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The Art of the Flip

Alan Gutterman, who has watched the sports and memorabilia marketplace for many, many decades, told David Seideman, Forbes contributor on such matters, that “there are more dealers trading with each other than collectors.” Well, it’s been that way for quite awhile now.

Seideman also has observed that many dealers come to shows like the National Sports Collectors Convention and mostly do business among themselves.

“The activity resembled not so much a Ponzi scheme, which has sinister intent, but a game of musical chairs in which the last player is left standing when the music stops,” Seideman wrote in his column recently. “Was it really that simple for one dealer who paid another $5,500 for a ragged 1952 Mickey Mantle rookie card to flip it for $5,900, as he had hoped?”

Another dealer was willing to pay $20,000 for a 2009 Yankees World Series ring on the bet he could flip it for a profit. It sold for $23,000. Yep, day trading his hit the sports memorabilia business. Again, it’s been this way for awhile now, but the numbers are more robust than ever, making the risk that much greater. How much can investors stomach? Six figures? Seven figures? Clearly, the priciest, most vintage and most rare items are purchased to own, not to flip.

But don’t ask Todd McFarlane about today’s value of the Mark McGwire 70th home run ball and other McGwire and Sosa home run balls for which he paid $3.005 million. Maybe for that price, he’s content to enjoy his slice in collecting and baseball history, no matter the fallout from McGwire’s and Sosa’s alleged battle with steroid use. The race for 70 home runs in 1999 captivated fans everywhere. For now, six-figure items likely have years of appreciation already built into the paid price. At the time these items were purchased only one person wanted them so badly — the owner. They bought them to enjoy them, not so much to flip them.

Meanwhile, buyers of investment grade items know — or still believe — that something purchased today will always be worth more tomorrow.

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