2021 Exit Strategy

[bcbgcbrcb]

I would like to ask for various opinions on this subject. A little background, I sold off my Negro League baseball memorabilia collection along with a smaller comic book collection back in 2021 at the peak of the market, of course, realizing strong prices for most all of those items. In hindsight, my big mistake was taking the money as fast as it was coming in and buying HOF rookie cards (which is my strongest area of expertise) for all 5 team sports spanning all eras from pre-war to modern. One good thing was that I bought only the best of the best so no mid-lower tier HOF'ers.

Fast forward 2-2 1/2 years later to today and, obviously, just about every single card that I bought has either maintained value (best case scenario) or dropped by as much as 80% in some cases. Also to note, I will soon be 55 years old with significant health issues which will most likely prevent me from ever working any real type of full-time job again, nothing at all since August, 2017 and have been denied disability four times already and won't reach social security age for another 7 years. So, my only source of income is whatever I can make from my collectibles, buying and reselling.

Thus far, two years into this situation, made significantly worse by the economy/inflation as it has done to everybody else, my exit strategy for moving all of these 2021 purchases was initially to begin liquidating by lowest value first, thus, regardless of percentage loss, will not be a huge dollar impact. Much of that inventory is now gone. As I mentioned simply holding everything and waiting for a better market is not an option as I need funds every month to pay my bills to live on.

Moving on, my next strategy has been to liquidate the ultra-modern stuff of all values, which seems to have taken the biggest dip over the past couple of years. I am still in the process of doing this. From here, my longer-range plan is to begin with the early 2000's stuff and work backwards by decade to bridge the gap until social security age or disability approval or possibly going back to work one day.

Given where I'm at right now, would anyone recommend a different plan going forward or a different alternative for what I have already done (too little to late probably but at least I'll know)? Also, any specific rookie cards from the 1960's era to current that could be expected to regain value when the market improves and be the best alternatives to hold on to longer term? One more note, I have an inordinate amount of money invested in a couple of Star Jordan rookies. Do you think those are must holds or better to liquidate at roughly a 50% loss and put the money into Mantle/Mays/Aaron rookies instead?

[raulus]

Hi Phil -

Sorry to hear about your health troubles. That is no fun at all.

I'm still very much in the accumulation phase of my collecting, so I'm not much of an expert when it comes to liquidating.

If I'm reading your post correctly, it sounds like you have a relatively short horizon in terms of liquidating your collection, potentially as short as just a few years. In your post, you raised the possibility of dumping some of your current pieces in favor of buying others, I guess with the hope that you'll make more money in the process because the newly acquired pieces will do better over the next few years, at least compared to the ones that you sell today.

My personal observation is that short-term holds are often challenging, at least when it comes to trying to make money for those of us poor slobs who aren't dealers. Selling some Jordans today to buy 50s and 60s HOFers to hold them for just a few years might work out for you. Or it might not. Over such a short window, I don't think any of us have a really strong grasp about where the market will go, and whether you'll come out ahead.

Naturally, if you're able to successfully play dealer by getting high retail on everything you sell, and on the other hand buying everything at 50% of retail, then go nuts. You'll probably be just fine, assuming you can actually buy and sell at those prices.

But absent that sort of really nice setup where you can buy cheap and sell for high retail, I would be inclined to not try to trade in and out of pieces just to make money. My inclination would be to keep doing what you're doing - selling off pieces as it makes sense. Although I might tweak your approach slightly in terms of ordering. My focus would be to sell off pieces that are at or near their all-time highs first, and then get to the weaker pieces later. Selling into strength is usually a much better recipe for getting top dollar, and in the meantime if you're really lucky, maybe your weaker pieces will strengthen by the time you get around to selling them.

[Exhibitman]

https://adamstevenwarshaw.substack.com/p/selling-it

I am sorry for your situation, Phil.

As for what to do, no offense meant, but it sounds to me like you need a bit of a reality check. Selling off items to buy into a rapidly rising 'hot' market and not having a plan to take profits fast was NOT the right plan; it is a mistake that has been made repeatedly since the junk wax era. At this point, I don't think it makes sense to try using the same model to chase a different result. Your plan is inherently risky because card investing is a highly speculative, competitive field with terrible entry and exit costs and literally no bottom to a bad investment except the commons bin.

Your path, based on your statement of status, is to get out and stay out of the card business. Like a fat woman in a bikini, it is not for you (i can say that because I am a fat man who doesn't take his shirt off at the beach). You say you need the money to live. Any financial planner will tell you never to speculate with money you need. Whatever you get out, do not put it back in, bank it. And check with your CPA about tax losses that you might be entitled to claim on a soured investment.

Hoping for a massive bounce on the Jordans is folly. Just to get back to par would require a raging bull market and, frankly, there are enough Jordan cards out there to make that unlikely in your compressed time frame. Best bet would be to arrange a private sale (to avoid the transaction costs) with a retail collector. About the only thing I can think of is that if the cards are in Beckett holders, cross them to PSA. If they cross, that will be worth it.

