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The Bubble is Bursting for One Card

The Bubble is Bursting for One Card

This guest post came through our Article Submission Program. Thoughts and opinions are those of the author.

Introduction

Investors Beware – The Bubble is Bursting for one card

That’s right, and it is all coming to an end. But before you guys start panicking, I’m not referring to the bull run we are experiencing in the hobby. I think the overall health of the hobby / investing is excellent, as more money gets poured in daily. However, I am extremely concerned about one card in particular. The Luka Doncic Panini Prizm RC.

2018-19 Panini PRIZM Basketball Card MEGA BOX Chase LUKA DONCIC ...

We all know Luka Doncic – international superstar having an MVP-like season, averaging close to a triple-double and likely be the NBA’s household name for the next ten years. He plays for one of the biggest markets and the talk of every NBA enthusiast, card collector and investor. Let’s talk briefly of his true rookie card – 2018 Panini Prizm Luka Doncic Base #280.

Based on some videos I watched earlier this year, I am told a raw base Luka could be purchased around $10 somewhere in December 2018. Fast forward a season after he has won the Rookie of the Year, Luka’s base Prizm PSA 10 was selling for around $70 on eBay. I know this because I had eyes on this for a while back in August 2019. However, back then, the hype was about Prizm Silvers and base cards didn’t get as much attention as it did compare to today. Also, it is evident that base cards were printed in the hundreds of thousands and hence it would rarely qualify as an investment product to do its scarcity (or lack of it) alone. Just look at the recent population report from PSA.

But as Luka’s on-court performance started to boom, so did his card prices and investors began to take notice. PSA 10 base Prizms climbed from $70 to $100 to $150 within weeks. Luka gained a lot of attention and naturally more sales volume to his cards. But that’s when investors started to swoop in.

Hundreds of copies started flying off the market and investors were hoarding more than their average share of PSA 10s. More copies were being graded and even more, were being stashed away. As investor demand increased, so did the price and in a blink of an eye, PSA 10s were already $250. A full three times of where it was a short few months back. However, prices didn’t stop there as early 2020 where lots of new investors with fresh money entered the fray and hopped on the Luka train and prices continued to climb.

So where are we at today? See below:

Good news is, this price isn’t artificially inflated. The bad news, in my opinion, the escalating prices are due to investors buying from investors. What this means is that as long investors believe that Luka’s prices will continue to soar, they will keep buying as many copies as they can get and likely pushing the prices up further.

But who’s selling? Where there is demand, investors who bought in earlier will take profits off the table. Perhaps not to the extent of liquidating their entire position but given price have 10X what they were last September. They could realistically sell 20% of the portfolio, pocket in some free net cash and ride the remaining as pure profits. And at any point, if that investor feels like taking more money, he could do so knowing his capital is already covered.

Hence, I see this as an on-going loop that has dire consequences. In my opinion, a large percentage of that eleven thousand population is currently held by investors – possibly in a range of the low hundreds. Meaning we have a few hundred people sitting on probably six to seven thousand copies of PSA10, transacting with each other and collectively pushing up the prices gradually.

So what’s the disaster scenario when the bubble bursts? Investors, holding up to hundreds of PSA 10 Luka Doncic’s and start flooding the market at a much faster rate than other investors/buyers can consume. Prices start to go down as the market becomes more saturated when and suddenly, when facing a downward graph, new investors begin to shy away. After all, the organic growth (genuine collectors who are interested in Luka) does not increase exponentially as how an investor picks up multiple copies of a single card at one purchase session. Hence, the number of entrants of true Luka collectors into the market is unable to sustain the astronomical price of the Prizm PSA10. Therefore other investors, including holding several to hundreds of copies, will be faced with a dilemma:

To sell before prices go further down?

To buy to either consolidate their holding or to prevent the free falling price?

To hold and wait and see what happens and if the prices would readjust upwards again?

Regardless of the decision, it’s tough because you invested $500 or $10,000 into these PSA 10s.

From my observation, the Luka Panini Prizm PSA 10 is quite a clear example of an impending bubble burst. Will it happen for sure? It’s hard for me to say in this bull run. But, I foresee as long as there is continuously new money introduced into the market through new and inexperienced investors, Luka maintains his on-court performance than his PSA 10 prices will continue to trickle upwards. I’m just wary we maybe already at the tipping point as we head into the postseason. However, everything I mentioned above could count for nothing if Luka beats Lebron and the Lakers to the title this season, of which Luka’s base Prizm PSA10 prices will shoot to the moon.

