Liquidity & Investing vs collecting

[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.

[Peter_Spaeth]

Originally Posted by 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.

Why nuts? I would guess if you took a basket of elite graded cards and compared the rate of return on them to the stock market or most other investments over the last 20 or 10 or 5 years, the cards would have a better rate of return.

[Leon]

Originally Posted by Peter_Spaeth

Why nuts? I would guess if you took a basket of elite graded cards and compared the rate of return on them to the stock market or most other investments over the last 20 or 10 or 5 years, the cards would have a better rate of return.

My personal experience agrees with you wholeheartedly.

[packs]

Ok well do you guys have 401K's or some other retirement plan? If so, why didn't you just pour that money into a few cards?

[Leon]

Originally Posted by packs

Ok well do you guys have 401K's or some other retirement plan? If so, why didn't you just pour that money into a few cards?

I have a rollover 401k. As those rules are, it is tax deferred until I take it out and earns interest that way, compounded. Most of that is in Fidelity Index 500 fund shares. I prefer to leave that alone as to diversify a bit (and not pay the 10% penalty to take it out for cards). Everyone has their own methods. I always think of this imaginary, but oft used, financial "pie" in my head and know there are many pieces for a reason. If I only had 1 piece of pie that piece wouldn't be cards. It would probably be the Fidelity Index 500.....

Having very much money in a savings or other cash type account is actually like losing money in today's economy. All in my humble opinion...
*AND Please seek professional tax and estate planning advice and don't rely on anything I say . I had to sell my whole collection to fund a college degree.....LOL


.

[ls7plus]

Originally Posted by 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.

+1. IMHO, the big bucks spenders are NOT purchasing for investment--money is the least of their concerns. They are buying legitimately desirable items, are not concerned with cost, and are simply trying to put together the very best collections possible for purposes of pride and enjoyment.

Happy collecting,

Larry

[Leon]

Originally Posted by ls7plus

+1. IMHO, the big bucks spenders are NOT purchasing for investment--money is the least of their concerns. They are buying legitimately desirable items, are not concerned with cost, and are simply trying to put together the very best collections possible for purposes of pride and enjoyment.

Happy collecting,

Larry

You either haven't been reading the board or didn't understand what has been plainly said, imo. They ARE purchasing for investment.
Put a very high grade '52 Mick out there or a T206 Wags....or many, many of the high grade HOF rookies and there are a LOT of investors.. not buying for collecting and unfortunately they barely know what they are buying except pieces of paper in plastic. The cards are almost secondary to some....AND NOT for enjoyment.

A board member investor who has shown hundreds of thousands of $$ in cards on this board asked another board member, privately yesterday, what a flip was. Not quite a collector I would say.... But maybe what ALL of my friends in the hobby are telling me is wrong. (and many see who is bidding as they are auctioneers) Don't be foolish, there are a ton of investors in the hobby right now.


ps. Congrats on the CJ Bob...

.

[Peter_Spaeth]

What's interesting is the different predictions I am hearing from people who have been doing this a long time. Some think the game has changed forever and that at least the high end RCs and some other cards have moved from collectibles to investment commodities; some think it's a short-term trend and the investors will take their profits soon and move on and prices will collapse.

Right now, my understanding is that much of the buying one sees on these cards that are skyrocketing is being done by a relatively small number of people. So I think it's still a volatile situation.

[botn]

Originally Posted by Peter_Spaeth

What's interesting is the different predictions I am hearing from people who have been doing this a long time. Some think the game has changed forever and that at least the high end RCs and some other cards have moved from collectibles to investment commodities; some think it's a short-term trend and the investors will take their profits soon and move on and prices will collapse.

Right now, my understanding is that much of the buying one sees on these cards that are skyrocketing is being done by a relatively small number of people. So I think it's still a volatile situation.

Peter, anyone else besides Brent of PWCC who think the game has changed forever? Trying not to laugh as I type this.

[ls7plus]

Originally Posted by Leon

You either haven't been reading the board or didn't understand what has been plainly said, imo. They ARE purchasing for investment.
Put a very high grade '52 Mick out there or a T206 Wags....or many, many of the high grade HOF rookies and there are a LOT of investors.. not buying for collecting and unfortunately they barely know what they are buying except pieces of paper in plastic. The cards are almost secondary to some....AND NOT for enjoyment.

