Cards = Investments

[EvilKing00]

With the current state of the economy, I was wondering everyones thoughts on Cards as "investments".

Money in the bank with the current interest rates is a joke. The stock markes is always an interesting place BUT be careful. Im in the RE business and IMO there is no better time to invest in properties, BUT asside from homes, I think Cards makes a damn good investment. Not that I "invest" in the cards i but I love to just collect them.

[wazoo]

Cards, especially the old ones make great investments. They will keep going up in value.

[kmac32]

Depends on the cards involved. T206 ans E121 seem to be holding their own value but I wouldn't necessarily say they are going up in value like an investment should.

[wazoo]

For t206s, no doubt they have gone up in value during the past 5 years. Now they seem to be staying at a standstill, which is fine by me.

[r2678]

Just make certain you differentiate between investing and speculating. For investing, I'd go for the tried and true. Go for quality, too. If a card or autograph has a problem when you buy it, it will have that same problem when you decide to sell. Stay mainstream. And learn your subject.

[cyseymour]

I would say cards are investments, certainly. If there weren't resale value, I think far fewer people would be interested, we can say that for sure. It would be like collecting paperclips.

Now whether they are good investments depends on the card. No one really knows what will rise in value, it all seems based upon the whims of collectors. Prices even vary so much just by the auction.

Cards should continue to appreciate in value, and especially so as the stock market continues to rise. Still, I think you pretty much have to enjoy the ownership of the cards as the first priority.

[EvilKing00]

interesting to hear some responces, , like i said i dont do it for investment - for example I bought a shair in the green bay packers last year. no resale value, as they cant be sold AND im not even a packer fan, im a giant fan, BUT i just thought it would be so cool for my son to own a piece of an NFL team. (or any team for that matter, this is the only one possable)

[sb1]

Where's Barry when you need him?

[Exhibitman]

They are a nontraditional form of investment. But damn, they're way more fun than anything else.

[esd10]

i have noticed that there seems to be more collectors than buy for investment purposes now than 5 years ago and prices reflect that. about 4-5 years ago i bought lower condition of e98's and e90-1 for a small fraction of what they sell for now and i wish i had never sold the e98 ed walsh a beater none the less but i paid like $30 for it and now good luck buying any e98's for those prices for the most part.

[Brian Van Horn]

I can only say I do not own a single stock, unless you counted my 401K which I recently rolled over to an IRA. Which is better, cards or stocks? For my sanity (whatever that is), cards!

[Rob D.]

I bought stock in dictionaries and spell-check software. Haven't done very well.

[bbcard1]

I bought my first cards simply for investment the end of last year. I am in the process of flipping them, hope to make 20%, but might not....didn't bet the rent, so it's ok. Bought them with a CD that was earning a whopping .4%, so even if I make 10% that would be ok, but that is a tight margin considering you are assuming some risk....cards could always get lost or stolen or turn out to be fake.

[drmondobueno]

Started buying cards again in 2012 when my money market started paying 0.15%. Figured there would be a way to liquidate if I need to but would be a big enough pain to do so that finding alternative funds would be simpler. Close to retirement age so accessing 401k's are in the cards, so to speak. Figure to have the cards until I kick. Have a few liquidation options for my spouse, if she chooses, in my will. I guess I am planning to wait and see values 15 to 20 years out.

I am actually going back to work next month after being retired for the last 5 years ( sounds better than unemployed) besides building bamboo rods. Kind of a nice way to live after 40 years in the L A ashtray. Never would have thought I would have the opportunity or the means to collect the Monster. Nice way to spend the winter so far...great group of people, too.

Peace and prosperity with a 5.5% compound growth rate

[cyseymour]

Originally Posted by Brian Van Horn

I can only say I do not own a single stock, unless you counted my 401K which I recently rolled over to an IRA. Which is better, cards or stocks? For my sanity (whatever that is), cards!

