Health of Asset Class - Over/Under 1955 Topps Koufax PSA 9

[Exhibitman]

Originally Posted by raulus

Adam - I guess I'm not as familiar with the thinking behind why passed lot percentages are a meaningful metric as a gauge for the health of the hobby. Could I trouble you to unpack that a bit more about why you view it as meaningful?

Unless I'm mistaken, a passed lot is merely a lot that didn't get any bids. I suppose part of the fun there is where the auction house puts the initial bid, and whether that's an attractive price point. But even if just one person bids, then the item wouldn't fail, right? I suppose it's also possible that if the item has a reserve that isn't met, then that might count as a passed lot.

Part of me also wonders whether a big part of the calculus here is the question of whether the auction house is deliberately turning away relatively worthless pieces (maybe a 1988 Donruss common in BVG 6 as an example) such that they never get to auction, and therefore never have a chance to fail because no one will bid the minimum $10 on them.

Sure. I've been watching passed lot percentages in 'collector' level card auctions since the Great Recession. At the worst, some auctions had 30% of lots not open. I noticed during the pandemic boom that virtually everything sold. I think in 2022 I had one passed item among hundreds of card lots I consigned to cash in on the surge in prices. To me, the fact that nearly everything still is selling is evidence of broad interest in the hobby. There are a ton more middle-class collectors spending relatively modest monthly budgets than there are wealthy collectors pursuing six-figure cards. The latter make the headlines, but the former are the bread and butter of the business. My take-away from passed lot figures is that despite the many auctions out there, collectors are not saturated and not fatigued. Prices may fluctuate, but interest is still high.