Are cards bad investments?
RonBurgundy
Posts: 5,491 ✭✭✭
Over Thanksgiving I picked up an old Beckett from 1992. I started leafing through it and found that the values for many vintage cards and sets had not appreciated substantially from '92 to today. One example, among many: 1957 Topps Mickey Mantle: HBV in 1992, in near mint: $900. Today's SMR in PSA 7: $925. Many other stars were the same. Set values, if they had risen at all, had risen only about 10-15% max.
It seems the only appreciation has come from the ultra high end market - PSA 8 and up. That makes some sense, but it offers no solace to collectors who collect very nice cards - including those in PSA 7 - and have seen only small increases in value over the years. It also excludes all but the most well funded collectors out there.
I may go back and do a more detailed analysis at some point, but would curious as to anyone's thoughts.
It seems the only appreciation has come from the ultra high end market - PSA 8 and up. That makes some sense, but it offers no solace to collectors who collect very nice cards - including those in PSA 7 - and have seen only small increases in value over the years. It also excludes all but the most well funded collectors out there.
I may go back and do a more detailed analysis at some point, but would curious as to anyone's thoughts.
Ron Burgundy
Buying Vintage, all sports.
Buying Woody Hayes, Les Horvath, Vic Janowicz, and Jesse Owens autographed items
Buying Vintage, all sports.
Buying Woody Hayes, Les Horvath, Vic Janowicz, and Jesse Owens autographed items
0
Comments
2. Yes - there are many fluctuations in the card market. Many cards have gone down in value, other have remained stagnant, and yet others have appreciated significantly.
If, for example, in 1992 you had purchased $925 worth of un-altered Near Mint T-206 commons, you would be sitting on something today worth well in excess of $10,000. Probably many times that.
As in most things in life - the answer is "It depends". And you cannot forget volatility, either. In 1992 you probably could have purchased Mark McGwire rookie cards for $3-$5 a piece, as he had just come off a 22-home run season. You could have purchased 300 of them [or more] for that same $925 in 1992, and probably sold them for tens of thousands of dollars in 1998, even though they would be worth significantly less today.
~ms
It could change in the future, but the current demographic trends in the hobby are not good (fewer collectors overall, fewer young collectors). However gold has been flat until the investment funds started to get in the market, then it just took off. I guess those stupid infomercials worked.
I have gone on a little collecting spree over the past two years for me and my two young boys. It is nice to collect something that I will be able to hand over to them in 20 years but I have been doing so under the impression that these cards will appreciate in value (collecting 60's topps and 1933 Goudey).
I have also been going by the assumption that as the years go by there will be less and less supply of these cards. Some will stay in attics, conditions will continue to deteriorate, some will get lost, some people like me will not be parting with their cards for some time. It is for these reasons that I assumed values wuld go up.
I also think that the vintage market will not stay flat because some of the collectors who have been focusing on the modern cards will make a switch.
So I do collect for enjoyment, but I believe and speculate that the $25 1967 Pete Rose I purchased the other day will be worth north of $95 in 2025 (7% increase a year).
I don't see any more factors that will drive interest higher. The modern market is starting to fix itself and people always want the latest rookie card.
Until more new collectors are brought into the hobby, I believe we will be in a holding pattern. I attend shows in Michigan, Indiana, Illinois, and Ohio. The shows are smaller, the crowds are smaller, and I see the same people every week. The Sun Times shows in Chicago sometimes bring out new people, but I think they are there for the autograph signers.
First, you really shouldn't compare raw NM prices to graded NM prices simply because what most people call a raw NM could end up grading a PSA 5 or 6 (and in most cases , it does). Especially when referring to high dollar, high profile, star player cards.
If you can find raw vintage cards that will grade a psa 8 or better than you should be able to realize a nice profit (case in point-board member paid $500.00 for a '63 Fleer CL raw, it came back a PSA 9 and he sold it for $2,700.00)! Disclaimer: Past performance is not indicative of future results!
Bottom line is, invest in stocks and bonds, collect for enjoyment!
T-205 Gold PSA 4 & up
1967 Topps BB PSA 8 & up
1975 Topps BB PSA 9 & up
1959 Topps FB PSA 8 & up
1976 Topps FB PSA 9 & up
1981 Topps FB PSA 10
1976-77 Topps BK PSA 9 & up
1988-89 Fleer BK PSA 10
3,000 Hit Club RC PSA 5 & Up
My Sets
I agree that generally you should not compare raw prices to graded prices, but that example was striking to me because the SMR price for a graded card was so close to the 1992 raw book value.
