Submitted by: Adrianna Notton

Sports memorabilia touches a warm spot in almost anyone who is of a certain age, and who has followed sports since childhood. Sport has this power because where a human lifespan might average the classic “fourscore and seven” years, the athlete’s career rarely exceeds twenty, with most cycles for team sports lasting at most ten years. This means that a fifty year old man who has been following sports since he was a boy already has between two and four generations of memories behind him.

The athletes who were stars in his boyhood, Joe Namath and Roberto Clemente, Earl “The Pearl” Monroe and Bobby Orr, belong to a different era. A football, baseball, basketball or hockey stick bearing any of those athlete’s signatures will elicit memories. That gives these items value in the form of prestige, and value in the form of money. It’s no surprise that sports memorabilia is a significant player in that larger class of investments known as Collectibles.

Collectibles are a form of investment like others, whether stocks, precious metals or commodities. They are somewhat hard to define, because there really is no limit to what could or could not be a collectible. A dollar bill isn’t typically considered a collectible. But if someone has a dollar bill and can certify that it was the first dollar ever earned by John D. Rockefeller, it would be worth perhaps hundreds of thousands times more than its face value.

Typical collectibles include rare stamps, coins, and old comic books. Celebrity autographs, from historical figures ranging Cary Grant to Otto von Bismarck, belong to this group of investment. Like every other investment instrument, collectibles have their advantages and disadvantages. Chief among their advantages is that they are perhaps the best hedge against inflation.

The reason for this lies in scarcity and sentiment. With respect to sentiment, there is a powerful motivation to own these items that is entirely extra-economic. Imagine a Panamanian immigrant to America who is fifty years old and has become a successful entrepreneur. Now present him with boxing gloves autographed by his boyhood hero, Roberto Duran. He may not even ask whether there is a market for those gloves, or whether they’re going to appreciate in value. He wants them, will pay the price, and once he owns them he’s never going to sell them.

That means there’s one less pair of Roberto Duran boxing gloves on the market. But of course, Duran is still out there, no doubt still autographing items including gloves. But if those gloves had been autographed by Sugar Ray Robinson, the scarcity becomes starker, because this world isn’t generating any more Sugar Ray Robinson autographs.

Collectibles do have their downside. They aren’t easily fungible. Selling can be difficult, and getting a good price can be more so. They don’t generate interest for their owner while they’re sitting, lacquered in a glass case. They are subject to decay, and with decay comes loss of value.

Essentially, they sit right on the cusp of investment and non-economic status item. Buy a tennis racket autographed by Martina Navratilova because you loved Martina when you were a kid. Let its value be part of its charm rather than something you expect, and you’ll have a sound approach to collecting sports memorabilia.

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Source:

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