schemes...?
manitoba
Posts: 2
Hello, folks,
So, I am new to this site and collecting in general. I have a question:
Among global collectors of valuable artifacts of any kind, there is a marketplace that determines value on any given item based on quality, rarity, etc. I am wondering if any collectors engage in supply side value manipulation, and if this concept actually works, or if it does not actually work in the real world:
For example: Some theoretical item is valued at $1000. and there are 50 known copies of it in the world, held by different collectors. If one person were to simultaneously buy all 50 copies of this item, at $1000. each and therefore hold the world supply, could he therefore set the price? OR - if he were to burn 49 of these copies, and hold the one and only original item in existence, would its value be more than the $50000 invested? Even if he paid inflated prices to owners who were reluctant to sell, would there be a worthwhile net profit at the end?
Is this witchcraft? Do people engage in this kind of enterprise? Or is it all smoke and dreams? I assume this in not a new concept, there must be an established understanding of this scheme?
Thank you for your consideration,
So, I am new to this site and collecting in general. I have a question:
Among global collectors of valuable artifacts of any kind, there is a marketplace that determines value on any given item based on quality, rarity, etc. I am wondering if any collectors engage in supply side value manipulation, and if this concept actually works, or if it does not actually work in the real world:
For example: Some theoretical item is valued at $1000. and there are 50 known copies of it in the world, held by different collectors. If one person were to simultaneously buy all 50 copies of this item, at $1000. each and therefore hold the world supply, could he therefore set the price? OR - if he were to burn 49 of these copies, and hold the one and only original item in existence, would its value be more than the $50000 invested? Even if he paid inflated prices to owners who were reluctant to sell, would there be a worthwhile net profit at the end?
Is this witchcraft? Do people engage in this kind of enterprise? Or is it all smoke and dreams? I assume this in not a new concept, there must be an established understanding of this scheme?
Thank you for your consideration,
0
Comments
It could possibly happen, but I have not heard of anyone going out and destroying T206 Wagners, or burning signatures of George Washington.
Theoretically, seems like it should work. You would really have to find something that a LOT of people want. But if there are that many looking, a person would probably never find all the items simultaneously and purchase them all at the same time...unless maybe they were back doored from the factory.
If you are talking a rare, high grade card that set registry guys are searching for...say a pop 2 or 3 in the 50s or 60s, if you have all of them, you might make some great profit but before any more pop.
The problem is that finding an item where demand is price inelastic is almost impossible. Collectibles would not be one of those items. As yankeeno7 stated, "people will just not care and move onto something else they enjoy collecting."
Also, the likelihood of being able to accumulate all of the current item at the current value would also almost be impossible. These are collectibles. Not all owners would be willing to part with their items at the "current value" and any "open-market" purchases would most likely be above the "current value" as you, the buyer, are now artificially increasing demand.
The Hunt brothers attempting to corner the silver market always comes to mind when this topic comes up.