Liquidity & Investing vs collecting
 

I don't post often, but I feel compelled to share some thoughts. Most of you will likely disagree, and that's ok too. I hope eventually you get it.

If I asked any of you the value of a barrel of oil, most of you would log on to Bloomberg or CNBC and check the ticker. Why? because it shows live transactions where buyers and sellers agree on a price. There is security in knowing where assets such as oil, wheat, sugar or now sports cards trade repeatedly. As more trades happen, more people get more comfortable with price and liquidity and feel it is safe to make a 'bet'.

In the basketball world, Jordan rookie cards are the ultimate commodity. Baseball you have mantle rookies, football... Try on a Namath rookie for size. What do you feel safer putting your money in??? A Jordan rookie at 30k or a PSA 9 1934 Gehrig that never trades that will cost you 10x the price because that's what a private broker says it's worth?

Tell me why a Jordan PSA 10 shouldn't be worth 30k? There are roughly 250 of them... That's five per state in the union. Are you honestly going to try to make an argument that there aren't more than 250 people that are able and willing to own a Jordan rookie at 30k to say they have one? They should probably be worth 100k+ each!

Give me the liquidity, give me the commodities, give me the transparency. If you want to collect, fine... Go buy a PSA 6 gold border common. If you want to invest, give me a PSA 8 Koufax all day long and twice on Sunday. Complain about prices changing all you want, but when you are done, you will miss the move... Or perhaps you already have.

Peace

I have never needed a card to trade constantly in order to ascertain it's value and I have been dealing and collecting successfully for 25 years. I also do not define liquidity in this market as something which is based on the frequency that item trades. Liquidity and market efficiency has never really been a problem in the hobby for me as a buyer or a seller.

As for your example of the 86 F Jordan vs the 34 G Gehrig I would feel much safer placing my money in the Gehrig but I do think your comparison is like comparing apples to oranges. Historical pricing, before 2015 on both of those cards would support my reasoning. If my memory is correct the Jordan 10 USED to be a 100K card. Regardless this post sounded more like a commercial for the 86 Fleer Jordan...

A BGS 10 Jordan has sold for 100k. I believe this sale took place when a PSA 10 Jordan was in the 10-15k range. They're much more rare.

Whether or not the PSA 10 Jordan is still a good investment at it's current all time high valuation remains to be seen and is an interesting topic for a discussion. I think it is.

its all about risk/reward. Gehrig would be a slower more stable investment for long term. Jordan will have huge price jumps in both directions depending on the current market when the card is sold. Both players are special and very Iconic to their sport they dominated while playing. The Population from Gehrig is ten times more rarer than the Jordan, but we all know scarcity doesn't always mean value. One last thought, is Gehrig's story is over and his Legend continues, and Jordan is still writing his. If the unthinkable happend to Jordan where he got caugh in a scandle or committed a violent crime... Then that would really affect the value on his card too. I love both Jordan and Gehrig and I actually have both their rookie cards.

It's not a commercial for Jordan cards... None of which I even own.

It's an example that although there are a large number of a certain card available doesn't mean that is bad. It also doesn't mean it's not still under priced.

How many people are going to pay 300k right now for a PSA 9 1934 Lou Gehrig (10x the Jordan card) ?? Maybe 5-10 people max. That doesn't mean I wouldn't rather have the Gehrig card... All I am saying is that if I have 300k to 'invest', 10 Jordan cards might be the better investment. Why u might ask?

Ok say another awesome cardboard wonder comes along that you can't do without? Are you going to call you card broker to go sell that Gehrig? Or are you going to send Brent at Pwcc a couple Jordan PSA 10s to pay for that Ernie banks PSA 8 and George Brett PSA 10? Cards like Jordan rookies are almost as good as cash... They are liquid. Rare high end cards are too, but they are way tougher to move in a pinch.

These cards are becoming commodities with real value ... Real liquid value with someone like Pwcc taking them as payment for winnings :).

There are obviously a lot of hedge fund guys pouring cash into the hobby right now who feel the same way as you do. I'll stick to collecting scarce-rare seldom-traded baseball cards that I like, and investing in mutual funds.

