Inflation, the Dollar, and Comic Prices

[ft88]

Just a commentary on the rising prices in comic books.

 

Comic value have generally increased over the past 5-7 years or so and I would argue that the reason has been motivated as much by inflation as by anything else such as CGC, ebay, and movies. Collectible comics are in essence another form of a commodity. They are a scarce good with varying levels of demand. They are also universally (ie internationally) valued. The Wall Street Journel has a nice editorial about the price of Oil and the Greenbacks Fall. In it there is a chart where since 2000 oil and gold are up some 250% vs the dollar and 100% vs the Euro. Other commodities have similar large increases vs both currencies.

 

So if you accept my defininition of commodity and you agree that comics are another (very specific) form of a commodity. Then you have to wonder what increase in value is due to the intrinsic growth and interest in comics vs inflation.

 

BTW a few comments on inflation. I am of the school that the CPI is a guide for inflation and not a very good one. I won't go into detail here but the two key problems with CPI are hedonics and housing adjustments. Hedonics are the subjective adjustments to inflation due to substitution and improved quality of consumibles. Housing is where CPI uses monthly rent rather than price to purchase. Bottom line is CPI is generally lower than true inflation. My view is that inflation is better judged by looking at commodities and the growth of the money supply. Many say the strict definition of inflation is, in fact, the growth of the money supply. Using CPI, it takes $122 today to purchase the same thing as $100 in year 2000 (http://data.bls.gov/cgi-bin/cpicalc.pl). That is simple hogwash and enough on that.

 

There are a million variables so I do understand its impossible to conclude anything with any sort of exactitude. But that said, I look at prices of typical collectible comics defined as reasonably high demand with reasonable supply to see how they have performed over the past 5-7 years.

 

I find that the rise in value is really not that great compared to other commodities. An ounce of gold or a tank of gas rose in price much higher than your CGC Spidermans and Batmans. I'll agree that you can buy a much better TV or computer with those same comics compared to 6 years ago. This again gets to how to define inflation. But overall comics have not really kept pace.

[JiveTurkeyMoFo]

But overall comics have not really kept pace.

 

Many GA books especially were bringing stronger coin in the earlier days of Heritage and CGC (Actions and pre Tec Detectives being obviously excluded). On a nominal basis, most books are flat to slightly down. Adjusted for inflation, there is a more substantial depreciation.

 

I expect this trend to continue for the forseen future, with some notable exceptions to major titles. If you're a true "collector", the next few years will be a good time to buy.

 

Now, as to whether there will be a turnaround with some nice upside appreciation at some point in the future remains to be seen. What we might be witnessing is a long-term secular downtrend in prices that may not ever end in a rebound.

 

Either way, I don't care. I primarily buy with profits from flipping anyway, so I don't stand to lose any "real" money even if we head into a prolonged market changing downturn for prices. I just hope to pick up as many high grade gems as I can. (thumbs u

 

 

 

[seank]

If you're a true "collector", the next few years will be a good time to buy.

 

 

 

I hope you're right.

[Ivanko]

As a collector (not a dealer), I typically don't buy with the hopes of them going up anyway; that's what other investment vehicles are for. If they do increase, it's a bonus. I consider myself a holder and preserver of something that someone can enjoy years from now.

[Stronguy]

Just a little look at history shows that money flows into other "investments" llike art and collectibles when money is cheap. The dolar is weak right now because the fed has made money so available. It's got to find some place to go.

[Robert Beerbohm]

Having been away from the boards for a couple weeks doing a fine Christmas with both my daughters under my roof for 10 days - been too long since they are grown up now - then spent this past week pumping a few hundred new vintage items up into my eBay store, taking a break, saw this post, thought i might be able to weigh in a thought pattern or two, if its OK.

