what's going on everybody welcome back to an episode of stacking slabs your hobby content alternative this is not the flagship the flagship dropped yesterday there was a topic that was burning a hole in my brain and i felt like i needed to talk about it so that's what we're going to do here and i have the free space we had a spot this week wanna dig into the topic at hand because it is something that has been on my mind i'm a curious individual i like to observe i like to reason i like to try to understand and the best way for me to do that is to look around make my observations and hit record and do an episode like this one before i get into today's episode i wanna thank you the loyal listener of the stacking slabs network there are a variety of options here across the sports card industry from a content perspective that take your time some great creators out there creating content on a variety of mediums and do appreciate you spending some time here with me it means a ton if you are coming around for the first time make sure you hit follow wherever you're listening to this so you can continue to get the content we are producing here on the stacking slabs network and if you wanna go an extra step further tell a damn friend what is on my mind i am an individual who spends a lot of time thinking about small categories smaller collecting circles we've dedicated shows on the stacking slabs network to some of those smaller categories wnba card podcast book to last wrestling card podcast if i had to place a bet i would bet that there are plenty more of those shows in this network's future when you have a less defined category that is forming you have individuals who see opportunities they buy cards they see things that maybe not everybody in the category sees and they have these cards that they buy they put them in their collections and then maybe it comes time to sell those cards and there might not be a rich history of comp data sales history anything to point them to what the price is but i think the question i want to explore and that's been on my mind is how should collectors measure agreement in a small market i'm not here to give you a silver bullet i'm not here to be definitive i'm just here to have a conversation and this conversation really started to take shape with a card that is sitting on golden right now that i can't stop thinking about and it is probably something that i can't stop thinking about because it is a card of a subject that i collect it is the twenty twenty five topps royalty wwe wrestlemania patch autograph one of one of john cena it is hand signed the patch was used at wrestlemania forty one the night cena won his record setting seventeenth championship it comes from his final wrestlemania the card is graded at psa eight i was in the building for the match i was watching this unfold as i'm recording this right now the hammer bid it's at ninety two thousand with golden's twenty two percent buyer's premium the display total currently is a hundred and twelve thousand two hundred and forty dollars there have been fifteen bids and there's still a whole lot of time left i wanna be very precise from the beginning this isn't the final sale it's a live auction the number could go higher i bet you it goes higher the auction could develop in ways none of us can predict what we have today is evidence of bidding not a completed transaction but even before it closes the card has already done something interesting it has placed a six figure number in the middle of a relatively small wrestling card market once that number appears everybody who owns something remotely connected to it has to decide what that number means if you own another john cena one of one did your card become more valuable if you own another card from this wrestlemania patch set did your card just become more valuable if you own a high end wrestling card that is not cena and has nothing to do with the product did the ceiling for the entire category just move and if you're trying to buy one of those cards should you accept a seller saying look at what the john cena is doing these questions are not unique to wrestling cards they show up anywhere transaction data is very thin player collections vintage oddball issues women's sports soccer non sports game memorabilia regional releases low pop cards when there are hundreds of sales the market can absorb one strange result when there are five one sale can become the entire conversation and so that's what we're exploring again how should collectors measure agreement in a small market what can one major sale teach us what can it not teach us and how do we keep ourselves informed without either dismissing this sale or turning it into a universal comp my thesis is simple a landmark sale is a signal it is not a conversion table it can move the frontier it can change attention it can reveal a buyer we did not know existed it can give a category more credibility but price discovery is not price inheritance every nearby card does not automatically receive a percentage increase because one extraordinary card found extraordinary demand the work is figuring out what actually transferred collectors use the word market very casually we will see one sale and say the market says this card is worth twenty thousand dollars but a market is not a voice it is a process of people with different information motivations and budgets trying to reach terms so let us start with agreement an asking price is not agreement it is one person's proposal an offer is not agreement it is one person's willingness to transact if the other side accepts a live auction bid is not yet a completed agreement it tells us that at least one qualified bidder is willing to be in the auction at that level subject to the auction's rules it may also tell us something about an underbidder but it does not tell us how the auction ends even after an ascending auction closes the final price is not a vote taken across the entire category the auction is designed to find the point where one bidder remains after others exit in broad terms that closing level often tells us a great deal about the winner and the strongest