Moron or genius?

“Your friends are shit, you tell them you made twenty-five grand last month, they're not going to fucking believe you, fuck that, fuck them! Parents don't like the life you lead? Fuck you mom and dad! You'll see how it feels when you're making their fucking Lexus payments.”—Jim Young, Boiler Room

Despite everything I’ve learned in decades as a collector and dealer, I still feel a tinge of shame when I buy an expensive card instead of being “responsible” with my money. Do you? If so, remember this: SEC Rule 156 (17 CFR 230.156) prohibits mutual funds from telling investors to base their expectations of future results on past performance because it is all speculative. Any differentiation between one form of investment and another is merely a perception of their value and risk relative to one another made in the absence of the knowing the most critical variable of all: the future.

Unfortunately, none of that kept your Uncle Ron from calling you out at Christmas dinner for buying Willie Mays cards instead of being “responsible” with your money. That is the subject of today’s column: dealing with the emotional pressure of being a card guy in a world of people who are not members of our peculiar tribe.

I did not readily come to the place where I could plunk down tens of thousands of dollars for cards as an investment. It took decades. I admit it, I just didn’t have the balls to drop that kind of bank on a card twenty-five years ago. I was still way too constrained by what I was ‘supposed’ to do. Hell, I even remember seeing cards selling for what I thought were bargain prices and not doing it because it would have been irresponsible. Sadly, had I gone against my ‘better judgment’ and been irresponsible just a few times we would be retired today on the proceeds of cards I looked at, thought were good deals, and could readily have purchased, if I’d trusted myself (a Gehrig Exhibit RC selling for under $2K? Ruth rookie for under ten grand? Stacks of Ty Cobb checks at fifty bucks per?). Yeah, I know, big fish stories, we’ve all got them. My regret is that my hesitancy was borne solely of irrational concerns about how others would react. In short, I got a case of the guilties.

The trajectory of my change of perspectives is interesting. Even as the internet exploded the hobby into a real industry, my wife was still a cynic, and I was still defensive. I started traveling to the National in 2003 after chatting with other collectors online for a few years. Before that, I’d been to a couple of Anaheim shows when the National still ventured west of Chicago. That year, and every year I headed off to the show after (I went to 17 straight before COVID), my wife gave me a sour expression when I told her how much money I was bringing said the same thing to me as I left: “Have fun with the other dipshits.”

It sure looked like I was dipshit. I admit it. Us collectors look ridiculous from the outside. Grown men dress like ten-year old boys and travel to lousy venues in second-rate locales to sit around and play with toys. We are so pathetic that the hookers stop hanging out at the convention hotel bars after the first night with no customers. From my perspective, I just took two flights to travel to Cleveland in August to play with baseball cards. You must be nuts if you think I’m gonna pay a hooker for her services when I could buy a pretty decent card with that money.

But I digress.

The Great Recession was a watershed for me. Call it proof of concept. I was heavily involved with real estate in my legal practice. Lots of real estate speculators and their service providers. In many ways, it was inevitable as the real estate bubble in Cali inflated that my real estate-based practice would inflate with it. I went to the National in 2008. It was a bad show for me. I wasn’t really sure I should go. Everyone was worried and conserving funds. I came home with very few new cards. When I went back to work, I found that I had three days of stuff to do, then nothing. My entire real estate client base went out of business all at once, like the dinosaurs dying after that meteor strike in Mexico. I was way short of funds to cover my family’s cash flow needs, so I went on the street, so to speak, to make ends meet; I liquidated cards through eBay to cover my cash flow. This went on for a few months. It proved that even during turmoil there was a real, viable card business there, that I wasn’t just tossing off with this stuff. Watching stocks crater (for the decade from 2000-2009 the S&P 500 lost nearly 25% of its value) also brought home the unease I’d always had with so-called mainstream investments (as I recounted a few weeks ago).

I still didn’t fully trust myself, though. When my daughter neared college age and started making noises about medical $chool, I had to try and save for it. My solution was work harder as a lawyer and shut down the card thing instead of pushing further into cards. I became a ‘kill-eat’ card buyer: I had to raise the money from cards to buy cards or no new cards for me. I stagnated for a few years like that until it became apparent that medical school wasn’t where her interests were, and I could call off the financial red alert. That is when I finally started to pay real attention to the financial end of card collecting, to really start to analyze what I was doing and buy for investment rather than just buying whatever tickled my fancy. The goal no longer was just to sell enough to feed my habit with profits, it was to lay the foundation for a serious business and investment.

Once I made up my mind to be proactive, my approach changed. I sold into runs, bought into things that hadn’t gone up with the proceeds, sold into those as they ran, bought into items I think will be solid long-term investments. I bought into certain cards before they became popular, whenever I thought I saw something brewing. For example, I saw the movie 42 and realized how monumental a figure Jackie Robinson was; if there was a Mount Rushmore of ballplayers, he would be on there with Ruth, Young and a fourth guy. I then saw the low prices of his stuff relative to other players of his importance and bought a lot of his early cards. No Uncle Ron voice telling me to stop and be fiscally ‘responsible’. How it worked out? Well, let’s just say that buying a stack of pre-1950 Robinson cards at that time was a good hunch to follow.

My wife eventually caught up to me. As card prices surged during COVID and my wife started seeing news stories about six-figure cards she asked me why I hadn't bought some of the highest-flying cards when they were affordable to me. I told her it was because I was being responsible and putting every spare dime into IRAs and other “proper” investments. It wasn’t just my ‘proper investment’ circuit breakers, though; it was also her. She had to admit that if I'd come home in 2000 and said "hey, honey, I just took $10,000 and bought a baseball card", she'd have thrown me and the Ruth rookie card out of the house. Now, she wishes I’d bought one every year. Being right is addictive as hell, BTW, and probably why I enjoy making a hundred bucks on a card flip (and telling the wife about it) more than making a thousand bucks working at my day job. I turned a 25% profit on a card in a few days recently. I literally had it resold profitably before I even received it from the auctioneer. I felt like a damn genius.

This is the psychological component of being a card guy. The naysayers will be in your head and at your table. Understand that no matter what you do, you are an idiot to a sizable number of those around you for wasting your time on “that crap”, and those people will gleefully tell you that you are an idiot right up until the day you throw the proceeds on the kitchen table. Do not listen to the doubters and check the guilt at the door. Only then can you hear yourself think.

Next time: trees, meet forest.