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Invest4thefuture
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Would it work at all? Granted that the manager was experienced and had a good track record.
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I know this may sound absurd, but prospecting mutual fund?
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GAbballplayer148
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I think it could work, depending on the goals of the investment group. If 7/10 people who invested are looking to make a 300% profit every year I think that is a little unrealistic, and would make the idea implausible. However, if there was a group with realistic (125-150%) yearly increase I think it could succeed.
Topnotchsy
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Those are pretty huge increases.GAbballplayer148 said:
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Invest4thefuture
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I think a 10% yearly gain compounded would be a huge success... with the expense ratio being anywhere from 1-2% depending on the amount of money they are handling. I'm not talking about a group prospecting venture, but more just a group of people investing in the expertise of one or two individuals to yield a profit.
GAbballplayer148
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Topnotchsy said:
125-150? I've averaged 170% over the past 3 years, so I don't think it is too unrealistic. I also havent really hit on Heyward, Stanton, or any of the 5-700% return guys, so its really just been buying at the right time, selling at the right time, grading certain cards, etc.
Edit: When I use the term 125-150%, that includes making back my initial investment, so 25-50% are probably the numbers you are looking for.
Buynhisellnlow
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The real issue would be liquidity and volume. Doesn't matter how good someone is - there is a vast difference between obtaining the appropriate volume of and liquidating stocks, commodities, options or bonds and doing the same with cards. There are cards of players that I'd invest several thousand more into at current market prices but they just aren't available in the open market to be had at this time.
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Invest4thefuture
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Buynhisellnlow said:
Yeah I agree, though even large hedge funds have that problem with stocks. That's why it'd likely have to be a closed-end fund... meaning the shares among the fund are split up among a group of people (5-10), and after that it is no longer open to investors. Then if anyone wanted to get out, they could only sell their share to another person or to the fund itself and cash out. I'd also expect there to be annual or semi-annual yields?
Again, this is an extremely preliminary idea, but it might not be a bad one if properly planned.
Topnotchsy
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GAbballplayer148 said:
As Buynhisellnlow mentions (below) when you get to larger dollar amounts, it is a whole different game. Still 70% gains are pretty impressive. This is on all the money you spent that year and not just on the cards you sold I assume?
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Invest4thefuture
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No I understand, but in a closed-end fund, there will be a set amount of capital put in and then nobody can purchase a share of the fund. Meaning if 10 people each invested, say, $100, then the fund would have $1,000 to work with and following some diversification rule that says no more than... 20% invested in one player, that's only $200 dumped into one guy. Sure volume may be a problem for some, but then it's just patience or not being able to fulfill that 20%, which isn't exactly a problem. There would be no new investors so that it would never reach a point of having too much money to work with.
Then the question just becomes what to do with the profits... either pay it out in dividends (equally split among the investors, after the manager takes his cut), or reinvest it back into the fund...
Then the question just becomes what to do with the profits... either pay it out in dividends (equally split among the investors, after the manager takes his cut), or reinvest it back into the fund...
All The Hype
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GAbballplayer148 said:
Yeah I was gonna say, I'm around 170-180% return too and I haven't hit on Heyward/Stanton/anyone who has seen 90000% increases overnight. Definitely not unrealistic.
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I have seen this done quite successfully with vintage cards. Specifically, a pooling of finances to purchase sets, large lots, and collections that are then sold by the "manager" on an individual process and then the profits of the breakdown are split. Happens quite often, and is surprisingly easy.
GAbballplayer148 said:
I have looked at this as a potential business in the future, however I can identify a few problems:
1> The more money under management, the harder to find enough good ideas without stretching too far.
2> Supply of "good idea" cards is somewhat finite.
3> Liquidity is a major problem for large volume of certain cards.
If you were only managing a few hundred thousand it would not be hard at all. However, to manage $10-20 mil (smalled private type fund out there), good luck finding inventory and being able to turn it.
BG
BunchOBull
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This has been done with high grade vintage cards, something with a fairly steady influx, and the results were mediocre at best. If anyone decides to do jump aboard this ship, don't have grand expectations, but please share your experiment with us. Not investments, but gains/losses.
volume is a huge issue.
anyone can get lucky - pick up a $20 card & flip it for $50 a year later;
but try buying that card 100 times at a great price, and selling 100 copies at the "peak" (like after a no-hitter, or home-run streak), and you have a supply & demand potential problem.
anyone can get lucky - pick up a $20 card & flip it for $50 a year later;
but try buying that card 100 times at a great price, and selling 100 copies at the "peak" (like after a no-hitter, or home-run streak), and you have a supply & demand potential problem.
If a group invested heavily into a few prospects couldn't they, in a way, corner the market? If the group starts with a small time prospect and buys up alot of his refractors, xfractors, and blue refractors, wouldn't that group have control over the market? They could then set their price for a certain card, and if there's not many left out there, the collector would then have to buy from you for that price or not have the card.
Does that make sense? Could that be applied to prospecting? Or am I just feeling the effects of a Friday morning
?
Does that make sense? Could that be applied to prospecting? Or am I just feeling the effects of a Friday morning
?
jkeys
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Drew said:If a group invested heavily into a few prospects couldn't they, in a way, corner the market? If the group starts with a small time prospect and buys up alot of his refractors, xfractors, and blue refractors, wouldn't that group have control over the market? They could then set their price for a certain card, and if there's not many left out there, the collector would then have to buy from you for that price or not have the card.
Does that make sense? Could that be applied to prospecting? Or am I just feeling the effects of a Friday morning
This can actually backfire. If you are controlling a vast stake in a specific player/card, that means there aren't copies on the free market floating around. Lots of buyers hit ebay to see trends or current prices, and not being able to find benchmarks can be a problem. Not only that, if you are constantly overpaying to capture marketshare, interested collectors may "give up" on a card/player and stop bidding, hence driving a price downwards.
Mudcatsfan
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I think a huge problem would be agreeing on decision maker.
Any prospector worth his salt thinks he knows better than the next guy.
Would i put 100 bucks in for fun? Maybe.
Would i put a serious amount in based on someone else's decision making, heck no.
Any prospector worth his salt thinks he knows better than the next guy.
Would i put 100 bucks in for fun? Maybe.
Would i put a serious amount in based on someone else's decision making, heck no.
All The Hype
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Mudcatsfan said:
Exactly. I actually like the idea of a group of people investing in a big card (say splitting the price and then the profit on a superfractor three ways) and have actually done this successfully before, but I'd much rather have control over my 100 bucks and what it goes toward purchasing.
ALL_THE_HYPE said:
Its not about having control of 100 dollars, its about have the buying power of many people. The key in my eyes is to be diversified in different player, sports and even possibly era's.
I've seen it work with the purchasing of high dollar raw vintage from reputable dealers and then grading and flipping. If you can make quality purchases and get high grades, you can make alot of money. A few years back friends of mine did it but i couldnt afford the 500 dollar buy in at the time. They invested in high quality mantles from guys they knew they could trust and turned 5 grand into what is about 35-40k today. With the economy, they have been on the sidelines unless they see a card thats too good to pass up.
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