be high, but float can actually be tiny. Population can be flat and float can still be tightening because more holders are vaulting, more set builders are trying to complete, and more long-term holders are deciding not to sell. So available supply and true supply can move in opposite directions. You can have a market where totally graded supply is rising steadily, the harvest is getting bigger, but the float is contracting because conviction is rising and holders are not letting go. That makes the headline supply looks loose, but the actual market feels tight. And you can have the opposite, of course. Population growth can be flat, but the harvest that you get is stable. Conviction breaks, though, and a lot of times you get a wave of holders who decide to sell at the same time, and this tanks the market. Most of what we call in a price move, on a day to day, week to week, that's more of a float move. How much of that available supply people are trying to sell is actually moving? We contrast that with a population move, which is kind of like the river, how many are actually in it? The two are connected, but they're not the same, and people need to realize that. You cannot trade on. Off the pop report alone. It does not tell you who is hoarding those mangoes and who is selling them. I know I touched on this before, but it truly does matter which window you measure from. That 2014 card is up almost 400% over the past year. And it's up 2% over five years. Isn't that crazy? This is the same card. It was in the same market of people. It's just the stories are totally different. Supply is now frozen on that card. The harvest on the vintage of the mangoes has stopped growing. The price is now going to be the one that's set to do all of the work. Over that longer window, though, for that five years, the population almost doubled. The grove continued to grow and it continued to meet that demand. New copies continued to arrive from the graders' backlog, which started in COVID, and then from collections that opened up, and then raw inventory becoming graded inventory as COVID brought that to bear. But these movements in the past year versus the past five years, they're both true. They're both computed correctly, and they're both real things that happened that are right. I think we think of a return number. I got 50%, I doubled and got 100% back. I think we think about that as an asset itself. But really it's just two moments in time moving from one asset into another. If I move from my dollars into a card at this time and then move from my card into dollars again at a bad time, it didn't go well. But if I moved from dollars into a card at a bad time, and then even if I moved from the card back into dollars at a good time, it probably didn't go well. Timing is truly everything, and where you set those windows is critical to long-term investment. That's why Slabnomics exists, to be able to tell you guys where we are in the market. Where are we at in the market cycle? Has the market cap moved too much for this card to be able to be a viable long-term investment for us at this time? In the stock market, we talk a lot about entry points. And that's what I want to give you as well. What does the data tell us about is this a good entry point or not? Keeping your head above the hype is truly the only way to have good long-term returns. And that's contrasted to what everybody's telling you. All the headlines are screaming how much money everyone is making. But the true story is not about that headline number. It's about when did I enter and when did I exit? And one way we can tell if it's a good tunnel to go down, to enter into in the first place, is to make sure that the numbers are on our side. For the 2014 and 2018 Messi Prism Silver, the answer in the past five years has actually been no. Everyone that bought at the top has not been made whole. They're actually down 40 to 47%. For 2022, the three-year window is the brand new five-year of that 2014 and 2018. Anyone buying that card at $1,600, which is what I just sold one of my 2022 Prism Messi Silvers for, is going to get absolutely crushed in the next few years because supply continues to go up and demand is not going to be able to keep pace, just like we saw in the past five years for the 2014 and the 2018. Turning it on its head, though, that 2014, which has no new supply coming in, the iconic card that only has 39 gems, that is a vintage gold mine. This is such a meaningful structural signal for us. The float is going to tighten on those vintages while the float continues to expand on hypermodern. This is the move that we need to start making. The way to think about it is while everyone's rushing into this door, what door, when they come out of that door all at once, are they going to rush into next? For me, looking at everybody running into those new, modern, shiny cards that have a thousand different parallels, they are going to come out of that disenchanted from that system, and they are going to pile in to those old releases that have very few parallels, true structural rarity. That's where the next float is going to go. So a few practical things that you can do from this episode, when you're looking at a market cap number, which is actually something you can see on card ladder, decompose it. I talk about this a lot, but on Gemrate, you can actually go see what the population of Gem Mint 10s was for a certain card at a certain date. So you can see how much the price has moved since the high, but you can also see how much the supply has moved. And if you have those numbers together, it can paint a much different story. Price growth tells you about value creation, whereas supply growth tells you about issuance and grading pipeline. So watch the float, not just the population. Second thing I want you to do, pick your window honestly. Don't measure a recovery against the most flattering possible start date. Measure it against when you actually bought. The market does not owe you any headlines, and it's not going to make them up for you. It owes you what the price leg on the dates you actually held was. In the same way as the island, the mangoes are what they are, and the harvest is what it is. The price of those mangoes is going to be reflected by the population, the trees, and what the people choose to do with what they have. And if you can hold those three variables in your head at the same time, you are going to be reading this market better than 90% of the people talking about it. Thank you so much for listening to this episode of Slabnomics. I hope that I've helped you understand a little bit more about supply, demand, and how mangoes work. And if you've enjoyed it, make sure to share it with a friend. Check out everything I have on Slabnomics.com. One little reminder I only have subscriptions open for my founding investor tier on Slabnomics.com this very week. They are going to close on Friday by end of day. You can lock in your price forever. So check it out on slabnomics.com backslash investor hyphen tier. And as always, keep building and I will talk to you later.