That is a big if!

Conclusion:

This article is just my opinion of one Luka Doncic card, remember always to do your own research when investing in a player moving forward.

I think we can all admit, most of use have either invested in or had our eye on Luka Doncic for awhile. This was an excellent article regarding his Panini Prizm RC, graded at PSA 10. I would love to hear the thoughts of those hardcore Luka Doncic fans or investors in the Comments below.

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View Comments (17)
  • I am 100% on board with this. I first believed the Luka card to be overpriced when I saw that his Silver Prizm PSA 10 was trading for about $3,500 with a POP of about 1900 and growing while the Dirk Nowitzki Topps Chrome was going for about $1,100 with 100 POP. People have lost their mind over Luka and everyone is trying to make $ off the card game right now. We need those that are inexperienced to leave the hobby or become more savvy with time and then we will see more stable prices. I think this shares attributes with Topps Project 2020. Everyone thought they could make easy $. With Luka they haven’t been wrong until perhaps recently.

  • Nice article and people keep beating the Dead Horse on Pop reports. However, completely disagree with you on this card. I see it at $1000 by end of 2020 and $2000 at the end of 2021. Luka is the BEST rookie in since Giannis and will be a generational and GLOBAL super star. Just my opinion. ZiggyNo

  • Thank you for the excellent article. It’s one of the more honest article while looking at the recent boom. I’m extremely cautiously optimistic and feel it’s a good time to start unloading little by little if you’re over exposed. When was the last time this industry has EVER cared about “2nd year” card. NEVER. We’ve never cared about 2nd year cards let alone even thought of grading a 2nd year card that wasn’t either #’d low or special insert. Even though the hobby gets newer influx of “new money” once cards reach a certain price with the massive printing in this case your example of Luca, people will start looking at cheaper alternatives. “the flow over effect”. Once the price reaches the brim, it spills over to other products, like 2nd year and the lower sets and etc etc, and we’re already seeing that. There’s no reason to dump your entire collection as you stated but being optimistically cautious is the right move right now and it’s not a bad idea to sell a few things to cover the other cards you’ve bought from this recent run. Being smart prevents you from holding bags. The card manufacturers like UD, Panini, Topps and ETC HAS NEVER EVER in the history of cards under produced their products for long. When they see demands, they always over produce. We saw it multiple times in the past. People have a bad assumption that the manufacturers in this case Panini with basketball cards are going to maintain a similar print run throughout. People have to remember that Panini has their product designs and etc etc for the year and it takes them a while if they need to change course and make more products to meet demands. They always do and always will. We will see another massive print in VIA more products, more parallels, and more base printing in general to meet demand. It just takes a while for them to get started and when they do, it’s almost always when the market starts to cool off and they just end up adding ice to the cooling market already with the massive print run at the worst time possible

  • You couldn’t be more wrong about this card imo. People are looking at these prices through the eye of a collector and not an investor. This is why all you hear is about the pop report. To a true investor, the card being as liquid as it is makes it more attractive not less as long as the demand is there, which it is. Lebron is the only other comp you can make to Luka based on age and performance. This card will continue to rise as long as he continues to perform

    • Agreed, liquidity in the market is only going to stabilize prices and make it easier to get in and out of the investment. Time time parlay those base cards into the parallels.

  • Look over HERE===== Now look over THERE====== It seems that there are so many platforms for sports card influencers on youtube and facebook and the web in general now, that the culture is becoming thought of as, “Look at the shiney object”, culture. While there is a lot of great information being given on these platforms, eveyone needs to take every article, every opinion, with a grain of salt and be careful not to fulfill “The sky is falling” or “To the moon Alice!” prophecy because of reading the prophecy. I am just as bad or worse than most when it comes to trying to gather information and then acting on it just because the thought has been put in my head. While a great deal of the information is really good and insightful, it can in itself create the reality. POTENTIAL IS MORE OF A DRIVING FORCE THAN THE REALITY! In my opinion, Lukas’ potential is what will keep driving his card prices regardless of pop reports at least as long as his numbers stay in their current range.

