Sunk Costs in the Hobby Video

[Snowman]

As someone pointed out above though, determining a card's value as a buyer isn't always as simple as seeing what a similar one last sold for at auction, unless it is a highly traded commodity card like an 89 Upper Deck Griffey or a red T206 Ty Cobb. The same is true for realizing a card's potential as a seller. Some cards have much stronger valuations in very niche segments of the hobby, and if you just toss one of those cards up for auction on eBay, you're gambling on whether or not the right buyers will see it, because if they don't, you could easily end up taking a bath on the card if it sells to someone in a different segment of the hobby.

When a card is difficult to price, I think sometimes dealers who aren't very good at pricing/math will often just resort to looking at what they paid for a card as a surrogate for what it might be worth today because they're not confident in what they could actually get for it and they're afraid of making a mistake. Especially for a card that's not easy to find.

As an example, I primarily collect perfectly centered mid-grade cards with strong eye-appeal. Historical sales prices for these cards have extremely high variance because the hammer prices depend heavily on who happens to be watching the auctions. If you take a card like a perfectly centered PSA 4 Hank Aaron RC for example, there are multiple cohorts of collectors who will value it very differently. This card is notoriously difficult to find perfectly centered. The VCP median price for recent sales of a PSA 4 is around $4500 for an off-centered copy of this card. But when a perfectly centered copy hits the auction block, you have investors/flippers who might bid $3500-$4000 hoping to turn a profit on it if they get lucky and win. Then you have collectors who zoom in on the corners and shrug their shoulders over the centering that might pay $4500 for it. Then you have the largest cohort of the market that will notice the centering and will add a premium to it, perhaps bidding it up to $5000-$5500 or so. Then you have a smaller cohort of what I call the "true collectors" who really care about eye appeal, and they might pay upwards of $7k for it, reasoning that it's worth a full grade bump in price due to the eye appeal. Then, you have an even smaller cohort of the truly OCD-centering-obsessed collectors like myself who even cringe at a 55/45 copy and that have been looking for a dead-centered Hank Aaron RC for years to replace their "off-centered" 51/49 copy, knowing that there are only a few dozen of these to have ever surfaced. Those buyers will gladly pay $10k for it because they'd MUCH rather have it than an off-centered PSA 6, 7, 8, or 9 and $10k sure seems like a bargain in contrast.

Someday, I might start a thread about estimating the value of cards that are difficult to price, as there are some fairly interesting mathematical nuances or mechanisms that can come into play. One of the more interesting ones is the non-linearity of centering premiums across both grades and sets.