Wednesday, November 12, 2008

Final Thoughts on Lang's (and Tackle Prices)

Final Thoughts on Lang's (and Tackle Prices)

With the latest Lang's in the books there has been some sizzling correspondence -- both public and private -- about the meaning of this auction. I think everyone agrees it was a once-in-a-generation accumulation of fishing tackle, in particular fishing reels. I think many people would agree that it also was a strange auction in that some prices were extremely high (see Vom Hofe, Edward) while other prices were depressed (see Pettengill).

Here are some actual statistics, not speculation. I randomly chose around 10 reel and lure auctions from each of the completed auction pages and saw whether they met the auction reserve (more on this later) or not. Guess what? The answers might not be what you thought. For the fishing lures I ended up randomly selecting 56 auctions. 30% did not meet auction estimates (many of these were one bid short, it might be added). 52% reached the auction estimate. But surprisingly to some, 18% exceeded auction estimates, some by a wide margin. So while the number of items that went below auction estimate was 10% higher in this random sample, that margin may very well have been offset by the fact that nearly 20% of the items exceeded pre-auction estimates. As an aside, why is it we only talk about those things that "underperform" and not those that "overperform?"

Conversely, I looked at a cross-section of 50 fishing reels and discovered that 64% came in below auction estimates (a number at over 33% below), 24% came in at auction estimate, and 12% exceeded auction estimates. It doesn't take a brain surgeon to realize that some of the reels--especially the very high end ones--sold at veritable bargain prices. in fact, as one particularly knowledgeable collector noted, a number of reels sold for "once in a lifetime prices."

Armed with some actual evidence, instead of speculation, for what it's worth, and only after corresponding with dozens of peoples by phone and by email, here are my thoughts on the Lang's auction. In other words, what does this all mean?

1) The Sky Is Not Falling, Chicken Little. Despite the fact that some items--many people point to fishing reels exclusively but there were other tackle (see Pequea) that fit this description--in the most commonly used phrase of the day "underperformed," this does not mean that this auction does not represent a vibrant, healthy market. Certain items--the rare early wood minnow at $20,000, the Hosmer in the box at $15,000, the vom Hofe over $10,000, the Archimedean at $11,000--set record or near-record prices. Other items like the Helen Shaw collection did extremely well, considering just how much of it was auctioned off. Frog lures, Bagley, and other niche collectables were strong.

Were some areas lower than others? Of course. But what we should concentrate on is not the fact that one segment sold less well than others, but rather in one of the most trying economic times in history, the fishing tackle collectables market supported a very large and successful auction. That the money was allocated more in one area than another does not mean the sky is falling.

2) Auction Estimates Are Just That--Estimates. The fine folks at Lang's spend a lot of time and effort coming up with a pre-auction estimate. But in the end, it is exactly that--an estimate to give the bidder some idea of what similar items have sold for in the past. I think we put too much stock in an auction estimate, especially when it concerns high-ticket items, where we might be tempted to consider an item a failure if it reaches $10,000 but the pre-auction estimate was $12,000-$15,000. I think that is a mistake. Auctions are one particular moment in time. True values are built up over long periods of time, and reflect both up and down markets. At that time and place, the hypothetical item in question--for whatever reason--was worth $10,000. Next week it could be worth $12,000 again. This brings me to my next point...

3) Don't Be Fooled Into Thinking Prices Have Changed. I think my greatest fear--borne out through a number of conversations--is that people will automatically think this auction has reoriented the prices on tackle, particularly certain very rare items. That would be a mistake, but I'll put it in the words of a seasoned collector (who will remain anonymous) who has said it better than I can: "What I fear is that folks will use this as a benchmark and think that a Meek #44 is now worth $3500, or that Leonard fly reels are now worth $500. This is not the case. An auction is nothing more than a snap-shot in time and as such does not reflect true market conditions. Sure, it makes a statement, but it does not chart a new course." Absolutely dead on. Recent prices must be taken together as a group to give an idea on current market value. This leads me to my next point:

4) Sometime You Get the Bear, Sometimes the Bear Gets You. When it comes down to it, all auctions have an element of luck to them. You succeed because you are able to find two (or more) people who want your stuff enough to bid and have enough money to pay. Sometimes you get lucky--the aforementioned rare wooden minnow exceeded its generous pre-auction estimate by 25%. Sometimes you don't; several ultra-rare Philbrook & Paine reels dropped 1/3 below their pre-auction estimates. This auction came at a trying economic time, which coincided with several important collector friends of mine--for reasons that have little to do with the economy--sitting this one out. The absence of even a handful of these kinds of collectors can be reflected in a short term downward trend. This will always even itself out, but for this particular Lang's auction, it was an unlucky confluence of events.

The last four Lang's auctions have far exceeded expectations. This one did not, although I don't think it is cause for panic as some have recently declared (holding a funeral for fishing reels was funny, but not realistic). Three auctions in a row represent a trend. Or as the aforementioned anonymous wag declared, "While previous prices (at Lang's) bordered on the absurd, in this auction they did the same ...but in the opposite direction. The truth lies in the middle."

5) The Elitist Label Is Dead. I have heard people complain--and not just in the tackle field but in other sporting collectables areas--that auctions like Lang's only cater to the high end collector with deep pockets. This auction absolutely destroys that absurd belief forever. Even a beginning collector could find once-in-a-lifetime bargains here, lures and reels it would cost them 3-4X as much on eBay. In fact, I imagine you'll see a selection of these items coming up for sale very soon, and that they'll bring far more than the purchaser paid for them originally. The truth is that smart collectors live for auctions like this--and intelligence is what makes a beginning collector a seasoned veteran. After four consecutive "seller's" auctions, this one was a "buyer's" auction.

The bottom line is this: we are all extremely fortunate in this hobby to have a world-class auction twice per year. After all, collecting is cyclical, although we tend to remember this only when the wheel turns downward.

-- Dr. Todd

1 comment:

ajith said...

Hey, nice site you have here! Keep up the excellent work!
collectables for sale