welcome back to another episode of stacking slabs your hobby content alternative hope you are well hope you're enjoying your collection the hunt trading perhaps interacting with other collectors researching listening to content like this there is many avenues and many options on ways that we can participate in the sports card hobby in the sports card industry right now it's bigger than ever before and you are spending some time here with me listening to this pod wanna say i appreciate you if you are stumbling across stacking slabs for the first time we put out a lot of content every day something we're enjoying what we're doing make sure you hit the follow button tell a damn friend run on over to the patreon group for new and exclusive content from the stacking slabs platform after i put together the episode from last week regarding one card and its implications after a big sale on the market i had a lot more to say i realized that after i published the episode also i got a lot of feedback from you the loyal listener about that and so i figured there's some space here this week let's expand what should collectors watch next when does one sale become the market when i spent the entire episode last week talking about one idea it was one sale is not the market we talked about the john cena wrestlemania forty one patch auto one of one case study which was interesting way to approach it i think mostly because that card has not sold yet and it is still active as i'm recording this there's eleven days left it is at a hundred and twenty four thousand four hundred and forty dollars with buyer's premium and at that time that was the clearest example that was running in my brain because it was impacting a lot of things that were going around me areas that i collect and areas of focus we had a major number sitting in the middle of a wrestling card market that does not have hundreds of comparable transaction and if you have not listened to that episode yet my question was simple what does one landmark result tell us what does it not tell us we talked about the evidence ladder we talked about the difference between a signal and a comp we talked about price discovery versus price inheritance and we talked about the danger of taking one sale and spreading it across every card that has the same connection to it but as soon as i finished that episode another question started bothering me and i'll get to that question but if you have not listened to that episode yet i published it a week ago it is out and it might add further context to this conversation but the question that started bothering me was if one sale is not the market when does it become the market and how long should collectors wait before treating a landmark result as evidence that something larger has changed is it a week a month six months do we need another sale for validation do we need all three what if another copy does not appear for two years and obviously with the cena card the only way that reappears is if whoever wins it sells it again what if there are transactions happening privately that card ladder ebay golden or public databases never see what if dealers at shows are already buying cards at new levels before another public sale ever happens and there is another piece to this i think buyers and sellers have different problems after a landmark sale if you're buying you don't want somebody else's excitement to become your price if you're selling you don't wanna miss a period where demand attention and capital have come into your category and those are different jobs so that's where i wanna spend our time today i wanna talk about investigation i wanna talk about evidence and of course if you've been listening to stacking slabs long enough you know i wanna talk about psychology i wanna talk about what happens on the auction platforms or card shows or inside dms and through private transactions and i wanna answer the question that i started with how long should collectors wait before treating a landmark sale as evidence for a wider impact on their category i don't think the answer is number of days i think time is the wrong unit of measurement we should not wait for a certain number of days we should wait for confirmation think about that distinction thirty days passing does not make a sale more valid if nothing else trades nothing else gets offered no serious buyer show up and every seller who raises a price gets rejected what did those thirty days teach us not much now flip it imagine a landmark sale happens within two weeks another comparable card trades a known underbidder purchases an alternative to private sales happen happen near the new range dealers at a show start buying the category at prices above the old market cards that used to sit for months start disappearing the two week period might give us more information than the six months of silence so the question is not how long has it been the question is what has happened since that is the entire foundation for what i want to explore in this episode think we need to separate liquid markets from thin markets let's use a card that sits on the opposite end of the spectrum from the sino one of one card ladder currently shows sixty six sales during a three month period for the two thousand three topps chrome lebron james psa ten sixty six if one copy sells for eighteen thousand you don't have to spend six months wondering whether the market agrees more copies are coming you can launch the next auction then the next one then the next one as of early september card ladder recorded a three month range between twelve thousand eight hundred and eighteen thousand two hundred and fifty for the card that averages around fifteen thousand one hundred and eighty the repetition does the work for you now take an important one of one or an obscure nineties insert or a rare wrestling card or a wnba card where the important cards appear once every couple years your clock works differently you might wait a year and never receive another direct