Liquidity & Investing vs collecting

[kickitup]

I don't post often, but I feel compelled to share some thoughts. Most of you will likely disagree, and that's ok too. I hope eventually you get it.

If I asked any of you the value of a barrel of oil, most of you would log on to Bloomberg or CNBC and check the ticker. Why? because it shows live transactions where buyers and sellers agree on a price. There is security in knowing where assets such as oil, wheat, sugar or now sports cards trade repeatedly. As more trades happen, more people get more comfortable with price and liquidity and feel it is safe to make a 'bet'.

In the basketball world, Jordan rookie cards are the ultimate commodity. Baseball you have mantle rookies, football... Try on a Namath rookie for size. What do you feel safer putting your money in??? A Jordan rookie at 30k or a PSA 9 1934 Gehrig that never trades that will cost you 10x the price because that's what a private broker says it's worth?

Tell me why a Jordan PSA 10 shouldn't be worth 30k? There are roughly 250 of them... That's five per state in the union. Are you honestly going to try to make an argument that there aren't more than 250 people that are able and willing to own a Jordan rookie at 30k to say they have one? They should probably be worth 100k+ each!

Give me the liquidity, give me the commodities, give me the transparency. If you want to collect, fine... Go buy a PSA 6 gold border common. If you want to invest, give me a PSA 8 Koufax all day long and twice on Sunday. Complain about prices changing all you want, but when you are done, you will miss the move... Or perhaps you already have.

Peace

[botn]

I have never needed a card to trade constantly in order to ascertain it's value and I have been dealing and collecting successfully for 25 years. I also do not define liquidity in this market as something which is based on the frequency that item trades. Liquidity and market efficiency has never really been a problem in the hobby for me as a buyer or a seller.

As for your example of the 86 F Jordan vs the 34 G Gehrig I would feel much safer placing my money in the Gehrig but I do think your comparison is like comparing apples to oranges. Historical pricing, before 2015 on both of those cards would support my reasoning. If my memory is correct the Jordan 10 USED to be a 100K card. Regardless this post sounded more like a commercial for the 86 Fleer Jordan...

[pokerplyr80]

A BGS 10 Jordan has sold for 100k. I believe this sale took place when a PSA 10 Jordan was in the 10-15k range. They're much more rare.

Whether or not the PSA 10 Jordan is still a good investment at it's current all time high valuation remains to be seen and is an interesting topic for a discussion. I think it is.

[BeanTown]

its all about risk/reward. Gehrig would be a slower more stable investment for long term. Jordan will have huge price jumps in both directions depending on the current market when the card is sold. Both players are special and very Iconic to their sport they dominated while playing. The Population from Gehrig is ten times more rarer than the Jordan, but we all know scarcity doesn't always mean value. One last thought, is Gehrig's story is over and his Legend continues, and Jordan is still writing his. If the unthinkable happend to Jordan where he got caugh in a scandle or committed a violent crime... Then that would really affect the value on his card too. I love both Jordan and Gehrig and I actually have both their rookie cards.

[kickitup]

It's not a commercial for Jordan cards... None of which I even own.

It's an example that although there are a large number of a certain card available doesn't mean that is bad. It also doesn't mean it's not still under priced.

How many people are going to pay 300k right now for a PSA 9 1934 Lou Gehrig (10x the Jordan card) ?? Maybe 5-10 people max. That doesn't mean I wouldn't rather have the Gehrig card... All I am saying is that if I have 300k to 'invest', 10 Jordan cards might be the better investment. Why u might ask?

Ok say another awesome cardboard wonder comes along that you can't do without? Are you going to call you card broker to go sell that Gehrig? Or are you going to send Brent at Pwcc a couple Jordan PSA 10s to pay for that Ernie banks PSA 8 and George Brett PSA 10? Cards like Jordan rookies are almost as good as cash... They are liquid. Rare high end cards are too, but they are way tougher to move in a pinch.

These cards are becoming commodities with real value ... Real liquid value with someone like Pwcc taking them as payment for winnings .

[markf31]

Originally Posted by kickitup

It's not a commercial for Jordan cards... None of which I even own.

It's an example that although there are a large number of a certain card available doesn't mean that is bad. It also doesn't mean it's not still under priced.

How many people are going to pay 300k right now for a PSA 9 1934 Lou Gehrig (10x the Jordan card) ?? Maybe 5-10 people max. That doesn't mean I wouldn't rather have the Gehrig card... All I am saying is that if I have 300k to 'invest', 10 Jordan cards might be the better investment. Why u might ask?