I also think that price guides like Beckett are increasingly worthless because there are only 2 situations where a person pays high Beckett prices for a vintage card: 1) Where a fool is the buyer. 2) Where a large, reputable dealer is selling raw stuff that you know will grade well. That is it. The actual market values (I'm talking selling prices here, retail prices) are almost always lower.
Perhaps the mantra should be, "Buy raw, (grade), then sell high."
Buying Vintage, all sports.
Buying Woody Hayes, Les Horvath, Vic Janowicz, and Jesse Owens autographed items
Even if one plays the modern, quick flip, route - the loses will mount up with the gains.
IMO, one has to separate investment from speculation:
I think speculation is an attempt to take a little money and make a lot. Whereas, an investment is an effort to prevent a lot of money from becoming a little amount. That is, investment with respect to long term capital gains, slow appreciation etc.
These are just my thoughts on this and if it sparks a debate, again, that's OK - I just don't think except for very high grade material, that cards are a 'true' investment unless kept as a small speculative portion of ones portfolio.
As for modern, anyone who plays that game can have it. I hate the stuff and will never spend a penny on it.
Buying Vintage, all sports.
Buying Woody Hayes, Les Horvath, Vic Janowicz, and Jesse Owens autographed items
Compared to the blackjack tables, cards are more desirable. Compared to Apple Stock cards are less desirable. Guess it depends on your perception ....
Julen
RIP GURU
As for the rest of us, there is still money to be made buying and selling mid-range cards. You just have to be smart about it when acquiring inventory. Buying at "book prices" will not get you anywhere.
I know there is a recent post on this--- as a large buyer just paid $900,000 to a private collector for several cases of mid 70's baseball, and several cases of Jordan's rookie year Fleer cases.
can you say "RETIRED"? I knew you could!!
"you make your money when you buy"
Cards are not a good investment overall ...however they have proven to at least rise with inflation...not everyone can say that about their hobbies.
There is also knowledge...the more you know about a particular issue you can begin to see trends and realize a good deal when you see.
Groucho Marx
"you make your money when you buy"
Cards are not a good investment overall ...however they have proven to at least rise with inflation...not everyone can say that about their hobbies.
There is also knowledge...the more you know about a particular issue you can begin to see trends and realize a good deal when you see.
Groucho Marx
<< <i>I always love these posts. I've put two kids thru college by buying during the off season and selling during the regular season. PSA 10s only. Its brings scarcity into the equation. Buying all Bonds. >>
TM
That's a great accomplishment but not totally relevant to this conversation.
What you are doing is "dealing" - buying and selling - IMO.
The spirit of this discussion, I believe, is the long term purchasing of items for appreciation down the road.
Not being a dealer.
If I were "investing" - it would not be a job - just buy - hold for years and then find a way to liquidate.
What you do is time consuming and done on a regular basis.
mike
How much money could be made if you invested in his cards? LOL! (1952 Topps boxes!)
rbd
Quicksilver Messenger Service - Smokestack Lightning (Live) 1968
Quicksilver Messenger Service - The Hat (Live) 1971
loth
<< <i>cards can be a great investment IF you are very focused AND lucky. Example, buying a few pujols 2001 BC a few years can net me my initial investment many times over. >>
IMO, proper investing should not bring in the element of luck. That would be speculating.
mike
A investment need not be held any length of time to qualify as an investment. The original question was "are cards a bad investment"? Everytime I see this come up, the answer across the board is no. I disagree. Done correctly, I think cards are a wonderful investment because the buying public is not very sophisticated or informed. I may hold on to stuff for several years, or just a few months. It depends on when I can see an opportunity to sell and make a profit. In my opinion, these buying and selling trends are much easier to predict than the market. I guess the real question here, is "define investment". No disrespect intended, I enjoy your posts, I usually just read and snicker, but this topic always draws a smile, because I seem to be one of the few that invests in cards and has a optimistic attitude about the potential.
Buying cards are below market and selling them at market is being a dealer, there is always money to be made dealing. As a dealer, it doesn't really matter if a card increases in value, you main goal is to sell for a profit.
