$15,000 to spend on 1-5 cards...WWYD?

[cgjackson222]

Originally Posted by Peter_Spaeth

Great chart, but does the typical way one talks about annual return take into account some notion of compounding, in which case the annual returns would be somewhat lower?

There is no discount rate, interest rate, inflation rate, nor any other assumptions

[Peter_Spaeth]

Originally Posted by cgjackson222

There is no discount rate, interest rate, inflation rate, nor any other assumptions

Fair enough, and not my area, but I thought when people speak of annual rate of return for investments they're considering compounding so just dividing by the number of years in the period would overstate.

https://www.investopedia.com/terms/g/geometricmean.asp

[raulus]

Originally Posted by Peter_Spaeth

Fair enough, and not my area, but I thought when people speak of annual rate of return for investments they're considering compounding so just dividing by the number of years in the period would overstate.

https://www.investopedia.com/terms/g/geometricmean.asp

So, some bad news here. Looks like my quick and dirty math in my head overstated the annual returns, and not by a little.

The annual return on that first one, factoring in compounding, is 15.4%.

Like me, you are probably thinking, WTF!!!

Just seems really low when your item goes up about 1,000%.

But I ran the math a few times and reverse engineered it. Investing that sum for that 15.4% rate over about 16 years gets you the final value.

Just another example of how your returns on cardboard might actually be less than you expect. Admittedly, not every investment in the stock market is going to generate 15.4% per year for 16 years.

And the return on cardboard is calculated before even factoring in selling costs and taxes. Although admittedly often investment returns are quoted on a pre-tax basis.

[Peter_Spaeth]

Originally Posted by raulus

So, some bad news here. Looks like my quick and dirty math in my head overstated the annual returns, and not by a little.

The annual return on that first one, factoring in compounding, is 15.4%.

Like me, you are probably thinking, WTF!!!

Just seems really low when your item goes up about 1,000%.

But I ran the math a few times and reverse engineered it. Investing that sum for that 15.4% rate over about 16 years gets you the final value.

Just another example of how your returns on cardboard might actually be less than you expect. Admittedly, not every investment in the stock market is going to generate 15.4% per year for 16 years.

And the return on cardboard is calculated before even factoring in selling costs and taxes. Although admittedly often investment returns are quoted on a pre-tax basis.

Right. It's geometric, not arithmetic. Those are still nice returns but we need to keep it in perspective and apples to apples. I doubt there is any investment that generates a 70 percent annual return over time.


https://www.investor.gov/financial-t...est-calculator
The beauty of compounding, illustrated.

[raulus]

Originally Posted by Peter_Spaeth

Right. It's geometric, not arithmetic. Those are still nice returns but we need to keep it in perspective and apples to apples. I doubt there is any investment that generates a 70 percent annual return over time.


https://www.investor.gov/financial-t...est-calculator
The beauty of compounding, illustrated.

And most of that return came during the pandemic. Prior to that point, your return was low to mid single digits on an annual basis.

[Peter_Spaeth]

Originally Posted by raulus

And most of that return came during the pandemic. Prior to that point, your return was low to mid single digits on an annual basis.

Oh well.

[raulus]

Originally Posted by Peter_Spaeth

Oh well.

Just for fun, I attempted to recreate the spreadsheet above. Basically you buy at the first price point, and then we calculate your return as if you had sold at the subsequent dates. So just for example, with the 51B Mantle, you buy in 2005, and then sell in either 2011, 2015, 2019, 2020, or 2022. Then I calculate your return as if you had sold at any one of those dates.

Because we often have selling costs, I also added in some math to calculate the return based on 0%, 10%, and 20% selling costs.

And the results are better than I expected, even before the pandemic. For the most part, you're looking at mid to high single digits through the mid to late teens, even when we're talking about the 20% selling cost mark. Which isn't bad! It's not amazing, but certainly not bad.

And if you factor in the pandemic, then they pretty much all get into double digits. For people who like to look at spreadsheets on screens, here's the details.

Note: Please ignore the fact that the first price point is negative - that's just part of the fun when calculating XIRRs with excel - the first number needs to be negative, since that's what you're spending to buy it. Please also ignore the fact that I'm not factoring in taxes. Since most investment products are evaluated based on pre-tax results, that seemed appropriate here as well.

[Republicaninmass]

Originally Posted by raulus

And most of that return came during the pandemic. Prior to that point, your return was low to mid single digits on an annual basis.

Not if you bought at the top, and sold at the bottom.

2016 was faraway, so not surprised people don't recall Clemente rcs going over 100k in psa 8 only selling for 20k through 2021.

[Peter_Spaeth]

Originally Posted by Republicaninmass

Not if you bought at the top, and sold at the bottom.

2016 was faraway, so not surprised people don't recall Clemente rcs going over 100k in psa 8 only selling for 20k through 2021.

2016 was IMO clearly a manipulated market on certain cards anyhow. I fondly recall the "buying group." Those were fun threads.

[G1911]

Originally Posted by Republicaninmass

2016 was faraway, so not surprised people don't recall Clemente rcs going over 100k in psa 8 only selling for 20k through 2021.

Shh, any examples of 'top cards' going down are not to be spoken of . Inexorably and forever up! Money printer go brrrrr

[rats60]

Originally Posted by Republicaninmass

Not if you bought at the top, and sold at the bottom.

2016 was faraway, so not surprised people don't recall Clemente rcs going over 100k in psa 8 only selling for 20k through 2021.

Those cards weren't paid for.