Everyone always says all players care about these days is money, is that how many collectors are becoming ? Especially the newer ones ? How will this affect the hobby as many cards begin to either lose or not gain any value over the upcoming years if the collectors are only concerned with increased value instead of having a true love for the hobby. The continued talk of investment of cards is only asking for a big letdown, especially in high graded cards in my opinion ( unless they are very rare ). It only takes a couple of people to drive the price way beyond insanity, but who is going to take their place and be there to buy them when the time comes to sell in 5-10 years or longer ? My concern with investing in cards would be that the core big time buyers are older and who is going to replace them ? With baseball becoming not much more popular than hockey how is that going to affect vintage cards ? Many vintage collectors lived through the 1950's, 60's, and 70's when baseball was a part of the american fabric so they can probably justify spending large amounts of cash to touch the past they long for , but that is no longer the case and needs to be considered I would think. With all this talk of investing in cards, without increases in value ( which I do not see except in the rarest of cards ) won't the negative talk of over value and stale market take affect and cause the money only collectors to jump ship as quickly as they jumped on ? It will make it easier for true collectors to get some nice cards at good price, but might cause an investor collector to pull their hair out and jump off a bridge.
Johnny, I think you underestimate the number of younger collectors out there that are in the Vintage card market. The late 20-somethings & those in their 30's are the same kids that collected in the 80's-90's baseball card boom, and while those cards did not hold their value many of the collecors of those items moved towards the pre-war market. Thus, I think you would be surprised at the number of under-40 collectors there are out there (actually this forum is a good example of that). Also, the # of these collectors is likely to rise as those same individuals who collected Baseball Cards as kids begin to have more discretionary spending money.
I think the idea that baseball is only as popular as hockey isn't quite accurate. Two seasons ago, Major League Baseball broke its all-time attendance record. They would have broken it again last year had there not been a bunch of games cancelled due to the hurricane. I remember reading two years ago that something like 76 million people attended MINOR league games during the year.
So I think that baseball is thriving in its own way. It doesn't have the TV audience that football has, but I do think that there are a lot of reasons for that. If baseball had a 16-game schedule, primarily played on Sundays, I don't think there would be any question as to what the national pastime is. But because there's a game every day from April through October, I think the enthusiasm waxes and wanes during the course of a season. That's just one of many reasons why I think baseball's popularity is difficult to measure against football.
To address the actual issue, though, I think that even in the long-term, the hobby will continue to thrive. As people get older, their sense of nostalgia begins to increase and they become more interested in old things. Look at the people on this board - it's safe to say that none of us - except maybe Leon - were alive when Ty Cobb played, and yet that's what we all collect. Most of us collect out of a sense of history or love for the game.
I think the hobby has only just begun to tap into the vast wealth that was accumulated by younger people during the dot com boom. Many of those people still have plenty of money, and as they get older their own senses of nostalgia will start to kick in, and some of them will enter the hobby. I also think that after this recession is over, people will be a little more hesitant to put all their money in the market, and may begin investing money in other places - and our hobby will get some of that money.
The staggering dollars that are brought by the major auctions amaze me, year after year. I see that trend continuing.
Well I am one of those 30 something guys collecting prewar cards. I collected with my dad in the 80s and 90s and got back into things a few years ago when I got bored with my other hobby. I greatly enjoy cards, pehaps more then past hobbies.
I see it as collecting and investing. I do not buy cards with the expectations they will increase in price, however I know my card values have done a lot better then my wifes 401K. My cards are up 10-20% and her invesments are down 25%+++ That is a BIG gap.
I think if you buy good quality stuff that will always have a following you will be fine. I don't see the market for T-206, Cracker Jacks or Caramel cards vanishing over night. These cards will only get better with age.
On a side point a buddy of mine is only 25, just getting his feet wet and really doesn't have any disposible income, I know he would be hooked on cards fast, but I don't bring him with me as he doesn't need to be tempted. I don't think it would be hard for a sports lover to get hooked on cards quickly and there has been increased steady demand for this stuff for 50+ years, I don't see that stopping anytime soon.
