My collecting tactics for long term investment
FRNAllStar
Posts: 322
Yes sports cards for investment!
MY plan for collecting will be a fun project for me personally.
My goal is to collect cards by buying them as singles. These cards will be rookies only. They will also be modern autographed/jersey cards from SPX. These cards are limited,eye appealing, and seem to have a large market supply of demand. These spx auto/rookies should stand the test of time. I will also collect old rookie cards that I fancy to like example: (joe montana).
I dislike opening packs since I believe the odds always catch up with you. You might as well go to a casino. Also your left with a whole bunch of worthless cardboard(cards). However the special insert that of a rookie with an autograph and as a bonus, a game used jersey be proclaimed a collectors piece. Something that will increase in value. Also it being a rookie seperates it from other auto cards.
So what do you think?
I like the Spx auto/jersey rookies. Also I like the exquisite auto/patch rookies. These are cards that are limited quanity.
I will be looking for rookies from colleges I like and teams I like. Also rookies that I feel are undervalued and may shoot up in value example(brett favre's backup Aaron Rodgers).
Any insert sets you like to reccomend for rookie speculation?
Anything you would like to criticize about my proposed tactic?
Any advice about what might be a waste of money?
Alot of people say cards are not an investment. I know alot about sports. So I think it would be fun to try and find a couple of HOFer's or all star athletes when there are rock bottom waiting for there moment to shine. Then when the hype hits them SELL. Could be fun and buying and selling would be easy on ebay. I just hope inserts like SPX AUTO/JERSEY ROOKIES will hold value and keep a market demand.
If all doesn't work I still have a card with an autograph of a player I like.
Remember all that expensive vintage you own now was modern crap one day and was worth crap in it's time.
MY plan for collecting will be a fun project for me personally.
My goal is to collect cards by buying them as singles. These cards will be rookies only. They will also be modern autographed/jersey cards from SPX. These cards are limited,eye appealing, and seem to have a large market supply of demand. These spx auto/rookies should stand the test of time. I will also collect old rookie cards that I fancy to like example: (joe montana).
I dislike opening packs since I believe the odds always catch up with you. You might as well go to a casino. Also your left with a whole bunch of worthless cardboard(cards). However the special insert that of a rookie with an autograph and as a bonus, a game used jersey be proclaimed a collectors piece. Something that will increase in value. Also it being a rookie seperates it from other auto cards.
So what do you think?
I like the Spx auto/jersey rookies. Also I like the exquisite auto/patch rookies. These are cards that are limited quanity.
I will be looking for rookies from colleges I like and teams I like. Also rookies that I feel are undervalued and may shoot up in value example(brett favre's backup Aaron Rodgers).
Any insert sets you like to reccomend for rookie speculation?
Anything you would like to criticize about my proposed tactic?
Any advice about what might be a waste of money?
Alot of people say cards are not an investment. I know alot about sports. So I think it would be fun to try and find a couple of HOFer's or all star athletes when there are rock bottom waiting for there moment to shine. Then when the hype hits them SELL. Could be fun and buying and selling would be easy on ebay. I just hope inserts like SPX AUTO/JERSEY ROOKIES will hold value and keep a market demand.
If all doesn't work I still have a card with an autograph of a player I like.
Remember all that expensive vintage you own now was modern crap one day and was worth crap in it's time.
0
Comments
<< <i>What were the best long term investment cards to come out of the 90's or the 80's >>
That's a tough question because the market is always changing. You can list anybody who is now in the HOF or will end up there. The problem with stuff from the 80's and 90's is that they made a ton of it so it's going to be a long time before Shaq rookies are hard to find!
I mean Exquisite basketball is a super high-end product but it's rare because it's a factory made rarity. To me that doesn't hold as much appeal as seeing a Mint 9 1954 Aaron rookie. Now that's rare!
Also just for the record a 1981 Joe Montana rookie doesn't qualify as old unless you are 8 years old!
