PSA Sets as an investment
Fuzz
Posts: 903
As I was reading through the posts on the 86 Fleer BSKT set in 10, there was some discussion on the investment angle of the set. I think everyone agreed it was poor. This also appears true about essentially every complete or near complete set on the registry. If you have already gotten that far, then you have probably had to pay "low pop" or "pop one" prices for at least some of the cards in your set. If that is true, in time it will be shown that you over paid for at least some of the cards and that will eat into your investment returns.
There are advantages to going first however. It will be easier to defend the top spot in the future than to catch up and pass it. So being early may result in several awards and not just one. There is always a chance (better in some sets than others) that a pop 1 card will stay a pop 1. If it does, you have a gold mine.
It really doesn't seem about money but more about the fun of collecting, competing and being first and winning. (Because really isn't winning pretty fun?). I spent hundreds to get one certificate last year and am spending thousands this year to try for others. In 60's BB a slabbed 8 would be about $15, the same card unslabbed about $2. Throw in the $7 grading fee and $6 of "value" has been created. That comes from the buyer's pocket. I suspect that the people that have top sets don't really need or care about the money in general.
The people that are worried about the investment aspect are net sellers at the moment. The are selling low pop cards for top $ and hope to buy them back later at a fraction of the price. Probably a good bet with the realization that it may be several years to complete the circle. I suspect that the 86 Fleer set in 10 was built for bragging rights. I bet he gets a good six figures worth of bragging out of that set as well.
Fuzz
There are advantages to going first however. It will be easier to defend the top spot in the future than to catch up and pass it. So being early may result in several awards and not just one. There is always a chance (better in some sets than others) that a pop 1 card will stay a pop 1. If it does, you have a gold mine.
It really doesn't seem about money but more about the fun of collecting, competing and being first and winning. (Because really isn't winning pretty fun?). I spent hundreds to get one certificate last year and am spending thousands this year to try for others. In 60's BB a slabbed 8 would be about $15, the same card unslabbed about $2. Throw in the $7 grading fee and $6 of "value" has been created. That comes from the buyer's pocket. I suspect that the people that have top sets don't really need or care about the money in general.
The people that are worried about the investment aspect are net sellers at the moment. The are selling low pop cards for top $ and hope to buy them back later at a fraction of the price. Probably a good bet with the realization that it may be several years to complete the circle. I suspect that the 86 Fleer set in 10 was built for bragging rights. I bet he gets a good six figures worth of bragging out of that set as well.
Fuzz
Wanted: Bell Brands FB and BB, Chiefs regionals especially those ugly milk cards, Coke caps, Topps and Fleer inserts and test issues from the 60's. 1981 FB Rack pack w/ Jan Stenerud on top.
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Comments
Well said wabbitwax.
I was talking with a member of our community last night about this "pride" and the stupid money that gets in the way. And in this case, the SMR's attempt to catch up.
The card was the 1952 Topps Herman Wehmeier. A few years ago, this was THE toughest card in the set. I believe there was only one 8. Then the next 8 became the first one available to the public in a Mastro auction. I can't remember exactly what it went for, something like $12,000.
Then, of course, they started slowly coming out of the woodwork, with prices like that. The next one went for about $8,000. Then I think there was about 3 more over the course of two years, each one declining about $2,000. The SMR was attempting to pinpoint the value,and of course they were behind as they tried to scramble with its true worth. Paitience will $ave you, but pride will take the front seat if you have the ego and cash to support your whim.
I know someone will probably correct the exact figures of the card, but that's not the point. Sets as an investment would probably not be your priority. By investment we mean appreciation potential.
And when you go "silly" for one card that puts a dent in that fender.(one more car reference)
Do it for fun!!!
I tottally agree with you. One dealer told be about 9 months ago that the registry has created this
ego-driven state where people are trying to compete for the best sets overall. I think he is right. They are trying to put the best set together and thus that means paying big dollars for certain cards. As people see that cards are bringing more money then they get their cards graded because they see the opportunity to cash in big on a certain card .....thus there are more of a particular card out there and the price goes down because the card is more available and there are not as many people competing for one card since some people already have that particular card.
