2021 Exit Strategy

[bcbgcbrcb]

I would like to ask for various opinions on this subject. 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. In hindsight, my big mistake was taking the money as fast as it was coming in and buying HOF rookie cards (which is my strongest area of expertise) for all 5 team sports spanning all eras from pre-war to modern. One good thing was that I bought only the best of the best so no mid-lower tier HOF'ers.

Fast forward 2-2 1/2 years later to today and, obviously, just about every single card that I bought has either maintained value (best case scenario) or dropped by as much as 80% in some cases. Also to note, I will soon be 55 years old with significant health issues which will most likely prevent me from ever working any real type of full-time job again, nothing at all since August, 2017 and have been denied disability four times already and won't reach social security age for another 7 years. So, my only source of income is whatever I can make from my collectibles, buying and reselling.

Thus far, two years into this situation, made significantly worse by the economy/inflation as it has done to everybody else, my exit strategy for moving all of these 2021 purchases was initially to begin liquidating by lowest value first, thus, regardless of percentage loss, will not be a huge dollar impact. Much of that inventory is now gone. As I mentioned simply holding everything and waiting for a better market is not an option as I need funds every month to pay my bills to live on.

Moving on, my next strategy has been to liquidate the ultra-modern stuff of all values, which seems to have taken the biggest dip over the past couple of years. I am still in the process of doing this. From here, my longer-range plan is to begin with the early 2000's stuff and work backwards by decade to bridge the gap until social security age or disability approval or possibly going back to work one day.

Given where I'm at right now, would anyone recommend a different plan going forward or a different alternative for what I have already done (too little to late probably but at least I'll know)? Also, any specific rookie cards from the 1960's era to current that could be expected to regain value when the market improves and be the best alternatives to hold on to longer term? One more note, I have an inordinate amount of money invested in a couple of Star Jordan rookies. Do you think those are must holds or better to liquidate at roughly a 50% loss and put the money into Mantle/Mays/Aaron rookies instead?

[raulus]

Hi Phil -

Sorry to hear about your health troubles. That is no fun at all.

I'm still very much in the accumulation phase of my collecting, so I'm not much of an expert when it comes to liquidating.

If I'm reading your post correctly, it sounds like you have a relatively short horizon in terms of liquidating your collection, potentially as short as just a few years. In your post, you raised the possibility of dumping some of your current pieces in favor of buying others, I guess with the hope that you'll make more money in the process because the newly acquired pieces will do better over the next few years, at least compared to the ones that you sell today.

My personal observation is that short-term holds are often challenging, at least when it comes to trying to make money for those of us poor slobs who aren't dealers. Selling some Jordans today to buy 50s and 60s HOFers to hold them for just a few years might work out for you. Or it might not. Over such a short window, I don't think any of us have a really strong grasp about where the market will go, and whether you'll come out ahead.

Naturally, if you're able to successfully play dealer by getting high retail on everything you sell, and on the other hand buying everything at 50% of retail, then go nuts. You'll probably be just fine, assuming you can actually buy and sell at those prices.

But absent that sort of really nice setup where you can buy cheap and sell for high retail, I would be inclined to not try to trade in and out of pieces just to make money. My inclination would be to keep doing what you're doing - selling off pieces as it makes sense. Although I might tweak your approach slightly in terms of ordering. My focus would be to sell off pieces that are at or near their all-time highs first, and then get to the weaker pieces later. Selling into strength is usually a much better recipe for getting top dollar, and in the meantime if you're really lucky, maybe your weaker pieces will strengthen by the time you get around to selling them.

[Exhibitman]

https://adamstevenwarshaw.substack.com/p/selling-it

I am sorry for your situation, Phil.

As for what to do, no offense meant, but it sounds to me like you need a bit of a reality check. Selling off items to buy into a rapidly rising 'hot' market and not having a plan to take profits fast was NOT the right plan; it is a mistake that has been made repeatedly since the junk wax era. At this point, I don't think it makes sense to try using the same model to chase a different result. Your plan is inherently risky because card investing is a highly speculative, competitive field with terrible entry and exit costs and literally no bottom to a bad investment except the commons bin.

Your path, based on your statement of status, is to get out and stay out of the card business. Like a fat woman in a bikini, it is not for you (i can say that because I am a fat man who doesn't take his shirt off at the beach). You say you need the money to live. Any financial planner will tell you never to speculate with money you need. Whatever you get out, do not put it back in, bank it. And check with your CPA about tax losses that you might be entitled to claim on a soured investment.