Ron's question about investments was asked in the context of buying and holding for several years.
Remember the mass panic when board memebers first thought the paoutdoorsman2004 find was real and would flood the market.
Eyebone
Now you are going to tell me that people who have spent 5,000.00 or 500,000.00 in their collections are not investing? What a joke, I am sure every person who buys a card doesnt care if the value goes down.
Please, this is such a joke, YOUR COLLECTION IS AN INVESTMENT..weather measured by the time you put in to it, (you have an oppertunity cost associated with time) , or money, you have some sort of an investment. So whatever you collect it is an investment, how well you do when you sell will be determined by when you sell, how much you bought it for, and then and only then can it be determined weather you owned a CD, Bond, or Google....
Are cards a good investment, sure if what you buy is at a decent price and appreciation is realized.
I'll take my portfolio of stocks and my card collection and when I sell both of them in 30 years or so...I am sure I will realize some sort of return hopefully it will be google, not a CD.
Link To Scanned 1952 Topps Cards Set is now 90% Complete Plus Slideshows of the 52 Set
Investors, dealers, and speculators are not the same thing. While they all have the ultimate goal of making money, the process they use to get there varies. The each have different criteria in determining whether or not to buy.
Those guys are probably just happy with their cards retaining their value with small yearly increases.
Eyebone
<< <i>^^ investing and speculation both have elements of luck, just to different degrees......... >>
With respect to investment expectation, that's like saying the moon is about the same size as the sun.
mike
<< <i>Mike,
A investment need not be held any length of time to qualify as an investment. The original question was "are cards a bad investment"? Everytime I see this come up, the answer across the board is no. I disagree. Done correctly, I think cards are a wonderful investment because the buying public is not very sophisticated or informed. I may hold on to stuff for several years, or just a few months. It depends on when I can see an opportunity to sell and make a profit. In my opinion, these buying and selling trends are much easier to predict than the market. I guess the real question here, is "define investment". No disrespect intended, I enjoy your posts, I usually just read and snicker, but this topic always draws a smile, because I seem to be one of the few that invests in cards and has a optimistic attitude about the potential. >>
TM
I totally understand what you are saying - but what you are doing is a business of sorts and not investing.
You have to list the items, sell them, go to the post office on a regular basis. That's not the expectation of an investment. Put up the capital and expect a return for little more than the stroke of a key on the computer.
I hope you can draw this distinction - for that's all I'm saying.
Some of my stuff has done very well over the years. I have two cards I purchased for about 500 bucks that would sell now for about 4 grand a piece. But I never bought them for "investment" purposes.
But thanx for the input. And, BTW, I do not take any offense by you disagreeing with anything I say.
Since after all, we're all friends here.
<< <i>Regardless of one's definition of "investment", doesn't it simply come down to knowledge, timing and a bit of good fortune? Just like the stock market, one can lose a bundle "investing" in cards (either on a quick buy 'n flip or on something bought for a much longer term) if one makes poor decisions and buys/sells at the wrong time.
Eyebone >>
Agree Eye
But IMO, keep in mind that investing, implies long term quality stocks or mutual funds with little or no risk.
When luck is involved, we're usually talking about "speculative" stocks or bonds.
mike
<< <i>Investments all have different returns, and returns are based on risk. A CD at your bank FDIC insured pays 2% for 2 years, no risk, no return, yet it is an investment by pure defination. Google at 85 held on to 400 is an investment as was buying yahoo at 300 both high risk with different results. Buying a utility company, or US treasury Bond, risk return, are in all investments.
Now you are going to tell me that people who have spent 5,000.00 or 500,000.00 in their collections are not investing? What a joke, I am sure every person who buys a card doesnt care if the value goes down.
Please, this is such a joke, YOUR COLLECTION IS AN INVESTMENT..weather measured by the time you put in to it, (you have an oppertunity cost associated with time) , or money, you have some sort of an investment. So whatever you collect it is an investment, how well you do when you sell will be determined by when you sell, how much you bought it for, and then and only then can it be determined weather you owned a CD, Bond, or Google....
Are cards a good investment, sure if what you buy is at a decent price and appreciation is realized.