I know that as I progress with my income and knowledge of different sets I plan to buy more cards, as much as I can really
Looking for 1915 Cracker Jacks and 1909-11 American Caramel E90-1.
Johnny touched on a point I've been concerned about for a long time. The golden age of baseball memorabilia collecting, which began in the late 1970's and early 1980's, was fueled entirely by the baby boomers who were coming of age. They began by buying the baseball cards of their childhood, and many branched out into vintage cards and the like.
But this group is nearing retirement, and the next generation will not collect the same way. How it will all pan out is a mystery, but I imagine the hobby will certainly change. In fact, in many ways it already has.
The last few World Series have outdrawn the Stanley Cup in terms of US TV viewers by a factor of over 5 to 1. Hockey may enjoy high popularity in a few US cities and with our esteemed brethren to the North, and I will readily concede it's a fun game to watch in person and the playoffs can be pretty cool, but in terms of widespread appeal it remains in the eyes of slack-jawed masses, ie me, merely hockey.
This is a very interesting discussion...one that my wife & I have actually discussed lately. I was amazed with her input. I actually wanted to put my '39 Goudey set on the auction block to buy a new boat. The wife said "NO" (fairly convincingly too). Her reason...you cannot replace history. You can always buy a boat. Needless to say...I'm gonna' have to keep the set & the wife. I am a 30-something myself. As for as my childhood 70's & 80's collection...well, that has all been sold. However, my love for collecting has not diminished. I simply "invest" in the pre-war cards I always dreamed of having as a kid. You know...the Cobb's, Mathewson's, & Lajoie's we all drooled over at card shows in the 80's. I've lost thousands in the stock market over the years. However, I don't think I've lost a dime on any baseball card I've invested in except maybe a few of those steroid junkies cards from the 80's. I've seen prices realized on pre-war cards continue to rise, even through a recession. I just don't see a fallout when people actually do have money to spend again. And...even if there is a fallout, who wouldn't want to own a piece of history? Just my two cents.
It is good to hear baseball is still alive and strong, but it sure seems to be slowly fading from the youth but hopefully not. I am one of the under 40 collectors and am surprised to hear there is a good amount of younger people getting into vintage and history of baseball, that is wonderful! I live in the 'hockey state' so my view is skewed. I do feel a ceiling has been reached as far as value goes on many cards, but as long as new blood enters the hobby it will keep going strong.
If you collect 50s and older cards traditionally after 5-10 years youll do very well on the investment you made into your collection. You may take a few hits on some items but overall your collection as a whole will increase in value. If you collect modern cards thinking it will be a good investment for 5-10 years down the road, forget it.
I don't collect cards for investment purposes. I just don't. I don't think what the value the card might be in 10 to 15 years. When I am buying a card, I think about the player on the card, the collectors who may have owned in the past. I think about how to display the card, what to tell admirers of the card but I do NOT give one second thought about the future value of the card? I collect for the joy of collecting, period. If the cards are worth something down the road, my kids or grandkids will find out, not me.
This message has been edited by martyogelvie on Apr 1, 2009 9:13 PM
You may speak for me and count me in on one condition: I'm allowed to say that three times in the past year you've e-mailed me for advice on anything from picking out a tie that matches your socks to how to get dinner reservations at your favorite New York diner.
Marty, I second that sentiment. Although if I ever reach a point where I can't pay for the necessities of life anymore, I know where I can go to raise some money. Hopefully that won't be necessary and my kids will get the stuff. I have a 20-year old son who is a sports nut, knows baseball history back to the beginning, and is as interested in the vintage cards as he is in the stuff from the modern era.
I'm one of the younger collectors out there who used to collect the shiny stuff. I'm 27. I started collecting in 1990 when I was 8, and collected nothing but modern until about 2 years ago. As companies kept churning out the exact same product year after year, and as packs got into the $100 range with a chance for a Jason Bay autograph in every pack, I slowly got out of modern. I still do collect some modern cards, but it's mostly Ken Griffey Jr. because he was my favorite player when I was a kid. I used to have over 2300 different Griffey cards, but now I am down to about 40-50, mostly autographs.
