CBS MarketWatch: Collectibles Are "The Stupid Investment Of The Week"

[joe_collector]

I was just trying to illustrate how the argument by crash theorists that those who don't mind seeing a crash, really do because of the money they've put into it. I would love to see a crash also as then I could complete many a set for cheaper.

 

Murph, this is a scenario that can only be answered when the time comes. I've heard this a lot prior to other crashes, yet when the Reaper comes calling, the vast majority of "I'd love a crash, because then I could buy cheap" guys go running with their tail between their legs.

 

A crash isn't just a decline in values, but a powerful market mentality that says "get out now!".

 

For example, let's just say that values plummet, and that ASM that was selling for $4K, drops to $3.5K, and then a few months more falls to $3K, and then to $2.5K, and looks to go even lower....

 

At what point would you buy? How would you feel about laying down $3K on something whose value was plummeting?

[joe_collector]

When this huge collector base tries to sell enormously appreciated assets into a shrinking collector base that has less money, the end result will be unprecedented and undeniable.

 

Now there's a sig-line quality comment if I've ever seen one...

 

I also love how wags bring up Golden Age comics from the 30's and use them to predict trends for Silver and Bronze.

 

Anyone with a smidgen of intelligence should see the vast differences in supply, attrition, collector mentality (which really jump-started in the 1970's) and readership.

[joe_collector]

Perhaps, enough of us wont sell because we dont WANT to or HAVE to sell

 

Have you ever moved a relative into a old age/nursing home? Have you seen what they allow in terms of personal belongings and storage space?

 

If not, look into it and them try and imagine smuggling in a few boxes of ultra-valuable collectibles.

 

It's the old Edgar Church scenario, and your relatives will be madly selling off all your stuff, while you wave good-bye from the retirement villa...

[MMMarvel-migration]

I consider myself a collector/Investor. I have been keeping track of comic prices since the early 80s. In that time I can't think of a single key mainstream marvel comic that has dropped in value. There might of been a few years where a price dropped slightly, but not significantly. On average every Marvel mainstream key as steadily gone up in price. I see no reason why that trend would somehow start to reverse. Especially, when we are talking about Silver, Bronze, and 80s modern keys. The prices might stabilize on those key issues, but the bottom definitely won't fall out.

 

I am of the opinion that new readers are being created faster than old readers are dying off. That might change in 10 to 20 years, but I don't see it in the near future. Key comics of characters that have spanned generations are in no immediate danger of loosing their value and will continue to increase in value as the CGC Census continues to give a more accurate assessment of the #s of keys out there. You have 3 or 4 generations competing against one another while bidding on Ebay to have 9.4 copy of Hulk 181. If anything, it is going to get more difficult to locate HG copies because there isn't enough supply to meet demand. I am still waiting for 10,000+ copies of Hulk 181 9.4s to appear.

 

[delekkerste]

I have been keeping track of comic prices since the early 80s. In that time I can't think of a single key mainstream marvel comic that has dropped in value...I see no reason why that trend would somehow start to reverse.

 

No one is disputing that there *was* big money to be made in high grade keys and choice comic art pieces in the 1980s and much of the 1990s. If you see no reason why that might change, I humbly suggest you re-read this thread (minus the attempted hijackings), because there are plenty of plausible reasons out there why that most likely will change. If you're playing by 1983 rules in 2003, you are cruisin' for a serious bruisin'.

 

 

I am of the opinion that new readers are being created faster than old readers are dying off.

 

Is that why circulation levels are down 80% since a decade ago? Only a handful of titles sell more than 100,000 copies, a figure which used to be considered a cancellation cut-off. Sure, not all collectors read new issues, but the sheer magnitude of the decline shows that there is no freaking possible way on this good Earth that more people are entering the hobby than leaving it. I think the attrition rate has stabilized in the past few years, but given the cultural & demographic changes I have described, along with the near-total neglect on the part of publishers to cultivate a next generation of readers, I have not an iota of doubt that the industry & hobby's long-term secular decline is still in force.

 

 

If anything, it is going to get more difficult to locate HG copies because there isn't enough supply to meet demand. I am still waiting for 10,000+ copies of Hulk 181 9.4s to appear.

 

This is a specious and irrelevant argument. If there isn't enough supply to meet demand, the price rises so that supply & demand equilibriate. We don't need new supply to hit the market if enough buyers decide that maybe buying a common book that's already appreciated a thousand percent or whatever in the last decade isn't such a wise decision.