comp that doesn't mean you learn nothing it means your investigation has to move outside that direct comp this is why i'm becoming more interested in signals that exist around transactions the card sale is one piece the market response is another i've reduced this to three words proximity independence and persistence let's start with proximity how close is the new evidence to the landmark sale the same card in the same grade is strong a card from the same family is weaker another card of the same player is weaker again a card from the same category sits further away we established this last week information radiates outward its strength falls as you move away from the original object the second word is independence i don't want five pieces of evidence that all come from one person if the same buyer wins the landmark card buys the next comparable privately and bids up the third card we have learned something about the buyer we have not necessarily learned the same about the market i want different buyers different sellers different venues different transaction settings independence matters because markets become more credible when separate people reach similar conclusions without needing one another to make that happen then there's persistence does demand survive after the headline disappears i think this one matters a lot the hobby moves very fast a record happens on tuesday everyone talks about it on wednesday and by friday another card has become the story persistence asks whether the demand remains after social media moves on are people still searching are buyers still making offers are dealers still comfortable owning inventory does the next auction attract real competition can somebody sell a similar card without spending three months convincing the market that the previous sale mattered that's persistence proximity independence and persistence those three ideas tell me more than thirty days on a calendar there's another rule i think collectors can use the larger the jump the more confirmation you should require a card that normally sells for ten thousand dollars trades for eleven thousand five hundred i don't need an investigation team the market moved fifteen percent it happens now imagine that same card sells for forty thousand dollars something happened perhaps the market changed perhaps the copy was better perhaps two collectors decided they both needed it perhaps the venue created more competition maybe there was information we didn't know about or maybe somebody made a mistake maybe the previous market had been wrong we don't know yet the size of the jump increases the burden of proof the jordan pmg gives us the current example i did an entire episode on this the ninety seven metal universe michael jordan red pmg bgs eight sold at all for one point four million in august the prior public bgs eight sale was two hundred and ninety eight thousand nine hundred in june of twenty four also listed a bgs eight sales at four hundred and eighty thousand and three hundred and twelve thousand from twenty twenty one the august result came in at close to five times the twenty twenty four bgs eight result it deserves attention part of the reason why i did a whole episode on it you can go back and check out the episode it also deserves a high burden of proof before we can declare one point four seven million the market price for every bgs eight jordan red pmg that's not disrespecting the sale that's respecting the size of the information change i brought something that i wasn't expecting in last week's episode i brought the irs valuation guidance into that episode i'm going back to it because there is something useful here the irs isn't trying to price sports cards for us i'm not suggesting that what i like is the posture publication five sixty one tells people assessing comparable property to consider similarity timing transaction circumstances and market conditions it asks how similar is the property how close was the sale to the valuation date was it an arm's length transaction what was the condition of the market it also says the weight given to a comparable sale depends on the degree of similarity think about how different that is from what happens in the hobby our process often looks like a cart sells screenshot circulates seller finds screenshots seller changes price we're done that's not investigation investigation means asking what conditions created the result and whether those conditions still exist here's how i think about the period after a landmark sale the first phase is the reaction window this is when screenshots travel group chats light up collectors congratulate the buyer or the seller owners start looking through their collection sellers change prices buyers start searching the player or set the result feels like information some of it's emotion this is the period where i place the least confidence in the surrounding market reaction you might ask why because nobody has had to prove anything yet changing an asking price costs nothing posting that your card is now worth more costs nothing saying you're a buyer at yesterday's price costs nothing we hear and see that all the time the next phase is what i would call the testing window now people have to put capital behind their opinions a seller lists a nearby card at a new level does someone buy it a dealer gets offered another copy does the dealer step up an underbidder misses the landmark card where does the person go next someone brings a similar card to a show can the seller receive real offers near the new range this is where the story starts meeting the market then comes the confirmation window transactions begin to happen not screenshots not asks but transactions the market starts building a body of evidence then comes what i care about the most absorption can the category absorb the new price that word gets to the heart of this a landmark sale introduces all of us to new information the market then has to absorb it sellers need to decide whether to bring the supply