When I got into pre-war (mostly T206's) I knew it was going to be more expensive than the modern stuff I was collecting. While I am not collecting pre-war for an investment, it was a way for me to continue with the hobby I loved, and not worry about everything that I buy being worthless because of overproduction. When you get into the kind of money it takes to build a decent sized pre-war collection, money has to be some sort of a factor. Pre-war provides me with the enjoyment of doing something that I love, while knowing that I'm not just setting my money on fire every time I buy a card. I see that as a very nice balance. It has also given me a chance to learn a lot more about the history of baseball. That is something that I was already learning a little about, but the T206 set has really opened up my eyes to some great stories about the game.
You drive a hard bargain. I don't wear ties. I rarely wear socks. I hate restaurants that require reservations weeks in advance. And I'm also not partial to NYC since all those diners cost $200+ for dinner for 2 (or so I've heard.)
Perhaps we should lower our sights and only go after antepenultimate collections?
Go back and read the thread from a few weeks ago where Leon asked everyone 10 questions, one of which was age. you will find there were dozens of board members who were under 40. In fact, I bet the average age was right around 40 (the age where you have a good amount of disposable income).
I am 33, and I collect vintage cards. I don't plan on giving up anytime soon.
And, if you are selling cobbs, I can beat Al's 10 cents on the dollar. I'll gladly pay .11 cents on the dollar.
Michael that is a great point and it is good to see such a diversity in age. It seems that most truly love collecting for the history and challenge of putting together player and team sets and subsets and type collections. I was reading through Bruce post on investment and hedges and was really surprised to see that in the 2500+ per card market there is only 100 serious collectors, and my guess is that out of those 100 most are over 40. Of course that really doesn't affect the average collector, but it really is a small world after all.
First, please recognize that much of that thread was written 18 months ago. It was an old post bumped up and, as such, had some speculation that was pretty out of date.
Second, I think Bruce's number of 100 collectors in the +$2500 card market is nothing more than a guess, and a ridiculously low guess at that. I think the number is easily 10 times that high. (For what it's worth, my number is a guess also, offered free, and worth exactly what you paid for it.)
I'm 33. Was a baseball nut in the 80s and collected everything I could get my hands on. I remember wanting any T206 but they were always in the extra thick plastic screwdown cases at the card shows with price stickers of like a gazillion dollars on them. (I don't know where all you people with the $5 T206 Ty Cobbs in the 80's saw them). I focused on girls instead of cards in the 90s and dropped out of the hobby.
I am exactly the person Rhett is talking about- I'm 33 years old, and as my disposable income grows, more is spent on cards. I love the hobby. I find baseball in general to be somewhat reprehensible today and barely follow it, but I'm fascinated by the history, I love the artwork on the early cards, etc.
My job is very intense, and when I can take a break to play with my cards (I keep them locked up in my office), I'm brought back to my childhood when things were simpler. Everything about this hobby is fun and relaxing. If my daughter wants to sell them when I die and buy a Prada pocketbook, fine. If she has to buy a Prada knockoff instead of the real thing because these pieces of cardboard are worthless, she'll (theoretically) have money from other investments, and in the meanwhile, I'm having a good time. My cards are worth more than my 401k, but its an accident. An accident, however, which helps me justify even more purchases in the midst of this economic meltdown.
The previous post about looking at the December thread about ages, interests, etc, to me, points to the new generation more than making up for any veterans who bow out. We are chomping at the bit for an opportunity to get our hands on some of your cards if you decide to get out of the hobby.
On some cards I collect strictly for fun. I don't expect that they will make any real money over time and I don't really care because I spend less on whole sets of them than on a nice meal at a fine restaurant. I just enjoy having them. In that category you can definitely place cards from the sets issued when I was a kid (like Star Trek, James Bond, Kung Fu, late 1970s baseball, etc.). They are just purely nostalgia and relaxation for me. Other cards, I fully expect will hold value or grow in value over time.
