2021 Exit Strategy

[Kco]

I see a lot of people on here saying cards/memorabilia are not an asset class/good asset class to have a chunky amount of assets invested in. I'd agree and disagree. High quality, High desirability items will whether downturns FAR better than run of the mill low grade items.

I have a portion of my collection I'd classify as "purely enjoyment" (think 10-15%). Thats where i collect players or teams I love and don't care all that much about the value change.

The other 85-90% is in high grade premium Vintage autographs/Memorabilia. It so happens that I also enjoy collecting those items, but I make no mistake that those are also investment vehicles. The good news there is most of those items are at or above value wise what I paid over the years, some substantially so. Think High Grade autos on Ruth, Mantle, Jackie Robinson, Clemente etc etc.

There are certainly blue chip areas of collecting to hold investments in, looking back at the last few financial downturns (including 2022), those items have remained very resilient, where as things like stocks, index funds, bitcoin etc have actually gone down further percentage wise and are still lower value today than anything memorabilia I bought and held in the same window.

[the-illini]

Originally Posted by notfast

I’m going to come off as a huge dick but that’s OK.

No, it’s really not ok.

[Peter_Spaeth]

Phil's situation as he describes it is one in which he cannot take risks. That changes the analysis completely in my view. If you can afford the downside risk, sure there are collectibles that are potentially great investments. And they are fine to own in a diverse portfolio. I hope I own some myself. But someone with no reserves on which to live should not be in collectibles exclusively or even to any significant extent and maybe not at all. The name of the game for Phil should be safety.

[Yoda]

Phil, so sorry to hear about your situation. If I was you I would sell off all your 50's RC and amass some capital that would produce income in a safe investment, money market, CDs etc. Your other cards you could sell at your leisure when the opportunity strikes. Good luck.

[Republicaninmass]

Originally Posted by samosa4u

I was born in the 80s and so I don't remember this boom. The same goes for most of the people who got burned during the pandemic. They were too small or weren't alive then.

Hence the reference to "people who lived through that". I was born in 76, but was a part time "dealer" in 1990

[egri]

T-Bills are yielding over 5% right now, are much less risky than cards, and have short durations so you can take money out as needed with a little bit of planning.

[raulus]

Originally Posted by egri

T-Bills are yielding over 5% right now, are much less risky than cards, and have short durations so you can take money out as needed with a little bit of planning.

Hopefully the high rates stay with us for a while. Personally, I'm paranoid that they won't stick around that long. Maybe a year? Although with any luck, even if they drop, they'll stick higher than 0.000001% like they were for the last forever.

At the same time, the WSJ had a pretty extensive article today about how higher rates are likely here to stay, and the impact that will have on several sectors of the economy, from cars to commercial real estate to savers and retirees. So maybe even if we're not getting 5% in perpetuity, maybe we'll at least get 3%.

[Johnny630]

Originally Posted by raulus

Hopefully the high rates stay with us for a while. Personally, I'm paranoid that they won't stick around that long. Maybe a year? Although with any luck, even if they drop, they'll stick higher than 0.000001% like they were for the last forever.

At the same time, the WSJ had a pretty extensive article today about how higher rates are likely here to stay, and the impact that will have on several sectors of the economy, from cars to commercial real estate to savers and retirees. So maybe even if we're not getting 5% in perpetuity, maybe we'll at least get 3%.

Higher for Longer unless we get a nasty recession which I do not think will happen. I think 4%-5% is here to stay the next two years.

[raulus]

Originally Posted by Johnny630

Higher for Longer unless we get a nasty recession which I do not think will happen. I think 4%-5% is here to stay the next two years.

That’s the trick, right? If the economy takes a nosedive, rates will fall pretty quick.

[Republicaninmass]

Originally Posted by Johnny630

Higher for Longer unless we get a nasty recession which I do not think will happen. I think 4%-5% is here to stay the next two years.

