Looking to Build a Solid Collection of "Investment Grade" Cards

[octane1749]

I collected baseball cards as a kid (late 80's/early 90's). However, I am looking to get back into it with a focus on pre-1960's cards that have investment grade focus. Even though my focus is acquire "works of art", I would prefer to have the ability to sell them at some point in the future.

1) Am I better off getting 1-3 high profile cards in great condition or 10+ average cards in decent condition?

2) Where is the best place to find a reputable cards/sellers (local dealer, online dealer, ebay, etc)?

3) Is the PSA guide a good indication of value or are there other pricing guides that are more useful?

4) Is PSA the most recognized/high quality rating system out there?

5) Any other tips you can throw at me would be greatly appreciated.

Thanks

[cyseymour]

Originally Posted by octane1749

I collected baseball cards as a kid (late 80's/early 90's). However, I am looking to get back into it with a focus on pre-1960's cards that have investment grade focus. Even though my focus is acquire "works of art", I would prefer to have the ability to sell them at some point in the future.

1) Am I better off getting 1-3 high profile cards in great condition or 10+ average cards in decent condition?

2) Where is the best place to find a reputable cards/sellers (local dealer, online dealer, ebay, etc)?

3) Is the PSA guide a good indication of value or are there other pricing guides that are more useful?

4) Is PSA the most recognized/high quality rating system out there?

5) Any other tips you can throw at me would be greatly appreciated.

Thanks

For 50's cards, try to buy PSA 10's, preferably "1 of 1". 52 and 55 Topps are the most solid.

The PSA guide is woefully inaccurate. Most subscribe to Vintagecardprices.com to learn prices. Or use google searches.

SGC is good for 19th century material and pre-war cards, but not set registry type stuff.

I like the 3 cards idea. 3 is a good number. Really, I think five is too many. 99% of the posters here will disagree.

Best to use an auction house like REA, Goodwin, Heritage. Ebay is sketchier, so make sure the seller is reliable. But the best cards all go to auction houses these days. The dealers are almost all overpriced.

Take some time to follow the auctions this winter to get accustomed - wait to buy until springtime. Study past auction results - you can go to the Robert Edward Auctions website and see the kinds of stuff they sell, then decide what you like.

Just an opinion - most people here like pre-war cards and they are ultimately more rare and interesting. Portrait cards are great art-like collectibles, whether they be T206, N172, etc.

[octane1749]

Thanks a lot for the info. You gave me a lot to research/think about.

Is there a minimum price that is considered "investment grade" or is based more on the rarity of the card?

What do you mean by "1 of 1". I've seen "1 of 3", "1 of 6", etc.

I understand its a tradeoff but would you rather have a "common" card PSA10 or "star" player in lesser condition?

[cyseymour]

I would not buy any 50's cards because they are not rare and the buyers for those cards are baby boomers who are dying out and/or selling their collections.

[egbeachley]

Most people here will say to pick a few of the very best. I disagree for 2 reasons. First, there isn't a difference in total profit if 1 card valued at $10,000 increases to $12,000 compared to 100 cards at $100 each increasing to $120 each. Although I realize it's quicker and easier to sell just 1 card than 100 cards. But the logic is the same when considering 1-3 cards vs 10-30 cards.

But the biggest reason for not buying a card that is 1 of 1 or even 1 of 3 for investment purposes is that it may suddenly become 1 of 10 which will kill the value. Think of the Black Swamp find, Hard for that to happen to mid-grade cards.

[terjung]

Go for true scarcity, NOT grade scarcity.

A PSA 10 with a population of 1 in the grade (1 of 1) could be a 1 of 10 tomorrow. So, the value could drop dramatically.

Pick a scarce card of a big named HOFer.

[smtjoy]

Agree go for scarcity but I think it also needs to be popular/(in demand).

I think a fun way is to post and ask everyone if you could afford 1-5 cards with a budget up to 50k what would you purchase. If you can get around 20+ responses then take the cards that get the most votes.