I am actually happy there is another person with my exact feelings. I thought I was the only one who thought that the new Major League baseball is a piece of poopoo. I think it has been ruined on many different levels and I probably can't name 15 of today's players, nor do I care to. I do like the minor league games and my family and I still go to them. They are a lot of fun, cheap, and the guys look like they are having fun even sans multi-million dollar a year contracts. I don't care if the players make that kind of big money but it seems they whine about everything and then if they don't get their way they go on strike. Great game. Not.
I love everything about the hobby ie... collecting, investing (I guess that's what it is), the friendships made etc etc.....I also love finding new cards and the little E100 scraps got me excited (it doesn't take much). BTW, I thought they were printers scraps from day one and called Mark M the day after they were put on ebay...and he felt the same way too(though no one can be positive with the information we have). best regards
Based on the personal collecting thread, there are many of us in the Forum that represent the 'new' generation of collectors. I'm 27, and started collecting pre-war 2 years ago. Like many, I got hooked in the early 90's when my Mom got me that first pack of 1991 topps. And the rest is history, or so they say.
As far as the investing or collecting question goes - it's both in my opinion. We all collect here because we love the hobby, the players, the history, the cards, and the relationships we develop with fellow enthusiasts. That said, we are all investors as well - whether we like to admit it or not. We exchange cash or cards for new ones that we expect to retain a certain value (and also satisfy a personal interest, of course). If the trade/cash value decreased in the cards we received, we would all most certainly be disappointed. You expect your cards to retain a certain value. Why do we all want high-grade HOF's? Well, because we want to complete a set, stand out as a collector, etc, but it's of course, at the same time, a very safe and secure investment.
I look forward to continuing to be an active part of this hobby for decades to come...
I guess it really is both collecting and an investment as so much cash is traded back and forth and value is attached. After thinking about it nothing will really change, especially with all the younger collectors getting involved. I guess the golden age set the standard prices and grading really changed everything. The fact that the game today is so garbage might actually help vintage and the history of baseball, although the same things said today were said when Babe Ruth and all the power hitters changed the game forever, minus all the steriod issues. I guess I wont be getting any Cobb's or Ruth's at a deep discount anytime soon so I better start saving.
I'm 28 and I actually bought my first vintage card (a EX 1952 Topps Willie Mays) 11 years ago. As far as the investment part goes I'm usually content to get my money back when I sell a card. I try not to let my accumulation of cards to get over a certain dollar amount so I usually end up selling cards I've had for a while in order to pick up new ones. As long as I'm not losing money (at least too much) I'm not that concerned about the investment end of things considering I usually don't hold onto anything long enough for it to go up in value any noticeable amount.
I remember as a kid in the eighties, some kid had a tobacco card, a T206, and it just amazed me. He said it was worth $100, and I gave him some real nice rookies from the 70's, really about half my collection, to get the card. Turned out it was only worth about $10, and I never got my stuff back.
Nevertheless, for some people, history just fascinates them, and I am one of those people. I'm 32 now, and as many board members will probably attest, half-crazy! But cards just capture my imagination. To look at a card that is a hundred years old, and yet somehow still in mint condition, that is a miracle to me.
In the late nineties, I "invested" in a bunch of very rare modern cards of rookie players, using statistical analysis to project them to be stars. They all failed (Rick Ankiel, Beltre, Tatis, Cuddyer, etc.), and I lost thousands of dollars. But during that time, I purchased a T206 PSA 9 just for safekeeping. That's how I learned what has real value.
I have always loved cards, but I cannot remember a time in my life that I acquired a card without the expectation that it would increase in value. I have made my share of mistakes. But the hobby has served me well. For those of you who can collect without consideration of the value of the cards, I applaud you. Maybe one day I'll have enough money to do that.