I notice heritage a set wich alot of people are looking forward too. When all is said and done you will have a whole bunch of basic modern cards with inserts that could be common ones. I would much rather just buy the insert i want straight up. I Don't wanna buy an insert when it is High in demand and red hot(example ALEX SMITH 1st draft pick) but buy it when it's rock bottom, perhaps a college football player who needs a couple years to build his skills. So buying his rookie in his sophmore slump year or later, to me seems like a good investment.
All I say is do it for fun and if you end up making a few $$ in the end you did o.k.
In the 90's it seems there was alot of insert sets that were Very expensive and then just dropped in price as more and more insert sets pumped out.
I feel that the insert rookie is special because a player only has 1 year to release rookie cards. The problem is will there be so many rookie insert sets released in this current modern era that the premium auto rookie insert will fall in price.
You are joking right? If you are not joking you don't know anything about sports cards. You may know sports as you say? Just a few helpful hints before you decide to use this "hobby " as your kids college fund.
1. Vintage is only worth something now because of :
a. Paper drives, limited print runs and miss handling over 60 to 110 years. Only truely high grade cards are worth bundles of cash. PSA 4 and below of 100 year old cards can still be had for under $40.
b. Truely mint and low pop 1960-79 cards are selling good. Cards in that range that are not what I described can be had for under $10. Not gonna pay for the semester yet.
c. For the 300 new rookies each year (all sports) only a handful reach high dollar collector status and this may be for only a short time. 2-5 years. Can you be sure you can pick all winners? Secondly the game used and inserts have reached a point that although limited there may be 50 limited variations for each player. Hardly scarce.
d. The final and most important point. There are no cards today that have limited runs that are not treated like gold. From pack to slab in 7 days. Everthing produced with any value is still around. Players come and are forgotten and the product outways the demand and the price falls. 98% of modern loses its value after the hot market cools. Too many examples to list.
Final conclusion. Collect for fun and save the investing for other more stable markets. Find a good adviser and put your money somewhere else. I could go on, but I'm sure many others will add more.
2dueces's Sports Cards
"I spent 50% of my money on alcohol, women, and gambling. The other half I wasted.
It's true that rarity of the vintage short print runs is the key to long term value.
"I spent 50% of my money on alcohol, women, and gambling. The other half I wasted.
don't buy modern stuff with the intention of holding on to it. You will simply get torched. Not only do you have all the issues which deuces and BWF brought up, but you have the inexplicable irrationality of the market itself to deal with.
Example: Let's say before the NFL season this year you did your homework and decided that Willis McGahee was going to have a big year, so you stocked up on his Ultimate Collection autos at $200 a pop. You leave on a three month long trip overseas, then come back and check McGahee's stats. Sweet! you think. He's rushed for over 1000 yards by week 11. I made a good call when I bought his cards, and now I'm going to cash in.
Except for one thing. You go on to the 'bay and discover that his UC rookie has no DROPPED to $70. Guys were buying them up at $200 a crack two and a half months ago, and now that he's having a great season the value on his cards has plummeted 66%.
Who can explain it? It's defies logic. But anyone who's looking to hold onto modern cards for longer than, say, 4 minutes is going to have to get used to these kinds of screwed up market dynamics.
<< <i>Steve young has dropped alot too! Same with jerry rice. >>
The simple answer is that modern is not a good "investment" at any price. If you like these players then collect them but they have already hit their peak and thinking that going to the HOF is going to make them jump is not realistic. There might be a small jump but then things get back to normal real soon! Collecting cards is a hobby! The whole idea of making lots of money on new product is a new concept and one that is fading fast.
<< <i>Before this gets ugly. What were the best long term investment cards to come out of the 90's or the 80's >>
As was stated previously, these cards rarely (if ever) hold their value in the long run. Ever wonder why? It should be noted that, as stated before, sports cards are a hobby, not an investment.