When nobody thinks it will happen, it will. Plenty think it will happen so I don't know anymore

[Johnny630]

Originally Posted by Republicaninmass

When nobody thinks it will happen, it will. Plenty think it will happen so I don't know anymore

I think we’re gonna be OK. The landing so far has been very soft. I believe it will continue to attenuate and the rates will stay high 4 hovering around 4-4.5. Then life could happen, who the hell knows lol.

[Peter_Spaeth]

Economists have predicted 9 of the last 5 recessions -- Paul Samuelson.

[Mark17]

Originally Posted by Peter_Spaeth

Phil's situation as he describes it is one in which he cannot take risks. That changes the analysis completely in my view. If you can afford the downside risk, sure there are collectibles that are potentially great investments. And they are fine to own in a diverse portfolio. I hope I own some myself. But someone with no reserves on which to live should not be in collectibles exclusively or even to any significant extent and maybe not at all. The name of the game for Phil should be safety.

It seems one of the early sentences in the original post has been forgotten: "A little background, I sold off my Negro League baseball memorabilia collection along with a smaller comic book collection back in 2021 at the peak of the market, of course, realizing strong prices for most all of those items."

So, apparently the OP built a collection, sold it at or near the very top of the market, and now is looking at having to give back some of those profits. My point is, considering all, he's probably still in pretty decent shape overall. So that's a good thing.

If the OP did an analysis of how much money is needed over the next 7 or 10 year timeframe, factoring in some anticipated inflation, then looked at how much his current collection could realize if sold tomorrow (and put into T-bills or CDs,) it would seem that would be the sensible, and non-exciting, thing to do.

I've found building a 1962 Post Cereal baseball set has been a lot of fun, and it's very budget-friendly. Once in awhile I'll pick up a T-202 common. So the OP could still participate in the hobby as a collector, just not as a serious investor.

[Peter_Spaeth]

Mark, I think he spent what he took in on cards, because elsewhere he offers a computation on what percentage of his cards he will need to sell each year to generate the income he needs to live on. He doesn't mention having anything else put aside for that purpose, either cash or other investments.

[Mark17]

Originally Posted by Peter_Spaeth

Mark, I think he spent what he took in on cards, because elsewhere he offers a computation on what percentage of his cards he will need to sell each year to generate the income he needs to live on. He doesn't mention having anything else put aside for that purpose, either cash or other investments.

Right. So if he spent what he took in on cards (which he sold at the top of the market) and now sells them for maybe 50% what he paid, he's in decent shape. If your collection goes from $100 to $200 then you sell and re-buy stuff which you then have to sell at 50%, you end up with your $100 back. Roughly.

Then we are both suggesting he puts that dough into a conservative cash-based, interest bearing savings account.

[Peter_Spaeth]

Originally Posted by Mark17

Right. So if he spent what he took in on cards (which he sold at the top of the market) and now sells them for maybe 50% what he paid, he's in decent shape. If your collection goes from $100 to $200 then you sell and re-buy stuff which you then have to sell at 50%, you end up with your $100 back. Roughly.

Then we are both suggesting he puts that dough into a conservative cash-based, interest bearing savings account.

Agree, his best course is to get all the way or mostly out of cards and into a conservative vehicle. But I don't think he's listening, he's just fine tuning which cards to sell first. You can't make the horse drink, as they say. I hope he reconsiders.

[Leon]

Hey Phil
Sorry to hear of the health issues. I hope that gets better. I, too, think you should be conservative if the finances are so needed. Good luck with everything.
.

[Republicaninmass]

I'd sell asap if the funds are badly needed. If there is some event which triggers others into "must sell mode" there will be a vicious race to the bottom.

[Yoda]

The late '70s were a terrible time economically; long gas lines due to OPEC freeze, prime rate at about 18%, sagging stock market, high inflation and no home mortgages available. Not saying we are headed into a similar scenario, but it sure a time to be careful with your money.