Auction psychology

[byrone]

CNBC’s Bob Pisani described his auction experience (bidding on 1970’s concert posters), with additional insight from a psychologist on why we do what we do during auctions

“Collectors will tell you that to be a successful long-term collector of anything, you must be disciplined. You must know what you are willing to pay for something, and not go over that price. You cannot be carried away by the emotion of an auction. You must be willing to walk away.”



https://www.cnbc.com/2022/10/20/bob-...investing.html

[raulus]

Words of wisdom to live by!

I can attest that while that's my goal, I sometimes fail, particularly when the item in question is high on my list of items I can't live without.

But at the same time, I'm usually pretty good about controlling myself and letting items go. If for no other reason than eventually the price just gets so high that my resources are no longer sufficient.

That and I'm not going to borrow and/or tap my retirement funds to get it. And 99.99% of my collection is not for sale, so selling something to cover the cost is also not going to get me there. Although for a lot of people, these may be possible strategies to expand our means.

[BioCRN]

I tell others that if I wanted everything I wanted in my collection I could get it done in less than a month throwing money at everything and be done with it (outside of some very rare things).

Part of the chase is waiting for my price, which also leaves open opportunities to overspend a bit for stuff that doesn't come around too often.

Given how many people spend years building a set/collection only to sell it and move onto something else, there's some respect due for the chase, itself.

[Peter_Spaeth]

The problem with this philosophy is that others don't live by it, and most of the time you will lose to one of them. And worse still, the giddy price will become the new baseline.

[G1911]

Sometimes I am amazed that some idiot is willing to pay so much for an obscure old cardboard picture that they outbid my stupid bid. Then I have to do some soul searching.

[raulus]

Originally Posted by Peter_Spaeth

The problem with this philosophy is that others don't live by it, and most of the time you will lose to one of them. And worse still, the giddy price will become the new baseline.

I’ll agree with that, at least when it comes to items that are desired by a large number of collectors, particularly if they ar hard to find, and especially during frothy times in the market, like now.

It’s always going to be a question of how comfortable you are with losing. Some of us don’t like losing, so we tend to throw caution to the wind to avoid that negative outcome, even if it turns out to be a Pyrrhic victory, with the cost of the item making a big dent in our resources.

[raulus]

Originally Posted by G1911

Sometimes I am amazed that some idiot is willing to pay so much for an obscure old cardboard picture that they outbid my stupid bid. Then I have to do some soul searching.

Who are those idiots!!!??

I vote we kick them off the island.

[G1911]

Originally Posted by raulus

Who are those idiots!!!??

I vote we kick them off the island.

Finally, someone else gets just how wrong it is for other people to have the audacity to outbid me! Crimes against humanity are real.

[raulus]

Originally Posted by G1911

Finally, someone else gets just how wrong it is for other people to have the audacity to outbid me! Crimes against humanity are real.

If I’m the one doing the selling, then crimes against humanity are encouraged.

[G1911]

Originally Posted by raulus

If I’m the one doing the selling, then crimes against humanity are encouraged.

I believe it usually works that:

When you are buying, every stupid bidder is involved and escalates the price beyond all reason.

When you are selling, all of these bidders are distracted by some other shiny bauble and you suffer a crime against humanity yourself.

[parkplace33]

I truly believe that for many AH bidders (especially in the last two years and on big ticket items), they have more money than God and don't care what items cost.

[JimC]

There are no set rules in this game. If you applied a strict, disciplined approach to what you would pay for quality Ruths and high end Mantle cards in 2017 the satisfaction you would have gotten from not "overpaying" would not have lasted long as you watched prices skyrocket from those levels.

You also have to decide what you want more, a good deal or the item. Prices for rare items are tough to predict because you never know when two buyers will decide they don't want to wait ten years for another shot. Personally I have more regrets over the items I didn't buy because I thought the price was too high than over the ones where I overpaid. Example: every Jim Thorpe I didn't buy.

[raulus]

Originally Posted by JimC

There are no set rules in this game. If you applied a strict, disciplined approach to what you would pay for quality Ruths and high end Mantle cards in 2017 the satisfaction you would have gotten from not "overpaying" would not have lasted long as you watched prices skyrocket from those levels.