You should collect with a theme, and I think you have that with the tactics you have stated. And if you stick to it, you would be headed toward building a collection that may be well worth something in the future.
Good luck in your singles search!
I would advise: Don't spend more than you can comfortably afford and collect what you like. Your happiness is more important than $$$. Even the stock market doesn't follow a logical mathematical principle; the hobby of collecting certainly doesn't.
Good luck!
P.S. Don't let all the vintage collectors on here deter you from collecting what YOU like and want to.
1) Collect what you like, but if you think you're going to get rich from modern sportscards, then I've got some swampland in Saint Diego for you.
2) I never buy anything made after 1987. The only reason I buy anything from 1978-87 is that's when I was a kid growing up and I'm filling some holes in my collection. Really 1975 and before is all that matters to me.
3) If you want to invest and try to make a buck, look for value and never deviate from it. NEVER, EVER, overpay for something unless you are going to keep it for yourself and you don't intend on selling it. If I ever did dabble in the modern market - and I can assure you I won't - I would have one mantra to describe my buying philosophy: PENNIES ON THE DOLLAR.
Happy collecting and Stay Classy.
Buying Vintage, all sports.
Buying Woody Hayes, Les Horvath, Vic Janowicz, and Jesse Owens autographed items
<< <i>The Willis cards are a tough example.......he was really hyped up this off season, remember....this guy was picked to be a top 5 back in most fantasy football leagues. He is having a solid year but nothing spectacular compared to how strong he finished last year, it also doesn't help that he is playing on a losing team right now. >>
This may be true-- I don't follow fantasy football, so I'll take your word for it-- but it still defies logic when you see the cards for a guy who's going to run for 1300+ yards drop 66%. That's just ridiculous. The larger problem with speculating on modern cards is that you have to win a real parlay; first, you have to pick a guy who isn't going to bomb, and THEN, from that small subset, you have to pick guys who are going to become 'hobby favorites'. The sporting world is full of perennial All Stars and future HOF's who simply don't get any respect from sports card enthusiasts. How would you like to be sitting on a stack of Curtis Martin or Jerome Bettis RC's? Or Eric Dickerson for that matter? These are all top flight backs, with 1st ballot HOF careers, and their RC's in most cases can be picked up for nothing. And this doesn't only apply to football. Look at Todd Helton, or Troy Glaus, or Chauncey Billups.
I don't collect modern cards (although I do keep a loose eye on the market) for the simple reason that I don't think it's unreasonable to expect collectibles to not lose 50% of their value 1 year after release. And that's exactly what happens if you take all sportscards, in aggregate, and compare their collective value at the time their issued to 1 calendar year later. And the situation is even worse if you crack boxes. A 100$ box today will, if cracked, yield contents on average that won't be worth 20$ a year from now.
Let me emphasize that I'm in no way trying to diminish the collecting goals of modern collectors. We're all united by a love of sports cards, and if collecting modern cards is satisfying to a collector than I say go for it. But for guys like me, who have a general appreciation of sportscards but don't really feel connected to any particular team, player, sport or era, I think there are far better ways to spend one's collecting dollar.
I'm not considering collecting cards as my career!
Im not considering cards for a Retirement.
I just think rather than ripping packs open and getting alot of crap. I would rather Buy cards as singles that are rookies,autographs and from high end sets. The premium rookie you might say. So when I buy a single card I'm gonna use tactics that will allow me to have a card that is my best chance for an investment or a longshot hopeful dirt cheap for resale if he skyrockets. Not a whole bunch of cards but a small amount of cards. Premium rookie cards. These could be players from my favorite team or anything else, mostly players who don't get enough respect or haven't flourished yet, hopefully. I would think these kind of cards would have the best chance of holding a value from this modern era. Also If I buy a rookie who is rock bottom the chance of him skyrocketing is there. Rookies will always have there spot in card collecting
I welcome all comments,
Just please consider i'm collecting cards just like you. This is not my job. I just think buying a few singles rather than packs would be easier to sell in the future, especially modern. Plus I can choose which players I feel may improve. If not It's a card just like any other.