At one point I had several 1986-87 Fleer BKB sets and I sold them periodically over the last few years....While a PSA 10 Set is very impressive since it is hard to acquire all of those 10's; there is still plenty of raw 1986-87 fleer out there, and I would bet that there are still cases somewhere sitting around so I would say that 10's of each of the 132 cards is still out there. So I would not count on this as being a long term investment.
Carlo
<< <i>Pride will cost you alot of money >>
Reminds me of a scene from "Pulp Fiction" where Mr. Marsellas tells Butch what to do when that
feeling kicks in. Butch didn't listen and made lots of money....
aconte
Whenever you look at something as an "investment"...you have to have a framework that includes 1) Over what timeframe and 2) Compared to what other use of capital.
The thing that sticks out at me is the many(not all) of the sets are both built and sold "ASAP" and "at any cost". This tends to make the investment in the set higher (buy at any cost) and the proceeds from the sale a crapshoot (sell at whatever happens to be the prevailing sentiment at any given point).
I honestly believe that graded sets CAN be a good investments...but you have to search out and be able to recognize value.
Regards,
Alan
<< <i>these are just pieces of cardboard >>
WABBITTWAX - With that said remember that "money is just pieces of paper" but none the less both the "paper" and the "cardboard" do have a value
Website: http://www.qualitycards.com
I believe that if you are collecting as an investment then you should not call it collecting. Somehow the person who has the 86 Fleer BSKT set in 10 did not assemble it thinking they would make a profit selling it. At least I hope not.
All I am saying that what is right for you may not be right for someone else but that doesn't make it wrong.
Just my 2 cents.
Chris
Regarding Jay's (qualitycards') comment: <"remember that "money is just pieces of paper" but none the less both the "paper" and the "cardboard" do have a value.">
Yes, but the green stuff has the backing of the full faith and credit of the United States of America. My card collection has a much less firm backing of the full faith and credit of PSA.
Regarding Alan's (acowa's) comment: <"I honestly believe that graded sets CAN be a good investments...but you have to search out and be able to recognize value. ">
Very true, but capitalizing on the supply side of the equation is only half the battle. Demand must be continually stoked for the good investment concept to continue. I'm glad to see competition on ebay for cards I need, even if I lose auctions from time to time. I'm even more happy to see new sets registered on the Registry. In the long run that will push the demand side and if I did a good economic job in building my set, it will yield a good investment return.
Personally, I build sets in multitudes of ways. In no particular order, I (1) Buy graded cards, (2) Buy raw cards to get graded and wait for a special, (3) Buy sets or near sets to merge with mine and sell off the excess, (4) trade with others and (5) shamelessly trade my time to work for cards as an apprentice to big-time dealers at shows.
RayB69Topps
Though many modern cards have gone down in value -- the price of unopened vending, wax and cello from the years 1976 - 1980 all have risen, sometimes dramatically. Many vintage cards, though exceptionally rare, do not seem to realize great returns on investments. Nonetheless -- specific examples seem to do exceptionally well. Babe Ruth singles, Black Sox singles (Buck Weaver, Joe Jackson, etc.), as well as Ty Cobb, and certain high-grade commons. Sets, singles and cards seem to come in and go out of favor over time. You can often build a nice empire of cards if you keep an open mind, buy when low and sell when high. PSA 10 cards have shown huge increases in the 1997 - 2002 timeframe, though certain years and players have gone down in value.
Yes -- it is largely about the fun of collecting. But some people are putting enough money into certain of their sets that it can equal a significant portion (if not more) of a year's salary. When that much dough is being pumped into the hobby, I think a fair consideration ought to be given to the investment. Some have more money to put into the hobby than others -- and it is usually those types of people that are more able to pay the insane prices to build their sets. Others are more selective and patient in what they build.
