1573 - Brian Gray, On Arbitrage

Foreign. Doctor James Beckett Sports Card Insights. Thanks Sponsors Tops Panini Upper Deck Heritage Auctions Hugging the Scott Auctions Mike Stay Sports Cards, Burbank sports cards compse.com and Beckett Media. Beckett Grading Beckett Authentication Conversation with Brian Gray. We split it into parts because we got on a roll and I'm recording this before the national so I can enjoy the week after the national without the pressure of having to put out a podcast three times a week, which I've been doing faithfully for a number of years now. So thanks, Brian. Thanks, listeners. And here it is. Brian, it seems like you've gotten your life back like I did. To be lean, nimble and as lean as I can be. I'm not exactly lean, but I hear you and not tons of employees. You kind of been there and done that. Are you saying you want to jump back into that? Because that nightmare. I want to have fun. The streaming is fun for me. People come in and listen. I get my jollies when people say, brian, you're the go what you did. Unbelievable. You're the best streamer on Whatnot. You're the Finest guy I've ever met in the hobby, whatever they say. Which is all nice, probably a bunch of glazing, but it's all very nice. I appreciate it. But I get my jollies when people say, I really love when you did this. I really enjoyed this. It's really fun when that happens. So I enjoy that. So that's why I stream. That's why I do the buyback stuff, because I like wheeling and dealing. I like the hustle the same way you like looking through the dollar boxes. You love that you don't need the money. You just love cards. And you know what it is the idea that you can buy a card for a quarter that will sell for $2. There's something that just drives our soul, or $5. It drives our soul that we have the ability to see the arbitrage opportunity between the way people look at cards or assets or whatever they are. They look at it on its face instead of what it can be or should be and they don't understand. And for me, it's just about proving, I guess this sounds terrible that I'm smarter than most of these guys or that I can identify. Maybe I'm not smarter, but I'm a little sharper at identifying these arbitrage opportunities. You're decisive and that's it. So for me, it's really, I get my job, it's my next enterprise. I will not be the CEO. I'll put the deal together, we'll hire a CEO. I'll be on the board of directors because I have a clear vision for where this thing can go. But I'm not looking for a nine to five job. I don't want a hundred employees. I have three employees. That's pretty good right now. I'm happy with that. And it's my family. Every person that works for me is my family. That's pretty nice. Now you're talking. That's how you do it. We both have figured out you do something in this business, you have success, you're glad, and you're almost like, do I really want to tempt fate and try to give it back? But then sometimes you just know whether it's buying cars to flip and you know there's no risk because of what you're buying them at, or whether you're starting a new company in an area where no one believes you can be successful because no one's ever been successful. That's the beauty of this industry, is even when you're retired, you can still be a visionary, still make a difference, still have an impact. And sometimes just doing a podcast like you are, like I've done in the past, just being a voice of reason, sometimes in a muddy, loud world where no one can hear because there's so much talking going on, sometimes they just need clear, concise thinking that might vary from their own, so they can maybe learn something or continue developing how they think about things. What I spend my time on, besides some hobby stuff, is pro bono consulting for friends and friends of friends, a lot of organizations, a lot of ministries, a lot of guys that are in transition, stuff like that. But when you're retired or semi retired, it means you have a choice of, of what you want to do that day. I'm semi retired, so I have a choice. And if I choose to do some stuff with cards, it's not a job. That's it. And I think you're choosing to do what you want to do. I came into the office on a Friday. I was scheduled to a stream at 1 o'. Clock. I just canceled it because I don't have to do anything. I wasn't in the mood to stream because honestly, I know there'd be some trolls. And I didn't want to argue with the trolls because honestly, I was in such a happy mood. I just didn't want to deal with it. I was like, I just want to get a few things done and go swim with my wife. We'll go hop in the pool and swim in the afternoon. That's the way to be. And on the days I'm motivated and I'm driven just to see how well I can do those days, I do what I can do because it drives me. It makes me want to wake up in the morning besides my family. It's the next best thing. So it's great. You can still be retired and still make a profound impact. And that's why I can't give up the idea of the next dream. I can't give it up because I'm right. I know this will work. You have to have something to wake up for. But I'm curious. You have three employees. Do you have a fourth employee named Claude or