Yah, same for me, stock market was driving me nuts, every day, up or down, I think one of the nice features of cards is that you don't have to follow the price everyday and sometimes don't find its value till after it's been sold. That's some peace of mind right there.

But of course the value can always drop and there is a pretty big overhead in the buyer's premium. Those are problems but it comes with the territory with collectibles, I believe.

[rjackson44]

great topic just buy what you like and enjoy the hobby

[freakhappy]

Originally Posted by rjackson44

great topic just buy what you like and enjoy the hobby

+1...Well said, Octavio!

[foxxfan]

I can tell you that my ex-wife and her attorney felt that my cards were investments (maybe assets is a more accurate term). They even had my spreadsheet detailing every item and what I valued it at. Took nearly a decade and my oldest daughter becoming a huge Reds fan to get over that and decide to get back into the hobby.

[barrysloate]

Originally Posted by sb1

Where's Barry when you need him?

I'm out Scott...people can correct their own darn spelling!

[Ulidia]

Originally Posted by EvilKing00

With the current state of the economy, I was wondering everyones thoughts on Cards as "investments".

Money in the bank with the current interest rates is a joke. The stock markes is always an interesting place BUT be careful. Im in the RE business and IMO there is no better time to invest in properties, BUT asside from homes, I think Cards makes a damn good investment. Not that I "invest" in the cards i but I love to just collect them.

This question comes up a few times. If someone treats it as an investment, that's fine but very much would need to be a (minor) part of a more varied portfolio. Whether some think otherwise, pricing is too volatile i.e. a card could be have a perceived value at auction of $100k but could easily go for $75k or $125k so it's very hard to predict a real time price.

Remember, also, that when buying a high value card, you're typically paying a higher price than anyone else is prepared to. And of course, the thing that all too many overlook are the buy / sell spreads of buying and selling cards which are prohibitive from an investment perspective - for example, you buy a card at $100k in auction? Given premiums etc, you'll need to sell it for a considerably larger amount just to break even.

Also, same as any other hobby, too easy for heart to overrule head in terms of decision-making.

Not trying to put anyone off investing in cards, and I genuinely think that they can work as part of a portfolio and a hedge against inflation, but tread VERY carefully.

[bcornell]

Originally Posted by wazoo

Cards, especially the old ones make great investments. They will keep going up in value.

Except when they don't. Take a look at prices in 2007 vs. now and you'll see that putting money in your mattress might have had better returns.

Bill

[glynparson]

Anyone that thinks you can't make money investing in cards is a fool. Just like anyone that thinks just buy and old card and it goes up are also foolish. You just have to buy based on price more than what card you d most like to own. It absolutely can be done. They are like stocks on that some go up some go down and some stay the same. It's also often a good idea to buy formerly hot issues once they cool considerably then buying the flavor of the month issues when they are hot.

[Sean1125]

50's and 60's HoF in high grade are good investments for the next 15-20 years, 70's and 80's high grade after that IMO.

[EvilKing00]

Originally Posted by bbcard1

I bought my first cards simply for investment the end of last year. I am in the process of flipping them, hope to make 20%, but might not....didn't bet the rent, so it's ok. Bought them with a CD that was earning a whopping .4%, so even if I make 10% that would be ok, but that is a tight margin considering you are assuming some risk....cards could always get lost or stolen or turn out to be fake.

ahhhh very interesting, this was exactly what i was talking about, cards instead of a cd or whatever. Well done

[T206DK]

Originally Posted by EvilKing00

With the current state of the economy, I was wondering everyones thoughts on Cards as "investments".

Money in the bank with the current interest rates is a joke. The stock markes is always an interesting place BUT be careful. Im in the RE business and IMO there is no better time to invest in properties, BUT asside from homes, I think Cards makes a damn good investment. Not that I "invest" in the cards i but I love to just collect them.

very risky to "invest" in something that has no REAL value

[EvilKing00]

no real value is true, as its not backed by gold (only thing that has value is cash). But forever, itmes that are limited and/or wanted with prices attached where the value that go up and down, like cards, stocks, cars, homes, etc hold a value to those who want it. If there is no demand for it there is no value.

