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Cards as part of your savings/investments
Buckwheat
Posts: 644 ✭
I have been pondering this idea lately. While we would all like to think that our cards willl be worth much more than we paid for them someday, that certainly is not a guarantee, and you don't earn any return while holding them. But I think that actuallly, they can play an important role in your planning.
Before Ebay, you had to be very knowledgable to be able to buy a card from a dealer, and not walk away with your investment dropping 50% right off the bat when you tried to sell it back. Thus, the turnaround cost was high, which greatly diminished liquidity. The only way to make money under this scnario was if cards continued to rise in vale steadily while you held for a while. For those of you who bought cards 20 years ago, and still hold them, this has actually happened, and you are probably sitting on a nice return.
But now with Ebay, you can buy a card, and if you need to sell, you can easily get back 90% after Ebay fees. Sometimes more, sometimes less, depending on how closely you follow the market. So what this means is that cards are very liquid, and can be rapidly converted into cash.
So I can see at least two places where cards can play a role in your financial planning. The first place is a a short term savings account. Practically all financial planners recommend that you keep a rainy day fund of 3months to 6 months salary in cash or highly liquid assets. Instead of keeping this in a bank earning 1% return, how about putting it into cards, where your return could be much more, the chance of loss of principle is very small, and best of all, it is a whole lot more fun to have cards than a statement from the bank to show for your money. If you need the funds, they can be rapidly converted into cash.
The second place is keeping them for the long term. They aren't making any more vintage cards, and as long as you store your slabs away from sunlight, the cards will last a long time. The high likelihood is that vintage cards will continue to increase in value. And the risk of them dropping in price significantly over a long perioed of time is very small. When you need the money, you can sell them and only have capital gains tax to pay. How does this cpompare to mutual funds(or stocks)? Well, a mutual fund willl probably give you a return each year, but it will also give you tax consequences each year. Second, a mutual fund is much more volatile in price, and they charge a management fee each year. But most importantly, they aren't near as much fun to own. Owning cards is more like owning land or gold, with the exception that there are no carrying costs with the cards as there is with land or gold. And they are much more liquid and less expensive to sell than land. While I don't think you would want to put 90% of your long term savings into cards, 5-10% seems a very reasonable risk to take.
Currently, it seems that PSA 7 and 8 cards pre 1975 are very cheap, and stand the most likelihood of increasing in value. They won't get the big jumps that PSA 9 and 10 cards may due to such a limited supply, but they will also be much less likely to go down in price. Just some thoughts that have been rolling around in my empty skull.
Before Ebay, you had to be very knowledgable to be able to buy a card from a dealer, and not walk away with your investment dropping 50% right off the bat when you tried to sell it back. Thus, the turnaround cost was high, which greatly diminished liquidity. The only way to make money under this scnario was if cards continued to rise in vale steadily while you held for a while. For those of you who bought cards 20 years ago, and still hold them, this has actually happened, and you are probably sitting on a nice return.
But now with Ebay, you can buy a card, and if you need to sell, you can easily get back 90% after Ebay fees. Sometimes more, sometimes less, depending on how closely you follow the market. So what this means is that cards are very liquid, and can be rapidly converted into cash.
So I can see at least two places where cards can play a role in your financial planning. The first place is a a short term savings account. Practically all financial planners recommend that you keep a rainy day fund of 3months to 6 months salary in cash or highly liquid assets. Instead of keeping this in a bank earning 1% return, how about putting it into cards, where your return could be much more, the chance of loss of principle is very small, and best of all, it is a whole lot more fun to have cards than a statement from the bank to show for your money. If you need the funds, they can be rapidly converted into cash.
