Cigar Flipping Discussion (moved from La Escepcion Thread)

[Puros Y Vino]

See, THAT is what "drives me MAD", but I don't think it's "immoral".

And even then, it's not even at the flippers.

When I was down in Havana in November, a bunch of the bigger name retailers and such had used their "special access" to get in and buy up **** tons of the Diplomaticos RE Cuba. Hell, I MYSELF was gonna try and get 10 or 12 boxes - at least 4 or 5 for me personally, and the rest to resell, IF I didn't like them for myself, and IF the market warranted it with the increase in valuation.

But, I didn't even have an opportunity to buy myself any, nor any for some Canadian friends.

And it was because Habanos S.A. and/or the LCDH stores in Havana made these deals with the various overseas vendors and allowed them all to be scooped up.

I was mad that things weren't set up in Cuba to at least make sure they weren't all being scooped up by outside persons, and that they didn't have any effing boxes available for those of us enthusiasts who made the effort to be down there for the Encuentros Partagas.

Pissed? Yes.

Immoral? No.

I remember you bitching about this. This is a little different than flipping IMO as I expect tobacconists to do this. BUT. Given that this RE was not meant for distribution outside of Cuba to it's partners it can be seen as a transgression. It seems in Cuba, money talks more than ever. You saw it with the side deals on the Dip RE and the chicanery with the taxi's. Cuba's new relationship with the USA has resulted in a free for all. You have new people visiting that have no idea what things cost and the Cuban's picked up on that quick. Like lambs to the slaughter.

[CanuckSARTech]

How would you have felt if (hypothetically of course) the people who used their connections to buy up all those boxes were waiting just outside all the LCDHs reselling them at 2 or 3 times what they had just paid for them, and that was their sole reason for buying? To me that's immoral.

Understood. My answer is led a bit by Frank's response as well...

I remember you bitching about this. This is a little different than flipping IMO as I expect tobacconists to do this. BUT. Given that this RE was not meant for distribution outside of Cuba to it's partners it can be seen as a transgression. It seems in Cuba, money talks more than ever. You saw it with the side deals on the Dip RE and the chicanery with the taxi's. Cuba's new relationship with the USA has resulted in a free for all. You have new people visiting that have no idea what things cost and the Cuban's picked up on that quick. Like lambs to the slaughter.

So to answer Wabash, THAT'S a bit of an issue I had with it. This was a CUBAN RE. Not a Spanish, or British, or Swiss one. The cigars were available right before we got down there. Well, we get down there, and the Venezuelan gov't and Euro retailers scooped them all up.

IF some were standing outside the shops, selling them at 2 or 3 times the pricing, at least I'd have considered it, and likely bought up a box or two. Maybe more.

But them taking them out of country exponentially upped the costs, and also ups my costs due to the added shipping risks and whatnot.

Again - mad, pissed, frustrated.

But, it's not IMMORAL. What MORAL obligation do these people have to me, or any other cigar smoker? None. People are superimposing their OWN morality on these actions by others. IT IS ALL A BUSINESS TRANSACTION ON A QUOTE-UNQUOTE LUXURY PRODUCT, nothing more. As someone said before, not bread, water, medicine, etc. If someone doesn't like, don't buy.

[RijkdeGooier]

We all have different thresholds for trading practises It appears. Nothing inherently wrong with that.

Birds of a feather and all that.

[NSXCIGAR]

You should research price elasticity of demand. A tight supply leading to higher prices for highly elastic items (like luxury goods) leads to, yes, decreased demand.

You're trying to selectively apply very basic free market economic principles of supply and demand to an imperfect market with barriers, restrictions and imperfect information. When you study economics, you learn pretty quickly that there are no truly free markets. There are myriad variables you have to account for that completely flip the script. No business or enterprising individual wants a truly free market, despite what they say. Nobody makes money in a truly free market.

Arbitrage is not a virtue. In many cases, it completely ignores the intention of the initial supplier, at which point it can absolutely be an immoral practice. Yes, ultimately the supplier priced their commodity lower than a free market equilibrium would dictate. But there are many different reasons for that. Sometimes they don't know or care. Other times maybe they want to entice consumers or extend a modicum of goodwill. The free market equilibrium is held up as a virtuous ideal, when in many cases, it's the opposite. Whether it's a luxury good or a basic necessity, if your justification is that you're selling something for what the market will bear, that's fine. But it completely ignores several other factors, including morality, which is completely separate from economics.