[Nashvol]

If and when CD and savings rates increase, would folks collect less - thereby leaving us hobbiest/investors with a fistful of cards and memorabilia that fewer people are interested in?

[EvilKing00]

Originally Posted by Nashvol

If and when CD and savings rates increase, would folks collect less - thereby leaving us hobbiest/investors with a fistful of cards and memorabilia that fewer people are interested in?

rates should begin to move up over the next year or so - how high is really anyones guess. as for mortgage rates i think we hit the bottom 3.25%ish on a 30 year fixed, im not sure there will be a 2.99 on a 30 year but i guess its possable. A 5% interest rate from a 1 year CD is still a way off IMO.

But when that happens and it will, eventually, cards IMO will not only hold their value but should rise as well, rise along with the better economy. More money for people like us means more cards we can buy.

[pcoz]

Certainly cards are investments, as many have made a fortune off of them. Some have made a nice living being a dealer as well. Prewar cards aren't exactly cheap, so as much as I enjoy the cards I have, I wouldn't have put the money out with the intent to lose money over time. It just doesn't make any sense to direct financial resources away from your family with a blind eye on value, just because you like them. The investment in the cards and future value have to be considered. With a finite amount of cards from that era, I think most cards/pieces will continue to appreciate in the years to come.

[Ulidia]

Originally Posted by EvilKing00

no real value is true, as its not backed by gold (only thing that has value is cash).

Cash isn't backed by gold either. In particular, as the US continues to print more and more money, the real purchasing power of the $ falls (other western countries are also printing money in vast quantities to deflate their own debt burdens).

That's why assets, whether it be gold or real estate or memorabilia, can potentially act as a useful hedge against inflation. However, the speculative nature of baseball cards as an investment, or any similar collectible, would certainly put it in the high risk category.

[tiger8mush]

Originally Posted by Ulidia

Remember, also, that when buying a high value card, you're typically paying a higher price than anyone else is prepared to. And of course, the thing that all too many overlook are the buy / sell spreads of buying and selling cards which are prohibitive from an investment perspective - for example, you buy a card at $100k in auction? Given premiums etc, you'll need to sell it for a considerably larger amount just to break even.

Good point. So lets you buy a card at auction (more than anyone else is willing to pay, of course) for $1k. Then lets say 15% buyers premium of $150 + $20 insured shipping. So you have $1,170 invested in this card. You hold the card for 5 years as investment and then decide to consign it to an auction company that has 0% sellers premium. You spend another $20 to ship to them, insured. $1,190 now. So the card has to sell at auction for AT LEAST 20% higher than it did 5 years ago just for you to break even. You are taking a risk that it sells lower, you are NOT GUARANTEED it'll sell for that price. Did you also spend extra $ on home insurance for the card or a safety deposit box? So if you want to make 10% in 5 years (only 2% a year), it'll have to sell for at least 30% higher than its previous hammer price. Heck, inflation is higher than 2% a year! So even then you are probably losing money.

[barrysloate]

Best advice I can give is to build a good quality collection and hope for the best. Try to buy nice looking, scarce cards, in the best condition you can afford, try to purchase cards of key players, and keep working at it for as long as you can. Be patient and try to control the addictive nature of collecting, because that will cause you to overpay. No guarantee you will make money, but there's a good chance you will. Timing of course is an important part of it.

One of the pitfalls, however, is that it can be expensive to sell cards. Let's say you've bought a group of cards that have increased in value by 20% in a short period of time. You consign them to an auction and they in fact do sell for 20% more, but the auction house takes most of that profit away in fees. So that's one problem right there.

Rob G. said much of what I said in the previous post. Sorry Rob.