Hoping for a massive bounce on the Jordans is folly. Just to get back to par would require a raging bull market and, frankly, there are enough Jordan cards out there to make that unlikely in your compressed time frame. Best bet would be to arrange a private sale (to avoid the transaction costs) with a retail collector. About the only thing I can think of is that if the cards are in Beckett holders, cross them to PSA. If they cross, that will be worth it.

[Peter_Spaeth]

I would seriously consider selling everything now and consulting with a financial planner about the best way given your situation to invest the proceeds. If these are vital resources, I would not leave your welfare to the whims of the card market.

[perezfan]

So sorry to hear of your health issues... such a bummer. The current inflation and gas prices are a killer, and it especially impacts the unemployed/under-employed and retired segments of the population who have limited earning potential. And even if the rate of inflation slows, the prices are never going back to what they were pre-pandemic.

I'd sell off the ultra-modern stuff first. While the market has dipped a bit, I think you should still get what you can. Quality vintage stuff is far more likely to retain its value... especially in tough times.

Also, have you tried hiring a Disability Attorney? I know it differs by state, but in many cases, a legal specialist will know how to work the system and properly submit the paperwork to get you started and eligible for Disability benefits. I know that dealing with this faction of the government is beyond frustrating, and seemingly unfair as to who receives benefits and who doesn't. So perhaps a Disability Attorney can cut through the red tape.

Hope this helps and best of luck!

[G1911]

Do not spend more than you can afford to lose on toys.

Do not ask a bunch of junkies and people with a vested fiscal interest in pumping a market with a history of giving horrifically irresponsible financial advice if you should invest in the same assets.

Do not count on a collectible with recent huge jumps to inexorably gain value.

Do not empty your 401K or take out loans to buy baseball cards.

Do keep some cash on hand. Do diversify your investments. Do seek financial advice from people without a conflict of interest. Do invest in things that the powers that be also rely on and will do anything it takes to keep going positively over the long haul.

[GeoPoto]

If all your money is in cards (which is what it sounds like), my advice would be to liquidate 90% of your card holdings as soon as practicable and put the proceeds in some combination of CDs and/or bonds maturing within the next 15 years. With the residual 10% of your card holdings, do whatever makes you happy.

[Exhibitman]

High yield savings accounts are good right now too. The best ones are paying better than the current rate of inflation, at least until the next reset.

[oldjudge]

Hi Phil! I'm sorry to hear about your troubles. I think you have gotten some good advice so far. My only other suggestions would be to make sure you also discuss this with your family. Also, if you can set up at card shows I would think that you have mobility. Is there any type of part time work that you can do from home to supplement your cash flow? That might buy you more time for liquidating the cards in an orderly manner. Good luck!

[bcbgcbrcb]

Thank you all for the advice thus far. So if I’m hearing correctly, the consensus is to continue selling off pretty much as I have been doing but don’t use those funds to buy back more cards to invest in. Glad I asked, that’s exactly what I’ve been doing all along. If I eliminate that part of it, will need to sell much less to survive. So, I guess the question then becomes, am I better off selling now all of those cards that I overpaid on back in 2021 and banking the money or holding on to them with the hopes that values come back one day closer to where they were when I bought them. I know, nobody has a crystal ball to know that, wish I did.

Either way, seems like the damage has already been done with no way to recoup those funds. Am I correct there? Just making better decisions going forward with investing the money elsewhere?

[Peter_Spaeth]

Originally Posted by bcbgcbrcb

Thank you all for the advice thus far. So if I’m hearing correctly, the consensus is to continue selling off pretty much as I have been doing but don’t use those funds to buy back more cards to invest in. Glad I asked, that’s exactly what I’ve been doing all along. If I eliminate that part of it, will need to sell much less to survive. So, I guess the question then becomes, am I better off selling now all of those cards that I overpaid on back in 2021 and banking the money or holding on to them with the hopes that values come back one day closer to where they were when I bought them. I know, nobody has a crystal ball to know that, wish I did.

I think we are all telling you to sell them now and put the money someplace safer. What you paid is irrelevant, really, except to calculate gain or loss for tax purposes. The issue is how to best provide for the future, going forward.

[Peter_Spaeth]

Also, depending on the grades and above all the centering, those 101 Jordans might do better if you crossed them to PSA. Although the centering even on the high grade BGS ones might argue against that. But at equivalent grade, PSA will far outsell BGS.