The second place is keeping them for the long term. They aren't making any more vintage cards, and as long as you store your slabs away from sunlight, the cards will last a long time. The high likelihood is that vintage cards will continue to increase in value. And the risk of them dropping in price significantly over a long perioed of time is very small. When you need the money, you can sell them and only have capital gains tax to pay. How does this cpompare to mutual funds(or stocks)? Well, a mutual fund willl probably give you a return each year, but it will also give you tax consequences each year. Second, a mutual fund is much more volatile in price, and they charge a management fee each year. But most importantly, they aren't near as much fun to own. Owning cards is more like owning land or gold, with the exception that there are no carrying costs with the cards as there is with land or gold. And they are much more liquid and less expensive to sell than land. While I don't think you would want to put 90% of your long term savings into cards, 5-10% seems a very reasonable risk to take.
Currently, it seems that PSA 7 and 8 cards pre 1975 are very cheap, and stand the most likelihood of increasing in value. They won't get the big jumps that PSA 9 and 10 cards may due to such a limited supply, but they will also be much less likely to go down in price. Just some thoughts that have been rolling around in my empty skull.
Ole Doctor Buck of the Popes of Hell
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Comments
I think Dude put it best when he stated that timing is everything; at least in the short term. I do recall collectors doing very well in the late 90's when they sold during the economic surge/PSA popularity swing. Recently, I have to think that dslsports is doing something right. They are unloading some phenomenally sharp vintage cards. At the same time, it is concerning that they are auctioning what seems to be recently graded high end vintage cards. Naturally, one would think that the population of vintage cards is fixed. However, it is obvious that amount of "graded" high end vintage cards continuous to grow. Thus, no one really knows what the denominator resides.
Nevertheless, I believe that the growth of vintage collectors will outpace the gradual increase of slabbed high grade vintage cards; this is a "feeling" and nothing scientific or evidence based. Thus, like any other investment, one will probably realize a profit if they are successful in buying cheaply.
I agree that one should strive towards 3-6 month safety cushion. However, I prefer to have this cushion in the bank or money market. I am too attached to my cards to use them for short term emergencies. However, I do realize that there are occasions when this is unavoidable.
Ron
Your mention of vintage PSA 7's and 8's being the best option is dead on target. I'd also add in 6's for pre-1960 cards. Right now, I don't believe the market is truly aware of the rarity of high grade vintage cards, particularly commons, and high grade includes NM 1960's cards and EXMT 1950's cards. Further, I think this same market is perhaps several years off from figuring it out.
Some people like to fantasize about a glut of these vintage high grade cards suddenly hitting the market and thereby bringing prices down to what they consider more affordable. This is more wishful thinking than economic reality, in my opinion. The graded card collecting hobby -- especially in terms of SET collecting -- is still very young. It will grow, just as raw card collecting has grown, but probably at a slower pace because of the higher level of capital required. But make no mistake -- well heeled collectors of vintage graded cards are out there and more will come.
More raw cards will come out also, not in a glut, but gradually. The question is -- Will supply keep pace with demand? As you said, they're not making more high grade vintage cards so the supply is finite. Demand, by its nature, is not finite. Could demand go down? Sure it could. But as more collectors/investors sink money into graded vintage cards, word will get around and more will wake up to the tremendous investment vehicle graded 7's and 8's offer -- relatively low capital, high liquidity (as you pointed out), and potentially huge ROI down the road as supply dries up even further.
Scott
I still dont think cards are a good investments as a whole. But i do agree that with enough examination a person could come out in the red with cards.
the trick would be to figure out what sets are cold now and what sets could be hot down the line. this is extremetly hard to do and it would be too much work to do short-term
Also an important factor would at what price point to buy.
lets say a card is worth 20 bucks now
5 years from now that card is worth 40 dollars.