[Sean1125]

Originally Posted by tiger8mush

Good point. So lets you buy a card at auction (more than anyone else is willing to pay, of course) for $1k. Then lets say 15% buyers premium of $150 + $20 insured shipping. So you have $1,170 invested in this card. You hold the card for 5 years as investment and then decide to consign it to an auction company that has 0% sellers premium. You spend another $20 to ship to them, insured. $1,190 now. So the card has to sell at auction for AT LEAST 20% higher than it did 5 years ago just for you to break even. You are taking a risk that it sells lower, you are NOT GUARANTEED it'll sell for that price. Did you also spend extra $ on home insurance for the card or a safety deposit box? So if you want to make 10% in 5 years (only 2% a year), it'll have to sell for at least 30% higher than its previous hammer price. Heck, inflation is higher than 2% a year! So even then you are probably losing money.

If you can't get in the investment at a solid price, why would you invest in it? The money is better sitting around doing nothing than having a reasonable potential to lose.

Purchasing a card that you need to clear 20% more than the previous sale to break even is just putting more emphasis on the risk because you know you can get out of it but you don't know the amount until it actually sells.

Minimize the risk by making sure you purchase correctly in the first place - it would require more time making sure you get into whatever you are buying at a price you know you could get out of it at. So don't buy the card unless you are sure you could get what you paid "tomorrow"

[Nashvol]

Originally Posted by tiger8mush

Good point. So lets you buy a card at auction (more than anyone else is willing to pay, of course) for $1k. Then lets say 15% buyers premium of $150 + $20 insured shipping. So you have $1,170 invested in this card. You hold the card for 5 years as investment and then decide to consign it to an auction company that has 0% sellers premium. You spend another $20 to ship to them, insured. $1,190 now. So the card has to sell at auction for AT LEAST 20% higher than it did 5 years ago just for you to break even. You are taking a risk that it sells lower, you are NOT GUARANTEED it'll sell for that price. Did you also spend extra $ on home insurance for the card or a safety deposit box? So if you want to make 10% in 5 years (only 2% a year), it'll have to sell for at least 30% higher than its previous hammer price. Heck, inflation is higher than 2% a year! So even then you are probably losing money.

And, if there are better options to invest in a recovered economy (savings/CDs, for example) wouldn't today's card investors be a shrunken market? Where would prices be then?

[EvilKing00]

personally if i was making an extra 500 or 1000 due to my CD interest rate i would just spent it on more cards,

[Sean1125]

Originally Posted by Nashvol

And, if there are better options to invest in a recovered economy (savings/CDs, for example) wouldn't today's card investors be a shrunken market? Where would prices be then?

IMO if there was no investment in cards there would be absolutely no way to determine prices and I think they would be ALL over the place. The one collector that "needs" the card will buy it, then there will be no more demand (or much lowered).

Edit* that would all be speculation of course, I don't think in the near future investments will be pulled out of cards

[Leon]

I don't recommend it whatsoever but approx. 13 yrs ago I took all of my money out of the stock market (except a few 401k rollovers in bonds) and put it all into pre-war cards. Best decision I have ever made, financially. I don't recommend it but it's been a lot of fun. And I enjoy the cards a heckuva lot more than I would have pieces of virtual paper. I think I have done ok on ROI too....though I can't know for sure until I sell. I have always been somewhat of a (calculated) gambler.

[Jlighter]

I was reading an article where people put up expensive artwork as collateral for a mortgage. I wonder if the same could be done with vintage Baseball cards?

[Leon]

Originally Posted by Jlighter

I was reading an article where people put up expensive artwork as collateral for a mortgage. I wonder if the same could be done with vintage Baseball cards?

I took out an SBA loan for a little over a half a million dollars nine years ago (paid back last year). I scheduled my cards, on the loan, as assets. They were used in the equations. They weren't collateral but they were listed as assets and were taken into account.

[I Only Smoke 4 the Cards]

Originally Posted by EvilKing00

With the current state of the economy, I was wondering everyones thoughts on Cards as "investments".

