Valuation

[Snapolit1]

Toughest thing about buying anything is that valuations at the upper end of any market always look stupid. Every successful stock always looks overpriced. Google looked like a crappy deal at 100. I remember when Amazon was 25 and pundits were saying steer clear.

In 1999 I sold a condo in NYC for way more than I bought it for. I thought the buyers were insane. I felt guilty at the closing. That condo is now worth 5 x what I sold it for.

I then bought a house in the burbs. Everyone told me we really overpaid. One of my new neighbors drove buy rolled down car window and started mocking me for what I paid. Now of course it is worth way more.

Everything I have ever bought in my life that I was convinced I really overpaid for turned out to be a smart move. And almost everytime I went the cheap route it fell flat. (Cars are the exception, because they are always a waste of money and not an investment.)

Not saying every card is going to appreciate in value. But be careful before you laugh at the stupid price some guy just spent on a Goudey Ruth or Ruth rookie. 5 years from now will probably be higher.

[Leon]

Steve, if you could go back and read a lot of old posts, I feel the same way. I have excitedly paid record high prices for a ton of cards. And all but a few have been great buys, when looking back, with respect to valuation in the future. Even my star card, the E90-1 Young, was a record high price paid. And I couldn't be happier with it and am quite sure it is more valuable today.

[mechanicalman]

As a VCP record-holder myself on a couple cards, I agree with the sentiment here. One of my hobby mentors once told me that you can't "overpay" for quality cards; you can just pay its future price early.

Of course, I don't believe that applies to all cards, or perhaps even most, but I firmly believe centered HoFers from the most collected pre-war sets should do well. And if they don't, I don't care - they deliver a ton of intrinsic value for me. My retirement is not dependent on my collection.

Edited to add: Steve, your neighbor sounds like a dick. Who wouldn't want someone to pay high in their own neighborhood?

[rainier2004]

Sam is a smart dude.

I recently overpaid for a PC as of 1/12018...by 8/1/2018 I bet its s deal. That's not why I buy, but I do try to buy things early that I think will sky rocket and overpaying now versus not being able to afford it later is a no brainer for me. Enjoy the hobby, its not all about the $$$.

[Hankphenom]

The wealthy know that it pays to buy the best, but the problem comes in having the wherewithal to do that. The rest of us are stuck with the reverse--and more difficult--proposition: buy low, sell high.

[rainier2004]

The wealthy know that it pays to buy the best, but the problem comes in having the wherewithal to do that. The rest of us are stuck with the reverse--and more difficult--proposition: buy low, sell high.

Then there's the buy low, don't sell model...I like that one better.

[bbcard1]

Personally, I accept my collection as a hobby...it's a good hobby, one that should at worst be worth what I have in it. But as such I don't ever buy cards as investments. My IRA/401K is an investment. My business is an investment. My cards are a hobby. For that reason, a lot of time I end up with low to mid grade sets and am happy in them.

[Snapolit1]

Then there's the buy low, don't sell model...I like that one better.

Buy low sell high is a beautiful thing. My experience has been that buy high sell higher is a lot more common.

[Snapolit1]

Really just a variation on the old adage “buy the best house you can afford”.

[drcy]

Disagree with the sentiments in this thread. The way to wealth isn't via overpaying. Rather a silly notion if you ask me.

[Snapolit1]

When I was a kid I used to hound my old man about buying the inverted Jenny airmail stamp. (You may know what it is, US airmail stamp with airplane upside down.) In 1971 some lunatic bought a plate block (4) of them for $150,000. At the time it was considered sheer insanity. There were headlines in the paper about the craziness of it. Today it's probably worth north of 5 million. During the same period of time thousands of US stamps that are hoarded away by folks have stayed flat or gone down in value. I am sure the same thing is true with baseball cards.

It's not about overpaying. It's about paying more than anyone else for something that is a genuine scarcity and having the vision that demand for it will grow over time.

[mechanicalman]

Disagree with the sentiments in this thread. The way to wealth isn't via overpaying. Rather a silly notion if you ask me.

I don’t believe this thread is about the “way to wealth” through baseball cards.

[drcy]

Whenever the topic of what cards are good investments comes up, I mention that it's not just the card but what you pay for it. Paying more than market price, or even at market price, is bad investing practice.

I also think asking "what is a good investment?" is a sign of myopic financial thinking, but that's another topic.

