Bidding against the deep pocket...
jimrupprecht
Posts: 75
Ok, I have to admit that the single biggest frustration I have with auctions (eBay or otheriwse) are the people who have more money than God. There have been many threads about such people... Rob started on the other night in regard to 1961 Topps PSA 9 cards, but that is just one example.
Here is my question: what are the ethics of such situations? If you know or suspect that someone in the "top all regardless" class of bidder is going after a card, how high can one bid before the bid is considered inappropriate? Is there such a point?
Now for a concrete example. I am building sets that a couple of "top alls" are also building. In the absence of a bid from a "top all", eBay auctions for the cards generally close between 50% and 110% of what, in my own assessment, the card is "worth" (which may be more or less than SMR). As a rule, I am generally unwilling to pay more than 125% of what I believe a card is "worth." In fact, I can count on one hand the number of times I have exceeded my personal 125% rule, and I have purchased many thousands of cards.
So let's say, for argument sake, that a card comes up for auction that I believe is worth $100. To make is easy, let's say that the SMR says $100 as well. Let's also say that we're talking about a card that will draw limited interest. Given the above, is it ethical for me to place a snipe for $500 on the card (I assume the risk of having to actually pay that for the card), knowing full well that I stand a good chance to win it for $75 UNLESS a "top all" bidder gets into the picture, in which case it means they will end up paying well over what the card is worth?
Thoughts, anyone?
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JR
Here is my question: what are the ethics of such situations? If you know or suspect that someone in the "top all regardless" class of bidder is going after a card, how high can one bid before the bid is considered inappropriate? Is there such a point?
Now for a concrete example. I am building sets that a couple of "top alls" are also building. In the absence of a bid from a "top all", eBay auctions for the cards generally close between 50% and 110% of what, in my own assessment, the card is "worth" (which may be more or less than SMR). As a rule, I am generally unwilling to pay more than 125% of what I believe a card is "worth." In fact, I can count on one hand the number of times I have exceeded my personal 125% rule, and I have purchased many thousands of cards.
So let's say, for argument sake, that a card comes up for auction that I believe is worth $100. To make is easy, let's say that the SMR says $100 as well. Let's also say that we're talking about a card that will draw limited interest. Given the above, is it ethical for me to place a snipe for $500 on the card (I assume the risk of having to actually pay that for the card), knowing full well that I stand a good chance to win it for $75 UNLESS a "top all" bidder gets into the picture, in which case it means they will end up paying well over what the card is worth?
Thoughts, anyone?
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JR
0
Comments
So what am I missing?
My approach is to just place my usual bid limits. If I get lucky and the deep pockets stay away, I consider it a victory. If I tried to run them up, I run the risk of overpaying, then I'm the fool.
Besides, I have seen a stategy used by some big money bidders. Start out by placing bids well above SMR, and win everything in sight. Do this for a couple weeks, so your name gets known. You scare off other potential bidders, and limit the competition from even wasting there time bidding. Then start selectively throwing out low bids on certain lots. The first guy that makes the unlucky move to push you up gets hurt!
Besides these big money spenders will lose interest far sooner that they will run out of cash.
1953 Topps in PSA 8
1941 Playball in PSA 8.
1952-1955 Red Man cards in 7 and 8
1950 Bowman in PSA 8
Sniping solely because you know that Mr. Deep Pockets has more money than you and has a high probability of bidding on the auction, and you are "out to get him" for pricing you out of the market = unethical
In your hypothetical example, if you are willing to pay up to $500 for the card then go for it. Especially if you are not aware of a specific individual that you are "sure" will be stepping up on that auction.
It is primarily the reason I have suggested in Number Two above (w/ the caveat of throwing in dealers who will facilitate the process) that many high-end vintage collectors keep their sets hidden when they are actively planning to upgrade it. Even someone like Charlie Merkel keeps many of his sets hidden where he (presumably) believes that there is room for more upgrades -- and he has a reputation for paying top dollar. He keeps some sets like his 1952 Topps open, presumably again, because he has most of the best cards -- and most of the 9s and 10s are not sold privately anymore no matter who you are.
Persons like Don Louchios take this to the extreme by not opening up any of their sets. As he has an incredibly run of PSA 8s, 9s and 10s from a large number of vintage and pre-war sets, though has relatively few of them complete, he has an "incentive" to keep his sets hidden.
Everyone should be RESPONSIBLE for their bids.......
John
Everyone should bid within the guidelines of SMR to be fair to everyone?
<< <i>in which case it means they will end up paying well over what the card is worth? >>
Simply put a card is worth whatever the winning bidder wins it at, be 1/2 of smr or 10 times smr.