Money in the bank with the current interest rates is a joke. The stock markes is always an interesting place BUT be careful. Im in the RE business and IMO there is no better time to invest in properties, BUT asside from homes, I think Cards makes a damn good investment. Not that I "invest" in the cards i but I love to just collect them.

I buy a card because I like it. I never plan on selling it or seeing it make me any money. They are just good old fashioned fun and a challenging hobby.

[familytoad]

Guys, I don't think of my cards as an investment that will make more money when I sell than what I paid for them.

Now that would be fantastic, except I don't really know when I am going to sell them. It may be in response to a financial emergency where I won't have the luxury of time to maximize the profits. It could be because I see the writing on the wall...the next generations of baseball fans aren't card collectors like my generation and if there is no demand, our supply is going to be worth significantly less. I might just want to sell and work on my bucket list of travel destinations.
Or I might die before I sell, which means I personally didn't get ANY money out of it

I guess I think of my cards as a "potential savings" account.
I already save a percentage of my income, but by spending another percentage of money on cards, I have this admittedly flawed idea that I could sell them at any time and recoup that spending. If I bought steak and lobster everynight I couldn't get anything back on that. I guess I could just increase my percentage of savings but it seems that some guys just need to spend!! (guilty)

It's an interesting ,important topic to think about what to do with all of these cardboard gems looking forward. I know that many of us spend a pretty high percentage of our money on cards. We wouldn't be doing it solely for the joy of looking at pictures of deceased old athletes...these things are expensive and you can just look at the catalogues or websites if you just like seeing them. It's some instinctful bravado that makes us want to have and hold these items...I can't explain it very well, but I know I have it.

So if someday I am able to get back all the money I have spent on cards over the years, I'd be pretty pleased. If not...well I guess that's ok too. I'm not exactly counting on the former, but I have hope.

[bbcard1]

As tricky as it sounds, I have a collection, and that's my collection. The cards I buy to sell as an investment are something completely different and I don't consider them part of my collection. I just separate the two in my mind.

The way I figure it, i have put thirty years into collecting, learning scarcities, making contacts, etc...if I had done that in stock market I would probably be more successful there.

Still, I don't think I will play with more than 5-10% of my investments on cards.

[DeanH3]

Originally Posted by familytoad

Guys, I don't think of my cards as an investment that will make more money when I sell than what I paid for them.

Now that would be fantastic, except I don't really know when I am going to sell them. It may be in response to a financial emergency where I won't have the luxury of time to maximize the profits. It could be because I see the writing on the wall...the next generations of baseball fans aren't card collectors like my generation and if there is no demand, our supply is going to be worth significantly less. I might just want to sell and work on my bucket list of travel destinations.
Or I might die before I sell, which means I personally didn't get ANY money out of it

I guess I think of my cards as a "potential savings" account.
I already save a percentage of my income, but by spending another percentage of money on cards, I have this admittedly flawed idea that I could sell them at any time and recoup that spending. If I bought steak and lobster everynight I couldn't get anything back on that. I guess I could just increase my percentage of savings but it seems that some guys just need to spend!! (guilty)

It's an interesting ,important topic to think about what to do with all of these cardboard gems looking forward. I know that many of us spend a pretty high percentage of our money on cards. We wouldn't be doing it solely for the joy of looking at pictures of deceased old athletes...these things are expensive and you can just look at the catalogues or websites if you just like seeing them. It's some instinctful bravado that makes us want to have and hold these items...I can't explain it very well, but I know I have it.

So if someday I am able to get back all the money I have spent on cards over the years, I'd be pretty pleased. If not...well I guess that's ok too. I'm not exactly counting on the former, but I have hope.

+1. Well said Brian. Plus I always end up overpaying for cards I want so investment potential goes down the drain. I'm glad that if/when I sell I can at least get most of my money back.