underbidder it does not tell us the average opinion of every potential buyer a completed paid arm's length sale is one instance of agreement between a buyer and a seller under a particular set of conditions multiple independent sales near one another in time involving informed buyers and sellers begin to establish a range repeated sales through different venues and different counterparties create something closer to durable market agreement the distinction matters because we often ask one transaction to do the work of ten i never thought i would go here in the history of stacking slabs but we're going here probably because i'm preparing for my own personal quarterly taxes and perhaps because my father is an accountant but i spend time on the irs's site and the irs publishes valuation guidance for art and collectibles and i'm not bringing this up because tax guidance can tell us what a john cena card is worth it can't i'm bringing it up because the discipline is useful the guidance says the sale of an item is an arms length open market transaction is often the best evidence of its value it also says that the weight given to another comparable sale depends on the degree of similarity the comparable has to be similar enough that a well informed buyer or seller would genuinely consider it when differences exist they need to be identified and adjusted for the irs makes an even more direct point later an appraisal opinion is only as valid as the facts supporting it without those facts it's just a guess that is exactly our problem in small card market we do not have to become appraisers but we can borrow the posture verify the transaction identify the value characteristics compare like with like documented the differences and state our own uncertainty the goal is not to produce perfect number a perfect number does not exist it'll never exist the goal is to make a defensible decision a liquid market gives us repetition we can see the same card trade several times we can compare auctions with buy it now sales we can observe whether a new high is defended by the next sale or rejected by it we can watch buyer substitute one card for another a thin market removes most of that feedback the items are heterogeneous the buyers are few the cards appear irregularly private deals are common the quality of the patch autograph grade provenance can all vary the venue can change the result one motivated buyer can have an enormous effect this does not make the sale fake it makes the inference fragile there is a useful lesson from the art market and shout out chris hosh hochgast for talking about art he is kind of bringing it to the forefront and sharing some comparison between art and cards and i think cross category comparison is always good but researchers who study art prices have to account for the fact that paintings are different from one another and do not trade often one common method is to follow the exact same painting across repeat sales another tries to estimate how characteristics such as an artist size medium age and condition contribute to the price even then the research finds noise selection problems and anchoring a study in the american economic review found that prices and even expert presale estimates for paintings were influenced by the price at which the same painting had previously sold cards aren't paintings but the structural problem is familiar every transaction contains information and every transaction can also become an anchor this is why a thin market produces two opposite mistakes the first mistake is dismissing the result that was just one crazy buyer this sale means nothing that is too easy if a bidder is prepared to spend six figures on a wrestling card that is real demand if another bidder pushes that person to the current level that is additional evidence the category may have attracted deeper capital than we all understood the card may have created a new reference point for what the best wrestling cards can be and i'll slide in my opinion here i think this john cena card deserves to be the highest selling wrestling card of all time based on the subject based on the autograph based on the patch being from his seventeenth championship which is the most all time and his last wrestlemania it has everything you could want in a card the second mistake i find is universally trusting a result if a card is worth more than a hundred k mine must be worth forty thousand this is also too easy it skips the hard work of identifying why this specific card attracted this specific competition the responsibility position lives between those extremes do not explain the sale away do not spread it everywhere think it's our job to locate it let us decompose the card first there's a subject john cena is not simply a popular wrestler he is one of the most recognizable stars wwe has ever created with a career that extends into movies television and mainstream culture his collector base can reach beyond traditional wrestling card buyers second we talked about the moment last mania seventeenth championship it's attached to a specific event and a specific career history we talked about the construction of the card patch autograph you go across categories and look at the most expensive cards of all time most of them have some sort of game use material in an autograph there's also the product in the release context topps royalty was built to present premium event linked wrestling cards this is not a random insert that happened to receive a nice patch the entire concept points attention towards cards like this there's also the timing cena just retired it's fresh in the hearts and minds of wrestling fans and collectors the hobby is processing the end of his ending ring career still i know i am and the card is being sold while the story remains emotionally alive there's also venue and presentation and this is something i think we as a collecting community should consider and talk about more golden is positioning this inside its elite auction environment in front of buyers who arrive expecting important collectibles golden adds twenty two percent buyer's premium this means the current a hundred and twelve