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#1
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: bruce Dorskind
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#2
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: barrysloate
Wealthy people may decide to buy very large baseball card collections for themselves, but I don't see them putting together portfolios for their clients. I think it would be a bad move. |
#3
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Jason L
This brings up the topic of one of my threads from a month ago that asked the question if others had seen any formal discussions of the card market as an asset class. |
#4
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: JimCrandell
Bruce, |
#5
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: JimCrandell
Barry, |
#6
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Kenneth A. Cohen
The scenario presented by Mr. Dorskind does not seem at all farfetched to me. We have seen manias on much crazier commodities - e.g. tulips and beany babies. One thing for sure, you know it'll be time to get out, at least from an investment angle, when you start getting hot tips on baseball cards from your barber. |
#7
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: pas
Violins are a bit different in that musicians actually use, and presumably drive the demand for, high quality older instruments. Perhaps there are people who just collect them, but certainly the great violinists of the world also demand and pay for, and use, Stradivariuses and similar instruments -- presumably because they sound better, etc. So unlike cards there is some "intrinsic" value there. That said, it is hard to ignore that cards can be both a hobby and an investment, although one wonders whether hedge funds with fiduciary duties to investors would be willing to take the chance on future appreciation. |
#8
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Al C.risafulli
It's an interesting subject, for sure, and definitely one that goes completely against the grain for those of us who participate in this hobby as a distraction from this sort of thing. |
#9
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Tom Boblitt
it isn't ALREADY happening........... |
#10
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Jerry Hrechka
Already happened in the graded coin market (Late 1980's). Coin values ended up dropping severely and are only just now beginning to recover. Ultimatelely true value and demand will be determined by collectors. |
#11
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Chad
And I'd bring this up to my boss, but I don't want to lose my job. I can see cards being used for an individuals investment portfolio, but they're just not liquid enough for use in a hedge fund. At least not a fund that operates on margin which are most of them. The nice thing about stocks, bonds and currencies is that you can buy today and sell tomorrow AND you don't have to worry about a conrer getting bent or depending on a third party to determine if the corner of your Treaury Note has been rebuilt. |
#12
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: barrysloate
Jim- you have invested a portion of your own money into baseball cards because you have a knowledge and appreciation for them. Would you recommend them to your clients? Or to put it another way, if a client wrote you a check for $1 million and asked you to put together a baseball card portfolio for him, what would you do? |
#13
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: JimCrandell
Barry, |
#14
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Jimmy
There is a definitely talk in business about investing in collectibles in general and sports cards and memorabilia are on the top of the list. I believe over the last 10 years the card market has grown to one of the most interesting and marketable hobbies which has turned collecting into investing for many people. We all invest a lot of time and money in the hobby we enjoy so much and that is way the hobby is worth a second look by leading investors in business. If you just look at the amount of companies that have been created or have grown over the past 10 years that have an interest in what people collect, we can see that the interest and investment will only get better over time. |
#15
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: barrysloate
Jim- fair enough, and collectors have been putting away high grade cards since the 1970's. But they have almost always done it themselves, based on the knowledge they acquired. Asking a hedge fund manager to do it is a different story. Would he know what he was doing? I don't think baseball cards can be bought blindly, and I have never put a portfolio together for a client. I would much prefer he learned to do it himself, and should I have cards for sale that would fit in, all the better. |
#16
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: pas
Low pop commons are not great investments in my humble opinion, their value is easily compromised when (as is inevitable) more are found. It's a dramatic example to be sure, but 52 Bowman Casey Stengel was previously thought to be a low pop card in 8, routinely selling for over 2K. Yet Mastro just came up with a find of OVER FIFTY in 8 and 9, totally destroying the market for the card. I would stick to prewar HOFers for investment purposes, hard to go too far wrong there. |
#17
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Al C.risafulli
Here's two interesting questions for Jim and Bruce both: |
#18
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: JimCrandell
Peter, |
#19
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: leon
Part of the allure for me is the difficulty in obtaining certain cards, in any condition. Another part of the allure is that baseball was/is my favorite sport while growing up ...and still today...though I rarely follow major league baseball currently. The 3rd part, and maybe (dare I say) just as important, is the fact that the little masterpieces of art have gone up in value. It's like a tri-facta in that respect. The other part of collecting that is great fun is the camaraderie involved. I have met hundreds of really great people in the hobby and, with this board, it seems like I meet new folks every week. With all of that going for it, it's no wonder cards can be thought of as an investment.....regards |
#20
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: JimCrandell
Al, |
#21
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Jason
cardtarget.com (not trying to plug them, but in this case it IS on topic). |
#22
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: pas
Jim, it was really bizarre, and I have not heard any explanation as to the origins of the lot. But it took probably 90 percent out of the value of the card. |
#23
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: JimCrandell
Peter, |
#24
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: pas
I can ask them under clause 1-c-DAV and get back to you. |
#25
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: JimCrandell
Peter, |
#26
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Al C.risafulli
Never mind - just realized that Bruce started this thread and not Jim. |
#27
