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NostoNews, November 1, 2004
by Tommy Jasmin

The value in Nosto value

In a CBG article a few months back, Chuck Rozanski discussed the problems with establishing a price guide, claiming there are no "right or wrong positions", and that results can only be subjective. This month I'll tell you why just the opposite is true.

It's a bit ironic that the origins of Nosto were motivated in part by a point Chuck laments in his article. The leading print price guides (for coins, the "Red Book" Guide Book of United States Coins, St. Martins Press; for comics, the Overstreet Comic Book Price Guide, Gemstone Publishing) are inherently flawed. To elaborate on how, might be an entire separate article. A very brief summary might go something like:
  • Too few grades represented
  • Data based on "expert opinion" rather than facts and algorithms
  • Electioneering factors into many of the gathered sales data
  • Data is stale by the time it sees print
But back to the main point I want to make. An accurate price guide is possible. You've found it. All it takes are two ingredients:
  1. A very large set of real data
  2. A very intelligent set of algorithms to process the data
Why haven't the established price guides been able to do this? You'd think the data are available. Chuck claims he provides an enormous data set of actual sales to Overstreet each year. We've asked nicely several times if he could give Nosto a copy as well, but have yet to get so much as a polite "no, sorry".

However, we've learned just gathering accurate, verifiable data can be a daunting task. At least gathering enough sales data to properly fuel a set of pricing algorithms. But we've found a way to do this (over 130,000 actual sales contributed to the last pricing update).

But the tougher nut to crack is what you do with that data. And this is where Nosto has the advantage of 50 years of programming and engineering experience. This has gone into crafting our "funnel". If you pour enough good sales data into a funnel of smart algorithms, good pricing data will come out the bottom.

Nobody else seems to know how to do this. Granted, it's a very difficult engineering problem to solve. You can't possibly gather sales data for every item known to exist, much less in all grades. So you have to be smart and make intelligent adjustments based on very similar items for which you do have data. You also have to be very careful to eliminate erroneous data. You would not believe how much data we started with, and threw out, to get down to the 130,000 good data points for the last update.

I'll go further to state the data typically reported in columns like Chuck's "Tales from the Database" is of very little value to someone like me. The 10 anomalous sales listed do nothing more than prove fools still exist. Reported sales like $92.40 for an Iron Fist 14 in FN, or $52.50 for an Incredible Hulk 340 in VF don't provide any real "value". Most collectors would, and do, only pay a fraction of those numbers.

And this is where the real value of Nosto data comes in. Accountability. Verifiable data. On Nosto, you can not only look up an accurate computed estimate for any item in any grade, but you can look at the actual sales that drove those values - with info to track the data right to the source. Like the Heritage auction and lot number, or the eBay id number.

Here, a prospective buyer can learn someone recently bought a VF Incredible Hulk 340 for $16.50 (still too much IMO) and might think twice about handing over (again, only IMO) a ridiculous $52.50 to Mile High.

Let me close by citing an example. Below is an ad we created earlier this year. We checked on the latest values from the competition - now long after the sale took place. For Wonder Comics 15, Guide "X" now says $850 in 9.2, and Guide "Y" still says $530 in CGC 9.4.




Prizes

Don't forget, all you have to do is create a single Collection, Wantlist, or Salelist item during the appropriate month to qualify for our sweepstakes. Why not take a look and see what we're giving away (and gave away last month), free as always.



Thanks, we'll see you all next month.

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