Hamlet

Yikes, there is an $850 sale now.

I think I've been clear that the actual bet itself won't show much. The time frame is too short and FP1 is a single book.

I do think that it will be much more interesting to watch the group of Marvel keys I selected versus the S&P500 over a longer time frame. I think that as the years go by that will show the inherent advantage of investing in stocks over comics.

Someone mentioned this would give evidence of the stocks>comics debate. It won't. Even if comics come out ahead, the bet is rigged in favor of comics. Still, this will be fun to watch. A bet makes it even more interesting.

 

I see at least three large flaws with the comparison.

 

Transaction costs - You buy comics with 0% commission, but you sell with something much higher - call it 10% (higher at Heritage, potentially lower at eBay). You buy and sell stocks with a much smaller commission on the way in and the way out. Stocks already have an inherent edge because of transaction costs. That should not be discounted.

 

Asset vs Index - The bet is "cherry picking" a select group of comics or a single comic, but chosing a market index for stocks. This will produce more volatility for the comic side of the bet, which could either be good or bad. A more appropriate comparison would be all comics or all silver age, etc if comparing to an index.

 

Liquidity - Although not captured in the numbers, there is a HUGE liquidity advantage in stocks. Say you wanted to invested $50k in that FP#1 CGC 9.6. Not going to happen. Even if it could happen, that would drive a CGC 9.6 well above $650 in the process. Say you have an AF15 CGC 4.0 and have to sell it tomorrow. Will you get full GPA? Maybe, maybe not. Using the same $50k investment, could you sell 5 copies at full GPA tomorrow? Probably a bit harder. The least liquid stock in the S&P 500 trades ~$20 million a day. That is probably more liquidity than occurs in the most liquid comic book in a year.

 

 

Fees aren't a part of the bet.

The FP 9.6 on Comiclink sold for $708. It won't be in GPA, but its a data point that looks good against the $650 cost basis of this bet.

 

unless you were the seller and netted $637.

I mostly put together the list to test the conventional wisdom that SA Marvels are a can't miss investment from here, which I disagree with strongly.

The DC keys don't have that same conventional wisdom consensus.

For that reason, I agree with you that they have a better chance of doing well as a investment.

Where are the DC SA keys? That is where the better opportunity will be over the next few years IMHO as they are starting from a much lower value point.

The FP 9.6 on Comiclink sold for $708. It won't be in GPA, but its a data point that looks good against the $650 cost basis of this bet.

Another issue that muddles this is trying to figure out what percentage of the restored books on the census were sent in by owners that didn't know they were restored.

I suspect that that is not a small number. How many people on these boards have gotten back the unexpected Purple Label?

I agree with that up to a certain point. Restored copies can still bring pretty good money, and the percentages to blue label have increased as blue label prices have gone into the stratosphere. Even now, 1 in 3 copies on the census is restored. So there is definitely still a financial incentive to slab a restored copy, although I believe the reason many people do not when they sell is because they likely think they can get an even greater percentage without the alleged "taint" of the purple label. This is also likely why people who know (or think) they have a copy with something done to it simply choose to leave it raw. It wouldn't surprise me if well over half of however remaining unseen OO copies are out there were messed with one way or another over the years.

 

Cute pooches by the way!

 

-J.

 

Here is the thing. If someone is selling an AF15 in a non-trashed grade, they are going to make substantially more by getting it graded unless it is restored. Someone who knows what they are doing and is trying to maximize their sale price would not be selling an unrestored VG+ AF15 raw. So a raw AF15 for sale is more likely to have restoration than one in the wild that the owner has no interest in selling.

That doesn't mean that most raw AF15s are restored. It means that most (or more at any rate) raw AF15s for sale are restored.

Note that this probably holds less true in the real low grades. If a copy is remaindered, I doubt that there is much financial incentive to get it graded. Does anyone care about the color touch on their remaindered copy?

Saw a raw AF 15 today and toyed with the notion of purchasing it. It appeared to be around a VG/VG+ (priced at a solid 15% below GPA) but upon further inspection it was clear that it at least had some color touch and was pressed to cover up trimming to likely eliminate MC.

 

Realized that there are so so so many AF 15s in the wild, but based on this evidence they are all restored.