The invest in stock comment or others of sort although welcome is sort of off-topic. Just so you know this is not a get rich quick scheme. but just my style, I like to collect things that are rare not valueable,this in hopes it becomes valueable. So with the present upon us I just wanna chance at tomorrows gems.
<< <i>Here is an example. I paid $4 for this card >>
And this card has a book value of $30.00 so what does that tell you?? Plus the fact that defensive players don't carry the hobby the way QB's,WR's and RB's do. As I said before it's a buyer's market so if you like Trufant and want to collect some of his stuff go for it. But a $30.00 card of a decent player selling for $4.00 should show you that we know what we speak of. If you just want to speculate and have some fun collecting then go for it.
RBs can make you money if they are setting records or are on a winning team. However RB draft choices are more solid than QBs, so it's hard to find hidden gems. The only recent player to "surprise" the hobby was Priest Holmes. Larry Johnson is making a comeback, but he started high as a rookie.
WRs are the toughest to pick. Even a HOF-caliber WR doesn't attract much attention. WRs need a personality in order to get attention.
Money can be made with DEF players if they are on a winning team. Trufant is OK, but better picks are Roy Williams in Dallas and Terrell Suggs.
<< <i>The only players in football that have any chance of rising in value are QBs. As the draft has shown, picking a franchise QB is more about luck rather than skill. The only way you're going to make money buying singles is trying to find the next breakout QB. I would focus on QBs under 26 that have a shaky starter in front of them.
RBs can make you money if they are setting records or are on a winning team. However RB draft choices are more solid than QBs, so it's hard to find hidden gems. The only recent player to "surprise" the hobby was Priest Holmes. Larry Johnson is making a comeback, but he started high as a rookie.
WRs are the toughest to pick. Even a HOF-caliber WR doesn't attract much attention. WRs need a personality in order to get attention.
Money can be made with DEF players if they are on a winning team. Trufant is OK, but better picks are Roy Williams in Dallas and Terrell Suggs. >>
And that isn't even the whole story, as the QB also needs to play for a winning, high profile team. There are no exceptions to this. If a decent player toils for a crappy team his cards will never receive hobby attention.
In fact I'd go so far as to say that no player at any position has a chance to receive lots of hobby attention if he doesn't play for a winner. Who can think of an exception? Barry Sanders springs to mind, but I think he's it. Eric Dickerson is one of the all-time leading rushers, but he played on those wretched Rams and Colts teams-- and as a result his cards are one step removed from being common.
<< <i>Rudi won't ever be hot in the hobby with Carson Palmer and Chad Johnson on the same team. Rudi has a steady style that doesn't excite collectors. >>
I don't follow you. The more great players a team has, the more each player benefits (from a hobby perspective). Look at Andre Reed, Thurman Thomas and Jim Kelly-- or Aikman, Irvin and Smith. Or, for that matter, Manning, Harrison and James. Each of these guys are more collectible than they would have been if they hadn't been surrounded by other great players at the skill positions.
Your "piles of cash" icon is ironic. I suppose you think that cards like Trufant's are going to bring you bundles of money in the future. No way. It'll be a losing proposition.
<< <i>FRN Allstar,
Your "piles of cash" icon is ironic. I suppose you think that cards like Trufant's are going to bring you bundles of money in the future. No way. It'll be a losing proposition. >>
Reread his post above and you'll see this is the last thing he is expecting.
A young QB will always grab the most spotlight and then the best RB or WR. In the Bengals case, Chad has a higher profile than Rudi. I call it the ESPN factor, which players end up on ESPN the most?
Rudi is a nice RB, but I don't think he is viewed on the same level as Thurman Thomas or Emmitt on their teams. Edge is probably the 2nd guy on the Colts. No one really collects Marvin.
I like the card.
I had a chance of a card rising in value.