forward buyers need to decide whether to pay more dealers need to decide whether to own inventory at the new level collectors need to decide whether alternatives now look cheap auction houses need to decide whether similar cards deserve more attention if all of those participants adjust and transactions continue the result starts becoming part of the market if sellers raise prices and buyers disappear the market rejected the extension the sale still happened the market simply decided not to spread it i think one of the first things that i wanna know after a major auction is what happens to the person who lost we're all losers at some point sometimes we move on sometimes we obsess over losing and have to go out and get our next chance at that card we spend all of our time talking about the winner i think the honor bidder can tell us as much think about the card that finishes at a hundred k one bidder owns the card another person was willing to go close to the hundred k and left with nothing where does that capital go does the underbidder wait for another copy does that person buy a different grail do they go for the next best parallel do they buy another car in the same set or do they leave the category and spend their money elsewhere the answer tells you how transferable the demand was the object is an area of focus and it becomes useful when we're trying to determine whether one sale has implications outside of the object itself if the underbidder loses a jordan red pmg and immediately starts chasing the other jordan pmg that's evidence that is important for everyone who is in that space if the under bidder buys a jordan jambalaya instead that's evidence that premium nineties jordan cards compete for the same type of capital if the person goes out and then goes buys a let's say mantle or a vintage baseball jackie maybe the pmg demand was attached more to the individual buyer than the category itself follow the money after the loss that's information we spend a lot of time studying the demand landmark sales also change supply owners see a record and start thinking if that card got that much maybe it's time that brings inventory out and the market's reaction to the new inventory tells us a ton imagine a card hasn't appeared publicly for two years one finally sells for a record three more owners consign copies that's the test if the next three copies all trade around the new range we have a strong we have strong evidence if each copy comes lower we learn that the first sale stretch demand if the sellers refuse to lower their reserves and nothing sells we learn that the seller expectation moved faster than buyer's willingness that spread between seller expectation and buyer willingness is something collectors should watch when the spread tightens deals happen when the spread expands instagram gets louder and transactions get quieter think public sales databases are some of the best tools collectors have ever had i'm in card ladder way too much i'm sure many of you are too shout out card ladder for building an incredible set of data they are not the entire market though a lot of important cards transact privately that becomes more common as you move deeper into scarce cards in relationship driven categories on passion of profession i just interviewed grant slaton of waldorf stories he has done millions of dollars in private transactions and these are cards that if grant doesn't tell us about we would never know about i think the challenge is verification someone's saying i sold one for thirty thousand privately is just a data point it's not the same as a documented transaction but private markets still tell us things talk to people ask dealers what they're seeing ask collectors how they're reacting to offers ask whether cards are changing hands ask what type of consideration was involved if public data says a card is worth twenty k while three informed collectors tell you similar examples have traded between twenty seven and thirty two i don't dismiss that because it's not sitting inside of a database i lower my confidence then as a collector i investigate i wanna spend some time talking about card shows as information markets because i think it gets missed in these types of conversations a card show is not only a place where cards get bought and sold but it's an information market and this is why i go to shows i don't get to go to many shows but let's see here i've been to three shows this year been to fanatics fest been to columbus card fest and i have been to the national and of course i would like to leave home with a card but most importantly i like to leave home with a ton of information you're watching hundreds or thousands of collectors make decisions in the same building there is a ton of information there there's a ton of signals grant slaton talked about this when i had him on passion to profession he described how increased travel and more shows have created opportunities that don't always happen at the show itself a conversation creates a deal later someone watches and buy something a similar card gets brought to him late days later information travels through relationships grant told a story from the pittsburgh show he bought a michael jordan jambalaya above the old comp because he believed the card was undervalued another dealer watched a transaction three days later the dealer called grant after finding another copy the original deal created information that is exactly what i'm talking about the public database will eventually see some of this people close to the market often see it first that doesn't mean you blindly trust dealer chatter it means you add it to your investigation grant brought up another idea in our conversation that i think matters here he constantly asked some version of this what else can i get for the same money and i love this because landmark sales change our frame of reference a card sells for a hundred thousand dollars suddenly forty thousand dollars for another card feels cheap but cheap relative to