Investment potential- which cards will do best?

[Delray Vintage]

I know many on this board do not invest in cards, they collect. However, for those who love collecting but hope to make a decent return, which cards will appreciate the most in the next 10 years? Let's say you could buy 200k in cards today, what would you buy?

[bbcard1]

I think a lot of us will say a nice T206 Plank. If I were going to go with something more "high risk" I would pick up a couple of high grade big names (Ruth, Cobb, Gehrig) and put a portion into a very high grade Tattoo Orbit set, which I think has always been underappreciated and might possibly considerably outpace similar sets as is it seen as representative art form of the era...wish there were a couple more A-list hall of famers. I would see if i could find a really strong Delong set as well...

[Fred]

Usually for me the best investment is the card I didn't purchase. I always pick the dogs but I enjoy the pack of mutts I have.

For "investment" purchase I would look toward "tough" 19th century material in VG+ shape.

I'm going to guess a lot of collectors will say the popular collectors cards are good investments because they are "popular" and therefore high demand:

T206 (Wagner, Plank)
Jackson cards (E90-1T210, CJs)
33 Goudey Lajoie

Ya gotta wonder how much more Ruth can rise. He's still a strong buy candidate.

[glchen]

I would think in general, mid to high grade key cards of big name prewar HOFers should do well. (e.g., Ruth, Wagner, Gehrig, Mathewson, Cobb, Wojo, Young)

BTW if I had 200K to blow on cards, I'd probably try to get a Baltimore News Ruth in lower grade condition if one were still available for that amount.

[rainier2004]

200k?

Id buy 200,000 1990 score sets, another 100,000 1989 topps set and use the other 199k to buy the most beautiful e107 matty and wagner i could and call it a day....the shipping on the sets would be brutal though.

[egbeachley]

These kinds of questions are usually answered with a single great card like a quality T206 Plank and a few spectacular HOF'ers. And maybe you buy a handful for the $200K and 10 years later they go up to $300K. But that doesn't mean the great cards are the best investments since you could purchase 1,000 good T206 commons for $20 each that may go up to $40 each in 10 years.

Yes, it takes more time to find and sell in quantity. But you may sell at a time when there are NOT 2 bidders who really want the quality cards and you take a loss. This doesn't usually happen with commons.

[Runscott]

Originally Posted by rainier2004

200k?

Id buy 200,000 1990 score sets, another 100,000 1989 topps set and use the other 199k to buy the most beautiful e107 matty and wagner i could and call it a day....the shipping on the sets would be brutal though.

Steven, I had a friend who has a small room in his house just for storing 'investment' lots. He has '87 Topps wax boxes stacked to the ceiling. Anyone remember the Greenwell/Will Clark rookie rage?

I have my thoughts about this, but I'm currently cornering a couple of markets, so can't say.

[Peter_Spaeth]

Jeremy Lin RCs.

[Matt]

Originally Posted by Peter_Spaeth

Jeremy Lin RCs.

Easily the best short term investment over the last month. Shiny ones are going for over $20k!

[FrankWakefield]

2012 Topps cases, dig out the Schumacker squirrels and sell those immediately, then....

invest in something other than ballcards. Collect 'em. Invest in a home, an education, mutual funds, individual stocks, bonds. If you're in your early 30's or younger, buy 5 to 10 acres out and away from urban sprawl, plant hardwood saplings, tend to them for the first few years, then wait 30 years or so, then harvest the lumber. That's a long term investment that would put a couple of kids through college, with a car each on the front end and again as they graduate. A fellow shouldn't invest in a hobby, the attachment and sentiment screws up the financial reality of it.

[Bicem]

Cards that I felt were under-valued or should be worth more.

[Peter_Spaeth]

Originally Posted by Bicem

Cards that I felt were under-valued or should be worth more.

I would just stick with cards you KNOW are going to go up.

[drc]

A key is buying cards that won't go down. Be wary of cards that are in today, but ignored in the future. I think a lot of Topps (ala 1960s, 1970s) went down simply because they are so dang plentiful-- not that people don't still like them.

One thing that makes me wary of T206s and Goudeys as investment are their abundance. Their prices are propped up by demand not rarity. However, I agree T206s are great cards, my favorite ever set. So there's good reason for their long lasting popularity.

Picking investments by what is popular today (especially when that what is abundant!!!) is not a theory I subscribe to.

Having said that, I doubt market for T206s will collapse. They will be avidly collected for many years. And it's not as if they abundant in the 1985 Topps sense. They're just abundant for Pre-WWI cards.

[Oklahawg]

Originally Posted by FrankWakefield

2012 Topps cases, dig out the Schumacker squirrels and sell those immediately, then....

invest in something other than ballcards. Collect 'em. Invest in a home, an education, mutual funds, individual stocks, bonds. If you're in your early 30's or younger, buy 5 to 10 acres out and away from urban sprawl, plant hardwood saplings, tend to them for the first few years, then wait 30 years or so, then harvest the lumber. That's a long term investment that would put a couple of kids through college, with a car each on the front end and again as they graduate. A fellow shouldn't invest in a hobby, the attachment and sentiment screws up the financial reality of it.

Some of the best advice I've ever read.

