Quote:
Originally Posted by raulus
BobC - not to get too deep into the weeds with your accounting firm analogy, but I'm not sure it's all that applicable here.
When an accounting firm issues an audit opinion, it's basically pass/fail. While regulators over the years have been trying to get accounting firms to be more nuanced, there's never been a real movement beyond the current pass/fail regime. Certainly if accounting firms were issuing opinions graded from 1-10, with half grades and qualifiers and sub-grades, then more people would spend a lot more time reading auditors' reports!
On the other hand, with the TPGs, if they were just opining on pass/fail, then their job would be pretty simple. But having to take all of the various factors for any given card, weight them, and then boil them down into a single number is a heck of a lot more exciting than just pass/fail.
I think when you add on issues around service, volume, perceived acceptance in the marketplace, encapsulation techniques, and other features, there are just too many opportunities for differentiation that I don't expect that the TPGs in our world will ever get to a spot where they're aligned in all respects.
And if you want to get deep enough into the weeds here, most of the major accounting firms have a list of scandals that goes pretty deep. Even if you just look at their PCAOB examination findings, they all seem to be doing an imperfect job of actually following those immutable professional standards. So hoping that the TPGs will be more like accounting firms may not be moving in the right direction.
Which isn't to say that TPGs (and auditors for that matter) couldn't do a lot better!
But to expect that the market will view TPG grading opinions no differently than auditors' reports is probably not a realistic expectation given the differences between the services offered and opportunities for innovation among the TPG services offered.
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Hey Nicolo,
You are going a bit deeper than I intended. LOL
The point I'm trying to present is that at the end of the day, all the accounting firms and TPGs really do is give their opinions. And both are supposed to be (or in the case of TPGs, they should be) independent, knowledgeable, and giving their opinions based on a recognized and uniform set of rules and measurement standards, consistently applied. And if that is the case and actually true, why do the exact same cards, in the exact same grades, typically sell for more if graded by one TPG over another? You mentioned additional services and opportunities for innovations among TPGs as a basis for possibly explaining why one TPG's cards may sell for more than another's. Okay, what additional services and what innovations? I understand only one TPG has a working Registry, at least for now. Is that the additional services you're referring to? Because if so, is that Registry still the huge factor it once was in driving prices? If anything, I feel there may still be some carryover influence from the earlier days of the Registry where collectors would vie against one another to get that TPG's highest graded example of that card, but how many people, and what portion of the hobby, are still so actively involved in those Registry fights, especially when it comes to pre-war or vintage cards? For example, that SGC '52 Topps Mantle is now the most valuable card sold to date, and that doesn't impact anyone's registry standing. Further, I've often felt that in those cases of Registry fights, the dealers and sellers then actively push the "All boats rise with the tide." mantra to then justify pushing higher prices to customers of all the similar, but lesser condition cards they had and were selling. And a lot of that I always felt went back to the old Beckett price guides, or the SCD catalogs, which would base card prices off of a NM (or possibly EX-NM) figure, and values for other grades would then be a set percentage of those NM or EX-NM prices. And collectors got brainwashed and bought into that thinking. And because of those Registry people early on always pushing up prices for one particular TPG's cards over those of all the other TPG's, many in the hobby were sufficiently brainwashed into thinking that for some reason that one TPG's cards of equal grade and condition were somehow always intrinsically more valuable than any other TPG's similar cards. Just like Goudey Ruth cards were shown in the old Beckett's as his rookie card, and contributed to what I still feel is the extremely overpriced nature of those readily available and not rare at all cards today.
The truth is, one TPG's cards are intrinsically NOT more valuable, unless it is two Registry people suddenly vying for the same card. But of all the Ebay card sales, other online card sales, card sales at shows, and AH auctions going on out in the marketplace today, what percentage of those transactions today are truly driven by Registry considerations? And I'm talking about mostly pre-war and vintage, not the newer, modern stuff where many are possibly still actively trying to get atop those Registry lists that haven't been established and filled for years already.
That is why, and how, I possibly see the Registry as affecting and influencing prices of TPG graded cards. And for a vast portion of the hobby that don't give a rat's ass about a Registry or their set's Registry ranking, that isn't a service, it's a marketing technique I view as an overall bane to the hobby, and how certain players in this industry have been able to make a lot more money than they otherwise would have by pushing and continuing that thinking still to today. But my point is that if the TPGs really did what they were supposed to, opine and grade cards uniformly and consistently, then it wouldn't/shouldn't really matter which TPG graded it, the same card should sell for approximately the same price regardless of which TPG encapsulated it. Just like it doesn't matter which accounting firm opines on a company's financial statements and financial condition, as it has no bearing on stocks price in the marketplace, nor should it. As our beloved cards seem to be becoming more and more like investments every day, the parties that opine on them as to what gives them value, the TPGs that grade them, should aspire to be even more independent and consistent and non-biased in what they do. And a Registry really should not be influencing overall market prices like it may have in the past, and carried over to today. That fault lies with the collecting community, and more so with Registry geeks and followers who worship at it's feet.
And what innovations are you talking about? I don't know anyone that will pay more for a card in one TPG's holder over another, just for some perceived technological innovation that is yet to come from the one TPG.
And as for financial audits being a simple pass/fail test, they are a lot more than that. In college I learned the crux was in the finding of "competent sufficient evidential matter". And as for simply pass/fail, did you not ever work on an audit where you had to give a client "proposed audit adjustments" or basically edit or even re-write/add footnotes for them? Or what about walking into a company that has never been audited before, and having to be the one in charge of figuring out what look for, ask about, find evidence to test, and on and on. Not having someone else's prior year workpapers and checklists to literally just follow and copy off of certainly is a bit more involved than just running some pass/fail tests. LOL
And yes, I'm well aware of there being many accounting scandals and firms with issues over the years. But that is the point, they are known, and the accounting firms in many cases, if not most all, were held accountable and ended up paying for their issues and scandals, sometimes dearly. Author Anderson met their demise with Enron. I have a friend who was a national tax partner with Laventhol & Horwath, who didn't like the direction and way they were going and left them because of that about three years before they imploded. Unfortunately, he found out the hard way why being in a general partnership can be bad. What big, heavily publicized cases have any of the TPGs actually lost in court, or otherwise suffered/paid dearly for? Again, all why I feel TPGs giving opinions on a card's condition should be held to standards, rules, and oversight, and be much more accountable for their actions, similar to public accounting firms giving opinions on a company's financial statements and condition. It isn't a perfect match, but close enough for me. Will we ever see my wishes coming true though, honestly, probably not.
09-20-2022, 04:48 PM
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