EMMM: Graded or Raw
Based on the data, it looks like you guys love me to be your tie-breaker. Our last article about picking up a Silver or a Base has very great results so I’ve decided to make it a series. Welcome Eeny, meeny, miny, moe.
Eeny, meeny, miny, moe, or EMMM (for short) is a series where we try to choose between 2 players or cards and try to answer why the other is a better choice.
For our first episode, we’ll try to answer what is a better purchase for a starting investor: A graded card or a raw card.
What are those anyways?
What are those anyway?
So for starters, graded cards are cards “graded” by grading companies. Sounds weird? Well grading companies like PSA and BGS, are companies that dictate how “perfect” a card is. Yes. Not all cards are created equal. Every single imperfection of a card is taken into consideration and at the end of the day, an “expert” will put your card in a slab and with the corresponding grade of the card. The grade ranges from 1 to 10 with 10 being the highest. Let’s stop at that. We’ll discuss the difference between a perfect card to a graded 10 card in our next article.
Now that we got that out of the way, let’s start
Round 1 — What are you and What is your market?
This is an important question because you have to know who you are first if you want to proceed. Collectors look for perfection and investors feed on that urge for perfection. If you’re a collector, I would suggest you go for graded because a graded card tells you exactly what you’re getting. No more asking for high-res photos or videos to know if the card you’re planning to buy got some defects. It is what it is already. So if you’re a collector, stop reading already. On the other hand, if you’re an investor, you have to answer the next question. What is your market? Are you in a group of collectors? or in a group of flippers? Determining that is the key. If you’re with collectors then go for graded cards because these collectors want perfection and having graded cards will make an easier deal. If you’re with flippers, then go for raw cards. Why? Move to number 2.
Round 2 — How much is your budget?
Flippers usually don’t have big capital. They want fast-moving cards that they can easily buy and sell.
If you’re with flippers, then the money is what’s most important. Getting the best bang for your buck is the best way to go but you have to remember how much is your starting capital.
Buying graded cards requires a much higher capital if you’re a new investor.
Take a look at this example. If you’re to buy a 2018 Luka Doncic Prizm Base raw, you’ll have to shell out Php 13,500 ($270) while you have to have Php 70,000 ($1,399) if you want a PSA 10.
So if you’re someone like me who has a very limited budget, go for raw cards and sell it raw.
I know this is very different from what other content creators say. Most of the time you’ll hear them say buy raw cards and grade them yourself but read at #3 so you’ll know why I chose a different path.
Round 3 — Do you have good eyesight?
I’m sure you’ve seen advice by other content creators that buying raw and selling them graded will earn you big bucks and that’s true. Just take a look at these two cards:
So some of you might say, I’d buy a raw card lot and grade them myself. It’s worth the risk, right? Well, consider these first.
Why is the seller selling those cards raw? If your idea is so good then why isn’t he or she doing it his/her self? I can think of 2 reasons.
- The seller just wants to earn quick bucks. The seller doesn’t know how to look at the cards and determine their possible outcome and decided to just sell those cards.
- The seller has a trained eye and has a vast amount of experience with handling graded cards that he/she knows that those cards will be graded low and want to pass it to an untrained eye like you and me.
There’s nothing wrong with selling it raw. Maybe you’ll earn a small premium but at least you didn’t lose money.
Round 4 — Are you a risk-taker?
At the end of the day, this question is all about the risk.
If you’ll ask me what is the best strategy? In a perfect world, it’s to buy raw and have your cards graded. You buy the cards cheap because it’s raw and then you sell it for x multiplier because you managed to hit those 10s.
That is if we’re in a perfect setting. Here are the factors to get that perfect setting:
A. A trained eye for raw cards
In a hobby that most people go for perfection, you got to have that eye for perfection. You have to have the skills to determine what a raw card might net if you get it graded.
B. Type of card you’re looking to buy
The best card you could get is an old card with a low PSA 10 pop report. That would give you the best multiplier. Let me show you an example.
Old cards with low pop.
I’m looking into Kobe cards in the local market in the past few days and I’ve been reminded that we’re dealing with cardboard at the end of the day. Old cards still hold the highest value (in exception of some cards like Luka’s) so net a higher multiplier if you score a 10. Why? because old cards have gone through a lot! Are they stored perfectly? Did a kid play with it? Being a coastal country, did the water get into them?
Let’s take a look at the card I was supposed to buy. 1996 Kobe Bryant Metal #137
The latest raw card was sold for almost Php 2,000 ($39.27) according to 130point.com
and the latest PSA 10 was sold for Php 76,000 ($1,525) according to PSA
That’s a 38x profit! That’s an example of the profit made in the perfect setting. A low pop card and an old card scoring a 10.
But not every card can survive 24 years in pristine condition. Take a look at a card a seller sent me
Old card but high pop
Let’s take a look at another Kobe card from the same set. 1996 Kobe Bryant Metal #181.
A raw card of this variant was recently sold for almost Php 2,500 ($46). It’s more expensive than the other one right? So the PSA 10 should also be more expensive.
The latest PSA 10 1996 Kobe Bryant Metal #181 was only sold for Php 43,00 ($865). That’s just shy of 56% of the previous variant but why? It’s because of the pop report.
There’s 426 PSA 10 of this variant versus the 115 of the other one hence the smaller haul for this one since it’s “easier” to get a PSA 10.
C. Money
Yes. You need this. Why? Because you’ll be holding that card for a long time. Why? Because of number 4.
D. Quick access to grading companies.
The reason is the grading companies’ turn around time. Living in the Philippines, we have to accept the fact that shipping cards in the US (where the grading companies are) require time. If you’ll also add the fact that COVID slows everything down, the required time for the card to be graded and get back to your hands might even triple, and with the ever-changing landscape of the sports card market, that time means money. The value might go up or might go down depending on when did you get the card back. So if you’re living in the US, that means the turn around time is way faster than if you’re living here in the other side of the world and that means a more stable price point across the board.
Conclusion
If you’ve ticked all the conditions for a perfect setting then go wild in buying raw cards and grade them for maximum profit but if not, you go for graded cards. Graded cards are easier to move since all of us have a collector’s heart inside but if you’ve already bought some raw and doesn’t have enough money to buy graded as a capital investment then there’s nothing wrong with buying raw and selling raw cards.
Disclaimer:
All information provided is for educational purposes only. My goal isn’t to tell you how to spend your money but to simply show you my own personal perspective of the hobby.
You are responsible for your own investment decisions. I am not, in any way, an investment professional. I’m just a normal human like you that walked the path you’re about to walk.