Quote:
Originally Posted by BobC
Didn't say it defines it, just that you need to consider it as maybe a more true reflection of FMV, as opposed to simply accepting the underbidder as setting the market value. There's no way to know that high bidder is a sole outlier, of if for whatever reason a number of serious and financially capable collectors who maybe wanted that same card as much as, or more than, the evental winner, didn't even know of the auction or couldn't participate in it.
Peter, in your example when you say no one else on Earth thought that particular card was worth more than $50, you are literally assuming that every person on the planet looked at the auction, and passed on that card. I would guess that most auctions have several hundred to maybe a few thousand bidders in them, at most. I would speculate that not every auction house or dealer has access to every possible collector that is out there. Heck, I've been collecting for 30+ years and can't begin to tell you how many auctions I've never looked at or bid in, and I know I'm not alone in that. So that is why I'm saying past auction sales can be a good indicator towards what a card's current FMV is, but shouldn't always be taken as the only major component or as a sole final answer. You even responded to someone on how you set prices for cards you put on the BST forum and said yourself you don't just look at recent auction sales, so basically we have agreed all along. Just maybe a differecnce in the weighting of factors you may choose to look at. Again, to me the definition of FMV is what a willing buyer agrees to pay an unrelated and willing seller for an item in an open, arms length transaction. Not what an underbidder was willing to pay in a particular auction.
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I think this is a good point about auctions not always being a good measure of the true market value of an item. It really depends on what that item is and how much current demand and supply exist in the marketplace. For something that gets traded often with both abundant supply and demand like a Shohei Ohtani Topps Chrome rookie card, recent auction prices are a pretty good predictor of what the next one will sell for because there are enough buyers out there for the card to be reliably bid up to its full potential, but also enough copies of the card to ensure that if someone misses out on it they won't be upset because they can easily just buy the next one.
However, for cards that are more rare, or that have a much smaller market, like say cards that sell for between 5k-25k, an auction is usually a terrible way to sell it unless you're really hard up for cash. You could make a pretty good living just by buying rare cards like these at auction and then selling them as 'buy-it-now' options if you're patient enough to wait for the right buyers to come along later. It's pretty common for a 20k card to only sell for 15k at auction because it just didn't happen to get enough exposure that particular week. For the really high end cards though, say 25k+, those usually get enough exposure from the large auction houses for auctions to bring in true market values again. But I would almost never sell a rare 10k card at auction on eBay without setting a reserve price. The risk that it sells below market is just way too high.