Are you better at buying sports cards than stocks?

TheCARDKid

It seems like there's alot of people on here (and on other boards) that do pretty well at buying what they know, spending a certain amount, picking out bargains, trolling through ebay for deals.

Does that kind of discipline, rationality and logic ever translate over into the stock market? If you can spot a bargain on ebay, can you spot a bargain stock (out of favor but with good fundamentals)?

I think it's amazing how people behave in these two different markets.

For the most part, collectors are fairly rational about things. Sure, you'll see bidding wars, '62 Topps Koufaxs bid up to an insane amount. Or guys bidding up pre war commons to crazy levels.

But when I go to a card show, most people seem very rational and down to earth. They know what they want (want lists). They know approx the price they want to pay. Everyone is off in their own niche; people don't seem nearly as swayed by the crowd as in stocks.

If you're in a little niche and there's only 5 other people collecting your set, do you care if there's a 1,000 people collecting modern Topps sets, no.

Yet in the markets, it's just a mass of confusion, there's 10,000 different opinions on everything. Rationality and logic go completely out the window for most people. Everyone gets swayed to one opinion and you see alot of crazy and irrational things.

earlycalguy

I think stocks and cards are different in the investment sense. stocks to me are buy and hold, maybe take some profits or cut your losses her and there. if you turn cards it's more like day trading. buy this week and sell next week.

mmoin

Some ramblings:

Card market- high transaction costs, labor intensive, lots of different markets in which cards are traded, far more unique assets. all in all, far more opportunities for arbitrage, and far more instances in which a smart collector can find a "mispriced asset"

Stock market- very low transaction costs, extremely liquid market that does an excellent job (overall) of maintaining consistent prices and eliminating potential for arbitrage, making index or buy and hold investing usually a far better strategy than active trading

I think you may be conflating the behavior of market participants with the actual volatility of the market- in general, it's the crazed actions of millions of stock market participants that allow the markets to (relatively) accurately value publicly-traded companies by having market prices be the result of aggregate supply and demand, while it's the speculation and prognostication of a small group of intelligent vintage card collectors/investors that results in segmented markets and arbitrage opportunities. There are very few (if any) collectibles markets that are less volatile, overall, than the securities market.

So, I think there are far more opportunities to look for underpriced items in cards, but because it's so labor intensive and there are such high commissions, I really don't see it as something that can be compared favorably to investing in stocks. Even when people show price guides from 1980 and say stuff like "I wish I could've loaded up on T206's back then", the rates of return (including storage/insurance costs and transaction costs) aren't really any better than having simply put your money in index funds and having had it compound at ~10% (so, overall about a 1300% return) for 26 years.

alnavman

Don't know if I can honestly answer that question.....let's see one of my stock purchases in past years was AOL.....when it was at $55 a share.....and one of my card purchases was a case of the first year UPPER DECK Football....purchased at $70 a box.....I think I sold my last box for that case for $7 a few years back......

You win some, you lose some.....you can't really compare the two, I buy cards more for my own pleasure and don't view them as investments......stocks are another story.....I have been lucky enough to have exxon stock and even made money on a few others.....

TheVon

I, for one, do way better picking stocks than I do baseball cards. I'd like to think that's because I buy baseball cards as a hobby first and an investment second. The truth is probably closer to the fact that I have always sold my cards low and bought high because I get too carried away with my enthusiasm for players.

Just last week I bought stock in Collectors Universe, actually, and I've already made 1.68%. Granted, that's not a very impressive number, but if I'd take a 1.68% increase week after week for any investment any time. Maybe one of these days I'll cash out my position in Collectors Universe and use the funds to pay for a submission!

zef204

Completely different realms. There are gains and losses for both in short and long terms, but they are different beasts entirely.


edited to add: I am better at buying cards. If I put as much time in on stocks as I do cards, perhaps I could shift the scale. But I think passion plays a part in our card buying and it doesn't always translate into the stock world. I think the factor of tangibility is one thing that is way different.

TheCARDKid

They're definitely two different investment animals...although it amazes me how people approach the two differently.

I've read alot of books about investing, trading (from Buffett, Charlie Munger, Market Wizards, Reminiscenes of a Stock Operator, Money Game, even Cramer (gasp)) and I don't think I'll ever understand how people become so swayed by the popular opinion of the time. Whether it's rushing into dot coms in the late 90's, gold in 1980, the nifty fifty of the 60's and 70's. The theme being..."if everyone around you is doing it, then it must be ok". Even though you're usually chasing price action instead of the actual underlying value of the asset.

In the card world, no one is swayed by "volume" (the number of bids in a Mastro auction). Or if you're a Yankee collector, you're not going to be swayed by what a Redsox collector got last week.

In the trading world (as opposed to long term investing for retirement, buying an index fund for 40 years), the top traits that come up over and over for success are discipline, staying rational and keeping your emotions in check (know thy self).

I'm sure you guys have seen the real esoteric stuff...zen and the art of trading, and going off into this meditation/physical realm. I'm thinking....what?? You're just buying something and selling something...is this going too far.

There's some really good traits that you can bring over into the trading world...

-Knowing your price and sticking to it. You're not going to chase price action.
-Knowing what you want/knowing your market. Not jumping into tech in '99 if you know nothing about it.
--Ignoring extraneous factors. Wall St. would be a quiet place if this happened. Not worrying about the performance of another stock, sector, index, asset class. You're not jumping around racking up extra transaction costs, taxes.