Inflation, the Dollar, and Comic Prices

[TupennyConan]

You're right. I did mean weak dollar.

 

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

 

Its hard to resist when I get carried away. My bad.

 

I still love comics.

[bodhee]

new poster to the boards but had to chime in on this one.. i agree that non ultra keys or non high grade golden age books are flat but the key here, as one postedr mentioned earlier, is the ability to sell your books AND NOT PAY A NICKEL IN TAXES.. compare that to your typical stock portfolio and a 35 or more % tax on profits and theres no question that comics are the better option..also, if you beleive as i truly do that the number of 30 somethings that are entering or re-entering the hobby will continue to grow< and you have yourself an excellent return on investment.

high grade silver however, because of their lack of scarcity and incease in numbers as collections and new books pop up every day, to me are very bearish as I feel that its the scarcity of the item that is the biggest mitigating factor in its value.. just my two cents..

[Blind Owl]

Welcome to the Boards Bodhee.

 

I sold you a Cap comic not to long ago. (thumbs u

[jkrk]

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.

 

Invest in commodities? Possibly. The corollary is that the age of financial assets (1982- 2000) is over for quite awhile. Lower rates will lead to sharp rallies in financial assets from time to time but there should be little net progress when compared to commodities. Low interest rates coupled with stagflation will push up prices of "stuff" (materials, etc) as prices rise faster than the cost of carry. Yes, commodities probably will be the superior investment...............unless we are approaching the "one hundred year flood". In that case liquid treasuries might prove to be the king of investments and commodities will suffer from a flight to liquidity. Take your pick.

[piper]

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.

 

Invest in commodities? Possibly. The corollary is that the age of financial assets (1982- 2000) is over for quite awhile. Lower rates will lead to sharp rallies in financial assets from time to time but there should be little net progress when compared to commodities. Low interest rates coupled with stagflation will push up prices of "stuff" (materials, etc) as prices rise faster than the cost of carry. Yes, commodities probably will be the superior investment...............unless we are approaching the "one hundred year flood". In that case liquid treasuries might prove to be the king of investments and commodities will suffer from a flight to liquidity. Take your pick.

 

This is a very depressing thread....

[ft88]

new poster to the boards but had to chime in on this one.. i agree that non ultra keys or non high grade golden age books are flat but the key here, as one postedr mentioned earlier, is the ability to sell your books AND NOT PAY A NICKEL IN TAXES.. compare that to your typical stock portfolio and a 35 or more % tax on profits and theres no question that comics are the better option..also, if you beleive as i truly do that the number of 30 somethings that are entering or re-entering the hobby will continue to grow< and you have yourself an excellent return on investment.

high grade silver however, because of their lack of scarcity and incease in numbers as collections and new books pop up every day, to me are very bearish as I feel that its the scarcity of the item that is the biggest mitigating factor in its value.. just my two cents..

 

First of all, we aren't "able" to sell comics at a profit tax free. While many can get away with it, especially at the low dollar level, there is risk of getting caught and all risk has a price. Even if the probability of getting caught is 1/10th of 1% the price to pay is probably very high. At the high dollar level the risks go way up.

[senbi575-migration]

I would agree with ft88 regarding the taxes.

 

You could argue that large auction houses, and even C-link that receive the cash from the buyer and forwards it to the seller is obligated to report any amounts paid to a single person in excess of $600 (or what ever the curent amount is) on a form 1099.

 

I suppose you could get around this if you sold directly to collectors via the boards or through conventions (I am not sure what the convention's procedures are with regard to tracking sales) and other means.

[TupennyConan]

One starts from the premise that ALL gross income is subject to taxation. To avoid that understanding at the outset is to court danger. No one should be willing to tolerate that kind of risk, in my opinion.

 

 

[the blob]

One starts from the premise that ALL gross income is subject to taxation. To avoid that understanding at the outset is to court danger. No one should be willing to tolerate that kind of risk, in my opinion.

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Unless you're selling off your OO collection you amassed 30-50 years ago (that you paid nothing for), meaning if you're a collector who buys and sells to finance his/her hobby, you ought to have enough expenses that a lot of this is a wash. Your pre-tax NET income is what is subject to taxation, as in gross minus cost/expenses Granted, in this area sometimes it isn't so easy to know what your "cost" is, but it seems like most people here who are selling are often doing a lot of buying too. I had no profit last year because I blew more than $3K on storage rooms. Bye bye profit!

 

And once I've unloaded the last storage room, about 25% of my house will be housing this krap (luckily I have no use for my third floor!). I'm sure I can find some deductions in there that aren't being fully utilized through my mortgage deduction.

[TupennyConan]

One starts from the premise that ALL gross income is subject to taxation. To avoid that understanding at the outset is to court danger. No one should be willing to tolerate that kind of risk, in my opinion.

---------------------

 

Unless you're selling off your OO collection you amassed 30-50 years ago (that you paid nothing for), meaning if you're a collector who buys and sells to finance his/her hobby, you ought to have enough expenses that a lot of this is a wash. Your pre-tax NET income is what is subject to taxation, as in gross minus cost/expenses Granted, in this area sometimes it isn't so easy to know what your "cost" is, but it seems like most people here who are selling are often doing a lot of buying too. I had no profit last year because I blew more than $3K on storage rooms. Bye bye profit!

 

And once I've unloaded the last storage room, about 25% of my house will be housing this krap (luckily I have no use for my third floor!). I'm sure I can find some deductions in there that aren't being fully utilized through my mortgage deduction.

 

My cost basis is always equal to my price realized on the sale of my asset

[ft88]

Unfortunately, push comes to shove, its up to you to prove your cost basis. Guilty until proven innocent with the IRS.

[TupennyConan]

Unfortunately, push comes to shove, its up to you to prove your cost basis. Guilty until proven innocent with the IRS.