I'll take my portfolio of stocks and my card collection and when I sell both of them in 30 years or so...I am sure I will realize some sort of return hopefully it will be google, not a CD. >>
I Just Love
I will respectfully disagree. Perhaps we should have two boards. Those who are collectors and those who are accumulators for the purpose of flipping this stuff for cash.
The question was asked about this stuff as investment. Everything I have ever read by experts on investment tell you don't put money into collectibles for the purpose of long or short term return.
People can think what they like. These pieces of cardboard, leather, paper, metal etc., when collected for the purpose of enjoyment give the best return IMO.
I'm enjoying the conversation - an please, in no way do I feel this is a confrontation - this is a great discussion. And, probably the best one we have had in a while.
thanx
mike
Great points - and superb analysis. I agree. This is a great debate and I have enjoyed it immensely.
Over the years I've read a few articles about our hobby in the Journal or the Chicago Trib and the articles are always poking fun at baseball collectors: Like "can you believe someone just paid 1.2 million for a baseball card? Or "why do adults congregate to meet aging sport stars and trade antique cardboard" sort of quotes.
I've shown a few friends my card collection and when some says "what did you pay for something like that" I usually lie. "Oh that Manlte goes for around fifty bucks". This is because any non collector would think I was an idiot for paying a grand for a baseball card. I don't want to give people more reasons to think I'm strange. This is probably why most of us, myself included, would naturally say that cards are not an investment. So why do I still spend a lot of money on cards when I could send checks to a mutual fund?
After thinking this through I think that I can admit to myself that cards are an investment just not a good one. I still wouldn't advocate over 5-10% of one's net worth in cardbord or even coins or gold. "Oh honey lets invest in busting a 71 topps vending box."
Generally, if something is fun to purchase we get too emotionally involved and it becomes a bad investment. Good investments like a diversified stock portfolio or a practical rental property are not much fun to own and decisions regarding buying and selling of such things are always made with a clearer head.
Maybe more people can now call themselves "basball card investors" with some pride!
just friendly debate,
I guess If I purchased a box of 1952 topps cards in 1952 and held them unopened all these years and continued to buy boxes of topps cards each year for 10 years until 1962 because I am an unopened collector, and each box in 1952 cost me 1.80 for the box and .05 for a pack and today I could sell 1 pack from that box for 7K or more (see current mastro price)
I guess that would qualify as a collection that was a good investment. Huh?
what is .05 compunded over 50 years at 10%? well 5.00 would be 586.95...
now what is .05 into $7,000.00...a damn good investment
and before everyone says Oh but that wont happen again, I say..86-87 fleer anyone?
Link To Scanned 1952 Topps Cards Set is now 90% Complete Plus Slideshows of the 52 Set
<< <i>Mike,
just friendly debate,
I guess If I purchased a box of 1952 topps cards in 1952 and held them unopened all these years and continued to buy boxes of topps cards each year for 10 years until 1962 because I am an unopened collector, and each box in 1952 cost me 1.80 for the box and .05 for a pack and today I could sell 1 pack from that box for 7K or more (see current mastro price)
I guess that would qualify as a collection that was a good investment. Huh?
what is .05 compunded over 50 years at 10%? well 5.00 would be 586.95...
now what is .05 into $7,000.00...a damn good investment
and before everyone says Oh but that wont happen again, I say..86-87 fleer anyone? >>
That's an isolated incident in time.
There's very little of that product and thus the unusual appreciation which will not be a "pattern" which is needed to predict a stable investment.
It's important that we equate apples with apples. An investment portfolio is designed with stability in mind. It can have a % of speculative investment like sports cards in it. But, the question, if I have it correct deals with cards/collectibles as a good investment - which to me implies stability, predictability, safety and a fair rate of return.
Collectibles, across the board, are risky. For all the success stories, there are plenty of guys who have tubed.
Just look at the McGwire ball - 3 million - what can one get for it today?
mike
If anyone thinks of cards as investment - they can be IMO - just very speculative in nature.
For all the success stories - there's way too many horror stories also.
Many of the "investors" who used to post here are long gone.
mike
An investment, to be successfull, must always be in strong hands. If it is not, then selling at inopportune times will manifest and, well, people tends to lose money. You might ask yourself:
1 Have you ever carried a balance on a credit card as the result of a baseball card purchase?
2 Have you ever gone without something you needed to buy cards?
3 Have you ever been late on household bills because of card purchaes?
4 Have you ever wished that you could buy cards in a margin account?
5 Have you ever sold a card out of financial necessity?
5 Do you wonder why the CBOE dosen't offer derivatives based the value of Babe Ruth's signature?
If the answer is yes to any of these questions, you are really not investing because the slightest hiccup in your own personal financial situation may cause you to liquidate and, my friend, cards will cause you to lose money and that just would not be a sound investment.