 

Sounds like you be a person who buys "high end" or rather in the least "high grade" for "top dollar", or, in the least, had been, and maybe just a person who watches the trends in the hobby

 

Writing here as some one who has been buying & selling old comic books since 1966, set up a table at my first show in Houstoncon 1967, co-opened first store in Aug 1972, with the Reilly collection, co- found one of the nicest stashes of GA books one could ever hope to be blessed with - plus having bought literally thousands of one owner collections and accumulations of all sorts over the past 40 years,

 

my point is, i think, that the concepts within the hobby seem to have changed every half a decade than the previous five years. And prices have steadily gone up over these four decades i have been at this, to the point that this comics trip is simply a way of life for me for almost as long as i can remember

 

What you say would be true for the encapsulated third party graded aspect of this hobby

 

There i fully agree with you that the prices gave gotten silly again as of late concerning the "cream" of what this hobby has to offer

 

then again, i remember when that early Sotheby's auction saw an AF #15 sell for $38,000 - and it was like a VF if i remember correctly

 

Did that guy do OK over time? He surely blew it for any possible sort of short term return

 

What we have going here is a two edged sword

 

Some stuff brings stratosphere prices for certain perceived at the time "hot" title

 

this in turn gets a measure of media publicity

 

that in turn brings out more stuff hoping to cash in on these silly prices

 

if the stuff coming out has too large of a spigot at the time, too much stuff comes on the market, causes what we call a "glut" - and as these sellers sell out, we lose them as collectors - they got priced out of the hobby

 

prices either stabilize over the short term, or even come down for a spell

 

people drift back into the marketplace

 

eBay has been a god-send for demonstrating that almost nothing is truly rare - all the way back into the 1840s - it has caused a lot of material to come "down" in perceived value due to the overwhelming glut of material as we witness every day coming onto the market place plus all the other auction venues, etc

 

But eBay is just a rough barometer as what any given book there sells for is a function of whoever looked that week

 

Me, i prefer to place my stuff into my e-Bay store. I try to select what 40 years has taught me sells month in, month out, and do Buy It Now

 

I sell a lot of material to collectors. And i see two differing levels of collector

 

1) the investor

 

2) the reader

 

both collect

 

what 40 years in this specific field has taught me is investors used to be called speculators back in the day - if you are riding any given band wagon in this field and buy high, you can wait years to recoup investment coupled with some sort of real profit

 

and it is the slabbed books which are the commodity of which you speak,yes?, i assume so, please correct me if i am wrong, and i would say that at times in the past, sales records of vintage comic books have proved out better than buying into gold

 

but right now, in the present market when some prices have truly gone into the stratosphere if one is to believe the hype one reads on such matters, speaking as the fellow who broke the two grand barrier on selling comic books, which got a LOT of AP/UPI wire stories all over the country back in 1973, i know how this stuff works

 

what has taken off even more is the original art market - which seems to show no top end yet, as if it could just be getting started, even

 

Me, i am more at heart of the "reader" mentality, while totally protecting the high end 9 and better stuff which does come my way, selling off what comes thru without trying to gouge on most of it, just some of it, the ones i truly care about personally -

 

so, as far as whether or not comics are keeping up with other commodities, from my perspective, it depends on what level of the distribution chain you buy at.

 

 

 

 

 

 

 

 

 

[Scott Summers]

Just a little look at history shows that money flows into other "investments" llike art and collectibles when money is cheap. The dolar is weak right now because the fed has made money so available. It's got to find some place to go.

 

And with another rumored rate cut on the way, our currency is really going to be on the ropes. I have a couple of buddies overseas who are actually now in legitimate contention of picking up some heavy weight silver keys that normally would have been out of their price range, but because the dollar has been tanking so much against the euro, they can now afford them present day where a few years ago or so they would not have considered it.

[innocuous]

Even more rumors today about interest rates dropping. Even more bad news. I have a friend living in London getting a U.S. salary. It's so bad, when he threatened to quit, his company offered to pay his rent for the remainder of his stay.

 

On the otherhand, I got so burned in 2001, that I've been diligently saving. So, if HTF books do come up, I'm getting ready.

[showcase4]

Just a commentary on the rising prices in comic books.

 

I find that the rise in value is really not that great compared to other commodities. .... overall comics have not really kept pace.

 

Ohhhh horse hockey!

This may be true for an average comic portfolio, full of mostly OK stuff with a key or two sprinkled in, however......

for an exceptional collection, full of high grade CGC unrestored keys and semi-keys, I would betcha' the return on investment could blow away just about anything you put it up against...blue chips, gold, oil...etc. etc. Throw in the additional perk of the ability to sell without claiming the profits as income in many cases( hope the IRS is not reading this ), and you have tax free sharp gains when you go to sell. I have never seen anything perform as well as a 9.4 AF15, 6.0 Action 1, or 8.0 FF1 ( just to name a few ).

