The Psychology of Bidding.......

[MattyC]

Originally Posted by GregMitch34

My "psychology" is buying only cards with perfect or at least great centering. In my mind--part true, part fantasy--that makes every card I get at a fair or market price ACTUALLY a nice bargain since I figure (hope) that it's at least 10-20% more valuable than the average price for the card due to centering. This often proves true, which only encourages me...

Wonder if you folks agree...

Greg, I think you and Leon have nailed it in your posts here. People love to look at the "average" price on VCP, but that is just what it is-- the average. It is not at all what the very best card in its grade will go for.

I think far too many collectors get hung up on "overpaying" based on the "average," as if that average is the real market price. And that is a gross misinterpretation of what that VCP average really is. Staring at that average and fear of overpaying will only lead one to miss out on and lose the very elite cards for any given grade.

If one really wants a card that blows away others in its grade, and even those with bigger sticker numbers, one has to be prepared to pay a premium over the VCP average. If I know how rare a card is to find centered or without some usual endemic flaw, and I see that rare, standout example, then I want it. And I will pay what it takes to get it in my collection. I never, ever see this as overpaying. Not when the alternative is losing out on the top specimen for the grade, or paying a bit less hard-earned money for an inferior example, when I will forever know very well that there's a better one out there. To me, overpaying is actually paying any amount for a lesser card, just to save a couple bucks.

And the proof is in the happiness. I would bet the farm that when it comes to cards like the ones you mention, and the Ruth in this thread is a prime example, there is far more underbidder's remorse than winner's remorse.

But of course the philosophy you mention only makes sense when one does not view all cards in the same grade as identical. There is a real danger in getting hung up on wanting 'Grade X,' as much as there is in getting hung up on the VCP average. That danger can lead to one buying downright ugly cards that, in the future, will never perform or appreciate the way the best looking ones in the grade will.

Leon's Ruth in the initial post here is just such an elite example for the grade. Should he ever want to sell it, he will be able to find many more buyers for this example that has elite centering, as compared to had he paid closer to the VCP average for an ugly example. And I'd bet the proverbial farm that his 4 will appreciate at a greater rate than the usual looking 4.

[GregMitch34]

Good comment. I NEVER consider VCP average--I will look at all sales listed to see fluctuation, and latest, and follow links to see photos if provided. Same at Card Target, which has photos of EVERY card, even the backs, so it's easy to see why prices were higher or lower for each example. That way you can usually see the "premium" your card deserves (and has often gotten). As I wrote, sometimes it's only a small amount--but still very real. And enough to get me to take the plunge on a card I might normally pull back from.

[ullmandds]

i DON'T KNOW WHAT MOST PEOPLE DO...BUT i BID WHAT i AM COMFORTABLE PAYING FOR A CARD...USUALLY WITHOUT CONSULTING ANY PRICE GUIDES/vcp.

[h2oya311]

Originally Posted by ullmandds

i DON'T KNOW WHAT MOST PEOPLE DO...BUT i BID WHAT i AM COMFORTABLE PAYING FOR A CARD...USUALLY WITHOUT CONSULTING ANY PRICE GUIDES/vcp.

I sure hope you and someone else w/ your buying philosophy are bidding on my consignments!!! It's amazing how many graded cards sell for close to VCP, even for rare cards w/ only a few graded specimens.

I use VCP, but always look at the actual sales, photos, and avenue of sale when thinking about a fair price. It can be dangerous though. I once purchased a few t205 from a small AH thinking I got some bargains, but t205 prices realized had recently fallen and I was using 2012 values for some of the rarer ones. I didn't take a bath, but I certainly didn't get any return on my investment. This serves as a constant reminder to me of three things: (1) I am not a dealer, (2) only but cards you want, need, or for which you have expertise, and (3) exercise caution when using VCP, even when used appropriately.

Remember, a card needs only two bidders to realize a certain price...if one of those two guys no longer needs a card or isn't paying attention, the subsequent sale will invariably be much lower than the previous sale...the laws of supply and demand can be a bitch sometimes!!

[steve B]

Originally Posted by h2oya311

I sure hope you and someone else w/ your buying philosophy are bidding on my consignments!!! It's amazing how many graded cards sell for close to VCP, even for rare cards w/ only a few graded specimens.