thousand two hundred and forty dollars displayed price contains a ninety two thousand dollar hammer bid and twenty thousand two hundred and forty dollars paid to the auction house if we compare it with a direct private sale a platform that reports only the seller's accepted price we have to normalize the economics there may be bidders with private motivations we can't see i think we get tunnel vision we think that everything we see on instagram for instance is the hobby it's not a bidder could be building the best cena collection in the world that we don't even know about a bidder could value the championship moment more than the market generally does a bidder could have missed a prior grail and decided they're not gonna miss this one got celebrities and athletes that are probably going to enter the auction those private motivations are legitimate but they do not automatically transfer to another object here's the most important point we cannot confidently assign a dollar amount to each ingredient we cannot say cena contributes forty percent the patch contributes twenty percent the autograph contributes fifteen percent and the story contributes the rest the value may come from the interaction the card could be worth more as a unified historical object than the sum of its features this is why simple ratios fail a seller cannot say my card has half of those attributes so it's worth half as much markets do not price rare collectibles like a parts list when a landmark result appears i usually see four different arguments or at least in the prep for this these are the four that i could put together the first is the same card argument somebody owns another copy or parallel from the same card family and believes the big sale reprises it this is usually the strongest path of comparison but it still requires adjustments is the serial number different is one card a one of one and the other is numbered to five is the patch better is the autograph cleaner is the grade different is the sale current was it the same venue that sold it for modern cards a one of one and a card number to five are not separated by a universal multiplier we have to observe how buyers in that product treat those level the second is the same subject argument somebody owns a different john cena card and assumes the big result raises all premium cena material there can be some truth here the sale may reveal stronger demand for seen at the top of the market it may cause buyers to revisit what they consider his best cards it may send collectors towards alternatives when they cannot buy this one but the effect should depend on how well the other card competes for the same collecting job is it also a definitive cena card is it tied to a major career moment is it signed is it a vague use is it truly scarce does it have an established place in cena's card hierarchy or does it merely have cena's picture on it the third is the same product or same category argument somebody owns a wrestlemania patch autograph of a different wrestler and believes the scene established a new multiplier for the entire set again the sale can help it validates the product concept it shows that collectors may treat these as event artifacts rather than ordinary modern patch cards it creates attention for the checklist but subject demand still matters career importance matters the exact moment matters patch quality matters a cena championship patch and another performer's event use patch share format not necessarily a buyer pool or value profile the last one is the category argument somebody owns a rare wrestling card with a different subject from a different product tied to a different story and says the entire market has moved this is the weakest direct validation claim but it's not necessarily meaningless a six figure wrestling card can raise the category's visibility it can invite in new money strengthen seller confidence and encourage owners of great cards to bring them to market it can alter what auction houses are willing to promote it can help collectors believe that the category's best items deserve to sit beside high end cards from other sports that is category evidence it is not a direct comp think about the sale radiating outward in circles the exact item sits in the center very similar cards are in the next ring alternative cena grails occupy another ring the topps royalty wrestlemania set and elite wrestling cards sit further out the information does travel but it weakens with distance the mistake is treating every ring as if it sits in the center this brings us to an operating tool that i've been thinking about that i think collectors can actually use i call it the evidence ladder at the bottom is the asking price a seller can ask anything the asks may reflect research aspiration negotiating room or maybe purely fantasy it is useful because it tells us where supply is willing to appear it does not tell us where demand exists the next rung is a claimed private sale without supporting detail i do not believe our first reaction should be to accuse people of lying private markets require discretion but discretion and verification are different things if we cannot confirm the item cash component trade component fees date counter parties or whether the deal was actually completed we should label the result for what it is an unverified indication a reported sale may lead us towards better evidence but the word sold does not verify itself above that is the documented but unaccepted offer this tells us a real buyer was willing to engage at a number it is evidence of demand but not agreement next we have the live auction bid that is stronger because the bidder has entered a defined process still the lot has not closed bid counts also need care fifteen bids does not necessarily mean fifteen different bidders proxy bidding or repeated bids can create many bid events for a small number of participants above that is verified arm's length transaction the card changed hands the buyer and seller were independent the consideration is understood the sale was not designed to manufacture a public comp this is strong evidence for the card under those conditions