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Posted By: bruce Dorskind

Collectibles are clearly an important asset class. Particularly
among the top 1% of Americans who control 35% of the wealth.

The private banks and family offices which assist the country’s
wealthiest citizens with their finances generally have
experts on staff to advise in the collectibles arena.

Whilst trading in baseball memorabilia is certainly not as
“fluid” as the equity and bond markets, or for that matter
the rare coin market, one would be hard-pressed to argue
that a multi-million dollar collection of high grade cards is
not an asset class.

No one is suggesting that a sophisticated investor should
allocate 25% or 50% of his assets to collectibles, but if one
were to review the asset allocation of private banking customers,
one would find that equity, bonds, property and cash rarely represent
100% of a client’s portfolio.

Whether it be art, antiques, coins or baseball cards, “collectibles”
often represent 2-5% of the overall assets.

If liquidity were the primary concern, then the investor should limit
him/herself to cash, equity and government bonds. However,
we think that an investment in ultra high grade baseball cards
will generally outperform the other markets.

Of course, the strategy for an investor will have to be quite
different from the strategy of a “pure collector.” One must
invest in items where there is active, consistent trading
and prices are not controlled by a handful of “investors/collectors.”

For example, if one tracked public auction records for the
past 10 years for PSA 8 Hall of Famers from the three most
popular pre War Sets ( T 206, 1915 Cracker Jacks and
1933 Goudeys), one would find that the growth in portfolio
value would dwarf the equity, bond or real estate markets.


Bruce Dorskind
America’s Toughest Want List