Posted By:
warshawlawI am a card investor...I admit it. I am also a collector.
I have two groups of cards, in my mind: the core collection I intend to have arrayed around my deathbed and everything else. I sure hope the core collection appreciates in value, but I keep the cards because I enjoy them. If I don't recoup the $275 I am into my Thorpe Exhibit, who cares...it ain't goin' anywhere. Then there are the cards I buy solely because I think they will appreciate. When they hit my target prices, I unload them.
Like every other investment, how you do on cards depends on what you buy, when you sell it and how much you spend. ROI (return on investment) is the measure. I love to buy cards and flip them quickly, trading if possible so that I am into the cards I end up holding for far below market. If you buy the right cards and catch a wave of price rises, you can very rapidly increase the value of the portfolio. The ROI is insane if you hit it right, much better than any stock trade could be, especially if you trade up on cards. I love owning a significant card with little cash into it. The problem is volume; stocks have all the advantage when it comes to making big piles of money bigger with relative fluidity. If I pick up a card for $30 and flip it a week later for $300, my ROI is huge but my resulting gain in an absolute sense is not. If I buy 1,000 shares of Zilchcon at $1.50 and it goes to $5, my ROI is lower than the card deal but my absolute gain is much bigger. IMHO, as we talk about bigger deals and higher priced cards, the ROI falls of necessity. I often make 5-10 times the price of a cheaper card when I finally decide to sell it; I would be happy to double a larger priced card. I have to say, however, that finding stocks to buy is a pain in the butt chore while finding cards to buy is an amusement. Who doesn't love to thumb through 100's of cards looking for that one good one??
I have actually done a head to head comparison with stocks, twice. In the 1990's, when the market was leaping ahead 40%-50% a year even in mutual funds, I put everything into stocks. About a year ago, my wife wanted to start "investing" in stocks again. I say "investing" that way because from what I have seen since the 1990's, there is no rationality to the stock market, it is rife with insider trading, and it has worse odds than craps for the average guy. This last year or so, my card investments have done much better than my wife's stock portfolio, and she follows investment advice from so-called professionals.
I also look at cards as a hedge investment against stocks, real estate and inflation. The hobby has followed an upward trajectory for 70+ years. I don't think we will see it turn to crap unless everything turns to crap, in which case we are in deep caca as a whole. There are sectors of the card market I would not touch right now as investments, simply because I don't think they will grow relative to other card sectors.
Finally, I cannot conceive of an investment like cards, except art. It tends to appreciate over time and you can appreciate it while you own it. 