What I am saying is that for some, cards could be viable long term investment, but for others the same cards are not a good idea. Because of the speculative nature of cards (they HAVE to be considered speculative because the overall market is so small that true liquidity, even for a small investor, does not exist-- even on Ebay) I would still stick to a 10% max of your investable net worth. I.E.-- if you have 100k in your 401k or taxable accounts your probably being irresponsible if your collection is worth over 10k, that is, some of your money might make better sense elsewhere. If your over 40 then I would remove the word "probably".
Why do make these bold statements? Because I'm wise? No. Because I'm brave? No. Because my wife is preparing to have friends over and I am hiding in the basement with time to kill. Cheers.
Good points.
One thing that is true - if you have some serious coin to throw at this, one might come up with some items with pretty good appreciation.
But I'm talking about high end stuff - like a contract that was purchased for about 100 grand and then got sold for a million a few yrs later - a Ruth contract.
I saw a really good flip on a PSA 8 52T set also.
But most of us are not in that category - I guess the rich get richer? For us, altho it would be nice, if needed, that we saw a profit if we sold out stuff - by the time you figure all the fees involved - the profit may not be that large.
I really like collecting - it's in my blood - but I'm only expecting a dividend of pleasure and satisfaction.
But, if I ever need to sell - I'll try to be ruthless! LOL
mike
How about the person who has a margin call on a commodities contract? They are forced to liqidate and sell, now before you jump up and down and say thats speculating I will tell you its not, its an investment, The cattle farmer who is trying to protect his upcoming sale locks in a price for delivery by selling a cattle future protecting him from a major downside move in live cattle. Now he has full intention of delivery of those animals. Yet if he has a margin call was he speculating? No, they were investing and protecting the current market value of his cattle sales. They could get a margin call and have to flip the contract the other way, but it was an investment risk they needed to take. Now we can debate this all day, and I simplified this for this discussion because there are many factors that go into this and this isnt the place for this.
Or what if you have a nice portfolio of stocks and something happens and becuse you need the cash you liquidate, does that mean you didnt invest? Thats just not right. If someone sells any investment for money i.e card, coins, stocks, whatever, becuse of a need for cash, that in no way discounts the investment.
I just dont agree that cards are a bad investment, any asset, has to have certian factors that define investment, a fair market place for exchange of said good, a fair way to determine value.
Cards meet those requirements, so we know it is an investment, now is it good? I say yes, certian items bought properly will appreciate over time and others will not. Mike you pointed out that with every success there are many faluires, Doesnt that sound just like the stock market, just like friends saying my mutual fund was up 10% this year, and then your fund was down 12%? Isnt that a success and a faliure in the same market place?
If I own stock A and it goes down 20% and you own stock B and it goes up 10% we have both "invested" my choice was wrong and yours was right.
Just like buying the McGwire ball was wrong, buying the 56 mantle for 800.00 10 years ago that graded an 8 was good.
The examples I used were extremes, not your everyday returns, I could have easily said, 15,000 examples of people who have sold thier items for more than they paid for it, as you can rebutt with 15,000 of examples where that isnt the case.
The point is, any investment is one that requires a well thought out plan, not over paying (not buying at the top of the market) and appreciation for that item. While I agree that buying 10,000.00 worth of Zack Duke RC's is maybe not the smartest idea, I can't see how buying something 50 years old (ie, 56 topps in psa 7/8 condition) 20 years from now wont appreciate.
I guess the real answer lies in future, I will see you in 20 years god-willing, and when I sell I'll let you know how I did, only then will "we" be able to determine who was right. so I guess we will leave at: We agree to disagree..
I will continue to invest in my collection along with the stock market and hopefully when I cash out I can be lying under a plam tree sipping funny looking drinks with umbrellas in them...thanking my stock market portfolio and Ol' Mickey Mantle, amongst others.
Link To Scanned 1952 Topps Cards Set is now 90% Complete Plus Slideshows of the 52 Set