 

Steve

[ft88]

Lets use the FF1 as an example since the AF 15 and Action 1 have so few price points and represent the very cream of the crop rather than an example of a perfectly nice high end collectible. It'd be unfair to seek out the best performing stock and then say that stocks are better than comics. Gold and Oil are proxy's for commmodities and dollar weakness, I am sure there are other commodities out there that have outperformed those two.

 

GPA has the FF1 in 8.0 going from 12k to 22k since 2002 not a ton of data points there either but it seems about right. I guess doubling in price in 5-6 years is pretty good, but compared to housing (even at todays prices) or commodities they haven't held up as much. And an FF1 8.0 is a cream of the crop book. Its not an AF15 or Tec 31 but it has to rank in the top 20 most desired books.

 

If we used an average collection typified as 100 VG 60's Marvels and DC's and 100 high grade Byrne X-men, my guess would be appreciation of 0% to low single digits over the past 5-7 years.

 

Not trying to go either way on whether comics as investments are a good idea or not. Simply trying to view the appreciation in value as a way of measuring the interest in the old comic market industry as a whole.

 

 

 

[Transplant]

One of the problems with measuring ROI with comics is the price point paid fluctuates based on many variables. I guess I mean that gold has a very structured market for trading as do stocks. Not sure that Ebay or the auction houses can equal those markets. What got me thinking about this was the statement about an average collection. Depending on how the collection is sold, the ROI can be up or down. Liquidity in comics is usually going to necessitate discounting. I think that's why marquee books look more like stocks and other "liquid" investments. Just a thought I had.

[TupennyConan]

BB of the Fed almost came out and promised a 1/2 point cut in rates today. Even this wasn't enough to excite WS with anything more than a 120 point gain compared to the 200+ point per day losses over the past 10 days.

 

Last week or so the fed flooded the money supply with billions again. I purchased Slovakian crowns years ago when they weren't worth a thing in anticipation of the Euro replacing the crown once Slovakia becomes a fully participating EU member. Little did I know that the greenback would go into the tank as it has. So, I was happy with my buy as the crown is doing nicely.

 

Even the loonie has begun to outstrip the dollar.

 

I do know that I see an increased interest in books from overseas buyers day in & day out.

 

Over in General, CycleGirl has posted ASM's performance over the decade. If we are to believe her numbers, it has seen about a 7.5% increase annually. But I think she meant only keys. We all know that ASM keys are the best selling comics of all time. Well, very low risk CD's last year were at 5.25% but are now below 5%. My 60/40 portfolios with Wachovia Securities, Raymond James, & to a lesser extent Oppenheimer, hover around 11%.

 

I, like others, buy the comics I want when I want for my own crazy comic book pleasure. My investment dollars, however, instead flow into CD's, the markets, &, my favorite of all, small business.

 

[Scott Summers]

Even more rumors today about interest rates dropping. Even more bad news. I have a friend living in London getting a U.S. salary. It's so bad, when he threatened to quit, his company offered to pay his rent for the remainder of his stay.

 

On the otherhand, I got so burned in 2001, that I've been diligently saving. So, if HTF books do come up, I'm getting ready.

 

 

Nice that your buddy at least spoke up & got something out of it. Fed futures right now are pricing in another 50 basis point near term rate cut with 75% certainty. That would take the fed funds rate down to 3.75%. Craziness for sure.

 

Hey thanks by the way for popping in on my reading your comics thread

[Scott Summers]

BB of the Fed almost came out and promised a 1/2 point cut in rates today. Even this wasn't enough to excite WS with anything more than a 120 point gain compared to the 200+ point per day losses over the past 10 days.

 

Last week or so the fed flooded the money supply with billions again. I purchased Slovakian crowns years ago when they weren't worth a thing in anticipation of the Euro replacing the crown once Slovakia becomes a fully participating EU member. Little did I know that the greenback would go into the tank as it has. So, I was happy with my buy as the crown is doing nicely.

 

Even the loonie has begun to outstrip the dollar.

 

I do know that I see an increased interest in books from overseas buyers day in & day out.

 

Over in General, CycleGirl has posted ASM's performance over the decade. If we are to believe her numbers, it has seen about a 7.5% increase annually. But I think she meant only keys. We all know that ASM keys are the best selling comics of all time. Well, very low risk CD's last year were at 5.25% but are now below 5%. My 60/40 portfolios with Wachovia Securities, Raymond James, & to a lesser extent Oppenheimer, hover around 11%.