The card will most likely just hold a stable price and not drop to pennies so If i don't make a big investment then I really lose nothing. Kind of like a pack of cards. Except I get a card I really want guarenteed.
Like I said I'm not making these tactics part of a career plan. It is a plan for how I plan to collect and participate in the hobby. So in my collection i will choose to purchase low end rookies On premium Insert cards who's career has not ended and may have a great upside.
Remember I like rookies who are in sophmore slumps or 3rd or 4th or 5th years of thier career who may have a turn for the better in thier career. not 1st year overhyped 1st rounders. Also the card I will purchase will be the Premium rookie example for the athlete, Maybe not the best Like Spx spectrum 1/25 or others with less than a 100 examples. but a normal Autograph,jersey patch rookie with a limited # of 500 to 1500 from a premium set will be my target.
<< <i>Well if my marcus trufant card shows no increase I have no problem and here is why.
I like the card.
I had a chance of a card rising in value.
The card will most likely just hold a stable price and not drop to pennies so If i don't make a big investment then I really lose nothing. Kind of like a pack of cards. Except I get a card I really want guarenteed.
Like I said I'm not making these tactics part of a career plan. It is a plan for how I plan to collect and participate in the hobby. So in my collection i will choose to purchase low end rookies On premium Insert cards who's career has not ended and may have a great upside.
Remember I like rookies who are in sophmore slumps or 3rd or 4th or 5th years of thier career who may have a turn for the better in thier career. not 1st year overhyped 1st rounders. Also the card I will purchase will be the Premium rookie example for the athlete, Maybe not the best Like Spx spectrum 1/25 or others with less than a 100 examples. but a normal Autograph,jersey patch rookie with a limited # of 500 to 1500 from a premium set will be my target. >>
All told I think FRN has actually come up with the most level headed way of speculating on cards that I've ever seen.
<< <i>Like I said I'm not making these tactics part of a career plan. It is a plan for how I plan to collect and participate in the hobby. >>
Then just do it!
"I Will do it"
I just appreciate everyones advice and criticism. It's great to examine another persons beliefs. I'm glad we could debate On my style of how I collect 2000-05 modern cards in the hobby.
Thanks, and any other conversation is on open ears.
John
HOF SIGNED FOOTBALL RCS
<< <i>what makes it so tough is even if you DO find the next HOF RB on a very solid winning team (thurman thomas?) their cards can still be worthless! You just really have to luck out, and have that common Brady SP Authentic RC in your rookie box to really make it, IMO. Otherwise, it's tough.
John >>
Right. And Brady won 3 Super Bowls in his first five years in the league. If that's what it takes for a guy's cards to jump then we're all better off collecting Yu Gi Oh.
<< <i>Here is an example. I paid $4 for this card. He is in his 3rd year. Plays for the seahawks my favorite team and came from Washington state college and born in washington. So cool card for my liking. Also I feel this card may have a shot at going up in value. I can't see it going down and if it does i still have a cool autograph. This is trufants best rookie I believe. The spectrum version of this card is exactly the same except limited to 25 and it says spectrum on it
As been said, the value of this card is only $4...and that's to a hometown fan. Imagine what the rest of us thinks that card is worth.
I only mentioned early on about getting ugly because of the moronic statement, "Remember all that expensive vintage you own now was modern crap one day and was worth crap in it's time."
<< <i>
<< <i>Here is an example. I paid $4 for this card. He is in his 3rd year. Plays for the seahawks my favorite team and came from Washington state college and born in washington. So cool card for my liking. Also I feel this card may have a shot at going up in value. I can't see it going down and if it does i still have a cool autograph. This is trufants best rookie I believe. The spectrum version of this card is exactly the same except limited to 25 and it says spectrum on it
As been said, the value of this card is only $4...and that's to a hometown fan. Imagine what the rest of us thinks that card is worth.