[oldjudge]

Originally Posted by bcbgcbrcb

Thank you all for the advice thus far. So if I’m hearing correctly, the consensus is to continue selling off pretty much as I have been doing but don’t use those funds to buy back more cards to invest in. Glad I asked, that’s exactly what I’ve been doing all along. If I eliminate that part of it, will need to sell much less to survive. So, I guess the question then becomes, am I better off selling now all of those cards that I overpaid on back in 2021 and banking the money or holding on to them with the hopes that values come back one day closer to where they were when I bought them. I know, nobody has a crystal ball to know that, wish I did.

Either way, seems like the damage has already been done with no way to recoup those funds. Am I correct there? Just making better decisions going forward with investing the money elsewhere?

No one knows what the future will be for card prices. What is likely, however, is that it will be volatile. What you need I believe is stability in cash flow. You can get that with short term fixed income instruments. I would not tie up funds in long term bonds because if interest rates continue to rise and you need to liquidate early you could lose money there too.

[raulus]

Originally Posted by bcbgcbrcb

Thank you all for the advice thus far. So if I’m hearing correctly, the consensus is to continue selling off pretty much as I have been doing but don’t use those funds to buy back more cards to invest in. Glad I asked, that’s exactly what I’ve been doing all along. If I eliminate that part of it, will need to sell much less to survive. So, I guess the question then becomes, am I better off selling now all of those cards that I overpaid on back in 2021 and banking the money or holding on to them with the hopes that values come back one day closer to where they were when I bought them. I know, nobody has a crystal ball to know that, wish I did.

Either way, seems like the damage has already been done with no way to recoup those funds. Am I correct there? Just making better decisions going forward with investing the money elsewhere?

I think it depends on how badly you need the money to get by. Or in other words, how tight are you financially? Do you need to sell everything and cash out at today's values just to barely squeak by? Or do you have some cushion - and if so, how much?

If you've got some cushion, then you have the flexibility to let some of these pieces ride and not sell now. Pick some that make your heart sing, and that you hope will rise between now and when you need that portion of the money later. Sell the rest.

If you're really tight, with really no room to spare, then I agree with the others that it's a better idea to just sell everything now and invest in some short-term, low risk assets, like a money market fund or some CDs. No sense in risking your ability to survive on the cardboard market, particularly if you're talking about a window of a few months or a few years.

[packs]

I wouldn't hold out for any return to the market of 2021. The market was at an all time high then and even though cards may one day approach those values again, it won't be any time soon.

[jimq16415]

Originally Posted by perezfan

Also, have you tried hiring a Disability Attorney? I know it differs by state, but in many cases, a legal specialist will know how to work the system and properly submit the paperwork to get you started and eligible for Disability benefits. I know that dealing with this faction of the government is beyond frustrating, and seemingly unfair as to who receives benefits and who doesn't. So perhaps a Disability Attorney can cut through the red tape.

I just went thru all that and agree about the disability attorney. They know what SS requires for you to be approved and they'll get the needed things from your doctor. If you get approved then SS pays your monthly amount (your projected amount if you retired at full retirement age) going back to when they determine you were disabled or when you first applied. The disability attorney takes 25% of that check, so if they don't feel you have a winnable case they won't take it. After that you'll owe them nothing. I think there's rules against them charging more. If you do get approved you're eligible for medicare in 2 years instead of waiting till you're old enough.

I also agree with selling the modern either way for what you can get. And don't buy more. Use the money you get to pay off higher interest stuff first.

Good Luck. It'll get better

[ALBB]

yes, sad story ,no doubt

I'm glad my collection is and has always been lower grade/ beat up/ for fun stuff.

Im sure it has $ value...but it was never something I needed to rely on for - " cashing out purposes " down the road

[Kco]

Not knowing your financial needs on a month to month basis or your rough collection value, It's semi hard to answer the question of what you should do. Is your collection worth $1 million and you need $40k to live on? In that case, I'd sell a few pieces here and there to fund it. I do agree, the modern stuff would be the first stuff I'd sell off. Quality vintage has and should hold up over the medium and longer term. As for the STAR Rookie, they were hyped up and pumped up massively in 2022 artificially in my opinion. I'd take the money there.

[bcbgcbrcb]

As far as the disability situation, you guys are 100% correct. I realized the same early this year so hired a law firm down here in FL to represent me this fourth time around in applying. They advised me right away of the long-term process involved, likely around 3 years, so it will definitely be a long haul but I hope to get approved one day. At least that shortens my wait time to another 2-3 years to collect some kind of monthly income as opposed to 7 years with Social Secirity.

[JollyElm]

(Author's note: this is a blatant attempt to add a bit of humor to the proceedings, so any investment advice given should be taken with a bucketful of salt.)