Ok say another awesome cardboard wonder comes along that you can't do without? Are you going to call you card broker to go sell that Gehrig? Or are you going to send Brent at Pwcc a couple Jordan PSA 10s to pay for that Ernie banks PSA 8 and George Brett PSA 10? Cards like Jordan rookies are almost as good as cash... They are liquid. Rare high end cards are too, but they are way tougher to move in a pinch.

These cards are becoming commodities with real value ... Real liquid value with someone like Pwcc taking them as payment for winnings .

We have a perfect example going on right now related to this argument.

Here we have a 1915 Cracker Jack - Joe Jackson on Ebay being consigned through PWCC:
http://www.ebay.com/itm/1915-Cracker...0AAOSwNsdXSg9R

The current bid on the card is $63,800 with over 13 hours still to go (as of this posting)

This exact same example was purchased in a 2009 Heritage auction for $41,825 (incl BP).
http://sports.ha.com/itm/baseball-ca.../a/714-81128.s

It was purchsed again in a 2011 Paragon auction for $55,612 (incl BP).
http://paragonauctionsite.com/LotDet...nventoryid=375

Since the current PWCC listing reached a bid of $55,555 (which for this argument I will say is close enough to equal to the previous Paragon sale including BP) there have been 9 unique bidders on the PWCC eBay listing. To your point about how many people might be interested in such a card "Maybe 5-10 people max" this listing is currently right inside your estimate but with 13 hours still to go the number of unique bidders above that mark could increase.

We can revisit this specific example tonight once the PWCC listing ends, but the fact we have a relevant example to study and apply in this discussion is interesting.

[packs]

Anyone who is willing to put $300K into cards as an investment in their future is nuts. The only people spending $300K on cards are high rollers who don't even need to see a return. I would say the same is probably true for everyone who's purchased that Joe Jax card too. I would be very surprised to hear about anyone laying out their life savings on a card who was just a normal person who managed to save 60K.

[begsu1013]

Originally Posted by markf31

We can revisit this specific example tonight once the PWCC listing ends, but the fact we have a relevant example to study and apply in this discussion is interesting.

i snagged the cj jax. im sure there is some flawed history to this example, several will claimed it's altered/trimmed, gasp at the price, tell me that i am a fool or all the above.

in reality, i could care less. ive always wanted this card and wasn't gonna settle for one that i wasn't visually happy with. my chances dont come up very often.

tell me im an idiot and i'd probably agree, but in less than 3 years it will be the 100 year anniversary of the card itself and the '19 world series and the idiot will have it and smiling.

study long, study wrong.

edit: typo change '16 to '19...leaving the retarded verbage of the 100 yr anniversary to prove the idiot part though.

[botn]

Originally Posted by pokerplyr80

A BGS 10 Jordan has sold for 100k. I believe this sale took place when a PSA 10 Jordan was in the 10-15k range. They're much more rare.

Whether or not the PSA 10 Jordan is still a good investment at it's current all time high valuation remains to be seen and is an interesting topic for a discussion. I think it is.

Was referring to a time before you were in the hobby, not since VCP has reported sales--2015. I was wrong however, the Jordan did not used to sell for 100K but when it was a much lower population card it was selling for over 40K. There was a dentist who used to post ads in SCD buying certain cards from the set for obscene numbers. This was probably 15 years ago.

[Peter_Spaeth]

There was a dealer back in the day who used to bring his Jordan 9s (among other things, he had huge volumes of cards) to the Parsippany NJ show and he told me they would always bump a certain percentage of them into 10s. The show bump phenomenon made me pretty cynical about grading at least at the upper levels.

[pokerplyr80]

Originally Posted by botn

Was referring to a time before you were in the hobby, not since VCP has reported sales--2015. I was wrong however, the Jordan did not used to sell for 100K but when it was a much lower population card it was selling for over 40K. There was a dentist who used to post ads in SCD buying certain cards from the set for obscene numbers. This was probably 15 years ago.

Yea that's pretty crazy. That dentist could have been buying up PSA 8 52 Mantles for 40k instead of the Jordans at that time. It looks like a few years later in 2006 they were going for 5k.

[4815162342]

There are obviously a lot of hedge fund guys pouring cash into the hobby right now who feel the same way as you do. I'll stick to collecting scarce-rare seldom-traded baseball cards that I like, and investing in mutual funds.

[Peter_Spaeth]

If you believe what you say, you should be buying Jordan 10s. Just be careful, seriously, not to get a fake one, there are some pretty convincing ones from the Mexican guy out there.