 

Gene

[jbud73]

Perhaps, enough of us wont sell because we dont WANT to or HAVE to sell . The argument presupposes that we Boomers WILL sell to cash out, and that we will NEED to sell. Perhaps those of us with sizable collections will choose to keep them in part because we have so much disposable cash to afford these books (even having bought them years ago for less $$$ but still lots of dough) This would limit the supply to only what CAN be absorbed by the marketplace, the younger 30 and 40 years olds who wont be selling for 20-30 years.

 

Maybe Gene's TIMING is off: There really arent THAT many copies of key SA and GA books in high grade. And these are the "enormously appreciated assets" in the argument. It just might be possible that ALL of the ones that come to market WILL be absorbed by it for quite some time to come, albeit with a little softening in the prices. Perhaps Gene's right but OFF by a generation. Its the Gen X and Y guys who will be left holding the bag when there arent enough of todays Modern collectors to move up to the nicer stuff???

 

Again alot of good points on this topic which is something that I guess affects us all. Some things I thought that I'd throw out there, with the presupposition that I hold the main contributors to this thread in high esteem and consider and apply alot of what they say in formulating and considering my own opinions.

 

1. I think that the article fails to elicit the intangible arguement, IE it is true that comics are not liquid, that you need a buyer and that companies actually make things. However, by that same token stock investors rarely have a stake in the company and Vice versa. Collectors have a stake in their collections so I'm not sure that the presupposition that uses the the stock market to elicit speculation in a collectables market is necessarily always valid, there are points of extrapulation, however.

 

My arguement here suffers form the fact that investors, in the vein of Comgeek etc make up a portion of the collectables market that cannot be underestimated.

 

2. The Baby Boomer influence cannot be overstated, as almost anyone who works with or has studied demograhic patterns will tell you, if a generation creats a ripple in the demographic stream, then baby boom was a tidal wave by comparison. What this means for the comic market is dubious however. There may be a flood of books on the market with a lack of generational capital and demand to absorb them. However this may not occur in a Big Bang fashion as the Boomers are generally well off enough to NOT be forced to sell and basing a market trend on what their heirs do is loop hole ridden.

 

On a personal note I hate the baby boom as a generational phenomenon, they up pretty much everything they could, consumed to death and yes like every other aspect of society the Generation X and Yers will probably be left holding the bag. Some of the ppl I admire and respect most are in this generation bracket, but I think my macro summation reamains intact.

 

3. Any arguement that posits the collector base as rising for one of its tenets is in serious trouble. While the publishers have doen little to stimulate the comics medium within the printed pamphlet artform. They have successfully crossed over to other mediums. Again the "trickledown" hate the term but it can be applied here, effect of this cross media success on the comic market is very difficult to gauge.

 

4. So to sum up, what happens in the wake of the end of the baby boom demographic impact (god let it be soon), combined with the sustained ability of successive generations to stabilize their absence, IE will post-BBers collect SA in GA in quantities that allow for continued market growth? Will investors fill the partial gap left by a dwindling collector base? Will the collector base continue to dwindle? What impact will post 80s stuff have when it turns 30, are all issues that will be key determinants in the future of our hobby as an industry.

 

 

I welcome comments on my comments and the furthering of all discourse related to this topic 'cause macro looking inside and outside the box is always important in any industry.

 

[joe_collector]

There is a good point being raised here, and although it's a virtual certainty that time will not be a friend of comic book values, it will be interesting to see how long and how substantially "investors" (like Comgeek) can artificially prop-up the market by continuining to buy and thus promote a "strong market".

 

Or more succinctly, how deep are their pockets and how much can/will they risk?

[jbud73]

Oh, um just to orient my personal perspective in this whole mess, so ppl dont think that I'm crunching numbers trying to make my million in the comics marketplace

 

I'm the kinda guy who sits there and looks at Batman 232 or Nick Fury 4/6 until I almost weep in appreciation and both those books were done before I was born in '73. But I think that I am an endangered species, IE there aren't alot of ppl like that who are my age out there, this board is awesome but can blind you to macro elements in the market. IE if I met up with 100 30 yr old north americans randomly at lets even say a huge chain books store, I bet that less than 5 of them know that Wolverine's 1st app is in Hulk 181.

 

Not the most scientific test but it does have its implications......................

[Zonker]

IE if I met up with 100 30 yr old north americans randomly at lets even say a huge chain books store, I bet that less than 5 of them know that Wolverine's 1st app is in Hulk 181.

 

Do you think that test would have produced any different results in 1993 or 1983?