a 100% return....however lets say shipping was 3 dollars when you bought it and when you sold it you lost a 3 more dollars in ebay/paypal fees
so now you have 23 to buy and sell at 37 for a profit of 14 dollars in five years which is 70% increase
so lets say you buy 1000 cards = 23,000 and sell them 5 years later for 37000 = 14,000
but lets say you buy EBAY stock in 99 at $ 40 and sell today at $ 90 a %125 increase then lets say you spend the same amount 23,000 you could have bought 575 shares and then sell them today for $ 51750 making yourself a nice profit of 28,750
even if they kill you on taxes and fees you would still come out much better investing in stocks
and not to mention that all you did buying stocks was buy it once and sell them once ...with cards selling 1000 cards is a lot of work... A LOT
the people like fogel and others bought their cards 20 years ago and sure they have made a lot of money, but they would have made even more if they had invested in INTEL and MSN...so yes vintage cards are a good fun and safe investment but they should never amount to more than 10% and unlike gold and land the sportcards market is quite volitatile and unpredictable.
if you want a safe investment buy bonds, if you want excitement buy stocks
the more you "invest" in cards the less happy they would make you...just ask Davadillo who spent more time ranting about SMR values than just enjoying his 1000's of cards.
Groucho Marx
I purchase two cards like this per month. I sure hope it is a good investment. I stick to cards there are less than 50 known. I have maybe 250 like this on the registry. It is my primary retirement means. Stay with pre WW1 cards to reduce risk. I doubt the PSA 7 stuff from the 60's and 70's has much up side. They can all be replaced with money! Pre war cards can not for the most part be replaced with money.The card I refer to above with E-bay link has first to be found again. A PSA 7 of this card would easily have brought $4000.
<< <i>http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=4133472440&ssPageName=STRK:MEWA:IT
I purchase two cards like this per month. I sure hope it is a good investment. I stick to cards there are less than 50 known. I have maybe 250 like this on the registry. It is my primary retirement means. Stay with pre WW1 cards to reduce risk. I doubt the PSA 7 stuff from the 60's and 70's has much up side. They can all be replaced with money! Pre war cards can not for the most part be replaced with money.The card I refer to above with E-bay link has first to be found again. A PSA 7 of this card would easily have brought $4000.
link
I agree with a lot of what you say, but suppose you had bought Cisco or Juniper or AOL in 1999!! I was fortunate enough to sell a lot of stock to fund my baseball cards in 2001 and 2002. The stocks I owned are all well below what I sold them for, but my cards are worth more.
As far as Davalillo, I expect that he will make quite a chunk of change when he eventually sells his cards, whether they are in PSA slabs, or some other company.
As far as the frictional costs you describe, they can be avoided by buying cards in lots, or higher value cards. The same could be said about the commission on the sale of stock.
To really play devil's advocate, supppose you had bought Mickey Mantle cards for a penny each when they first came out. Or a whole 1960's set for $12, as they cost then? I believe that the return on that investment would swamp any stock return you could get.
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the more you "invest" in cards the less happy they would make you...just ask Davadillo who spent more time ranting about SMR values than just enjoying his 1000's of cards. >>
There is nothing more true than this statement. Having expectations of riches and high returns on sportscards is foolish, both because it may never happen and also because it takes away some of the enjoyment from this hobby as it has for Davadillo
Its all relative, i am sure that some people bought cards that have lost 1000's in value
To make this work both the card buyer and the stock buyer must make good choices ..LOL (easier said than done)
As far as buying cards for a penny when they came out, the same could be said if you bought microsoft in their first year, all original members including the secretaries were paid in stocks and they are all billionares today.
Of course you could made money on cards, but if money is the only concern ..then you should ask yourself if there is a better way to make more of it.
Im playing devil's advocate as well, i agree with you with the basic idea that cards while fun can also add a good safety net to savings, they are liquid enough and usually increase in value.
either way i dont have 20000 dollars to invest in cards or stocks ..lol and even though stocks would be a wiser choice for investing the money....cards would be 100 times more fun
Groucho Marx
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the more you "invest" in cards the less happy they would make you...just ask Davadillo who spent more time ranting about SMR values than just enjoying his 1000's of cards. >>
There is nothing more true than this statement. Having expectations of riches and high returns on sportscards is foolish, both because it may never happen and also because it takes away some of the enjoyment from this hobby as it has for Davadillo >>
Only problem with these statements is the author must not have experienced buying a "raw" T206 green portrait Cobb in nearMint condition in 1973 for $40.....sold it in 1982 for $300 to pay down a college loan and would love ..............as a collector to have it back along with all and any other cards I sold when I had to only to find that now the Cobb is going to cost over $13k "if" you can find one for sale! Of course the money is an issue! A big one,no matter how much I just love that card. Couple that with a pile of children to consider and then the word "investment" becomes the hinge the decision to buy weighs heavily on!
