|
|
|
My hope is that we can engage in a rational dialogue regarding how chip values are derived.
Some of you know that about a year ago, I began collecting extensive data on final auction prices of select chips
sold on eBay. In a nutshell, I had a family member who is highly accomplished in writing computer software (he wrote programs
that NASDAQ uses to complile data, and is currently a consultant for the Securities Industries Automation Corp.) write a program
to sort all the ending auction prices of about 30 Las Vegas casinos that I collect. My goal was to come up with a reliable tool for estimating current market values for chips I owned or was interested in obtaining. The end result: I gave up after about
a half year of collecting data. The major stumbling block was that no matter how much we refined the search criteria, the results
were unmanageable. Too much manual sorting had to be done. It would require almost full-time dedication to yield accurate,
publishable results, and frankly, I don't have that much time!
We gave up on it a few months ago, but I did get reams of data and a very good handle on current market values of the chips we looked at, so I
can honestly say that I am not making rash statements or snap judgements.
After the book arrived, I went through my entire collection, and compared the values in the guide to my estimation of
the values I had on my chips using the data I collected.
Now a word on my collection, and the chips I analyzed: They were all R-3 to R-7's, they were all LV Casinos, they were
in various conditions from AVG to NEW and there were multiple eBay sales to compare values. I did not look at common
chips.
My sense is that generally, the values for the chips compared were inflated in the guide by about 30% on average. Of
course, this is not an "across the board" assessment, some were higher, some were lower. The majority, however, were
overvalued.
There are many explanations for the variance. First, I did most of my data collecting from February to July of last year,
and I am sure that by this time, the values in the guide were completed. The market did come down since then. Also, I
understand that the values in the guide are what you can expect to pay a dealer for these chips, and overhead for the dealer's
cost of operation is in the guide values.
I know that I am biased because I do most of my collecting thru the eBay world, but the problem I have with the guide is this:
If a chip is sold numerous (over 20 times in a year, as example) times on eBay at, say an average $20, and the same chip is sold by
dealers 4 times a year at an average of $40, what is the fair market evaluation of the value of that chip? My sense is
that the authors in the guide put more weight on the dealers sales than the eBay sales, and this is what I have a problem with.
I think the true value of that chip is reflected in the average of the multiple sales.
I would certainly NOT make a similar argument regarding the rarer chips. When a chip sells once a year or less, I would
be more inclined to rely on an experts assessment of the value, rather than on what the chip sold for once last year. Also,
condition REALLY skewers the results when a chip hardly ever hits the market.
Where do you draw the line? Who knows, but even though the authors of the guide goes out of their way to say how they
derive value, I routinely come across people in the hobby buying and selling chips who don't understand this, or who do,
yet try to use the skewered values to their advantage.
Also, I will admit that I have another bias....I have purchased a few small collections/chip lots over the years, and
I run up against the problem of "value" when it is time to talk turkey, so, while I realize my emphasis is on a
highly accurate estimation of current, "real world" value, this may NOT be what most other collectors are looking for.
In closing, I want to reiterate that I have nothing but the UTMOST RESPECT for the hard work and dedication of the authors
of the guide. From my own small attempts at trying to accurately derive values, I KNOW that it must be a TREMENDOUS
undertaking. In fact, when the guide arrived, the first thing I did was get it spiral bound, because I know I will consult it
daily until the next one is published. I just want to make the point that I think it is a mistake to believe that
deriving the true value of your chip(s) will ever be as easy as simply opening up the guide.
|
|