[jbud73]

No probably not, just saying that sometimes the message boards can over inflate or skew our thoughts in ways that are not realistic when discussing the MARKET implications of the industry. This really limits ability to anticipate change to the industry from outside influences as comics as an industry or collectables market does not function in a vacuum.

[joe_collector]

just saying that sometimes the message boards can over inflate or skew our thoughts in ways that are not realistic when discussing the MARKET implications of the industry.

 

That's exactly it. We all laugh at the other markets that have crashed (like Beanies and Sportcards) but refuse to see what's coming down our particular road.

[Foolkiller]

I'm surprised that this topic constantly generates so much discussion...

But it also makes me think that the article posted by Gene has a lot of truth to it, as does a great deal of what Gene and JC constantly are bringing up... people are investing in comics, sometimes too much, and have become emotionally involved with these investments...

 

My observation is that whenever people bring up Hulk 181 (yes, that book again) or the market crash, there's a lot of people who get very, very distrubed by that information. If people are collecting "just for the love of the hobby" or because they "truly believe, with true confidence, in the investment potential of the books", then I would think that this would not spark so much debate, and often times impassioned responses. I think most people, especially collectors, don't want to believe that there could be a downtrend coming, very soon, in the hobby. Especially on CGC books, and the incredible prices attained for high grade books.

 

In my simple, simple way (and because Gene dwarfs my intellect concerning financial matters) let me present a very basic maxim: when anything becomes inflated well beyond the point of it's actual value, there has to be a correction. It's true in the stock market, it happened in the card market, and I think it's coming very soon in the comics market. So... I see these posts where people are saying that market isn't going to crash, and that there are more (say what?) collectors/readers coming into the comic book hobby and I wonder, are people just telling themselves that? Can you ignore lower distribution and continuously falling sales in raw numbers each year? Can you ignore prices that seem to outstrip reason? Can you ignore the fact that many of the collections that were built up of high grade material will be coming back into the market as those collectors die off? Where are the new collectors emerging from with the funds to continue to buy these items in 10 or 20 years? People cite other collectibles, but generally cite things with MUCH broader appeal... Marilyn Monroe, western collectibles, toys etc. had much broader appeal than comics, which have a niche.

 

I see one of the primary problems in resistance to the raw data and examples Gene and JC provide is the psychological need for most current collectors to resist the actual information out there. This is not to say that they are most certainly correct in every aspect of their argument, but rather to say that their argument is exceptionally strong. It's backed up by a lot of facts. I don't believe that the crash will be Amazing Fantasy 15 worth $1. But if you bought a copy of Hulk 181 for a record price, and now can't even get back your investment (for example, you pay $2500, now you can't get $2000) I'd say there's going to be a significant problem. And then the mindset of people really comes into play, because a couple of those sales and people start to say, jump off the ship before it sinks completely. Get rid of those 9.6 books for what you can get... dump it before I lose anymore... and then you have a crash.

 

But I will say this... in the 1993 or so, when we had a small implosion, I'm sure a lot of people might have thought comics were dead... it certainly looked bleak... but the hobby ultimately rebounded and the base of the silver/bronze only got stronger... so although I believe there is bound to be a significant correction... will there again be a renewed period recovery and growth? The question will be, how many of these current comic investors will last long enough to see it, because of their overplay at the current moment.

[Foolkiller]

I'm surprised that this topic constantly generates so much discussion...

But it also makes me think that the article posted by Gene has a lot of truth to it, as does a great deal of what Gene and JC constantly are bringing up... people are investing in comics, sometimes too much, and have become emotionally involved with these investments...

 

My observation is that whenever people bring up Hulk 181 (yes, that book again) or the market crash, there's a lot of people who get very, very distrubed by that information. If people are collecting "just for the love of the hobby" or because they "truly believe, with true confidence, in the investment potential of the books", then I would think that this would not spark so much debate, and often times impassioned responses. I think most people, especially collectors, don't want to believe that there could be a downtrend coming, very soon, in the hobby. Especially on CGC books, and the incredible prices attained for high grade books.

 

In my simple, simple way (and because Gene dwarfs my intellect concerning financial matters) let me present a very basic maxim: when anything becomes inflated well beyond the point of it's actual value, there has to be a correction. It's true in the stock market, it happened in the card market, and I think it's coming very soon in the comics market. So... I see these posts where people are saying that market isn't going to crash, and that there are more (say what?) collectors/readers coming into the comic book hobby and I wonder, are people just telling themselves that? Can you ignore lower distribution and continuously falling sales in raw numbers each year? Can you ignore prices that seem to outstrip reason? Can you ignore the fact that many of the collections that were built up of high grade material will be coming back into the market as those collectors die off? Where are the new collectors emerging from with the funds to continue to buy these items in 10 or 20 years? People cite other collectibles, but generally cite things with MUCH broader appeal... Marilyn Monroe, western collectibles, toys etc. had much broader appeal than comics, which have a niche.

