Evaluating collectibles properlyWill Mickey Mantle pay your rent?

One of my favorite lines in any movie is one from the movie “A Bronx tale”. Chazz Palminteri makes a comment to a young kid, who idol worship’s Mickey Mantle in the 1950s.

He tells the kid to “..ask your Father if Mickey Mantle will pay his rent?”.

He convinced the kid so much, that his Father claimed that his son, later tried to throw away his baseball cards.

I’m thankful that I never threw away my baseball (and basketball) cards, because they’ve been a small (but ever growing in value) part of my investment portfolio over the years.

An unlikely source

About four years ago, my wife and I were trying to cobble together enough cash to purchase a vacation home.  We ended up making early withdraws from our retirement money, but there was a shortfall of a small amount.  That was when I turned to my stash of collectibles.

I’ve been a LONG time collector.  Just like investing in most things…I’ve been doing it from a very young age.  Regarding sports memorabilia, one of my strategies was always to buy the oldest thing I could afford, knowing that those items usually appreciated the fastest and by the most.  The downside with that is that you usually need to outlay a bigger up front cost, but it can pay off handsomely.

One of my most prized items in my card collection was a complete set of Fleer basketball cards from 1961-62.  This set included, what was considered the “Rookie cards” of some very popular players.

These cards included Wilt Chamberlain and Bill Russell.  I had kept them in pristine condition since I had acquired the set, probably around 1980, when I was about 14.

When I plopped the entire set on Ebay in an auction format, the ending total was probably close to $3,000.  Not bad for a $200 to $300 investment and for something that was collecting dust for most of those years.

The deal on the house ultimately fell through, which makes this point all the more poignant.   Ultimately, I probably sold myself short by not having the cards appraised by a third party card service.

Particular, individual cards from that series now sell for the entire price that I had obtained for the entire set.

Consider authentication

Currently, I’m “in between jobs”, so with the market high, I figured it might be a good time to get rid of some items on Ebay and do a little “clutter purging” in the process.

I have a closet of “junk” that I’ve collected over the years: Cards, programs, ticket stubs, comic books, etc.   The majority of it is worthless.   However, there are exceptions and core pieces that have some value.

One of my goals for 2018 was to finally complete the process of having some cards authenticated.

One of the largest and most prominent services is “Professional Sports Authentication” (PSA), located in California.   The other is Beckett Grading service.  (There is no affiliate link associated with this post and each service has it’s own pros and cons).  They both evaluate sports cards on a number of different criteria.  After their evaluation, they encapsulate the card into a tamper proof container, along with a serial number and details of the grade received.  This is usually a number value from 1 to 10.

The price difference of a “graded” card and an “ungraded” card can be significant. Mainly because there are counterfeits and grading can be somewhat subjective, when done by a layperson.  Plus, the owner of an ungraded card will always evaluate on the high side, since higher graded cards are more valuable.

If I had taken the time to have my 61-62 Fleer set, professionally graded, it could have fetched 3 times the amount I sold it for.  That’s nothing to sneeze at for doing a bit of leg work coupled with some patience.

Get it done

Getting back to my goal for 2018 of moving through this process, I started with one of my “holy grail” cards, a 1986 rookie card of Michael Jordan.

It’s one of the most highly sought sports card and has maintained it’s value over the years.  The process is a bit of a pain and took much longer than I had anticipated, about a full 30 days. I thought it would only take 5 full business days.  However, my card came back graded as a NM-7 which averages a selling price of between $1,200 and $1,500.  If I had tried to sell this card without it being graded and just my own photos on Ebay, it probably would go for around $500.  That’s not just marketing hype.  There is a certain level of trust associated with these grading services and it removes the buyer and seller’s “subjectivity” from the equation.  Works for me.

Going through the process 2 times now has helped me build a formula for which cards should be certified to maximize my investment.

This is based on a number of factors that include:

  1. My own assessment of card condition
  2. Cost for evaluation/authentication
  3. Recent market sales prices for similar items

Don’t get carried away

For a person with “Obsessive compulsive disorder” (OCD),  collecting things,  any “things”, can be a costly proposition.

I used to work for a publishing company and one of their sales strategies was to create a series of books that would look pretty on bookshelves, but needed to be “complete”.

Smart….for them.  I’m not immune to collecting stuff.

The other big downside of many collectibles is storage.

That’s one of the things that this recent “evaluation” has helped me to do.  Purge stuff that has low value, but a large footprint.

You really have to separate quality over quantity.  An entire baseball card set from each season, usually contains 792 cards.  It’s rare that any one of those cards from any given year will become “highly valuable”.

I stopped collecting complete sets (all cards in a particular series) in the early 1990’s.  The card companies got wise to the OCD thing, and created too many subsets and “chaser cards”.  Subsets and “chaser” cards are designed to keep you buying more cards, with the hope that you might find the “holy grail” card.  It rarely happens.

 

Evaluating collectibles as an investment
Worthless cards can take up a lot of space
Market risk

Yes, just like in the stock market, bad things happen.

When I used to tell my wife about some of the value I had locked in these cards she would say “Sell them.”    At certain times she may have been correct , at least from the standpoint of taking a closer look at potential “bubbles”.

Before the steroid scandals,  Mark Macguire and Jose Cancesco’s rookie card were booming.  After the scandal and a tell all book,  those cards dropped by about 90%.   Also, unforeseen events, like OJ Simpson’s trial, etc. caused his cards to be almost worthless.  I’ve watched many individual items rise and fall based on a number of events and factors.

If you ever watch the PBS show, “Antiques Road Show”, you’re probably familiar with the updated shows that show the value of a collectible when the show first aired and now.  I love to guess with my wife on the direction of the updated value.  In fact, I’m almost an expert on re-creating the sound for when the price drops.  It’s something like this….’brrrl-ahhhhh”.  That sound happens more often than you might think.

The sports collectible market is just that, it’s a “market” with all the ups and downs and risks of any other market.  Timing it is virtually impossible, but with enough patience and some knowledge you can maximize your return and have some fun at the same time. Maybe you’ll even get your buddy MJ to make a contribution to your expenses.

What collectible items would you consider selling if you really needed to?  Do you list your collectibles and/or jewelry as part of your “Net worth” statement?

 

 

 

 

 

Evaluating your collectibles as an investment