As far as Davalillo, I expect that he will make quite a chunk of change when he eventually sells his cards, whether they are in PSA slabs, or some other company
Jim could loose 30% of what he has put in them and still retire with a hell of a nest egg just from his card money alone!
Paul.
My opinion is that in order to actual have a decent investment in cards, you need to do your homework just like any other investment. For example, personally I invest in stocks that I know or current support in my daily life (Honda for example). If you go out and randomly buy stocks that you aren't aware of, it could turn around to bite you. Education is key.
If you buy only PSA 9 cards from the 70's, the supply is much more likely be available than buying PSA 9 cards from the 30's. With more supply becomes less demand and price dictates that. That being said, as mentioned, timing is also key.
The great thing with Ebay or auction is that you control whether you sell it. If you buy a card for $100, keep it for a year and believe it's worth $110 (10% increase without including Ebay fees), you have the right to list it at $110 and see if it gets bids. If not, all it cost you were the fees. If SMR or the industry suddenly demands higher costs in that year, you are in a good position to sell and will likely get that $110 or higher.
I believe cards can be a great investment if you have patience and money to invest.
Furthermore, having one's collectible allocation is just one type of item, be it coins, art, or sportscards, is generally a risky strategy if you need to regard them as investments instead of enjoyment. And again, this risk is magnified for those who don't have a large bank account. Spreading the risk around is a fundamental tenant of successful investing, and someone who has $50,000 in cash savings, $75,000 in home equity and $50,000 in baseball cards ought to step back and take a second look if you need to regard those cards as an investment (which in that example, you would be forced to do anyway).
The bottom line is one'e personal tolerance for risk and loss. If someone has a large card collection and is in it for the fun and enjoyment, and especially does not anticipate the need to sell in the near to intermediate term, then that's great.
The problem I see for sportscards however is their relative lack of liquidity versus more established collectibles such as art and coins. If you have the time and patience to bleed things away through eBay as Stump is doing, then great, but that's a nickle and dime approach involving lots of time, effort, and opportunity cost. A personal crisis requiring a quick $25,000 or $50,000 derived from selling slabbed sportscards leaves you with few easy alternatives beyond eBay, the auction houses and perhaps this Board and of course those venues all have their issues.
Balance is key, and if I had a client with a net worth of under $1 million who wanted to allocate 10 to 15% in collectibles, I would never advise them to put the bulk of it in sportscards. They don't have the global following other collectibles have, the knowledge base is therefore limited (they have virtually no following outside the domestic US, or at least enought to add liquidity) and all of these factors add up to a market whose true liquidity (especially in large amounts) is not something I would want to have to rely upon in an emergency.
Of course as a hobby, I say go for it if it makes you happy!
My 2 cents.
Steve
It's a nice feeling ,however, to know that there is value present which could be used if I need it. In the past, dealers would only pay 30-40% of a card's value. Now with EBAY, one can obtain fairly close to market value on what I collect [high grade 1950 -1960 PSA cards]. Fortunately my daughter is EBAY proficient and she could liquidate my stuff fairly easily.
Always looking for 1957 Topps BB in PSA 9!
<< <i>the people like fogel and others bought their cards 20 years ago and sure they have made a lot of money, but they would have made even more if they had invested in INTEL and MSN...so yes vintage cards are a good fun and safe investment but they should never amount to more >>
That is an interesting thought. If Fogel had taken the same money and purchased those stocks they could have bought the Barry Halper collection several times over. Even if hechose to take that same money to buy a New York apartment or loft twenty years ago, he would still be better off than with trading cards. On the other hand guys like Fogel do not have to choose between their sportscards and more traditional means of investment. They can have both.
