Baseball cards as an asset class

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Posted By: Brian Weisner

Hi Peter C,
I'm probably as conservative as they come, but I've also been collecting vintage for 31 of my 39 years, so I feel fairly confident in my investments.
As far as wives go, I wouldn't trade mine for anything, but she doesn't handle the finances, she handles the kids and the house. Like most couples we discuss matters before making important decisions, but when consensus isn't possible, someone has to be in charge. And in my family that person is me..... Be well Brian

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Posted By: Jimmy

My wife was concerned about me spending money when we first got married, but then I had the idea of buying and selling to help pay the bills and my hobby. It may have taken her five years to understand, but the last few years she has been very supportive and helps me sometimes go through boxes I get from dealers, helps me take pictures and goes to the post office for me.

Jimmy

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Posted By: JimB

Paul,

"So all the Rawls fans would be willing to let the govt. redistribute their money/cards/real estate in order to help the poor and disadvantaged? I'll believe it when I see Jim's E93 Matty in my mailbox!"

I would not create a society in which people had to redistribute their baseball card collections. And who said anything about government redistribution of wealth in general? I was just talking about a thought experiment on the meaning of justice. If you are inclined to think that implies a redistribution of wealth, more power to you. Just leave my E93 Matty out of it.

JimB

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Posted By: Jason L

"If you are inclined to think that implies a redistribution of wealth, more power to you. Just leave my E93 Matty out of it."

Ah HA!!!

indeed, justice is very different from equality!

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Posted By: peter chao

I am inclined to think that wealth should be in the hands of people that know how to handle the money. I have no problems with Bill Gates and Warren Buffett handling money because they know what to do with it.

Baseball cards should be in the hands of those that appreciate them.

Peter C.

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Posted By: paulstratton

JimB,

I prefer Nozick anyway(surprise!)..."If the state did not exist would it be necessary to create it?"...or something like that. Interesting that neither Rawls nor Nozick mentions high grade caramel cards.

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Posted By: David Smith

If I were rich and didn't give a damn about baseball cards, the players and the history of the game, I would buy every rare and high grade card out there for the next year. That would drive the prices up and take quality cards out of the market.

Then, when the recession is in full bloom (and people are looking to places OTHER than stocks, bonds and real estate to park their money), I would dump the cards on the market with various auction houses and put that money INTO stocks, bonds and real estate.

The old story of Buy low, Sell high and get into investments others are down on.

David

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Posted By: JimB

"Interesting that neither Rawls nor Nozick mentions high grade caramel cards."

Clearly, it is a glaring omission on the part of virtually all socio-political philosophers. I may have to rectify that.
JimB

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Posted By: Dave Haas

Boxingcardman,

I was speaking in the plural "our/we" regarding paying capital gains taxes. Of course I personally adhere to all the IRS's tax laws and pay all appropriate taxes.

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Posted By: Jeff Lichtman

This has been a great thread as it really provides insight into our posters. Jim, as always, I appreicate everything you write (and appreciate that damn E93 Matty more); Brian, your words made me nearly laugh out loud and were also greatly appreciated.

All that I can add to this is that I believe that once someone becomes a parent the desire to accumulate great wealth for the purpose of accumulating great wealth falls by the wayside; instead, we'd all like to leave our children a world that is a better place than how we found it.

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Posted By: Gilbert Maines

Oh it is an investment allright. But if you are looking to collateralize a loan, your better off with a 7 year old pick up truck; a bank will lend you money on that. But that's ok. Just because those Simon Legree types think that pork bellies sound better than vintage cards, doesn't mean that it is true.

In my humble estimation, what you need to do is to maintain your financial level of involvement with this hobby below the "important" stage. This stage, I identify as: when the baseball card prices are spiraling downward, and you have lost your job just at the point that you are facing catastriophic medical bills, while putting your kids through college; you can still slowly add to your collection as prices continue downward, and you have sufficient resources to "buy them all" when baseball cards bottom out.

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Posted By: barrysloate

This thread has been one of the most philosophically stimulating ones we have ever had, but as I interpret it, it all comes down to Jim B.'s E93 Mathewson. Nothing else seems to matter. Simply profound!

