Investing in Collecting

[Tsaiko]

Anybody do it? Being new to all this, I was unaware of all the business behind collecting. I gave my first card to PSA for grading recently and was kind of surprised to see a Nasdaq symbol on the back of the slab. Ok, I fancy myself a fairly astute investor, so I did a little research on the company. Jeez, over 9% dividend, and not an accidental dividend either. That's pretty good. Digging a little deeper, the company is talking about raising the dividend. Their financials are in decent shape and the management seems good, which tells me the price seems to be fair. It barely budged during last weeks stock sell off. They just paid their dividend, so buyers aren't taking profit and running now. Investors must feel like, "why would I sell a steady 9% return?", right?
On the face of it grading and authentication of collectibles seem to be growing in demand. This isn't their only business either.
When I brought my one card to the show I had to wait to submitt my card because guys were in the PSA line with boxes of cards.
I searched the forum about this but nothing came up. I'm probably the last to know about this and everyone else has owned this company for years.
If so, does anyone have any opinions? Fairly safe long term investment? Less risky than a higher yielding REIT? I'm not looking for advice, just opinions.

Ok, this is where someone is going to tell me why the stock is going down to $5, right?

[Leon]

The original poster put this in the water-cooler section, which was the correct section, and I moved it to the front section to get some more eyes looking at it. Interesting thought for folks that might want to invest in the hobby in the form of Collectors Universe ...(parent of PSA)....

[Tsaiko]

Well Leon, more eyes looked at it, but apparently more eyes rolled
Thanks for trying to stimulate an interesting discussion.

If nothing else, the success and profitability of this company could be but one barometer for the overall growth of collecting in general. The more collectors desire grading and authenticating, the healthier the hobby in general. If these guys were to suddenly go under, it would be a bad sign for the future of collecting. Up over 1.50% since the initial post

[Leon]

Well Tsaiko, we tried. I think we have to look at Collectors Universe like any other stock except that stock happens to be associated with the hobby we all love. regards

[egbeachley]

I'll make a quick comment before I'm away from the Internet.

This company was very close to bankruptcy just a few years ago. Great turnaround, give them credit. But they have mentioned that the increase in Coin grading is partially (totally?) a result of the run-up in Gold prices. So, it seems reasonable to conclude if (when?) Gold prices drop, so will their revenue and profits. If they gave out all their excess cash in the form of dividends they may not be able to ride out the next storm.

BTW, the PSA Division has been unprofitable. If it's profitable now, it's just barely so after considering overhead allocations. But that's heading in the right direction, again give them credit.

[tcdyess]

I've been doing a lot of reading and gold may only be beginning. Buying some new American buffalos. The fed fired a warning shot today, going to be an interesting second half of the year.

Tim