Official Market Crash Thread: Part Two!

[comicinvestor-migration]

Murph, I wasn't taking a jab on your education or intelligence, but more that it's tough to see the potential impact of regular spending money they don't have, since you've been set you up financially since very early on.

 

Me, I was poor by choice during school (my parents offered money and luckily the doctors were able to sew the fingers back on ) but there are a good many things I fully admit I can't relate to, since I haven't "walked a day in their shoes".

 

Hence the comment about Fat Albert debating the ramificantions of world hunger.

 

 

[Guest]

Actually CGC books are a created collectable.

 

No, they are not. Some of the manufactured rare comics like museum editions are created collectibles. CGC books are simply comics that have been third party graded, with no manufactured distribution of grades.

[Guest]

I used to be a proponent of the Efficient Market Hypothesis (developed by Nobel laureates at the University of Chicago), but one of the key underpinnings of this theory is that investors act rationally based on their incorporation of all available information.

 

If the course tracked by the share price of this company is any indication, I don't think you need to lose faith yet, Gene.

[The_Man_Of_Steel]

It sounds to me like you are taking what he said literally. I think he meant it in more of a figurative way. I could be wrong, but I think that maybe the meaning of that phrase is more along the lines of...CGC has graded books that previously could not be sold for guide, and boosted the sales to multiples of guide. Simply compare what people are will to pay for the same book described in the same grade with the only difference being that one is raw, and one has been graded by CGC. The one that has been graded by CGC will fetch more money.

[Rival61-migration]

I bought Lucent last month for 76 cents a share. I doubled my money in 1 month. So did all my friends. The stock market is a zero-sum game. I thank everyone who bought or buys it for more than 76 cents a share for their money. The secret of the stock market is not so much picking stocks which you believe will increase as it is picking stocks which you believe cannot go any lower.

 

Paying $2200.00 for defenders #1 9.8? I think it can go lower. People seem a little confused about what guide prices really are. They are supposed to be a reflection of market conditions, not somebody's idea of what the prices should be. If they are not accurate (which by and large, they are not) then they should be ignored. All it takes is 2 people with a lot of cash to spend trying to put together a CGC 9.8 run of Chili to make the guide prices meaningless.

 

Speculators can only artificially inflate prices so far.

 

 

 

[comicinvestor-migration]

All it takes is 2 people with a lot of cash to spend trying to put together a CGC 9.8 run of Chili to make the guide prices meaningless.

 

I think you've totally missed the point as to what Guide Prices reflect. They do not assign a value that EVERY SINGLE sale must adhere to, nor are they meant to mimic prices paid by a couple of in a bidding war.

 

The piece of the equation you're missing is "long-term", whereby Guide prices have 25+ years of actual market research behind them, while CGC is still in its infancy and susceptible to horrible peaks and valleys. If you totally disregard long-term historical price trends and instead follow the latest over-priced fad, then you're getting ready to be fleeced.

 

I firmly believe that Guide prices are where CGC 9.4 comics will all eventually gravitate to. We've seen this happen with 90% of common CGC Silver/Bronze books, with only the keys and/or rare items achieving over/multiples of Guide.

[Guest]

Paying $2200.00 for defenders #1 9.8? I think it can go lower. People seem a little confused about what guide prices really are. They are supposed to be a reflection of market conditions, not somebody's idea of what the prices should be. If they are not accurate (which by and large, they are not) then they should be ignored. All it takes is 2 people with a lot of cash to spend trying to put together a CGC 9.8 run of Chili to make the guide prices meaningless.

 

The tone of your reply seems to be disagreement, but I agree with what you've said. Your 'all it takes is 2 people' comment is exactly the point I'm making. Defenders 1 9.8 should go lower than $2200..... but if only 1 or 2 more copies show up over the next 2-3 years, it may not.

 

And your comments on guide prices? Dead on the money. Some mis-informed stores/sellers are happy to look up and quote guide prices as though they're an edict from above.... often without grading the book.

