Mile High Card Co, Auction Closing Today T206 Wagner, Plank, Cobb Back, 1916 Ruth ..

[Rhotchkiss]

Agree - there were actual bids that took the Cobb/Cobb to at least over $1.07mm before I tapped out and went to bed. I guess the all-in reserve was greater than that. So, we know that FMV for the highest graded Cobb/Cobb is $1.1mm+/-, which apparently is not enough for the current owner

[benjulmag]

Originally Posted by Rhotchkiss

Agree - there were actual bids that took the Cobb/Cobb to at least over $1.07mm before I tapped out and went to bed. I guess the all-in reserve was greater than that. So, we know that FMV for the highest graded Cobb/Cobb is $1.1mm+/-, which apparently is not enough for the current owner

I'm not saying you are incorrect but how do we know this? Here is the rule regarding the right of the AH to bid up to the undisclosed reserve.

Minimum Bids- Each and every lot within the auction does have a minimum bid designated in both the catalog as well as online. A very few of the lots in the auction have a reserve price (please note the vast majority of the lots within the auction do not have a reserve price) A reserve price is the confidential minimum price that a consignor will accept before they will sell the material, this means that a bid of equal or greater than the confidential reserve must be placed for a successful bid to be accepted on that lot. MHCC may implement this reserve by bidding on behalf of the consignor and may place a bid up to the amount of the reserve, by placing successive bids if necessary. In the limited instances where MHCC has a financial interest in a lot beyond our commission, we may place a bid to protect our financial interest. Reserves when in place will be pre-determined and set within the auction software prior to the start of the auction. Again, please note the vast majority of the lots in every auction will be offered without a confidential reserve in place. For all items in the auction (unless an item is withdrawn during the auction)without a reserve, they will be sold to the highest bidder at or above the minimum bid.

The AH explicitly reserves the right to place secret bids on behalf of the consignor (or on its behalf if it has a financial interest in the item). So what information was disclosed as the bidding progressed to indicate how high the "real" bids went? And even if a "real" bid was put in at say, $750k, the bid it could have been topping might have been a house bid.

Again, I am not saying this is what happened, but it seems to me we have no idea how high the "real" bidding went, nor whether the bids that were topped to get to that last "real" bid were house bids. In the typical instance that I am familiar with, an AH will put an estimated price range for the item, and the rules will say the secret reserve cannot be higher than the low-end estimate. So that way at least a bidder can know that once bidding reaches a certain level, the bids that are being placed are not house bids.

[rjackson44]

terrific stuff

[Rhotchkiss]

Cory, thanks for pointing this out. I agree with you 100%. The last bid I saw may have, in fact, been inflated by one or numerous AH bids intended to get the card above the reserve. In fact, I bet there is a solid chance that is what happened.

[Bkrum]

Any thoughts about the final hammer price on the t206 set? I haven’t had the time to go through the set that was offered and figure out what appropriate price would be however my sense is it went a little low

Barry Krumwiede

[swarmee]

Originally Posted by Bkrum

Any thoughts about the final hammer price on the t206 set? I haven’t had the time to go through the set that was offered and figure out what appropriate price would be however my sense is it went little low

Well, since they offered it in either 'by card' or 'full set' format and the full set triumphed by $30K, then the set was worth more intact (at this specific point in time) than the sum of the parts. Saves the auctionhouse a lot of time as well. Of course, many bidders may have stopped bidding if they thought bids on individual cards at the end was fruitless.

[Rhotchkiss]

Originally Posted by swarmee

Well, since they offered it in either 'by card' or 'full set' format and the full set triumphed by $30K, then the set was worth more intact (at this specific point in time) than the sum of the parts. Saves the auctionhouse a lot of time as well.

PWCC would never offer something like this because they would lose $50k on inflated shipping costs

[benjulmag]

Originally Posted by Rhotchkiss

Cory, thanks for pointing this out. I agree with you 100%. The last bid I saw may have, in fact, been inflated by one or numerous AH bids intended to get the card above the reserve. In fact, I bet there is a solid chance that is what happened.

I will add that there are aspects of this rule that trouble me. As some of the posts suggest, likely many/most people did not thoroughly read the auction rules and were unaware of the right of the AH to bid up to a secret reserve. I know I was unaware of the rule until after the auction closed and I saw the lot passed. It certainly was not something I was familiar with.

The AH does say it sets this secret reserve before bidding starts, and it is imbedded into the software. But what is to prevent the following?

The AH has a financial interest in an item. Before the bidding starts it sets a crazy reserve, something that almost certainly the market cannot support. Then the AH places bids up to this reserve, and at the close of the auction announces the item did not sell. Unless people knew that the rules allow this, the market will be left with the impression that the market price was the last bid placed.

