A CARDBOARD GOLD MINE
Recent spike in value of sports cards has some traders, collectors playing a risky game
He gave up on sleep a little before daybreak, opting to begin his workday early and maybe right the previous night's wrong. Now, Sasha Tamaddon checks his watch lists on ebay, slides on black jeans and a T-shirt, and laces up the Air Jordan sneakers he received in exchange for trading cards. He navigates another site that tracks the valuations of collectibles. He tries to move on.
“I don't know what happened,” he mutters.
He keeps navigating, trying to distract himself from the six figures he didn't spend on a Michael Jordan rookie card a few hours ago. He saw it as a rare, devastating setback after a year of success.
“That's a tough one, bro,” says the 22-year-old who used to clean swimming pools before, he says, turning a US$15,000 investment in sports cards — one of several economic crazes that sprung to life during the coronavirus pandemic — into a collection worth about $1 million.
But on this morning, nothing has soothed him. So he packs nine trading cards worth about $160,000 into a small cardboard box and stashes it, alongside $10,000 in cash, into his Toyota Tacoma. Then he hits the road, starting a frenetic and unpredictable workday that will cover many miles, result in a few deals, and maybe bring back his luck.
Last year, with millions of Americans at home, fear and isolation gave way to boredom and nostalgia. Alongside cryptocurrencies and non-fungible tokens, the trading card market became another beneficiary of so much free time. Curiosity turned to research, which resulted in a surprising and dramatic boom. Cards featuring young stars and all-time greats sold for record amounts: often hundreds of thousands each. A “gem mint” copy of that 1986-87 Fleer Michael Jordan rookie, whose value in January 2020 was $39,600, sold for $720,000 in January 2021.
Those sales sent shock waves through the industry and sent collectors plunging into their attics for cardboard gold. A new generation of hobbyists didn't just buy, sell and trade. They followed how last night's performances by Mike Trout and Trae Young affected today's card values; then they logged onto Youtube and social media sites to debate what might be possible tomorrow. It had the distinct feel of gambling, the almost hourly rush of getting rich or going broke, and amid all this, auction sites crashed. Services that evaluate cards' conditions and assign a 1-to10 “grade” became overwhelmed.
“It boggled the mind,” said Ken Goldin, a mainstay in collectibles and memorabilia for four decades. His company, Goldin Auctions, did $800,000 in annual revenue in 2012; last year it hauled in $100 million, according to a February news release, and Goldin says it's on track this year to quintuple that. “I kept thinking that this can't continue; this can't continue.”
Tamaddon, though, has only known this bull market. While in college in late 2019, he set aside a hustle trading rare sneakers to buy a rookie card of Luka Doncic, the Dallas Mavericks' young phenom. The card's value kept ticking upward, so Tamaddon bought more and more copies of the same card — 35 in all, he says, with slight and increasingly rare variations and colours.
It was fun to sell and trade, he says, the rush a little addictive. So he kept buying new cards, following new athletes and sports, and trading them for more valuable ones. He emptied his savings account, quit his job cleaning hotel pools, set aside his dream of owning an aquatics business — all for the dustiest of hobbies, thin cardboard assets in a blockchain world.
“What is this guy doing?” Kyle Brunke, who used to clean pools alongside Tamaddon, remembers thinking. Now Brunke works for Tamaddon.
But as Americans increasingly venture outside and return to offices, the sports-card market may be experiencing a correction. The Jordan rookie dipped under $500,000 this spring, and more recently it has gone for less than $300,000. Which is partly why Tamaddon is in his truck, with Brunke in the back seat, beginning a day that will take them all over Southern California.
Tamaddon wants to make as much money as he can, as quickly as he can. But he also wants to keep feeling what he felt these past 18 months. And last night's frustration was a full-on buzzkill.
The previous evening, another Jordan rookie — this one a mega-rare copy graded as a 10 — had gone up on ebay. Tamaddon called a friend, Ryan Veres, and they agreed to bid on the card and potentially split the cost and any future profits. The card's value, recently on free fall, was expected to sell for around $200,000 — a quarter of its January price. Hoping the market had reached bottom, Tamaddon and Veres, who helps run his family's card shop in Burbank, agreed to bid as much as $210,000. But as the auction was ending, Veres got nervous.