I think that Machodoc's post regarding everyone's individual threshhold for sinking a large percentage of their net worth into income is dead on. Most people are not in the same position financially as some of the really big time collectors. The 10-15% guideline for collectibles is not for everyone. For those with less than one million, it would be unwise to sink $150000 into high grade cards for the 1950s 60s and 70s. For those with less than $100000 net worth, it would be absolutely insane to have $15000 in trading cards. There are just so many safer and more productive ways to invest.
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I think that Machodoc's post regarding everyone's individual threshhold for sinking a large percentage of their net worth into income is dead on. Most people are not in the same position financially as some of the really big time collectors. The 10-15% guideline for collectibles is not for everyone. For those with less than one million, it would be unwise to sink $150000 into high grade cards for the 1950s 60s and 70s. For those with less than $100000 net worth, it would be absolutely insane to have $15000 in trading cards. There are just so many safer and more productive ways to invest. >>
I believe that those with less than 100000 net worth can easily have 15000 in cards. They probably have as much or more than that in their car, and it does nothing but go down in value. And I am not sure that there are so many safer and more productive ways to invest. Real Estate is ok, but is very illiquid and has huge carrying costs. Short term bonds are safer, but have limited appreciation potential. $15,000 in stocks requires a mutual fund, as it is not enough to spread around among a variety of stocks.
But the big things with cards is that they are so enjoyable. What other hobbies besides collecting can you enjoy so much, and not spend a fortune. Golf, skiing, scuba, vacationing, skydiving etc. all burn up lots of cash that you will never get back. Cards are fun, liquid, and have the potential to increase in value.
Steve-Machodoc- I agree in general with the risk spreading. But as far as collectibles, you really have to know a lot about what you collect to do welll with it financially. And it is hard to spend the time on lots of different types of collectibles to be knowledgable enough to be successful. So if coins, or art or jewelry or antiques are your thing, then I think it may be better to focus on one that you can be very knowledgable about.
From Davalillo---
For those worried about my retirement, please tell them that the cards are
no more than 20% of my net worth and that I have a nice profit overall on
where I bought the cards and what they are worth today....and that despite
the feelings of some I enjoy the cards at least as much as anyone else.
i have also dabbled in stock (making a small fortune investing in ebay and Dell), but i've always enjoyed cards more. i follow the card market closely. this is my "stock market." and cards have a big advantage over stocks because you can actually enjoy cards. nothing interesting about a stock certificate displayed on your wall. but cards? my graded cards look awesome when displayed.
well here are the results 5 years later....
i could easily get what i paid back for the psa graded t-206s....probably 10-20% more...current return $1500-1700
the csa graded t-206 is a bust in its current state....i'd have to cross it...but for this example we'll say i took a $450 bath
here's where things get interesting....in 2001 the tech fund peaked at $6300, now it's worth $1500....so bacically the stock market doubled my money in less than two years....but in 5 years lost half the original investment and is now worth $1500.
basically my first experiment investing in cards and mutual funds netted me a 30% loss.
lsuconnman@yahoo.com
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I believe that those with less than 100000 net worth can easily have 15000 in cards. >>
If one has $100000 net worth and $15000 in cards, I wonder what else this person has to forsake to own those cards. I imagine this person would own some cars, some stocks and a small bank account totalling $25000? This leaves very little money for a down payment on your house. If $50000 is all the down payment that I can afford to put down on a house here in Los Angeles, I could imagine the crappy dump that I would have to force my family to live in. If that was all I had, I would put $65000 on my family's residence instead of owning a $15000 card collection. $15000 in that case would not only be financially irresponsible but selfish as well.
I will keep my stocks (large companies for dividends), my mutual fund that has returned avg (after taxes) of 15% for the last 15 years (hint - it's from Vanguard), my real estate, my bonds, my 401k (contributions/funds controlled by myself), and my IRA's for myself and my children (and the state sponsored 529b plan).