MS
<< <i>Pride will cost you a lot of money and in the long run, these are just pieces of cardboard. >>
That has to be one of the quotes of the year... Time and time again I have seen Ego drive prices substantially over book price!
My thoughts on the subject that PSA sets can be an investment are as follows:
1.) The key to almost any investment is the acquisition price. If you acquire the cards at the right price it is much easier to sell them at a profit down the line...Obviously probably the best way to do this is to acquire the cards raw and submit them your self . But in some instances (depending on your ability to grade raw) and the PSA SMR EBAY might be the way to go ... Make sure you watch the shipping charges...
2.) What is the market like for this issue both raw and graded. Is there a large supply of cards available? Are prices normally selling near SMR or substantially below it? Are there certain tough cards that make a set very difficult to complete? What is the hype value of a full set... Ie how often do you see a raw set on EBAY? If not very often then a graded set will show lots of hype as well.and may do well in an auction.
3.) Remember that if you want to get a good return you may have to hold your investement for a significant amount of time(Remember MOney has a time value relationship ) and the longer you hold the set the more your costs go up.
Just my 2 cents on the subject...Jeff
In the situation that I'm in - I just can't afford to do that.
With most complete graded sets from the 60's and 70's running into the thousands, but more likely 10's of thousands of dollars, it only makes sense "for me" to keep an eye on value and price. I don't envision selling the cards in the short term, but then again I don't envision getting laid off, having major health problems or needing to raise cash quickly for whatever reason. I've got family goals, career goals and retirement goals that take priority over my card collection.
Every one on this board builds sets because they enjoy them - whether they be full sets, team sets, player sets or whatever. Beyond that, the choice to spend whatever or keep to a budget is a personal one.
Bottom line - no matter what you spend, you'll probably still do better with cards than you have in the stock market the last 3 years...
Sets - 1970, 1971 and 1972
Always looking for 1972 O-PEE-CHEE Baseball in PSA 9 or 10!
lynnfrank@earthlink.net
outerbankyank on eBay!
<< <i>Every one on this board builds sets because they enjoy them - whether they be full sets, team sets, player sets or whatever. Beyond that, the choice to spend whatever or keep to a budget is a personal one.
Bottom line - no matter what you spend, you'll probably still do better with cards than you have in the stock market the last 3 years...
Frank,
Good points. I regularly spend more than I should for cards. But, I enjoy them. If I needed the money, I could probably get a decent % of what I have into my collection back, whereas my more traditional investments (Stocks, IRAs, 401ks, etc) have taken a considerabe nose dive over the past few years.
Does anyone else here agree with this theory?:
If I complete vintage baseball card sets in PSA 8 or better (1960 - 1975 Topps Baseball is what I'm currently collecting - no "vintage" arguments here please
Any thoughts?
JEB.
<< <i>don't you think that this may be a great long term investment (10-20 years) >>
All of these conversations are a bit incomplete without the discussion of entry price. I would agree with the statement if your entry point was low enough. I would disagree with the statement if you entry point was too high.
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Just a comment on your post. Nothing beats the return of the stock market over the long term.
Over a 20 year period my money would be on the market especially given the current lows.
The market will probably out perform most investment vehicles in the next 20 years - including
Psa 8 sets (if you would even call them investments).
My opinion...
aconte
<< <i>If you acquire the cards at the right price it is much easier to sell them at a profit down the line... >>
I read a similar statement on this forum a few months ago, and I wholeheartedly agree.
In dealing with sellers, sometimes I feel like I feel bad for "nickel and diming" over trading cards instead of simply paying their asking prices. Now I realize there is no other way, for those with limited resources, to approach this hobby. When you buy a card for more than you should, it will that more difficult for you to recoup your money down the road. If you multiply this over the course of several 700 card sets, this could add up to greatly diminished profits or perhaps even some losses.