If you believe what you say, you should be buying Jordan 10s. Just be careful, seriously, not to get a fake one, there are some pretty convincing ones from the Mexican guy out there.

My problem with 10s always has been that to me they are just Mint cards with a different flip for the most part -- that you couldn't tell apart but for the flip -- but in an era when flips seem to be independent commodities that seems not to matter.

Thank you for posting. I almost never use the investment perspective of collecting as the main factor when making a purchase - so maybe I don't have a sound grasp on some of the examples you've mentioned. I mainly do this for fun - but you raise some good points.

In your example cards aren't truly that type of commodity yet. If I buy a contract for a specific type of crude oil with a specific sulphur content and API gravity I expect to get exactly that. Grading companies have brought us closer to a common standard - but there is too much variability in the perception of the value of a certain grade - due to factors such as the PSA Registry. This can be seen when you compare the Fair Market Value of cards corresponding to the same grade across the various grading companies.

In addition, due to counterfeits, uncertainty of execution and the various quirks in how things are bought/sold, means many buyers are willing to pay a premium for the certainty of execution. You don't have that factor in commodities where you can go to any place that buys/sells and get the same result. That is certainly a reason some eBay dealers achieve higher prices for their cards than other sellers.

The depth of the market also varies greatly over time, making the market volatile for certain areas of collecting. Certainly there is volatility in the market for other commodities - but not to the extent of those that invest in cards. See the example in another N54 thread about the guy that bought $80K in the rookie card of a specific player...which later tanked. I believe it is also one of the reasons you can't compare the value of investing in, say penny stocks to those traded on the NYSE. The market isn't deep enough to support long term investment decisions without involving a significant amount of speculation.

Just my thoughts, and I admit I could be way off base.

Z

I think it's a good and relevant debate. I recently converting cash sitting in the back earning literally 2 bucks a month in interest into a '52 Mantle at a decent price. I personally think the '52 Mick is a commodity, and a good one at that. It will (imo) do a whole lot better than 2 bucks a month when he finds a new home. SMU doesn't take '52 Micks in their payment plan so he WILL find a home in the next 3 yrs. :). I like looking at him a lot better than numbers in a bank account too!!

My problem with investing big money into any slabbed card, pre-war or not, is a grading company's reputation (i.e. GAI) can be damaged beyond belief and severely devalue their cards overnight. As purely a hypothetical example, what if news broke that any of the big two/three companies was caught giving many faulty grades for personal gain, etc.? Or purposefully slabbing trimmed/altered/fake cards?

If I ever poured $30,000 into a card, I'd feel much more secure putting it into a rare card in general than I would putting it into a nominal card marked up 100x simply because of a grader's opinion. That's always seemed incredibly risky to me. I have no problem with graded cards and especially enjoy the protection they can provide to cards that could be damaged without a slab. But I just wouldn't have the desire to pay that kind of a premium for something based on opinion.

This is why I bought into what I think is the safest bet in the hobby. I wasn't going for a 20k HOF'er OJ which Richard, Keith and Jay already own. :)

The idea of something like Jordan cards being a riskier investment because he's still alive and his story isn't finalized yet is something I never really thought about. Sure at some point OJ Simpson and Bonds were fetching big bucks too. The guy who paid big bucks for a Sammy Sosa homerun ball has likely jumped off a bridge long ago. Jordan's reputation hasn't exactly taken off since he retired and who knows what he's gambling on these days.

By the way, I have zero interest in Jordan cards and never plan to buy one. I'd drop big bucks on Ruth any day over Jordan.

Why even own the physical card? The flips could be traded on an exchange and your online account will show your holdings. The cards themselves would be as obsolete as stock certificates.

If PSA can figure this out, it will happen. Others can chime in but I think they would need the ok from the SEC and get all the necessary securities licenses to act as a broker and then it could happen. Pretty unlikely though...

As for the Jordan, I have mine (a psa 8 oc). It's probably the best investment card I've ever bought. I wish it was a straight 8 but it presents really well and was reasonable about 1 1/2 years ago. I also agree with liquidity as a key factor to investing.

