The Collector/Investor Distinction is a Vague One

While most of us might consider ourselves to be true collectors, keeping the investment part out of our cards is quite difficult

Baseball card collectors can be lumped into many different categories. Some of us collect older stuff. Others chase modern. Others go for autographs. But the thing that groups us all together is that we all collect something.

As cards have gotten more valuable, the hobby has attracted others to the fold. Some of these newer folks are less what we consider to be traditional collectors and more investors hoping to make a buck. This isn’t true for all of them but the idea is that many are less interested in the physical cards and more interested in the type of investment they can bring.

But before we take a look at the dichotomy of collecting and investing, we’ve got to take a look back at the hobby crash to really get a good understanding of how the two are, and probably always will be, linked together.

The Crash of the 1990s and the Importance of Card Values

Grover Cleveland Alexander Barker Game Card

A lot of collector collectors believe that the addition of straight investors is kinda bad. Investing is sometimes looked at as dirty and, taken to extremes, even a stain on the hobby. But I’ve always taken a different approach.

If the hobby has active participants it is better off. As long as these participants are not out and out crooks, who those participants are is really of little consequence. Joe Blow flipping rare Mike Trout cards is no better or worse than the guy collecting pre-war stuff that I’m passionate about. I suppose if I had my choice, I’d prefer that the people in the hobby were as in love with the nuances of card collecting like I am. But, that isn’t realistic. And point blank, the more people interested in cards, whether for collecting or investing purposes, the better, since the values of cards are maintained through demand.

But why is the valuation part important to collectors? I mean, if collectors are in it solely to collect, why should they be concerned with a card’s actual value?

The hobby arguably was on life support or, at the very least, damaged significantly, when prices plummeted in the 1990s. Many collectors left because the hobby they had poured so much time and money into rewarded them with cards that were then worth a fraction of what they used to be.

Small tangent here, but we tend to mistakenly assign too much blame to several factors in the decline of the hobby, such as the overpopulation of insert cards, fewer kids collecting, or fewer shops and shows. Those all hurt and are all perfectly legitimate reasons to name for some of the decline. But the biggest problem in terms of the sinking prices was, by far and away, the emergence of the Internet and, subsequently, the development of sites like eBay. That exponentially increased the supply for collectors virtually overnight and is what made the cards far less valuable. Supply and demand are the top determinants of a card’s value and supply increased dramatically for every collector in every corner of the country with internet access. But that’s another article for another time.

Those decreased values led to an exodus of collectors. These collectors had often spent an exorbitant money on cards that were suddenly quite worthless. That led to fewer collectors and that led to a generally weaker hobby with a lot less interest.

The reason that collectors should care about card values is to avoid a return to those days. Even if you aspire to be purely a collector devoid of financial strings, you are better off when the hobby is doing well. When the hobby is doing well, collecting becomes easier and, for collectors of newer cards, that means a far more healthy lineup of possibilities with new products.

A Fine Line

1914 cracker jack reb russellSo with that history lesson out of the way, let’s take a look at collectors vs. investors.

Collectors sort of like to play this fun game of lumping others into binary categories. Part of that is probably because collectors are often judgmental and the other part is probably because it’s easy. You’re either a collector or you’re an investor. A shade of gray is not generally allowed and, for many, it becomes a black and white issue. Are you a good little collector or are you one of those evil investors that doesn’t care anything about the hobby?

The absolute reality, however, is that few collectors are in it solely for the collecting. More of us are a hybrid of both types than perhaps we even realize.

Collectors that consider themselves at the opposite end of the spectrum will often claim that they are not collecting to invest. That they are purely and 100% in it only for the cool-looking cardboard that the hobby has given to us. But let’s look a bit closer at that.

What is investing? At its core, most would define it as some iteration of allocating money or other non-financial resources (i.e. your time) with the hope of getting a benefit in return. But where I think collectors tend to get tripped up is by viewing that definition only in terms of trying to make a financial profit. For example, they believe investing to be, ‘I put $5 into this card and hope it becomes worth $10.’ That, of course, is a form of investing. But more loosely, I’d argue that investing can be more expansive. It doesn’t only have to be about turning a profit. Maybe it’s buying a card and then saving that card for years to come with the hopes that it’s worth, well, anything in the future. To me, that’s a form of investing. 

Let me pose a more direct question that speaks to the financial end of things.

Would you spend as much as you do on cards, whatever the amount, if the cards had a precise value of zero dollars and zero cents?

1923 Sarony Origin of Games GolfIn other words, would you buy that box of modern cards in search of high-dollar inserts if said inserts were now not worth a cent? Would you aggressively pursue a T205 set if Cobb, Matty, and WaJo were literally not worth the paper they are printed on? Would you happily plunk down a few hundred bucks for a Mickey Mantle card in poor condition knowing that it held absolutely no value?

I spend a good bit of money on cards. Not nearly as much as real heavy hitters, mind you, but still way too much. Buying cards on COMC is a pretty small fraction of my overall card purchases and I was surprised the other day when I looked at the history of my purchases there in the past few years and found it was much closer to five figures than I expected it would be. I was downright afraid to look at the eBay comps in terms of money spent.

Now, I definitely consider myself to be a collector. I love the history of the cards and, as evidenced by operating this site, I spend a great deal of time analyzing the complexities of various cards and such. Things like dates of distribution, print errors, and variations are all things I love about cards. And I love acquiring those cards merely to look a them and study them. The majority of the pleasure I get in collecting cards either comes in flipping through binders or by filling a hole in a set.

But I also absolutely, 100% am also buying these cards because they hold some value. That isn’t the sole reason but, sure, it’s part of it. The cards are not a part of my long-term investing plan or savings. If I lost them tomorrow, from a financial standpoint, my life would not really be altered. But I 100% keep track of what they are worth and will be quite happy to sell them in the future whether that’s tomorrow or 50 years from now. Would I consider myself investing in these cards? Of course. I have poured a great deal of time and money into my collection. The financial side is only part of it. I’ve spent countless hours researching cards, studying them, etc., all in an effort to make informed purchases. I’ve invested in my collection, in part, because the cards have value. I would not spend the amount of money I do on cards if they were worthless. That’s just being honest.

I suspect a select few collectors could make the claim of not paying any attention to card values and would buy just as many cards even if they held no value at all. After all, there are a good many junk wax collectors out there that buy those packs purely for the thrill of ripping wax. That’s downright awesome. But I suspect the amount of collectors solely doing that is relatively small by comparison.

To the collectors that decry investing, I’d argue that most of us are investors to a degree. We were investors when we happily gobbled up Ben McDonald and Jerome Walton rookie cards at $5 a pop as dumb adolescents and we’re investors now, whether we’re collecting Ty Cobb cards or Pete Alonso cards. The idea that the majority of us are in this 100% without any financial considerations is simply not accurate.

We may not be looking to actively sell our cards or buy cards only with an eye on their value increasing over time. But we do certainly pay attention to what they are worth and their value is, to varying degrees, important to almost all of us.

Whether we really choose to believe it or not, I’d argue that makes most of us investors on some level.

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