Collecting vs Investing

[Archive]

Posted By: Joann

Not to hijack the other thread about this hobby being passive, but I have been wondering lately about the extent to which even true collectors end up with the dreaded "I" word (@tbob) as a positive side effect to the collecting focus.

Even if you don't set out at the start to consciously invest, at some point your cards increase in value so that you have an investment anyway. I stopped completely when I first started school 2 years ago, and was shocked when I got back into it to see how some of my cards had appreciated while they sat dormant and even unnoticed for 2 years.

So, even if you are really just a collector, does anyone want to comment on how well their cards have done as an investment? Adam W made a comment in the other thread about having fun and a great ROI besides. Can we really have it all?

Also, at what point can we officially call these investments and (even if we are not in the business) start taking Section 212 (?) deductions for the actual expenses of managing our collections, instead of only the capital losses upon sale?

Joann

[Archive]

Posted By: Gilbert Maines

You only have a ROI if you sell. And if you bought the card because it fit your collecting goal, why sell it?

[Archive]

Posted By: Russ Bright

I started collecting in 1987, when I was 8. I bought the 1987 topps cards because i liked the wood borders (lol) collected through 1991 and stopped. started again around 1998. stopped in 2001. Moved away to college and thank GOD noone threw out my cards! i came back last year to 50 thousand plus cards that i hadn't thought about for 4+ years. Definately had become an investment by that point! But also had a desire to start collecting again. Sometimes I buy the new cards for a "hot card" that i can try to sell on ebay and make a little money (quick flip investment) but my eventual goal is to get rid of all of my cards (prune it down to the ones i love for collectible purposes). I have a 1986 topps Sid bream which is the first card I ever bought for a nickel out of a vending machine. It's worth about 5 cents but i will never sell, because it was a start to all of the Madness. I'm working on the T205 set because it IS valuable, but it's a collecting challenge to complete a set without trying to throw a lot of money at the set. ANY set can be completed by throwing thousands of dollars at it. This one i'm trying to trade (aha! never did that before!) and upgrade (really? what's that?) because i'm appreciating the value of collecting versus investing. I collect because i enjoy the cards and I love baseball (even though my team, the Mariners haven't done very well this year!) the investing thing is secondary. If i can make money doing what I love that's a great side effect. I play video games for a living and I used to work in Recording studios (audio engineer). I love all of these things and it becomes more than a job (or a hobby) if it's a passion... the investment value is just a bonus!


R

[Archive]

Posted By: Joann

Thanks Russ - that's kind of what I was looking for. You buy cards you want and like, and suddenly discover that it wasn't a waste of money, a worthless pursuit, etc. You do something you enjoy and find out later that without even meaning to, you also did something that made you money.

I really don't intend to sell cards that fit my collecting needs, unless it is to buy other cards that upgrade or maybe fill a more difficult slot. On the other hand, I certainly don't plan to have them buried with me either!

So either I will sell them when I am old, maybe to help finance part of retirement, or maybe because some young collector is all excited about them. Or at worst I leave them as part of my estate.

So what I'm wondering is what is the overall quality as an investment. Because if it can even marginally justify spending the money on something that is fun and relaxing, that just makes it better.

You don't have to actually sell the cards on an ongoing basis to have the value gain and have them be an investment - you can realize the gain far down the road.

Joann

[Archive]

Posted By: jay behrens

I love my cards and collecting in general, but I'd be lying if I didn't admit the investment end of it. I track my purchases and sales closely. Since my return to the hobby 5 years ago I've put together modest little collection with the some significant cards. All told, my total cash outlay for collection, less duplicates sold, is under $1500.

I won't say that I'll never sell my collection. I did it once before, but this time around, it's highly unlikely. The collection is a nice little nest egg to have sitting around, just in case. And it has performed far better than the markets in the past 5 years.

Jay

Growing old is not optional, growing up is.

[Archive]

Posted By: Gilbert Maines

In the mid-70s e-95s were $3-$5 each. E99s $6-$8 a piece, cracker jacks (either year) $4-$6 Walsh = $8.

t207swere $3-$5 with Livingston, Carrigan and Wagner variations = $10; Loudermilk = $100.

T227 baseball, $10 ea.; t206 Wagner >$1500., Plank $550., Demmitt $30. etc.

The Sports Collectors Bible, B.R.Sugar, 1975

Is this good? Is past performance indicative of that in the future? You gotta sell to make a profit, unless someone recognizes your item as viable collateral. And baseball cards are not there (if you are talking with a primary lending institution). Alternate lenders may consider your internal organs as sufficient collateral.


Edited to add: SGC50

[Archive]

Posted By: Rick

You could have also bought EBAY stock for 3 bucks in 98 or microsoft for 4 bucks in 96.

yeah i know you could have bought Enron etc ...but most people also didnt invest in pre war ..most people invested in 1986 topps.