My advice? Sell everything right now and put all of your money into buying as many of these cards as possible!! The Gregg Jefferies Rookie Card train is on the verge of leaving the station, and the next stop is Huge R.O.I. Town...so it's time to climb on board!!!!!

GreggJefferiesRookie.jpg



There are quite a few of us on the site going through serious and problematic health issues, so you're definitely not alone. It is tough, but we're all with you. Some people have offered some top notch advice so far, which is excellent. Hang in there!!!

[timber63401]

Originally Posted by bcbgcbrcb

Thanks again for all of the input, guys. If I refrain from reinvesting any more money from sales back into cards, I need about $1,500/mth for basic living expenses (cost of living down here is much more reasonable than NJ, that’s why we came down here in 2015). So, if I sell about 5% of what I have each year for the next 7 years until SSI age, that gets me about the bare bones minimum to live on and still have around 65% of the collection to do as I wish with as I go along or hold long-term for the future. My plan would then be to hold on to the pre-war and 1950’s GOAT rookie cards to make up as much of that 65% as possible. Seems like this would be a much better direction to go.

As far as the disability situation, you guys are 100% correct. I realized the same early this year so hired a law firm down here in FL to represent me this fourth time around in applying. They advised me right away of the long-term process involved, likely around 3 years, so it will definitely be a long haul but I hope to get approved one day. At least that shortens my wait time to another 2-3 years to collect some kind of monthly income as opposed to 7 years with Social Secirity.

Id sell $2000 worth a month if you need $1500 bare minimum. Stuff comes up. Good luck on whatever you decide. Its a tough decision no matter how you look at it.

[Casey2296]

$375,000 invested in dividend paying stocks, laddered Cd's, etc. paying an average of 5% yield gets you $1562.50 in monthly income. There are also income producing ETF's/funds that yield higher than 5%.

Not sure if your card holdings have that much value, this is just an example.

[bcbgcbrcb]

Don’t worry, I had my share of Jeffries rookie cards back in the late ‘80’s. Just one question, is your’s the Tiffany version or just regular Topps? I know better than to buy that junk wax stuff now, only looking for the premium cards.

[glchen]

Phil, I'm definitely very sorry to hear about your health situation and wish the best for you on that front.

Financially for your questions, I think a lot of the posters have already given their advice. From my side, the first thing I thought of, was first to make sure that you maximized your tax benefits through all of this, if it were relevant. It may not have much of an impact if you don't have much of an income these days. However, if you did have capital gains that you needed to offset with capital losses, make sure to take those things into account.

The next thing was imagining what I would do in your situation. First, this could happen to anybody, so I wouldn't beat yourself up too much on this. In hindsight, everything is 20/20, so obviously now, everyone can say that you should have just invested all of that money that you made from selling your Negro league cards and bought Tesla or Nvidia stock. Back then, no one had a clue, and lingering too long on it will only hurt your mental health. Just accept the situation and move on.

As others have said, I'd first take stock of what your expense are each month, which you said in a later post are around $1500. First sell a little more than that, so that you are comfortable and not stressed out about the situation too much. When we are under too much stress or mental pressure, that will usually be when we make mistakes with your investments and financial decisions. So first sell enough so that you are not under this pressure.

For what to sell first, I would use your hobby knowledge. I only collect Ruth/Gehrig cards, so I know all of those cards very well, and am not close to being any kind of expert at HOF Rookies. But with your knowledge and expertise, I would first sell those cards that you think would be least likely to go up in the next couple of years, that is, you would expect those cards to have the worst ROI from their current market levels (not from the price you purchased them at). Even though what you said was that you mainly focused on the major HOFers and stars and not the minor ones, my guess would be to sell the least well known or in demand cards first. For example, keep the Mantles and Jackie Robinson's and sell the Karl Malone's and Tim Duncan's. Some cards for a player may be more likely to go up than another for the same player. For example, Goudey Ruth's are usually more in demand than Ruth's strip cards even if some of the strip cards may be much rarer. The cards with better eye appeal are usually more well liked and in demand by collectors, so even in the strip cards, the W516's are much more in demand than the ugly W512 strip cards for Ruth. Again, these are just examples, and I'm deferring to your expertise here.

Next, once you have a basic nest egg where you're not too worried about paying your rent and your bills for the next few months, put together a longer term plan. For example, for your health, determine what your reasonable capabilities are? Can you spend 7-8 hours per day, scanning through ebay, looking for deals where you can make certain profits, re-listing and flipping cards or other things? In order to do these things, you need to have a spending budget and a plan. I usually make a profit, selling cards on ebay, but for me, it's like a secondary hobby to support my card collecting. It's not something where I feel the pressure to make money to support my livelihood. For myself, if I don't make any money or even lose money, it's really not a big deal, but it's not the same situation as you.