I only mentioned early on about getting ugly because of the moronic statement, "Remember all that expensive vintage you own now was modern crap one day and was worth crap in it's time." >>
Wha? That's not moronic. It's completely true, and speaks to the fact that neither you nor I really have any idea what's going to be desireable 20 or 30 years from now. Who knows? Maybe SPX becomes the standard bearer for modern issues, and all the autographed RC's-- even the obscure ones-- shoot to the moon as people start trying to cobble sets together.
The larger point is this-- you simply cannot get burned too bad buying 5$-15$ cards of modern RC's. If Trufant, or some other player of his caliber, goes on to have a reasonably productive career this card will at the worst hold at 4$. Unlike with Manning, etc., there is no hype built in to the price of this card. When you pay that 4$ the fact that he 'might become a star' is not factored into it's current value.
Also-- and this can't be overemphasized-- there is a finite number of these cards out there. I know, I know--- 'but there are eighty different sets that all have his card numbered to 250'. So what? Then there's 20,00 of them out there if that's the way you want to look at it. In any event we can figure out how many there are, which eliminates the nasty possibility of increased supply screwing up the value. Anyone who has a graded Topps baseball set post 1960 that they put together four years ago could certainly speak to what happens to a card's value when hundreds more just like it suddenly spring from the ether and find their way to the 'bay. If nothing else the man holding this Trufant RC won't have this problem.
My first thing with baseball is I nevr ever purchase any top players cards or game used items, they are over priced when they first come in and a large majority of them can be picked up for a lot cheaper several years down the road. I really started doing this hardcore in about 1997 and I can break it down by year on how I did. I really would load up on about 5-10 players a year and here is how I have done. Some of the years are off but it is pretty accurate, I have a big list here of what I bought each year, I spend a lot of time researching mainly just cause I like it and it gives me something to do on the side. I like to usually pick up bowman chrome rookies the year after they come out when all the rookies aren't over priced. I stopped doing this in about 2002 since there became too many cards out there but you can below where I really did well on a few select players and my losses havent been that bad since I buy cards dirt cheap.
1997 I just bought different players from different years- Purchased a ton of Abreu bowmans/Bowman Best.....he's a top 20 player but still his cards are not selling that well, good profits for myself though. Tons of Jason Schmidt 94 topps traded, worked out well since I was getting them for about a quarter each. Lots of 96 Bowman Brett Tomkos.....yeah that really didn't develop like I thought it would but I do hang out with his brother Scotty every now and then. I picked up a 100 lot of 95 Topps traded Beltrans.....obviously this was huge for me but I sold a decent chunk after he won ROY so I didn't maximize my profits, oh well. That was pretty much it for that year so I did alright.
1998 Only Bowman/Chrome- I bought very heavy into Tejada and sold off a large portion of his stuff after he won MVP, I think I had 5 refractors at one point. I still have 2 Game Used bats from him as well. I also bought a lot of Roy Hallady which I'm still sitting on and a lot of Mark Kotsay which I regret now, oh well. Still sitting on a ton of jayson Werth and Johnny Garland cards from that set as well.
1999- This was a bad year for me for buying, still sitting on a lot of cards of guys who never really developed out of the 98 set. I picked up a bunch of Jimmy Rollins and Lowells but the profits will never be that great ever.
2000- This was my best year I think since I picked up 300 Fleer Update rookies of these players : Soriano, Gagne, Hudson, Joe Mays, Freddy Garcia, Byung Kim, and Matt Riley. Obviously I made a killing on Sorianos, Gagnes, and Hudsons. I was selling the Sorianos at almost 10 a pop at one point and Gagnes at about 7ish. The Kims I did very well on as well but still am holding about 100 of them. Garcia has been solid but nothing special. The Joe Mays looks like a complete loss right now and Matt Riley is really up in the air. I also bought a lot of Mulder/ Hudson and Soriano Chromes that year......and to against my theory I also picked up some Austin Kearns cards just on a thought and that is why I don't like doing that anymore.