Im guessing the list would have cards like-

1933 Goudey Lajoie
T206 Plank
T206 Magie
1916 Ruth Rookie
E98 Wagner (Black Swamp find)
E98 Cobb (Black Swamp find)
1952 Topps Mantle
Etc

Good luck.

[sdkammeyer]

Originally Posted by smtjoy

I think a fun way is to post and ask everyone if you could afford 1-5 cards with a budget up to 50k what would you purchase. If you can get around 20+ responses then take the cards that get the most votes.

ask and you shall receive
we were doing this just couple weeks ago.

http://www.net54baseball.com/showthread.php?t=159234

here were a couple from my list:
E90-1 Joe Jackson
An E98 Cy Young from the "Black Swamp Find"
T206 Cobb-bat off
T200 Detroit Team card

[Bridwell]

The investment question comes up quite often. I'm sure a few collectors will chime in and say that you can't count on an old piece of cardboard to be a growth investment. It's pretty speculative to think that a $5000 card will be worth $6000 in a couple of years. Another problem is that when you go to sell you will have some fees or the buyer will have some fees if they are buying your card in one of the big auctions. The card might sell for $6000, but your proceeds from the sale might be $5000.

I don't like investing in NMT-MT cards because I'm skeptical that an antique card could have survived in that condition without being trimmed or doctored. If the technology to detect trimming gets a little better, it could become obvious that they should not be in the plastic slabs graded as 8's and 9's.

Vintagecardpricing is a great way to track prior sales of a particular card in the same condition. You can also see trends over the last 5 years. I look for cards that are EX to NMT and have low populations. Sooner of later, collectors will be working on quality sets and will drive the prices up.

[ctownboy]

First off, I have no clue what you should or should not invest in because:

1) I don't know how much you have to spend.
2) What your time horizon is for liquidation.
3) If you are going to buy and hold or flip and then reinvest the proceeds.
4) What your acceptable profit margin is.

So, my advice is to buy cards that you actually like just in case, you know, the economy slips into another recession (or worse) or the card market tanks for some other reason. That way, after sinking X amount of dollars into some pieces of cardboard, if things go wrong then at least you have the pleasure of looking at cards you actually like.

Nothing worse than to buy something you don't like because you think it is a good investment idea only to have the investment part not work out. So then you have to sit and look at something you lost money on AND you don't like.

David

[barrysloate]

First thing I would do is study the market- watch the auctions, read this board- and learn which cards are in high demand. Usually it's a card of a popular Hall of Famer that has some level of scarcity. Then try to buy one in the best condition you can afford. Buying cards that other collectors are always looking for is a great way to go.

[bbcard1]

Depends on the duration of your investment. If I was investing today and planning to unload it in six months, I'd probably chuck it all in silver where I think there's a more than decent chance for a 15% return if you buy on the dips and sell on the spikes.

I don't like baseball cards for long term investments, but I love them for a long term hobby.

[jhs5120]

I think the recent sale of the Memory Lane t206 Plank card has shown that baseball cards are not always a safe investment.

Personally, I would "invest" in low-mid grade key cards - Cobb bat off shoulder, Goudey Ruth etc. Collectors are always looking for these cards - even people outside of the hobby.

I would avoid any low pop commons and I would especially avoid cards from "The Black Swamp Find". As more and more and more and more and more are sold the price will only go down. It's safe to wait until they drop in price a bit.

[edhans]

Most important thing to remember is that the transaction costs are huge compared to securities. You'll be paying retail prices to acquire "invesrment grade" cards. Think about your options for selling them; 1) direct sale to a dealer, who will offer you a wholesale price to leave him room for profit; 2) Auction them-even if you get a zero consignment fee, buyers will factor the hammer fee into their maximum bids, thus reducing the proceeds to you; or 3) Become a dealer yourself and absorb the cost of travel, table fees, advertising, website development etc. into your basis. It's going to take substantial price appreciation to offset those costs and leave you with some net income. Then you get to pay income tax. Bottom line, collect what you like and gratefully accept any profit you derrive from your hobby.