 

:shrug: it's science.

What can I get for a VG copy?

You should be able to flip raw NM Spiderwomans #1 for 20.00 no problem. Not so much because of the AOS spec, but mainly because Spider-Gwen hype. Fans of that series chase older spider woman books for a while now. 9.8s are going for 150+ for awhile as well.. Thats not bad at all and will only rise higher imo

Do you think a 3.5 is lower or higher than the median copy out in the wild?

Think about all the coverless, remaindered, and three-hole-punched books out there. All of the books with a coupon cut out or a page missing. All of the taped up, or cover-detached books. Most older books (especially pre-1965 books) are pretty darn rough.

It is pretty amazing that the census median for AF15 is now only a 3.5 though. It probably skews less than almost any other SA book now that the price is so high.

I would contend though, that the median grade of the unslabbed copies is less than a 3.5. In fact, I think you've made that point yourself already.

 

This is actually not correct. The vat majority of copies already on the census now are lower grade. As I mentioned earlier in this thread, the average grade for all blue labels as of now is 3.67, and that average has steadily gone down as more blue labels have been added over the years. The highest it ever was when the first copies started hitting 15 years ago was just 5.11. Meaning, obviously, that people are submitting lower and lower graded books on average as time goes on.

 

-J.

That seems like a pretty obvious fact. The vast majority of any book from that time frame are going to be low grade, and the census is going to be skewed in grade distribution, showing a larger percentage of high grade copies, since the financial incentive to slab increases as the grade goes up.

They are still copies though. The idea that a book has to be high grade or unrestored to "count" is in itself a pretty narrowly held belief once you start looking at the wider collecting community.

something else we haven't discussed "that" much in this thread is that based on sampling Ive seen, the majority of the raw copies are lower grade or restored....

 

not as many really sweet untouched high grade copies out there in the wild that I have seen or know about (a few, but not many)

You just don't seem to get that the books on the market to sell are not going to be representative of the books in collections, because people will very likely slab an AF15 to sell it, but probably won't slab it just to slab it. There is a strong financial incentive to slab when you sell. It's also pretty much the only way you sell via the auction houses and E-bay, which is were most of the visible copies are. You're looking at the number of home inspections each year and trying to extrapolate that to the number of existing homes. If you looked at houses that have recently sold, and checked if they had a home inspection recently, they almost all would have. Would you then conclude that most homes have recently been inspected? You're ignoring the huge selection bias towards slabbing that comes when someone wants to sell their AF15.

Yes, some people will also slab a book for other reasons, but most old-time collectors are unlikely to. It's expensive and prevents them from physically handling their books. I've never slabbed a book. It would seem silly to do so unless I wanted to sell it. I suspect that is true of the majority of comic collectors older than say 40 or so. Probably not the majority of people on this site though.

I think that you're also complete discounting the lapsed collector. There are a ton of people who put together nice collections in the 70s, 80s, and 90s, got interested in other things, and just thru their longboxes in a closet. I left the hobby for 15 years, and only got back in because a friend of mine that I collected with in the 80s and lost touch with looked me up and got me interested in it again. My collection was just sitting in a closet for all that time. I wasn't going to sell it, but I wasn't doing anything with it. If I hadn't reconnected with that friend, they would still be collecting dust in my closet.

Those books are invisible to the census, and they are out there in very large numbers. I was a young collector with little money in the 80s. I could not afford an AF15. However, the collectors who were 10-20 years older than me could. Many of them completed their collections, and dropped out of active collecting in the 90s when everything fell apart. Like me though, I would suspect that an awful lot of them didn't sell their collections, they just put them in their closet.

You are interacting with people who like to buy and sell comics on this board, but many collectors don't enjoy selling. They buy, but even when they've lost interest, they don't necessarily sell. I suspect that the number of collections currently sitting in the closets of lapsed collectors who are 50-70 years old is a massive number. I can't think of any way to figure out how many there are. There are no statistics to measure them, but they are there, all the same.

Joey I was simply paraphrasing you, as even my estimate of 3-5k would still technically be "thousands and thousands" but certainly not on the level of 20k which I believe to be pie in the sky.