For example, the normal thing to do, would be to put most of your cards on ebay with a high BIN price, perhaps even about your purchase price, and then see if anyone bites. You never know. But that way, you will get the price you want. However, with that approach, you may not get any sales for months, and that won't put food on the table. So you would need to put together a strategy that works for your situation.

Finally, for your last question, I think the 1985 Star Michael Jordans can easily shoot up in the future. I'd personally try to hold onto them, but again, you know your situation the best, so you'll have to make that decision as part of your overall strategy.

Good luck, Phil, and definitely wish the best for you.

[JollyElm]

Originally Posted by bcbgcbrcb

Don’t worry, I had my share of Jeffries rookie cards back in the late ‘80’s. Just one question, is your’s the Tiffany version or just regular Topps? I know better than to buy that junk wax stuff now, only looking for the premium cards.

Merely junk wax stuff???? The God of must-have cards, the Gregg Jefferies Rookie???????? You can't be serious, my friend. Wow, I've never realized two collectors could be so far apart on bankable hobby knowledge.

[The Detroit Collector]

Hey Phil,
I am very sorry to hear about the health.
You have given me great knowledge and advice. I wish I could return the favor, but I don't have the answer.
There is a ton of great advice in here. I hope everything works out for you.

[Peter_Spaeth]

Originally Posted by bcbgcbrcb

Thanks again for all of the input, guys. If I refrain from reinvesting any more money from sales back into cards, I need about $1,500/mth for basic living expenses (cost of living down here is much more reasonable than NJ, that’s why we came down here in 2015). So, if I sell about 5% of what I have each year for the next 7 years until SSI age, that gets me about the bare bones minimum to live on and still have around 65% of the collection to do as I wish with as I go along or hold long-term for the future. My plan would then be to hold on to the pre-war and 1950’s GOAT rookie cards to make up as much of that 65% as possible. Seems like this would be a much better direction to go.

As far as the disability situation, you guys are 100% correct. I realized the same early this year so hired a law firm down here in FL to represent me this fourth time around in applying. They advised me right away of the long-term process involved, likely around 3 years, so it will definitely be a long haul but I hope to get approved one day. At least that shortens my wait time to another 2-3 years to collect some kind of monthly income as opposed to 7 years with Social Secirity.

By only selling 5 percent of your collection a year, you are assuming the ones you don't sell retain their value (or go up). This is where you got burned before. If as you have suggested the cards are your only or principal asset that will provide needed future income for a number of years, IMO it's much better to put them into a better investment vehicle that will provide a more reliable return. Nobody rational would have an investment portfolio consisting of only or mainly cards. PS just my personal opinion.

[raulus]

Originally Posted by Peter_Spaeth

Nobody rational would have an investment portfolio consisting of only or mainly cards.

100% agree with this statement. Although based on responses to other threads, plenty of our fellow collectors might pursue this asset allocation strategy.

Confession: having ~25% of my own personal assets in cardboard scares me a bit sometimes, although most of that concentration is due to the recent runup in prices over the last few years. Otherwise I would be closer to a much more reasonable 5-10%. Add to it the fact that the cardboard collection is fun money and not "gotta have it to survive", and it feels a little less dire.

At the same time, if what I understand is correct about the OP, then the horse is already out of the barn in terms of holding most or all of his personal assets in the form of cardboard. Now we're just talking about what to do about it given the current lay of the land, and over what time to get it done, particularly given a general plan to divest of the cardboard in the coming weeks/months/years. Bottom line is we're really just rearranging the deck chairs a little by trying to evaluate ordering of sales and whether to sell tomorrow or spread it out a little.

If I were in your shoes, particularly given your relatively short horizon, I wouldn't try to move too quickly to shift everything over. Certainly if you get nice prices that work for you on your stuff, then by all means, sell baby sell. But I wouldn't feel huge pressure to SELL NOW just for the sake of selling so that I can diversify my investments for the next X years.

As others have noted, I would also consider the tax implications. If selling everything tomorrow means you get to pay a fat tax bill, and selling over time means you get to avoid most of that tax by keeping your income in a lower tax bracket and avoiding all those sweet tax enhancers (including at the state and local level for those of us lucky enough to live in high tax jurisdictions), then I would give some serious consideration to minimizing my tax bill, at least within reason, and within the contours of your financial needs and situation. But maybe I'm just projecting because if I were to sell today, then about 40% of my proceeds would go to taxes, which would put a serious dent in any budget.