[glchen]

Most of the previous posters already gave the same advice that I was thinking of. Here are some other points I was thinking of:

(1) Don't spend money you don't have or really need (like for rent, food, etc).
(2) There are thousands of flippers/investors trolling ebay and the auction house listings every day trying to make money. You need to really educate yourself by using this board and other resources to do well. If you find this stuff fun, which you might well because you collected as a kid, it will be great. However, if you find it boring, tedious, and too much work, you'd be better off just parking your money with a good financial advisor.
(3) Your buying price is key. There are a lot of things you can buy, but if you purchase at the wrong price, it will be tough to re-coup your investment. Buying at the wrong price can mean buying really hot items when they are at their peak value or just buying an item higher than everyone else is paying. This is why knowledge and using resources such as VCP (vintagecardprices) or completed sales histories needs to guide your buying. Here is another useful article from a recent SCD: (here: Link) on another iconic card that is popular for investments.
(4) A corallary to #3, patience, patience, patience. The card you want will in most cases inevitably come around again. Make sure it's at the price you want, in the condition you want, with the eye appeal you want.
(5) As others have said, it's still supply and demand. It's better to buy cards that others also really want, and one that has limited supply. Most on this board, including myself, are strong proponents of absolute scarcity/supply as opposed to grade scarcity, but there are others who have different opinions. The main reason for absolute scarcity is that grading scarcity can be subjective. A Gem Mint 10 in one grader's eyes is a 9 in another, and that can mean tens of thousands of dollars in value for the most sought after cards. That's too much for us to put our faith in.

Good luck whatever you decide to do.

[Chris Counts]

If I was investing, which I'm not, I'd buy something that's undervalued. In my estimation, high grade cards, unless they are truly rare, are overvalued. As far as I'm concerned, the most undervalued cards are the undergraded ones, particularly those that look like high grade cards, but have small flaws that torpedo their grades ...

[Leon]

Or you can do like I do....just go ALL IN...and if you lose you can live in a Van down by the river!!

http://www.youtube.com/watch?v=3nhgfjrKi0o




,

[oldjudge]

If you are determined to invest in cards, let me give you a different take. Look at what other people are buying now, and stay away from these items. Chances are this is a hot area in the hobby and it may lose favor in the near future. Instead, study the card market and see what is genuinely rare, but possible out of favor. Ask yourself why it is out of favor. Was it once popular, now not so much, and maybe popular again in the future, or is it a rare card that is visually not appealing and thus may never be popular (strip cards for example)? As strictly an investor you have one advantage over collectors, you never "need" a card. You should only invest in cards that you think are mispriced relative to scarcity and condition. Finally, one big caveat, I am not in favor of "investing" in cards. They are not liquid and transactions costs can be very high. Invest in stocks, bonds, commodities--collect cards.

[Bocabirdman]

Originally Posted by oldjudge

If you are determined to invest in cards, let me give you a different take. Look at what other people are buying now, and stay away from these items. Chances are this is a hot area in the hobby and it may lose favor in the near future. Instead, study the card market and see what is genuinely rare, but possible out of favor. Ask yourself why it is out of favor. Was it once popular, now not so much, and maybe popular again in the future, or is it a rare card that is visually not appealing and thus may never be popular (strip cards for example)? As strictly an investor you have one advantage over collectors, you never "need" a card. You should only invest in cards that you think are mispriced relative to scarcity and condition. Finally, one big caveat, I am not in favor of "investing" in cards. They are not liquid and transactions costs can be very high. Invest in stocks, bonds, commodities--collect cards.

...and after about a decade you will be well-versed enough to make a well-informed investment and savy enough not to.

[terjung]

Originally Posted by Bocabirdman

...and after about a decade you will be well-versed enough to make a well-informed investment and savy enough not to.

So true!

[drc]

An example of what you can do is look at some more obscure, undervalued, limited in number Babe Ruth cards, but ones that you like-- then get a high grade example. There may be some obscure, rare issues that you can get for a good price, and those maybe more likely to go up in value that the more popular issues.