 

To address one of your points and another rfoii brought up earlier...let's look at what we see at any given moment on the market. The ratio of slab to raw is in fact the exact inverse of what many are claiming they believe the ratio to be. If there were 20k raw copies still out there that would be a 10:1 ratio, and there would be (should be) at least some semblance of that in the market, and yet there is not and never is. Not even close.

 

Are people seriously saying with a straight face that the "only" time people slab a book is to sell? And that that is the "only" reason we almost exclusively see slabbed copies for sale? Geesh talk about abject speculation. Because no, the only people selling copies are not the owners of slabbed copies. There are raw copies hitting the market all the time. They don't hit often, but they do. Could that possibly be because there are far fewer than 20,000 of them out there? Hmmmm... And as I pointed out earlier, only about 1 in six copies available on the market right now is raw. Am I saying that this means 84% of copies are slabbed? No that's not what I'm saying. But guess what? It's just as likely that at least half have been slabbed at some point as it is that there are 20k still raw. It's also very likely that a significant number of copies have been cracked out and re-circulated and perhaps even re-slabbed.

 

The notion that people are only hoarding raw copies is also nonsense. And wouldn't it be just as likely that people would also hoard slabbed copies? And in comparable ratios? Yes it would be. And yet we see plenty of slabs for sale all the time. The fact of the matter is, regardless of what speculation a person can divine based on anecdotes, and how many copies they might have seen at one point in their lives, no one knows what became of those copies, where they are now, or if they even still exist. All we "know" is what we all can see (and have seen) on the market. And I posit that at any given time we will be lucky to see more than a handful of available raw copies at any given moment, and, as a relatively small percentage of the slabbed copies available at the same time, not because they are "rare", but because a very significant percentage of them have been slabbed. My 2 cents.

 

-J.

 

It's still in GPA currently though.

The $12.5k sale did not happen (thrill bidder)

 

what a dingus, I thought thrill bidders were to supposed to bid low before the book got into the stratosphere, not bid to win!

I didn't say there are vast number of people who have done this with AF15. I said "multiple" people. Your estimate of 10-20 sounds plausible to me.

Given the hoarding we've seen on the boards of much harder to find GA books and other SA keys (Showcase 22 comes to mind), I don't think its unreasonable to expect that people have done it with AF15.

I think you also seem to underestimate the number of people with large amounts of disposable income. Buying 2 AF15's a year would have cost about $5k (say 4.0s) before the last decade's run-up. That's not a ton of money for millions and millions of people.

Add to that the larger number of people who have 2-5 copies, and that is an awful lot of supply available if the image of this book as a can't miss investment ever gets tarnished.

You are making leaps in logic to try to draw a conclusion you predetermined.

 

Very few people have the free cash to accomplish what you are claiming. And of those that do, even fewer would spend their time or money on comics.

 

Sure are there a few examples of this, definitely. Are there more than 10 - maybe, more than 20 - it would be statistically unlikely.

 

Outside of dealers, very few people hoard 50+ books of the same issue. This can be said about any comic. Again, there are those that hoard a given issue, but there aren't large numbers of people hoarding the same issue in multiples of 50 and higher. Maybe (and I say that loosely) you could find larger support for this behavior in books post 1980, maybe.

 

People just want this to be true for convenience of argument, but outside of a few single references there is not data to support such a claim.

I think it is relatively likely that there are multiple people out there with 50+ copies of AF15 hoarded as an investment.

It's a pretty common book that has been in huge demand for decades. It wouldn't be surprising to find people who have been buying 2-3 copies a year for 20-30 years.

People often have very nutty allocations of investments compared to their incomes. I've seen a lot of people with middle class incomes with millions in company stock in their 401k. Sensible people would diversify, but many don't.

I bet there are some long-time comic collector/dealers who are doing the same thing with AF15. On top of that, the can't miss feelings about this book have likely fueled additional hoarding in more recent years.

Back to the topic of af15, please!

Ok. :shrug:

 

Here is my point of the existance of multiple hoarders:

 

Either these people don't know what they have (unlikely given that they hoarded them - people don't collect specific things that they know nothing about), don't care because they are Scrooge McDuck (moderately likely, but very very very small population) or they truly don't exist in abundance and few select real individuals have been created into an urban legend that drives many of these discussions into even greater levels of speculation (highly likely).