I'm astounded by the record prices of the Mantle/Clemente RC's, but especially the Jordan RC, with thousands and thousands slabbed. I do have a Clemente because I'm a Pirates fan, but I collect and invest in prewar for their scarcity and investment potential. I'll buy a Ruth RC with approx 75-80(a bunch have been crossed), who was the best baseball player of all time, having a 100 year old card, than chase a holder and grade of the cards today. Modern cards for that reason to me are significantly riskier. Prewar prices have been consistently solid and increasing, postwar with the PSA registry driving prices have done great as well, but modern cards to me are a risky proposition. Too volatile, too many of them, and too unpredictable in the future for me. Great point on that the players story may not be done yet even though they're done playing. No one is going to rewrite Ruth, Jackson, Cobb or Wagner's stories.

A real investor would not bother with already vastly appreciated cards but would be looking for the next wave cards so as to maximize returns.

All cards are liquid; the issue is a red herring. The discussion should be liquid at what price. Right now certain cards are flying off the shelf because we are in a mania. Anyone who has collected for a long time has seen it before. Remember E cards? T206 errors? Chasing the tail of a mania is a bad idea. Better question is what cards are still undervalued.

The PSA 10 Jordan discussion is incomplete. The relevant pop is not PSA 10 but is 8-10. Many collectors will simply downgrade rather than chase a ten. There may be a better ROI on a lesser grade card unless you expect the Jordan to go from $30k to $60k. Maybe it will. But maybe the better play is several 8s that have the potential to triple in the same time. If you are an investor. If all you can afford is one Jordan 10 you aren't an investor you are a person trying to sell yourself on a splurge.

Buy what you like and assume you will own it for a while. If you want liquidity and transparency go buy a security and leave the cards to the collectors. Trust me you won't be missed.

I think 10 flips are almost always a better "play" than 8 or 9 flips due to relative scarcity and perceived value among people who can afford them. Obviously more people can afford 8s than 9s, and more people can afford 9s than 10s, but that isn't material to this discussion because the supply of 8s and 9s is also correspondingly much higher.

It is material if you are analyzing investments as a combo of returns and liquidity. The issue to me is whether a card that has already doubled several times over is really a better investment than a corresponding value of cards that haven't. I'd prefer to gamble on the latter.

I think you are positing a false circumstance, where 10s have doubled it is overwhelmingly likely that 8s and 9s have already had significant appreciation too. Jordans are way the hell up in all the upper grades, for example, from what I can see.

I agree with peter

have you ever wondered...

there might be a reason some have doubled and some haven't? I agree there are deals to be had, but i think the thing to remember is that some cards are just getting left in the dust and might never catch up

+1

I bought a 1951 Bowman Mantle SGC 60 for $3,200 a few years ago primarily as an investment because, to me, it was obvious they were undervalued. Sold it for twice that this year. What's next is ... ? ;)

Personally I think that relative to the recent mania Paige cards -- and there are only three of them, with one next to impossible -- may be undervalued much as I hate that word.

We have a perfect example going on right now related to this argument.

Here we have a 1915 Cracker Jack - Joe Jackson on Ebay being consigned through PWCC:
http://www.ebay.com/itm/1915-Cracker...0AAOSwNsdXSg9R

The current bid on the card is $63,800 with over 13 hours still to go (as of this posting)

This exact same example was purchased in a 2009 Heritage auction for $41,825 (incl BP).
http://sports.ha.com/itm/baseball-ca.../a/714-81128.s

It was purchsed again in a 2011 Paragon auction for $55,612 (incl BP).
http://paragonauctionsite.com/LotDet...nventoryid=375

Since the current PWCC listing reached a bid of $55,555 (which for this argument I will say is close enough to equal to the previous Paragon sale including BP) there have been 9 unique bidders on the PWCC eBay listing. To your point about how many people might be interested in such a card "Maybe 5-10 people max" this listing is currently right inside your estimate but with 13 hours still to go the number of unique bidders above that mark could increase.

We can revisit this specific example tonight once the PWCC listing ends, but the fact we have a relevant example to study and apply in this discussion is interesting.

Anyone who is willing to put $300K into cards as an investment in their future is nuts. The only people spending $300K on cards are high rollers who don't even need to see a return. I would say the same is probably true for everyone who's purchased that Joe Jax card too. I would be very surprised to hear about anyone laying out their life savings on a card who was just a normal person who managed to save 60K.

