As you might have picked up in past posts, I like to find value when looking for new cards to buy.
I have an investment background so this is only natural for me–my whole life is involved with finding the best funds or stocks for a portfolio. Of course, part of that equation revolves around finding good value.
There are definitely some similarities in picking a stock versus picking a card to buy!
As I always say, card prices are a determination of demand versus supply. For stocks, it’s a similar story.
And if there’s excess supply (think 1988 Topps) with minimal demand, the cards are pretty much worthless.
But if there’s excess demand versus supply (think Tesla in the stock market or the Green Portrait Cobb) the price rockets higher.
With cards, we determine a card’s scarcity and attempt to evaluate the future demand based on a myriad of factors – player popularity, the card set popularity, etc.
This is NEVER a perfect science and not all collectors think this way, but it’s a good habit to get into if you are making some serious investments in baseball cards.
There are some givens for me. Names like Babe Ruth, Ty Cobb and Honus Wagner will never see a drop in future demand.
But depending on the card set we are considering, there could be more variability in demand over time.
Sure, there’s no certainty in any of this, but it’s the way I think about collecting.
I know common T206 cards might see an increase in line with inflation over time, but there’s no reason to think they should increase significantly in value.
I mean how much future demand should we expect for Buck Congalton’s T206 over time?
So, with that said, I am assembling what I call the All Vintage Cards ‘Value’ Portfolio.
In the stock market, funds labeled as “value” tend to have valuation characteristics below that of the market. Due to this value discrepancy, investors look for these lower valued stocks in hopes there is some reversion to the mean with valuation.
For example, today Ford (ticker F) would be considered a ‘value’ play, as it trades at a very low multiple versus its earnings (or P/E ratio). Whereas a company such as Tesla (TSLA) is very optimistically valued and trades at a significant premium to its expected future earnings.
Hence, I’m attempting to put a portfolio together of cards that I think offer good relative value and have opportunity for future appreciation.
Before getting started, I will reiterate this IS NOT INVESTMENT ADVICE. While I think cards are a good portfolio diversifier, please do your own homework. Don’t assume that I will be right about any of this!
Thus, without further adieu, here are the components of the All Vintage Cards ‘Value’ Portfolio. Continue reading