then comes a defended price another buyer makes a credible offer near the sale a similar card trades in the same range an under bidder remains willing to buy the market does not immediately fall away after the headline at the top is repeatable agreement several independent transactions across time or venues that establish a range informed participants can recognize the higher we climb the more confidence we can place in the number in a thin market we may never reach the top and that's okay the answer is not to pretend the evidence is stronger the answer is to widen our range and lower our confidence this also helps with made up sales the problem is not the private sale exists the problem is that presenting an unverified claim with the authority of a transparent transaction good market record should distinguish reported verified and publicly completed that one labeling habit would improve a lot for small categories i do not want this conversation to turn into collectors policing one another most of these reactions are human the first force is anchoring once we encounter a large number it becomes a reference point research and art auctions have found that even sophisticated participants and expert estimates can be influenced by a work's prior auction price in card six figure sale changes the scale of the conversation a fifteen thousand dollar ask that felt enormous yesterday can suddenly feel modest next to a hundred and twelve thousand two hundred and forty dollars or whatever the scene ends up at the second force is something i talk about a lot on here and that's the endowment effect behavioral economics use the term for our tendency that value something more once we own it ourselves the effect is especially relevant in collecting because ownership is rarely neutralized i know i do this all the time i buy a card that i love that has all the elements and the price is right and then i have it and i own it and i immediately think well this has gotta be worth more now i think that's very common we hunted the card we remembered the deal the card may represent a player moment or relationship that matters to us when a related card sells high our attachment and our financial interest point in the same direction another force is confirmation if you've spent years believing wrestling cards are undervalued a massive cena bid does not feel like one new data point it feels like proof that you were right that is emotional validation and it can cause us to accept the parts of the sale that support our own thesis and ignore the features that make the card exceptional next we have social proof a prestigious auction a public bid and a lot of conversation can make an object feel safer people infer that other informed buyers must know something sometimes they do sometimes everyone is responding to the same visible number you also have competitive arousal auction research has studied how rivalry time pressure and the desire to win can push bidding beyond limits established beforehand i'd be careful applying the phrase winner's curse to every collectible auction many cards have private value if someone is willing to pay more because this particular scene and moment completes a personal collection that isn't automatically irrational the winner's curse concern becomes more relevant when a bidder is relying on a common resale value if i win because i hold the most optimistic estimate of what everyone else is willing or everyone else will pay me later i need to ask whether winning is evidence that my estimate was too aggressive none of these psychological forces means the sale is invalid they explain why one result can travel so quickly through a community the number does the financial work but it also does the emotional work it validates taste status patience and identity that is why the discipline question is not am i biased we all are the question is what process can i use before the bias makes the decision for me i'm a collector that i would consider systematic over the years i've learned i have to build systems with my own buying in order for me to justify the purchase we operate and collect in this world where there is temptation everywhere and without systems i make mistakes i buy something i don't want i have to sell it it sells for less so i think it's about developing a system or a process especially if you collect in a small category some of the things that i've been thinking about in terms of participation in small categories and building a system are creating steps so you can do this in a variety of ways but in this example we'll take the first step as just freezing the facts you can write down what exactly happened what is the ask offer what is the bid was the reported number hammer price buyer's premium or the seller's net was it trade was the card altered graded authenticated for the scenic card today the facts are a ninety two thousand live hammer bid a hundred and twelve thousand two hundred and forty dollars with golden's twenty two percent buyer's premium fifteen bid event and an auction that remains open calling it a a hundred and twelve thousand two hundred and forty sale today would overstate the evidence next you can define the claim do not ask what does this do to the market it's too broad ask which claim you are testing does it change the value of another topps royalty cena card does it change the value of different cena one of ones does it change the standing of event used wrestling cards does it raise the ceiling for wrestling cards as a category each claim needs different evidence next map the value drivers list what serious buyer is likely paying for in this instance subject career moments product reputation autograph event used materials visual eye appeal timing then compare the subject card with the sale do not count matching features judge whether the card satisfy the same collector desire two cards can both be one of ones and still be distant substitutes a number to five card can sometimes be a better substitute than an unrelated one of one if it captures the same moment image or product identity next build a comp set not a comp start with the closest available transaction