---
title: "The Pokemon cards beat the S and P 500 claim and what the math leaves out"
description: "A viral clip claims Pokemon cards returned 3,261 percent over 20 years against 421 percent for the S&P 500. The comparison has a survivorship problem, a costs problem, a tax problem, and the two headline numbers do not agree with each other."
category: "Markets"
category_url: https://boursel.com/category/markets
author: "Hannah Blackwood"
published: 2026-07-18T22:55:00.000Z
updated: 2026-07-18T22:55:00.000Z
canonical: https://boursel.com/article/the-pokemon-cards-beat-the-s-and-p-500-claim-and-what-the-math-leaves-out
tags: ["collectibles", "alternative-assets", "index-construction", "survivorship-bias", "capital-gains-tax"]
---
# The Pokemon cards beat the S and P 500 claim and what the math leaves out

A viral clip claims Pokemon cards returned 3,261 percent over 20 years against 421 percent for the S&P 500. The comparison has a survivorship problem, a costs problem, a tax problem, and the two headline numbers do not agree with each other.

A clip circulating on social media makes a striking claim: Pokemon cards
returned 3,261 percent over roughly 20 years, an average of 21.8 percent a
year, against 421 percent and 8.79 percent a year for the S&P 500. Cards beat
stocks by about 2.5 times.

The claim is worth taking apart, not because Pokemon cards are especially
important, but because the same reasoning appears every time an alternative
asset is marketed against equities. Whisky, watches, handbags, trading cards
and art all get compared to the stock market this way, and the comparison is
almost always built the same, flawed way.

## Start with the internal arithmetic

Before any question of methodology, the two numbers in the card claim do not
describe the same thing.

A total return of 3,261 percent means an investment multiplied by 33.61 times.
Compounded over 20 years, that works out to about 19.2 percent a year, not 21.8
percent. Run it the other way and the gap is wider: 21.8 percent a year
compounded for 20 years produces a total return of roughly 5,000 percent, well
above the 3,261 percent quoted. The S&P figure has the same problem in
miniature, since 421 percent over 20 years annualizes to about 8.6 percent
rather than 8.79 percent.

These are not rounding differences. A claim that cannot reconcile its own
headline figures is a claim assembled from pieces of different calculations.

## Price return is not total return

The larger issue is what the S&P 500 number represents. The [Yahoo Finance
account of the claim](https://finance.yahoo.com/markets/stocks/articles/pok-mon-cards-beat-p-214500876.html)
notes that SPY, the largest S&P 500 exchange-traded fund, returned 509.56
percent from July 17, 2006 through July 14, 2026 with dividends included.

That is the number a stock investor actually earned, and it annualizes to about
9.5 percent a year. The 421 percent in the viral claim looks like a price-only
figure, which measures the change in the index level and ignores dividends
entirely. Dividends are not a rounding error over two decades; they are a large
part of why anyone holds equities.

Comparing a collectible's gross price appreciation against a stock index
stripped of its dividends is the single most common way these claims are
inflated.

## Survivorship: the cards that are not in the index

Collectible indexes are built from items that still trade, which is a quiet but
severe filter.

Cards that were thrown out, damaged, lost, or simply became unwanted do not
appear in the data, because there are no transactions to record. What remains
is a sample of things that stayed desirable enough to keep selling. As the
financial adviser Bo Hanson argued in the discussion of the claim, collectible
indexes track graded, top-condition headline cards, not the experience of
someone who bought a pack at retail.

The equity comparison would only be fair if the S&P 500's record were rebuilt
using only companies that still exist and still sit in the index today, quietly
deleting every bankruptcy and delisting along the way. No credible index
provider does that, precisely because it produces a fantasy.

## Condition, grading and the cost of transacting

A graded card and a raw card are different assets. Professional grading assigns
a numeric condition score, and the difference in price between the top grade and
the one below it can be several multiples. Grading costs money and takes time,
and the population of cards submitted for grading is itself selected: people
grade cards they already believe are valuable.

Then there are the frictions. Auction houses charge buyers a premium and
sellers a commission. There is shipping, insurance and, for anything held
seriously, storage. A round trip through the collectibles market can absorb a
substantial share of a gain before tax, and there is no dividend or interest
arriving in the meantime to offset the carrying cost. An S&P 500 index fund, by
contrast, can be bought and sold at spreads measured in basis points and pays
its holders along the way.

## The tax treatment is worse

This part is specific and checkable. The Internal Revenue Service treats
collectibles differently from shares: net capital gains from selling
collectibles such as coins or art are [taxed at a maximum rate of 28
percent](https://www.irs.gov/taxtopics/tc409), against a top long-term rate of
20 percent for most other assets.

An investor comparing the two asset classes on a pre-tax basis is therefore
overstating the collectible's advantage even before the costs above are
counted.

## What is actually true

None of this means collectors have not made money. Some have made a great deal,
and scarce items with genuine cultural demand have appreciated substantially.
Collectibles can also behave differently from equities in a given year, which is
a real if modest diversification argument.

What does not survive scrutiny is the specific claim: an internally inconsistent
return figure, measured on a curated sample of survivors, compared against a
stock index with its dividends removed, before transaction costs, carrying costs
and a higher tax rate.

The useful habit is not skepticism about any particular asset. It is asking four
questions of any performance comparison: what is in the sample and what dropped
out of it, is the benchmark a total return, what does it cost to get in and out,
and what is left after tax. Most headline claims about beating the market do not
survive all four.

## Sources

- [Pokemon cards beat the S&P 500 by 2.5x, but the math is a lie](https://finance.yahoo.com/markets/stocks/articles/pok-mon-cards-beat-p-214500876.html)
- [Topic no. 409, Capital gains and losses](https://www.irs.gov/taxtopics/tc409)