2001: Bought good size lots of Zambrano, Oswalt, Zito, Broussard, and Inge. The first 3 were huge profits but I will take a loss on the last 2. This was the 1 time I wish I was a fortune teller so I could have bought up every single 2002 Topps traded auto of Cabrera and Zambrano, oh well.
2002: The last year I really did anything like this anymore and I still have an inventory of questionable players. My big money maker was Johan Santana....there was a 3 month stretch when I was buying almost every single 2000 Bowmans Best or Finest rookie I could find for under 10 bucks, I had nearly 40 of each and the profits were amazing. I don't think I will ever have that again. I bought a lot of Peavy and Haffner rookies as well and I also dabbled into Oliver Perez a little bit.
So with a lot of research it can be done but the Santana scenario was just a lot of luck and that was it. I like buying the cheap cards because if I'm wrong my loss won't be that bad as opposed to dropping $100.00 on a card that may be worth $25 in 6 months. Best of luck to you but I wouldn't invest too much money into it and just treat it like a hobby.
<< <i>Yes sports cards for investment!...
...Remember all that expensive vintage you own now was modern crap one day and was worth crap in it's time. >>
Not necessarily true for today's cards.
Baseball Cards or Blue-Chip Stocks?
Hobbies are great, but are they the best way to make money? Fool contributor Stephen Simpson explains why confusing collecting with investing can be bad mojo.
By Stephen D. Simpson, CFA
June 7, 2005
We spend a lot of time here at The Motley Fool giving readers the tools, information, and encouragement to help them become better investors. But we don't spend as much time clearly defining what exactly qualifies as an investment.
To me, an investment is best defined as a stake in an enterprise that is expected to grow in value and/or produce cash flow. Buying a share of stock, a government bond, or a piece of a business --whether it's the local coffee bar or a lead mine in New Mexico -- is an investment.
Many collectors and hobbyists mistakenly think of the objects of their desires as "investments." But collectibles such as coins, stamps, or diamonds don't have growth potential, nor do they produce any cash flow of their own.
Compounding your woes
Why does it matter? It's all about the power of time and compounding, my friends.
A 1917 Standing Liberty quarter is going to be more or less the same in 20 years as it is today, but many of today's public companies will likely be significantly different in size and/or scope at the end of that same time period.
Companies' ability to grow from within is a major advantage. Johnson & Johnson (NYSE: JNJ) has grown internally at a double-digit clip for decades, which in turn has powered double-digit compounded annual stock price growth. Compare that with collectibles: On average, they grow in value by about 5% to 7% a year. Even if the stock market grows only about 9% a year in the future, that 2% difference compounds to slightly more than a 20% difference in total return after only a decade.
It's certainly true that stock investing offers no guarantees, but neither do collectibles. What's more, you can almost always sell a listed stock for something close to its quoted price any time you please -- something not always true of collectibles.
Over the long haul, stock performance is reliably linked to earnings and cash flow growth. The valuation of collectibles, though, is based more upon raw supply and demand and the vicissitudes of taste. A Renoir has value because people choose to value it. If you look at the history of price movements in art, coins, and the like, you don't see any sort of reliable correlation -- the price of a Renoir moves independently of the quality of the artist's work. It has more to do with people's taste at a particular point in time.
I believe I can explain why Cisco Systems (Nasdaq: CSCO) is worth more than Foundry Networks (Nasdaq: FDRY). I'm not sure it's possible to provide a similar analysis of the relative values of a Picasso and a Monet, or an 1823 dime and a Mickey Mantle rookie card.
Problems unique to collectibles
Beyond valuation, there are many problems that those who wish to "invest" in collectibles have to navigate.
There is an inherent market imbalance in the collectibles world -- regular folks typically buy at the retail price and sell at the wholesale price. While many investors would be furious about paying a 4% or 5% spread in the stock market, many collectors would be thrilled to see just a 10% or 15% spread between the "buy" and "sell" price.
