COLUMN

Making a profitable nostalgia trip

While the value of stocks declines, many young investors have found the rewards of old bubble-gum hockey and baseball cards

DIANE FRANCIS January 23 1989
COLUMN

Making a profitable nostalgia trip

While the value of stocks declines, many young investors have found the rewards of old bubble-gum hockey and baseball cards

DIANE FRANCIS January 23 1989

Making a profitable nostalgia trip

COLUMN

DIANE FRANCIS

My teenage son and his friends regularly spread their investments out on the living-room floor. Despite their relatively tender ages, their portfolios continue to soar in value while mine drops. And their good fortune continues to mount despite the stock market crash of 1987 and the lacklustre performance of the markets ever since. But the secret of their success is that they are not investing in stocks or bonds with an eye on future profits. They are cashing in on the past, buying and selling cardboard baseball and hockey cards, and often they are outperforming many top stockbrokers. For instance, as my gold shares fell in value last summer on the Toronto Stock Exchange, my son’s Mario Lemieux card collection more than doubled in value to $15 from $6 per card.

Trading cards has become big business. Known as sports collectibles, items range from cards in mint and even damaged condition to posters and other memorabilia. They are being sold in shops that seem to be springing up regularly on both sides of the border. And “investing” in cards is not as hokey as it sounds. It avoids the kind of volatility in stocks that often costs investors like myself money. Besides that, it is an enjoyable extension of that pleasant boyhood preoccupation with collecting and swapping cards with friends.

Fun aside, the stakes are often high. Rare cards fetch six-figure prices. Their values, like those in the stock market or on the grocery store shelf, are strictly affected by supply and demand. Even though cards are published annually by card manufacturers, supply is limited because there are just two companies that have the right to photograph and reprint National Hockey League players and five companies that do the same for major-league baseball. Proceeds from the sale of the cards go to both the baseball and hockey players’ associations, and piracy is illegal.

On average, baseball cards are far more valuable than hockey cards. That is because

While the value of stocks declines, many young investors have found the rewards of old bubble-gum hockey and baseball cards

demand is higher due to the fact that there are far more baseball fans in North America than hockey fans. Besides that, supply is sometimes scarce, and some baseball cards are extremely rare, dating back to 1875 when they were introduced as a premium in boxes of cigars or tobacco tins. Bubble gum came in the 1920s. Those older cards are unbelievably valuable, again due to supply and demand. The rarer the commodity, the greater its value.

For his part, Kevin Zubek, a 16-year-old collector and part owner with his parents of a sports-collectibles retailer, Z & Z Sportscards, in Mississauga, Ont., said: “The single most valuable baseball card is from 1911, a Pittsburgh shortstop named Honus Wagner. It is worth $150,000 because there are only 50 or so out there.” Wagner’s card is more valuable than baseball great Babe Ruth’s because Wagner was against smoking, resented his card being put in tobacco products and sued the companies to stop distribution. The result was that only a few were distributed.

As for current players, performances affect a card’s value. Lemieux more than doubled in price over the summer after he won the NHL scoring title. This gives “investors” another reason—not that they need one—to scour

newspaper sports sections. Said Zubek: “You look for home runs, the game averages of pitchers. Who has gone three for three. That kind of thing means the card is worth more. You also look for trades. Take the Blue Jays’ Fred McGriff. If he’s traded to the Yankees, there will be more interest in his rookie card.”

Unfortunately, players’ fortunes are like the stock market’s, and what goes up can also come down. The rookie card for Blue Jay George Bell declined in value over the summer to $11 a card from $15 as his game deteriorated. And the past is also more valuable because it is rare. For instance, the latest U.S.-published card catalogue quotes a price of $425 for a complete set of NHL players in the 1964-1965 season, but a set of 1978 players was worth only $40.

Here in Canada, hockey is still more popular than baseball. In stores like Z & Z, customers can cruise huge inventories of cards and buy special plastic cases to keep them in mint condition. Collectors also traffic in players’ jerseys, posters and autographed items including balls, bats and hockey sticks. Hockey cards fetch lower prices because of the relatively recent expansion of the National Hockey League, combined with the fact that fans are confined mostly to Canada and a handful of U.S. cities. One of the most valuable hockey cards around these days is Wayne Gretzky’s 19791980 rookie card, worth $50. But that is still less than the $70 you’d get for the rookie card of José Canseco, an outfielder with the Oakland Athletics.

Because autographed cards are more valuable than unsigned ones, one of the biggest draws to the regular card shows is the fact that players attend who will sign cards for a fee. Baseball’s Mickey Mantle makes a handsome living doing that, among other business interests, as thousands queue up and pay Mantle $20 to sign their cards, bats or balls. A Mantle card in mint condition can be worth up to $7,200.

Card shows function as miniature stock markets for sports collectibles. Typical of the breed was one I attended in December at a Toronto hotel in a room the size of a small gymnasium. There was a nominal entrance fee of $3, a couple of former hockey stars on hand for signings and dozens of tables set up by dealers and collectors where cards could be bought and sold. Like stock markets, several publications print recent prices for cards of all kinds. But, said Zubek, “football is not of that much interest anywhere.”

As with any economic activity, crooks have sometimes gotten in on the act. Several years ago, a man in the United States was convicted of counterfeiting Pete Rose cards, and there are still shenanigans as some hoarders “shortstop” the market and buy from wholesalers in large batches before the cards can reach the stores. It is all a microcosm of the stock market, except that collectors are often sentimental about their assets. Said my son: “I know the value of my card collection has doubled, but I cannot ever imagine selling.” But that is not the case with stocks, especially ones that drop in value. I can vouch for that.