I use VCP, but always look at the actual sales, photos, and avenue of sale when thinking about a fair price. It can be dangerous though. I once purchased a few t205 from a small AH thinking I got some bargains, but t205 prices realized had recently fallen and I was using 2012 values for some of the rarer ones. I didn't take a bath, but I certainly didn't get any return on my investment. This serves as a constant reminder to me of three things: (1) I am not a dealer, (2) only but cards you want, need, or for which you have expertise, and (3) exercise caution when using VCP, even when used appropriately.

Remember, a card needs only two bidders to realize a certain price...if one of those two guys no longer needs a card or isn't paying attention, the subsequent sale will invariably be much lower than the previous sale...the laws of supply and demand can be a bitch sometimes!!

A dealer I'm friendly with in another hobby once told me " If the item is a good one you can't pay too much, just too soon" Meaning that even spending a bit over what's typical for something really nice will usually payoff in the long run. Sure, you'll hardly ever be able to flip it right away, but if it's something you'll keep for a few years you'll do better than the person paying an average price for average stuff, or a low price for items with problems.

I'd have to agree. When I started T206s were about 1.50 for VG commons, Maybe 1.00 for G, maybe 2.00 for EX. Most HOF players were 5-10. Most backs didn't matter at all, I think my Broadleaf that's poor was $5, maybe 10.
The difference now is much bigger. And I think in a few years it will be bigger still.


Bidding in auctions is different for everyone.

For me Ebay stuff gets a few different tactics

For stuff I'm fairly sure on the value of, I snipe. Not with a service, but manually - Mostly because of budget. If I put snipes on all the stuff I want I'd be in trouble very quickly.
If I'm interested in it but not really interested, I usually just bid and see what happens, especially if it's a cheap or really common thing.
Stuff I'm not sure about the value of I usually handle the same way, except I might put in a low bid early to remind me to do some research.

Then there's the stuff I really want or like, or that looks like it might be special in some way. Those get a bit more attention, and I discuss them with my wife who is very good at giving a second opinion or reality check. Then I figure out what's a bid that would have a reasonable chance of winning. Depending on what other items are up I might abandon most of the others to bid more. In one case I went as far as finding some extra funds. (Then after all that work they got ended early )

I've only bid in a couple auction house auctions, and the experiences haven't been all that great. One had a "computer problem" and couldn't see any of the online bids. And decided to simply continue the auction. Maybe 50 lots, including nearly all the ones I'd bid on. Those went for around 1/3 of my bids. The other "forgot" to ship the cards I won. Then promised a discount on the shipping and never followed through.
I'm not so sure I'd bother again.

In person auctions are much more interesting. And there's way more psychology. Figuring out how competitive the other bidders might be based on how they bid, whether to wait for the opening price to drop a bit or to start the bidding right away.....Harder, but more fun.
Some stuff goes for way more than I'd expect. And some stuff ends up going for a bargain. --- 4 late 80's-early 90's factory sets, sold for $65?! Early 40's Braves warmup jacket in bad condition, but supposedly Ernie Lombardis - $100. At the same auction The warmup didn't get much attention in preview. probably because it was hung up near the door and everyone probably figured it was one of the workers jackets like I did. I bid on it nearly blind. Based on what I could see from 20-30 ft away. I'd have gone higher, but fortunately the only other bidder dropped out.

Steve B

[MattyC]

This is golden advice:

"A dealer I'm friendly with in another hobby once told me " If the item is a good one you can't pay too much, just too soon" Meaning that even spending a bit over what's typical for something really nice will usually payoff in the long run. Sure, you'll hardly ever be able to flip it right away, but if it's something you'll keep for a few years you'll do better than the person paying an average price for average stuff, or a low price for items with problems."

Could not agree more. For quick flippers, paying premiums for the best looking card in the grade is "overpaying." But for the collector who wants to enjoy a card for years and thus has a long investment horizon, it is the way to go 100% of the time. Not only do you get the pleasure of admiring and owning the better looking card, but you also will do better if you sell it several years down the line for whatever reason.