Yes, but prices will immediately begin to trend downwards to meet that demand as stock accumulates, since prices then are above equilibrium. There is no scenario where price would not tend toward the equilibrium price without major losses accumulating for the stock holder. Ticket scalpers have a time constraint and often have to sell at losses. Most flippers and scalpers don't have the patience to play complex games like restricting supply. Also, all scalpers together would have to collude to effectively restrict supply. Unlikely.

Also, the ability to postpone consumption is very important in determining the degree of price elasticity of demand, as is percentage of the person's income the good represents. In the case of event tickets with a fixed date and relatively low cost, PED is a marginal dynamic at best.

And if you read my prior posts, I'm discounting all exchanges prior to the exchange in question. Obviously Italian laws prohibiting tobacco export are not free market conditions. That's irrelevant to the discussion of individual transactions under voluntary conditions at the moment of exchange. IOW, we could call the Soviet black market an essentially free market, despite it's very existence being due to state central planning. To claim that certain transactions don't conform to free market dynamics because of a tariff on the paper that the ticket is printed on, while technically true, is absurd. When we deal with individual exchanges--and only those specific exchanges--as long as they are voluntary and in an environment where basic property rights are protected from fraud, it's fair to categorize these as free market dynamics for all intents and purposes.

And people do want free markets, just not in the industries they do business in. The pressures of competition are immense, especially in saturated markets. And while profits do tend to move towards zero in a free market, only in an evenly rotating economic model could that actually be so. Information and desires are constantly changing, constantly creating profit opportunities and resetting the tendency toward zero.

The market equilibrium isn't some ideal--it's the only way to know whether resources are being allocated in a way most beneficial to society. Period. It comes about naturally. It's a signal, a knowledge surrogate that allows people to make decisions with as much information as possible about all scare resources in the economy.

Arbitrage has nothing to do with anyone's intentions. Arbitrage is a natural market process that insures goods and services throughout the structure of production are allocated to their highest and best uses. Sure, they have their reasons for doing that--many times they overprice their products. Sometimes intentionally, sometimes not. But as far as underpricing for charity, that's a very bad idea. Underpriced goods will get bid up and re-sold in the market. Period. This can't be stopped without totalitarian edicts and costly enforcement. People will sell their underpriced tickets from the supplier, despite all the supplier's "good intentions." Generally, nobody's doing anyone any favors by underpricing goods in a market. If it is done, it's charity at the supplier's expense and the party who would be willing to give up more to get it that loses out.

[NSXCIGAR]

How would you have felt if (hypothetically of course) the people who used their connections to buy up all those boxes were waiting just outside all the LCDHs reselling them at 2 or 3 times what they had just paid for them, and that was their sole reason for buying? To me that's immoral.

If that was what's happening, or could happen, that would be another issue. But that's not what's happening at all. Nobody's standing just outside the door of the LCDH selling these things. There's significant expense and risk in purchasing, transporting and shipping these cigars from Italy out and into our hands.

As far as price, would many people we know pay 600-900 Euros for these cigars right now? I would not. Is that what the market would bear? Maybe, but then the only reason HSA is selling them for 350 euros is they're stupid. Clearly, this price is too low for world demand. It's misleading right now because they may actually be overpriced relative to Italian demand, and the unique export situation has given rise to where we find ourselves.

What if the Italian LCDH proprietors struck a deal with some Swiss vendors, bought up all their own stock at 350, drove it all to Switzerland and agreed to take a cut of the difference between 350 and X? The X price would reflect market value, people...and would be just the same as what you'd pay from a flipper--market price.

[ayepatz]

I find some irony in this "morality of flipping" debate, given that we are talking about CUBAN cigars here.

Site etiquette prevents me from pointing out the bloomin' obvious...

[wabashcr]

Just curious. Do you make the same judgement about other businessmen who sell other goods at a profit ? Or am I missing a qualifier ? No intent to start an argument here. I was just taken aback by the use of the word "immoral", and am guessing that I missed something...which would be no big surprise

Nope, mainly just price gougers and scalpers. Profit isn't immoral in and of itself. There are many ways to make a profit that all fall somewhere on a continuum of morality. I think the practices I've described clearly fall on the end of that continuum where morality is sparse.