[The_Man_Of_Steel]

I firmly believe that Guide prices are where CGC 9.4 comics will all eventually gravitate to. We've seen this happen with 90% of common CGC Silver/Bronze books, with only the keys and/or rare items achieving over/multiples of Guide.

 

I hope your right CI, cause I'm gonna BUY, BUY, BUY...books that I want and like. If this happens, the prices of raw books should be even lower which would help me buy a ton of books I cannot afford right now. I think one of the things you fail to see about me CI, is that I am with you all the way on NOT following trends, I buy what I like/enjoy NOT what some preview says is going to be the next "HOT" book. I learned my lesson about 9 years ago...at a local comic shop.

[Guest]

"I think one of the things you fail to see about me CI, is that I am with you all the way on NOT following trends, I buy what I like/enjoy NOT what some preview says is going to be the next "HOT" book."

 

I think this goes for most of the people on this board. I suspect the vast majority of us are veteran collectors/fans who buy what they like first and foremost. As a result, I tend to avoid getting too worked up over debates like 'the crash', and instead enjoy debating and learning from our fellow posters.

[Guest]

It sounds to me like you are taking what he said literally. I think he meant it in more of a figurative way. I could be wrong, but I think that maybe the meaning of that phrase is more along the lines of...CGC has graded books that previously could not be sold for guide, and boosted the sales to multiples of guide.

 

Maybe, MOS. I took the comment 'CGC books are a created collectible' literally, because I don't see anything figurative in it.

[delekkerste]

Thanks for the lessons on Economics, delekk, I've come to just sift through your posts cause the [!@#%^&^] runs so deep I usually end up falling asleep.

 

That's funny, because I read every word of your posts. Mainly because I can't believe that someone with a college education pursuing his Master's degree in Finance can actually believe the things you write. Your naivete is simply astounding (and I can tell by the tone of the other posters on this Board that many of them would be in full agreement with that statement.)

 

But that's OK. Smart money wouldn't exist without people like you to be on the other side of the trade. Somehow I don't think Clark McLeod (who Donut very rightly says should be indicted, or least forced to give back his ill-gotten gains) is shedding any tears over the losses of you & your fellow shareholders. He has, quite literally, already laughed all the way to the bank.

 

Gene

[murph0]

That's great to know. End of conversation.

 

Brian

[FlComicFan]