[GregMitch34]

About two years ago, after not doing anything about collecting for about ten years, I sold all the cards that weren't beauties or that I cared about (and almost all my 1950s cards) art a decent price, and certainly at a profit from what I spent a decade or more earlier, and created a kitty--in a separate bank account linked to pay pal. Since then I have just gone up and down on that account without spending a penny elsewhere. It feels like free money, although I do have to sell some nice cards (but never nicest) to stay above the zero mark.

I recommend this approach--if you can limits purchases to that one account--because you don't fret about spending other money and it can just be fun. And your collection gets nicer and nicer as you sell off cards you like less and ones you truly treasure or are great investments.

[dodgerfanjohn]

Well, some first post here...kind jumping in head first...but I do believe I have a few things to add.

1.) "Investment" is dependant on an increased interest level at whatever point you choose to sell in the future. This is not only NOT guaranteed(or even necessarily likely), but after you factor in the selling costs listed earlier in the thread, it just becomes that more difficult.

2.) Those of us who bought vintage cards in the 80's or earlier...yeah those cards blew up in value since then. And its directly related to #1 above...the card collecting community blew up in size as well. I can definitively state that going forward, there will never be another increase in the size of the collector base as was experienced from ~1980-1995...short of the hobby contracting to miniscule size and then expanding again. Basically what I am trying to say is that the 300% increase in card prices, just isn't going to happen again(exception: You are Nostradamus and can predict which "rookies" will be future hall of famers and buy those cards at $0.10 or whatever. exception 2: there are small sets that have devoted followers and theres ability to corner the market).

3.) Current investments...in my 457 plan theres a "stable value fund" that is not invested in the stock market. It keeps going down little by little, but has consistently turned 3-4.5% over the past ten years, the past two years being no exception(Possibly 2.8% this year, can't remember at the moment). I assume anyone in an IRA can invest in such a fund. At the moment, and for the past few years also, bond funds(and this is a tricky one so make sure to research) have been doing 4-6% over the past 5 years or so. Point being that there are "safe" investments doing better than a CD.

4.) My assumption always has been that those really making money on baseball cards are buying them at the dealers price level. IE, the exact same thing that goes on for the television show "Pawn Stars"...you get people that are desperate for immediate cash or who dont want to deal with selling the stuff themselves, and offer them 25-75% on the dollar depending on what the item is.

[edhans]

I bought stock in dictionaries and spell-check software. Haven't done very well.

An early nominee for best post of the year.

[dzolot]

Originally Posted by EvilKing00

interesting to hear some responces, , like i said i dont do it for investment - for example I bought a shair in the green bay packers last year. no resale value, as they cant be sold AND im not even a packer fan, im a giant fan, BUT i just thought it would be so cool for my son to own a piece of an NFL team. (or any team for that matter, this is the only one possable)

MSG is publicly traded and they own the Knicks and rangers.

[Jlighter]

Originally Posted by dzolot

MSG is publicly traded and they own the Knicks and rangers.

As is Manchester United.

[EvilKing00]

Originally Posted by dzolot

MSG is publicly traded and they own the Knicks and rangers.

although u can own shairs in MSG you dont own the team directly, you own the company that owns many other things, knicks, rangers, TV stations, properties, ETC - The packers i believe are the only team owned by the public, that is in the US. As far as Manchester United - im only talking about the USA

A few others - that do but not really IMPT "major league sports" listed here http://en.wikipedia.org/wiki/Categor...orts_companies

[Fred]

I don't look at the card board as an investment. I see it as a hobby. I think that's what it was when I first started collecting about 40 years ago. Some people could look at it as an investment.

Here's something to think about. If cards were truly an investment wouldn't the market be strong because of the 'quantative easing" that's going on? That's a lot of $$$ getting pumped into this economy and I don't see the card values sky rocketing with the extra amount of money being thrown into our economy. Do you think this stuff has topped out?

Honestly, I hope the price of cardboard hits the floor so that I can buy the stuff I like and not have to feel like I'm going to have buyers remorse because I bought a slabbed piece of cardboard.