How does a 19 year old have $1,500 in 1972?

[hunterdutchess]

Mastro is the man! Not only does a 19 year have $1,500 in 1972 but instead of spending it on booze, cars, or a chick he buy's a t206 Wagner!
http://cgi.ebay.com/TRADER-SPEAKS-Oc...d#ht_505wt_900

[Bilko G]

freaking awesome!!!!!!!!!

[prewarsports]

As good as that sounds from an investment standpoint, there is a TON of stuff you could have bought 40 years ago and made way more money than that Wagner card. Just a simple investment of $1500 in a mediocre stock portfolio that you dont touch for 40 years probably does better. Not to dimish the Wagner story, it is cool and I like it, but sometimes people forget the time value of money when reading stories like this.

On the flip side in 1995 when I was 19 years old I was investing heavily into Steve Finley cards thinking he was the man. I am glad that "heavily" for me meant about 50 bucks! Anyone want to buy a bunch of 1989 Bowman Glossy cards?

[39special]

I don't have $1500 in 2011!!

[vargha]

Better value performance than a 1972 Ford Pinto, that's for certain.

[fkw]

I wonder how many T208, T211, T214, T215, etc. cards you could have got back then for $1500?

[tjb1952tjb]

Got a good laugh from that, Steve. Thanks!!

[sports-rings]

As good as that sounds from an investment standpoint, there is a TON of stuff you could have bought 40 years ago and made way more money than that Wagner card. Just a simple investment of $1500 in a mediocre stock portfolio that you dont touch for 40 years probably does better. Not to dimish the Wagner story, it is cool and I like it, but sometimes people forget the time value of money when reading stories like this.

The wagner in the photo looks to be in very good shape and better than a PSA "1". say it is worth 400,000 today.

that's 267 times higher than than the initial investment. using simple interest and not compuding interest, divided by 40 years is an annual return of 660% per year!

What stock or investment has approached this?

[sportscardpete]

Originally Posted by sports-rings

The wagner in the photo looks to be in very good shape and better than a PSA "1". say it is worth 400,000 today.

that's 267 times higher than than the initial investment. using simple interest and not compuding interest, divided by 40 years is an annual return of 660% per year!

What stock or investment has approached this?

Bank stocks, right?

[prewarsports]

That is the power of compounding interest. Nothing makes 660% per year, but you start compounding interest on a decent stock portfolio over the long haul and that $1500 for 40 years makes more than that Wagner.

[baseballart]

Originally Posted by prewarsports

That is the power of compounding interest. Nothing makes 660% per year, but you start compounding interest on a decent stock portfolio over the long haul and that $1500 for 40 years makes more than that Wagner.

Dow Jones Industrial was about 1000 in 1972, 12880 at end of December 31, 2010. Not quite the same return as a Wagner. Different asset mixes would no doubt produce much better historical results, but that is an average indication of the performance of the US market since 1972.

http://stockcharts.com/freecharts/hi.../djia1900.html

If a stock portfolio has an average dividend yield in excess of the prevailing interest rates, there is considerable risk to the capital. As well, tax must be paid on dividends and interest, cutting into the compounding effect. As well, as 2008 shows, stocks have risk to capital loss as well as capital appreciation.

Interest on $1500 at 10% after-tax (an impossible historical rate of return, without great risk to capital) compounded annually provides a value after 40 years of $67,888. Compounded daily, it amounts to $81,852.

http://www.moneychimp.com/calculator...calculator.htm

[Rob D.]

I'm probably leaving out key information, but using a compound interest calculator at this site -- http://www.moneychimp.com/calculator...calculator.htm -- I entered the following values:

Principal: $1,500

Years to grow: 40

Interest is compounded four times annually (quarterly)

Interest rate: 12 percent (which I thought was generous over the course of 40 years; some years the market will do better, other years worse)

The calculated future value comes to $169,842.

Changing the interest rate to 15 percent results in a future value of $542,235.

EDITED TO ADD: I was typing as Max was posting. I think we're making the same point.

[Bill Stone]

But looking at a Wagner every day compared to looking at a bank statement --priceless.

[sportscardpete]

I was able to gather some data from a local Bloomberg machine.. Here is what I come up with:


Returns from day of Wagner purchase to 5/31/2011

We shouldn't have to debate compounding vs. simple interest, unless we calculate dividends as well (which I will not do)! Way too much time. Anyway:


Honus Wagner Return: 2580%

Disney: 4493%

Microsoft: 29015% (in much less time)

Apple: 8629%

S&P 500: 1194%

Coca Cola: 2577%


So to sum it up, the Honus Wagner beat the S&P. Pretty impressive. I can go into detail if anyone wants me to.

