Investment Potential

[FrankWakefield]

ctown... I was bicycling in 1964, doing the same thing. Coke bottles brought 4 cents, Pepsi and RCs 3 cents. I could find them in ditches along roads... I'd check the ditches on Saturday mornings, and usually get enough bottles to get 6 to 8 packs of cards...

And I read the posts.

An old collector of motor cars once explained to me that the value of Model T's peaked a few years ago, when men reaching retirement with spare money could indulge themselves by buying an old car they'd once had... He said the demand bubble peaked with that demographic. And that as those guys died off, the demand for those cars decreased a bit, and prices fell. (I never drove a Model T as a kid or as a first car, so I'm not as interested in having one as someone who did.) I understand that it isn't the same with ball cards. None of us saw Christy Mathewson pitch. (My great uncle did tell me about catching a train up to Detroit to pick up a car to drive back down to Kentucky. He went to a Tigers game, he told me about seeing Cobb getting a hit off of Walter Johnson, and stealing a base...) So we'll still collect Mathewson cards, and the old cards. But there is a slight effect to card collecting. Will any of you admit that you draw the line at the 20th century, and don't buy Old Judges?

There are collectors out there who draw the line at 1952, because of the big Topps, and collect only forward from there. Those guys don't look at this board. We here aren't a fair sampling of ball card collectors.

The crass, hard-hearted, cynical side of me makes me think that if folks would invest in an education then they'd see that pouring money into a ball card collecton isn't investing. Not even if you want it to be.

[barrysloate]

Ctownboy- a bit wordy perhaps, but a lot of sincerity, something you don't see every day...and please call me Barry.

[bosoxphan]

I feel very comfortable in the demand profile for vintage cards over the next 10-15 years. After that who knows but are there really any investments outside real estate that you can forsee the future 20 years from now? Certainly not company stocks. The companies that dominated 20 years ago are very different than the ones leading the landscape now.

[Exhibitman]

Actually, Frank, I don't care for OJs; I just don't like the aesthetics.

I don't think the doom and gloom predictors or the endless market rise predictors are accurate. It is just silly to think that the hobby will crater (absent of course a total cratering of everything else) and it is equally silly to think that we will see T206 prices double in real terms over the next five years. We are not likely ever to see a National like the 1991 Anaheim show, nor, frankly, would I want to. The market for new shiny crap is 1/10 of what it was, but I have to question whether it ever should have been so crazy in the first place. I recall setting up with vintage cards at local shows next to guys selling 100-card bricks of Griffey, Sheffield and other hot rookies (Gregg Jeffries anyone?) in the early 1990s and knowing that there was something inherently wrong with the money changing hands on those deals. The only thing I've seen that was comparable was the real estate market in 2006-2007. The bottom line for the hobby is that about 70 million tickets are sold to baseball games every season. I do not see that pool of fans withering away. Some of them will read up on the history of the sport, will discover this site, and will become addicts just like us. I also see lots of collectors younger than me (more it seems every year I age) who haven't hit their peak earning years yet. They'll get there and the hobby will go on. Like those frothy heights, the current doldrums are out of whack and will pass as the economy passes through the rough patch. The same thing happened in the early 1980s. I know I'd be buying more cards at today's prices if I had the cash.

30 years is a long time, relatively speaking. It can be an entire career. Cards have a track record over 30 years of being pretty decent alternative investments. Like anything else, of course, there are some elements that are better than others and some that were just dum [sic] in the first place. The two constants, however, have been rarity and HOFers. Rare cards and memorabilia of the top players trump everything else for security and for return on investment.

As far as the question posed in this thread, in all candor, $5,000 is peanuts for investment purposes. At 10% year over year it would not even reach $90,000 in 30 years. And yes, I will take that ROI every day; my point is that $5,000 isn't going to make anyone rich or break anyone's back (if it might, don't risk it--put it in an insured account), so we're not really talking about big, life-altering money. If I was going to plunk $5K into the card market now without any real expertise in cards, I would look to purchase a variety of top-flight HOFers from rarer issues. I would avoid 'fad' things like rookie cards, modern gimmick cards, and high grade plastic (slabs), simply because of their volatility. I'd probably also take a chunk of the money and buy a Ruth check or a Cobb check if I could find a reasonably priced one. I really don't think you could go wrong with that. Now, if you want to gamble, my bet would be to go to the National and hunt raw cards for slabbing. I have spotted and slabbed some really high end commons over the last few years--nothing like pulling a few top slabs from raw commons to make your investment day--but it requires a good eye for what the graders want (education) and some luck and persistence slogging through piles of crap to get the few gems. I don't really consider that investment, though; more like placing a bet on a number in roulette.