[Peter_Spaeth]

I would seriously consider selling everything now and consulting with a financial planner about the best way given your situation to invest the proceeds. If these are vital resources, I would not leave your welfare to the whims of the card market.

[perezfan]

So sorry to hear of your health issues... such a bummer. The current inflation and gas prices are a killer, and it especially impacts the unemployed/under-employed and retired segments of the population who have limited earning potential. And even if the rate of inflation slows, the prices are never going back to what they were pre-pandemic.

I'd sell off the ultra-modern stuff first. While the market has dipped a bit, I think you should still get what you can. Quality vintage stuff is far more likely to retain its value... especially in tough times.

Also, have you tried hiring a Disability Attorney? I know it differs by state, but in many cases, a legal specialist will know how to work the system and properly submit the paperwork to get you started and eligible for Disability benefits. I know that dealing with this faction of the government is beyond frustrating, and seemingly unfair as to who receives benefits and who doesn't. So perhaps a Disability Attorney can cut through the red tape.

Hope this helps and best of luck!

[G1911]

Do not spend more than you can afford to lose on toys.

Do not ask a bunch of junkies and people with a vested fiscal interest in pumping a market with a history of giving horrifically irresponsible financial advice if you should invest in the same assets.

Do not count on a collectible with recent huge jumps to inexorably gain value.

Do not empty your 401K or take out loans to buy baseball cards.

Do keep some cash on hand. Do diversify your investments. Do seek financial advice from people without a conflict of interest. Do invest in things that the powers that be also rely on and will do anything it takes to keep going positively over the long haul.

[GeoPoto]

If all your money is in cards (which is what it sounds like), my advice would be to liquidate 90% of your card holdings as soon as practicable and put the proceeds in some combination of CDs and/or bonds maturing within the next 15 years. With the residual 10% of your card holdings, do whatever makes you happy.

[Exhibitman]

High yield savings accounts are good right now too. The best ones are paying better than the current rate of inflation, at least until the next reset.

[Kco]

Not knowing your financial needs on a month to month basis or your rough collection value, It's semi hard to answer the question of what you should do. Is your collection worth $1 million and you need $40k to live on? In that case, I'd sell a few pieces here and there to fund it. I do agree, the modern stuff would be the first stuff I'd sell off. Quality vintage has and should hold up over the medium and longer term. As for the STAR Rookie, they were hyped up and pumped up massively in 2022 artificially in my opinion. I'd take the money there.

[jimq16415]

Originally Posted by perezfan

Also, have you tried hiring a Disability Attorney? I know it differs by state, but in many cases, a legal specialist will know how to work the system and properly submit the paperwork to get you started and eligible for Disability benefits. I know that dealing with this faction of the government is beyond frustrating, and seemingly unfair as to who receives benefits and who doesn't. So perhaps a Disability Attorney can cut through the red tape.

I just went thru all that and agree about the disability attorney. They know what SS requires for you to be approved and they'll get the needed things from your doctor. If you get approved then SS pays your monthly amount (your projected amount if you retired at full retirement age) going back to when they determine you were disabled or when you first applied. The disability attorney takes 25% of that check, so if they don't feel you have a winnable case they won't take it. After that you'll owe them nothing. I think there's rules against them charging more. If you do get approved you're eligible for medicare in 2 years instead of waiting till you're old enough.

I also agree with selling the modern either way for what you can get. And don't buy more. Use the money you get to pay off higher interest stuff first.

Good Luck. It'll get better

[ALBB]

yes, sad story ,no doubt

I'm glad my collection is and has always been lower grade/ beat up/ for fun stuff.

Im sure it has $ value...but it was never something I needed to rely on for - " cashing out purposes " down the road

[JollyElm]

(Author's note: this is a blatant attempt to add a bit of humor to the proceedings, so any investment advice given should be taken with a bucketful of salt.)


My advice? Sell everything right now and put all of your money into buying as many of these cards as possible!! The Gregg Jefferies Rookie Card train is on the verge of leaving the station, and the next stop is Huge R.O.I. Town...so it's time to climb on board!!!!!

GreggJefferiesRookie.jpg



There are quite a few of us on the site going through serious and problematic health issues, so you're definitely not alone. It is tough, but we're all with you. Some people have offered some top notch advice so far, which is excellent. Hang in there!!!

[bcbgcbrcb]

Thank you all for the advice thus far. So if I’m hearing correctly, the consensus is to continue selling off pretty much as I have been doing but don’t use those funds to buy back more cards to invest in. Glad I asked, that’s exactly what I’ve been doing all along. If I eliminate that part of it, will need to sell much less to survive. So, I guess the question then becomes, am I better off selling now all of those cards that I overpaid on back in 2021 and banking the money or holding on to them with the hopes that values come back one day closer to where they were when I bought them. I know, nobody has a crystal ball to know that, wish I did.

Either way, seems like the damage has already been done with no way to recoup those funds. Am I correct there? Just making better decisions going forward with investing the money elsewhere?