    • 100% agree with your comment, ultimately you have to (or should) do your own research and draw the conclusion you want when purchasing cards for your collection or as investments positions. Personally if your new to the game I believe you should try to find a mentor to guide you through for the awhile, until you have an understanding of the card game. The article submissions is where community members can voice their opinion and get some positive or negative feedback on the subject.

      • You put a disclaimer on the article as “do your own research”, but the research you proposed about pop reports was valid. You just poorly analyzed how this card would perform without considering how the investor’s and collector’s in the hobby were reacting. It was unnecessary, reckless and damaging to new, excited investor’s, like myself, who liked Luka and purchased one of his cards for long-term investing. I have no doubt the PSA Collector has multiple copies of this card, yet warned people away from buying it. Don’t put out another article again based on opinion if it’s based on weak analysis.

  • Also one other comment…..a headline like “The Bubble is Bursting” sounds like news. It is 100% incorrect at the moment. I would not have allowed a headline like that. A lot of people only read the headline and it seems a little irresponsible to try to grab attention with a headline like that, that is 100% false….at least at the moment. In my opinion headlines should be factual or posed as a question or possibility. It is almost comparable to a tabloid headline to me.

      • Thank you, I am not trying to be too critical, but really only commented because I love the information that I am getting from the Sportscardinvestor site and am also a member of market movers, so I when I read an article which is
        as grabbing as this one was, if it is not factual it takes away from what I will expect the next time I look through the articles. I look forward to gaining knowledge and insight by being a member and the headline was a little shocking when you have so much invested in Luka, and since there are influences caused by what is put out on credible sites such as yours it was a little disturbing. If it were true, I would have appreciated the information, but being false it seemed like a tabloid headline grabber. Also I was a little disturbed by any potential influence headlines like this could cool off the rise of values. Just like on Wall street, when you are an influencer there are things you can say and cant say that are considered not proper.

    • Couldn’t agree more. I was a newer investor when I read this/watched the Youtube video looking for “expert” advice in the hobby. This did nothing but scare me away from this card as it made it seem like it was going to crash soon after this was written. Now I’m out $500 and counting since I sold mine at $200. They say to do your own research, but now I realize that just means they weren’t confident in their own analysis and used it as a disclaimer in the case they were wrong (which they were, at the moment). Even if the bubble bursts, I’d be surprised to see the PSA 9 base card go back down to $200, where it was at when the PSA Collector posted his video.

  • I purchased a base 280 PSA 9 for $185 in May since I like Doncic and wanted to hold it long-term, however, this article and the PSA Collector video on YouTube convinced me to sell it right before it really took off. I don’t feel this article emphasized the popularity of this card or extent of the influx of investors in the card hobby enough and focused too much on pop reports. To me, it just shows vague inference, that you don’t have a true finger on the pulse of the hobby and made a very poor analysis. At the moment, I’m hoping for a bursting bubble and that I can possibly re-purchase a PSA 9 for $300-$400 if they lose in the playoffs early and the hype dies down. Biggest regret since coming back into the hobby. Luckily, I was able to buy four retail boxes before the spike in price, so, if these do go to the moon, I may crack some packs to try and pull at least one.

  • Interesting to reflect on this article 6 weeks after as we approach the mid 2000s in value for the card noted. With everything going on economically and a pending offseason looming with the clippers matchup, im curious as to what will transpire with the market. Will the market retain at the mid high end as investors prop the market for the offseason or will we see weak hands panic as the market shifts gears? Hard to tell. I hold more mid high end lukas and a lot of unopened product and i find myself at a challenging intersection. One on hand, we have a very special player that comes along once or twice (or maybe even once as I’m not ready to put Giannis development at the rate of Luka yet) a decade, and yet we have to acknowledge the turbulent effects an economic downturn can cause on a hobby such as this. Full disclosure, I hold two silvers a 9, and 9.5, along with a mosaic 10 and Prizm 9.5 true gem auto. Tough decisions as his seasons end looms. Profit to be made, but potentially a lot left on the table as well. Regardless of what I choose, excited to watch his development in the coming years. Hope the hobby stays strong regardless and enjoying the new blood in the game

    • What do you think you’re going to do? I bought a PSA 9 for $90 in February. I can sell for over $600 now. Good time to unload?

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