Investing in Modern Pokemon

Throughout the COVID-19 pandemic, it has become abundantly clear that material possessions present a fantastic opportunity for profit. Hell, even immaterial possessions like NFTs have proven themselves to be insanely lucrative. While I wont speculate on the economics of this phenomenon, I will gladly share some personal opinions targeted at those who have decided to try and invest in modern Pokemon cards.

Author’s Note: There are many different investment strategies that can be utilized to make money with Pokemon products. These strategies are highly contingent on your personal risk tolerance and life philosophies. The following guidance is my personal opinion and should not be taken as fact or financial advice of any kind.

Graded Singles

Many newcomers may find the prospects of graded singles to be quite tempting. PSA 10 versions of cards like the Pikachu Rainbow VMAX (colloquially known as the ‘Chunky Chu’) seem like a great candidate for long term appreciation — right?

It’s important to remember that people did not anticipate Pokemon’s enormous success 20 years ago. Most people did not take proper care of their cards. As a result, the marketable supply of high quality cards for this generation is likely smaller than we think. How many of these cards do you think were chewed up by dogs, destroyed in laundry machines, or flat out disposed of?

Fast forward to today and even the most novice of players are instantly placing their cards in sleeves anticipating some sort of increase in market value. Pandora’s box has officially been opened and people are much more aware of exactly what they have to lose by not making an effort to preserve the condition of their cards.

Of course, this is not to say that one can not make money with modern Pokemon singles in the immediate market. The implication is simply this: the future for graded singles is unclear. No one knows how long these sets will be printed. No one knows exactly how many cards were pulled. No one knows how many were sent in for grading. The only thing we do know is that these figures are all at record highs which suggests that the supply for these cards — especially cards in good condition — will continue to be abundant.

Sealed Product

Purchasing and holding sealed product is probably the best approach when it comes to modern Pokemon. It’s a fairly conservative strategy that requires very little time to profit from. Sets like Unified Minds and Forbidden Light are great examples of this phenomenon. Just by virtue of them being out of print and a couple years old, they both still maintain a value much higher than their original wholesale price. It’s very interesting to note that sets like Forbidden Light are essentially worthless when it comes to their constituent cards. The chances that someone will make their money back by opening one of these boxes is slim to none — yet it continues to hold its inflated price as a sealed product. Why is this?

There is a certain je ne sais quoi when it comes to sealed product. Perhaps there is value in the possibility that a certain card will be pulled. Perhaps there is value in the excitement and anticipation of violating a freshly sealed product. I don’t know — but it’s possible that factors like time and scarcity play an important role. The set was released in 2018 which makes it four years old. Given that it is out of print, it is unlikely that more will be made which drives the illusion of scarcity (no one actually know yet if this set is scarce)

Let me be perfectly clear: there is no guarantee that sealed product will make you boatloads money. It might make you no money at all. I am simply arguing that this is the most conservative and reasonably safe strategy for someone who has already decided that they are going to invest in modern Pokemon cards.

I also believe there is also a fairly compelling ‘nostalgia factor’ that can be attributed to the current generation of modern Pokemon cards that will not be present in future sets. In 10 years, it’s conceivable that the COVID-19 lockdowns will be remembered with some sense of nostalgia. Whether that nostalgia is good or bad does not matter — fans will naturally recall the rise of the “rip and ship” phenomenon and how exciting it was to witness the release of sets like Vivid Voltage. It’s a stretch — but I think it’s a better bet than graded singles. Besides, any increase in the value of graded singles will naturally drive the value for the sealed sets they came from.

The Problem With Vintage & Summary

When it comes to anything collectible, having the earliest versions almost always proves to be the most lucrative investment strategy. Even a decade from now, some strata of collectors will always want the original versions of these cards. So why not invest your resources into purchasing vintage cards?

Again, this is just my opinion, but I’ve always felt a sense of vulnerability when browsing for vintage product. The fact that a seller would even suggest a booster pack is unweighed is utterly insulting. Given the value of these products, there is simply no way these products weren’t molested in every way possible prior to being introduced to market. I simply do not trust the sellers. Even if I do trust the seller, there is no chance I could trust the previous seller. This is what happened with Logan Paul who was recently scammed when purchasing a case of 1st Edition Base Set Booster Boxes. The chain of ownership with these products is simply too long, too convoluted, and filled with too much plausible deniability. If you find vintage being auctioned from an estate sale or something — fine. Otherwise, I am not interested.

Andrew Grover, a successful entrepreneur who made his millions from NFL trading cards, notoriously had this to say about investing in card games: “In my lifetime I have not seen a single person lose money on an asset they held throughout the years. Buy it, put it in a vault, and leave it alone. This strategy has worked for the last 20 years and it will probably work for the next 20”

Grover’s thoughts make a lot of sense to me. As long the Pokemon brand continues to remain relevant, and as long as the world population continues to grow, it seems conceivable that the demand for out-of-print Pokemon sets will always persist.

Let me know what you guys think below.