But for now, the way my life currently is, I definitely have to be concerned about the cards from an investment perspective. Sure, I love SGC's holders, but my valuable cards are PSA because that's been the better investment. Yes, I want my cards to appreciate in value, and perhaps that is healthy, too?
This message has been edited by leonl on Dec 17, 2012 11:17 AM
We have read the earlier posts with considerable interest.
Whilst we agree that the nature of collecting will change. That axiom is true for any
area of collectibles. Certain items go in and out of favor over time. Prices rise
and fall accordingly. That is true for pottery, stamps, coins, furniture and certainly baseball
Whilst there may be millions of people who have collected baseball memories, in certain areas
of this hobby, as in all hobbies, selected sub-collecting areas are thinly populated. The exit of
two or more major collectors can quickly drive down prices. By the same token the entrance of
a few major players can dramatically increase prices.
In baseball, books and sheet music are considerably less expensive than they were in the late 1980's.
Pre 1900 cabinet cards are relatively far more expensive than they were during the Copeland Auction.
At said auction we bought a NY Kalamazoo Bats for under $5000 and Joe Jackson Texas Tommy
for about $8000- said cards are now worth 5 to 9 times as much. However, there are many items from the Copeland
sale which reached their zenith at Sotheby's March of 1991.
As for the comments that today's fan will lose his/her attachment to baseball and no longer be interested in
collecting rare historical memorabilia, we disagree. Those young professionals who grow up to be multi-millionaires
and billionaires (perhaps with the way the US government is printing money- trillionaires) will develop sophisticated
tastes, an interest in history and will collect the most interesting and valuable items in the hobby. As people mature,
their interest and tastes change. Very few people who were wild about a 70's rock n roll group like The Grateful Dead
collect its memorabilia. In fact a number of dead heads collect Impressionist Art.
Finally, our comment that there are probably only hundred collectors who are consistent buyers of pre-war high condition
cards that sell for $2500 is far more accurate that the "drunken estimate" of 1000 such collectors.
Our comment referred to those regularly spend $2500 or more on rare pre-war cards. If there were anywhere near 1000
such collectors- prices would be far higher- and the number of bidders on individual cards would be far greater.
By regularly spend - we don't mean one or two purchases of $2500+ a card a year. We would suggest a minimum of 10 or purchases
of cards at that level per year.
We would be happy to wager $10,000 with JIM who assured us that there were a 1000 collectors
who spent regularly spent $2500 each or more on 10+ cards per annum. To win all he has to do is supply us with a verified list of 500 people
(and cancelled checks and auction records) of 10 or more purchases of pre WWII baseball cards during 2008. We are giving him a
margin of 500 collectors. It is time to put up or shut up.
America's Toughest Want List
This message has been edited by Yankeefan51 on Apr 2, 2009 10:06 PM
To answer the original question: I would say I almost exclusively collect with no intention of reselling. Ocasionally I make a purchase with profit in mind at a future date, yet I still never seem to sell anything.... Oh well. Above all else enjoy what you do. You can't take the cards with you once your ride's over.
I didn't "assure" you of anything. I stated that my number was a guess, just as yours was.
"Drunken estimate"? Hardly.
You added all sorts of silly qualifications to your "100 collectors" BS after the fact. There are far more than 100 collectors on this board who have spent over $2500 on a card. Your assertion was that there were only 100 in the entire industry.
"It's time to put up or shut up."
LOL. Right Brucie. I take my orders from you. There's only one person in the world allowed to tell me to shut up, and in order to achieve that level of expertise, she's had to stay married to me for 27 years.
Better get that other line. I think Joann is calling for advice. What a d** you are.
Edited to take out the "terrible name" I called Bruce (which he has earned), because name calling is against the rules.
This message has been edited by jvb6034 on Apr 3, 2009 10:18 AM
"Better get that other line. I think Joann is calling for advice."
Quip of the day.
That said, while incapable of taking accountability for his own words, Bruce does make an interesting point or two about how just a handful of buyers can propel or deflate segments of the hobby.
