Official Market Crash Thread: Part Two!

[cd4ever]

I'm with Murph. As a buyer, not a seller, I absolutely welcome any significant drop in prices.

[FlyingDonut]

A couple of things:

 

First, to those who own stock in McLeod USA, please read A CEO's Lesson: What Goes Up . . . Telecom Company's Trajectory, Descent A Symbol of an Era , excellent story from the November 10 Washington Post.

 

I think everybody needs to release and understand that prices on certain sectors of the CGC marketplace are dropping rapidly. This is not a feeling, this is fact. Prices on books that are:

 

1) post-1966

2) CGC 9.6 and less

3) relatively "common"

4) not by any stretch of the imagination "keys"

 

are absolutely plummeting. Yes, prices for "keys" in grade continue to rise. Scottish's ASM 129 and Hulk 181 are keys, and, as such, will continue to do so.

 

Yes, prices for 9.8 books continue to rise (although I think $2200 for Defenders 1 is insane, especially given that Comiclink is going to resell it). But I think all the "defenders" of the marketplace are looking at these sales in the abstract and not looking at the forest.

 

If you are sitting on 9.6 "common" books right now, you have the equivalent of Lucent stock (which I bought...) at $60 in 1999. Lucent was (and still is) a great company with solid management and real "product". The stock is trading at $1.50 or so now.

 

Please note, however, that this does not apply to "raw" books. Raw book prices continue to rise., for example this http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=12593&item=736604162&rd=1 Daredevil 181 at 2X guide.

 

Just my two cents.

[COI]

I agree with your comment on CGC prices, and raw books.

 

One of the reasons raw high grades(VF+ or higher) will continue to do well is that so much quality stuff is being sent to CGC, even though there are still a lot of people out there who want to collect "CGC free". Add to that people who want to submit for profit and you get competition(especially with bidding).

 

It's also much easier to find bargains on raw books because they are not as liquid as their slabbed counter-parts.

[delekkerste]

Great article on McLeod. Murph, the company's vice chairman sold out of $119 million in stock while you and your fellow stockholders got nearly wiped out by staying "loyal" to the company. As a stockholder, you don't owe any "loyalty" to the company, especially not one where the fat cat execs are cashing out and hanging you out to dry. The only loyalty management should expect is from their cocker spaniels at home, not from their shareholders.

 

Gene

[murph0]

Do you realize how many jobs the company supplies to the state of Iowa? You can talk all you want, I'm not selling as I think it will help keep the company afloat.. It still doesn't explain why if he's making tons, he would have to "downgrade" his house. Certainly though he still has a lot of money, I think recently he was valued around 10 million. But I'd rather have his business in Iowa then in some other state. You can have your opinion and I can have mine, and no I'm not reading some of those articles.

 

Brian

[FlyingDonut]

Umm, I hope that the sand doesn't get into your eyes when you burrow your head further into it.

 

You should definitely read the article. As a shareholder you should understand that McLeod did things that were simply wrong and not in the best interests of the company, its shareholders and the community.

 

Tell you what. I'll open a plant in Iowa, run it into the ground as you buy more and more shares of my company, sell my shares at the high and screw you and all of my shareholders as I continue to do so and then plead "poverty" as my paper value plummets. Of course, seeing as I've been cashing out all along, unlike you, who has continued to invest in the local boy who has made good, I'll be OK.

 

McLeod is a criminal and should be in jail.

[FlyingDonut]

A couple of quotes from the Washington Post story:

 

...McLeod's luck seemed to float down to his hometown, so even when he exercised stock options to the tune of about $98 million in February 2000, who could begrudge him when middle-income investors in his company, McLeodUSA Inc., and other telecoms sometimes made $50,000 in a day, and riches seemed to be their reward for simply believing?

 

"You thought with Clark, well, here's a real chance to change things in a big way for yourself," recalled Doug Bean, a Cedar Rapids real estate agent and investor. A new paper millionaire who had decided that his stock gains in McLeodUSA could fund his retirement, Bean happily sought out McLeod at the Cedar Rapids Country Club, congratulating him on his vision and helmsmanship.

 

Hold on to your stock, McLeod told anyone who asked, and when the price began dropping slightly in early 2001, Bean did just that, his faith in McLeod's talents absolute even as the company's debts ballooned and worries escalated.

 

Only later, after the company's investment money ran dry and the resulting panic took Bean's stock down from its $35-per-share, post-split high of 2000 to less than $1 a share, did he and others even begin to think about the options McLeod had exercised in 2000, a windfall shared in by the company's vice chairman, Richard A. Lumpkin, who took home about $119 million when he sold his...

 

By early this year, McLeod's wealth looked like spoils to many ruined investors. By then, McLeodUSA was in bankruptcy, the stock was worth 18 cents a share and the 55-year-old McLeod had retired to Clearwater Farm.