Was referring to a time before you were in the hobby, not since VCP has reported sales--2015. I was wrong however, the Jordan did not used to sell for 100K but when it was a much lower population card it was selling for over 40K. There was a dentist who used to post ads in SCD buying certain cards from the set for obscene numbers. This was probably 15 years ago.

There was a dealer back in the day who used to bring his Jordan 9s (among other things, he had huge volumes of cards) to the Parsippany NJ show and he told me they would always bump a certain percentage of them into 10s. The show bump phenomenon made me pretty cynical about grading at least at the upper levels.

Why nuts? I would guess if you took a basket of elite graded cards and compared the rate of return on them to the stock market or most other investments over the last 20 or 10 or 5 years, the cards would have a better rate of return.

My personal experience agrees with you wholeheartedly.

Ok well do you guys have 401K's or some other retirement plan? If so, why didn't you just pour that money into a few cards?

I have a rollover 401k. As those rules are, it is tax deferred until I take it out and earns interest that way, compounded. Most of that is in Fidelity Index 500 fund shares. I prefer to leave that alone as to diversify a bit (and not pay the 10% penalty to take it out for cards). Everyone has their own methods. I always think of this imaginary, but oft used, financial "pie" in my head and know there are many pieces for a reason. If I only had 1 piece of pie that piece wouldn't be cards. It would probably be the Fidelity Index 500.....

Having very much money in a savings or other cash type account is actually like losing money in today's economy. All in my humble opinion...
*AND Please seek professional tax and estate planning advice and don't rely on anything I say :). I had to sell my whole collection to fund a college degree.....LOL


.

What I'm really trying to say though is that I don't think a normal person looking to build their future is going to invest 60K or 300K or any significant amount of their life savings in cards. I think the only people who are plunking down 60K or 300K on a select card or cards is a person who isn't counting on the return changing their life. They are more or less gambling and not investing.

Just...wow. Speechless.

Normal
 

I wonder how many normal people we have on the board. What is normal ?

I would guess a lot since you don't often see a Joe Jax like that show up in a pick up thread.

If you're an ordinary guy looking to invest his savings, you're not only looking at expected ROI, you're also looking at the probability that you're going to lose everything. Maybe the expected ROI on Mantles is really really high, but there's also a chance that this is a huge bubble and you'll be left holding the bag. If that happens, you're ruined. And avoiding being ruined is extraordinarily important.

Whereas the stock market didn't drop more than 50 percent the last time it crashed.

I am confused? let me get this straight... since the dollar amounts are beyond what you are comfortable spending, trading high end cards should be considered gambling?

Most of the time, I certainly don't begrudge anyone for having more or less money than me, nor do I question their motives or reasons for doing what they do. However, when you say things that are this narrow minded, it makes me understand perhaps why you have less than me and probably always will.

What is so confusing? If you're spending 300K on cards, you've probably got the 300K to burn if it's going to cards, right? So then that is entirely different than your 401K or your Roth IRA where you're depending on making money back, because it's your life savings. How does that type of thinking make me a pauper? All I'm saying is buying high end cards at those prices isn't how most people are going to retire. It's how comfortable people might make some more money.

it doesnt, but its all relative.

just because 300k is beyond your comfort zone, it does not mean its beyond mine. And if you say that anyone that invests or spends 300k on something he can afford to invest or spend it on does not make it 'gambling' because its more than you would invest or spend.

All I am pointing out is just because I decide that 300k is an appropriate amount I am willing to put into cards, it does not just make it 'gambling' and it wont matter if i make or lose money.

That sort of thinking is wrong. I think we all make decisions that we are comfortable making, or at least we should. Perhaps your threshold is lower than mine, but that doesnt make you a 'pauper', but it does seem a bit ignorant.

justin c

Willing to put into cards and sacrificing your life savings are two different things. You're talking about leisure whereas I'm talking about survival.

I think you could make your point without ad hominem remarks directed to people's relative net worth, no?