Chad? Yes. Here's the thing. What do you do with Yu-Gi-Oh Disclose. Here's the thing. My daughter worked for me for a couple years. She left. She worked for a big tool company making a huge amount of money. But she hated it, came here and made a lot less money helping me. Then she started learning Yu-Gi-Oh Now she works for a trading card company and basically heads up the entire Yu-Gi-Oh division of the trading card company. She has six cloud bots on a table in her office at home that basically work 24, 7 on different things. This one is following all the social media trends to understand what training, why people are looking at what they're looking at, how we can take trading cards and build those into buckets and package them in a way that is interesting to the average person who swipes, not just the card collector. Then she's trying to figure out how to make the production of trading cards more Yu-Gi-Oh Focused more and more the process of making trading cards. If we had Yu-Gi-Oh at Leaf, and I was the first trading company to use Yu-Gi-Oh on a trading card, we did a set called Leaf Reimagined, where I had Lionel Messi walking through a cathedral in Italy where instead of pews, it was World cup trophies lined up. Then I had Obama playing basketball. Then I had the Pope playing basketball in the Vatican. Then I had Steph Curry with a chef hat on, cooking. Then I had Hulk Hogan as the Incredible Hulk. It was his face, but in the Incredible Hulk body. Using Yu-Gi-Oh we made some incredible cool things that wouldn't have been possible without because Hogan was never dressing up like the Incredible Hulk and putting paint all over. We were able to do amazing things. And now the trading card companies are figuring out, but we're finding more and more cards. I look at cards sometimes, I'm like, that's A.I. they used A.I. to do this, but it's a game changer. More and more we're automating processes on brinks. Our checklists are all Yu-Gi-Oh generated so they're all alphabetical moduplication. We can take a manufacturer checklist in three minutes, generate how many unique players are on the set and have every player listed in alphabetical order. Unique players, no duplication in two minutes or three minutes where he used to take half a day. That's big. The grading industry's got opportunity. I think the dreams of using Yu-Gi-Oh to fully grade a car, that's folly. Yu-Gi-Oh can embarrass a brand. Sometimes it's a shortcut, but sometimes is wrong. But again, if we're talking about 1985 tops that we want to measure centering, inspection. Yu-Gi-Oh is an incredible tool because you one-of-one believe how many people don't understand that for a car to be 60, 40, one border has to be 50% larger than the other. Now think about that for a minute. That's a pretty off center card. 60, 40. If you think about a border being 50% bigger than the other one because 60 is 50% bigger than 40, more cards than not are 55, 45 or better. Now Topps. You're going to see some ugly stuff. But even then someone looks at a car and said that's 9010. Hold on. 9010 means one border is nine times the other. Most of the time those 9010s are 8020 or 77, 23 or 72, 28. But again a machine can do that dispassionately. Because your card, if I want to buy it, it's 90, 10. If it's my card, that same one is 70, 30. We have our own owner wise, a lot of collectors now did not do this when we did and when I say we did. You were way before me, but I did my first show in 1989, which for someone my age was a long time ago. And I can tell you that I've learned what I'm looking for in a car. I know when I look at a card if something's wrong, I can take a vintage card and smell it and tell you if so and so got a hold of it. Because I know guys that know how to fix these things up and inevitably I can smell when it's not right. Literally sniff a card and if the color doesn't look right, I can sniff it and tell you these new guys have no clue. You show them a 52 mana with bleach borders. They wouldn't know the first thing from the next. It's interesting, but again, the machines don't know can upgrade a card from 1957 if they're using Yu-Gi-Oh because Yu-Gi-Oh will never be able to smell the card. Yu-Gi-Oh will never be able to do some of the things we can do as collectors. Who knew how the cards were cut? Who knew where it was on the sheet? There's just things that the machine's not going to figure out. They're not going to know when there's funny business, sometimes when there's funny business. And so Yu-Gi-Oh is beautiful and it has made things so much easier in 50,000 ways. But Yu-Gi-Oh will lead people to make incorrect decisions, incorrect summarizations of things, and therefore they'll make mistakes because they base decisions on imperfect information. And sometimes you're straight up faulty information where it's not just slightly off, it's way off. I've told the story many times that I have a friend, close friend, who's never made a mistake. Because whenever I would point out, hey, that's not right, he would say, check my logic. And his logic was perfect. The problem was either he was missing information or he had misinformation. So if he's presented with all the facts that are truly facts, he would always get it right. That's