[samosa4u]

I am sorry about what you are going through at the moment. A lot of people got burned during the pandemic. I did some trades for a LeBron and a Tom Brady card during the pandemic peak and now they are down by eighty-percent! Those b*stards! It's going to take me a while to make that money back! Sucks though!

Now, your investment questions are very specific and nobody has a crystal ball here. You might load up on post-war and ultra-modern goes crazy again. You might load up on prewar and watch it lose value over the years. Again, nobody really knows what is going to happen.

What you can do is diversify though. Go after game-used memorabilia, tickets, photographs, non-sports cards, hockey, etc. This will lower your risk, you know what I'm saying??

Good luck!

[bcbgcbrcb]

Thanks again for all of the input and good ideas, guys. Here is one example, albeit maybe the most drastic. I bought a 1986 Fleer Olajuwon PSA 9 at the all-time record price of $3,000 back in 2021. Today that card regularly sells in the $450 range for the past few months now. That's a $2,550 loss out of a $3,000 investment or 85%. Better to sell now and take that $450 (almost feels like I should just burn the card and be done with it already) current market value or hold? Realistically, it can never/will never get back to even $2,000 again and I would be pretty certain that it never gets back to even $1,000 again but I think it certainly COULD go up in value in the shorter term. On the opposite end of the spectrum, I don't see it dropping in value much more if at all from where it is today. I have many instances just like this, better to sell and pocket the money that's left or hold unless I desperately need the money to live on in the very near future?

[Rhotchkiss]

Originally Posted by Casey2296

$375,000 invested in dividend paying stocks, laddered Cd's, etc. paying an average of 5% yield gets you $1562.50 in monthly income. There are also income producing ETF's/funds that yield higher than 5%.

Not sure if your card holdings have that much value, this is just an example.

I agree with this ^^^.

I have no clue what you own or what it’s worth, but in your situation, I would convert cardboard to cash and consult with a financial planner. I think it’s fine to keep collecting lower price cards, but, unfortunately, I feel your days investing in cards are likely at an end and you need cash flow and a much less risky/volatile asset

[Peter_Spaeth]

From Phil's last question it's pretty clear he is not interested in the big picture advice people are giving. He's just going to keep trickling out cards to meet his immediate cash needs and his only question is which ones.

[Snapolit1]

Personally I would sell what I need to every month and not look back. Regret is not going to get you anything. Just bite the bullet and sell what you need to get by. Your present needs and happiness are more important. And if you sell a little at a time you can drag it out and maybe some cards will bounce back a little.

[Peter_Spaeth]

Originally Posted by Snapolit1

Personally I would sell what I need to every month and not look back. Regret is not going to get you anything. Just bite the bullet and sell what you need to get by. Your present needs and happiness are more important. And if you sell a little at a time you can drag it out and maybe some cards will bounce back a little.

And what if they decline precipitously? Then where is he?

[Snapolit1]

Originally Posted by Peter_Spaeth

And what if they decline precipitously? Then where is he?

Could happen. I'd hedge it and sell slow but regularly. I've been in same predicament with stocks.

If a star player card is down 80% I might take a shot at it bouncing back a little.

Either way a gamble.

[Peter_Spaeth]

Originally Posted by Snapolit1

Could happen. I'd hedge it and sell slow but regularly. I've been in same predicament with stocks.

If a star player card is down 80% I might take a shot at it bouncing back a little.

Either way a gamble.

Perhaps but many would say don't try to catch a falling knife. Applying that logic to particular stocks -- that they can't possibly fall any further -- would not in most people's view be a good strategy.

[G1911]

Originally Posted by Peter_Spaeth

Perhaps but many would say don't try to catch a falling knife. Applying that logic to particular stocks -- that they can't possibly fall any further -- would not in most people's view be a good strategy.

Get reason out of here and pump! Inexorably upwards! The ups are up and the downs are future ups.

[Casey2296]

Originally Posted by Peter_Spaeth

From Phil's last question it's pretty clear he is not interested in the big picture advice people are giving. He's just going to keep trickling out cards to meet his immediate cash needs and his only question is which ones.

I'm not sure what Star Jordon Rookies are worth but Phil (great name) says he over invested in them. The trick is to have your residual income cover your monthly nut, sell the highest value cards until you can set up an income producing portfolio so you know your basic needs will be met, then play with the rest if you want.