Cards will not provide you with a tax-sheltered income either. Don't overlook taxes and tax-sheltering your income in terms of "saving" for the future.
Properly invested, and in the correct frame of "investing" mind, (hint - throw away every "Money magazine" that you can buy from the newsstand), investing in the proper vehicles will outpace sportscards (at least in this day and time--- I doubt anyone will find a hoarde of MINT old cards for awhile) in every instance......compound interest will CRUSH appreciation of your assets (sportscards) every time.
When you begin looking at your cards as investments, the hobby ceases to become "fun".....I can tell from lurking and reading post after post that there are some members on these boards that have forgotten that this hobby is supposed to be fun.
As I said, just my 2 cents.....I'm in the minority; however, I think many of you are looking at this issue thru a slanted perspective.
Dal
Website: http://www.qualitycards.com
Buckwheat,
I would respectfully disagree with your above statement. With fluctuations from auction to auction, if you needed to liquidate and fast, I think it's common to see a 30% difference from one auction to the next on the same card. It will depend on who is bidding during the week you post your auction. After the time to post and scan, waiting for your money and the auction to end, I think you would be hard pressed to come up with cash in 2 weeks.
Compare that to a stock, mutual fund, or savings account where the money is "liquid", and you might not be too impressed with the quality of your "investment" and how easy it would be to cash out in times of emergency.
Nate
I see where you are coming from! - it would be wonderful to invest in a portfolio of Clemente, Aaron, Buddy Biancalana (oops) etc etc, but how many of us can keep business separate from pleasure when the 2 worlds would be interconnected through the "greatest evil of all", money.
BTW, I think most investors wouls would consider pork bellies (Eddie Murphy and Dan Akroyd = Trading Places) and futures to be GAMBLING and not investing.....huge difference, at least thru my glasses, maybe not everyone's!!!
Nate - in almost all "funds" that return an adequate amount of interest, you will be penalized (substantially) for early withdrawl. So your money in therse types of vehicles, is NOT liquid at all. You must do as the original poster suggested, "keep it (3-6 months worth) in the bank for emergencies!
That's one way the rich get richer......they have it, and don't "need" it right away....so they make it "work" for them in vehicles that have a greater interest rate, but are not very liquid.
Dal
<< <i> From Davalillo---
For those worried about my retirement, please tell them that the cards are
no more than 20% of my net worth and that I have a nice profit overall on
where I bought the cards and what they are worth today....and that despite
the feelings of some I enjoy the cards at least as much as anyone else. >>
Yes Jim. We know you are loaded, blah blah blah, and have tons of cards, blah blah blah, and you are a successful banker, blah blah blah , and that you may tranfers your card to GAI holders if we are not careful, blah blah blah that you made boatloads of money of your investments, blah blah blah ,that all the big dealres come to you, blah blah blah, that you get all the good gossip blah blah blah......
You are right, and you are wrong. The type of fund you are referring to are the "load" funds that charge both an entry and exit fee. I managed a large mutual fund for T. Rowe Price for many years (5-star Morningstar rating, thank you very much) which was - and is - a "no load" fund. The only fee a no load fund charges is a "management fee" which in my time for that fund was 75 basis points (3/4 of one percent). No load funds do not charge an entry and redemption fee. I am a firm believer in no load funds and remain a big fan of my former employer (although they have dabbled in the "load" world recently - gasp!)
Steve
I am sorry if i offended you. My comments were general and hypotetical and i probably should have not use any particular names. Especially names of people who can not reply on this board.
One other comment, i was refering to vintage cards. i Truly believe that modern cards are huge money losers, buy for pleasure ( i buy some modern autos for fun) but to invest in modern is insane!
Groucho Marx
I'd like to understand from a historian of antiques and collectibles what we could expect from this sports card hobby.