There's nothing narrow-minded about his comments. The high end baseball card market is extremely volatile. The prices are going through the roof right now. That trend isn't going to continue forever. What goes up, invariably, will go down. When you consider, too, the amount of market manipulation that is present in our hobby, I just can't see how anybody would be so cavalier. Realizing that, the inherent risk is palpable. If you choose to bet big, more power to you. You may make a lot of money. But don't for a second think your gains are the result of sound financial rationale.

Comparing high end baseball cards to commodities is wildly inappropriate.

Everyone's situation is different. If you don't have a financial set up you are presently happy with, I certainly wouldn't be pouring a sizeable chunk of what you have into cards, artwork, race horse partnerships, or anything else like that. But if you are comfortable financially, whatever that means to you, I don't see why buying a 75,000 Mantle card is a whole lot different from buying a condo in Florida you might rent out. It may go up, it may go down . . . I doubt it will be worthless when you go to sell it. Diversifying is the name of the game. If some relatively modest % of your wealth is in baseball cards, I don't see an issue with that. In fact I think its pretty smart.

I don't see an issue with that either. At the risk of being called poor again I'll just reiterate that I'm talking about leisure investing vs. future dependent investing.

Speaking of what goes up must come down, I wouldn't be too happy if I had "invested" in Go Pro.
Check out the one year chart.
https://www.google.com/?gws_rd=ssl#q=gpro

+1,000,000

exactly

Wow, that 52 week spread is painful. Down 19% in May, alone.

His second post was phrased nicer, but he is right either way. $300k (since we're using that number) is a lot of money to a lot of people on this board, but that doesn't mean that it can't represent a small and reasonable percentage of someone's net worth to be invested. High end sports cards have been a good investment in recent history. Calling it gambling just because the number is big doesn't make any sense.

Yea that's pretty crazy. That dentist could have been buying up PSA 8 52 Mantles for 40k instead of the Jordans at that time. It looks like a few years later in 2006 they were going for 5k.

Sure it does. Gambling is defined by the act itself, not the possible financial implication of the outcome. Suggesting otherwise is reckless, in my humble opinion.

If a billionaire goes to the Luxor in Las Vegas, and puts down a $1 million chip on black at the roulette table, regardless of the outcome, or how he tolerates any potential loss, he's gambled. He may have risked a very small portion of his net worth, but he's gambled, nonetheless.

As I said before, I've got no problem with the guy doing whatever he wants with his money. To each their own. If he wants to rent a limo, and blow $100k on hookers at the Bunny Ranch, God Bless America! But that's not how he framed this whole discussion. He came here espousing an extremely risky investment strategy, and gently chided those who are going to, or have already "missed the move."

"Give me the liquidity, give me the commodities, give me the transparency."

First of all, in this hobby, I find there is a shocking lack of transparency. If there is any, at all, it is because hobbyists, like the fine folks here on Net 54, are fed up with the rampant criminality that has become all too commonplace. Unlike commodity trading, there is no inherent transparency within the hobby. There is no regulatory body in baseball cards; no oversight. One of the third party grading companies began its existence by facilitating a gross misrepresentation of a Wagner T206's quality. Major auction houses have been complicit in criminal behavior warranting FBI investigation, and federal prosecution (cough Mastro cough); and, you've got rampant shill bidding on Ebay. Oh yeah, and you've got a criminal mastermind somewhere in Mexico flaunting their ability to create high-value graded cards out of thin air. This is the environment in which I'm going to risk hundreds of thousands of dollars? Discretionary income, or not, to bank on the continued upward trend in pricing, which day and night is being responded to here with utter disbelief, is displaying questionable logic.

"Past performance is not necessarily indicative of future results." Especially when the system is being gamed against the individual investor. Even the most principled auction houses, through no fault of their own, and even after employing the strictest guidelines, and independent transparency--they get caught in the muck. We've seen highly-visible persons on our own board, people who work their tails off to make this hobby as safe as is humanly possible, caught up in the middle of dealings with stolen goods. If a man with that level of hobby sophistication, with this incredible tool at his finger tips, can get blindsided, what chance does an honest investor truly have?

