How Long Before Hedge Funds Control The Rare Card Market?

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Posted By: bruce Dorskind

About a year ago, we suggested that a number of Hedge Funds would soon
look at rare baseball cards as an investment opportunity.

Whilst the reaction to this post was generally negative, our conversations
with a number of Hedge Fund professionals led us to the conclusion
that rare cards, as well as other collectibles, were a strong investment
possibility.

This weak, The Deal (wwwTheDeal.com) one of the most influential
and respected news sources on Wall Street carried a story about a hedge
fund that has been formed to "dominate the rare violin market."


In our view, a 25-50 million investment in rare baseball cards would
enable a fund to acquire a number of important collections and completely
change the nature of the baseball card business. Whilst this may not be
a popular idea amongst longtime collectors, those who have assembled
formidable collections of rare high grade cards will have the opportunity
to realize an incredible return on their investment.

Violin Story

One US fund promoter announced:

For the last forty years, the value of great violins has increased dramatically. Being that they are 'tools of the trade', they are not prone to the fluctuation experienced in the fine arts market. This consistency makes the purchase of great instruments historically one of the most secure of art investments. Moreover, the use of one of these classic treasures can change the course of a career. We encourage individual and institutional investors to explore including stringed musical instruments as a separate asset class in investment portfolios to preserve the purchasing power of scarce capital ...

A conservative estimate of the annual appreciation of a great violin used to be between 5% and 10%. However, already starting in the late 1970's, due to the globalization of Western economies, the influence and activities of foreign organizations and individuals in local markets have caused violin prices to rise more rapidly. There has been a steady increase in the rate of appreciation of great instruments. Since examples set the standard in the market, Machold Rare Violins looks to the sales prices of extraordinary violins to evaluate the current rate of increase. Today, we put the average annual percentage of appreciation between 10% and 15%


Yours truly,