Over the holidays I had occasion to catch up with friends from college I had not seen in years. One of the guys decided to do a Google search on each of us and found out about my relationship with the sports memorabilia industry. It did not take long before the topic turned to the concept of buying and investing in stuff. In a nut shell, they wanted to know what some of the pieces I have worked on went for and if I could offer them any insights on what to buy and what to stay away from. My first question to the group was if any of them had any interest in collecting or starting a collection or where they just looking to diversify their portfolios if you will. They all agreed that they really did not want to collect as they had past “collecting baseball cards a long time ago.”
With this as a point of departure, I told them they needed to see this as they did any other investment they would make by asking themselves some very basic questions:
1. How much are you looking to invest?
2. How long where they willing to hold the item?
3. What kind of a return where they looking for?
I also told them that there are some other things to consider when investing in sports memorabilia that makes them different for other types of investments such as liquidity. The brokerage firms they are used to dealing don’t exist as that function is served by dealers, auction houses, and other collectors. I also told them that these same entities serve as the market for tracking valuations for these items as well.
We are all about the same age and all sold our baseball cards at about the same time, the mid to late 1980s. At that time, many dealers where highlighting comparisons between the Topps 1952 Mickey Mantle rookie card and the cards of the “hot rookies” of the day. There was also the same comparison between early-unopened material and the ability buy and “put up” newer boxes and cases for later. Sad to say, I know some people who sold or traded cards from the 1950s and 1960s for unopened product from the 1980s. We know how this turned out.
I then offered the old adage about the value of real-estatete… “Land has value because they ain’t making no more of it.” I ask them to think of memorabilia in those terms.
Newer product which I define as post 1980 will always be out there in the same numbers as they are today today. Additionally, this is also the time when there was a realization of the value of game used items and problematic items began to proliferate. This also created problems and competition with access to product as well. Nowadays, you really have to have access to a primary source (either team or player) to make any money on getting and turning newer items as the further it gets from the source, the lower the profitability on any one item unless you spot a sleeper player who you can get cheap and then sell when he gets hot. The key as with other types of investments is not to hang on to it for too long. Think of what the market is like for players like Sosa, McGwire, Bonds just to name a few.
This creates some circumstances that would both be helpful and hinder my friends. On the plus side, since they all seemed to express no interest in “collecting”, there would not be the emotional or sentimental value associated with the player. On the down side, since they did not seem interested in following a player, team or sport, this sort of ruled out the “sleeper” option. With this being the case, I told them they should focus on what I consider either the “Blue Chip” items or those that have a larger collecting appeal to more than one type of collector.
For the Blue Chip items, I asked them to name some the greatest players that come to mind. The names of Ruth, Mantle, Rose, Jackie Robinson where at the top of the list.
I told them that these where good choices because of a number of reasons. First being they are vintage players. Next all of these players have solid followings on an individual level. Thirdly, they are all connected to great teams and teams of prominence and I explained the concept of team collectors as well. The other thing I addressed is an understanding of what collectors collect. There are team collectors as well as period or style collectors.
Next thing to consider with respect to investment grade items is condition. While folks will want to find all original uniforms, the farther back you go the tougher they are to find. Hallmark player uniforms in less than original condition are still solid buys based on the rarity. The key becomes ensuring that the alterations or changes are vintage and not manufactured.
If I had to establish a list of what I think are solid buys, they would be:
1. Vintage uniform and bats of NY Yankees and Brooklyn Dodgers with special attention to players of prominence.
2. Unique or one year styles of flannels that are in original condition. A couple of years back I sold a 1934 Reds Road one year style for $13,000.00
3. First year 1970s knits or early style baseball knits from the 1970s.
4. 1960’s and 1970s NFL jerseys. The rise in popularity of the NFL among younger collectors will likely lead these to become tougher over time.
5. Pre- 1980 H&B Hall of Famer bats.
6. Older team jackets as I have always felt these where undervalued and are in shorter supply than jerseys.
If I was looking at items for investment, I would really shy away from anything post 1980 as the volume is too high. As in all cases, sports memorabilia is only worth what someone is willing to pay for it. The key to selling is knowing who the best buyers are or networking with well established dealers who can put you in contact with them at the right times. Auctions facilitate sales, but there are both problems with having the item tied up for a time or having the auction house run other products along similar lines as yours that could tend to drive the price down.
I thought that the thoughts I shared with friends over dinner might have some value to you as well as you consider adding to your collection in 2007. Bottom line, guidelines for investing can be summed at as follows:
Invest money you can do without.
Never buy things you are not sure of.
Vulnerability exists if you are not educated about what you are buying or don’t know someone’s opinion you can trust.
Establish contacts in advance with people who can help you come sell time.
Stick to your sell plan, when you can get what you where after, sell.
Track prices on the items you are buying. If you bought in an auction, remember you got it because no one would pay more at that time.
MEARS Auth, LLC