This books is just trash. Sell your copies now--

http://boards.collectors-society.com/ubbthreads.php?ubb=showflat&Number=8429544&fpart=1

There are 9.2, 9.4, and a 9.6 copies of Forever People listed so far in the next Comic Link auction.

 

Just FYI for those looking for a copy.

 

 

 

Comic Link Forever People

Yeah, I should have asked for a 10% advantage for the selling fees.

I think that the actual bet is pretty much a wash, odds-wise. The time frame is too short for the natural advantages that stocks have to really kick in.

I do think that the thread will be a very interesting one to dig up in 5 years though.

I'm really interested to see how this works out. One point to remember when running the comparison. There are costs related to both holding (insurance) and selling (fees) comics, and there are benefits (dividends - S&P 500 around 1.75% year) to holding stock.

As promised, my SA key issue price snapshot. I pulled the 90-day GPA average for the books, and I tried to choose grades that had more than a single entry. That actually was pretty limiting. For example, I was going to list FF1, but it just didn't have much in GPA for the last 3 months. I also included GSX1 and IH181, since they are very liquid books that many people are invested in.

For the SA books, I focused on the lower grades (mostly 3.0 and 5.0). That is where there was enough current data to be useful, and also where I think most people are realistically putting their money. I picked higher grades for the BA books, since they are readily available and trading hands in those grades.

AF15 CGC 3.0 $9786

CGC 5.0 $18075

AV1 CGC 3.0 $1141

CGC 5.0 $2500

IH1 CGC 4.5 $11325

CGC 6.0 $21995

ASM1 CGC 2.5 $2629

CGC 5.0 $5053

Xmen1 CGC 3.0 $1820

CGC 5.0 $2921

JIM83 CGC 3.0 $2400

CGC 5.0 $3999

DD1 CGC 3.0 $670

CGC 5.0 $1047

GSX1 CGC 8.0 $780

CGC 9.2 $1302

IH181 CGC 8.0 $1697

CGC 9.4 $3497

It's funny, I don't have a strong opinion on FP1 either way.

I think I will put together a group of SA keys to track in this thread that is more representative of the group think "can't miss" books that I think are likely to be poor investments going forward.

Top of my list would be AF 15 in CGC 3.0 for 10k. I think that is going to look a little foolish down the road.

Fair enough. I think you just described the median sale, though, not the mean. Given that there aren't generally a ton of sales, the mean might be better though. It also has the advantage of being calculated right in GPA. So we could just take the 12 month GPA average on 3/1/17. Does that sound good?

My reluctance is not the stakes. My reluctance to the shorter bet is that it becomes more speculation than investment. I'm trying to show that comics are not a great long-term investment. They happen to be a great vehicle for speculation, though. The shorter the time frame, the less likely it is that my point will be made.

So our bet will be $100 to the charity of the winner's choice, to be settled on 3/1/17.

My side-

SPY, current quote 210.66

Yours-

Forever People #1, CGC 9.6, current value stipulated as $650

Don't forget, I'll have two years of dividends to add in if it is close

 

It's $100 for charity, man. I'd do mean, 12 month GPA sale (the sale closest to the middle of the range in 9.6, higher of the 2 middle sales in the event of an even number of sales) as of 3/1/17.

The problem is that I don't consider 24 months to be a meaningful amount of time from an investment standpoint. Five years is about the shortest timeframe I consider investments in.

How would we determine the end value for the 9.6?

 

I'll take $650 cost basis on 9.6 vs SPY for 24 months. Name the stakes.

What would the starting valuation of the FP 1's be? It doesn't appear to be a book that has a locked in value quite like a IH181 or a GSX1. The last GPA on the 9.6's was $741, but there was one in Comiclink recently that went for $550.

If market value is between those two, I'll take SPY to outperform them over the next 10 years.

 

Look, I have no problem with stocks. But if you are going to come to a comic book chat forum and tell everyone how stupid they are for buying comics and how brilliant you are for buying stocks at least have the cajones to name one stock or one mutual fund that you think can outperform my stack of FP 1's.

