Invest in Stocks or Cards

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Posted By: Andy

I started buying high end cards as an investment, and I got hooked. Only problem is you have to be able to eventually sell your investment, I have yet to do that. When I look at my "investment" cards I usually feel pretty good about them. Even the ones that I felt I overpaid for at the time are worth substantially more. With the recent stock market turbulence, I can not say that about my Wall Street investments. I wonder, should I buy more stock in Google or some high end Ty Cobb cards? Does anyone else look at collecting kinda like playing the stock market?

Feel free to post a scan of your favorite card that was purchased as an investment....but you know deep down you probably will not sell anytime soon.....I will post mine when I get set up for it, but it will be my T206 Green Cobb!

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Posted By: Doug

Until my green Cobb pays off I would have to vote for stocks or some kind of high interest savings account!

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Posted By: leon

I am not an investment or financial advisor so take this with a grain of salt. I think cards can be an investment like any other asset if you want them to be. You really need to be careful on what you pay and understand that what goes up must/can come down. I think we have seen some of that on the lower end lately. I decided, about 10 yrs ago, that I was going to put a good chunk of my savings into cards. I don't necessarily suggest doing that but I got luckey and it worked out ok. I have never purchased a card for my collection as an investment (I do some buying and selling now) but they have done pretty well over the long haul. If I had to give advice I would say cards could be a small part of your portfolio. If you buy ones you enjoy you will at least get the enjoyment from them no matter the value. Just be prudent, careful, and make them a small part and I don't think it can do harm. Also, you can consider collecting them as relaxation and fun no different than going to Vegas....except, if smart, I think your odds will be better at cards...just my 1/2 cent opinion....

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Posted By: Paul S

I send my Google certificates in to get graded. I've found PSA to be more lenient but SGC more accurate. Hope this helps.

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Posted By: Rich Klein

Which we may be on the cusp of joining; collectibles such as high end cards do terrifically at that time. This is not a perfect match but that has worked fairly well in the past.

So, short term, I'd be buying cards if I needed a quicker turnover. In addition, as Bruce D and Jim C always say or imply, and they are correct in this, always buy the best condition you can afford.

Remember, this is advice only if you are looking at this as a pure investment; if you are looking at this as a collector in any way; then purchase whatever the heck you want and enjoy it while you can

Regards
Rich

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Posted By: leon

I agree with you except I feel collecting true "rarity" might be safer than "condition" rarity. It's a great debate though....regards

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Posted By: Doug

Not a bad point. As long as the demand outweighs the supply you are in good shape.

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Posted By: Rich Klein

In that a collection rarity can be just as good if not better than a condition rarity; however, in heavier traded sets, then the condition triumphs.

So I will amend to say -- condition rarity in more known sets and collection rarity in lesser known sets is probably a good mix.

And yes, as I watch the stock market tumble yet again today with the credit and sub prime mess having no immediate end; cards do look better and better short term.

Regards
Rich

I suspect both Leon and myself would like to hear, on a pure investment debate, whether you believe collection rarity trumps condition rarity or vice versa. It does make for an good thread -- so let's go at it -- but nicely of course, save the fighting for ESPN and Friday Night Fights, in which I just saw one of the best one-punch knockouts I've seen in years

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Posted By: Doug

I vote for collection rarity if we are going that route...

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Posted By: Harry Wallace (HW)

Cards could certainly be small part of a well diversified portfolio, but they should probably not be a large part of your investments. They may well outperform stocks over a given time period, but they are much more risky, less liquid and have extremely high aquisition costs. I would stick wit a nice mix of index funds of stocks, bonds, real estate. commodities, etc.

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Posted By: Frank Wakefield

I don't know this stuff, but my understanding from seeking information from folks who do seem to know is that the stock market isn't going to blaze ahead this coming year. The Dow will end up close to 1500. Interest rates will gradually drop, eventually being a per cent lower this time next year.

I'd think if you're investing for the long term, the market is a fine place to do it. If you're wanting a turnaround in a few months, the market isn't a great option.


I've said many times, and at greater length, that folks have absolutely no business 'investing' in baseball cards. It is a hobby. Invest in stocks. Invest in a mutual fund, or several. Invest in real estate. Invest in your own home, by paying off the mortgage sooner, or improving it, or both. Talk to an accountant about the tax advantages of buying a home, paying on it for a few years, then selling it for more and soon thereafter buying another home... Invest for a kid of yours by buying a few acres and planting a few acres of hardwood trees, cherry, walnut... 30 years from now the kid can harvest the lumber and be in great shape financially. Invest in an education, for yourself, a spouse, or a child or grandchild. An education is an excellent investment.

