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Originally Posted by kickitup
Lastly, if the prices I paid were so crazy high for everything, why haven't multiple high quality home run baker t206 cards showed up on eBay ? Why haven't any more high quality PSA green Cobb's surfaced yet as available? Why haven't all those folks with the top notch PSA 8 mantles put them up for auction if these prices really are crazy??
I can tell you why... Because people don't want to sell. Until they do, prices will keep going up... It amazes me that people don't understand that, but that's fine by me because I get to enjoy these cards and make money at the same time while some folks that like to complain and conspire on message boards will be left with nothing but their incorrect assumptions about guys like me.
Welcome to America !
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+1. Q. David Bowers used to say in his excellent coin books that "the collector is king," but I'm not sure if he realized the actual nuts and bolts of the "why." The collector is indeed king when it comes to very scarce or rare desirable items, because while value = demand over supply mathematically, the "supply" factor that is relevant is not the number of examples in existence, but instead those that are available. If we start, for example, with 1,000 people going after 50 rare, desirable cards, then the ratio of demand to supply is 20 to one, equating to a certain value. Then let's say that a couple of years down the road, 40 of those collectors attain their cards, tucking them away into their own private collections where they will remain for decades (in the coin hobby, they refer to this as being "in strong hands"). That leaves 960 collectors seeking just the 10 examples that are still available, leaving the demand to supply ratio at 96 to one. Nine more are sold,and held by collectors who are not buying to flip the card, but because they like it and want to keep it, leaving merely one example still available for sale. Our ratio of demand to supply has now risen to 951 to one--anyone think that the price has remained within a country mile of what it was when our ratio was 20 to one?
In reality, the situation is a bit more dynamic--as a substantial portion of the available supply is absorbed by true collectors, and prices begin to dramatically rise, the situation attracts additional attention and demand, causing the demand end of the equation to rise even further. Supply too rises, however, as the rising prices leverage some of those previously sold out of what were intended to be permanent collections--the price has simply gotten too high for some to resist the impulse to cash in. The internet, as well as the number of quality auctions, has accelerated the pace at which the above phenomenon has occurred for the simple reason that you used to either have to attend many, many quality shows or get lucky with an SCD ad in the '90's to find that rare, desirable "unicorn" of a card you'd been seeking for many years. Now, with communications enhanced between buyers and sellers, even the rarest will come to your attention far, far sooner.
Econ 101 in a dynamic nutshell!
Hope you all find your unicorns--I'm putting mine together before too many "big boys" come looking for them!
Larry