[Runscott]

Originally Posted by steve B

A dealer I'm friendly with in another hobby once told me " If the item is a good one you can't pay too much, just too soon"

The trick is knowing which affordable items are the "good ones". Everyone knows the really big ones such as the T206 Plank or Wagner, or the Goudey Lajoie. If you aren't good at making such determinations for lower-priced cards, you better stick to studying market values.

[steve B]

Originally Posted by Runscott

The trick is knowing which affordable items are the "good ones". Everyone knows the really big ones such as the T206 Plank or Wagner, or the Goudey Lajoie. If you aren't good at making such determinations for lower-priced cards, you better stick to studying market values.

In the hobbies that are his primary business -Stamps and coins - there are long established and reasonably accurate price guides, and most of the production totals are known.

Stamps in average condition are readily available for about half the catalog price. I'm no longer sure about coins.

What he was talking about are the things that aren't bargains right now, but will probably be seen as bargains a few years from now.

To use couple examples from cards
Leons Ruth would always have been a bit more than others that would be called the same grade, and a dealer who graded strictly might have called it just VG. (There was some pushback for a time against stuff like VG-EX, some felt there was no middle ground, it was either VG or EX. ) I was given probably 6-7 chances to buy Goudey Ruths. All VG, all around $100. (Sadly for me I never bought one) Leons would have been a bit more even from someone who would just call it a really nice VG. So at the time if I'd bought a card like that for say 125 I'd have "overpaid" The difference now of course is much larger. And it's still worth "overpaying" for since it's very nice for VG-EX.

When I bought my few Carolina Brights backs, I "overpaid" by paying probably 3x what a common was at the time for the commons and the going rate for the Cobb. They were simply poor condition T206s with an interesting back. That's obviously changed a lot.

It's more about paying a bit more for either rarity or condition than finding a bargain.

That's a whole different exercise.
(Like the lucky people who bought Chinese stamps 15+ years ago when they could be had by the boxful for almost nothing. Who knew they'd become more capitalist and like stamps and want their rare stuff back?)

Steve B

[MVSNYC]

I never check price guides...ever. VCP, SMR, MPH, LOL, LMK, FYI, or even SOL.

My focus is, and always has been, T206...after 25 years of collecting, I think I have a good sense of values. If something pops up and want a price opinion, I'll ask a friend or two, but never check price guides at all.

I watch a card, and if I want it, I bid. if I really want it, I bid strong. I bid up to what i'm comfortable spending.

[brianp-beme]

Originally Posted by ullmandds

i DON'T KNOW WHAT MOST PEOPLE DO...BUT i BID WHAT i AM COMFORTABLE PAYING FOR A CARD...USUALLY WITHOUT CONSULTING ANY PRICE GUIDES/vcp.

Same here (or +1 for plus one types). Sometimes this can cause friction...a few years ago I really ticked off one board member when I offered 1/4 of what he thought his card was worth. Ends up he was closer to the going price at the time. I guess I was just working off of old brain 'fo, which will happen if you have been in the hobby long enough.

Brian

[darwinbulldog]

Originally Posted by ullmandds

i DON'T KNOW WHAT MOST PEOPLE DO...BUT i BID WHAT i AM COMFORTABLE PAYING FOR A CARD...USUALLY WITHOUT CONSULTING ANY PRICE GUIDES/vcp.

My approach is the same in that I only bid what I'm comfortable paying. However, that's always a function of what other people are paying. I can't imagine, for example, that I'd feel comfortable giving someone $500 for a nice D304 common if no one else ever paid more than a few bucks. I don't see much difference in using VCP versus the price guides versus just tracking sales for a while myself in order to figure out approximately what other people would be likely to pay for the card. They're just slightly different measures of the same construct. Sometimes I'm willing to pay more than that estimate, sometimes less, but I've never just looked at card and said, "I have no idea what anyone else would pay for that -- $1? $1,000,000? -- but I'll bid $325 without trying to estimate what others might pay first."

[glchen]

Originally Posted by MattyC

...
Leon's Ruth in the initial post here is just such an elite example for the grade. Should he ever want to sell it, he will be able to find many more buyers for this example that has elite centering, as compared to had he paid closer to the VCP average for an ugly example. And I'd bet the proverbial farm that his 4 will appreciate at a greater rate than the usual looking 4.