You also have to decide what you want more, a good deal or the item. Prices for rare items are tough to predict because you never know when two buyers will decide they don't want to wait ten years for another shot. Personally I have more regrets over the items I didn't buy because I thought the price was too high than over the ones where I overpaid. Example: every Jim Thorpe I didn't buy.

It has certainly been the case historically that I've regretted missing out on stuff. However, over the last 24 months, I've regretted losing a lot less, even though I'm losing a lot more. Maybe I'm just numb to it, but more likely, the prices are just so high that losing seems like winning sometimes, particularly if I am willing to wait for another one to come back onto the market.

Just for fun, here's a couple of somewhat recent examples where I was the underbidder, and I'm not really regretting it:

https://bid.robertedwardauctions.com...?itemid=103985

https://bid.robertedwardauctions.com...?itemid=103692

[BobC]

Originally Posted by raulus

It has certainly been the case historically that I've regretted missing out on stuff. However, over the last 24 months, I've regretted losing a lot less, even though I'm losing a lot more. Maybe I'm just numb to it, but more likely, the prices are just so high that losing seems like winning sometimes, particularly if I am willing to wait for another one to come back onto the market.

Just for fun, here's a couple of somewhat recent examples where I was the underbidder, and I'm not really regretting it:

https://bid.robertedwardauctions.com...?itemid=103985

https://bid.robertedwardauctions.com...?itemid=103692

What is even more surprising to me were the final hammer prices. Both PSA 9s, but the older '54 Topps Mays card going for exactly 30% less than a '62 Topps Mays?!?!? They are both not always found well centered, but if anything, I would have expected those prices to more likely be the other way around. Possibly a case of two determined collectors fighting for registry improvement or superiority in regard to the '62 Mays?

The PSA pop reports show a total of 16 '54 Mays cards graded as 9s, with three of them having qualifiers, but none graded higher. Meanwhile, the pop report shows a total of 9 '62 Mays cards graded as 9s, with none having any qualifiers, but in this case there is 1 single higher graded '62 Mays card graded 10. Though there are actually fewer '62 Topps Mays cards graded 9, or higher, I can't see enough of a difference in the numbers to justify and explain the big difference in those final auction prices being based on these pop reports alone.

[raulus]

Originally Posted by BobC

What is even more surprising to me were the final hammer prices. Both PSA 9s, but the older '54 Topps Mays card going for exactly 30% less than a '62 Topps Mays?!?!? They are both not always found well centered, but if anything, I would have expected those prices to more likely be the other way around. Possibly a case of two determined collectors fighting for registry improvement or superiority in regard to the '62 Mays?

The PSA pop reports show a total of 16 '54 Mays cards graded as 9s, with three of them having qualifiers, but none graded higher. Meanwhile, the pop report shows a total of 9 '62 Mays cards graded as 9s, with none having any qualifiers, but in this case there is 1 single higher graded '62 Mays card graded 10. Though there are actually fewer '62 Topps Mays cards graded 9, or higher, I can't see enough of a difference in the numbers to justify and explain the big difference in those final auction prices being based on these pop reports alone.

1962T in high grades tends to sell at a pretty good premium. Wood borders can be a real issue with getting dinged up pretty easily, and I think that’s what’s coming into play here with the prices.

If you look historically at those two cards in PSA 6, 7, 8, the 1962T consistently sells for a lot more than the 1954T in the same grade. And often the difference is 2x or 3x.

Also, we’ve seen a few of the 1954T in PSA 9 come onto the market over the last 5 years. I think this might be the only 1962T in PSA 9 in that span. So there was probably some pent-up demand for the 62T.

[BobC]

Originally Posted by raulus

1962T in high grades tends to sell at a pretty good premium. Wood borders can be a real issue with getting dinged up pretty easily, and I think that’s what’s coming into play here with the prices.

If you look historically at those two cards in PSA 6, 7, 8, the 1962T consistently sells for a lot more than the 1954T in the same grade. And often the difference is 2x or 3x.