My problem with 10s always has been that to me they are just Mint cards with a different flip for the most part -- that you couldn't tell apart but for the flip -- but in an era when flips seem to be independent commodities that seems not to matter.

[Leon]

I think it's a good and relevant debate. I recently converting cash sitting in the back earning literally 2 bucks a month in interest into a '52 Mantle at a decent price. I personally think the '52 Mick is a commodity, and a good one at that. It will (imo) do a whole lot better than 2 bucks a month when he finds a new home. SMU doesn't take '52 Micks in their payment plan so he WILL find a home in the next 3 yrs. . I like looking at him a lot better than numbers in a bank account too!!

[Cozumeleno]

My problem with investing big money into any slabbed card, pre-war or not, is a grading company's reputation (i.e. GAI) can be damaged beyond belief and severely devalue their cards overnight. As purely a hypothetical example, what if news broke that any of the big two/three companies was caught giving many faulty grades for personal gain, etc.? Or purposefully slabbing trimmed/altered/fake cards?

If I ever poured $30,000 into a card, I'd feel much more secure putting it into a rare card in general than I would putting it into a nominal card marked up 100x simply because of a grader's opinion. That's always seemed incredibly risky to me. I have no problem with graded cards and especially enjoy the protection they can provide to cards that could be damaged without a slab. But I just wouldn't have the desire to pay that kind of a premium for something based on opinion.

[Leon]

Originally Posted by Cozumeleno

My problem with investing big money into any slabbed card, pre-war or not, is a grading company's reputation (i.e. GAI) can be damaged beyond belief and severely devalue their cards overnight. As purely a hypothetical example, what if news broke that any of the big two/three companies was caught giving many faulty grades for personal gain, etc.? Or purposefully slabbing trimmed/altered/fake cards?

If I ever poured $30,000 into a card, I'd feel much more secure putting it into a rare card in general than I would putting it into a nominal card marked up 100x simply because of a grader's opinion. That's always seemed incredibly risky to me. I have no problem with graded cards and especially enjoy the protection they can provide to cards that could be damaged without a slab. But I just wouldn't have the desire to pay that kind of a premium for something based on opinion.

This is why I bought into what I think is the safest bet in the hobby. I wasn't going for a 20k HOF'er OJ which Richard, Keith and Jay already own.

[Snapolit1]

The idea of something like Jordan cards being a riskier investment because he's still alive and his story isn't finalized yet is something I never really thought about. Sure at some point OJ Simpson and Bonds were fetching big bucks too. The guy who paid big bucks for a Sammy Sosa homerun ball has likely jumped off a bridge long ago. Jordan's reputation hasn't exactly taken off since he retired and who knows what he's gambling on these days.

By the way, I have zero interest in Jordan cards and never plan to buy one. I'd drop big bucks on Ruth any day over Jordan.

[ls7plus]

Originally Posted by Peter_Spaeth

If you believe what you say, you should be buying Jordan 10s. Just be careful, seriously, not to get a fake one, there are some pretty convincing ones from the Mexican guy out there.

My problem with 10s always has been that to me they are just Mint cards with a different flip for the most part -- that you couldn't tell apart but for the flip -- but in an era when flips seem to be independent commodities that seems not to matter.

+1. Buy the card, not the holder. There are far too many "9's" which will compete with the "10's," with very little substantive difference between the two. Specifically, PSA has graded 2,418 "9's," 6,745 "8's," and 158 "8.5's." SGC has graded 308 "8's," 287 8.5's," 136 "9's," and 12 "10's." Taken together, the supply factor of "high grade" Jordan's looms far too large for me to take this card seriously as an investment in the long run. It's value will appreciate similarly to analogous coins in the coin market, where such items, scarce (and definitely not rare) in the highest numerical grade, but much more common in a minimally lower grade, are cyclical in value appreciation. The fact that a high grade Jordan rookie is simply not any kind of real rarity makes for a significant downside risk for the long term. If they're on the upswing and you can pick up one for the right price, flip it as soon as you can make some substantial money. Not at all an item for long term holding, IMHO, and very, very vulnerable to demand swings, whereas you won't see that with classical rarities in vintage cards. The latter will prove much more stable with likely very close to linear appreciation. What works to obtain the latter in EVERY field of collectibles is one simple formula: rare, significant, and in the best condition you can find or afford. The Jordan is not and never will be rare, although it meets the other criteria, but those are the two least important for value.