[Peter_Spaeth]

Originally Posted by bcbgcbrcb

Thank you all for the advice thus far. So if I’m hearing correctly, the consensus is to continue selling off pretty much as I have been doing but don’t use those funds to buy back more cards to invest in. Glad I asked, that’s exactly what I’ve been doing all along. If I eliminate that part of it, will need to sell much less to survive. So, I guess the question then becomes, am I better off selling now all of those cards that I overpaid on back in 2021 and banking the money or holding on to them with the hopes that values come back one day closer to where they were when I bought them. I know, nobody has a crystal ball to know that, wish I did.

I think we are all telling you to sell them now and put the money someplace safer. What you paid is irrelevant, really, except to calculate gain or loss for tax purposes. The issue is how to best provide for the future, going forward.

[Peter_Spaeth]

Also, depending on the grades and above all the centering, those 101 Jordans might do better if you crossed them to PSA. Although the centering even on the high grade BGS ones might argue against that. But at equivalent grade, PSA will far outsell BGS.

[oldjudge]

Originally Posted by bcbgcbrcb

Thank you all for the advice thus far. So if I’m hearing correctly, the consensus is to continue selling off pretty much as I have been doing but don’t use those funds to buy back more cards to invest in. Glad I asked, that’s exactly what I’ve been doing all along. If I eliminate that part of it, will need to sell much less to survive. So, I guess the question then becomes, am I better off selling now all of those cards that I overpaid on back in 2021 and banking the money or holding on to them with the hopes that values come back one day closer to where they were when I bought them. I know, nobody has a crystal ball to know that, wish I did.

Either way, seems like the damage has already been done with no way to recoup those funds. Am I correct there? Just making better decisions going forward with investing the money elsewhere?

No one knows what the future will be for card prices. What is likely, however, is that it will be volatile. What you need I believe is stability in cash flow. You can get that with short term fixed income instruments. I would not tie up funds in long term bonds because if interest rates continue to rise and you need to liquidate early you could lose money there too.

[raulus]

Originally Posted by bcbgcbrcb

Thank you all for the advice thus far. So if I’m hearing correctly, the consensus is to continue selling off pretty much as I have been doing but don’t use those funds to buy back more cards to invest in. Glad I asked, that’s exactly what I’ve been doing all along. If I eliminate that part of it, will need to sell much less to survive. So, I guess the question then becomes, am I better off selling now all of those cards that I overpaid on back in 2021 and banking the money or holding on to them with the hopes that values come back one day closer to where they were when I bought them. I know, nobody has a crystal ball to know that, wish I did.

Either way, seems like the damage has already been done with no way to recoup those funds. Am I correct there? Just making better decisions going forward with investing the money elsewhere?

I think it depends on how badly you need the money to get by. Or in other words, how tight are you financially? Do you need to sell everything and cash out at today's values just to barely squeak by? Or do you have some cushion - and if so, how much?

If you've got some cushion, then you have the flexibility to let some of these pieces ride and not sell now. Pick some that make your heart sing, and that you hope will rise between now and when you need that portion of the money later. Sell the rest.

If you're really tight, with really no room to spare, then I agree with the others that it's a better idea to just sell everything now and invest in some short-term, low risk assets, like a money market fund or some CDs. No sense in risking your ability to survive on the cardboard market, particularly if you're talking about a window of a few months or a few years.

[packs]

I wouldn't hold out for any return to the market of 2021. The market was at an all time high then and even though cards may one day approach those values again, it won't be any time soon.

[samosa4u]

I am sorry about what you are going through at the moment. A lot of people got burned during the pandemic. I did some trades for a LeBron and a Tom Brady card during the pandemic peak and now they are down by eighty-percent! Those b*stards! It's going to take me a while to make that money back! Sucks though!

Now, your investment questions are very specific and nobody has a crystal ball here. You might load up on post-war and ultra-modern goes crazy again. You might load up on prewar and watch it lose value over the years. Again, nobody really knows what is going to happen.

What you can do is diversify though. Go after game-used memorabilia, tickets, photographs, non-sports cards, hockey, etc. This will lower your risk, you know what I'm saying??

Good luck!

[bcbgcbrcb]

Thanks again for all of the input and good ideas, guys. Here is one example, albeit maybe the most drastic. I bought a 1986 Fleer Olajuwon PSA 9 at the all-time record price of $3,000 back in 2021. Today that card regularly sells in the $450 range for the past few months now. That's a $2,550 loss out of a $3,000 investment or 85%. Better to sell now and take that $450 (almost feels like I should just burn the card and be done with it already) current market value or hold? Realistically, it can never/will never get back to even $2,000 again and I would be pretty certain that it never gets back to even $1,000 again but I think it certainly COULD go up in value in the shorter term. On the opposite end of the spectrum, I don't see it dropping in value much more if at all from where it is today. I have many instances just like this, better to sell and pocket the money that's left or hold unless I desperately need the money to live on in the very near future?