[ctownboy]

bluedevil89,

I am not concerned about what the "whales" pay for things or what they collect. However, in the context of this thread, I am trying to point out that "investing" in cards may not be a wise thing to do, no matter what card or set you go after.

When "whales" spend their money, either wisely or follishly, they are creating a demand in the market which I can not do.

With the advent of graded cards, auction houses dedicated to sports memorabilia and the internet, "whales" have an easier time finding things to buy and somewhat more assurance of what they are buying as being authentic. When they spend, all ships elevate with a rising tide. So, if they want to buy rare back T206s and go after them hard, prices go up. Same with Wilson Frank cards or anything else they throw their money at.

The problem is, what happens when they STOP throwing money at a card or a set? What happens if and when they become disinterested in collecting cards and/or memorabilia or they die? Where is the demand going to come from to keep the prices as high as they are or to increase them?

Are foreigners going to magically come into the market? They haven't done so in the last 10 years so why start now?

Are young people going to step in? If so, WHERE are they going to get the money from? T206 Wagners in VG condition go for what, $150,000 or $200,000 thousand dollars. How many people 40 and younger collect cards AND have that type of cash to throw around on ONE card?

How much do common T206's go for now as compared to 10 years ago? How much has the price increase in those cards been because of Baby Boomers using their money to buy cards? WHat happens when they STOP buying cards or they die? WHat happens when the heirs start putting all of that product onto the market?

If the person who started this thread (or their friend) is wanting to know about investing in cards and which one or ones are going to go up in value they also have to be told about the downside. What I have been posting about is the downside I see (and also the risks my mentor has warned me about).

Again, if my collection drops to ZERO value, I will be a little upset BUT I wont panic. That is because I haven't spent a lot to put it together and I didn't start out collecting thinking about making huge bucks and retiring early.

I bought what I liked and what I could afford.

[ctownboy]

Thank you Barry and please call me David.

[bosoxphan]

There will be new whales imo. Know quite a few collectors in their 30's (of which im one) who spend thousands on single cards. Not whales yet but the whales weren't whales in their 30's either.
If future generations is the key to any collectibles market than i can't think of a single one who's going to be around long term. I know very few youngish coin collectors, art collectors, etc.

[rhettyeakley]

I had felt the way alot of the posters here do several years ago when I was in my mid 20's. At that time I really didn't know many people my age collecting vintage cards. However, I am 32 now and I have met so many young collectors between 25-35 years old over the past few years that I am actually fairly optimistic about the future of our little hobby.

I think you may actually see an increase in collectors of vintage cards over the coming years that were born and collected during the "rookie card craze" of the 1980's, people like me. I (along with most of my friends) collected cards and we were really into it, however, like most young people I completely lost interest in cards between ages 18-22 or so as I spent time studying and chasing skirts. But once I began to have an actual income and my "collecting gene" began to kick in again I went back to what I knew (baseball cards) and changed my focus to the things that had actually held their value over the years (vintage). In short, I think many people from my generation could come back as they begin to have discretionary income to play with.

-Rhett

[ChiefBenderForever]

I had a pretty nice newer basketball card collection and I think many of you would be shocked to see what kids are spending on new 'Exquisite' basketball cards. Rookies who have never even played go for more than 1000.00. They came out when Lebron, Carmello, and Wade were RCs and the Lebron rc goes for 5-10k which is insane. Anyways I had a huge KG collection along with many others and sold most of them after he got traded to the Celtics. As soon as I started selling them I began to get emails from all around the world asking if I would ship to their country, so I changed my NBA listings to be shipped world wide and sold to more different countries than I can name, it was a lot of fun, I made way more money, and never got ripped off once which I was shocked about. So I think what I learned is that when it comes to cards there is a market for everything, and even though the NBA currently sucks it has a massive world wide appeal.