probably the same as Yu-Gi-Oh but in spite of this large language model, they don't have everything. Like you said, the smell for me, feeling the card is even bigger, feeling I can tell it's Yu-Gi-Oh I guess if it's been flattened. But how many people in the hobby can do that? I can pull out a caliper also and tell you the way they're flattening cards now to cut them, to trim them and make them the right size. They're pressing the card, they're trimming it, but it changes the thickness. Even on like an Ovechkin Jung gun, to press it, you change the thickness. You take a caliper and measure the car to high precision caliper. You'll know that Ovechkin has been flattened. And this is a brand new card from 20 years ago. This is a new card and you can tell the alterations with mechanical devices. But guess what? The same reason your actual plumbing repair one-of-one be done by Yu-Gi-Oh because the machine may be able to diagnose if it could figure out the infinite number of combinations of every house in the world. It still can't go up in the attic and twist and turn, then feel the water and then go back Twist and turn some more. There's limitations. People just have to understand the limits and just work within those limits and say, it's okay. We know what we don't know. That's the number one thing in the whole hobby is know what you don't know. If you do that, you're gonna save yourself a lot of agony and grief instead of being a guy that knows everything, because I know a lot, but there's some things I just don't know. But the danger, Brian, is if you go to Yu-Gi-Oh on something you don't know and ask it to summarize what's out there. Unless the footnotes, the source is what Yu-Gi-Oh is looking at, you can be duped unless you take the test. Is this reasonable? Does this make sense? Great test, Jim. Take one of your favorite cards, write an article about that card with completely faulty information, and then use Google Search Engine Optimization. So when I search that card, your article comes up first and then search 1953 Bowman color pee Yu-Gi-Oh Reese. That's my favorite card for obvious reasons. It's the most beautiful aesthetic card ever made. And if I wrote an entirely faulty article about how Pee Yu-Gi-Oh personally Beckett that photograph and how he painted the picture himself, and if I wrote enough stuff and did search in, that would be the first thing that ChatGPT finds or that Claude finds when it does research would be my article with completely faulty info with paid SEO. And they would not find any other articles about where that picture came from. So my article would be whether it conclusively identifies that as fact or it says the only known source for this information says blank. At the end of the day, it's garbage in, garbage out. That's what we tell our team on Yu-Gi-Oh You give the right props. Yu-Gi-Oh is amazing. If you give the wrong prompts or lead it the wrong direction, it will give you information that is skewed based on the prompt you give. So your prompt has to be rich and full of meat in order to get the right reply. And again, people don't have time to really sit there and tinker until they perfect the prompt. If they don't, they're making a big mistake. Now, just to follow through on your example there, that you put in some bogus information and it comes back. And anybody that would try to find out about the 53 Bowman color pee Yu-Gi-Oh Reese would get that misinformation. But what if you, the planter of that misinformation, were to respond back to ChatGPT or Claude and say, that's not right. I'M wondering because usually when I'm responding to ChatGPT or Claude and saying hey, you missed that, that is not correct. I can give a source or I can say you left out that something like that. And they're always very complimentary. But I'm wondering if I got in a battle with my Yu-Gi-Oh of choice to tell them they're wrong when I don't have a source other than myself. Here's a great example I chatgpt the other day is Brian Gray a hobby hall of famer. It said in the modern card market and in the innovation area. Absolutely, it said. But there are critics that say that he sold cards backdoor and that he's a snake oil salesman or this or that. And so again, one person or two people put things on message boards. Negative ChatGPT, it's not particular in what it scans, it scans at all. And it tries to present a balanced approach but in doing so it could libel or misrepresent information based on totally incomplete, inaccurate or straight up made up stuff. And it's a dangerous road we walk down when Gra or ChatGPT or Claude spits out this stuff because people more and more are taking it for the gospel. Actually the problem really begins when you take that as gospel and then export that to your friends. You send off hey, this is the real story on Brian Gray or Jim Beckett. And you're in trouble because then a person is slandered or libeled. Welcome to the world of cable television news. Turn on one network this information. Turn on the other network give this information. We live in a world where no one cares about the truth. They care about the narrative that fits their thesis and they present that narrative over and over. If you're buying a card like