but do not stop there look at several evidence channels use same card or same card family sales when available use the subject's established grails use comparable cards from the same product use similar event link artifacts use the prices of realistic alternatives available to the buyer use prior offers if they are credible and properly labeled the point is triangulation no single comparison has to be perfect if several imperfect comparisons point towards a defensible range next normalize the transaction compare buyer cost with buyer cost or hammer with hammer account for premium taxes only when relevant to the decision trade value payment terms venue timing market conditions a private deal with immediate payment and no premium is not mechanically identical to the headline auction total next run the replacement test ask what the same buyer could purchase with the money if a seller wants thirty k for a cena card because of this auction what other cena cards wrestling grails or event used memorabilia are available around thirty k would an informed buyer choose this card over those alternatives the replacement test forces us as collectors out of the seller's story and into the buying decision next run the counterfactual test remove one feature and ask whether the argument survives if the card featured a different wrestler would the comp still make sense if the patch were generic and not linked to wrestlemania forty one would the buyer pool be the same if the card was number to five would the scarcity function the same way if it sold privately without golden's presentation instagram reels all the pomp and circumstances would it travel this far the features that break the comparison are probably the features carrying much of the price next state a range and confidence level in a thin market precision is often performance saying a card is worth exactly eighteen thousand seven hundred and fifty dollars can create the appearance of knowledge we don't have a range is more honest you might say based on the two adjacent sales a credible offer in the current market our likely transaction range for this is fifteen thousand to twenty two thousand but confidence is low no direct comp has sold in two years that is more useful than false estimates it tells the other party what you know and where the uncertainty lives next look for the confirmation after the headline the first sale changes the hypothesis the next evidence tests it do comparable cards receive real offers do they complete transactions does the under bidder redirect capital towards an alternative one sale can announce a possibility follow-up activity tells us whether the market learned a new price or merely witnessed a singular event if i were buying in a small market after a landmark sale i'd make sure that i was very mindful of my mindset i was very mindful of the information i was very mindful of my own personal level of excitement was it based on the sale is it based on my personal viewpoint do i have the information laid out it's crazy the cena card has got plenty of time left and i'm captivated by it i love wrestling cards i love john cena i like big sales but i also hear a lot of conversations about it i hear a lot of people preparing for this sale and its impact so it gets me to think about this what does this john cena card mean it means at least one series bidder is willing to pay ninety two thousand dollars at the hammer price while the auction is still open it means this specific combination of cena wrestlemania forty one a record setting championship event used material and a hand signature in one of one scarcity has created extraordinary demand it may mean the market has underestimated the top end of cena collecting it may mean event linked wrestling cards deserve their own place in the hierarchy it may mean new buyers are entering the category or existing buyers are willing to concentrate more capital into the very best objects it absolutely means collectors should be paying attention it does not mean every cena card is worth more by the same percentage it does not mean every card from the set inherits the results it doesn't mean that a seller can choose a number and call it market value and because the auction is still live it does not give us a final sale at all the best way to respect a landmark transaction is to be precise about it identify what makes the object special follow the information outward reduce the weight as the comparison becomes less similar separate verified transactions from reported ones compare buyer alternatives use ranges admit when confidence is low then watch what the market does next small markets are not problems to be solved with fake precision they're environments where judgment matters more the goal is not to become the authority who announces what every card is worth the goal is to become a better observer a more credible seller and a more disciplined buyer one sale can be historic without becoming universal a big number can expand our imaginations without replacing our process and when the next landmark card appears the question should not be how much did my card just go up the better question is what did the market actually agree to and how close is my card to reason that agreement happened that is how we learn from a thin market without letting one number think for us i hope you enjoyed this episode obviously i'm thinking a lot about this sale thinking about smaller markets thinking about how individuals position their cards when sales like this happen i hope you enjoyed this if you enjoyed this episode and it's got you thinking and you are feeling like you learned something from this do me a favor share it tell a damn friend spread the word i appreciate all of your support so much coming out every day here on the stacking slabs network can't stop won't stop we have a lot of passion for what we're building over here we are trying to build thoughtful independent content for the sports card collector and the builder in the sports card industry the stacking slabs network is just getting started really appreciate you being a part of it happy collecting take care we'll talk to you soon