Highest regards,

Larry

[Zach Wheat]

Originally Posted by kickitup

I don't post often, but I feel compelled to share some thoughts. Most of you will likely disagree, and that's ok too. I hope eventually you get it.

If I asked any of you the value of a barrel of oil, most of you would log on to Bloomberg or CNBC and check the ticker. Why? because it shows live transactions where buyers and sellers agree on a price. There is security in knowing where assets such as oil, wheat, sugar or now sports cards trade repeatedly. As more trades happen, more people get more comfortable with price and liquidity and feel it is safe to make a 'bet'.

In the basketball world, Jordan rookie cards are the ultimate commodity. Baseball you have mantle rookies, football... Try on a Namath rookie for size. What do you feel safer putting your money in??? A Jordan rookie at 30k or a PSA 9 1934 Gehrig that never trades that will cost you 10x the price because that's what a private broker says it's worth?

Tell me why a Jordan PSA 10 shouldn't be worth 30k? There are roughly 250 of them... That's five per state in the union. Are you honestly going to try to make an argument that there aren't more than 250 people that are able and willing to own a Jordan rookie at 30k to say they have one? They should probably be worth 100k+ each!

Give me the liquidity, give me the commodities, give me the transparency. If you want to collect, fine... Go buy a PSA 6 gold border common. If you want to invest, give me a PSA 8 Koufax all day long and twice on Sunday. Complain about prices changing all you want, but when you are done, you will miss the move... Or perhaps you already have.

Peace

Thank you for posting. I almost never use the investment perspective of collecting as the main factor when making a purchase - so maybe I don't have a sound grasp on some of the examples you've mentioned. I mainly do this for fun - but you raise some good points.

In your example cards aren't truly that type of commodity yet. If I buy a contract for a specific type of crude oil with a specific sulphur content and API gravity I expect to get exactly that. Grading companies have brought us closer to a common standard - but there is too much variability in the perception of the value of a certain grade - due to factors such as the PSA Registry. This can be seen when you compare the Fair Market Value of cards corresponding to the same grade across the various grading companies.

In addition, due to counterfeits, uncertainty of execution and the various quirks in how things are bought/sold, means many buyers are willing to pay a premium for the certainty of execution. You don't have that factor in commodities where you can go to any place that buys/sells and get the same result. That is certainly a reason some eBay dealers achieve higher prices for their cards than other sellers.

The depth of the market also varies greatly over time, making the market volatile for certain areas of collecting. Certainly there is volatility in the market for other commodities - but not to the extent of those that invest in cards. See the example in another N54 thread about the guy that bought $80K in the rookie card of a specific player...which later tanked. I believe it is also one of the reasons you can't compare the value of investing in, say penny stocks to those traded on the NYSE. The market isn't deep enough to support long term investment decisions without involving a significant amount of speculation.

Just my thoughts, and I admit I could be way off base.

Z

[the 'stache]

Just...wow. Speechless.

[sbfinley]

Originally Posted by kickitup

I don't post often, but I feel compelled to share some thoughts. Most of you will likely disagree, and that's ok too. I hope eventually you get it.

If I asked any of you the value of a barrel of oil, most of you would log on to Bloomberg or CNBC and check the ticker. Why? because it shows live transactions where buyers and sellers agree on a price. There is security in knowing where assets such as oil, wheat, sugar or now sports cards trade repeatedly. As more trades happen, more people get more comfortable with price and liquidity and feel it is safe to make a 'bet'.

In the basketball world, Jordan rookie cards are the ultimate commodity. Baseball you have mantle rookies, football... Try on a Namath rookie for size. What do you feel safer putting your money in??? A Jordan rookie at 30k or a PSA 9 1934 Gehrig that never trades that will cost you 10x the price because that's what a private broker says it's worth?

Tell me why a Jordan PSA 10 shouldn't be worth 30k? There are roughly 250 of them... That's five per state in the union. Are you honestly going to try to make an argument that there aren't more than 250 people that are able and willing to own a Jordan rookie at 30k to say they have one? They should probably be worth 100k+ each!

Give me the liquidity, give me the commodities, give me the transparency. If you want to collect, fine... Go buy a PSA 6 gold border common. If you want to invest, give me a PSA 8 Koufax all day long and twice on Sunday. Complain about prices changing all you want, but when you are done, you will miss the move... Or perhaps you already have.

Peace

I don't understand the point you're attempting to make here. At all.

[Peter_Spaeth]

Originally Posted by sbfinley

I don't understand the point your attempting to make here. At all.