The first time I noticed it was when I was aggressively building my 1938 Goudey set in higher grades. The prices I had to pay for cards in 6, 7, and 8 were often multiples of the prices in published price guides. Even after I started tracking every sale I could find in an Excel spreadsheet, I found the number consistently rising.
After I completed the set, I continued to track prices for a while, and noticed a decline of maybe 10% over the course of a month or two. It took me a while to realize that since I was no longer bidding on these cards, they were selling for a little less than they were before.
Now, I'm no "whale," I'm barely a guppy. But that's an illustration of how the exit of just one collector from a thinly-traded issue can impact prices.
All that said, I still think that the market for sports collectibles of all kinds - and not just the ultra-elite stuff but ALL of it, in all grades - will generally continue to rise. There may be pockets that occasionally dip, but I'll consider those to be anomalies in an overall upward trend.
This message has been edited by Novocent on Apr 2, 2009 10:32 PM
Another pompous pronouncement by the Dorskind Group.
Business must be slow.
Nothing but unverifiable opinions stated as facts:
"If there were anywhere near 1000 such collectors- prices would be far higher- and the number of bidders on individual cards would be far greater."
Really? Evidence, please.
" ...there are many items from the Copeland sale which reached their zenith at Sotheby's March of 1991."
Really? Name them. And prove that they've topped out, please.
"Finally, our comment that there are probably only hundred collectors who are consistent buyers of pre-war high condition cards that sell for $2500 is far more accurate that the "drunken estimate" of 1000 such collectors."
And this gem:
"Those young professionals who grow up to be multi-millionaires and billionaires (perhaps with the way the US government is printing money- trillionaires) will develop sophisticated tastes..."
Actually, the preponderance of evidence shows just the opposite--an inverse correlation between wealth and taste.
We are also treated to the Group's gratuitous insults ("less than esteemed collector"), as well as a completely meaningless sentence fragment: "Whilst we agree that the nature of collecting will change." (The irony here, of course, is that if Bruce left out his ubiquitous and affected "whilst," the fragment in question would be a complete sentence.
Well done, indeed.
(Now I'll prepare myself for Bruce's usual "nutty professor" tirade.)
Apparently there are those who can not only disagree, but must turn everything into a bet for money. I suppose it is an attempt to back the other person into a corner where if they refuse the bet, there is an implicit admission that they are wrong. I remember kids pulling this ploy when I was at summer camp.
Well, I'm 32 now, and can't say that there aren't times when I act childish, and probably everyone else, so it probably shouldn't come as a major shock when it appears on the boards. It's a shame, though, because I was really interested in hearing from the other younger members of this board to see what drew them into collecting vintage cards.
As for the issue of whether interest in vintage cards will pass as people from that time period pass away, I don't see it happening. Mainly because I view pre-war cards as somewhat like antiques. People are long since gone from the days of George Washington, but people are still pretty interested in original copies of the Declaration of Independence.
I approach the hobby as a collector. However I feel that what we do is more of an investment than many other hobbies.
A good comparison is people that play golf as a hobby and spend thousands of dollars on equipment, club dues, and greens fees. After many years of playing they will have spent a lot of money, but besides memories will have little in the way of a return on their money spent.
We have the luxury of spending hours doing what we love, the thrill of competition through auctions, the satisfaction of success in achieving individual goals, and most importantly sharing this time with friends in the hobby. The difference is we could recoup most of what weve spent if not all or even more should we choose to leave the hobby.
I think everyone collects for a different reason. There may be a few that get into the hobby thinking they are simply investing, but I would dare say once theyre in it becomes much more than that. Either way were all investing be it for collecting or monetary return in a hobby with a great return compared to most others.
I find this a fascinating subject because, like most serious collectors, I have spent a lot of time trying to justifying putting even more money into my collection by thinking of it as an investment. Anyway, here are my thoughts:
Any "investment" has risks, although there are a lot of card investments that of the truly speculative type. That being said, I do think that there are certain sets that will always hold their value, at least as long as anyone is collecting. The question, with a lot of sets, is whether they will appreciate reasonably, say at the rate of a decent-yielding bond or merely hold value. I think there is very little at this point that will appreciate at the rate of common stocks unless it is of a speculative nature.