Phils mistake was thinking his incredible foresight in collecting Negro players would transfer to his decisions at the height of the market, (I can't even name the top 5 team sports), those were heady times rife with opportunities to lose money if you were drinking the kool-aid, I overpaid for a few cards then too.

The difference is collector/investor dynamic.

I would almost guarantee Phil was a collector of NL and when he sold them he turned into an investor. As a collector I still spend too much on awesome cards, it's my hobby and I love it, but I would never consider myself an investor, I'm not that smart when it comes to cardboard. I just collect what I love.

I feel like we should all meet Phil and have an intervention to square him away so he can get back to being a collector. I'm sure Leon has some rented space in a basement in Cleveland where this could take place.

[Mark17]

Originally Posted by JollyElm

Merely junk wax stuff???? The God of must-have cards, the Gregg Jefferies Rookie???????? You can't be serious, my friend. Wow, I've never realized two collectors could be so far apart on bankable hobby knowledge.

Second worst advice I've ever heard: Invest in Gregg Jefferies rookies.

Worst advice I've ever heard: Invest in 1989 Topps Gregg Jefferies non-rookies.

[Peter_Spaeth]

Originally Posted by G1911

Get reason out of here and pump! Inexorably upwards! The ups are up and the downs are future ups.

If Olajuwon was such a great bargain at his falling knife price of 450, there would be more demand and that would put upward pressure on the price. There is every risk he could go lower.

[Peter_Spaeth]

Originally Posted by Mark17

Second worst advice I've ever heard: Invest in Gregg Jefferies rookies.

Worst advice I've ever heard: Invest in 1989 Topps Gregg Jefferies non-rookies.

Right up there with the relentless urgings of dealers at local shows I used to attend to buy this and that and the other wax box because they were "drying up."

[G1911]

Originally Posted by Peter_Spaeth

If Olajuwon was such a great bargain at his falling knife price of 450, there would be more demand and that would put upward pressure on the price. There is every risk he could go lower.

I've been told this is unpossible, cards are a money printer.

[rjackson44]

Hang in octavio

[Republicaninmass]

I'd just like to make a comment here. I saw what happened during the late 80s early 90s boom of collecting, and that's why I sold off 90%. It's hard to believe people who lived through that, didnt/don't see what's happening. I guess it's the hopium similar to stocks. The hope that this time it will be different.

I followed a portion of Casey's advice. Paid off all debt, and put money into dividend stocks, IRA and CDs. I had actually cashed out my 401k during the Great Financial Crisis to buy real estate and cards. In that respect, it took about a decade to come full circle. I couldn't see what might be me and my family's future, resting on "cards might keep going up"

[bcbgcbrcb]

Phil:

Thank you for adding some humor to the thread, I can sure use it.

Unfortunately, that fateful day in 2014 when I had the heart attack, Phil the Collector pretty much went away, possibly forever, as my income stream from my job went from a high 5-figure salary prior to that to $10K, $10K and $25K over the next three years before zeroing out in 2018 and every year thereafter. Thus, Phil the Investor was born in 2014 as I would need to make the most out of the sports memorabilia collection that I had accumulated up to that point and make it last for the rest of my life, not a "collect what you like" situation anymore. I've had some other things fill in the gaps over the years including Mego's, comics, dollar box cards, etc. but the only significant money comes from the old collection. I feel that I made all of the right decisions handling that original collection, including selling everything throughout 2021, thus, maximizing my return by selling at the peak of the market. Of course, the entire reason that I am in the position that I am in now is because of my ill-fated decision to buy up HOF rookie cards as fast as the sales money came in to keep ahead of the rapidly rising market. You know where things went from there.......

[notfast]

Originally Posted by bcbgcbrcb

Thanks again for all of the input, guys. If I refrain from reinvesting any more money from sales back into cards, I need about $1,500/mth for basic living expenses (cost of living down here is much more reasonable than NJ, that’s why we came down here in 2015). So, if I sell about 5% of what I have each year for the next 7 years until SSI age, that gets me about the bare bones minimum to live on and still have around 65% of the collection to do as I wish with as I go along or hold long-term for the future. My plan would then be to hold on to the pre-war and 1950’s GOAT rookie cards to make up as much of that 65% as possible. Seems like this would be a much better direction to go.

As far as the disability situation, you guys are 100% correct. I realized the same early this year so hired a law firm down here in FL to represent me this fourth time around in applying. They advised me right away of the long-term process involved, likely around 3 years, so it will definitely be a long haul but I hope to get approved one day. At least that shortens my wait time to another 2-3 years to collect some kind of monthly income as opposed to 7 years with Social Secirity.

