SMR vs. VCP

Exhibitman · #1 01-25-2012, 07:08 PM

I don't know why anyone would give any credence to a price "guide" that deviates from actual price data the way the SMR does; what is it "guiding" you to, how to pay the wrong price for a card? It is as useless as a heap of rat feces as far as I am concerned.

vintagetoppsguy · #2 01-25-2012, 08:24 PM

Quote:

Originally Posted by Exhibitman

I don't know why anyone would give any credence to a price "guide" that deviates from actual price data the way the SMR does; what is it "guiding" you to, how to pay the wrong price for a card? It is as useless as a heap of rat feces as far as I am concerned.

You guys aren�t looking at this the right way. SMR actually helps keep prices down. Let me explain. I think we can all agree that the VCP price is lower than the SMR price on most cards. Why is that? Simple, nobody wants to pay book value for a card. Most of us are comfortable paying 70-80% of book value for a card, and most VCP prices are 70-80% of SMR.

Let me give you 3 quick examples. Let�s take a 1962 Topps #5 Koufax, #300 Mays and #320 Aaron, all graded a PSA 6. Each card has a SMR of $100, however the VCP average for those three cards is $71.46, $85.13 and $72.71 respectively.

I guarantee if one (or all) of those cards went up to $200 in the next edition of the SMR, the VCP average would increase as well because people would be willing to pay more if they thought the card was worth more. Likewise, if one (or all) of those cards went down to $75 in the next edition of the SMR, the VCP average would decrease as well as people would pay less if they thought the card was worth less.

In other words, it doesn�t matter what the price says in the SMR because most people don�t want to pay book value for a card. They want to feel like they�re getting a deal. Let�s say for a minute that SMR changed their pricing structure to reflect VCP prices (the price on most cards would go down). Well, the VCP prices would go down shortly thereafter because people wouldn�t feel like they�re getting a deal by paying book value for a card and they would start to pay less.

Anyway, that�s why SMR is necessary. It gives us a starting price and we�re usually willing to pay 70-80% of that price. It doesn�t matter what the SMR price says, VCP average will always be 70-80% of that (on most cards).

Consider it like buying a car. Nobody pays the sticker price for a car. We all know that the dealership is willing to negotiate off that price. We drive out of the dealership feeling good because we feel like we got a deal. Look at it as if SMR is the sticker price and VCP is the driveout price. Sure, the dealerhsip could put their lowest price and the windshield, but then you would feel like you were paying sticker and wouldn't feel like you got a deal.

rdixon1208 · #3 01-25-2012, 10:28 PM

Great take David. One that I've never heard before. I'm curious though....how does this hold up with prewar cards? I've never opened a SMR.

Bye the way: I was looking for you at the Tristar show Saturday. I don't know if you made it but it was a decent show. Quite a lot of pre-war.

BobbyVCP · #4 01-25-2012, 10:34 PM

Nice theory but likewise I can give you just as many examples where SMR is way lower then the actual price of VCP. All the prices for the most part are driven by the registry people, I constantly see high grade commons in 9 or 10 sell for huge amounts, then the next one comes out and you lose a bidder because one has it so the price drops. Then a third one comes to the market and again now 2 registry guys are out so the price drops even more.

majordanby · #5 01-25-2012, 11:22 PM

does anyone know how PSA comes up with their SMR values?

smtjoy · #6 01-26-2012, 09:34 AM

I see what your saying David and maybe SMR is High on Topps and Bowman cards but on most cards I collect- Exhibits, M101, E's it is quite low and I almost always pay over 100% even for VG cards. Hell on 1933 exhibits I will buy as many as you can find at 110+% of SMR.

Bosox Blair · #7 01-26-2012, 01:49 PM

Quote:

Originally Posted by smtjoy

I see what your saying David and maybe SMR is High on Topps and Bowman cards but on most cards I collect- Exhibits, M101, E's it is quite low and I almost always pay over 100% even for VG cards. Hell on 1933 exhibits I will buy as many as you can find at 110+% of SMR.

SMR is also way low on many T207s, M116s, and pretty much all pre-war hockey (especially grades between 2-4).

IMO the SMR plays very little part in the actual prices paid for pre-war cards. Walking around the National in 2011 for several days and talking with many pre-war dealers and collectors, I don't recall a single person looking at or referring to the SMR (despite the fact that they gave a free copy to pretty much everyone in the room).

Cheers,
Blair

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