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Originally Posted by LukeLyon
Using roulette as an example is a logical fallacy. When you play roulette, you have a known loss rate. It's small and static (let's call it 3%). You can't compare that to investing in baseball cards, or stock, or real estate where the returns are unknown.
There is every reason to believe that a person can make money investing in baseball cards. Just look at recent returns. There are a lot of people that feel comfortable investing in that way. Any investment can lose value, and cards are no different.
People that are calling cards a gamble are just missing the point. Your investment portfolio should be diversified. If you have a diversified portfolio, I'm certain that you own some investment instruments that are far riskier than a PSA 9 Jordan rookie. They are just offset within that particular fund by other, less risky investments.
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As someone who writes about investing for a living, and has done so for the last 18 years, I have to chime in here, even though I'm at work and don't have time to write a lot. Yes, sports cards can be seen/used as an investment. But Bill Gregory's point, which I agree with 100%, is that they are a very risky investment, given the high price volatility, the lack of regulatory oversight, and the documented fraud and other shady doings in the industry. Whether you want to call investing in sports cards "gambling" is a matter of how you define gambling; no, buying high-end cards is not like playing roulette, a pure game of chance with known odds, but it's a very risky strategy, akin to buying penny stocks or something similar.
Yes, of course it's possible to make money buying and selling high-end cards, especially when you do it in a rising market like we're in now. And it's not like playing roulette; knowing what you're doing is definitely helpful. But it's very possible to lose money investing in cards, especially if you pay top dollar for a hot card near the top of the market. I know Luke made this point in the post I've quoted above, and I'm not trying to pick on Luke, just putting all this in terms used for other investments.
Luke is also right that any investment portfolio should be diversified, and that if cards are part of your investment portfolio, they should be a relatively small part, just like any other risky investment. Putting all of your net worth into sports cards would be like putting all your money into internet stocks in 1999; some people who did that made money in the short term, but they eventually got burned big-time. I'm not saying that card prices are necessarily going to crash as badly as internet stocks did in 2000-2002; maybe high-end cards would be more comparable to blue-chip growth stocks in 1999, most of which were very overvalued in retrospect and suffered significant losses over the next few years. Some of them (e.g. Amazon) eventually gained all those losses back, and more, but some (e.g. Cisco) did not, and remain far below the peaks they reached in 1999-2000.
The question of whether cards (even graded cards) are really comparable to commodities is a whole other question that I don't have time to get into now. Maybe later.