Also, we’ve seen a few of the 1954T in PSA 9 come onto the market over the last 5 years. I think this might be the only 1962T in PSA 9 in that span. So there was probably some pent-up demand for the 62T.

Don't disagree at all, just don't really get why his '54 card would sell for less than his '62. IMO the '54 is a much better looking card to begin with. There are many people who are not real crazy about the wood grain effect on '62 Topps cards at all. And the '54 set also marks the first Topps cards they actually used real player photos on, so there is that added extra as well.

As I said, the pop reports don't seem to offer a reasonable explanation for such a price difference at all. What does possibly help explain it is if the high grade '62s have been hoarded in the recent past and not showing up for sale, as you mentioned. In which case, that difference could be due to two collectors just waiting a long time to finally find a high grade '62 Mays card for sale, and both went after it. Which actually just reinforces my original point that I don't think it was primarily the pop reports alone that explain the differences in the prices paid for those two different Mays cards.

[Jewish-collector]

Put a bunch of extra zeroes before the decimal place and dare anyone to outbid you.

[raulus]

Originally Posted by BobC

Don't disagree at all, just don't really get why his '54 card would sell for less than his '62. IMO the '54 is a much better looking card to begin with. There are many people who are not real crazy about the wood grain effect on '62 Topps cards to begin with. And the '54 set also marks the first Topps cards they actually used real player photos on, so there is that added extra as well.

As I said, the pop reports don't seem to offer a reasonable explanation for such a price difference at all. What does possibly help explain it is if the high grade '62s have been hoarded in the recent past and not showing up for sale, as you mentioned. In which case, that difference could be due to two collectors just waiting a long time to finally find a high grade '62 Mays card for sale, and both went after it. Which actually just reinforces my original point that I don't think it was primarily the pop reports alone that explain the differences in the prices paid for those two different Mays cards.

Upon further reflection, and looking at some of the historical results a bit closer now, I may have over-stated the pricing differential here, pre-pandemic at least.

For example, at PSA 8, the 1954 Mays pretty routinely sold for about $3k-$4k. Same grade for 1962 was around $3.5k to $5.5k. Still a premium, but probably closer to 20-30%.

I'm not entirely sure that you can necessarily explain it just based on pop counts and aesthetics. For better or worse, the market tends to take on a life of its own, and often the results aren't as explainable as we might like. I guess if we were really adventurous, we could go out and take short positions on the 62, and long positions on the 54 so as to arbitrage and drive the pricing to a relative spot where we think makes more sense. But in the process, we might lose our shirts!

[mrreality68]

Originally Posted by byrone

CNBC’s Bob Pisani described his auction experience (bidding on 1970’s concert posters), with additional insight from a psychologist on why we do what we do during auctions

“Collectors will tell you that to be a successful long-term collector of anything, you must be disciplined. You must know what you are willing to pay for something, and not go over that price. You cannot be carried away by the emotion of an auction. You must be willing to walk away.”



https://www.cnbc.com/2022/10/20/bob-...investing.html

Great wisdom but it is hard to always be disciplined especially with the rarer cards and the frequency or lack there of them coming up for auction.

All you can do is the best you can to stay fixed on your collection preferences and you Mr budget and still plan to also not be focused by other items sometimes

Just enjoy the hunt and enjoy your collection (and share pictures of New pickups in our monthly pickups thread. Lol

[BioCRN]

Originally Posted by raulus

For better or worse, the market tends to take on a life of its own, and often the results aren't as explainable as we might like.

At this beginning of this year I sold a PSA 8 1975 Jose Cardenal for $150 and that wasn't even a top-3 sell price for that card in that time period. It was $100-$150 range in the year before, too.

A recent one sold for $61 (including shipping) and there's a $96 buy-it-now sitting around with no action on EBay right now.

I still have no idea why there was a run on the card. I bought 2 PSA 8's about 5 years earlier for $20 combined.

