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

[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.

[Peter_Spaeth]

What was the annual return of SPY in the same periods, can you add that in for comparison? At least for first to last dates.

[raulus]

Originally Posted by Peter_Spaeth

What was the annual return of SPY in the same periods, can you add that in for comparison? At least for first to last dates.

Welp!

I'm a bit hesitant to share the results, primarily because someone might draw some conclusions based on data that is selective and only representative for the window presented.

Additionally, the cardboard pieces presented here are not necessarily representative of the entire cardboard market, as these are hand-selected major pieces from HOF players. At the same time, if we're being honest, these cards are likely to have a fairly robust market in terms of trading volume, so the market is unlikely to be manipulated by spurious outliers, at least in general barring shenanigans. I also haven't dug into the data presented by the earlier poster to evaluate whether there was any cherry picking of cardboard data points that might influence the data here.

Part of the fun is that if you bought stocks in 2007, you were buying high, and it took a while to come back after the great recession. Another part of the fun is that stocks have performed poorly over the last 6 months, so your returns are down if you're selling today.

There were certainly some windows where stocks did better here. And some where they did worse than these specific cardboard pieces. Maybe in another decade, we can look back at people who bought cardboard in 2021 or 2022 and see how they did relative to investing in the market. We might very well get some different results considering the relative current strength in these markets.

Without further ado, here's another sweet spreadsheet to stare at on your screen, until you go cross-eyed.

[Peter_Spaeth]

I would bet a lot that a basket of higher graded elite prewar cards and Mays and Mantle rookies and 52 Topps would best the S&P 500 by significantly more. Yeah you can qualify it in a hundred ways but it's still pretty damn interesting, isn't it? Thank you for the charts btw.and to Charles for the first chart.

[Johnny630]

I’ve been investing through my employer's 457b plan 100% of my allocation in the S&P500 ETF Low-Cost Vanguard Fund since I was 23 in 2005. I’ve been increasing my contributions once or twice a year depending on if we get a cost of living or not. I maxed out said contributions this year at $20,500. If the government allows me to keep increasing I will until it’s maxed. I’ll stay fully invested 100% allocation into the S&P 500 until I’m 55. The last 7 years will be far more to safety. Will retire at 62. So far I’ve been very pleased with my returns.

[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.

[Republicaninmass]

Originally Posted by Peter_Spaeth

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

Now the sales are totally legit,!

[Peter_Spaeth]

Originally Posted by Republicaninmass

Now the sales are totally legit,!

LOL of course.

[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

[Peter_Spaeth]

I will never forget a certain one time major AH owner telling a dealer friend of mine, I can show any price realized I want. I also recall cards that had "sold" in that AH showing up literally within a week on ebay -- with a guy I knew to be close to the AH owner -- at 70 percent of the sale price or less. Dirty industry, always has been.

[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.

[Peter_Spaeth]

Originally Posted by rats60

Those cards weren't paid for.

But they were reported by the AHs, certain ebay sellers, and VCP.