 

Sometimes taxes/accounting make me want to just go get a job and close-up shop on all of my efforts. Bummer.

 

250 point drop in the Dow today on the Citi news (which was already factored in right?). Makes no sense. Day traders maybe. Oil was down too though???

 

BTW, Spidey & MJ aren't married anymore...

 

Why is Captain America dead???

[MCMiles]

Sometimes taxes/accounting make me want to just go get a job and close-up shop on all of my efforts. Bummer.

 

Word.

[bodhee]

spoken like a true accountant.. but if you think that most ebay sellers are claiming all of their profits your nuts.. I'm sure if the IRS woke up and started auditing EBAY Sellers (god forbid), there would be a ton of people forking over $ to the government.. Regardless, most of my key books have been purchased outside of Heritage and C-Link (although the market for where you can sell or purchase high end books is quickly becoming limited to just these few options and a few major dealers), so this (loophole) might change. But even taxes aside.. Look at Gpa and you'll find that high grade early Actions, Tecs, Timelys, etc can double in value in just a few years. If you are truly looking into the hobby as an investment vehicle and stick to particular types of books, there is no question you can outperform the market.

And the average investor (myself and I assume most of the people on the board) know zero about commodities investing nor the risks involved. We do however know comics and the benfit of years of experience coupled with a network of other freinds and collectors in the hobby give your experienced collector a distinct advantage in making the right choices when investing in books. Not at all different from those on Wall Street taking advantage of their old boys network. Average Joe doesnt stand a chance to make a dime in the market bunless he/she is in for the very long haul.

Sorry for the rant, as I said, maybe it's just because I have been back in the hobby for just three years but I've seen a tremendous jump in the value of key books in that short time frame.. Now if only I had jumped back into the hobby in the early 90's!

 

[the blob]

Well, buying GA slabs in 2002-2003 and into 2004 was a good time. I don't have much experience with real keys, but 6.0 - 8.0 type books that are basically as good as you're going to find for some issues/titles were getting overlooked by some of the $ out there that was overly focused on 9.4 or better (and thus not buying much GA, or only buying really expensive GA or only buying books that aren't actually that rare) like they were used to seeing with SA and BA.

 

I sold much of what I acquired then in 2006/2007 when I bought my new house and probably averaged maybe 100% profit per book after costs (averaged in there were a few I overpaid for due to ignorance --- a Green Lama comes to mind, which turned a profit, but not a big one). Mind you, I don't know whether I could have replicated this on a larger scale because the prices I paid were a result of huge numbers of lowball bids and the occasional win. I wasn't necessarily winning the stuff I wanted most, of course.

 

Of course, "investing" in some non-key 1940s Batman or Captain Marvel is hardly a high stakes game. Not too exciting.

 

And honestly, as they say...past results do not..blah blah. I don't see why it can be assumed that we'll see another doubling in 3-4 years. We sure as heck won't see one in the real estate market, so why comics? The only "knowledge" advantage people who "know" comics have is not overpaying for something, not so much knowing what will be much more valuable in 3-5 years.

 

Of course, those who overpaid a little for high grade non-restored GA keys and semi-keys in the late 90s did pretty well when CGC came on the scene and suddenly made those HG books much more liquid and more premium priced.

[ft88]

I think you'd have to assume that any high dollar comics bought before CGC had a significant risk of being restored. It would be easy to see survival bias in the comic world in terms of price increases. (Although this is a fault in the investor world too with mutual funds).

 

Is it really the case that 6.0 to 8.0 books increased in value by 100% as a whole? Mid grade hoo hum GA books didn't seem to do that well but have defnitely gone up. Still 5 years and 100% return is great but no better than housing and commodities for the most part. I guess that's my point is that comics increase in value in a commodity type fashion resulting more due to inflation and dollar weakness than a "doubling" of interest in comic collecting.

 

Just because the price increases doesn't necessarily mean demand went up. And for every group of books that exceed the averages (Spiderman, Pre Robin Tecs, Early Actions) I can name even more that didn't (Superhero Fawcetts, pre code horror, low-mid grade DC/Marvel 60's, VF or below Disneys/Barks)

[the blob]

Is it really the case that 6.0 to 8.0 books increased in value by 100% as a whole? Mid grade hoo hum GA books didn't seem to do that well but have defnitely gone up.

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Well, as always, it depends on how much you paid for them! I wasn't buying "the market", I was buying 1 in 50 or 100 books that slipped through the cracks of the ebay bidding process for whatever reason. Luckily I had enough loot at the time that I could have $10-15K in bids going on 30-60 or whatever books and if I won them I wouldn't have to go bankrupt, I'd just need to cool it for a while. (Not that I won even 10% of them) Same boat I suppose a bunch of people here are in. Of course, at the same time I was tossing a lot of lowball bids for OA and I think I got hit for about $4-5K in auction wins on OA in one week, which led me to cool down that sort of activity!

 

Heck, one I can remember is a mid-grade Hit comics I picked up for $200 via heritage (through their ebay auctions) [which was half guide at the time] and sold for $450 [which was around guide at the time i think]. Highest graded in the census, but only a 6.5 and not a great one either. Just dumb luck. And I actually did well on a bunch of mid-grade Batmans/Detectives at 35-50% of OPG that got sold for around OPG. Can't really say "the market" went up 100%, just some overlooked stuff. At the time I figured if I paid up to 50% of OPG for slabbed GA books I could not go wrong long or mid-term and I did ok with that.

 

But you're right. Up until about 6 months ago was a great time for a lot of things. Heck, I doubled my money buying tech stocks in 2002 and selling in late 2006 and the value of my apartment roughly doubled then too (and I didn't have to pay any cap gains tax on that one either!)