 

I see one of the primary problems in resistance to the raw data and examples Gene and JC provide is the psychological need for most current collectors to resist the actual information out there. This is not to say that they are most certainly correct in every aspect of their argument, but rather to say that their argument is exceptionally strong. It's backed up by a lot of facts. I don't believe that the crash will be Amazing Fantasy 15 worth $1. But if you bought a copy of Hulk 181 for a record price, and now can't even get back your investment (for example, you pay $2500, now you can't get $2000) I'd say there's going to be a significant problem. And then the mindset of people really comes into play, because a couple of those sales and people start to say, jump off the ship before it sinks completely. Get rid of those 9.6 books for what you can get... dump it before I lose anymore... and then you have a crash.

 

But I will say this... in 1993 or so, when we had a small implosion, I'm sure a lot of people might have thought comics were dead... it certainly looked bleak... but the hobby ultimately rebounded and the base of the silver/bronze only got stronger... so although I believe there is bound to be a significant correction... will there again be a renewed period recovery and growth? The question will be, how many of these current comic investors will last long enough to see it, because of their overplay at the current moment.

[OldSchoolTerry]

The simple way I think about this topic is....

 

 

If you're a collector, buy the books you like because you appreciate the art, like the stories, treasure the memories they bring back to you.........

 

If you're looking at it as an investment, really consider if comics are an attractive long term investment compared to any other alternatives out there in the world........

 

If you're one of those specs bidding these "funny books" to sky high prices, pass the hot potato along before it burns you, or.........

 

 

[Mushroom]

Ok....I will do my one post on this subject and try and put forward an alternative view. I appreciate Gene's and Joe's passion in this area but to constantly trot out the same diatribe around textbook macroeconomics to predict the end of comics as we know it is just as false as those who view the comic world through rose coloured glasses.

 

There is a big difference between a contrived collectable and a collectable that retains its'market value and presence. Most successful collectables were made to be consumed i.e. a victorian cedar chest was made to hold clothes, an Action #1 was meant to be read over and over again, a cigarette card was designed to promote the consumption of tobacco, later baseball cards were created to sell gum or other confectionary, stamps were created to identify paid postage on a letter, coins were used to buy things, etc etc etc. These things were not created for people just to hold onto. As a result of consumerism...interest in items as keepsakes began to flourish....people turned to collecting. This is quite understandable as collecting was an important pastime in an era where children had little to do on rainy days to keep themselves occupied (i.e. no TV no radio).

 

Collecting lead to competition among peers who fought to have the best available. In normal consumerism rareity often comes through mistakes, natural limited production (i.e. short availability times as a result in a change of monetary rate, changing social standards, change in production techniques etc etc) or in manufactured redundancy (i.e. deterioration of product materials such as paper). Wanting to have what somebody else has leads to market competition, in the early days and example of this would be the swapping of multiple minor cards for an important baseball star. As boys and girls became adults then the barter for key items became monetary compensation.

 

Let's skip forward to the 70's onwards. The logical progression for built in obsolescence for a generation who was savvy with the term collectable was to create a false market that thrived off the mentality that rareity guaranteed dollars. Unfortunately rareity became 1000, 10000, even 100,000 items..all of which would be kept in perfect condition. Think about it....the true size of collecting markets up until this point had been quite small (given population levels at the time) but the rareity of the collectable meant that you only needed a continuing growth in a commited segment to ensure that prices would continue to rise. Now small commited markets had to absorb a 100 fold increase in volume to ensure continued market returns on these limited items. This is where speculators came to bear....advised by financial planners and scam artists they were sold the argument that historical returns were achievable on these manufactured collectables. This of course led to greed and unsustainable market conditions.

 

Let's look at a few of these:

 

Stamps....most stamps preduced since 1970 have been deliberately created for the investor...post offices raised the number of issues dramatically for each year, they increased the volume of the number of stamps issued and started to produce stamps that had no cultural relevance to the issuing body (check the number of disney stamps that small islands have produced over the last three years). Technology improved so much that true mint copies became plentiful and could be guaranteed to survive going forward. The result was a massive glut of product that rose sharply and then crashed when prices could not be sustained.

 

Comics....same as the above. More issues, larger numbers available, better storage, better paper, limited variants and so on.