A board member investor who has shown hundreds of thousands of $$ in cards on this board asked another board member, privately yesterday, what a flip was. Not quite a collector I would say.... But maybe what ALL of my friends in the hobby are telling me is wrong. (and many see who is bidding as they are auctioneers) Don't be foolish, there are a ton of investors in the hobby right now.




ps. Congrats on the CJ Bob...

.

With all due respect, Leon, it appears that some of these, perhaps the most knowledgeable, are cut from a different cloth. I'm speaking of Bob's post re the Cracker Jack Jackson, of course, but also of a M101 Ruth rookie in "7" that supposedly went to the owner of the Arizona Diamond Backs a few years ago. Was Al Taubman strictly investing in his $500 million or so art collection, auctioned off through Sotheby's fairly recently? One would think that if that was the case, it would have been up for auction before, rather than after, his death. Sure, art is art, but collectibles are also collectibles, and their appreciation/depreciation follow rather constant principles throughout their various iterations, almost like the laws of physics. That's why one particular 1964 Aston Martin recently changed hands for $11 million. This special edition model was supposed to have a manufacturing run of 25, but only 19 were made. Gee, might "rare and significant" have something to do with the above?

It's also why 1967 L88 Corvettes have recently changed hands for $3-$4 million--20 made, with 560 horsepower 427 racing engines that ultimately ended the Shelby Cobra's domination of Corvettes on the longer sports car racing tracks (165 mph top end for the much higher drag coefficient Cobras, versus about 190 mph for the L88 Vettes). These things will appreciate due to their, what was that phrase again, "rare and significant" nature, regardless of the initial motivation for their purchase, and in many cases, are simply being snapped up and disappearing from the market for quite a few years. They're being kept and held because well-healed, knowledgeable collectors LIKE them--sure, they like the thought that their value will increase, but do you really think that guys like John J. Pittman, who assembled a $40 million coin collection over his lifetime (purchasing mostly in the rare, undervalued, quiet areas, because as an Eastman Kodak chemical engineer, he could never afford the so-called "trophy" coins, such as the 1913 Liberty head nickel, 1804 silver dollar, 1894 S dime) and kept it for his entire lifetime was primarily motivated for investment? He LIKED his coins, which is why they only came up for auction AFTER his death, just as Bob quite obviously is delighted with his '15 Cracker Jack Jackson.

You're probably right that there is a significant amount of big dollar, near-mindless investing going on now, but IMHO, it would be incorrect to ascribe all the huge price increases we've been seeing in truly significant items largely to that factor. Just beware that if something seems overpriced relative to the existing number of examples, it probably is, and that these are the items, just as occurred in the coin and car collecting fields, that are in for the greatest correction in the market.

You are also correct that I have not been able to stay in touch with this truly great board you have fashioned as much as I would have liked for the last few months, due to an overwhelming work load (on the plus side, that heavy load has financed some long-sought after acquisitions). But the various collectible fields are far more alike than they are different, and the same principles will apply over time. I find the coin collecting field to be the closest parallel to cards, and it's history, having become an organized hobby roughly 120 years before cards, offers some unique insights as to where ours is likely going. The eminent Q. David Bowers, author, collector and coin dealer for more than half a century, wrote that, over time, the collector (as opposed to the investor) is king, because the former has taken the time to study the field, whereas the latter are often like lemmings, following the herd even as they plunge over the cliff. The collector, who in Bower's considerable experience enjoys the highest LONG TERM appreciation in his collection, buys and HOLDS, because he truly LIKES what he has obtained.

Hopefully, based on the above, the current market is not nearly as dominated by investment-only types as your post seems to indicate, but if it is, I would stay away from purchases where condition rarities seem to be hoisting up the prices of far lower condition examples to rationally unwarranted levels, where the latter are really not hard to come by. Persistent trends throughout the histories of other collecting fields make such "investments" a very, very risky proposition. Depending upon their significance, they will be cyclical in appreciation at best.

My very best wishes always,

Larry

[Peter_Spaeth]

Many lemmings these days it seems.

[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.

[Sean]

Originally Posted by begsu1013

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 '16 world series and the idiot will have it and smiling.

study long, study wrong.

Last year was the 100 year anniversary of the card. I think you mean that in 3 years it will be the 100 year anniversary of the Black Sox scandal.

In any case, congratulations.

[begsu1013]

yes. it's late, it was a long thread, im tired.


oh. and f the peanuts, gimme some cracker jacks.

[pokerplyr80]

Congratulations on the pick up. I think the price was pretty reasonable given the quality of the card.

[ullmandds]

Wow! Mucho congrats!