Monday, March 19, 2012

Bryce Harper (OF, Wash)


Bryce Harper (OF, Washington)

The kid is cocky, talented, and his cards are severely overpriced.  No one denies the potential of Bryce Harper as a 5-tool stud in the making.  He’s been tearing up the competition since he was 9 years, when he accepted offers to play for travel teams.  Rumor has it that in one of his early travel league tournaments, Harper went 8-for-8 with 7 HR and a double.

Harper is young, and has shown glimpses of what he can do as the youngest player in AA, but can his Bowman Chrome autograph really be worth $300?!  I argue, no.  The reason is grounded in simple economics (as most of my analyses are): demand has peaked, and supply will continue to grow.

Let’s start with demand.  If you frequent the forums or watch Harper auctions, it’s clear he is, and has always been, in demand.  Everyone wants Harper autos.  People trade way too much for him and fawn over the higher-end autos.  Simply put, the kid is touted as the best prospect in MLB history, and everyone is aware of this.  Demand is at a peak, and it can do one of two things: stay at the peak or fall… so there’s no upside to demand, only downside.

Now, let’s look at supply.  Harper sells brands: Bowman Chrome, Bowman, Bowman Platinum, etc.  He is the best marketing tool Topps has, so it makes sense that, with every new product, we will see new Harper cards, especially autographs.  That is, supply of Harper autos will increase.  A good example of this is Harper's Bowman Chrome Rookies.  Once Harper's auto's hit the market, his 2010 Bowman Chrome USA card dropped from $75-100 down to $50.  Similarly, his 2011 BC card dropped from $10, and I've seen it sell for as little as a couple bucks on the forums.  I anticipate a similar effect with every new Harper card that saturates the market and dilutes the pricing of all Harper cards.

If supply increases and demand stays the same/decreases, Harper prices go down.  Now, I should point out the distinction between my passion for the game and investing.  I'm a Harper fan.  I think he'll have a great career, I'm excited to watch him play, have him on fantasy teams, etc.  He's good for baseball.  But, as an investment, I'm not buying.  If you have Harper autos, sell them and buy 50 other prospect autos with the ridiculous amount of money you’ll get.

Recommendation: SELL

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