As a collector, you have a tremendous advantage over every dealer you may be doing business with. Yes, you read that right, you, the collector, have the advantage!
Dealers have a fatal flaw that keeps most, if not all of them from cashing in big in the very markets in which they participate. What is that flaw? It's this: Dealers know the price of everything, but the value of nothing! Here's what this means: Dealers need to turn inventory in order to make a living. They know down to the very last dollar what something is worth today--but only today. Lets sat that mythical poster XYZ is incredibly rare and only appears in Mint Condition once every two or three years. Let's also assume that it is commonly believed that less than a dozen Mint copies exist and that the last one to appear sold for $2500 two years ago. With these fact, the dealer will probably assume 10% appreciation for two years, bringing the value he/she is willing to pay to $3000, with the idea that the piece can be resold for a profit at $3250-3500. Armed with this information, the dealer will pass on this item at anything over $3100.00
Long term this could prove to be a huge mistake. 1) There is no telling when a similar piece will enter the market. If it's another three years, this could easily be a $5000 poster, but the dealer misses out because of $100. 2) The dealer is not taking into account that Mint Material has migrated into very strong and sophisticated hands which greatly increases the cost when the next piece does appear. 3) The dealer fails to recognize that the popularity and appeal of the material is now going mainstream into major museums around the world, 4) The dealer fails to recognize that the appreciation and rarity of Mint material is exploding upward, with premiums jumping to levels similar to what is found in other collectibles. I could go on and on. The bottom line is that the dealer was so "smart" about knowing what the piece was worth from past facts, that he could not ascertain the true value of the piece moving forward! That's just dumb!
We see this in the financial markets as well. Mutual Fund managers will regularly pass on undervalued companies with great 3-5 year possibilities because they don't see a catalyst that will move the stock in the next quarter!
As a collector, you need to use this superior position and long term outlook to your advantage. Recognize opportunities for what they are. Don't penny wise and pound foolish. Most times, paying that extra 25% now will be a whole lot cheaper than what you'll pay 3 years down the road when the opportunity presents itself again. Let time and positive fundamentals work for you..not against you. Be long term greedy. You'll look like a genius and will have a lot more fun with you collection if you have the strength to play out your hand!