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

Seems like you have roughly $400,000ish in cards based on the $1500/month 5% sell rate math.

If this is the case and you do not have any other way to survive financially for 7 years, you are not good managing your finances. Like at all.

Sell everything. Find a professional and get your future set up properly.

This is almost hard to believe because you’re saying you heavily invested in stuff that is now worth 25% of what you paid.

Either way, reinvesting in cards should not be an option.

[rhettyeakley]

Originally Posted by notfast

If this is the case and you do not have any other way to survive financially for 7 years, you are not good managing your finances. Like at all.

Not sure this type of response is necessary.

Phil came here for advice and has gotten some solid advice up to this point, not sure why you feel the need to mean about it. You knew you going to come off as a dick but went there anyways!?! Weird.

[samosa4u]

Originally Posted by Republicaninmass

I'd just like to make a comment here. I saw what happened during the late 80s early 90s boom of collecting, and that's why I sold off 90%. It's hard to believe people who lived through that, didnt/don't see what's happening. I guess it's the hopium similar to stocks. The hope that this time it will be different.

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.

[Snapolit1]

There is a lot of BS in the investing world, but the idea that one should diversify broadly is a new brainer. Stocks go down, bonds usually go up . . . . real estate goes up and down . . . etc. Don't put all your eggs in one basket.

[glchen]

I'm going to come off as a contrarian, but all of this sell everything advice, I do not agree with. If you look at financial history, many of the best times to invest are in a down or bottoming market, and the people who end up being worst off are those who sold during these "falling knife" times. Obviously, Phil has to sell something because he needs money to survive on, but I don't believe in this selling everything philosophy. Instead, if it were me, I would use the dollar cost averaging scenario. Just as dollar cost averaging is a recommended investment/saving strategy for buying, it can be the same thing for selling. The idea is that it is very difficult to time the market. Using dollar cost averaging will flatten out your risks, so that you will get some of the highs and some of the lows, ie, you won't get the best gains or the worst losses, but you will be somewhere in the middle.

I don't know how many cards Phil has, but I would try to put all of his inventory in a spreadsheet if he doesn't have one already. I would use the 2017 prices as the reasonable "floor" on the lowest the prices will go. I arbitrarily chose this year since it is pre-pandemic before the huge rise that happened there, and therefore, the prices for this year were not "irrationally exuberant." You can choose another year if you think that is better. Phil's cards will not go to 0. All of his cards as far as I know are HOFers, and not modern cards that folks are "betting" will be big stars in the future. If he held Stephen Strasburg rookie cards, I would say to sell those immediately because those cards could defiinitely go to 0. Hakeem's rookie cards will not go to 0. Saying that, I would still categorize him as a "minor" HOFer and not a gold mint one such as Lebron or Kobe, and put him on the sell earlier.

Therefore once the spreadsheet is put together, I would list the cards with their purchase price, current market value, and 2017 market value. Then based on this information, and Phil's own expertise on future ROI, I would rank each card with the smaller number being sell early, and larger numbers being sell later. Once the list is finished, review the totality of it to see if Phil is comfortable with the selling order, and the expected returns/income that he would be getting by selling each tranche. He would then sell these at regular intervals to get the income he needed to live on, have an emergency nest egg, as well as seed money for whatever business he is thinking of starting to generate future income such as card flipping. As I mentioned in my previous post, he should also consider tax consequences to minimize any liabilities there.

Speaking of taxes, he should also look to getting a seller's permit if he doesn't have one already. Getting a seller's permit means that you don't need to pay sales tax on your purchases, but it does mean that you will need to start filling out Schedule C on your taxes to declare your business income to the IRS (as well as your state's business sales tax forms). Schedule C income is added to your gross income on your income taxes. Typically the capital gains rate on collectibles is at a lower rate that the tax rate for your income taxes, so people often prefer just paying the sales tax and using the capital gains rate. However, if Phil's income is basically around 0 these days, he won't be paying income taxes, and getting the reseller permit may be more advantageous from the tax perspective. Obviously, it can also be a pain to do all of the record keeping if he doesn't have that already, so he still may not want to get the permit.

I want to add one more note to this sell everything discussion. There is an opportunity cost here. If you are selling the cards, you must believe you have a better alternative for your money somewhere else. If you are selling everything and getting a 5% CD, you are saying that you don't think the cards you would be keeping would return you 5% in the next year. If that is what you believe, then I agree, sell. If you think the cards will go up more than 5%, then keep those cards you think will beat that return rate. Of course, you must keep an emergency fund if things go sideways and take into account your risk tolerance threshold.