[wabashcr]

But, it's not IMMORAL. What MORAL obligation do these people have to me, or any other cigar smoker? None. People are superimposing their OWN morality on these actions by others. IT IS ALL A BUSINESS TRANSACTION ON A QUOTE-UNQUOTE LUXURY PRODUCT, nothing more. As someone said before, not bread, water, medicine, etc. If someone doesn't like, don't buy.

I certainly understand your perspective, and I think the quoted part above is where the nuance lies for me. Morality to me isn't an obligation to anyone else. It's right or wrong. Just because it's a voluntary business transaction or a luxury item doesn't mean the seller is acting in good faith. Of course I recognize anyone's right to charge whatever they want, and of course if the price isn't acceptable to me, I pass. I've never asked anyone for a pricing favor, nor have I ever called anyone out or piled on someone for gouging. But given an existing discussion on the matter, I have no problem adding my two cents. I'm not on any crusade against flippers or anything of the sort. I just think it's a shitty, and yes, immoral thing to do.

[NSXCIGAR]

Nope, mainly just price gougers and scalpers. Profit isn't immoral in and of itself. There are many ways to make a profit that all fall somewhere on a continuum of morality. I think the practices I've described clearly fall on the end of that continuum where morality is sparse.

And who is the ultimate arbiter of how much profit or from what activities is immoral? Immoral is a very strong term, and I think inappropriate for anyone who creates value, which all voluntary transactions do.

Just because it's a voluntary business transaction or a luxury item doesn't mean the seller is acting in good faith.

What's good faith? If fraud or misrepresentation is involved, that's very different and always has been. There's either fraud, force or misrepresentation involved or there's not. Those things certainly are immoral. But absent those things, I just don't think the word immoral can be used.

Bad taste, possibly, but not immoral. Prostitution: bad taste, but not immoral.

[Pixa]

I think the main point I have taken is some people blame it on too low a price encouraging them to sell out fast and be turned for more on the secondary market as they sell at that price. So if they were sold at that price originally then there would not be this situation. Hope robs reading this thread as taking these peoples logic the 24/24 are not priced right as sell out fast so maybe he should bump the prices by 50% not to upset these people .

[wabashcr]

And who is the ultimate arbiter of how much profit or from what activities is immoral? Immoral is a very strong term, and I think inappropriate for anyone who creates value, which all voluntary transactions do.

What's good faith? If fraud or misrepresentation is involved, that's very different and always has been. There's either fraud, force or misrepresentation involved or there's not. Those things certainly are immoral. But absent those things, I just don't think the word immoral can be used.

Bad taste, possibly, but not immoral. Prostitution: bad taste, but not immoral.

We clearly have different definitions of morality. I don't think morality has anything to do with economic value. Even voluntary transactions that benefit both parties can be exploitative, incidentally, not unlike prostitution.

[NSXCIGAR]

We clearly have different definitions of morality. I don't think morality has anything to do with economic value. Even voluntary transactions that benefit both parties can be exploitative, incidentally, not unlike prostitution.

My definition of morality only concerns violations of property rights in the Lockean framework, such as fraud, theft or force against an individual. If you expand those criteria any further, you'll find you'll never stop. Anything offensive or in poor taste could then be considered immoral. Acting like a jerk could be immoral.

How can one, on net, both benefit and not benefit at the same time?

And are people not entitled to make decisions regarding their property and person that may not be in their long-term interests? And who's to say what interest is long or short term anyway? If a woman and her child are starving and she must prostitute herself, who can judge what her benefits are, near or long term? Only the individuals involved can even come close to knowing that, and even then they often don't.

Besides, using force to try and stop these acts is certainly less moral than the acts themselves. If free people vote with their dollars and continue to patronize flippers, scalpers and prostitutes and loan sharks that necessarily means enough people value them in whatever way they do, despite their public protestations or opinions otherwise.

People are well within their rights to shame these people into conformity but that's really all you can do, and I think even that is a little high and mighty.

[suggs]

My definition of morality only concerns violations of property rights in the Lockean framework, such as fraud, theft or force against an individual.