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: JimCrandell
Sorry Al--you're right. But I did try to answer your question. |
#28
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Al C.risafulli
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#29
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: barrysloate
I wish I had even a clue what you guys are talking about |
#30
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Corey R. Shanus
My guess is that unless hedge funds know what they're doing (i.e., making acquisition decisions based on real knowledge and understanding of what they're buying), they will not be successful in garnering high returns for their investors. Spending a lot of money in and of itself will not be enough. I recall an attempt by a well known collectibles company to generate investment returns by spending heavily in the Halper sale. They bought several million dollars of memorabilia, only to ultimately be forced to liquidate some time later at an overall loss. At the time they made their acquisitions, others opined that for the most part they paid too much and bought items that did not reflect the cream of the memorabilia market. |
#31
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: barrysloate
Corey- I remember that company well, and during the sale as I watched them bid and purchase very high priced material it crossed my mind that they didn't have a clue what they were doing. Not only were they paying too much, but they were buying the wrong things. |
#32
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: boxingcardman
$5 million will do it! Bring it on... |
#33
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Chad
It's not going to happen. Investment managers may get involved at the request of a client, but hedge funds aren't going to waste their time. If a hedge fund did decide to drop 30 or 40 million into a baseball card fund, where are they going to get the cards and then, who are they going to sell them to? And how are they going to sell this plan to subscribers? And how are the subscribers going to get their cash back when they decide to sell their subscription? I'm not saying it's impossible, but the money isn't big enough to deal with the headaches. Also, what would a fund dedicated to baseball cards and memorabilia use as their hedge? Cards are definitely an investment opportunity, but I don't see how it could work at the scale a hedge fund would need it to work and how a hedge fund could deal with the illiquidity of the cards. |
#34
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: JimCrandell
Chad, |
#35
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Jason L
I think you are right in that involvement by a true "hedge fund" is unlikely for the liquidity and strategy issues that you mention; however, I do believe it is entirely possible (and more likely) that an investment fund that is arranged more along the lines of traditional private equity could become involved and do quite well in this market, as these are vehicles where longer lock-ups are the norm...(which would be a more appropriate strategy and operating arrangement for this asset and market structure) |
#36
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: barrysloate
Bruce- I have a question for you: |
#37
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Al C.risafulli
Yes, I did have some questions for Bruce and Jim that I posted earlier - Jim responded virtually immediately. Bruce? |
#38
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Fred C
Doesn't there have to be a sustainable market for these cards if someone is going to use them as an investment vehicle? |
#39
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Chad
You could go 100% long, but that's a lot of risk. Also, I think having to wait for a major auction to sell is pretty illiquid. The premiums auction houses charge are really large compared to the commissions on stocks, as well. Even if you could negotiate down the seller's premium, the buyer's premium isn't going anywhere. There's also the problem of coming up with an inventory. There are other obstacles as well. |
#40
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Joe D.
I don't think the personalities would allow it to work. |
#41
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: leon
On the face of it I can really appreciate what you are saying about hoping the value of cards drops like a rock. My guess is less than 50% of die hard collectors would want that at this point....since we spend so much on the darn things. Even a die hard collector that spends $1000 on a card, because he has to in todays market to obtain it, wouldn't want that value to go to $100.....Just a different perspective. regards |
#42
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Jason L
has been born from reading your posts! |
#43
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Paul S
Fred, philosophically I'm with you. In fact, I bought a lot of stuff years ago that I still have, so I wouldn't really realize any loss. But, can we wait until I sell it before the crash comes? Then I can at least buy it back again |
#44
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Marty Ogelvie
I want the market to go down also (way down) just long enough for me to secure a few 1,000 T206 cards. Then it could go back up.. is that too much to ask? martyOgelvie nyyankeecards.com |
#45
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Alan
Does anyone remember when the baseball card market crashed in the early 1980's ? I remember I sat next to a collector, who bought a 1952 Topps Mantle for $600 in a live auction at the Columbia Hilton (Maryland) show sponsored by House of Cards (Huggins & Scott). Of course, after that crash, card values went back up higher & higher & higher.... |
#46
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Marty
Most other collectibles have a world wide market. There are coin and stamp collectors everywhere. I know that there is some card collectors in other parts of the world, but I doubt that the percentage is that great. High end cards are not that liquid. Only a few collectors would be able to purchase the big money cards, and how many of them would invest in the funds so they would already have a piece of the action. The buyer's premium in the auction houses and how long between consignment and final payout is too long. |
#47
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Fred C
Alan, |
#48
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: David Smith
I think a hedge fund in baseball (sports) cards and memorabilia would be a bad idea. Not only is the market not as liquid as investment professionals would like but there is also risk involved. |
#49
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Dave Hornish
Well, all of the 8's and above would finally and officially be in the hands of Wall St if Bruce's fantasy comes true. Since I'm in armpit land, it would not bother me one bit. I think it's a horrible idea for a fund though. |
#50
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How Long Before Hedge Funds Control The Rare Card Market?
Posted By: Ed Ivey
Lock all cards in portfolios to those caring only about bottom line. |
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