Do not invest in baseball cards. A hobby ceases being that if it is about the money. I miss a few cards I sold because their value had gotten so high that it seemed foolish not to sell them. I should have sold them, and I did. But I still miss 'em. I didn't buy them as an investment. I bought them as a tangible connection to the history of our great national pastime. Please don't even attempt to justify a hobby expense because of monetary value by calling it an investment.

Investment: the outlay of money for income or profit. Baseball card collecting for income or profit? BS. It is a hobby.

A fellow might as well invest in engagement rings, or washing machines....

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Posted By: Al C.risafulli

I vote you buy cards for whatever reason you want. If you want to buy them and consider them an investment, fine. Just promise yourself that you're going to spend a little time holding them, reading the backs, and getting to know them - there's lots to learn, and that's definitely something you can't do with a stock certificate.

But if you want to sell them for a profit later, go right ahead. Someone else will buy them.

For some, it's a hobby. For others, it's something else. Whatever. We're all in this for our own reasons.

I don't think I've ever bought a card as an investment. I usually just buy them because they're pretty. But that doesn't mean that you shouldn't if that's what you want to do. Go for it. And I think a green Cobb is a nice choice as a favorite.

-Al

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Posted By: Chris

I think it goes without question, that if you want to accumulate wealth, then you must first start by investing in stocks. I would never consider cards a front line investment vehicle. Yes, it can be a hobby used to potentially make you money, but I would rather have my hard earned dough riding on a fortune 500 company, than riding on someone who potentially wants to purchase my 1933 Goudeys. My play money goes to cards. My real money goes into things like stocks, real estate, and gold.

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Posted By: barry arnold

I collect for one reason.
I love the T206s---their history,their aesthetic appeal,their neverending
surprises,the Monster's mix of intimidation and wooing,and the amazing commitment of the community of T206 scholars to the taming of the Monster and
the collegial sharing along the way.

I do quite a bit of investing, particularly in real estate, so I have no problem with investing in itself.

Investment and T206 just aren't congruent in my world.

N.B. I would not superimpose this stance on those who have cogent arguments
in other directions.

best,

Barry

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Posted By: davidcycleback

If you're an investor in cards, sell with some regularity as it will make you a better, more realistic buyer. Investors who only buy tend to overpay and overestimate value. Selling sets you straight.

If you can get a a good profit, take it.

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Posted By: DMcD

"I bought them as a tangible connection to the history of our great national pastime."

There it is, sports fans. Well and succinctly said, Frank.

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Posted By: barrysloate

The past five years or so have been a tremendous boom period for collectibles, and vintage baseball cards have dramatically increased in value. I think that boom period may be coming to an end, and you may only see significant increases in very rare and high quality material. And some of that may come down simply because it went too high too quickly.

Some may remember how E107's, especially HOFers, skyrocketed overnight, partly because so many rookie cards appear in the set. Now they have softened and do not command the prices they once did.

If you build a quality collection, and stay in for the long haul, I'm sure you will reap some benefits.

You can probably say the same about stocks. 2008 may not be a great year for the market, but if you are in for the long term and buy quality you will probably do fine.

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Posted By: JimCrandell

Both. Vintage high end cards are a natural part of any diversified portfolio. The supply is limited, demand is growing and the market is relatively liquid.

I would focus on either SGC or PSA graded cards only, high end only and probably HOFers only if I were doing it for investment. Also be prepared to walk away from cards if it is an auction and of course spend a little extra and have Kevin look at the cards you bought.

Jim

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Posted By: Jack Richards

One of the biggest problems in investing in cards as opposed to stocks, it seems to me, is at the point of sale. With stocks, you call your broker or do it yourself, and it's done quickly and for a minimum amount. With cards, you probably have to go through a dealer or an auction house, and it will take a while and cost you 30-40-50%. That's a huge difference.

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Posted By: Dave S

IMO, Think you can consider any of the following as a SOLID investment: 1) HONUS (2) BABE (3) COBB (4) SHOELESS.
And to a slightly lesser extent: Matty, Walter, Cy, and Gehrig

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Posted By: Rob Dewolf

Vintage high end cards are a natural part of any diversified portfolio.

