New Partner

Invest4thefuture has officially become a partnership and will be rearranging the portfolio to better suit our needs. I will keep this blog updated with recent purchases, sales, and other news.

Portfolio Management

The most important rule in portfolio management is to diversify; do not stock up on one player alone. Doing so will greatly increase your risk of losing money if that player does not pan out or gets injured. For both baseball and basketball, you should choose around 4-5 guys and just stock up on them, and a few more couldn't hurt depending on the money you are looking to spend. Make sure that the players don't all play for the same team and don't all play the same position. For example, in baseball you don't want to pick all pitchers or all hitters, diversify. For basketball, don't invest in all guards or four guys on the same team.

All successful sports card investors and stock brokers follow this rule. I would say pick at least 4 guys and stock up on them until it is time to sell off, but have at least 4 at all times.

Timing

Timing is critical when investing in sports cards. It is important to know when to buy and when to sell, it is one of the key elements to becoming a successful investor. I will give a short list of good times to buy and sell.

Buying:
-Offseason (there is usually less demand for players now since they are not playing)
-Playoffs for a non-playoff team (buyers are focused on the playoff teams and often forget about the others)
-Injury time (prices usually dip during this time and rise when the player returns. The more serious the injury, the larger the drop)
-Any abnormal drop in prices compared to previous sales (sometimes prices may drop unexpectedly, making it a good time to buy)

Selling:
-Playoffs (plenty of attention/recognition given to players along with a huge increase in demand)
-Strong performances (nothing generates a stronger demand than several good games)

Once timing is perfected, making money is easy. One thing to remember is to never be greedy. If you are happy with the profit (which you should be), then it is never a bad time to sell since prices will come down again. The last thing you want to do is hold too long and have the prices come back down, which happens as soon as the supply overcomes the demand. So take the money whenever there is a good return since you will almost always be able to reinvest when the player cools down again.

The Downside of Europe

For us investors, players going to Europe is a nightmare. It, along with serious injuries, is the worst thing that can happen to a player entering his prime. Although Josh Childress was not the best player, I'm sure many people owned his cards, whether for collecting or investing, and ended up taking losses. When players go to Europe, they receive almost little attention from collectors and almost become forgotten, so prices significantly drop. The "European factor" is now something to consider when investing in players, although it is almost as unpredictable as injuries. This just goes along with the saying "don't put all your eggs in one basket."

Basketball Set Ratings

Here are my basketball set ratings based on return:

Ultimate- 5*
Exquisite- 5*
SPA- 3.5*
SPX- 4.5*
Base RCs- 3*

Maybe I should point out that the 06-07 SPx is more demanded and sells higher than the 06-07 Ultimate. So when purchasing from this year, SPx could be the better buy. (see rudy gay, brandon roy, rajon rondo, etc.) Once again, this statement does not hold true 100% of the time.

Deciding What to Buy

Selecting good players is very important to being a successful prospector, but another major factor is the set. For baseball, it is pretty straight forward: Bowman Chrome. BC dominates baseball prospecting, and the variation (base, refractor, xfractor, etc.) depends on your budget. But the only thing that varies among the parallels is your profit. For the most part, the cheaper card will produce the cheaper ROI, so when confronted with this decision, it is smart to either buy 1-2 high end cards or many low end cards. Nonetheless, stick to rookie year Bowman Chrome cards when investing in baseball.

Basketball is very different in terms of selecting a set. There are several different sets out there which can be profitable, but the most important thing is to buy from the player's rookie year. No matter what sport, player, or set, the rookie year cards will always be the ones to spike in value. Selecting a set in basketball primarily depends on your budget. For high end investors, exquisite is usually the way to go. These cards are top dollar and usually give the greatest ROI, but when buying, it is important to try to get a good patch (3 colors) with an autograph that does not run off the card. Ultimate and SPX are the next two best sets to buy from. Ultimate usually outsells SPX, but in some cases, a player's SPX cards sell for more than his Ultimate and will have the greater ROI. It is important before buying to see which one sells for more, because whichever of the two is worth more will be the better buy. Lastly are the true rookie cards (topps chrome, bowman chrome, etc.) and SP Authentic. These are the lower end cards, and usually return the least unless purchased in large lots. But sometimes this option is the way to go for the better players such as Chris Paul where high end cards like Exquisite are out of reach for most collectors.

The most important thing to remember is that the set makes a huge difference in the return on investment. Generally, the more expensive card will generate the larger profit, but when a player spikes, all of his rookie cards will increase in value.

Tim Alderson

Tim Alderson has played well as of late and received plenty of praise from BaseballAmerica. Because of this attention, his card prices temporarily spiked, making it a great time to sell. I took advantage of this opportunity and sold off everything I had of him before the supply exceeded the demand. The total profit for this transaction was about $80 (exact numbers to come).