Investing in cards its too risky ...its a thin market and while everyone talks about the high prices you have to realize that it has only affected very few cards.

Pre war cards and high condition cards from the 50's -60's

While its easy to pick up a 100 shares of any company...its hard to pick 100 cards in a single day for the same price in the same condition.

Remember if you get around 7% return ...you will double your money in ten years.

Cards are a nice...we all like them very much ...some of us will even hype them as investments...but we are probably the most biased group you can find on the internet.

its very easy to look at the last 5 years and make all sort of projections ...but what about the 10 years before that? they were mostlty flat.

its not a horrible place to park some disposable income...but its not a good long term investment...

[Archive]

Posted By: Gilbert Maines

The acquisition of tangible assets provides the feature that you can enjoy them while they hopefully rise in value.

There is no way with baseball cards to be certain that you are not buying at the absolute peak of the market - it has always been lower, and it may always be lower (except for the instant when you buy).

[Archive]

Posted By: edacra

The weird thing about investing in cards these days is there's little illusion as to what's rare. It was always easy to pick up the guide books and pick out some great obscure HOF cards at affordable values, but good luck finding them, and good luck finding them at book value. Now you can find nearly anything you want and prices aren't really bouncing around all that much.

As an aside, I've always had great luck collecting and horrible luck trying to invest. I wish I could get my money back for some 1987 fleer update sets I thought would make me rich.

[Archive]

Posted By: Matt E.

1. Do you have a Tax ID = Investor
2. Do you overpay for cards that you "need" I mean over invest = Collector
3. What side of the table are you standing on at a card show? Are dealers collectors, the answer is YES.

The line is blurred and difficult to determine. Deep down we are all collectors, just to different and varying degrees of financial means.

My son and I attended a card show this weekend in Columbus, Ohio (200+ tables). The first day we were there bright and early to get the best deals on certain cards we needed etc...

After talking at home that evening we decided to attend Sunday with the intent of just looking at what each and every dealer offered and not worrying exactly how much "that went for on Ebay". I think we enjoyed Sunday more than the first day because we were focused on being collectors not an investors. IMO

[Archive]

Posted By: Jason

may be on the simple side, but this a great question and I often find myself wondering about people's motivation/passion during transactions with others in the hobby, be it a card shop, a dealer at a table, or just watching others buy cards.

I buy cards to collect. I love collecting things, completing sets, either pre-made or creating some subset for myself. For a while as a teen, I became obsessed with the idea of flipping for a profit, for the sport of it...but then I realized that most of the original fun had gone out of it. A friend and I would go to a show with a set value of cash and a set value in cards, and the object of the game was to walk out with more of each. The problem was that even when I would "win" I would walk out with a bunch of stuff that didn't make sense to have or could contribute to any collection.

Over the years, I have assigned much more value to the concept of building something important in life. Something that is important to me, in that it's a collection that I enjoy researching, finding, and owning. But then also something that is important in its own right, in that it is a focused collection - something that others will likely assign a nice value to...not so serious as to qualify for a provenance designation, obviously, but something that others like as well, is a required chracteristic of intrinsic importance.

And then there is the simple, selfish desire to build something that you can be proud to pass on, that may survive you. We're only here a short time, time is extremely short, and what you do with that time and who you impact is important.

And so I hope to pass along to my kids some day, a collection of sports memorabilia that consists of several focused collections:
Autographed HOF baseballs
The Handley Collection (all things related to relatives who played the game)
HOF rookie cards
Chicago Cubs Team Sets
The Player Collections of players that were important to me or my father (Eddie Mathews, Roy Campanella, Duke Snider, Ozzie Smith, Walter Payton, Kirby Puckett)
others TBD....

Anyway...that's how I see it.

Investments?....only so I can include it on the assets side my personal net worth calculation, need to justify a purchase to the wife, or heaven forbid, someday I desperately needs the money...


If you've read this much, I commend you, and apologize for wasting too much of your lunch hour!!!
Jason

[Archive]

Posted By: davidcycleback

Smart investing requires great knowledge of the product. This is a knowledge that many collectors have and many investors do not.

If a baseball card collector decided that it's not aesthetic to invest in cards, so she put her money into individual stocks-- it's likely that she will know less about the companies she is investing in than she does about baseball cards.

I'm a collector and a reseller (not an investor, as it isn't my intent to hold onto an item for a long time). The items that I collect and the items I sell are usually in different areas. However, I will sell items I collect, if I have a duplicate or am not fond of the item. For me, the prime concern for both items I buy and sell is authenticity. For example, I don't sell Ming vases or Louis Vuitton handbags as I'm ignorant about authenticating either.

Handling items you don't collect is worthwhile, as you learn about material you would oridinarilly consider. Learning about new things is in and of itself a hobby.