Editor’s Note: What follows is a second (edited) excerpt from Jeff’s book, The Modern Baseball Card Investor. The first excerpt, The Four Basic Types of 
Ungraded Strategies, can be found here.
The concept of card removal is exceptionally important to understand, as it is fundamental to multiple expansion in graded cards – that is, the spread in value between graded BGS 9.5 Gem Mint-or-better cards and ungraded copies of the same card – which itself is in part a function of the relative devaluation of ungraded cards over time.
Card removal is a term that will be quite familiar to advantage gamblers. Card counting blackjack players know that presence of tens and aces in the deck are favorable to the player, while 2s through 7s are favorable to the dealer. Essentially, when tens and aces are dealt, they are no longer available in the remaining deck, and the composition of the remaining deck becomes more favorable to the dealer on the next hand; conversely, when 2s through 7s are dealt, the composition of the remaining deck becomes more favorable to the player on the next hand. And if enough smaller cards are dealt relative to tens and aces, the remaining deck composition will become favorable enough to the player that he can have positive expectation on the next hand.
Card removal also has a variety of applications in poker games as well. If you are holding Ace-King before the flop in hold’em, then it becomes mathematically less likely that another player has AA or KK. Alternatively, if you have three to a spade flush on third street in seven card stud and you see a bunch of spades out on the table in either players’ hands, then the odds of drawing to a flush become progressively worse the more spades you see in your opponents’ hands.
In baseball cards, the card removal effect is when the highest-quality copies of a given card become graded and thus are removed from the pool of ungraded cards, resulting in a lower average quality and thus lower average value of the remaining pool of ungraded cards. In the process, the spread in value between graded Gem Mint or better cards and the value of ungraded cards thus tend to widen by default, which by definition results in multiple expansion.
Maximum Leverage and Premium Class
Though some multiple expansion is a natural function of the devaluation of ungraded cards due to card removal, the card removal effect also promotes further multiple expansion by providing value enhancement in graded cards in a couple of ways.
For starters, when print numbers are relatively low and a given card is widely deemed valuable enough to grade, more and more high quality examples will become graded to the point that eventually Gem Mint+ cards can no longer be built. When Gem Mint+ quality cards no longer exist in the pool of ungraded cards, the supply of Gem Mint+ cards stops growing. At this point, Gem Mint+ copies of a given card have reached maximum leverage,[1] allowing further multiple expansion to occur with any positive change in demand.
This effect is stunted in issues burdened by oversupply – chiefly, issues from the late 1980s and early 1990s, for which an endless supply of unopened boxes remain. This effect is also stunted for cards of players for which there is little demand, as for these players there may not be enough demand to justify grading cards to the point the Gem Mint+ cards can no longer be built.
On the other hand, this effect is enhanced in issues with small print runs – particularly in limited print, serialized cards – and for key cards of players in high demand. When print runs are small or a player is in high demand, the probability is enhanced that the entire (or at least the bulk of) pool of Gem Mint+ quality copies of a given card become graded, thus helping the card achieve maximum leverage.
At the same time, graded cards create a new hierarchy – a premium class – among copies of a given card. If there are 50 gold refractors and only 15 ultimately grade BGS 9.5 Gem Mint and two others grade BGS 10 Pristine, the 15 BGS 9.5 Gem Mint copies are no longer one gold refractor out of 50, but are rather one of 15 BGS 9.5 Gem Mint copies, while the BGS 10 Pristine copies are now one of two atop the gold refractor hierarchy.
The presence of maximum leverage, combined with the creation of a premium class of high-grade cards, is fundamentally what has enabled high-grade vintage baseball cards to reach their current heights. It is also why the outlook for Gem Mint+, premium-color, serialized cards of modern ilk is far superior to that of the overproduced cards issued in the late 1980s and early 1990s.
Jeff Hwang is a gaming industry consultant and the best-selling author of Pot-Limit Omaha Poker: The Big Play Strategy, and the three-volume Advanced Pot-Limit Omaha series. Jeff’s latest book, The Modern Baseball Card Investor, was published June 30, 2014.
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