Bingo slabbing a book and giving it a grade by a team of professional graders should not cause demand for the book to go up to such a degree that the collector is willing to pay 4-10X guide. Granted I can understand the CGC slab and grade might make a book that has been proven to some degree over time to be scarce in high grade to sell for significant premium over guide say a ASM 1 in 9.4 I have no problem with that as a pristine copy of that has sold for a premium before CGC and likely will always do so. But, when fairly common comics or books which not till recently (with the advent of CGC)were in big demand are selling for stupid mutliples I dont think its healthy and just feel artificial. If you feel the need to spend your money on post 1966 books and are willing to pay large multiples (Defenders 1 in 9.8 for $2000+?) you are playing in a new game created in the last 3 years which strongly resembles the same that happened in the sportcard market a few years ago and the ending to that story was not positive. To their credit CGC does have a census which is a positive tool but with people cracking books and resubmiting is not entirely accuarate. I just have a feeling a lot of the buyers for the CGC top end books are not comic people and the flipping of books will stop sooner or later. If you want to have a collection of post 1966 books in NM 9.4 or better fine I'd love to add to what I already have but..... its insane to pay over guide or sometimes even guide for books that the anyone who has been around for even 10 years knows are plentiful in high grade (all the 1968 Marvel first issues, etc). What I mean by a created collectible is this. Real value is items which were not intended to be kept and thus are really scarce or there is not enough supply to feed the demand. Vintage comics quality and they have a history of value built by roughly 35 + years of being traded and sold by first small group of colectors which grew with the advent of Overstreet and cons/shows mail order etc. When someone pays $2000 for a Defenders 1 in NM 9.8 I have to ask before CGC would you have been able to get 2x guide then $60 for that book? Ok maybe a very finnicky aesthetic driven collector may have rationalized and said to himself yes a perfect copy is worth paying that maybe 3x equaling $180. Now three years later its actually easier to locate a Defenders 1 in NM 9.4+ grade thans to the high prices being paid so there are more copies available to satisfy demand. Defenders as far as the title hasnt had anything to increase its demand there is no new series no hot anticipation of a movie or some other short term inrease in demand yet prices are way higher. I have three copies in NM none are slabbed I bought all for guide or less over the years and all would grade between 9.2-9.6 so I really dont care what price you folks are willing to pay but one of two things is going to happen, either prices will continue to stay at these crazy levels if not higher and a large base of collectors will be knocked out of collecting or the prices are going to come back to earth and a lot of people are going to get burnt just like the blind who paid obscene amounts for sportcards because they were slabbed. The whole mentality is a fiasco. People are buying raw books and gambling they will get a book worthy of slabbing. Then they send it in hold their breath and see what the book comes back a 9.4 or better so they can sell for a mutliple. Then the books get flipped between people so they can buy more and do it all over again. PS totally agree Golden Age is a safer choice. I can buy a golden age book and feel pretty confident that there wont be a warehouse find of a few hundered copies in NM . There is time proven scarcity and many collectors who collect Silver and Bronze books wil end up dipping their feet in these as well to further fuel demand. I'd rather have a solid vg copy of a Golden age book that exists in less than 50 copies total for guide or a great deal less if you know how to shop than pay huge mutliples of guide for a NM 9.4 silver/bronze book that there are 50+ copies of in NM 9.4 alone and

[ubiquiti]

Okay, I've given in to the fact there is a noticeable slump on all but 9.6 and higher graded comics and "hot" keys.

How much of this really has to do with the economy, and how much has to do with every other possible reason?

Shouldn't 9.2 and lower start selling better(not higher - just becoming more attractive) as the consumer moves to more "inferior" goods?

Or does that indicate a further shift considering everything south of 9.8 becomes inferior, and prices adjust to that?

just a guess on my part, but I would think the economy is about 75% the reason and market saturation and a few others to be about 25% of the cuase.

I know I, for example have cut my comic spending way back since I could potentially be laid off any time now, and my wife hasn't been able to find work for 5 months...

I would say as the economy improves, so will comic prices..

And unfortunately folks, the economy is NOT going to improve anytime soon. Especially when you look at the fact that a World War looms, thanks to brilliant, far-seeing diplomatic vision by our president, looming budget deficits in excess of $25 billion, and once the war starts, escalating terrorism that could possibly not only crush the insurance industry, but the government as well now, since they chose to reinsure all terrorism risks.....

[scottish]

O.K. There is a philosophy that if you believe positive things will happen they will and visa versa.

 

So...do we want the economy/world to go to or see it improve and live in a better place?

 

No judgment on anyone or their opinions, but I'm with murph and will not read any of the frickin' doom and gloom any further.

 

If that means I live in a fairy-tale world until the Devil slaps me in the face then so be it. It's my life! I wish you all good health and pleasant tomorrows.

[Rival61-migration]

I think the root cause can be placed directly on speculators. This can easily be evidenced by looking at CGC population numbers. For example, lets look at Captain Marvel (1968). The number of slabbed CM #1 issues accounts for nearly 90% of the total slabbed for the series. Speculators want #1, and could care less about #8. Were more #1's printed than #8's? No solid numbers, but my guess is probably. Did more #1's get purchased than #8's? Once again, probably. And finally, did more #1's survive in pristine condition than #8? Odds are, quite a few more. So to someone collecting a series, #8 would be more difficult to obtain 9.8 than a #1 9.8, and therefore, would normally command a premium.