I may no longer be able to work, but when I became a broker, I vowed to be held to a higher level, ethically, in my business dealings. I had a fiduciary responsibility to my clients, and though I'm no longer actively associated with a broker-dealer, I still take that responsibility very seriously. I cannot sit idly bye while I see risky investment advice, even in the guise of a "friendly suggestion", being dolled out.

VERY well said and put!



QUOTE=the 'stache;1548152]Sure it does. Gambling is defined by the act itself, not the possible financial implication of the outcome. Suggesting otherwise is reckless, in my humble opinion.

If a billionaire goes to the Luxor in Las Vegas, and puts down a $1 million chip on black at the roulette table, regardless of the outcome, or how he tolerates any potential loss, he's gambled. He may have risked a very small portion of his net worth, but he's gambled, nonetheless.

As I said before, I've got no problem with the guy doing whatever he wants with his money. To each their own. If he wants to rent a limo, and blow $100k on hookers at the Bunny Ranch, God Bless America! But that's not how he framed this whole discussion. He came here espousing an extremely risky investment strategy, and gently chided those who are going to, or have already "missed the move."

"Give me the liquidity, give me the commodities, give me the transparency."

First of all, in this hobby, I find there is a shocking lack of transparency. If there is any, at all, it is because hobbyists, like the fine folks here on Net 54, are fed up with the rampant criminality that has become all too commonplace. Unlike commodity trading, there is no inherent transparency within the hobby. There is no regulatory body in baseball cards; no oversight. One of the third party grading companies began its existence by facilitating a gross misrepresentation of a Wagner T206's quality. Major auction houses have been complicit in criminal behavior warranting FBI investigation, and federal prosecution (cough Mastro cough); and, you've got rampant shill bidding on Ebay. Oh yeah, and you've got a criminal mastermind somewhere in Mexico flaunting their ability to create high-value graded cards out of thin air. This is the environment in which I'm going to risk hundreds of thousands of dollars? Discretionary income, or not, to bank on the continued upward trend in pricing, which day and night is being responded to here with utter disbelief, is displaying questionable logic.

"Past performance is not necessarily indicative of future results." Especially when the system is being gamed against the individual investor. Even the most principled auction houses, through no fault of their own, and even after employing the strictest guidelines, and independent transparency--they get caught in the muck. We've seen highly-visible persons on our own board, people who work their tails off to make this hobby as safe as is humanly possible, caught up in the middle of dealings with stolen goods. If a man with that level of hobby sophistication, with this incredible tool at his finger tips, can get blindsided, what chance does an honest investor truly have?

I may no longer be able to work, but when I became a broker, I vowed to be held to a higher level, ethically, in my business dealings. I had a fiduciary responsibility to my clients, and though I'm no longer actively associated with a broker-dealer, I still take that responsibility very seriously. I cannot sit idly bye while I see risky investment advice, even in the guise of a "friendly suggestion", being dolled out.[/QUOTE]

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.

I don't understand the point you're attempting to make here. At all.

I interpreted it to mean he thinks certain high end postwar and modern cards are good investments even at today's prices. And that those who are not buying into it (literally) will miss the boat.

Didn't get that at all, but okay. I learned something new today.

I think it's gambling when the poster is talking about using the cards in place of cash. That's what he said in his first post. Buy a card and use it as a commodity. I think that's gambling because you're assuming the market will allow for it. I also think it's gambling because at that price point (300K), you must have other holdings for you to be putting it into cards. If you lose it, that was your card money not your retirement fund. And if it is your retirement fund, I think that's nuts.

Get it
 

Don't get it - to some degree he is just pointing out the subtleties of supply and demand in our hobby, er, investments. We have said before, demand out-trumps supply. And timing is also important. What the future holds? I would guess the Jordan RC and the 1934 Gehrig should both do just fine, but its just a guess - nobody has a crystal ball. Heck, what do I know, a couple of my stocks have not done that great - didn't guess right on those. Other stocks have done ok. My real estate has bounced back very nicely. Probably good to diversify a little.

I've read the opening post a few times thinking I was just missing something, given the thread has so many replies. Glad to know I'm not the only one who didn't understand the point.

You're getting caught up on the idea that $300k is all of his money. I know that's a very large number to most of us, but you need to allow for the possibility that it is just a small portion of the money he wants to invest in various things.