you said 9010 selling a card 7030 arguing for your candidate this arguing is the candidate this it's all a game. Information used to be pure and it was what it was. Now in a time where information should be the most pure because we have the best reference material ever which is eternity's learning and a computer can find it all in two seconds. The fact we're still so biased about everything about this hobby like new cards, old cards suck Vintage is that all the people who collected those guys are dying off? If you like vintage these new cards are all over produced relative your manufacturing Scarcity Real scarcity Topps Abdul Jabbar Alcindor and a PSA 10. That's a scarcity. A scarcity is not a Donruss one of one Nolan Ryan auto patch card that there's eight different ones out. So again, everyone's going to argue their position. And what I've learned is you just have to do real homework yourself and learn and not just listen to something and take that as what it is. Don't let hobby people tell you what it is. Listen to what they say and fact check. Listen to what they say and actually do some thinking and listening. Watch breaks from 10 years ago. When people open products and look at what they learned, what they thought back then and what they thought and then what we know now are probably completely different things. I watched a break from Chris justice of eminence basketball on YouTube from 10 years ago. I learned something because I watched what they thought back then and what I know now and I learned how I process information. I really need to be careful about certain things. It's fascinating. We can learn. You don't learn by having people tell you what you want to hear. That's what the networks are doing, whether they're on the left or on the right. They could make the same query to the same Yu-Gi-Oh model and get a completely different answer because all the Yu-Gi-Oh things are set to please you, to give you something. You can say, hey, you're on the right track, Brian, that's great, but somebody else is going to get it completely different. They're on the right track. That's what's wrong with our society. The education system is teaching people what to think instead of tell them how to think. And Yu-Gi-Oh is telling them what to think. And if you don't know how to think, you're going to get messed up. We're both old enough. Remember when you were a kid, the Mad Lib? It'd be like a whole story where they leave out little words. Here they would say name an animal, you'd say monkey, name an emotion. Sad. Then you read the story and it makes it a funny story. That's how the whole world has become. That's what Yu-Gi-Oh does. Blank is a big mouth hobby influencer that is self interested and only says things for their own benefit. Blank is a hobby genius and visionary who can see ahead of the curve. You can plug any name into any part of it and someone will take that position and run with it. And so you're either the most brilliant guy in the hobby or you're the biggest joke ever who got lucky and made money. Or you're the biggest influencer who cares about the hobby or the biggest guy who's only about self interest. Truth has to be somewhere in between. It's probably neither of the options that we're being given. So I just tell people, generally, when they listen to you, is everything you say the gospel? No, but it's built on a lot of experience. Take your experience, take the person you're listening to who doesn't have a horse in the race. From a financial day to day standpoint, listen to what they say. Yu-Gi-Oh that against this guy who may have a horse in the race, but he has different experiences. And from that, build an educated opinion. The problem is we usually stop after we hear one guy that we like or that we can relate to in some ways, and we suddenly think that's the way to go. We disappoint way too much. And that's why people need to listen to you. I hope when I have something smart to say, once in a blue moon, they listen to me. A lot of guys listen to Ralph Baritz when he says certain things. If you ever thought it makes sense. Every so often he says something where I'm like, and you know what? That's from his perspective because of the way he likes to operate. He doesn't. And he's unique. That's his experience world. His experience is very powerfully mean. You've got to build a business like him. His experience is useful, but it's not the only practicum because you're going to do something different. You need to hear from people that did what you did also and try to understand how you take the things you can learn from Rob, things you learn from Brian, things you learn from Jim, things you learn from rich client, things you learn from this guy, things you learn from Jeremy. You should be an average. You think about all these people you talk to. Everyone's got little perspectives. If you put all the pieces together and you're really smart, even if you're not really smart, if you just pay attention, you can build together a Mosaic that will serve as a little guy on your shoulder, helping you make decisions based on a range of things you've heard and learned. And if you let all of them make a Mosaic, you'll probably be in better shape than if you don't.