Uh, think about that statement for a moment. They might be "a natural part" for an investor who already has an interest in baseball or sports collectibles. But my guess is that you'll find many more diversified portfolios without vintage high-end cards than ones that include them.

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Posted By: Eric Brehm

I think the market for vintage baseball cards will remain strong over the long term as long as there are more new people coming in to the hobby, than there are those who are getting out. And as long as there are more current collectors who are adding to their collections rather than down-sizing. Most of those decisions won't be based on a desire to make money (or to avoid losing money), but rather on the continuing desire, for whatever reasons people may have, to own and view these old cardboard swatches. Some may wish to maintain a connection to their childhood, or to baseball history, while others may be motivated by an aesthetic appreciation for the miniature works of art that came in tobacco or gum packages, or simply by a basic quasi-obsessive desire to collect things. How that will all shake out over the coming years, I have no idea.

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Posted By: Joe D.

... invest in stocks not cards.

... use the profits to buy cards.


invest wisely, buy happily.

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Posted By: Frank Wakefield

As any wise person would, I agree with those that agree with me, DMcD, Joe D... Joe R has a great point.

But Cycleback has it nailed. You gotta be selling 'em from time to time, too. If you're emotionally tied to them, then that adversely affects your "investing". When it comes time to sell an investment, it needs to be sold, not held for sentimentality. That can easily be done with stocks. Not so much with cards.


Maybe the way to buy baseball cards as an investment would be to only buy excellent or better cards from 1933 or older, ONLY if you don't know who they are or anything about their scarcity. If you're buying them to build a collection of any sort, then that isn't investing, it is collecting. And you're fooling yourself.

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Posted By: Anonymous

Collection rarity that has some popularity trumps condition rarity from an investment perspective. Let me explain - from an investment perspective - the only thing that matters is the profit potential. Buying a high grade 1952 Mantle will likely cost you something around "market" value no matter when you buy it. Buying a T208 Plank in VG condition will cost you something "around market" price - as there aren't a lot of transactions nor demand to base it on. When you go to sell the two cards (as an investor I'm assuming you don't have to sell immediately, just when the market offers you good profit making opportunity) - you can easily sell the Mantle - for market price. You can sell the Plank, it will be more difficult - but if/when demand exists (either from someone collecting Plank or the set) there is more likely to be the opportunity to set the price. Both cards are rare - but I'll take the Plank as the investment.

I have a different take on the investment angle for Baseball cards. With fewer and fewer young guys playing the game I question what will happen once the "baby boomers" truly hit retirement age and don't have the spare 10 or 20K coming in to buy memories. I think there is a strong collecting base but it may actually start shrinking. And its from that collecting base that folks progressively move into older cards.

Naturally this advice is coming from a still working middle class guy thats never made a killing in the market.

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Posted By: barrysloate

I don't think it would be too difficult to sell a T208 Plank. I've never even seen one. I would savor that challenge. But agreed, the pool of buyers for 52T Mantles is much greater.

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Posted By: Jeff Lichtman

I think the only real downside to investing in high grade, low pop cards is that inevitably new raw cards are graded (or others popped out and resubmitted) and they dilute the value of your investment when they receive the same grade. A 1955 Topps Monte Irvin PSA 8 is a $2800 to $3000 card; however, if 5 more 8s are graded in the next few years, the card is worth $2000 at best.

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Posted By: leon

Agreed....and how is that PSA 8 T206 market going? Talking about some bumps in the road....

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Posted By: barrysloate

T206 PSA 7 market isn't so hot either.

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Posted By: dan mckee

If you are an investor, please do stick to the PSA/SGC highly graded cards and stay off of the rare ones. Or go with stocks and stop picking on us lowly collectors! All kidding aside, a true investment would be the old rare stuff in any condition. A bad investment is T206 commons that some college kid put an 8 or 9 on the label.

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Posted By: TONY Galovich

Six weeks I sold several cards I no longer wanted & purchased A quantity of american Silver Eagles rolls.
since I purchased them silver has gone up very nicely & sitting on a very nice profit already
& planning on selling a few more cards I no longer want to acquire more precious metals

Metals are not for everyone but since I rarely acquire standard items like stocks, bonds or real estate, I love alternative items since that has worked for me over the yrs

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Posted By: JimB

Funny how most think that the cards they collect are the good investments and those preferred by others are not. Happy collecting.
JimB

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Posted By: dan mckee

Not true Jim, my full run of Goudeys, Playballs, Topps and Bowmans were all collected by me and I wouldn't dare offer them as a good investment. My football sets, aurora monster models, matchbox cars and aurora racing cars are all collected by me too and not an offered investment in my opinion. And lastly, the fat women I collect on Friday and Saturday nights are probably my worst investment strategy yet!