[jbsports33]

education is the key to everything, even this hobby!

Jimmy

[pokerplyr80]

As a VCP record-holder myself on a couple cards, I agree with the sentiment here. One of my hobby mentors once told me that you can't "overpay" for quality cards; you can just pay its future price early.

Of course, I don't believe that applies to all cards, or perhaps even most, but I firmly believe centered HoFers from the most collected pre-war sets should do well. And if they don't, I don't care - they deliver a ton of intrinsic value for me. My retirement is not dependent on my collection.

Edited to add: Steve, your neighbor sounds like a dick. Who wouldn't want someone to pay high in their own neighborhood?

I agree on both points. Many cards are very tough to find with excellent eye appeal for the grade. When one is available it's often worth it to break a record. Any time I've done this I haven't had a problem getting out of the card later.

And I would welcome any neighbor who overpays for a house in my neighborhood. I'm not in real estate, but I'm pretty sure prices are usually based on what comparable homes have sold for. Maybe the guy didn't want his property taxes going up.

[rainier2004]

I don’t believe this thread is about the “way to wealth” through baseball cards.

Yeah, I didn't read that was the topic of the thread either.

Drcy - sometime you simply have to "overpay" according to the market, if I feel its worth it that I am just paying market value. When there are 6 or examples that exist of a card, buying something privately can actually save money as it can blow up in an auction. Glad we disagree...

[Vintageclout]

Toughest thing about buying anything is that valuations at the upper end of any market always look stupid. Every successful stock always looks overpriced. Google looked like a crappy deal at 100. I remember when Amazon was 25 and pundits were saying steer clear.

In 1999 I sold a condo in NYC for way more than I bought it for. I thought the buyers were insane. I felt guilty at the closing. That condo is now worth 5 x what I sold it for.

I then bought a house in the burbs. Everyone told me we really overpaid. One of my new neighbors drove buy rolled down car window and started mocking me for what I paid. Now of course it is worth way more.

Everything I have ever bought in my life that I was convinced I really overpaid for turned out to be a smart move. And almost everytime I went the cheap route it fell flat. (Cars are the exception, because they are always a waste of money and not an investment.)

Not saying every card is going to appreciate in value. But be careful before you laugh at the stupid price some guy just spent on a Goudey Ruth or Ruth rookie. 5 years from now will probably be higher.

+1 - it’s rather quite simple...buy premium Babe Ruth memorabilia because today’s retail is typically tomorrow’s wholesale!

[itslarry]

I agree on both points. Many cards are very tough to find with excellent eye appeal for the grade. When one is available it's often worth it to break a record. Any time I've done this I haven't had a problem getting out of the card later.

And I would welcome any neighbor who overpays for a house in my neighborhood. I'm not in real estate, but I'm pretty sure prices are usually based on what comparable homes have sold for. Maybe the guy didn't want his property taxes going up.
Bingo on the house. If you aren't going to sell, why in the world would you want higher taxes.
My parents pay more in taxes the the house cost 35yrs ago. Sure uses to make him cranky tax time.

[Leon]

Bingo on the house. If you aren't going to sell, why in the world would you want higher taxes.
My parents pay more in taxes the the house cost 35yrs ago. Sure uses to make him cranky tax time.

As for taxes, Ag exemption is the way to go :)....Ya' just have to fit the mold. At a house we own, nearby, we lease 3 acres to someone raising sheep so those 3 acres are ag exempt for tax purposes. And for where we live, in Texas it's 6 acres and 6 beehives to be an apiary. Love helping nature and me at the same time. (see Texas guidelines for an agricultural exemption). Oh, what were we talking, value? I say, diversify and buy wisely. And Cards CAN be an investment but it's risky too.
Every thread needs eye candy. Happy Collecting....

http://luckeycards.com/pe270redsteinfeldt.jpg

.

[Snapolit1]

I would happily put a few alpacas in my backyard if I could swing a tax deduction. But I've heard they are nasty and not much fun.

[conor912]

One of my new neighbors drove buy rolled down car window and started mocking me for what I paid.

WTF? How neighborly.

[conor912]

Paying more than market price, or even at market price, is bad investing practice.

I'd like to hear more about all these investments you're getting at below market price. :)

[mark evans]

I don't see past card sales or trends as an indicator of future values. To me card collecting is most satisfying when approached as a hobby.