One good aspect of cards as an investment, as compared to most collectibles, is that, for the most part, they can be sold quickly at close to their current value, like most stocks and bonds. Professional grading and the availability of a lot of serious active collectors on eBay and at the auction houses, make selling your investments in a reasonable period of time (say a month or two) for a price you would expect possible.
What Would I Invest In?
In my opinion, there are 3 sets I consider can't miss for the long-term. They are:
2. 1933 Goudey
3. 1952 Topps
Each set has a number of landmark cards that are scarce and are iconic with collectors (i.e. most collectors can identify the key cards from these sets on sight, T206 Wagner, 52 Mantle, 33 Lajoie, etc.)
Now, the Cracker Jack and Old Judge and caramel sets may also be can't miss, but when I was collecting in the mid-80s, no one spoke of them (except the E90). Also, there are not specific cards (again my opinion) that are iconic with collectors (although that can certainly change.) So, my gut tells me they belong in the class of the other three, but I have no reservations about the first three.
There are certainly a lot of other sets, mostly pre-1960, that may be good investment candidates, because the players have long retired, removing a major volatility factor, and the cards have been traded for long enough that a long-term price history can be established. Among these, the question is, do I invest in heavily traded issues, like, say early 50s Topps and Bowman or do I look at more obscure pre-WWI issues, for example.
It's a tough question, I think, and something each person needs to look at personally. I personally think that the 1953 and 1954 Topps and the 1953 Bowman Color sets are worth some level of investment, at least in key cards, because I know there will be collectors for those cards . There are enough stars that are still resonant with living collectors, the sets are early in the history of post-WWII collecting, and there is enough volume that they can be sold at a predictable price. On the other hand, scarcity is, and should be, very desirable for investment and I can see the wisdom of collecting more rare, obscure pre-war and 19th century sets. The question is, what will the market be for these when I need to sell. For me, that is a little less clear (but of course it depends on the set). Really, it depends on how long you intend to hold and the time flexibility you have on when to sell.
My Biggest Concern?
My biggest concern with investing long-term is the potential risk of high condition cards. All things being equal, the most volatile cards in terms of price are highly-graded cards. And, I know I am not alone in my suspicions of the number of high condition, older cards in the market (I have a stack of auction catalogs full of them). Certainly, there are some people who have "improved" the quality of their cards by artificial means and many of these cards have slabbed and sold at auction. Some have been discovered, but most likely a lot have not. The question is, what will the market's long-term response be to this issue?
I think the steroids issue may prove a decent parallel. For a long time, there were rumors of use and some actual examples, but the average fan didn't really care too much. They either rationalized it wasn't happening to a degree to be concerned (or at all) or they really didn't care. However, when more evidence came out, it became apparent a lot more people cared.
Now, that's not to say it's a certainty that anything will happen related to graded cards. But, it is a risk. And, it seems to me a potentially large one, especially if you are investing a signficant amount of money that you plan to use later in life.
Is there a solution? I think the only real solution, if you are putting in a significant amount of money, is to have an expert that you trust, with no ties to grading companies or card sellers, analyze each card for evidence of tampering (an expert in paper restoration, perhaps?) Nothing is 100%, but at least you'll have piece of mind, even if it requires cracking open your holder and having a card inspected, then re-graded. Better than having someone else do it when you action it in 10 years and void the sale.
I am 29 years old. I've collected baseball cards for most of my life, and most of the cards that I collected as a kid aren't worth the paper/ink used to print them. I enjoyed collecting them, but at some point I couldn't justify burning my money anymore, so I stopped. Now I collect vintage cards almost exclusively. I love collecting cards, but for me to continue to spend money on a hobby, I need to know that I can get some of my money back if I need to. I don't have a very high "disposable income", so if I spend $100 on a card, I need to know that I can get my $100(+/-) back if I need to. So while baseball cards are not my retirement plan, I do consider them to be somewhat of an investment.