The huge difference between comics and corporations as an investment is that corporations have earnings that add to their value as an investment over the years. Stocks tend to go up in value over the years due to those added earnings.

Buying stocks at an all time high when corporate earnings are also at an all time high is not as dangerous as buying a commodity at an all time high.

It may not be an awesome time to buy stocks, but those corporate earnings tend to bail out the long term stock investor. An AF15 doesn't have an earnings stream to do the same.

So your argument is buy low and sell high, then you go on to suggest buying mutual funds while the stock market is at an all time high?

This just isn't true. The moves in the dollar have been substantial, but they are tiny compared to the moves in gold. There has been massive speculation in gold in the last ten years.

Look at a long term chart of gold and compare the spike in 1980 to the recent spike? They look an awful lot alike don't they?

A bubble formed and has been popping, IMO.

In fairness, the primary reason gold has risen is a weak US dollar and the only reason it's dropped recently is because of the relatively weakER Euro that makes the US Dollar look more stable to the market.

 

And as the US hasn't done much to improve the value of the dollar with the monetary policy, it's more of a case of other currencies just doing worse than the US Dollar.

 

At least that's my opinion on it. I know a lot of economists that disagree with me on the US Dollar's strength.

You are comparing the intrinsic value of comics with that of houses? You don't appear to know what the word means.

I must own shelter for my family. I am currently looking for a larger home because my current one is too small for two adults and two children. I need a house. I specifically want a house in a certain area because it determines how my children are educated, as well as how long my drive to work is. Heck, I need a house as a place to store comics

I like comics. I enjoy collecting them, and I derive pleasure from owning old ones. However, their real intrinsic value is pretty small. How much does a set of Marvel Masterworks go for?

Hamlet makes good points....but one thing that bolsters the comic market is, people want to own comics. People dont collect houses just to look at them and enjoy them. So the intrinsic value may be a factor in a no bubble situation. If suddenly the market collapsed a collector could still say for example hey I have every issue of FF - I love these books.

Sure, but in the runup to the crash all anyone said was that there hadn't been a national real estate crash since the Great Depression. You mention that real estate investors weren't prepared for the worst, and I agree.

That doesn't appear different than many of the people investing in comics today though. I see the same mentality that they are investing in things that can't go down significantly.

I'm not worried about the guy spending $800 on a Hulk 181. I'm worried about the person putting 200k into GA/SA/BA keys because "they never go down".

I see an awful lot of talk that SA keys are can't miss investments, almost regardless of price. That kind of thinking usually gets corrected pretty painfully.

There's been multiple real estate crashes in US history...

 

http://www.businessinsider.com/the-economic-crash-repeated-every-generation-1800-2012-1?op=1

 

It's not like it was always a rock solid investment up until the last crash. If you were to compare real estate crashes to key issue crashes you would see that the differences are nearly polar opposite.

 

There is a tendency for people to assume that past behavior predicts future results in investing, and it is an incredibly dangerous tendency.

 

It's only dangerous If you use the past as an absolute, and aren't prepared for the worse, which is something a lot of real estate investors weren't prepared for. A lot of those people weren't even prepared to buy real estate in the first place, let alone prepared for the worse. Using the past to predict future outcomes can be a great tool when utilized correctly, though it can be dangerous when the full spectrum isn't taken into account. I think people took the real estate market value for granted, and If they had taken a closer look at how real estate has played out in previous times, they may have been a bit more hesitant to invest their money into it. I think ignoring past behavior can be an even more dangerous move than trying to incorporate it to your advantage.

 

Comics can be relatively inexpensive (especially compared to real estate). If someone was to invest $800 in Hulk 181, and the book crashed, then so what? You may have lost $800, but you certainly won't need to file bankruptcy (unlike the real estate crash). On the flip side, If someone was to invest hundreds of thousands of dollars into the same book, then yeah, it's risky, because If that book crashes, you now have to face a major loss. The solution here is to not put all your eggs in one basket. Regardless, there's always two sides to a coin.

 

I'm not saying it's impossible for there to be an AF 15 crash, or a Hulk 181 crash, but I am saying that investing in comics doesn't have to be as risky or dangerous as some people here are making it out to be.