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Posted By: leon

I think "prefer" is a polite term. With that said what is your preference? I know you have some beautiful high grade cards and some others too...This is a friendly debate....I am not sure there is a right or wrong answer....except for Jeff's observation. Surely a low pop high grade card wouldn't do as well if it became a high pop high grade card....best regards

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Posted By: leon

"And lastly, the fat women I collect on Friday and Saturday nights are probably my worst investment strategy yet!"


thanks for the LOL on a Saturday morning....

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Posted By: dan mckee

Quite welcome, I actually got a charge out of that myself when writing it!

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Posted By: boxingcardman

Which is a nice way to have your cake and eat it too. My best performing asset over the last decade has been my vintage cards. Nothing has come close. An astutely assembled card collection grows tax-deferred and can make for a nice nest egg. I wouldn't substitute it for a balanced portfolio of traditional investments but rather treat it as part of an integrated whole. And it even has potential for a business when I retire that I could also have fun in the process. What more can you ask?

As far as the nitty gritty, I don't think it really matters whether you advocate "high grade" or "high rarity" as long as you use common sense and don't go overboard with speculative issues. Anything can turn to crap but quality rarely ever does. People who were trading 100 count stacks of Ken Griffey Jr. rookies were deluding themselves. It was a game of musical chairs and the last ones standing were SOL. But so are the investors holding a dozen overpriced spec houses in Lancaster CA right now. Or people like me who are holding worthless shares of Enron (well, not totally worthless; I'm gonna get a few bucks a share out of the class action suit). However, I'm not seeing a huge spike in foreclosures in Beverly Hills...quality trumps. I personally prefer rarity over high grade because the value of high grade commonly found cards relies on a third party making admittedly subjective decisions that I personally do not see as having any real basis in fact, it can be undercut dramatically by a new find, and the market for it is much thinner than the overall card market.

One thing no one's mentioned is set assembly. Putting together difficult sets is fun and it can be quite lucrative when you sell the results.

Sic Gorgiamus Allos Subjectatos Nunc

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Posted By: Al C.risafulli

If I were going to think like an investor, I would want to invest in the cards with the least risk.

That means I wouldn't be buying low pop commons. The risk would be too great that they could become high pop commons.

I also wouldn't be buying anything scarce that nobody knows about, like 1921 Herps. Who knows if ten years from now, a shoebox of them doesn't show up at a yard sale?

I wouldn't buy any current players. I've seen too many Mark Fidrych and Joe Charboneaus.

I wouldn't be buying any commons, so I wouldn't be building sets. I'd want to be able to sell my cards to the widest possible market, without worrying about whether the supply will ever outweigh the demand. That means household names only.

I'd also want to safeguard myself against the possibility that the "market" loses confidence in high-grade cards due to alterations, or in low-grade cards for whatever reason, so I'd want to choose cards that have value in every grade, and I'd want to own them in a variety of conditions.

So, essentially, I'd just hoard '52 Mantles, Goudey Ruths, and T206 Cobbs. As many as possible. From an investment standpoint, I don't think you could go wrong with that. Which is also why I think all of us - even those of us who consider themselves "investors" - are really "collectors" who have different approaches.

-Al

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Posted By: Fred C

An investment is something that you hold for a period of time and expect to see a financial appreciation.

If you don't intend on selling the item then it's not an investment. Although it gets your appreciation from looking at the card, it doesn't make you money unless you sell it.

Aren't we all going to be buried with our card board? Sadly enough, I would tell my wife to do this and the ding bat would have me cremated...

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Posted By: JimCrandell

PSA 8 or 9 T206 commons are a great investment--you just have to pick your entry points. I have 125 or so psa 8 commons with an average cost of $300-$400. I think scarce cards in poor-fair-good condition will be poor investments. Investors generally want top condition cards.

I also disagree with the notion that if a few more of a card are graded it means the price will go down. Its supply and demand and if the supply goes from 20 to 25 of a mantle in psa 9 over three years but the net demand grows at 10% per year the price goes up.

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Posted By: Jeff Lichtman

Jim, I'm only going based on what I've seen anecdotally. A few of the very low pop/high graded 50s cards that I've tracked have been crushed as their pops go up. Once the 'rarity' aspect of the card disappears so does some of the value.