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Posted By: David Smith

Jeff L,

Nice thought but I don't believe that is true these days. The parents you are thinking about are the ones from the World War 11 generation and earlier. Those folks worked hard and sacrificed for the good of the country and their children's future. I don't see that type of sacrifice in a lot of today's parents.

Look at the people who caused the Enron collapse. They were wealthy (compared to a "normal" person) and I imagine they had children, yet they continued to do illegal activities until they were caught. Enron collapsed and when it did thousands of people were harmed.

On an every day, "normal" person level, people drive SUV's when they could just as easily drive smaller, less expensive autos that get better gas mileage. The difference in price between the SUV and smaller car could be used to pay down debt, add to a retirement account or start a college fund. Then there is also the difference in auto insurance and money saved in annual gasoline consumption not to mention the environmental impact aspect.

Another example would be Starbucks coffee. Why pay $4 or $5 dollars for a cup when regular coffee is much cheaper?? I am sure the difference in cost could be used by most people to shore up their financial status but it isn't. This is especially true if people pay for their Starbucks with credit cards. (I don't drink coffee and so don't see the big deal with Starbucks. I also don't know if Starbucks even accepts credit cards but I imagine with prices as high as they are that Starbucks would).

Just think, replacing a $4 dollar cup of Starbucks coffee once a week with a cup of $2 dollar "regular" coffee. If you did that one simple act for 15 years and took that $2 dollar difference and invested it in a mutual fund, by the time your child was 18, you would have enough to pay for a year of college at a state university and the "sacrifice" wouldn't be that great.

David

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Posted By: barrysloate

I brew my own Columbian/French Roast coffee every morning and boycott Starbuck's. They are just another symbol of what is wrong with America.

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Posted By: E, Daniel

It takes out the stresses and less enjoyable moments of life and makes me feel good. How many other ways do I get to pamper myself and feel special for $4 ? With all the times I have to say no to myself and my family, be financially restrained to the point of disappointment, I believe maintaining a little inner happiness and zen is worth every buck.
Downright cheap in fact.


Daniel

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Posted By: paulstratton

I think what Jeff means is that he is now planning to donate his Cobb collection to Peter C...I could be wrong though.

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Posted By: barrysloate

Daniel- if you had a mug of my fresh brewed coffee, you would swear off of Starbuck's.

Okay, I don't add all that vanilla latte stuff, but I make one mean cup of Joe.

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Posted By: E, Daniel

If I could come over to your joint daily (which I'm sure is bright and airy ) and lean back on a kitchen chair while you brewed your meanest joe, chuckle a little about the daily do's and make the rest of the world fade from view - I'd never need Starbucks again .
However, I live in Lawrence Kansas with few real friends outside my wife (left them in Australia), the stress of a growing family.... and putting the pot on for myself just doesn't achieve that kind of reverie.

And I'm also partial to the odd green tea frappacino. Do you make those too??

.


Daniel

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Posted By: Jason L

from Australia to Kansas?!
You must miss being near water?...

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Posted By: Frank Wakefield

After years of fooling around with coffee, my wife and I have settled on Papanicholas coffee. Their 5 star restaurant coffee. Whole bean. They don't wash the oil off of the beans, I think, and that is one of the ways they sell such great coffee. If you're always brand loyal and love Starbucks, don't try Papanicholas. You'll feel bad when you leave the green star...

http://www.papanicholas.com/>

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Posted By: JimB

When I think of what I paid for it and the offers I have received on it, it seems like it was a good investment. However, I will wait a while before cashing in.
JimB
Edited to add: I thought I overpaid at the time, but knew I'd never get another chance.

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Posted By: barrysloate

Don't make a green frappachino but do like a good cup of green tea.

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Posted By: Jeff Lichtman

Jim, that card is like pornography to me.

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Posted By: JimB

Jeff,
Thanks, but I hope your keyboard isn't sticky now.
JimB

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Posted By: DD

That may very well be the sweetest card on the planet.

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Posted By: peter chao

I'm partial to Seattle's Best which is in most Border's bookstores in the Bay Area.

JimB, great looking Matty.

Peter C.

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Posted By: JimB

Thanks for all the kind words about my card.
JimB

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Posted By: Joe D.

its one of the ugliest cards I have ever seen.

