My First Speculative Market

I really could never fall for Bitcoin. It holds about as much interest for me as tulips! Yet, that doesn’t mean that I have not been a victim of rampant speculation. My first speculative market was a disaster. I took almost all my cash and feverishly invested without thought or reason. I was truly convinced that I had found the simple path to wealth. Returns piled in fist over fist. For the first few years. And then I took my eye off the ball momentarily, and it was all gone. Every last cent!

Do I regret my little dalliance with high risk, high return assets?

I guess it was just part of the learning process. While no one likes to lose money, it is far better to make such mistakes when you are young and have years of earning power ahead. Although I certainly blame myself for the initial investing hubris, as I’ve grown older I have learned to give myself a little slack.

I mean, I was like twelve years old!

A Grand Slam

Maybe it was the gum. Or the rush of dopamine that came from opening the wax packet and sifting through the random allotment of cards. My friends and I eventually found that certain companies put the cards together in a predetermined order. I would rush out as the school bell rang, and run over to the local five and dime. The fifty cent packs were made of cellophane, and you could determine the identity of the player on the first card of the pack. Every year, I remembered the sequence for the hot rookie card and would sift through hundreds of packs to find the one with my desired player buried deep in the deck!

Boys and girls in the eighties (OK, mostly boys) went crazy over baseball cards. So crazy, in fact, that a number of new companies gained predominance as the thirst for more product began to rise.

Dwight Gooden, Daryl Strawberry, Vince Coleman…names that could send a little boy collector (investor) spinning. Every dollar of allowance and chore money quickly was distributed to this hot asset!

And the market responded. The value of the newest hot rookie card could jump past ten dollars in the first year. Not a bad return for a fifty cent investment!

I bough pack after pack. My best cards were housed in plastic pages and placed in a book or individually protected in single cardholders.

Full cases of cards were left in packs or cellophane, and preserved untouched for sale years later when the price was sure to triple.

I spent hours in front of the television, watching the Cubs lose, and tallying my totals on the calculator. Sifting through my humble version of wealth in the form of small square pieces of paper with pictures of grown men playing a child’s game, I couldn’t have been happier.

I was convinced that my first speculative market was a grand success!

The Bubble

Leaving for college, my future wealth rested in a fireproof safe stowed in my bedroom closet.

Then I discovered girls. And academics. And working out. All those things that take a hormonal young man’s eyes off the prize. Baseball cards fell to the periphery of my limited vision as I grew into the adult that I would eventually become.

My first speculative market was about to crash, and I had no idea that economic disaster was right around the corner.

Collectables Suck!

Of course, I am exaggerating. My collection was worth a few thousand dollars at the height of the market. It is worth a few hundred now.

Baseball cards quickly went from chic to a major source of net worth leak. In 1994, a player’s strike lead to the cancellation of the world series. Public interest in the sport and the hobby never quite recovered.

My first speculative market collapsed and I was stuck holding a bunch of useless paper.

Lessons Learned

Speculative markets depend on two things to be successful. Scarcity and value.

As previously mentioned, the boom on card sales lead to multiple new players in the arena. Now there was not only Topps, but also Donruss and Fleer. The glut of availability drove costs down. Now anyone could own the best rookie cards at a fraction of the price. There was no more scarcity.

Value is in the eye of the investor. When you are talking about cheap pieces of cardboard stock, there is no innate value to the asset. It is only worth what some sucker is willing to pay for it!

When the player’s strike happened in 1994, the nation’s disgust played out in this highly volatile market.

No one wanted to talk about baseball. They didn’t want to watch baseball, and they certainly weren’t holding on to the cards.

My unopened packs became worth about as much as the crappy piece of gum that were wedged inside between cards.

Value and Worth

In my first speculative market, I invested in assets that even today hold very little worth. Their value, however, remains in the eyes of this collector. Even now, I sometimes open up the boxes and pull the cards out. I feel the rough edges brush against my skin and hand over a stack to my son or daughter.

Yes, my hard earned knowledge about speculative markets and collectibles was value enough.

But there is something intangible about the joy I still feel when sifting through those cards. They remind me of summer days in the back yard watching the portable TV. Cursing the Cubs, making lists, and placing the valuable ones in their own plastic sleeves.

There were such possibilities back then. I was young, inexperienced, and ready to take on the world.