Are folks now just paying "high prices" to relive their childhood or that of their fathers or grandfathers? I'd have a hard time believing that a 1960s or 1970s high-grade star or common is going to mean as much to someone in their 30s to 50s with, on average, the capital to pay for it versus or kids or kids grandchildren plus 2 or 3 more generations.
Example: Will somebody on The Antiques Roadshow in the year 2050 be on TV and say this 1969 Mike Shannon in Mint or Nm/MT condition is extremely scarce and is worth a premium even though the guy is a total common MLB player. Therefore it is worth $2000. My guess is not. Rather, it will be the HOFers and special/great ones within the HOF that garner any money at all.
I also highly doubt that cards produced since 1990 will hold any value for future generations. I think overall that in the grand scheme of collectibles/antiques is a line that says once people understand that the item becomes a collectible is when things really count. So based upon this hypothesis anything prior to 1980 or even 10 to 20 years prior, it will all be viewed as contrived junk.
Interesting topic. No crystal ball perfect answers. Once again, some precedence and facts would be appreciated.
Erik
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So based upon this hypothesis anything prior to 1980 or even 10 to 20 years prior, it will all be viewed as contrived junk. >>
Wow Based on this hypothesis, even the 1960s cards may be viewed as junk. Scary.
You are right though. Many think that demand for these things will continue to expand, but I just don't see it. I am neck-deep in this stuff but my children and nephews and their friends all have absolutely no interest in trading cards. I finf it hard to believe they will be nostalgic for these things down the road when they are so indifferent about them today.
<< <i>You are right though. Many think that demand for these things will continue to expand, but I just don't see it. I am neck-deep in this stuff but my children and nephews and their friends all have absolutely no interest in trading cards. I finf it hard to believe they will be nostalgic for these things down the road when they are so indifferent about them today. >>
It doesn't take very many people to create demand for these things. The supply is very limited. Even in 60's cards, I doubt you will ever have more than 1000 of any card graded PSA 8 or above. Koby, I also doubt your family is into coins or art, or antiques, or fishing lures, or any of the other things that people collect. But nonethelss, there is a market for a lot of these things. Other than through collecting, I have never met anyone who collects graded cards. That is, none of my relatives, coworkers, friends, etc. collect. But demand is still there.
As far as people not caring 30 years from now about 60's players, I compare this to 30's or t206's nowadays. Most of the people who collect them never heard of the people they collect until they started in the hobby. Yet the market for them remains strong, as do prices.
Now the reason that I don't think that modern stuff will ever be too valuable is due to the huge amount of supply out there. It is scarcity that creates value.
Regarding the liquidity- It is true that it willl take weeks to get the money out. I still consider that liquid. You can always use a credit card for emergencies and sell cards to pay it off before interest starts to accrue.
Note-I am not saying that someone that is looking to invest money should start with sportscards. It takes a lot of effort and knowledge, and the novice is likely to overpay for stuff, not knowing any better. Rather, I am saying that if you enjoy the hobby, then it can be a good investment also, so you don't need to feel so bad about sinking the money into cards. If you count the hours you put into it as part of your cost of investment, you are unlikely to get your money back. But if you consider it fun, then you can enjoy yourself, and still make some money.
Edited for typos
Thank you for your opinion, but I have to disagree with you.
I am referring to no-load funds - all of the "funds" that I own are no-load funds.
Dal
Not a problem. I was merely responding to this sentence in your particular post:
"Nate - In almost all "funds" that return an adequate amount of interest, you will be penalized (substantially) for early withdrawl".
I wasn't referring to any of your particular investments since you didn't refer to them, but generically I do know a little something about the various classes of funds and my intent was to clarify that not "all "funds" that return an adequate amount of interest" penalize anyone for redemptions, only the "load" funds do that. In fact, I happened to manage a high yield fund which provided the highest interest rates possible (with risk however).
Have a great day!