I don't know how you can stand having it as part of your collection.




edit: Jim - did you get email about that book I wanted to send your way?

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Posted By: JimB

Hi Joe,
I did get your e-mail and was very appreciative. I sent a reply back within an hour or so of receiving it. Did you not get it?
JimB

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Posted By: Joe D.

I didn't get the reply.

please resend to and cc:

bjemarketing@yahoo.com
joe@internetville.com

with both addresses, I am bound to get it.

Regards,
Joe

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Posted By: Brian Lindholme

So, I don't know if this means anything philosophical or will have any relevance to my portfolio, but the first time I meant the kind JimB was in a Starbucks in Portland. We had some relaxing warm drink (...okay it was coffee) and talked baseball cards, and played some show+tell with cards.
Had we thought to bring up the writings of Rawls, or the wealth of Carlos Slim Helu it would have been just the perfect summation of this rather interesting thread.

(Hey I also work in the telecommunications industry, where's my E93 Matty?)

Actually that was a great day... Gotta do that again, Jim!

Brian L
familytoad

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Posted By: JimB

That was a lot of fun Brian. We should definately do it again.
JimB

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Posted By: Fred C

Cardboard investments... wow, let's all go out there and start indiscriminantly dropping all of our expendable income on cardboard... oh yeah, we've already done that...

It would be interesting to see what the "cardboard investment" gurus are touting as "investments". I'd have to guess that they've already selected "hi grade" material as a potential investment. I wonder what else they think is going to be "the stuff".

I think to a lot of us these cards really don't represent an investment, they're more of an escape from the daily grind.

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Posted By: JimCrandell

Of course Bruce is correct here.

Collectibles are a valid investment and certainly can be considered part of anyone's portfolio. I think anywhere between 10-20% of a portfolio can be put in collectibles--art, coins, sport cards etc. I wish the rest of my portfolio(real estate, stocks etc.) would have done as well as my sports cards.

Jim

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Posted By: Jeff Lichtman

Fred, why can't cards be both?

I buy only cards I like and I pass on cards that could be thought of as giving me the possibility of a greater return on investment over time. So, if I'm an investor I'm a lousy one at that when it comes to cards. But in the end the money I'm putting into cards will come back to me and possibly bring large returns -- so why can't I at last have an investment vehicle that gives me pleasure, much like real estate? These are not mutually exclusive concepts as any time you drop large numbers into a collectible it becomes part of your net worth, whether you perceive it to be that way or not.

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Posted By: barrysloate

I agree that cards are both.

They're a hobby and a form of relaxation, and along the way they generally increase in value.

I would think even the person who buys baseball cards purely for investment at least derives some pleasure from them. They certainly have more aesthetic appeal than pork belly futures.

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Posted By: peter chao

Again, it goes back to what your investment goal is, it it's important to derive pleasure from your investments then baseball cards seems like a worthy investment.

However, my goal is simpler. I don't want to get into another argument with my wife about the amount of space my cards take up at home. With a 3 car garage, there's only room for two cars, she thinks I'm way too involved in the hobby. According to her if I spent as much time working as I do on the hobby we would be living in Beverly Hills by now.

Peter C.

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Posted By: JimB

Peter,
Beverly Hills is overrated. However, baseball cards are still a relative bargain.
JimB

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Posted By: JimCrandell

Anyone who has invested a lot in graded baseball cards in the last decade has been a genius. Doesn't mean they will continue to go up--maybe they won't--but no question it is a viable asset class that has the dual benefit of being fun.

CD's, muni bonds, ugh!

If you don't have an oil well...get one!....and buy some high end vintage cards too.

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Posted By: Jeff Lichtman

Jim, I hate to hijack this thread but here's a thought that must have crossed your mind: if the price of a barrel of oil went back to $50 overnight --Iran goes bankrupt in how many months?

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Posted By: JimCrandell

Jeff,

Don't know the answer--but I think oil will stay high--at least another 3-4 years. Amazing given $70-plus bbl. global oil production can barely keep up with small demand growth.