what the hundred thousand dollar card or the other things you can buy for forty thousand dollars those are different questions this is where the replacement test comes in let's say the landmark cena sells for a big number which it will a seller now wants thirty thousand dollars for another cena card because the market has changed before you agree build the replacement set what else can thirty thousand dollars buy other scene of grails important wrestling cards event used memorabilia a card from another part of your collection other cards you won for years or nothing because this is the card you care about most that's fine too the point is to make the comparison the landmark sale wants you staring upward the replacement test forces you to look sideways i wanna make this actionable as i do in most of these conversation let's say a landmark sale happens tonight tomorrow morning you find yourself wanting a related card what do you do first i think you ask whether you wanted the card before the sale that's the easiest one the question will save you a lot of money was the card on your list last week were you studying it were you talking to another owner were you tracking the category there's nothing wrong with learning about a card because a card sold but awareness and urgency are different next i think you separate the card from the headline you document why you want the card without mentioning the landmark sale if you cannot make the case without saying look at what the other sold for then it's probably a good time to stop next build a replacement set what else can you buy for the money next determine proximity how connected is the card you're considering to the landmark sale is it the same family player set category next look for independent confirmation have other buyers shown up have similar cards traded are offers rising are dealers paying more next watch the supply a landmark sale often pulls cards out of collection your patience might create options this is a big one the immediate instinct after a record is i need to buy before everything goes higher the opposite can happen too the record brings supply out you wait two weeks and suddenly five cards you haven't seen in years become available now you have leverage next establish your walkaway number before entering the negotiation or auction this has been something that i have implemented in my process as i've matured as a collector and it really helps and it matters because auction environments are built around competition don't determine your maximum while you're being outbid determine it while you're sitting at your kitchen table then respect it think there's a place where strategy changes if you're selling and if you're selling a card that sits close to a landmark result waiting for confirmation is not always the best choice this is the asymmetry i think that matters most in this episode buyers often gain from patience sellers can gain from attention imagine you own the closest substitute to a card that sells for a record there is a buyer who won there is at least one buyer who lost there's collectors talking about the card auction houses looking for related inventory there are people searching for the player there are collectors recalculating their collection attention has concentrated you need to decide whether the attention is an opportunity not every seller should rush to the market if you own a card you want for the next twenty years just keep collecting if you plan to sell within the next year anyway the landmark result changes the equation your first job is proximity how close is your card the closer you are the more reason you have to act while the bidders remain engaged second identify the demand created by the original result can you find the under bidder does the auction house know are dealers asking for the card third choose the right transaction environment sometimes you want another auction you want competition you want public record you want price discovery sometimes the better route is private this is something that i'm thinking a lot about as i'm navigating my own collecting fourth don't let the landmark result ruin your expectations this happens all the time you own a fifteen k card a nearby card sells for a hundred thousand dollars you decide yours is now sixty thousand dollars you receive a thirty thousand dollar offer you reject it because the other card is a hundred k six months later the attention is gone you eventually sell yours for twenty two thousand you were right that the landmark sale affected your card you were wrong about the magnitude seller anchoring is real too anchoring works on both sides there's research from the art market that maps well to this conversation economists alan beggs and catherine grady studied repeat art auctions and found that previous sale prices influenced later auction prices and presale estimates the prior number became the anchor sports cards are not paintings the behavior is familiar a card sells for a hundred thousand dollars nobody can unsee that hundred thousand dollars the buyer sees it the seller sees it the dealer sees it the auction house sees it the number becomes the starting point for the next conversation this can create opportunity it can also create mistakes the buyer mistakes sound like if i don't buy it now this will be a hundred and fifty thousand dollars next time the seller mistake sounds like i'm not selling for less than the last one neither statement contains investigation they're reactions to the anchor and i think it's really important to understand that the market does not care what you paid there is another psychological trap that i wanna add to this and that's price memory we remember what a card sold for we remember what we paid we remember what somebody offered us then we treat those numbers like obligations to the future market and that the future market has to honor them it doesn't just think about the jordan example the market didn't care about the pmg sales a transaction records what happened