Tamaddon called and texted, his heart pounding and the adrenalin pumping as he pleaded with his friend to increase their bid. Veres refused. The auction ended.
About 12 hours later, Tamaddon settles into the Tacoma's driver's seat and gases it up the highway. Among his many stops today is Burbank Sportscards, where Tamaddon intends to confront his friend about last night.
“It was very educated,” he says. “It wasn't, like, impulsive.”
At perhaps the height of the market's hysteria, five men brawled over sports and Pokémon cards in a Target parking lot. One produced a gun, the store itself was evacuated, shoppers hid in the woods.
A week later, Target and Walmart stopped selling cards in stores and online shoppers snapped up new releases almost immediately.
Tamaddon and others in the collectibles industry insist violence is nonexistent, and conflict is rare, at shops and major card shows. But that doesn't mean Tamaddon is unaware of its dangers. A few months into collecting Doncic rookies, Tamaddon met a stranger online willing to sell him 15 of the cards for $400 — a great deal. Too great, as it turned out, because after he sent the money via Venmo, Tamaddon says, he received nothing more than a hard lesson in fraud.
Just last winter, he and a potential buyer reached a verbal agreement for a rare Lebron James Topps Chrome Refractor, Tamaddon says, worth $60,000. They set up an in-person meet at a card shop in Orange County, but when the buyer parked, so did another vehicle. Then another. In walked six strangers, the buyer included, and the shop's owner locked them all inside.
Though it turned out to be merely a case of poor communication and paranoia — the buyer brought a few friends to watch his back, Tamaddon would recall — it reiterated the fact that “surprises are not good,” he says.
“There wasn't much we could do,” he says.
“If they're just going to take the card and leave, then that's what it's going to be.”
It was a rush, to be sure, and Tamaddon has leaned hard into a world with the potential for huge money but similarly big risk. His success depends on unsophisticated, hastily negotiated transactions often worth tens of thousands. His clientele are occasionally strangers, and maybe they show up and maybe they don't.
Andrew Eiseman is a retired special agent with the Drug Enforcement Administration who operates a popular Youtube channel called the “Sports Card Investigator.” He says something from his new life reminds him of his old one.
“You almost liken it to a drug deal, right?” Eiseman says. “`I have this card, you have the money; you show it to me.'”
Counterfeit cards were common, he says, even before last year's surge. Phoneys have become increasingly convincing. With larger demand and greater values come increased desperation to get a cut of it — especially when the bounty is a 2½-by-3½-inch piece of cardboard that weighs roughly a gram.
“With any kind of exploding market like this, you're going to have bad actors,” says Eiseman, who collects but avoids the high-dollar, mega-adrenalin market in which Tamaddon moves. “When you're talking about thousands of dollars, it's not worth my stress.”
But it seems to be worth it to Tamaddon, at least for now. As he drives, he tries to play down the dangers, claiming the industry is “trusting,” perhaps to a fault. But a moment later, he's talking about the importance of collectibles insurance, his preference for wire transfers, the need to keep his most valuable commodities hidden away. In fact, he refuses not only to reveal where he keeps many of his cards, but how many locations in which he keeps them.
He says he drives the Tacoma to avoid attracting attention, and when he arrives to do business at shops he considers shady, he parks down the block and asks to be let in through a rear entrance.
“Somebody can take it,” he says with a shrug. “Somebody could walk into your house, boom, take it and leave. What the f--- are you going to do?”
He doesn't reveal much about his long-term plan, if he has one, or what keeps him hustling on days like this. A revival of the old pool business? An entry into the pricey Los Angeles real estate scene? Maybe, he says. Or maybe he'll just keep making deals until the market tanks.
He says he doesn't like looking too far into the future. Not when today has the potential to be so exciting.
“This is, like, more fun, at the end of the day than real estate,” he says. “It doesn't feel like work.”