A Great Debate?

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Posted By: Tom Lawrie

This is a horrible hobby for investing. Even collector-investing if you want to make a profit. It's great if you just want a hobby where you can probably eventually sell the cards for close to what you paid for them. But that makes no sense from an investing standpoint, unless you lost your ass in tech stocks and see zero growth as a positive.

Even if you were to consign your cards to a top auction house at some point in the future and maximize your return, they would still take 15%. And unless you got a great deal, you probably paid 15% juice in some form or another when you bought the cards in the first place. So unless your cards increase in value by 30% or more, you haven't made a dime.

Plus, as a recent article in VCBC points out, when a collector sells, they still have to pay income tax on the total sale price; it's better to be considered a dealer in such a case. But then you're no longer an investor.

So buy and collect for the love of the hobby. Otherwise you're better off investing in some crummy low-yield savings account than you are in cards.

So why does anybody ever buy cards for their collection? Because they can enjoy the cards now, and they may not be able to afford or locate them in the future.

OK, OK, I didn't answer the real question: which cards from 1917 to 1941 (or 1945 depending on cutoff) have the most potential to increase in value? I guess a set that has either moderate or moderately high production but with the potential for demand to skyrocket, or a set with very low production and the potential for demand to go up some.

- For moderate quantity, potential to skyrocket: I would guess some of the caramel sets from the 1920s, like E120s, E121s, E220s, E210s, etc. Great hall of famers, you see quite a few out there, but they don't seem to have gone up outrageously in price. Also, some sets like Sport Kings, which are in moderate quantity but are collected by a lot of different segments of the card hobby overall. Many of these cards - especially in nice intermediate conditions, anywhere from a 4 to a 7 - can be had for very reasonable prices (except for the Ruth and Cobb). Anything in PSA-8 or higher in any of these sets is already priced really high, so may not go up at all in the future unless you get a great deal. On the other hand, most Goudeys (and even the lower quantity US Caramels and DeLongs) seem like they've already gone up quite a bit in price over the last few years (in all conditions), so it's hard to say whether they would increase much more in the immediate future. The exception may be the 1941 Goudeys because of their lower production, poor paper quality, and art deco look (or whatever you call it); as a result nice cards are in demand and probably can go up in price.

- For low quantity, potential to go up some: obscure hall of fame rookies, some Cuban issues, Zeenuts, and a lot of the other low volume regional PCL cards if you can ever locate them. Some examples of the latter include: Centennial Flour Seattle Rainiers (issued in 1943, 1944, 1945, and 1947); 1940 Hughes Frozen Confections Sacramento Salons; and Mrs. Sherlock Bread pins of the Toledo Mud Hens (1920, 1922, and 1933). I'm sure there are a bunch more. (Go to a recent issue of VCBC and look up Marc Macrae's number in California; he is more than happy to share his great knowledge of PCL cards.) I would also mention the 1936 World Wide Gum (Canadian Goudeys) set of major and minor league players as an issue with low quantity and with some potential. Many people consider this to contain Joe DiMaggio's true rookie card; plus there are nice cards of Gehrig, Foxx, Dizzy Dean, Connie Mack, etc. None of the major sets issued in the U.S. during this era come anywhere close to the selection.

Most of these different cards that I discussed appear in one form or another in Mastro's current auction -

http://mastronet.com/index.cfm?Action=DisplayContent&ContentName=Current%20Auction

Lew Lipset similarly has a lot of the more obscure and desirable cards in his auctions - here's the link, though I'm not sure when his next auction is scheduled:

http://www.oldjudge.com/oldjudge/web/

Just my opinion.

Good luck,
Tom