[raulus]

Originally Posted by BioCRN

At this beginning of this year I sold a PSA 8 1975 Jose Cardenal for $150 and that wasn't even a top-3 sell price for that card in that time period. It was $100-$150 range in the year before, too.

A recent one sold for $61 (including shipping) and there's a $96 buy-it-now sitting around with no action on EBay right now.

I still have no idea why there was a run on the card. I bought 2 PSA 8's about 5 years earlier for $20 combined.

While that kind of movement is big in percentage terms, in absolute dollar terms it's perhaps a little less exciting. It could be that the movement and action has more to do with the number of pieces on the market at the time and the number and aggressiveness of buyers that happened to be in the market for it. Or it could just be that a handful of buyers didn't mind paying an extra $50 or so to pick it up now, rather than wait for the next one to roll around at a lower price. Because hey, what's another $50 among friends when it means you get your cardboard today?!

Or it could also be one of your famous "fake sale" patterns, where someone was trying to establish a market at $150 or so, and then unload their real card at that price. Although for an extra $50 or $100 to create a fake higher market price, it seems like a lot of work to me.

[Leon]

I have paid more than rare cards are worth, in my mind, to have them not go to auction. If 2-3 people with deep pockets wanted them in an auction, I would have no chance. And it's unlikely I will see some of them very soon again, if ever..So, sometimes, a collector has to do what a collector does.

I don't blame the guy with the Black Sabbath poster. Most of us, who have been doing it a while, have done something like that...and might again!
.

[Casey2296]

Originally Posted by Leon

I have paid more than rare cards are worth, in my mind, to have them not go to auction. If 2-3 people with deep pockets wanted them in an auction, I would have no chance. And it's unlikely I will see some of them very soon again, if ever..So, sometimes, a collector has to do what a collector does.

I don't blame the guy with the Black Sabbath poster. Most of us, who have been doing it a while, have done something like that...and might again!
.

Good point, if you're going to overpay its better to overpay with another board member, you just never know what could happen if rare cards make it out of the clubhouse.

Plus it feels better selling a card to a fellow member/friend/colleague than some rando in the outside world because you can always invoke the "if you're going to sell it, you have to give me first shot at buying it back" clause.

[BobC]

Originally Posted by raulus

Upon further reflection, and looking at some of the historical results a bit closer now, I may have over-stated the pricing differential here, pre-pandemic at least.

For example, at PSA 8, the 1954 Mays pretty routinely sold for about $3k-$4k. Same grade for 1962 was around $3.5k to $5.5k. Still a premium, but probably closer to 20-30%.

I'm not entirely sure that you can necessarily explain it just based on pop counts and aesthetics. For better or worse, the market tends to take on a life of its own, and often the results aren't as explainable as we might like. I guess if we were really adventurous, we could go out and take short positions on the 62, and long positions on the 54 so as to arbitrage and drive the pricing to a relative spot where we think makes more sense. But in the process, we might lose our shirts!

LOL

That's okay, I'll be happy with the '54 and '62 Mays cards I already have.

And sounds like you're agreeing with me, it is not the pop reports causing what seems to be a bit of a pricing anomaly for these two cards. We'll probably never know what could have caused such a big price differential between those two PSA 9 Mays cards in that last REA auction then?

[BobC]

Originally Posted by Leon

I have paid more than rare cards are worth, in my mind, to have them not go to auction. If 2-3 people with deep pockets wanted them in an auction, I would have no chance. And it's unlikely I will see some of them very soon again, if ever..So, sometimes, a collector has to do what a collector does.

I don't blame the guy with the Black Sabbath poster. Most of us, who have been doing it a while, have done something like that...and might again!
.

LOL

So true!

Once in a very great while it can actually work the other way though. Years back I'd heard of someone selling a card that was a white whale for me. Contacted them and sure enough, they had the card for sale and told me the price. They also told me they had already offered it to someone else, whom they were just waiting to hear back from, and was told they had first dibs. But if they passed on it, the card was mine at the same asking price. So of course, the other buyer didn't pass and lo and behold, I was SOL. But then several years later the very same card came up in an auction, and I miraculously won it for almost half of what it had been offered to me at before. So sometimes patience, and an auction, can work to your benefit.