Second, the health of a collectibles market is inextricably tied to the level of interest in that market. Granted, certain collectibles -- coins, stamps, baseball cards, diamonds -- have a long history of interest, and collectors can usually find buyers and sellers in any city of meaningful size. But that's not always true of more specialized or esoteric collectibles.
Lastly, twisting a collectibles hobby into an investment exercise can spoil the fun of both. Hobbies should be just that -- enjoyable diversions that take you away from the stresses and demands of your work and personal life. If people become uptight about whether they're going to make a killing from their latest antique or art purchase, they may find themselves losing their initial enthusiasm and love for the hobby.
The dealer's edge
There certainly are people who make money by investing in collectibles. By and large, though, these people are dealers -- people who treat the trade of collectibles as a business and so can rightly view their ownership of collectibles as a piece of a (hopefully) growing business.
As dealers, they have the opportunity to buy wholesale and sell retail. That aforementioned 10%-15% buy-sell spread puts food on the dealer's table and covers his or her inventory risks.
Dealers also talk amongst themselves, and they often share information with each other that they wouldn't divulge to all but their best customers. As such, they are in a good position to know what's selling well and position themselves accordingly.
For instance, most of the coin dealers I know bought up gold coins whenever they could in the late '90s and early 2000s, when gold was low, and sold a lot of them in the past couple of years. Now that gold's hot, they're trying to buy fewer gold coins and more of the unloved coins that now sell at lower prices -- expecting, of course, that prices will reverse again in the future. Amateur collectors have been buying a lot of gold coins lately, but they might have to wait a long time to see any gain from them.
How to profit from a hobby (if you really must...)
I hope that by now, you've abandoned the notion that collectibles are as sound a purchase as Starbucks (Nasdaq: SBUX) or Microsoft (Nasdaq: MSFT), but I'm sure some people will absolutely insist upon trying. So here's how to make the best of a tough situation.
Get yourself as educated as possible -- learn everything you can about your hobby and the trends that make it work. It's also a very good idea to locate and secure the services of a well-connected and reputable dealer.
It is also critically important that collectors and hobbyists avoid overspending on their avocations. Most collectors get a psychological "rush" from their new acquisitions; it can take considerable discipline to keep within a sound budget.
Success with collectibles demands that the collector be either exceptionally nimble, moving in and out of hot trends, or exceptionally patient. Trends can take literally decades to sort themselves out. Additionally, it can take years of price appreciation to recover from the bid-ask spread and make a profit.
The bottom line
Hobbies are great. They're one of the ways I've been able to maintain my own sanity while working in and around the real financial markets. But mixing hobbies and investments can spoil both and ultimately cost the collector a lot of money.
While you might be able to buy a painting from the next Rembrandt or discover a valuable armoire at a yard sale, the odds are against you. Most hobbyists who attempt to parlay their collections into investments will find themselves on the short end of the stick and holding items that are as popular as velvet portraits of Elvis.
Investing in faceless conglomerates like Wal-Mart (NYSE: WMT) or General Electric (NYSE: GE) may not be as emotionally satisfying in the short run, but it's a more reliable way of building your personal wealth over time.
SOURCE
It's about how should I spend the money I have set aside for my hobby. Not what is the best thing in the world I could buy for investment purposes, but what cards I can buy for the hobby im in that are good investments.
It got ugly.
Don't let the vintage collectors on here get to you. Yes they are annoying, but no one outside of the hobby gives a sh!t about baseball cards or baseball card collectors. Many people sneer at THEM for spending what they do on their "precious vintage."
If you're collecting for fun +/- turning a profit someday, I think you're doing very well.
Nice pick-up on the $4 card, BTW.
4 more cards and my Mars Attacks set will be complete.
30 more cards and my 65 Topps set will also be complete.
Sd
<< <i>I collect cards with an investment angle in mind too. An investment in happiness................Enjoy your cards and be happy. >>
Amen!