[Exhibitman]

OK, just to be clear, we are now putting on the big boy 'investor' pants: sentiment, collecting and emotions are out.

So many factors go into answering the question on how to price a deal for eventual resale. Some musings on the issue are all over my columns (see the link below in my signature line) and more will come in the future as I kick around the issue, but here are some appetizers:

Rarity (from "Bruce Lee Would Have Been A Great Card Investor"): "Market research is not just data mining prices. Understanding the context is everything. There are lots of databases with pricing information out there, so getting a rough idea of value can be pretty simple if the item is frequently transacted. You still have to account for eye appeal and the odd outlier sale, but you can get pretty close. For example, a 1954 Topps Hank Aaron sells hundreds of times a year (not rare, just demanded). You can get a pretty accurate real-time price on the card in any condition from any of dozens of data aggregating and scraping services. The art is understanding how the data fits on the rare or non-mainstream stuff. I recently needed to price a rare card that had not transacted in any tracked sale since 2014. I had the data, but it was meaningless because the card is so rare that the data is grossly out of date. If the data is meaningless, valuation is experiential. You must know enough to extrapolate from other sales of other cards, and that takes knowledge of how the market works generally."

Velocity aka Turnover (from "Whaddayagot?"): "The retail value on a 1976 Topps common may be $2 but it is a low demand card that will take a long time to sell at retail if it sells at all. The retail value of a PSA 7 1976 Topps Hank Aaron is about $80, but it is a high demand card that will sell readily, especially if I shave a bit off the price at a show. Given that reality, there is no way that I will trade you the Aaron for 40 of your commons, even if the retail values are similar. I might trade you the Aaron for 400 of your commons on the thought that it is worth the time and effort to price, list and carry $800 of retail value. I still must sell it all but I can risk grinding out a profit over time. The way it usually works is that there is an initial burst of activity (which I hope pays back the cost of the deal) and then a few sales a week trickle in as people build their sets. After I get my cash out with a decent profit, I will likely blow out the balance to finish the cash flow and create space for more inventory."

Trend-Chasing (from "Craps, Cards and Crappy Cards"): "In card investment terms, one of the most critical skills to develop is the ability to spot manias and trends. Like the surge in modern card prices from 2020-2022. The people who bought into modern product as it was surging were buying into the equivalent of a great craps run. They aren’t smarter than the rest of us (though they will shout out from every social media outlet that they are) they were chasing a roll. I know it is hard as hell to avoid it, but if you want to keep value in your card portfolio over the long term, if you want it to be a money-maker not a money pit, you must try to stay out of these trends, and if you go into them, have a clearly defined exit strategy and the discipline to implement it, or a huge loss tolerance. When there is a mania with rapidly surging prices, it is easy to look like a genius no matter how stupidly you buy because everything makes money when you sell and everything you have appreciates on paper. It is what happens when the table gets choppy that you need to understand."

I am continually at work trying to noodle out the secret formula for buying and selling, so there are undoubtedly more factors and more details to these. Every deal is different too. I will say that my bottom line on mundane deals is [cost of purchase + cost of sale] /3 = maximum price. If a card costs a buck and it costs me twenty cents to sell it on eBay, I won't pay more than forty cents for it. If it is a low velocity card, like a common, more like four cents. Bring me a nice, slabbed card and I will pay a higher percentage. The work is done, the value is pretty easily established, and I know where my price point has to be for a quick sale (turnover), so I can cut it closer.