Hi Matt, I don't know if I fully agree with this at least for cards in grade 4. (Great card, btw, Leon!) Leon's 4 will probably appreciate at a greater rate than a typical 4, but I doubt that it would generally surpass the grade of a typical 5. So there will still be band that it will be locked into. Cards graded Authentic or Poor, are very different, on the other hand, like your M101-5 Ruth. There can be a huge difference in eye appeal among these cards, as cards can have NM visual appeal, but just have a pinhole or slight back damage that drops the cards technical grade to Authentic or Poor. These cards can appreciate far faster than cards graded multiple levels above it.

[Leon]

Originally Posted by glchen

Hi Matt, I don't know if I fully agree with this at least for cards in grade 4. (Great card, btw, Leon!) Leon's 4 will probably appreciate at a greater rate than a typical 4, but I doubt that it would generally surpass the grade of a typical 5. So there will still be band that it will be locked into. Cards graded Authentic or Poor, are very different, on the other hand, like your M101-5 Ruth. There can be a huge difference in eye appeal among these cards, as cards can have NM visual appeal, but just have a pinhole or slight back damage that drops the cards technical grade to Authentic or Poor. These cards can appreciate far faster than cards graded multiple levels above it.

Thanks for the kudo Gary. I have a different opinion. I will absolutely pay more for a card that looks better, in a lower grade, than one that doesn't look as nice in a higher grade. My guess is that it is mostly registry collectors that will pay more for a higher grade than a nicer looking card. Most collectors I see commenting on this board don't share your view (I don't think).....Nice discussion and though I gave my particular example for me I was hoping members would give their view of how/why they bid on a card. Thanks again.....(you and I have a lot of the same thoughts on cards)

[bn2cardz]

Originally Posted by Stonepony

Any thoughts on bidding incements in the larger auctions? Specifically the 10% increment rule. I wonder at times if this hurts the consignor and final gavel price. For instance in Goodwins last auction an item went to "X" amount and closed there. I was willing to up the bid a couple hundred dollars but the 10% required increment ( plus the 20% buyers premium) was more than I wanted to go. If I had been allowed to up the bid at a lower increment its possible the eventual buyer would have outbid me again. Either way- consignor and aution house lost out on $ because 10% was too big a jump for me personally. Is there data showing that higher increments of bidding = higher gavel prices?

The 10% increases is a huge problem. Another issue is when you are allowed to put in a ceiling bid but it only does every other increment. This happened on an auction recently where I really wanted a card and wanted to put in the bid where it would make the next amount too high... yet the bid I wanted was between two ceiling bid options. I was very frustrated when someone outbid me with that between amount. I knew that was the amount I wanted but couldn't do it. Yet the next bid was way too high due to the increments.

[conor912]

Originally Posted by bn2cardz

Another issue is when you are allowed to put in a ceiling bid but it only does every other increment. This happened on an auction recently where I really wanted a card and wanted to put in the bid where it would make the next amount too high... yet the bid I wanted was between two ceiling bid options. I was very frustrated when someone outbid me with that between amount. I knew that was the amount I wanted but couldn't do it. Yet the next bid was way too high due to the increments.

I just encountered this for the first time last week bidding with REA. I, too, thought it was weird, so I called them and asked why they do that. They said they don't allow the same bidder to hold two consecutive auto-bidding positions to prevent ties and make it more fair for other bidders. I pressed further and asked why a tie wouldn't just go to the first bidder and he said "just so that there's no question" which I thought was a pretty weak answer. When I asked further, he matter-of-factly admitted that the whole reason was just to garner higher bids. Something about the whole situation rubbed me the wrong way.

[DeanH3]

I know I'm a difficult buyer. I'll ask about every possible imperfection that shows on a scan to make sure I know what I'm buying. I'd rather be a pest and have my concerns answered rather than not ask and be disappointed.

Once I'm all in on a card, I'm definitely guilty of paying a premium if it has the "look" I want. One in particular is my red cobby. I looked and waited for years to find one that met my criteria, centered, focused and bold color. Good thing sharp corners were not a criteria. When it popped up I went overboard and I have no regrets.

[BruceinGa]

What a stunning Cobb!!