Jim

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Posted By: Fred C

Jeff,

I never said that cards weren't investments. I just don't view them as that. Maybe that's foolish. To be an investment I'd have spend money (or capital) in an enterprise with the expectation of profit. That's not what I'm doing. I collect the cards because it's something I've done for a long time because I enjoy it. When I started out (and even now) it never occurred to me to make a profit off this stuff. For example, if I see an OJ of a player I really want, I don't break out the calculator and begin to figure out how much it's going to be worth 10 years down the road.

I suppose this stuff is very liquid in many cases and people could sell off a collection and buy a house with the money. Is a house an investment. To most yes, but to idiots like me it's just a place where I live. If I ever sold my house I'd have to find another or become a homeless person with a pretty nasty attitude because I'd have to carry all my frigging cards with me on the streets....

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Posted By: John

You don’t seem to hear much in the way of barrels of crude oil having their edges spooned out to present better on the open market to investors, not much in the way of forged copies of stock certificates passed off as real.

I also to date have never really heard of a person with a large stock or futures portfolio bouncing the idea of having a third party inspection/seal of approval letter process by yet another unknown third party to validate his or her investments worth.

I think it would also be safe to say that this same genius better hope that as more issues continue to come to light. That the very set of standards in which the genius dropped so much cash and currently values his or her portfolio, is never questioned by the very community that the so called genius expects to reap his or her profits from??

If that were to in fact happen, I think many so called investors could stand to lose quite a bit just a thought.

Before we start to toss around the word GENIUS lets take a step back.




edited to add pics for Jeff

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Posted By: Jim Crandell

Anyone who bought high end vintage graded sports cards 10 years ago could sell them today for multiples of what he paid for them-- today he is a genius. If they drop in half for whatever reason--not so smart. Baseball cards are relatively liquid and each auction confirms the investment appeal. Oil could drop in half too.

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Posted By: Fred C

Jeff,

"so why can't I at last have an investment vehicle that gives me pleasure"

It would be nice to have an investment that can give you pleasure. I would love to have been one of the three people that paid $10K for John Henry (the race horse). That must have been an investment that brought a lot of pleasure to the purchasers of that horse.

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Posted By: John

I have a feeling that most anyone who bought high end cards 10yrs ago wasn’t thinking purely of ROI, but more collecting cards and enjoying a hobby. Are they worth more today, sure but the same could be said of most anything from 10yrs ago. That doesn’t make anyone a genius IMO.

For arguments sake if this so called person was looking at a these purchases from the sole standpoint of ROI, there were many other things 10yrs ago which would have made this so called genius many times more wealthy than that of baseball cards.

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Posted By: davidcycleback

Whether or not baseball cards is an "asset class" is merely a rhetorical game.

Which has higher a financial return for the owner: $1 million return on 'investment' cards or $1 million return 'collectible' cards? The answer, of course, is the returns are identical. Only the nicknames for the cards are different. If you had instead labeled one of the two groups 'purple monkeys from Mars' cards, the financial returns would again be the identical.

As most baseball card 'collectors' hope that their cards appreciate in financial value and hope that the cards don't sell for 1/8th of the purchase price ten years down the road and try to buy and sell their cards at good prices, the difference between the self-professed investor and self-professed collector often is what they call themselves.

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Posted By: Fred C

The funny part is that there were lots of people speculating on rookie cards about 20 years ago. I wonder how much an 89 Upper Deck Griffey sells for today? I can remember people paying well over a hundred bucks for that card. Me, nope, I never really got caught up into it that much. I remember buying a pile of a hundred Dickerson (football) rookies for .39 each and a pile of a hundred Marino rookies for .49 each. I pretty much sold all the Marino's many years ago when people were paying a lot for that stuff. I was never into paying $100 for a rookie card that was only a few years old... now if you look at people that "invested" in those cards I'm sure you can find a lot of people shaking their heads (and kicking themselves in the butt) because of their "investments"... sure, some people made good money on that stuff but I don't see that happening again any time soon. Hold that thought... there are some people that still fuel a hyped card and pay tons for it... (Alex Gordon - Topps comes to mind...).

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Posted By: Jim VB

Jeff- "...why can't I at last have an investment vehicle that gives me pleasure..."


Taken out of context, this statement makes you sound like a pimp with a stable of "ladies". <LOL>

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Posted By: Jeff Lichtman

Jim, that's true -- the pimp does need to sample the merchandise...