And although some of us may have bought cards very cheaply that are worth 10x more today, that doesn't mean that such a return will continue; therefore, investing in a pile of dirt may have a better return going forward.

As for investment strategies, I'm shocked to read of anyone on this board whose best investment over the past ten years hasn't been his or her home.

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Posted By: JimCrandell

Jeff,

You may be right--past investment performance is not necessarily a harbinger of the future.

What are the low pop 1955 8s going for now? I need to upgrade about 20 7s to 8 to complete the set in 8 or better

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Posted By: peter ullman

I am a collector at heart...always have been...but 2 years decided to "invest" in cards as it seemed kinda easy...and I bought a t4 obak...a bunch of t206 cobbs...some others...and then waited to resell them. I did pretty good on the cobbs...basically got a nice green background for free and made about 20% on the t4. By the way I bought the t4 because I wasn't in love with it...just because they were pretty rare. After owning the obak I grew to really love it and it was difficult to sell. But in addition after I bought it T4's started appearing seemingly more frequently. Sorry for my rambling...in summary:

-it's hard to be a collector/investor in something you love...if not impossible

-invest in stocks...real estate...precious metals

-invest in fine art and other collectibles you may like as well

-if investing in prewar bb over the short term...I prefer type rarities and variations over condition rarity...In my dreams I'd have Leon's collection!

pete ullman in mn

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Posted By: Anonymous

I always thought an interesting approach would be to pick a key card of a popular player in a particular desirable grade, that has inherent value, with a reasonable "market cap." My SMR/Pop report long since expired, but what are the numbers on a Koufax rookie? If someone started aggressively buying them in NM/MT condition, I don't think it would take (relatively) a lot of money to move the market. Couldn't you easily see the market value doubling in a few years? There aren't that many of them, it's an item that'll always be in demand, and you won't see many more coming out of the woodwork.

This is really more market manipulation than investing, though...

Besides that, I agree with general assessments that cards are poor investments overall, but limiting to the key players/cards is probably the best avenue.

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Posted By: Jeff Lichtman

Jim, it really depends on the card and the pop. For example, Art Fowler and Monte Irvin.

Fowler: pop 27 in PSA 8. Used to be 23, now is no longer the lowest pop 8 in the set. Used to be a $1900-$2000 card. Latest prices:
11/8/07 eBay $1,275.45
11/5/07 eBay $2,359.34
8/24/07 Goodwin$1,188.00
6/23/07 eBay $914.98
3/1/07 eBay $1,055.00
2/15/07 Goodwin$1,326.58
10/26/06 Andy Madec $1,124.70
10/5/06 eBay $1,247.00
7/20/06 eBay $1,888.00

Monte Irvin: pop 26 in PSA 8. This card has stayed pretty steady in pop. Feel free to discount the Memory Lane price and Goodwin:

9/15/07 Memory Lane $4,365.13
8/24/07 Goodwin $3,818.00
8/13/07 eBay Auction $2,725.45
5/1/07 eBay $2,550.00
11/29/06 eBay $2,900.00

The point is that Irvin's pop in 8 has remained staedy while many people submitted and resubmitted Fowlers' in an effort to get another $2000 PSA 8 card. In one year the card dropped in half (discounting one bizarre price which I do not believe to be accurate).

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Posted By: JimCrandell

Thanks Jeff--very interesting.

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Posted By: barrysloate

You guys with your pop reports! That's more like commodity trading than card collecting.

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Posted By: leon

In your above comparison you forgot to discount cards on ebay in your first group, as they are the highest prices. So is every venue discounted?

11/8/07 eBay $1,275.45
11/5/07 eBay $2,359.34
8/24/07 Goodwin$1,188.00
6/23/07 eBay $914.98
3/1/07 eBay $1,055.00
2/15/07 Goodwin$1,326.58
10/26/06 Andy Madec $1,124.70
10/5/06 eBay $1,247.00
7/20/06 eBay $1,888.00

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Posted By: Jeff Lichtman

Leon, the Fowler pre-2006 was a steady $1900-$2000 card; only the last near $2000 sale was included in VCP. I'm discounting the over $2000 ebay sale because it was just an anamoly. I'm not sure the card ever sold for $2300 when it was a pop 22-23.

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Posted By: leon

So if we take out that one and this one,

7/20/06 eBay $1,888.00

we should be ok, right?