[iggyman]

I am a collector of baseball cards first and foremost, that is part of who I am. My disposable income limits me to what I can or cannot collect. Which is why I don't collect Old Judges (but if they should ever start dropping in prices........I will buy them by the bushel or at least by the pound). Human beings will always have a natural tendency to collect things. That is part of who we are and as a consequence; whales will always exist, because some human beings end-up with more disposable income then they know what to do with. I don't buy into this "end of the world" scenario for baseball cards. The game of baseball is thriving like never before in its history. Throw in the fact that old baseball cards have a unique niche in our society as well as the fact that Japan is baseball crazy (the bets on card prices would be "off" (as in, "all bets are off"), if that society ever started collecting old baseball cards in earnest.....hey, all it would take is some charismatic individual in an info-commercial). As the Exhibitman stated...."It is just silly to think that the hobby will crater (absent of course a total cratering of everything else)....". With all that said, the only thing I know for sure is that not even the "Amazing Krestin" can predict the future.

Lovely Day...

[Leon]

I will go against the grain on this question. Back in about 1998-1999, when ebay first started taking off, I took most of my money from savings and bought rare, quality, pre-war baseball cards. I am NOT advising anyone to do that. It's probably dumb. That being said I have never made a better financial decision in my life. I am sure I am in the minority but just thought I would give that bit of information to the very good discussion going on. I also think vintage collecting will be around for longer than anyone on this board. It's been going for about 75 yrs already...

On a Wagner's value....a vg one is worth multiples of the quote above. I would guess it would be in the 750k-1m range, today.

[Exhibitman]

Thats true, Rhett. I dropped out of collecting from 16-24; just didn't resonate with me. Once I saw the end in sight for school and got a job with what I thought was huge money (hey, after living on $1,000 a month as a student...) I went back to it.

[Jim VB]

Originally Posted by Exhibitman

...(hey, after living on $1,000 a month as a student...) I went back to it.

Wow! You had $1,000 a month??? Living the high life! (LOL)

[drdduet]

Leon,

I did a similar thing...I recall a few E95 Cobbs, Wagners, and Matty's I picked up and sold about a year later for 4 to 5x what I paid, not to mention a Sports Co. of America Ruth, some National Games, Tom Barker's, Delongs, T206 rare backs, etc--all of which sold at levels too high for me to ignore.

I was picking up National Game/Tom Barkers Joe Jax's (Ex or better) for a couple of hundred dollars each for a time....

[Leon]

Originally Posted by drdduet

Leon,

I did a similar thing...I recall a few E95 Cobbs, Wagners, and Matty's I picked up and sold about a year later for 4 to 5x what I paid, not to mention a Sports Co. of America Ruth, some National Games, Tom Barker's, Delongs, T206 rare backs, etc--all of which sold at levels too high for me to ignore.

I was picking up National Game/Tom Barkers Joe Jax's (Ex or better) for a couple of hundred dollars each for a time....

Hey Dr.D,
I have to admit I got luckey at getting in at the right time AND at that time, if we remember, the stock market was soaring, the economy was soaring and everyone, it seemed, was fairly happy financially. You could just buy a technology stock and it was almost like shooting minnows in barrel (which I wouldn't do but it's a good analogy). Anything I picked, stock wise, just went up exponentially. Then I made a decision, after seeing the hobby growing with the internet, to put a lot of my savings into cardboard. As I said, I would NOT recommend that today....but it worked for me. Hey, sometimes a gamble pays off. The worse thing that could happen was I would have some great cards to look at and collect. Here is one of them I did this strategy with...it came from a Mastro auction and from the Montgomery collection. I remember bidding on the smaller version but after talking to (I think Kevin St.) I decided to wait on this larger type. I put in my bid of about 10k, after what the juice would be, and went to sleep. I got up the next morning and found my bid had stuck. I am not sure what it would go for today but I think it's safe to say it was a good "investment"..... best regards