A side question since you've brought Locke into the mix: how would the Lockean Proviso complicate the matter about flipping? If people hoard all the LE's and RE's as soon as they're released and then intend to flip them later for a profit, then they're not leaving enough, as good, for others.

[NSXCIGAR]

A side question since you've brought Locke into the mix: how would the Lockean Proviso complicate the matter about flipping? If people hoard all the LE's and RE's as soon as they're released and then intend to flip them later for a profit, then they're not leaving enough, as good, for others.

Locke asserts that one's property is his to do with what he wishes. The flippers own the cigars at that point. They are their property, and as such, have inalienable rights to dispose of it as they see fit. Sell them at any price, smoke them, make a tent with them.

But if they're selling them at any price, even a high one, they are on the market. Supply is adequate, it's just that someone doesn't like the price. Anyone who wants a yacht can buy one. They are on the market. Just not at a price I can afford, reflecting its market value. All flippers would have to collude in their hoarding to prevent undercutting. And even if one flipper had all boxes, there's still an equilibrium price, and then you would see some price demand elasticity bringing demand down and hurting the hoarder's value of stock the longer he held out.

If people are able to flip anything, it means the price was too low to begin with, for whatever reason.

[suggs]

Locke asserts that one's property is his to do with what he wishes.

This is incorrect as it relates to what I was asking about. Locke's arguments don't rest on an *infinite* acquiring of private property by individuals, but a limited one that gives the individual the right to acquire property provided she doesn't acquire so much that others aren't able to do the same with the same resources. If, as I said, flippers are buying up all the REs and LEs, it doesn't matter what prices they choose to sell them for because they were unjustly acquired in the first place (from within a Lockean framework).

[NSXCIGAR]

This is incorrect as it relates to what I was asking about. Locke's arguments don't rest on an *infinite* acquiring of private property by individuals, but a limited one that gives the individual the right to acquire property provided she doesn't acquire so much that others aren't able to do the same with the same resources. If, as I said, flippers are buying up all the REs and LEs, it doesn't matter what prices they choose to sell them for because they were unjustly acquired in the first place (from within a Lockean framework).

As long as the property is the rightful fruits of their labor or exchanged for such, property rights are inviolable. Best use and homesteading come into play and nobody could own all usable property with those principles being adhered to. The Lockean proviso was meant to address the need for a homesteading principal.

So if I own all of anything I am violating another's property rights? If I own every single box of any cigar, that I paid my hard-earned money for from every vendor that had them, I am violating someone's property rights? Locke is rolling over in his grave...

The Lockean proviso is pretty much the weakest thing he ever wrote and has been pounced on for centuries by socialists pointing to justification for common property. This theory of his came about long before any theories of communal property were developed (tragedy of the commons, etc.)

Great thinkers aren't always right all the time. Ricardo was wrong about the labor theory of value and automation, but right on almost everything else.

[TonyAccardo]

For me the idea of flipping cigars for profit just goes against everything I enjoy about the cigar smoking lifestyle. The friendships, the sharing...etc. It is definitely not for me and I would feel very uncomfortable trying to flip and or buying a flip.

Saying that, I don't think there is anything wrong with it if that's what you do....it's a free country as they say. But you probably just wouldn't be the kind of person I would enjoy sharing this hobby with on a personal/friendship level.

What gets on my nerves is that I hear this alot. Its as if because we're talking about cigars, you're assuming that we're all friends and we're all brothers and because it's cigars we should all be ultra fair to the point of being stupidly generous with EVERYONE!! I'm sorry but I really don't care for some of the people who buy, smoke, or sell cigars and if I want to sell a box for more than I bought it for, which I do on many occasions, then to me, it's business. I could care less if you're a BOTL.

I'm a bit of a cynic and an ******* though and I know this, so that may have something to do with it too. But I also get sick of people at work wanting me to sell them cigars or split boxes with me and it's kind of a pain in the butt for me to order cigars for them too. Sooo, I order them for my co workers and I jack the prices up. I could care less that they're fellow cigar smokers and believe me, I've offered many, many times to give them this website and have explained to them how to go about ordering but they immediately get this stupid, derr-in-the-headlights look and want nothing to do with it. Ok then, I'll sell them to you for this price then!