A decade ago (roughly) I thought I'd buy some dirt cheap PSA cards from the mid-50s, but let the 9's and 10's alone (too pricey). The turnaround last summer was less than spectacular. For every card I made money on, I had 3-4 that didn't generate a profit, and 1-2 that went unsold or for dimes on my dollar.

However, instead of buying 100 cards if I had purchased 2-3 I might have sold at the time I bought a Walter Johnson B18 Blanket, mid-grade, for $75 - no one else was bidding! I was the first and only bid. Got a steal in my book. I learned then - I cannot guarantee that a second bidder will drive up the price on a valuable product.

[Oklahawg]

Originally Posted by drc

A key is buying cards that won't go down. Be wary of cards that are in today, but ignored in the future. I think a lot of Topps (ala 1960s, 1970s) went down simply because they are so dang plentiful-- not that people don't still like them.

One thing that makes me wary of T206s and Goudeys as investment are their abundance. Their prices are propped up by demand not rarity. However, I agree T206s are great cards, my favorite ever set. So there's good reason for their long lasting popularity.

Picking investments by what is popular today (especially when that what is abundant!!!) is not a theory I subscribe to.

Having said that, I doubt market for T206s will collapse. They will be avidly collected for many years. And it's not as if they abundant in the 1985 Topps sense. They're just abundant for Pre-WWI cards.

Scarcity should be the #1 guide, right? Pre-WW2 cards aren't being found still, are they? I haven't "found" cards on the street (garage sale, junk sale, whatever) in 30 years of looking. The "finds" are folks with a Beckett guide from the grocery store hawking 87 Donruss rated rookies and 89 Score boxed sets.

The problem with T206, for example, is the number of buyers - just how many new buyers are hitting the market? At some point there will be relative saturation, and it'll take some time for interest to ramp back up.

[William Todd]

Frank is spot on. Invest in investments for future income and growth. The best cards will be in demand but at a price that can vary greatly. Look at coins. I collected for 25 years and sold many graded cards in 2009 as I thought prices were kind of high. Pre War quality will probably hold demand the best, but demographics of the population should be considered. The baby boomers, a large buying population are retiring and need income. Holding your collection doesnt pay any income. I recently was lucky to have a client show me an original family T206 collection that was collected by her uncle. These types of original cards will gain in value as many graded/trimmed/altered cards see more scrutiny... Just my opinion. And I still
hold many cards and love T207's and T206's.

[FrankWakefield]

Thank you, William and Oklahawg...


If you buy a slabbed card for $1000, and sell it for $3000, you have $2000 of ordinary income.

If you buy $1000 of mutual funds and sell that for $2500, you have $1500 that is subject to capital gains tax.

There's a right smart difference. Collect collectables; invest in investments.

[Delray Vintage]

Long term gains on cards are not taxed at ordinary income, they have a max of 28%. While not at the favorable 15% at least not at highest rate.

[FrankWakefield]

Bob, you get an IRS agent to agree with that, then email me the agent's name, please Sir.

[joeadcock]

E107's would be on my list.

[Tsaiko]

Originally Posted by FrankWakefield

If you buy a slabbed card for $1000, and sell it for $3000, you have $2000 of ordinary income.

It's my understanding that the IRS looks at the $2000 as capital gains, just like a stock that appreciated that much. I'd love to learn why that isn't the case, please educate me.
Thanks,

[William Todd]

Cards are treated as collectibles...28%...End of story...

[sox1903wschamp]

Originally Posted by joeadcock

E107's would be on my list.

Yeah, me too!

[E93]

Originally Posted by Bicem

Cards that I felt were under-valued or should be worth more.

Profound insights from Jeff P. Thanks Jeff.
JimB

[Delray Vintage]

The policy reasons for taxing collectibles at 28% versus 15% for stocks or other business investments is that the latter are seen as investments in growing the economy. The policy makers in Congress do not believe art, baseball cards, coins deserve the best rate because they do not grow or multiply economic activity.

[E93]

Originally Posted by Bicem

Cards that I felt were under-valued or should be worth more.

Profound insights from Jeff P. Thanks Jeff.
JimB

[Bicem]

thanks Jim, the Dalai has nothing on me!

[E93]

I prostrate at your feet.... three times.
JimB

[Tsaiko]

Right, all I'm saying is, it is capital gains.

And, as I understand it, if your income tax bracket is below 28 percent, you'll pay at your income tax rate rather than a higher capital gains rate.

To the OP: Collect because you love the hobby, invest if you want to turn a profit. Psychologically, at least to me, it's two different worlds. That's not to say that collectibles can't be a part of a total portfolio, but I would think a smaller part than stocks, bonds and real estate.

If you do "invest" in cards long term, don't forget possible deductibles, like grading, insurance, building that display case, discussing collectibles with your CPA or tax attorney, etc.

Personally, I won't pay a penny of tax on collectibles, since they will be TOD to my heirs, who can sell them for their value at my death, also without paying taxes. Death, the best way to beat the IRS

[FrankWakefield]

Alright, I think that 28% or your tax rate if less deal is correct. It is for collectables. IRS won't accept cards as an investment. So I think what I had about ordinary income is incorrect and overstated.

It reminds me of Tulipmania.

[ChiefBenderForever]

Jackie Robinson and Pete Rose will only go up, ESP Pete Rose.

[g_vezina_c55]

t206 plank or wagner !