Duly note, I said pick a card that you like. I'm not suggesting you pick a butt-ugly card because it's obscure.

And it's safe to say Babe Ruth is going to popular with baseball card collectors 10, 20 and 50 years from now.

[octane1749]

Originally Posted by cyseymour

Best to use an auction house like REA, Goodwin, Heritage.....Robert Edward Auctions website and see the kinds of stuff they sell, then decide what you like.

Any other online sites I should be watching for pricing and/or auctions?

[octane1749]

Originally Posted by ctownboy

1) I don't know how much you have to spend.
2) What your time horizon is for liquidation.
3) If you are going to buy and hold or flip and then reinvest the proceeds.
4) What your acceptable profit margin is.

David

1) $5-10k
2) 10+ years
3) Buy and hold
4) 5%

Originally Posted by ctownboy

So then you have to sit and look at something you lost money on AND you don't like.

David

I couldn't agree more; I just don't want to buy something that goes the way of the 1990 Score Bo Jackson card

[octane1749]

Originally Posted by jhs5120

I think the recent sale of the Memory Lane t206 Plank card has shown that baseball cards are not always a safe investment.

I would avoid any low pop commons and I would especially avoid cards from "The Black Swamp Find".

What happened with the Plank card?

What was the "Black Swamp Find"

[sb1]

Originally Posted by octane1749

What happened with the Plank card?

What was the "Black Swamp Find"

These two questions alone, indicates you need to do much more research before ever spending any money on cards. I would suggest you read this forum front to back over the next month and then decide if this is want you want to "invest" money in. Or perhaps just dabble as a collector.

Most of the big returns in any collectible area were/are made by collectors who bought items long before the masses. It is very difficult to jump into any matured collectible arena and hope to make large returns, even small ones such as the 5% annualized return without doing a lot of howework and then just getting a bit of luck as well. The card markets are not unlike any other market, they can take swings from hot and cold on many different issues, as it is can be very thinly traded.

Just some pieces to ponder.

[octane1749]

I couldn't agree with you more. Clearly I am still in the early phases of looking.

I like the idea of focusing on one player/series, but I still want a broad understanding of pre WWII cards before narrowing my search.

This forum is an incredible resource. I do intend to read as much as I can before spending any money on cards. I have also searched on amazon for books on buying cards, but there are very few books on colllecting vintage cards.

[Mikehealer]

Try this one, originally published several decades ago, but still my favorite reference book on prewar baseball cards.

http://www.ebay.com/itm/Lew-Lipsets-...item564e5d831a

[mrvster]

t206 collect the monster

[travrosty]

dont waste your time with card grading, its a scam to benefit a few at the expense of the many. a grade of 10 will be something to overpay for. its the same as a 9 only they want 50 times your cash. if you want an investment, skip cards, too volatile. if you don't believe it, ask warren buffet how much he has invested in baseball cards.

[CW]

Originally Posted by glchen

(1) Don't spend money you don't have or really need (like for rent, food, etc).

C'mon, Gary, we're all responsible adults here, fully capable of self-restraint when it comes to spending money on cards.

BTW, Walmart has a great deal on corn dogs this week.

[mrvster]

id rather have t206 than cash

[Big Ben]

Originally Posted by oldjudge

If you are determined to invest in cards, let me give you a different take. Look at what other people are buying now, and stay away from these items. Chances are this is a hot area in the hobby and it may lose favor in the near future. Instead, study the card market and see what is genuinely rare, but possible out of favor. Ask yourself why it is out of favor. Was it once popular, now not so much, and maybe popular again in the future, or is it a rare card that is visually not appealing and thus may never be popular (strip cards for example)? As strictly an investor you have one advantage over collectors, you never "need" a card. You should only invest in cards that you think are mispriced relative to scarcity and condition. Finally, one big caveat, I am not in favor of "investing" in cards. They are not liquid and transactions costs can be very high. Invest in stocks, bonds, commodities--collect cards.

Great post! I very much agree. Invest in stocks, bonds, commodities and when it comes to cards, be contrarian collector.