I interpreted it to mean he thinks certain high end postwar and modern cards are good investments even at today's prices. And that those who are not buying into it (literally) will miss the boat.

[sbfinley]

Originally Posted by Peter_Spaeth

I interpreted it to mean he thinks certain high end postwar and modern cards are good investments even at today's prices. And that those who are not buying into it (literally) will miss the boat.

Didn't get that at all, but okay. I learned something new today.

[Touch'EmAll]

Don't get it - to some degree he is just pointing out the subtleties of supply and demand in our hobby, er, investments. We have said before, demand out-trumps supply. And timing is also important. What the future holds? I would guess the Jordan RC and the 1934 Gehrig should both do just fine, but its just a guess - nobody has a crystal ball. Heck, what do I know, a couple of my stocks have not done that great - didn't guess right on those. Other stocks have done ok. My real estate has bounced back very nicely. Probably good to diversify a little.

[ls7plus]

Originally Posted by Peter_Spaeth

I interpreted it to mean he thinks certain high end postwar and modern cards are good investments even at today's prices. And that those who are not buying into it (literally) will miss the boat.

It isn't necessarily bad to miss the boat, especially when it sinks en route to its destination. Hmmm-why does the Titanic disaster of April, 1912 come to mind? Maybe because that one was "unsinkable" too!

Hi, Pete.

Larry

[midwaylandscaping]

Th Manipulator needs to get to manipulating Mike Bossy and Rickey Henderson RC's. Zero plans to sell what I have, I'd just like to see a card or 2 of mine blast off. Got 5 of each in PSA 9, c'mon dude, get to work on this

[vintagetoppsguy]

Originally Posted by sbfinley

I don't understand the point your attempting to make here. At all.

I've read the opening post a few times thinking I was just missing something, given the thread has so many replies. Glad to know I'm not the only one who didn't understand the point.

[Rookiemonster]

But what about muhamed Ali ? Lol jk


All cards can be traded so yes they commodities. Last year I traded some cards for Yankee tickets. When I was a kid I traded cards for a new Louisville slugger.
This is the same old thread phased in a different way for the thousandent time.
We don't know the future but we can make a lucky guess.

Last year I made my biggest baseball card purchase. It was a Willie mays rookie.
I did not buy it for the sole purpose of investing .it was a card I really wanted.

[ALR-bishop]

I had not realized what hard work it has become to collect baseball cards. As usual I am one step behind. I even thought I was enjoying it.

[vintagetoppsguy]

Originally Posted by ALR-bishop

I had not realized what hard work it has become to collect baseball cards. As usual I am one step behind. I even thought I was enjoying it.

Enjoying it? No, no, no. You're doing it all wrong.

[Aquarian Sports Cards]

Originally Posted by kickitup

I don't post often, but I feel compelled to share some thoughts. Most of you will likely disagree, and that's ok too. I hope eventually you get it.

Condescend much?

[botn]

Originally Posted by kickitup

Give me the liquidity, give me the commodities, give me the transparency. If you want to collect, fine... Go buy a PSA 6 gold border common. If you want to invest, give me a PSA 8 Koufax all day long and twice on Sunday. Complain about prices changing all you want, but when you are done, you will miss the move... Or perhaps you already have.

Peace

In light of this http://www.net54baseball.com/showthread.php?t=222723 thread on the postwar side regarding the recent massive price correction on 55 Koufax 8s, I almost have to laugh at the above statement. This thread was started a mere 7 weeks ago too. So much for the game changing forever.

[bravos4evr]

ugh, this might not be very popular but I loathe the "investor" side of the hobby. The idea of "flipping" and all that irritates me to no end. It has taken cards that might have been ownable for the avg person into the stratosphere. I hear as much if not more about "flips" and grading and prices ..etc than I do about the player's ,their history and the game of baseball. It's like some low rent stock market, it reminds me ofthe junk wax era when it seemed kids were turning into Warren Buffet instead of baseball fans, (and that didn't end well did it?) and it makes me sad.

But hey, it's their money if they want to keep chasing the profits it's their bidness, but in the end I suspect several people are going to end up with egg on their faces and empty pockets when some of these 6 figure cards drop like a stone one day.


EDITED TO ADD: I'm not dismissing the idea of cards as an investment, not at all. If folks want to collect and then sell when they retire to have a little nest egg, that's fine. I'm talking about the flipping and extreme price increases cause by what seems to be a very few amount of people artificially creating a boom. These folks don't like baseball or the hobby, they just want to make a ton of cash and bail. I like capitalism as much as the next guy, but it's hurting the hobby not helping it.