 

Sports cards.......same as comics

 

Beanie Babies...for god sake no kid ever played with them and damn anyone that removed a swing tag (crazy)

 

The Nasdaq....largely vapourware that fueled people's greed. I know it is economic but it was the same greed conditions that fueled it's'success.

 

The comic market will not die, but it will shrink. What retains value will be those books that are truly rare and those that have cultural, historical or sentimental value.

 

GA books do not fluctuate like BA or moderns nor have they encountered the recent steep rise in value that SA's have simply because the market is mature. There is less risk in dollar terms in this market but there is also only marginal growth and as such this area is not greatly influenced by speculators.

 

SA is still in the growth curve but it will also mature to a level matching current GA.

 

BA has growth to come but due to the larger number of HG books available for each issue will encounter different problems than GA or SA. My belief is that BA collectors will be far more picky about what constitutes collectability....artist's, first appearances will be more important and obviously HG will be more important.

 

Moderns......for the 90's I don't hold out much hope.

 

Collecting is not investing......hype and false economies are not often rooted in fact. Those that protect the dollars that they spend on their collectables are those that generally know more than somebody else, but in general these collectors are more inclined to keep what they have due to the emotional attachment.

 

Am I concerned about the future of the comic market....not really, if I had to sell my collection then I would lose on some and gain on others. I believe I have a balanced collection and I certainly have some items that there will always be people wanting to buy them.

 

I have only ever bought two spec books....an ASM #129 and the Soulfire I bought off Donut and for both of these purchases I wrote them off in terms of getting a return on them.

 

Stamp, coin, cards or any market for that matter are still bouyant but only for those things that are truly rare and desirable.

 

As to market size....well....it will shrink but it will also expand. As an example of this..I collected Chinese stamps from the age of 11 and would get all the new issues as they came out...for a long time these issues were not worth a great deal as the collecting market was small, however, increased affluence in China in the late 80's onwards created a massive growth market size and stamps that were largely consumed and destroyed or were truly created in small numbers suddenly increased in value 300 fold. Now these stamps have maintained their value over the years and still record small increases each year but anybody buying them now will not receive the return that I might get one day. The problem has been that the greed factor has destroyed the market for any China stamp made since 1987.

 

GA market sizes continue to grow as a result of more international interest, SA will shrink alarmingly but then rebuild as will BA. Collecting tastes will be narrower and this will mean major downward adjustments in value for a large numbers of books. (more BA than SA) but the desirable items will always be desirable.

 

Will kids be reading comics? Not as we knew it but then at the same time the aura and history of the characters will continue to exist and interest will always be there. There are more kids aware today of Batman then there were in the 60's it is just that the medium through which they encounter him is vastly different.

 

Invest in comics at your peril....but collect what you truly love in the knowledge that prudence will ensure that you not only have what makes you happy but that you won't get hosed on them if, God forbid, you need to dispose of them.

 

Just my humble opinion.

 

As per the comments around people like Comgeek....well... he sells comics for a living to purely make himself some money...in this regard he is no different than a merchant banker or stock broker. For some people he makes money for others he doesn't. He is trading in a commodity...if the market should fail... then his ability to see this in advance and shift to another commodity will be vital to his ability to continue to make money.

 

 

 

 

 

 

 

 

[Mushroom]

Almost forgot.....those on this forum who predict that video games are the collectable of the future are extremely insightful....early intellivision, Commodore C64, Sega etc may just be the way to go. They meet all the criteria that has fueled collecting markets in the past.

 

Not my cup of tea but I will certainly be watching with interest.

[joe_collector]

That is a very good post Mushroom, and I agree with your basic sentments, but still disagree on how deep this will go.

 

Personally, I don't see anything past the first 10 issues of the initial Marvel Silver rush to hold anything resembling their current value. That and a few Silver and Bronze keys that turn out to be much rarer in HG (scratch Hulk 181 offf that list) than anyone thought.

 

Other than that, count on huge losses and buyer apathy.

[joe_collector]

Almost forgot.....those on this forum who predict that video games are the collectable of the future are extremely insightful....

 

Thanks for the compliment.

[duncan36]

Videogames have been mined far less than comics, kind of like comics were in the 1970's where no one but collectors knew comics were worth anything so you could pick up golden age at book merchants/flea markets for pennies. Almost no one has a clue that the old boxed 2600 game thats incredibly rare is worth more than a few bucks.

[joe_collector]

Personally speaking, I like the SNES and forward for any potential spec activity. The Ataris are older, but I still feel that the SNES marked the beginning of the current Video Game Age.