Now if it's truly a friend or family member then I will not raise prices. But just because the buyer is a cigar smoker now I'm supposed to not "flip" for profit! That seems much more wrong to me, not to mention asinine, than what I or any other "flipper" does in selling for a higher price point than we get the cigars for from the retailer.

In a way that's like saying any person who sells anything to another person for a higher price point is in the wrong because that buyer was a fellow gun enthusiast, car enthusiast, art collector, etc. It, to me, is a very stupid way of looking at things and just makes the person doing the whining look like a whiney little beta of a human! I know my viewpoint or the way I put it won't be accepted here but I could care less because everytime I see these types of posts from those complaining about it, it gets my blood boiling and it pisses me off to no end that someone could really expect that out of people. Get real!

[suggs]

As long as the property is the rightful fruits of their labor or exchanged for such, property rights are inviolable. Best use and homesteading come into play and nobody could own all usable property with those principles being adhered to.

So if I own all of anything I am violating another's property rights? If I own every single box of any cigar, that I paid my hard-earned money for from every vendor that had them, I am violating someone's property rights? Locke is rolling over in his grave...

"As long as the property is the rightful fruits of their labor or exchanged for such, property rights are inviolable."

Assuming a Locken framework, provided the property is justly acquired or justly transferred, you're correct.

"Best use and homesteading come into play and nobody could own all usable property with those principles being adhered to."

That may be true, but now you're operating outside of a Lockean framework. Locke directly argues for both best use and homesteading, and that people who don't adhere to this are not acquiring their property justly and, as such, are behaving immorally.

"So if I own all of anything I am violating another's property rights? If I own every single box of any cigar, that I paid my hard-earned money for from every vendor that had them, I am violating someone's property rights?"

Yes, for Locke.

[jwr0201]

First, understand that I am not attacking anyone here in a personal manner and really enjoy loud and energetic debates. That is what makes many subjects so very interesting. I have voiced strong opinions towards flippers and scalpers and will always feel they are scum without ethics. Just my opinion, same as many here obviously believe they are upstanding citizens. Two sides of one coin. Let's keep this non-directional and not offer up digs or personal slights towards any individuals. In other words, act towards each other as gentlemen and keep the debate heated, fast, interesting, but not personal. We all are individuals with different life experiences that color our opinions. Everyone has a good valid opinion. Personally, I have learned a lot about the subject from the opposing side and fully admit that. At the end of the day, I would certainly value having a good cigar with coffee or beer with anyone here much more than being right and offending my debate brethren. You should see when my group of friends get together to discuss politics! Damn near have to get an ambulance, but we are brothers and would do anything for one another.

On a US cigar forum I occasionally frequent, a member offered up a lot of Liga Privada No 9's, T52's and Rats for an unreasonably high price and was quickly called out by a members for doing so. At the time, LP's were scarce as hen's teeth and were nearly unattainable at local B&M's. The entire forum ostracised said member and nobody bought at the flipper's price, despite the fact that there were many collectors of super-premiums and these sticks were then very hard to get. Good example of what a majority of people think of the practice.

On another note, distrubutors need be a bit careful in allowing scalpers and flippers to have large lots because the demand for the high flipper prices are finite and when those who can and do afford to buy from the scumbags will eventually have their fill. The market for ultra costly items is a very small percentage of any market. After the higher end has reached diminishing returns and slow or stop purchasing, the flipper slinks off with his profits. Now, the distributors are left with having to deal with the regulars who may have some amount of ill will at seeing the once hard to get sticks readily available not at their old source, but at crazy prices from a flipper. No doubt that there would be some who would feel the lack of love and move on to another source.

[NSXCIGAR]

"As long as the property is the rightful fruits of their labor or exchanged for such, property rights are inviolable."

Assuming a Locken framework, provided the property is justly acquired or justly transferred, you're correct.

"Best use and homesteading come into play and nobody could own all usable property with those principles being adhered to."

That may be true, but now you're operating outside of a Lockean framework. Locke directly argues for both best use and homesteading, and that people who don't adhere to this are not acquiring their property justly and, as such, are behaving immorally.

"So if I own all of anything I am violating another's property rights? If I own every single box of any cigar, that I paid my hard-earned money for from every vendor that had them, I am violating someone's property rights?"

Yes, for Locke.

First, OK

Second, yes, best use and homesteading are important parts of property theory, and Locke introduced this. No argument here. Homesteading and best use is legitimate.