 

I, like others, buy the comics I want when I want for my own crazy comic book pleasure. My investment dollars, however, instead flow into CD's, the markets, &, my favorite of all, small business.

 

Very astute my friend. But hey, we all know what you are putting all of your disposal cash & savings into - one word .... chunks

[TupennyConan]

They say we are already in recession here in Florida...

 

Gold nears $900. The Taj Mahal no longer takes dollars. Will petrodollars divorce?

The dollar continued its fall on the rate cut news yesterday. Gas/oil rise.

 

But I recall the lament heard round the world of the bully dollar all through the '90's.

 

If only we could trade in chunks.

[Transplant]

The real danger is if the Fed's rate cuts don't boost the economy. We could be in danger of stagflation where prices rise but we still have negative employment/economic growth. A strong dollar is not a problem in and of itself. It makes our exports cheaper (see foreign buyers for US comics) and decreases our trade deficits generally. The real problem to me is that energy costs were already pretty high and the weaker the dollar gets the higher the cost to US buyers. This is not altogether terrible since high energy costs make domestic production more viable. You would be surprised at the oil sources that sit dormant when crude prices drop.

 

It will be interesting to see what the rate cut does long term. And it is long term. You need to wait about 6-12 months to really see the effects of rate cuts anyway.

[ft88]

I think you mean weak dollar but very good points.

 

My take is that easy money support bad investments or bubbles which eventually pop or deflate over time. Either way its painful. First, low rate money went into tech stocks and recently went into housing. There's not much left for it to go into except commondities or foreign assets.

 

One question I ask my fellow finance gurus in the office and never get a good answer.

 

With the benefit of hindsight, lets assume you were back in Japan in the 80's at the peak of the market. You hold Yen. Where do you invest your yen for maximum return. Again, you have perfect hindsight that the BOJ will reduce rates, the stock market will fall and the real estate market will crumble.

 

Oh and you can't invest outside of Japan.

 

This thought exercise is to determine where you put your money using US $. Markets are (were) at record highs, real estate a bubble, interest rates going from low to lower. This last point is to reflect the U.S. being Japan of the 80's. Because the U.S. economy drives the world economy, the U.S. markets are pretty well coupled with international markets. Just a fact of life.

 

My answer is to invest in commodities. Granted from the 80's to now they haven't done that well but they have done better than staying in Yen, or buying the Nikkei, or any real estate from that era. Food for thought as its a tough question.

[TupennyConan]

Dow is down a whole bunch again today...

 

What happens if China calls in our debt?

 

What happens if China invades Taiwan? Do we ask them to manufacture our war machine? We can't even build F15's that don't break in two in mid-air.

 

China is powered by rapacious capitalism, full tilt. They announced that they won't lower green house omissions b/c they are too busy on the rise!! Who complains?? China owns Darfur, who complains?? We are moving toward Socialism!! Russia, awash in oil money, has retired its national debt & we worry about drilling in Alaska!!

 

Because the West is naught but a pack of childish, bed wetters we are Doomed, as Charlie Brown would say.

 

Listening to the Dems debate is like watching a bunch of teenagers. Not a single adult on the stage.

[TupennyConan]

I think you mean weak dollar but very good points.

 

My take is that easy money support bad investments or bubbles which eventually pop or deflate over time. Either way its painful. First, low rate money went into tech stocks and recently went into housing. There's not much left for it to go into except commondities or foreign assets.

 

One question I ask my fellow finance gurus in the office and never get a good answer.

 

With the benefit of hindsight, lets assume you were back in Japan in the 80's at the peak of the market. You hold Yen. Where do you invest your yen for maximum return. Again, you have perfect hindsight that the BOJ will reduce rates, the stock market will fall and the real estate market will crumble.

 

Oh and you can't invest outside of Japan.

 

This thought exercise is to determine where you put your money using US $. Markets are (were) at record highs, real estate a bubble, interest rates going from low to lower. This last point is to reflect the U.S. being Japan of the 80's. Because the U.S. economy drives the world economy, the U.S. markets are pretty well coupled with international markets. Just a fact of life.

 

My answer is to invest in commodities. Granted from the 80's to now they haven't done that well but they have done better than staying in Yen, or buying the Nikkei, or any real estate from that era. Food for thought as its a tough question.

 

Your thought experiment makes my head spin.

 

Anyway, I love comics.

[Transplant]

You're right. I did mean weak dollar.

 

Tupenny: Let's not turn this into a political discussion.