What if in the 1996-97 time frame you were asked the question:

Would you rather spend $120,000 on a 1952 A+ Mickey Mantle baseball card or buy 8,000 shares of this new online bookseller based in Seattle?

Regardless of whether you were a Yankee fan or not, you probably would have thought the baseball card was a sure thing in retaining and probably increasing in value...and you would have been right. It did more than retain its value. As for that online bookseller, I think you know their story. 

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Thanks to NGPF Fellow Brian Johnson for passing along this news item about a very precious baseball card: 

The "Holy Grail" of baseball cards, a pristine 1952 Topps Mickey Mantle valued at several million dollars, was delivered to the History Colorado Center on Monday via armored truck for a 72-hour public display. "I want the community to enjoy looking at the card," said its owner, retired lawyer Marshall Fogel of Denver. "It's the finest card ever made, and it just happens to be my favorite player, Mickey Mantle."

So, what's the return on this investment? Here are the numbers from the article:

The card, which Fogel said was insured for $12 million "and is probably worth more than that"...Fogel paid $120,000 for the card in 1996. 

As for why it is worth so much...economics teachers will love the story behind the supply/demand imbalance:

One reason Mantle's 1952 card is so rare is that so many of them were returned along with other unsold cards by retailers making room for the 1953 cards. The returned '52 cards were subsequently sunk from a barge in the Hudson River.

Ok, so let's analyze this baseball card as an investment to see how the return on this baseball card might compare to some other popular investments.

For sake of comparison, we need to get an annual rate of return for the card. Let's use the appraised value that the insurer placed on it: $12 million. On a dollar-for-dollar basis, that's an incredible 100X return on his $120,000 investment in 1996 (but still pales in comparison to the 1000X return earned by early Facebook investors). For the math inclined out there, we calculate the IRR or internal rate of return (I used to be able to do this on an HP-12C). Thankfully, there are some IRR calculators out there, so plugging in $120,000 in Year 1 and $12,000,000 in year 22 (his holding period to date), you get the following results:

So, basically, his $120,000 compounded at annual rate of 23.29% to get to today's $12 million valuation (ignoring the costs of securing the card in a safety deposit box at the bank). Before getting to the bookseller, I wanted to make some other comparisons:

Warren Buffett's holding company Berkshire Hathaway and the S&P500 over the same period:

Here's Berkshire Hathaway's numbers (from Yahoo Finance): 

Opening price: January 1, 1996: $31,900

Closing price, July 17, 2018: $288,500

IRR: 10.53% 

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S&P500 returns

Opening price: January 1, 1996: $42.49

Closing price, July 17, 2018: $280.43

IRR: 8.96%

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As for the bookseller, their CEO has become the richest man in the U.S.:

Opening price: May 1997 price (split-adjusted): $1.50 

Closing price: July 17, 2018: $1,843.93

IRR: 40.33% 

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A fun thought experiment for sure, but let's be clear...picking the next Amazon or Mickey Mantle always seems easier in hindsight. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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