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Rob D.Thanks for posting that link, Eric, because it illustrates one of the pitfalls of investing in cards. That card and holder sold for $11,000-plus. If that card were in a PSA 9 holder, it would sell for roughly half that -- maybe. At least if I invest in a work of art, the piece will hold its value no matter what kind of frame is around it. Where's the value in that Three Stooges card? Obviously, a lot of the value is in the holder. I think most people would agree that if they were to invest in cards, they'd choose graded ones. Given the uncertainty in accuracy that's been commonplace within the grading industry in recent years, I'd be hesitant to "invest" a lot of money in a product that's going to rely heavily on the holder that a card rests in.
Another possible negative that I think folks on this board overlook is it wouldn't be that easy to predict what cards will appreciate. Sure, everyone can remember buying that lot of 30 pre-war cards for $300 15-20 years ago and later selling them piece by piece for a total of $3,000. But everyone blocks out the cards they bought and sold at a loss because the market was soft when they chose to sell. It's like when you're playing craps and have a feeling that an 11 is coming on the next roll and are correct. You tell that story for years about how you hit a 15-1 shot. What you forget is all the times when you had that feeling -- and maybe didn't bet it -- and the next roll was a 9. We have a lot of experts on this board, but I honestly think only a handful could take $50,000-$100,000 and turn a profit investing in cards. I'm not talking about dealers. I mean collectors who go into a transaction buying only for investment.
And let's say you have the skill and knowledge to pull it off, Would you be willing to sink a lot of money into an issue or card that's totally off most people's radar screens, that's not "hot" -- and then be willing to wait the required amount of time for demand to drive prices to a point that you'll make money? Kudos to you if you fit that mold.
Plus, as someone already pointed out, cards aren't all that liquid. Even if you're on the mark with your picks and you've built profit on paper, you still need to find a buyer.
It's easy to say, "Buy rare cards or Hall of Famers in high grade if you're going to invest." The trouble is, your competition for these cards are collectors who aren't buying for investment, and therefore likely will push the price beyond a level in which you'll be able to make a profit. On Monday I can make a call and buy all the IBM stock I want. So can you. So can my neighbor. So can your neighbor. We all can't do the same with near-mint to mint pre-war Hall of Famers.
Finally, given that the original post on this topic includes the lament that the stock market has underperformed for a period of -- gasp -- five months, I wonder who many collectors would have the stomach to "invest" in a largely unregulated marketplace in which grading services, auction houses and other third-party marketplaces (like eBay) are continuously questioned about their business practices.
Maybe it's semantics, but I think making money as a result of collecting cards and investing in cards are two different things. And I think the second one is a lot tougher than people think.