In the case at hand, people apparently (and not unreasonably unless they studied the rules in advance) felt the card had legitimate bidding up to $1M. Maybe it did. But maybe the last highest real bid was $500K, and maybe even that bid might have been to top a house bid. We simply do not know.

For me bidding on such an item, even being aware of the rules, I will never know that my bid reflects a real market bid, and that if I were to want to resell the item that I could come close to getting my money back.

I wonder whether this business model really obtains the highest price for a item in the instance that people are fully aware of what the rule allows. One incentive for people to bid is the belief other people have interest at that level. If that assumption is put into question by widespread knowledge that any bid, no matter how high, might be nothing more than a house bid placed to support a hidden reserve, people might be reluctant to bid. In contrast, if bidders are not generally aware of this practice, the rule can generate very high prices, prices that otherwise might be unobtainable. So I suppose it all depends on how knowledgeable bidders are about the rules.

In saying all this, I am in no way saying or implying there was any ulterior motive on the part of MHCC in how they ran this auction or set their rules, or that they wanted no more than to get the best price they could for their consignor in accord with fair market practices. I only know I was surprised to read the item passed at the last recorded price, and when I then read the auction rules, they were not what I expected or was familiar with. Had I decided to bid high enough to win the lot, and then learn that for all I know the next highest real bid was at half the level I bid, I don't think I would be too happy. Yes, I could have read the rules. But still...….

[calvindog]

Talk to Heritage, they have the same rules. REA does not.

[benjulmag]

Originally Posted by calvindog

Talk to Heritage, they have the same rules. REA does not.

Heritage does not have the same rules. They indicate a few days before closing whether the item has met the reserve, and if it has not, they raise the bid to the reserve price. So at that point forward a bidder will know that any bids reflect real bids.

[ullmandds]

But these "rules" many of the big AH's have are nothing new?

Which makes me question the hammer prices for many cards over the last 10 or so years in general.

Originally Posted by benjulmag

I will add that there are aspects of this rule that trouble me. As some of the posts suggest, likely many/most people did not thoroughly read the auction rules and were unaware of the right of the AH to bid up to a secret reserve. I know I was unaware of the rule until after the auction closed and I saw the lot passed. It certainly was not something I was familiar with.

The AH does say it sets this secret reserve before bidding starts, and it is imbedded into the software. But what is to prevent the following?

The AH has a financial interest in an item. Before the bidding starts it sets a crazy reserve, something that almost certainly the market cannot support. Then the AH places bids up to this reserve, and at the close of the auction announces the item did not sell. Unless people knew that the rules allow this, the market will be left with the impression that the market price was the last bid placed.

In the case at hand, people apparently (and not unreasonably unless they studied the rules in advance) felt the card had legitimate bidding up to $1M. Maybe it did. But maybe the last highest real bid was $500K, and maybe even that bid might have been to top a house bid. We simply do not know.

For me bidding on such an item, even being aware of the rules, I will never know that my bid reflects a real market bid, and that if I were to want to resell the item that I could come close to getting my money back.

I wonder whether this business model really obtains the highest price for a item in the instance that people are fully aware of what the rule allows. One incentive for people to bid is the belief other people have interest at that level. If that assumption is put into question by widespread knowledge that any bid, no matter how high, might be nothing more than a house bid placed to support a hidden reserve, people might be reluctant to bid. In contrast, if bidders are not generally aware of this practice, the rule can generate very high prices, prices that otherwise might be unobtainable. So I suppose it all depends on how knowledgeable bidders are about the rules.

In saying all this, I am in no way saying or implying there was any ulterior motive on the part of MHCC in how they ran this auction or set their rules, or that they wanted no more than to get the best price they could for their consignor in accord with fair market practices. I only know I was surprised to read the item passed at the last recorded price, and when I then read the auction rules, they were not what I expected or was familiar with. Had I decided to bid high enough to win the lot, and then learn that for all I know the next highest real bid was at half the level I bid, I don't think I would be too happy. Yes, I could have read the rules. But still...….

[benjulmag]

Originally Posted by ullmandds

But these "rules" many of the big AH's have are nothing new?

Which makes me question the hammer prices for many cards over the last 10 or so years in general.

As I said, I don't recall seeing a rule exactly like MHCC's -- a rule that prevents a bidder from ever knowing that regardless how high he/she bids it is to top a real bid.

[T206.org]

Originally Posted by ullmandds

But these "rules" many of the big AH's have are nothing new?

Which makes me question the hammer prices for many cards over the last 10 or so years in general.

+1

It's essentially a type of market manipulation, that is apparently legal in some states.