Best,
SW
1) If you buy them as investments, your mentality changes from collector to dealer. I buy with the attitude my grandkids will get them after I have kids and grandkids. I'll trade dupes after upgrades, but speculating on cards is tough to do. The cards that will go up in value are the cards you will have the hardest time parting with. Also you'll be tempted to sell during a spike upwards in the market. This isn't compatible with being a collector. Some have the urge to sell a set after building it. These people are into a different challenge. I cherish my cards.
2) The risk of buying ungraded material is huge. People know that slabbed cards sell best. If it isn't in a slab, I'm afraid. Your investment can turn to zero very quickly especially with the doctoring and high stakes.
3) Grading and shipping. You have to take these costs into account. Grading is expensive and unpredictable. Raw material represents the largest upside so even if your buys are authentic, you cannot guarantee a grade. One grade can means thousands of dollars.
Overall, I think it's great to have a hobby that retains a certain liquidity. Some people prefer to go to Las Vegas and lose their money at the tables. Some buy cars which is not a wise investment unless you can do the restorations and mechanical fixes yourself. Watches and art are good investments. However, the entry cost is much higher on those items. Do you want to own 6 watches or 400 baseball cards? Art is for the elite. It takes a few million dollars just to get in the game. Plus, you have to really know what you are doing or you can get phocked.
I wouldn't recommend baseball cards as anything more than a hobby. You become emotional and attached. You don't get attached to futures on IBM. You strictly deal with dollars and cents. There's nothing to cloud your judgment.
With that said, it's easier to go to sleep knowing you didn't flush your money down the toilet on baseball card purchases. If you aren't lazy and can work ebay, you can figure on returning a bottom of 70 percent as long as you're into vintage and not modern.
If you truly wanted to make money at this, you'd have to devote yourself, travel and take it seriously. That's called a "job". This is an escape from my job.
Best,
S.
<< <i>A point I haven't read here is whether or not 2 - 5 generations ahead of us will even care about this hobby. >>
This topic was discussed to a certain degree here...
[snip]
<< Demand may actually diminsh -- I grew up watching Mike Schmidt, not Richie AShburn >>
Try buying some 19th century, T or E cards right now (even Poor/Fair cards are in demand). A great majority of people buying/collecting these cards didn't bust Tobacco packs in their youth. Demand for pre WWI cards is increasing, yet nearly all collectors were born after WWI. I doubt any collectors were alive when Billy Sunday, Cap Anson, King Kelly or Buck Ewing was playing, yet their cards remain in demand.
[snip]
CU turns its lonely eyes to you
What's the you say, Mrs Robinson
Vargha bucks have left and gone away?
hey hey hey
hey hey hey
I invest in financial instruments and enjoy my baseball card hobby. Any funds spun off from my hobby are to add to the pleasure of further acquisitions.
Brent
PS- I am considering starting Small Cap Value Prospectus Set in PSA 9-10 though.
Bo Jackson Basic(#1) and Master(#1)
Bob Feller Basic(#4)
Sam McDowell Basic(#1)
2004 Cracker Jack Master
My Ebay Store
1.) Tax-Free (if sold in certain venues)
2.) Liquidity (if sold in certain venues)
I managed the T. Rowe Price Tax-Free High Yield Fund from 1990 to 1999. If you were a shareholder during that period, then I either get the blame or the credit!
Steve
Sorry about that - you are correct about the load funds. I guess I don't know that much about them, other than there are other alternatives to them. I never really learned about them (ignorance is bliss).
Thank you for the clarity - I think I'm on the same page as you (and that would be a first for me)
Dal
You deserve neither, I have stayed almost exclusively in equities in my 401k and Roth accounts. Only 22 years until retirement, assuming historical returns and the Big Hurt hitting a couple of hundred homers before he retires, lol. Oh wait, it's only a hobby for me.
It's great meeting you and hopefully our paths will cross again.
Brent
Bo Jackson Basic(#1) and Master(#1)
Bob Feller Basic(#4)
Sam McDowell Basic(#1)
2004 Cracker Jack Master
My Ebay Store