[raulus]

Originally Posted by BobC

LOL

That's okay, I'll be happy with the '54 and '62 Mays cards I already have.

And sounds like you're agreeing with me, it is not the pop reports causing what seems to be a bit of a pricing anomaly for these two cards. We'll probably never know what could have caused such a big price differential between those two PSA 9 Mays cards in that last REA auction then?

Obviously the bidders are responsible for the price differential. But beyond that, digging into why these two cards have the relative values that they have in relation to one another is likely to remain a bit of an enigma.

But the 1962T selling for 25% more than the 1954T seems to follow the historical relationship between these two cards pretty closely. Whether the bidders had that in mind in the heat of the action is unlikely. But that’s definitely where the chips fell in the end. The invisible hand at work!

[BobC]

Originally Posted by raulus

Obviously the bidders are responsible for the price differential. But beyond that, digging into why these two cards have the relative values that they have in relation to one another is likely to remain a bit of an enigma.

But the 1962T selling for 25% more than the 1954T seems to follow the historical relationship between these two cards pretty closely. Whether the bidders had that in mind in the heat of the action is unlikely. But that’s definitely where the chips fell in the end. The invisible hand at work!

And that factoid you are pointing out about more recent '62 versus '54 prices I find very interesting. I haven't really been actively collecting and paying attention to cards and prices from those sets for a decade or two now. But when I was, I always seemed to remember '54 cards going for more than comparable '62 cards. Maybe it also has to do with the higher grades for these particular cards, because as you speculated and pointed out, the full-bleed wood grain borders on the '62s do tend to highlight any edge and corner issues way more so than on cards with just white borders.

But then these are the kinds of conundrums that help to make, and keep, this hobby interesting to many of us. Good stuff!

[G1911]

Originally Posted by Leon

I have paid more than rare cards are worth, in my mind, to have them not go to auction. If 2-3 people with deep pockets wanted them in an auction, I would have no chance. And it's unlikely I will see some of them very soon again, if ever..So, sometimes, a collector has to do what a collector does.

I don't blame the guy with the Black Sabbath poster. Most of us, who have been doing it a while, have done something like that...and might again!
.

I have done this a few times. For truly rare items, it's a complete guess of what "overpaying" even is, and while I may hypothesize it 'should' go for $300, it might go for $3,000. Sometimes it's better to just pay $500 to buy it direct and skip the risk. Lose out on a deal maybe, but secure it and remove the risk

Other times I have paid 5x of what I think a card would go for at auction, because it is not available at auction and the seller isn't really looking to sell. For a card I can get elsewhere, I value based on the market because I don't want to unnecessarily throw money down the drain, but if it is a unique or nearly so item I want, I value it entirely based on its personal value to me.

[raulus]

Originally Posted by BobC

And that factoid you are pointing out about more recent '62 versus '54 prices I find very interesting. I haven't really been actively collecting and paying attention to cards and prices from those sets for a decade or two now. But when I was, I always seemed to remember '54 cards going for more than comparable '62 cards. Maybe it also has to do with the higher grades for these particular cards, because as you speculated and pointed out, the full-bleed wood grain borders on the '62s do tend to highlight any edge and corner issues way more so than on cards with just white borders.

But then these are the kinds of conundrums that help to make, and keep, this hobby interesting to many of us. Good stuff!

Just to be clear, I was only comparing the Mays items from those two years, not other items. The same ratio may or may not hold true more generally.

[BobC]

Originally Posted by raulus

Just to be clear, I was only comparing the Mays items from those two years, not other items. The same ratio may or may not hold true more generally.

No, I hear you. It is just that when your overall experience is that cards in one earlier set normally go for more than cards in a later set, you wouldn't expect the opposite to be true for one single player's base card in those two sets. Unless there was some special circumstance like the player's card in the later set was a short print, or maybe in the high number series.

I don't normally follow current card prices of individual players, like Mays, and am just surprised that a similarly graded '62 Topps card of his would go for so much more than his '54 Topps card. Defies logic to me. Oh well, live and learn.