Of course putting all of your investment money into baseball cards would be crazy. Putting all your money into any one investment instrument (other than t-bills and the like) would be very risky. In that regard, putting $300k into PSA 9 and 10 Jordans is really no different than putting it all into Coca Cola stock, or a single house. But all 3 can legitimately be called investments.

Just because you can't fathom putting $300k into high grade cards doesn't mean it should be called gambling any more than stocks or real estate should be.

But what about muhamed Ali ? Lol jk


All cards can be traded so yes they commodities. Last year I traded some cards for Yankee tickets. When I was a kid I traded cards for a new Louisville slugger.
This is the same old thread phased in a different way for the thousandent time.
We don't know the future but we can make a lucky guess.

Last year I made my biggest baseball card purchase. It was a Willie mays rookie.
I did not buy it for the sole purpose of investing .it was a card I really wanted.

Cards
 

I had not realized what hard work it has become to collect baseball cards. As usual I am one step behind. I even thought I was enjoying it.

Enjoying it? No, no, no. You're doing it all wrong. :D

This is my last post on this but you're missing my point. I can fathom someone spending 300K on a card. I'm not some pauper who thinks that's all the money in the world. And I don't understand the characterization. The price point is what I'm talking about. If you have that much to break off for cards, then you're a high roller and does it really matter if your card dividends pay out double or triple? I would say no. It would be nice if they did, but if they paid out the same amount you put in, or even slightly less than you put in, that's not making or breaking anything for you. That's because you're just having fun with your disposable money, like when you gamble. You aren't trying to build a future, you've already built a future if your card budget is 300K. I'm talking about the guy who sees a post about cards as commodities and invests their life savings into cards. That is what I'm saying would be insane. Not spending your card budget, whatever that may be, on the chance that you might make a little more money.

People
 

Not sure about you Packs, but I do not know most of the people on this board on a personal level. I just know them by their posts. I do not think I could accurately generalize about why or how people should collect. Each person must decide based on their own circumstance. One can be a just a buyer, just a seller, just a collector, just an investor, or any combination thereof. All I know for sure is my own situation, and I have enjoyed collecting cards since 1957.... and still do

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.

I'm with you on having these be the last posts. I definitely did not mean to characterize you as a "pauper" or anything of the sort. I just disagreed with your argument. It seems like you are saying that if someone has millions of dollars, you don't consider them investors anymore because they are already set for life. If the OP has $10mil, and wants to put $300k into baseball cards because he expects to grow his money, how is that not investing? Can Warren Buffet invest in anything, or when he buys up shares of a new company, is he simply gambling, since he really doesn't need the money?

It's just semantics, but I still think you are missing the point. I of course agree that no one should put all of their savings into baseball cards. They also shouldn't put it all into Coca Cola stock, but I bet you would call that an investment rather than a gamble.

I agree with everything you wrote Dave fwiw. I just disagreed with the comparison to roulette.

Yeah, I know we're on the same page. I just quoted your post because it mentioned a lot of the issues being discussed.

I am not sure I would ever feel comfortable suggesting to someone to invest in sports cards but for those who understand the market overall, I would not call it high risk at all. Typically there is not high volatility in prices. It is a market which is easily to navigate and has a great deal of transparency. Sure the hobby has plenty of fraud but is that more or less than has been happening for decades on Wall St? The fact that Wall St is regulated has not protected the average investor.

People have been making a living off of cards in all markets, not just the rising ones. In fact I would suggest the rising market we are in now is far riskier than previous times in the hobby. I have a business/finance background and I know I feel far more comfortable putting my money into cards than I do investing in a publicly traded company where I am a complete outsider and have no insight as to the way the company is really being run and which market makers are gonna dump the stock or load up before earnings. By the time the average investor gets news that they need to move out of a position it is too late. I do not see that same issue happening with cards.

Re cards being so volatile, when was the last time the card market dropped 50 percent? When was the last time it dropped significantly at all?

Packs
 

Packs,

I am sorry I hurt your feelings when I responded to your opinion of what you might believe I am doing should be characterized as. Hurting your feelings was not the intent. You are no better or no worse than me, period. The amount of money I have or don't have should not characterize what I do with it or how the impacts of what I choose to do affect my life.