Investor: Honey, I just invested in a 1933 Goudey Babe Ruth. It is the classic gum card of the greatest player ever. Over time it has held its value and then some. Besides, what was I supposed to do with the money, buy stock?
Collectors: Guys, I just got a 33 Ruth. Happy Days!
Just remember: cards will get you through times of no money better than money will get you through times of no cards...
Well here is some data regarding the appreciation in value of baseball cards in recent times.
In the book Cardboard Gems published by Mastro Auctions, Doug Allen put together a portfolio of 100 high grade (NM-MT) baseball cards, and showed the amount of appreciation in value of this portfolio from April 1995 to April 2006 to be 143%, which he says compares favorably with the performance during the same period of the S&P 500 (153%) and Dow Jones Industrials (133%). The total value of his 100-card portfolio was $986,875 in 1995, increasing to $2,401,940 in 2006.
Now one problem with Doug's portfolio is that about half of its value is tied up in one very significant, very thinly traded card: T206 Honus Wagner PSA 8. If you exclude this one card (which went from $430,000 to $1,265,000), the performance of Doug's portfolio drops from 143% to 104%. That still isn't too bad. In other words, without the T206 Wagner, the other 99 cards he selected, taken as a whole, roughly doubled in value from 1995 to 2006.
I thought it would be interesting to divide Doug's portfolio into two parts: pre-war and post-war, and compare the appreciation experienced by the two segments of the market.
The pre-war portfolio (excluding the T206 Wagner) consists of 34 cards: 5 T205's, 4 T206's, 4 1915 Cracker Jacks, 14 1933-1938 Goudeys, and 7 1939-1941 Playballs. The cards he selected were mostly of major stars such as Cobb, Johnson, Mathewson, Gehrig, Ruth, and Dimaggio. The T206 Magie error card and the '33 Goudey Lajoie are in there too. All of these cards increased in value from 1995 to 2006 except the '33 Goudey Lajoie, which dropped from $62,500 to $50,000.
The post-war portfolio consists of 65 cards covering 1949 through 1969, and includes 6 1949 Leafs, 17 1949-1954 Bowmans, 27 1950's Topps, and 15 1960's Topps. Again the cards are mostly of major stars such as Mantle, Mays, the Robinsons, Musial, Clemente, etc. Of these cards, 35 increased in value, while 30 declined or remained the same in value, between 1995 and 2006.
So here are how the two portfolios compare, in terms of total appreciation:
*34 pre-war cards went from $313,525 to $859,250, a 174% increase in value
*65 post-war cards went from $243,350 to $277,690, a 14% increase in value
*99 cards total went from $556,875 to $1,136,940, a 104% increase in value
Eric, super nice post; great financial break-down.
Just as Robert said a couple of posts above, I too collected in the hey-day of junk cards. I began to realize that the card industry was very suspect and well...just wasn't that fun (I'm "over" the glean and sheen of insert cards with swatches or autographs).
But Eric's post hit it on the head - I LOVE collecting, but not the new stuff; there just isn't a high probability of return on the cards now due to production volume (sorry, but I still don't consider a 1 of 1 card scarce - it's just a gimmick).
When I came to the realization that the new cards are....well, not fun to collect, is when I switched over to the pre-war stuff, which quite honestly, has absolutely thrilled me. Although I'm far from being considered a "whale" in the industry, I can certainly afford more than the $0.35 cents per pack of cards that I use to buy.
Also, I think we all, to some extent, collect as investment (how many times have any of you heard, when a card is damaged or when mom or dad tossed out some of your cards, you'd hear about someone saying, or yourself said, "Do you know how much those were worth??!!!")
I love to collect and it just happens to be helpful that it's a worthwhile investment! (who wants to buy my Jose Canseco 1986 Donruss Rated Rookie card? Anyone? Anyone? Anyone?) hehehe