Looking to Build a Solid Collection of "Investment 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.

[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"

[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.

[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