Calling what I am doing gambling is ignorant. Why? Because you have no idea what my situation is, just like I have no idea what yours is.

Just because it's a lot to you doesn't mean it's a lot to me. That's ok too... You are likely a nice guy, a great friend, a great dad etc, but just because I might have more money than you doesn't make me a gambler and you a collector because of the dollar amount I choose to put into cards.

My whole point was here that I am trying to encourage you all to not get caught up in what things used to be worth, but instead what they are worth now and what they will be worth in the future. I get annoyed so often by people complaining about how dumb prices are and how much manipulation goes on. I make up that people blame it on manipulation that prices are going up, but my sense is these same people are stuck in the past.

Hypothetically speaking, If I am willing to buy one Lou Gehrig card for 300k and that has a population of 3, I can assure you I am also willing to buy the other two for the same price before I let one of them go for less. I am an investor and I will protect my investment accordingly. I don't make any move without being willing to protect my move. If I think a card is worth 300k and there are 3 of them, I need to be willing to invest 900k in that card to make that purchase. That's not gambling, that is smart and logical investing. If I end up buying all 3 for 900k, fine, but I sure am going to support the market to protect my investment. I can only do that if I buy within my means and go in with a plan.

I hardly call that gambling. I think it's smart. I don't need you to agree with me, but I don't appreciate it when anyone tries to characterize what I am willing to do gambling when the dollar amount is merely larger than an amount they might be comfortable spending.

I can tell you all this. I don't buy a 50k Namath rookie unless I am willing to buy 50 of them for that. I consider my investments before I make them. I encourage those who don't think this way to realize there are others like me out there that are willing to buy not only one card, but all of them for "X" price and control the market.

This is happening and it bugs me that no one else realizes it. I can't convince you all that this is right or wrong, but I'm telling you it's happening because I am doing it and will continue to do so.

Not sure I understand why it is necessary to own all or attempt to own all of a particular card in order to justify owning one? What you have described is more of market manipulation or positioning yourself so that you can manipulate the market. I know you will not agree.

So if there is a pop1 PSA 10 Nolan Ryan rookie, am I manipulating and controlling the market becaus I own the best card and won't sell it? Just because I am willing to buy the best card at a certain time doesn't mean I am manipulating the market. It merely means I am willing to pay more than anyone else for it. And if someone wants to buy it from me, they will have to pay me what I think it's worth to sell it. That's not manipulation... That is free market capitalism and perfectly legal.

Go try to buy some pop1 tens from Ken Kendrick's dBACKS collection. Do you think he is just going to sell them because you want to buy them for $125? And are you going to accuse him of manipulation because he bought the best card and doesn't want to sell it for what you want to pay? And he is also willing to buy anymore that come available at the same price?

I would offer at least $150 for Kendrick's pop 1 10s on the chance that one of them would actually grade again. Buying a 1 of 1 that happens to be the whole market for that card in the grade is not the same as what you have described as attempting to buy up every example of a particular card but someone as astute as you did not need me to explain that to you.

And your purpose in coming here and admitting you are trying to corner the market or whatever term you want to use is? I mean other than to proclaim the new world order, of course, I got that one.

I would like to see some scans of the OP's investments.

This would be immediately after the era of overproduction. Everybody in the late 80's and early 90's were buying cards to put away for retirement. People were paying ridiculous prices for OPC premiere, Stadium Club, Kevin Maas rookies, etc, etc. That crash cost a lot of people money. Now of course this wasn't across all areas of collecting, but nevertheless, the "card market" dropped big time. I understand that this was the overproduced crap, but the people who were dumping money into the hobby had no clue(maybe like the people now dumping money into the sportscard market and inflating prices), and the rug was pulled out from under them. It all comes down to choosing wisely. If you know a collectibles market, then you can use it as an investment vehicle and limit the downside.

Yeah I remember that stuff and superpremium cards and all that but other than some individual cards like Canseco tanking and maybe wax prices of the really overproduced crap I don't remember a major drop. But if that's the last time it's been quite a while, no?

I'm guessing you never will.