An auction (if run clean) is a very fair environment, with a totally fair playing field. We all can place our bids if we choose and high man wins. Yes, there are deep pocket collectors who have more $ then you, but I'm sure you have more $ to bid then many other collectors. Keep pluggin' away, and when the deep pocket guys win the cards at a high price, you play a waiting game and will save lots of money...jay
Website: http://www.qualitycards.com
<< <i>Given the above, is it ethical for me to place a snipe for $500 on the card (I assume the risk of having to actually pay that for the card), knowing full well that I stand a good chance to win it for $75 UNLESS a "top all" bidder gets into the picture, in which case it means they will end up paying well over what the card is worth? >>
Seems pretty simple to me.
If you're willing to buy the card if you're the high bidder, whether at $75 or $500, you're fine. If you place your bid and don't intend to honor it (esp under a shill bidding account), you're not.
I do it all the time at auctions - I sense that some people are running me up to act like big shots, so I stick them with a few items. They learn not to stick their hand up unless they want to own it.
Dave
I think I am a pretty aggressive bidder for those sets that I collect. Any time that I bid on cards I usually bid a tad more than what I think it is worth. If I get it for anything less than my max bid, I consider myself lucky. If I lose I consider that I just ran someone up on that card and next time it will be cheaper for me because he is out of the way. The only time I get pissed off during an auction is when a collector bids market value on a card that he already has for his set. But then again, he is protecting the investment for both of us in this case.
1954
James
<< <i>JIM - I don't understand the dilemma.
Everyone should bid within the guidelines of SMR to be fair to everyone? >>
No, not saying that. IMHO, the SMR is less a reflection of the current market than it is an attempt to identify the long-term trend for any particular card. And if I personally had a nickel for every time I agreed with the SMR exactly, I'd have... well... not much.
My query is more about what, if any, legal bidding behavior in an auction is unethical.
<< <i>I think thats a dangerous game you are contemplating and it could backfire. >>
No contemplation here whatsoever... my 125% rule is pretty hard and fast for me.
I also agree it is unethical to bid up an item you don't truely want just to make the other guy pay. This is especially true if that bidder has a good idea of what the maximum bid is from Mr Deep Pockets.
Since I mostly bid on PSA 8s, someone cornering the market on me is not usually a problem. In the rare case it does happen, I'm content to sit back and wait 'til the big players get the card. Doing so often results in obtaining a card for a fraction of what the big players spent on it.
The best thing to remember is patience. There are very few cards so rare that you won't find them for the price you are willing to pay eventually. Naturally, there are ultimate floors and ceilings for these cards, and it may take years, but you'll get them. In the 25+ years I've been collecting, and especially in the 22 months I've been on the registry, I've seen lots of cards and sets cycle up and then come back down again. So is it unethical to pay a lot more than YOU think it's worth? Well, no. If you pay it, then you think IT IS worth that much. But you're never buying just a card, the intrinsic value of which is just above zero. You are effectively buying time to claim ownership as opposed to the time you don't own it (all of which is finite anyway). For a $100 card, is it worth paying $500 to own it today, as opposed to $100 three years from now when everyone willing to pay $101 or more has one? You'd be paying $400 for three years of ownership, on top of the price for the card itself. I hate to sound so mushy, but there are no listings in the SMR for time. That's for you to decide and as such your own ethics are what matter. For me, in a certain sense, I consider all my collections complete, but unpaid for yet. They are all on layaway, so to speak.
2005 Origins Old Judge Brown #/20 and Black 1/1s, 2000 Ultimate Victory Gold #/25
2004 UD Legends Bake McBride autos & parallels, and 1974 Topps #601 PSA 9
Rare Grady Sizemore parallels, printing plates, autographs
Nothing on ebay
The exceptions here would be Shane L. and Studebaker........run them up to the clouds
As far as ethos goes....acting in spite is never right.
1) You bid your $125 max, he wins it for $127.50
2) You bid $450 to screw with him, he wins it for $455.
3) You bid $450 to screw with him, you win it for $430 because he entered a $425 bid.
4) You don't bid at all, next highest bid is $60, he wins it for $61.
If you think about it, you completely lose in either scenario 2 or 3. Either you've paid too much for a card you don't want (#3), or you just artificially inflated the price on a card you'll want to buy later, but now you have to compete against others who might reassess and bid higher based on seeing it go one time for $455. If I was bidding on the card, and bid $100 hoping to get it, and see it go for $455, I might bid $200 next time. If I bid $100 and see it go for $127.50, I might reassess and bid $110 next time or the like.
Follow the golden rule. "Bid on what you want, for what you are willing to pay."
With that in mind, just think of how you treat your friends and act/bid accordingly.
Don't go telling everyone to bid me up on cards that I want for my sets, I have enough problems as it is with that stuff.
1954
Plus when you finally realize that hot dog cards are stupid you will know someone who hasn't realized it yet and will give you money for them (danstudebaker@hotmail.com)
As for me, I am now trying to corner the market on Jose Canseco rookies, so please don't bid any of them up........
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As always, looking for a Wilson Franks Jablonski
Collectable