 

I think we are reaching a "break-point" for speculator favorites. The saturation of so-called key issues are causing a much more fluid dynamic in sales as they are circulated from speculator to speculator, and only a small percentage of them are being removed from the pool to actual collections. The influx of more slabbed copies in high grade continues far outstipping actual collector demand. There really is only one predictable outcome.

 

Other issues in a series are often nearly impossible to locate in high CGC grades. Most dealers will tell you they are not rare, or difficult to obtain raw. There is a serious problem with this however. They are beginning to show up in the last year on the CGC census, but they have NOT been showing up for auction or at shows. The only CGC non-keys we have been seeing are in the lesser grades, from 8.0 to 9.2. This is presumably caused by collectors, not speculators. They are upgrading their collections, and the 9.8's just are not going to be changing hands. I refer anyone with questions to current e-bay prices for high grade slabbed silverage Silver Surfers. I see this as a model for the future, when CGC population numbers have increased dramaticly.Whereas CM #1 9.8 may go for 10X guide, a 9.8 of a "common" issue can demand upwards of 20X, and often does.

 

I suspect within the next few years we will see a reasonable pull back in key prices, accompanied by a dramatic increase in non-key issues in high grade. While the keys may be more fluid, and more "collectable", they have also been speculated and preserved. The others have not. I am snapping up so-called "common" issues which I believe actually may be exceptionally rare in pristine condition, especially the raw ones. For example, when I sent in my Captain Marvel collection for slabbing, my #16 turned out to be the only one ever slabbed (top census at 6.5, still unable to located a better copy... !). Pristine "common" issues from this series appear to be nearly non-existant. Those that actually do exist are not changing hands.

 

As collectors start driving this market in the next few years, the speculators may find themselves in a bursting bubble situation. In the end, I think the collectors will win.

[murph0]

Some issues may appear to be rare just b/c there's no reason to really bring them out of the box and do something with them.. if I can sell a gorgeous book from the 60's or early 70's and only get 20 dollars or so for it..what's the point? I'll just hold onto it.

 

Brian

[Guest]

Bingo slabbing a book and giving it a grade by a team of professional graders should not cause demand for the book to go up to such a degree that the collector is willing to pay 4-10X guide.

 

You clearly don't understand why the market has reacted in this fashion. The root cause of multiples of guide being paid for CGC books is the fact that collectively, this hobby can't grade to save its life. Ask scottish about MHCs grading. This is a reputed mail order dealer and they frequently overgrade books by a full grade or two. It is the established confidence in CGCs grading that allows a premium to be paid - no hidden defects, clipped stamps, resto check etc.

 

you are playing in a new game created in the last 3 years which strongly resembles the same that happened in the sportcard market a few years ago and the ending to that story was not positive.

 

Before we use the sportscard market for comparison, let me ask you if you have any experience collecting or dealing in sportscards? If not, you probably aren't qualified to draw any parallels based on hearsay.

 

What I mean by a created collectible is this. Real value is items which were not intended to be kept and thus are really scarce or there is not enough supply to feed the demand.

 

So you think there is enough supply of Defenders 1 in 9.8 to meet demand? Bidding on this item suggests otherwise. $2200 is probably excessive, but while you're waiting for the price to drop to guide, you might want to help O.J. find the real killers. There's nothing 'created' about a Defenders 1 9.8. Over the years, wear and tear and age has weaned the number of copies of this book that are out there in 9.8.

 

I have three copies in NM none are slabbed I bought all for guide or less over the years and all would grade between 9.2-9.6 so I really dont care what price you folks are willing to pay

 

Great. Two questions.... one - got a 9.8? And two, can you grade? What most people think is 9.4 isn't, hence the confidence in CGC graded books, as posted above.

[murph0]

"What most people think is 9.4 isn't"

 

Hell sometimes what CGC thinks is a 9.4 isn't.

 

Brian

[scottish]

From my expierence (HA!) a CGC 8.5 = my 9.4. 9.4 is a frickin' perfect book and anything higher is undiscernable to my poor vision/grading skills.