Investing in Baseball cards isn’t for everyone, and there is risk involved.
Do you have an entrepreneurial spirit? When you think about savings accounts and mutual funds, do you yawn and think, there must be something better? If that’s your mentality, then you might want to give baseball cards a run.
The first question most ask is a simple one, but also very astute, should I invest in new cards or vintage cards? That’s a tough one, for me I like to speculate, enjoy the game and spend a good deal of time researching players. I’ve had hits, and I’ve had misses, but this is my passion, so that’s part of the overall plan. The best comparison I can think of would be difference between buying blue-chip and penny stocks. Bluechips are established, stable, and the price per share likely won’t vary much. All things being equal, they will increase in value over time, but on a limited basis. Penny stocks have the greatest chance for fast ROI, but also a substantial downside. Often a penny stock will soar in value, only to be worthless the following week. In that case, it’s all about your capacity for risk.
If on the other hand, you’re an established baseball card collector and hold vintage cards, you likely already know their tremendous gain. I’ve outlined a few examples below, only to stir the emotions, most of these prices are beyond the reach of most of us.
Had any of these cards were purchased in their original wrappers, fortunes could easily have been made.
The 1954 Ted Williams card sold for $50,000. Not too shabby, but a card like this likely wouldn’t be bought as an investment, rather by a collector with the money to spare.
All time high priced card was Bonus Wagner and get this, the price tag was $2.8 Million. You can be sure that the seller was wearing a smile, and likely the collector was also.
These aren’t anomalies, they can and do happen, and if you have an interest in the game, and are willing to gamble a bit, then good money can be made. Here’s how I’ve done it, and while most of my friends still don’t understand what I do for a living, they all respect my bank account. I’ve been able to turn a passion for collecting into an investment vehicle that has produced good returns. That said, when I make the profit, which doesn’t happen every time, I diversify my money, putting some back into more cards, some into a completely different set of investments.
Today, quite obviously, the game has changed, and where once players were paid somewhat paltry sums, today some make millions per year. There are teams of sport’s analyst who analyze every aspect of their play, their life, their background and more, all in an attempt to quantize the player. This is particularly true on ESPN and was popularized in the movie “Moneyball.”
My Investment Strategy
From a young age, I had decided to think outside the box, to never march in step and to make my money by doing what I wanted to do, not what someone else suggested. To some that makes me an idiot, to others, once they see my averages, a genius. In fact, I’m neither, I’m a speculator in baseball cards and when I find a player of interest, usually a rookie, I’ll try to corner the market, often spending multiple thousands of dollars on various forms of memorabilia around the player. When I’m right, I can double or triple my money, when I’m wrong, sometimes I’m left with little to show for my efforts, but overall, I’m well ahead of the curve.
Throwing Money at Rookies
The surest way to lose money is by simply throwing money at the memorabilia of the latest up and coming rookie. Don’t believe me? I know of what I speak, I’ve lost money doing just that.
MY WORST INVESTMENT:
I’ve invested in a lot of rookies over the years. However I don’t own a crystal ball and like anyone, no matter my research, things can go wrong. For me it was Mike Zunino 2012 Bowman Draft RC Auto.
After studying the stats, I was sure I had a winner, Zunino was a power hitter in the minors and played catcher. I had dreams of wealth on this guy, but it wasn’t to be. I invested over $50,000, but since he hit the majors, every time he steps up the plate, nada, zero, zilch. If I liquidated my investment now, I’d be lucky to get $10,000. Strike three on that one.
If you simply enjoy collecting baseball cards and hope that maybe, one day, you’ll make a profit, then go for it. Have fun, enjoy yourself and see what kind of bargains you can find. If on the other hand, you intend to make this a serious investment vehicle, then you have to do your homework.
You’ll certainly hear the stories about the ones that won, where people made a fortune on a single card, or in one case, a grandmother left a mint tobacco card to her grandson, who then sold it for hundreds of thousands. Rarely though, will you hear the stories about those who have invested thousands, then find their collections are worth only pennies on the dollar.
Buy and Hold
If you’re both a lover of the game and it’s history, plus want to make a sound investment for the long term, then look for vintage cards with names like,
Babe Ruth, Ty Cobb, Pete Rose, Willie Mays, Mickey Mantle and others, which is akin to investing in a Fortune 500 company, they won’t make you rich, but they’re a stable investment.
Some of these cards have outperformed even the best stocks, but it’s unlikely you’ll find many financial counselors touting their purchase. There is an echo of our childhood involved in baseball cards when we sat on the steps and traded them one-for-one with our friends. Both the times and price may have changed, but not the love of the collecting the latest cards, then rooting for our favorities next game.
The Similarity of Stocks and Baseball Cards
If you’ve purchased shares in a company, then think of baseball cards the same way. A company issues shares in a company, while a team prints a set number of cards, just like shares, for a particular player.
If the talent of the player is extraordinary, the card may have a high initial price, similar to an IPO of a large, established company, Facebook for example. At that point, the price of the card will rise or fall depending on how well the player performs on the field.
And who’s the final judge on the price? Well, in a way you are, and eBay (or similar sites) acts as the middleman, buying and selling thousands upon thousands of cards, then taking a fee for the service, similar to a broker selling shares.
Investing in baseball cards has been good to me. It’s allowed to make money, while also learning more about the game and the players. By doing my research, I’ve uncovered some raw talent that others have sometimes missed, and made a good ROI while doing so.
Certainly, this type of investing isn’t for everyone, there is the substantial risk and having a decent bank roll when starting out is a help. If you h ave a knack for searching out talent, you can make a good income trading baseball cards, I certainly have.