Now that I have heard others say the same thing, I no longer feel like a cheapskate.
<< <i>Nothing beats the return of the stock market over the long term.
Over a 20 year period my money would be on the market especially given the current lows.
The market will probably out perform most investment vehicles in the next 20 years - including
Psa 8 sets (if you would even call them investments). .......
Aconte,
I'm not trying to compare my collecting with any serious investments such as stocks, bonds, IRA, 401k, etc. that will, in the long term, far outgain any collectible items, but, don't you think that 20 years from now, I might not realize quite a decent profit for my present collecting efforts? This is all in fun now and I am not anticipating any future gains but, wouldn't it be great if the $50,000 investment in cards that I have now may be worth $500,000 in the year 2025? I just made up the numbers, but say I quit collecting today and just kept the cards safely stored in my closet, wouldn't it be possible to eventually expect significant returns on my initial investment considering supply and demand?
JEB.
<< <i>This is all in fun now and I am not anticipating any future gains but, wouldn't it be great if the $50,000 investment in cards that I have now may be worth $500,000 in the year 2025? >>
Anywhere approaching that would be absolutely fantastic. I would take a second mortgage on my house to purchase more cards if that were the case.
It's possible the returns on some graded cards could be significant. I don't disagree on that at
all. I think your best bet though is like you said enjoy your collection. I do. And then at the
same time invest in your retirement. And have fun doing both!
aconte
<< <i>JEB,
Just a comment on your post. Nothing beats the return of the stock market over the long term.
Over a 20 year period my money would be on the market especially given the current lows.
The market will probably out perform most investment vehicles in the next 20 years - including
Psa 8 sets (if you would even call them investments).
aconte >>
I agree that you are probably right, but then if any of us had bought complete Topps or Bowman sets anywhere from the beginning through the 60's, and held them, we would have far outperformed the stock market. I believe that someone posted an advertisement from Topps to buy complete sets, either 1964 or 1967 for about $12. Retail for a pack of 6 cards was a nickel. What would $1000 worth, or 20,000 packs of unopened early 60's cards go for now??
Ask yourself this question: If I had $5,000 to invest by day’s end, and my only choices were $5,000 in 1950’s Mickey Mantle and Willie Mays cards OR $5,000 in 1990’s Derek Jeter and Alex Rodriguez cards, what would I chose?
Remember: I am speaking from an investment standpoint only. As a collector, acquire what appeals to you at a “reasonable” price, within your budget.
Joe
Yes, I was speaking specifically about baseball cards. I don't know much about the others.
Skycap
<< <i>As an investment, I believe that cards from roughly the 1948-1959 era will hold up much better than those from later years. It seems that cards from the 1960’s have generally become very plentiful in supply (PSA supply, that is). I’ve read a few times on these message boards about individuals picking out 1960’s cards from vending cases and sending them in to be graded by the hundreds or even thousands. They have essentially flooded the market. ... >>
Skycap,
When you say "plentiful" and "flooded the market", remember, that is the current market. There are more collectors starting graded sets every day. Considering that tens or hundreds of thousands of each card were printed in the '50s and '60s (I don't know the numbers - maybe someone here has more info on print runs), and only a small % of those are worthy of high grades today, there is a very limited supply of these cards. If the current grading phenomenon stands the test of time, I believe anyone collecting graded cards now has a definite advantage of obtaining the highest quality sets ever collected, while paying a lot less than they may be worth in the future. I don't think this is a bad investment. I did much worse last year when I put $2000 in a traditional IRA to reduce my taxes. That $2000 investment (which by the way saved me about $500 in taxes) is now worth about $1300. Even in the short term, I could have done better buying and selling $2000 worth of PSA graded cards.
JEB.
OK, I agree that we disagree. Please proceed to invest your card money in 1991 Donruss Elite and Yao Ming rookies while I continue to collect PSA 8 (and sometimes 9) 1950’s Topps and Bowman. At least we won’t go head-to-head in ebay.