under a set of conditions it is not a sign of a contract with the future so i guess we continue to go back to the cena card because the story is still developing before the golden auction ever began we had information there's a lot of information that's going on right now regarding this cena card i ask myself is the conversation online impacting the price what if nobody talked about this card we didn't wake up one morning with a six figure number appearing out of nowhere we had other wrestlemania patch results there's public bounties big promotion around these cards i think understanding how each of those pieces impacts the card is important and that's what investigation looks like you build the case one piece at a time i think one of the topics we as a sports card hobby should talk about more are signals and i think signals are very important because signals can teach us a lot of things if we are studying them i think collectors put every signal into one of three buckets narrative intent transaction narrative of course is what people say posts asks predictions dealer opinions content useful low commitment intent means somebody has put something behind that opinion a documented offer a bounty a bid a trade proposal the transaction the card move teams were reached capital changed hands which is the strongest now repeat that across multiple people that's when confidence grows if all you have is narrative it's important to stay skeptical if narrative turns into intent then it's time to pay attention if intent repeatedly turns into transactions the market is teaching you something so if i wanted one tool coming out of this episode this would be it after a landmark sale i would look at six layers of confirmation number one transaction quality was the original sale real completed paid at arm's length number two proximity are closely related cards receiving stronger demand number three buyer persistence are the winner under bidders and other collectors still spending money in this category number four independent transactions are deals happening with different buyers sellers and venues number five market absorption can more supply come forward without demand collapsing six persistence through time does the new range survive after the attention moves somewhere else you do not need all six every time a thin market might never give you all six the stack gives you a way to describe your confidence one layer interesting signal three layers pay attention five or six now we're getting close to market evident if you're buying after a landmark result slow your decision down not because prices are guaranteed to fall they're not slow it down because your information set is changing it's good to let sellers reveal supply let underbidders reveal where their money goes what's gonna happen next at the auction private sale transactions might surface you don't need certainty you need evidence to understand which risk you're taking if you choose to buy before confirmation that's fine name the decision correctly you are buying ahead of confirmation because you believe the market will defend your result that is different from saying that the market has already confirmed it words matter because they keep all of us honest if you are selling after a landmark result identify your distance from the center the closer your card sits to the landmark object the more valuable the attention window might be if the market gives you the price that changes your collection take that decision seriously i don't think that the buyer and seller should be using the same clock this might be the main takeaway of this episode the person buying and the person selling should not always use the same waiting strategy the buyer wants confirmation the seller can benefit from attention the buyer's risk is paying tomorrow's assumed price today the seller's risk is waiting for tomorrow's tomorrow after today's buyer disappears that's tension and i don't think there's a formula that solves it and this is where judgment enters and remember we have to be independent thinkers at some level this is the art of dealing you gather information you understand your object and your objective you understand the card you understand the person's objectives you understand the alternatives then you make a decision with incomplete information that's collecting so as we round up this episode the question is how long should collectors wait before treating a landmark result as evidence for a wider category i think we should stop counting the days we should start counting confirmation in a liquid market the confirmation might arrive next week in a thin market it might take months for a one of one direct confirmation may never arrive that doesn't leave us helpless watch the under bidder watch the nearest substitutes watch the private deals watch the new supplies because landmark sales don't only change markets they change our perception they make expensive cards feel cheaper they make sellers feel richer they create urgency they validate opinions we already held they put a number in our head that becomes hard to remove that's why the process matters last week i said one sale can be historic without being universal i still believe that this week i would add something to that the market tells you whether the history spreads not through time alone through behavior transactions capital and repetition a landmark sale creates a hypothesis what happens next tests it and your job as a collector isn't to predict every result your job is to keep investigating until you understand what you know what you don't know and what price you're willing to pay for uncertainty that's the game study the sale then study what happens after the sale the second part might tell you more my name's brett i collect sports cards i like talking about sports cards and this is one of those episodes about that appreciate you spending some time with me this week happy collecting take care if you're enjoying these episodes tell a damn friend talk to you soon