Third, That would mean anyone owning any unique, one-of-a-kind item is in violation of another's rights, and since your body is unique and one-of-a-kind, you being the only one owning your body would be a violation. But since only you can own your body, you and everyone else is born in violation of another's rights? This is in no way Locke's position, and I know this because it's ridiculous.

[suggs]

The Lockean proviso is pretty much the weakest thing he ever wrote and has been pounced on for centuries by socialists pointing to justification for common property. This theory of his came about long before any theories of communal property were developed (tragedy of the commons, etc.)

"The Lockean proviso is pretty much the weakest thing he ever wrote"

You're the one who was touting your morality from within a Lockean framework; now you're cherry-picking.

"and has been pounced on for centuries by socialists pointing to justification for common property."

The Proviso has also been propped-up a lot by a lot of contemporary libertarians to show they're not heartless jerks; so both of our comments don't really do anything to support or lessen it. Furthermore, Locke *does* advocate for common property--because, for him, the world was given to humans for their use by God, and we're supposed to hold it in common.

[NSXCIGAR]

On another note, distrubutors need be a bit careful in allowing scalpers and flippers to have large lots because the demand for the high flipper prices are finite and when those who can and do afford to buy from the scumbags will eventually have their fill. The market for ultra costly items is a very small percentage of any market. After the higher end has reached diminishing returns and slow or stop purchasing, the flipper slinks off with his profits. Now, the distributors are left with having to deal with the regulars who may have some amount of ill will at seeing the once hard to get sticks readily available not at their old source, but at crazy prices from a flipper. No doubt that there would be some who would feel the lack of love and move on to another source.

I agree with this, but if flippers are cleaning out their stock on a regular basis, wouldn't that tell them their prices are too low? I encourage distributors not to sell to middlemen, absolutely. But it's happening because there is a price equilibrium problem. If it's the HSA pricing that's too low, then this will continue unabated. Somewhere along the chain, prices are too low.

[suggs]

Third, That would mean anyone owning any unique, one-of-a-kind item is in violation of another's rights, and since your body is unique and one-of-a-kind, you being the only one owning your body would be a violation. But since only you can own your body, you and everyone else is born in violation of another's rights? This is in no way Locke's position, and I know this because it's ridiculous.

"That would mean anyone owning any unique, one-of-a-kind item is in violation of another's rights,"

That's not what either Locke or myself intended, and I believe you know that.

"And since your body is unique and one-of-a-kind, you being the only one owning your body would be a violation. But since only you can own your body, you and everyone else is born in violation of another's rights?"

No, bodily ownership and owning the fruits of one's labor are different for Locke.

"This is in no way Locke's position, and I know this because it's ridiculous."

You're right on both counts: it is not Locke's position, and it is most certainly a ridiculous straw man.

[jwr0201]

I agree with this, but if flippers are cleaning out their stock on a regular basis, wouldn't that tell them their prices are too low? I encourage distributors not to sell to middlemen, absolutely. But it's happening because there is a price equilibrium problem. If it's the HSA pricing that's too low, then this will continue unabated. Somewhere along the chain, prices are too low.

NSX - this is just wrong! We agree!!!

[NSXCIGAR]

"The Lockean proviso is pretty much the weakest thing he ever wrote"

You're the one who was touting your morality from within a Lockean framework; now you're cherry-picking.

"and has been pounced on for centuries by socialists pointing to justification for common property."

The Proviso has also been propped-up a lot by a lot of contemporary libertarians to show they're not heartless jerks; so both of our comments don't really do anything to support or lessen it. Furthermore, Locke *does* advocate for common property--because, for him, the world was given to humans for their use by God, and we're supposed to hold it in common.

So everything a guy writes is either totally right or wrong? How about using logical soundness as a guide? I've pointed out where that logic is wrong and I doubt Locke would have overlooked that. You're taking the proviso far too literally.

The modern libertarian interpretation of the proviso is one where it simply introduces homesteading and best use as the basis for the legitimate ownership of property and the fundamental basis of property rights. That's it.

Interpreting the proviso as you do is really contradictory to Locke's other positions, that's how I know it's the incorrect interpretation. He's right in one area but if that's what he meant with the proviso, he's wrong, because it's logically unsound.