[baseballart]

Originally Posted by Rob D.

EDITED TO ADD: I was typing as Max was posting. I think we're making the same point.

Rob

Anytime I start to play with figures, it gets dangerous (real life: tax lawyer. Definition of a tax lawyer? A person who has the personality of an accountant, but doesn't like to work with numbers)

However, I like your numbers calculated without taking tax into consideration. Unreported income means more business for me

[baseballart]

Originally Posted by sportscardpete

I was able to gather some data from a local Bloomberg machine.. Here is what I come up with:


Returns from day of Wagner purchase to 5/31/2011

We shouldn't have to debate compounding vs. simple interest, unless we calculate dividends as well (which I will not do)! Way too much time. Anyway:


Honus Wagner Return: 2580%

Disney: 4493%

Microsoft: 29015% (in much less time)

Apple: 8629%

S&P 500: 1194%

Coca Cola: 2577%


So to sum it up, the Honus Wagner beat the S&P. Pretty impressive. I can go into detail if anyone wants me to.

My stock picks look more like this:

Bre-X (-100%)
Nortel (-100%)
JDS Uniphase (-100%)

As pointed out above, the owner also gets to look at the Wagner. (Me, I get to look at a box of 89 Donruss)

[Rob D.]

Originally Posted by baseballart

Rob

Anytime I start to play with figures, it gets dangerous (real life: tax lawyer. Definition of a tax lawyer? A person who has the personality of an accountant, but doesn't like to work with numbers)

However, I like your numbers calculated without taking tax into consideration. Unreported income means more business for me

I tried to be generous without being totally unrealistic. But that's just me, an eternal optimist who always looks at the bright side of things.

[Big Ben]

Originally Posted by sportscardpete

I was able to gather some data from a local Bloomberg machine.. Here is what I come up with:


Returns from day of Wagner purchase to 5/31/2011

We shouldn't have to debate compounding vs. simple interest, unless we calculate dividends as well (which I will not do)! Way too much time. Anyway:


Honus Wagner Return: 2580%

Disney: 4493%

Microsoft: 29015% (in much less time)

Apple: 8629%

S&P 500: 1194%

Coca Cola: 2577%


So to sum it up, the Honus Wagner beat the S&P. Pretty impressive. I can go into detail if anyone wants me to.

Love the number crunching! But as an investment, the Wagner card would be tough to keep once the market for the card and the hobby took off the way it did in the 1980's-early 1990's.

[barrysloate]

If you bought a decent Wagner for $1500 in 1972, I don't even have to pull out my calculator to tell you you've done really really well. Not everybody can pick exactly the right stock or commodity, and seems like the rate of return on that Wagner is as much as any of us could hope for. Why quibble?

[sports-rings]

The wagner in the photo seemed very nice and lacking any cracks seen in many Wagner psa 1's. It also had 4 decent corners.

An undiscovered Wagner was auctioned off by Phillip Weiss for $800,000 about 2 years ago.

Perhaps Bill Mastro paid a "record price" for the card back than because it was a very high quality Wagner and my $400,000 was way too conservative?

[vargha]

$1,500 compounded at 15% annually for 40 years equals $400,000

[sox1903wschamp]

Thanks for posting Chris. Mastro was definitely a player at age 19 in 1972. He knew and communicated with all of the old time collectors and great names in our hobby.

At 19, I was trying to figure out college and life and buying up all the "old" 50's and 60's on campus but did not really know much about pre war cards

[Tom Hufford]

In 1972, I was in college and was ballpark organist for the Pulaski Phillies (Appalachian League) for $5 a game.

A couple of years before, Wirt Gammon had offered me a T206 Wagner for $500. Where would I get $500? (Besides, he was selling me the other T206's for 35 cents each.) My friend Bill Haber, who had a real job (at Topps), bought that Wagner.

$500 in 1970 - $1500 in 1972? Mastro may have overpaid.

[Gradedcardman]

In 1984, I was 17 and had been collecting T206's for about 5 years. I received a phone call that a Magie was available for $1000. Along with the Magie was another 20-25 HOF'S available. I scraped up the $1000 and then traded a 1965 set and a partial 1953 Bowman set. One of the most incredible days of my collecting life making that deal !! Boy have times changed !!

[E93]

When I was 12 years old in 1979 I inherited $3000. Coincidentally I saw an ad right around that time advertising a T206 Wagner for $3000. I think the ad was in CPU (Card Priced Update). I tried desperately to convince my parents to let me spend my inheritance on it. They just thought I was naive little kid who did not understand. Hmmm....
JimB