 

Since then, the company has emerged from Chapter 11 protection from its creditors, with $3 billion of its debt wiped out. McLeodUSA officials have argued that they should be individually exempt from liability lawsuits filed by shareholders, to which a federal judge answered no. Shareholders could go after McLeod if they wished.

 

The lawsuits charged that McLeod had not said what needed to be said when it was not easy to say it -- that he had failed to be candid when the company began careening, and that when he did speak, he and others materially misrepresented the company's ills.

 

[Rickdogg]

Nice pic donut

[FlyingDonut]

thanks! from Chamber of Chills 22

[FlComicFan]

Right On CI

 

"CGC comics are a graded commodity, like graded coins and sportscards, and are destined to follow the same path,"

 

Actually CGC books are a created collectable.

 

It took Overstreet and the comic book hobbyists 30+ years to get to where we were pricing wise 3 years ago before CGC hit. Then almost instantly a Iron man 1 which you couldnt get guide for ($250-300) even if it was a prime 9.4 or better became worth $1000 and up? Ridiculous this a market that has been artificially created and is too easy to be manipulated right now. In 5 years or little more we'll see a stable market till then its like picking stocks at the top yeah they might go up a little but are much more likely to go down. Chet

[delekkerste]

Umm, I hope that the sand doesn't get into your eyes when you burrow your head further into it.

 

Boy, you got that right Donut. 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. And here we have a case where Murph won't even read your Washington Post article and where misguided loyalty has caused him to endure a 99.5% capital loss without selling. He is single-handedly making a mockery of the theories of some of the brightest economic minds of all-time!! When I read Murph's posts, it is clear that investors (and comic collectors) in the real world do not act rationally at all with regard to either stock or comic prices.

 

Murph, the optimum functioning of our economy depends on efficient allocation of resources. You buying and holding stock as it plummets to zero doesn't help anybody. It can, however, do considerable damage to your personal bottom line.

 

You should not come to praise McLeod, but to bury him.

 

Brutus Gene

[actionuniverse-migration]

To me this is a non-issue because the comic market already crashed big-time in the 1990's for the exact same reasons sited now. People were paying ridiculously high prices for those brand new HOT books while also paying outrageous prices for books like Iron Man 1 and Cap 100. Look at how much prices went up on those books between 1989 and 1992. Then we had Marvel flooding the market with gimmicks, foil covers, bags, hologram covers etc...until the bottom dropped out from under them and they took the ENTIRE industry with them. Hell, it even bankrupted them and if they didn't find a way to rebuild, comics as we know them would be gone. Otherwise, everything goes in cycles. Right now silver and bronze are hot and gold age isn't. Not too long ago it was the exact opposite. In fact, it's a great time to buy up some gold books for under guide, wait for the semi-new cgc phenomena to cool off, as we all know it will, and go after those gems. Also, don't count on Spider-man 2 to respark Spidey sales, just remember how much impact Batman Returns had...NADA!!!

 

I've GOT BLISTERS ON MY FINGERS!!!

[murph0]

yada yada yada I double posted, so sue me.

 

Brian

[murph0]

"McLeod is a criminal and should be in jail. "

 

Odd that someone who's never met him and only knows him from an article that's sole source was that of a disgruntled real estate agent from Cedar Rapids, IA..who before QUITTING his job..invested nearly everything into the company..quit his job and bought a new Ford Lightning and some old collectors car from the 40's that I don't know what it was called.. Yep, if you base all your arguments by using ONE side of a story, then I'm sure you've come up with some really interesting stories to tell yourself. But as a former neighbor to Clark, and knowing Doug Bean through my father...this story holds about as much water as an invisible bowl.

 

Brian

 

P.S. Let me know when you open that plant..I'll certainly invest if it gets people in Iowa jobs..which btw is also why Iowa has one of the lowest unemployment rates in the nation.

[murph0]

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.

 

Brian

[comicinvestor-migration]

Yo murph, it's always fun, but talking real-world low/middle-class economics with you is like debating Ethiopian famine with Fat Albert.

[FlyingDonut]

Like I said before, I hope the sand doesn't scratch your eyes as you burrow your head deeper in the dirt.

 

Here are some facts. These are NOT anecdotal. These are NOT "taken out of context" and these are NOT based on anything except what is below.

 

FACT: Five year historical chart for McLeod USA before it declared bankruptcy.

 

FACT: McLeod's stock price since it came out of bankruptcy.

 

FACT: McLeodUSA has never had a profitable year. (source, McLeodUSA's annual reports).

 

FACT: If you bought 5000 shares of McLeod USA on February 21, 2000, when Clark McLeod exercised his options to the tune of $98 million, you would have spent $141,900, based on that days close of $28.38. Your $141,900 investment would be worth, based on Friday's (11/22/02) close of $0.87 (and, of course, assuming you could have kept your shares through the bankruptcy), $4,350. Nothing like a 97% loss on your investment.

 

So if I open a plant in Iowa, you're going to give me 97% of your money?

[murph0]

Yeah, that could be b/c I really don't care about economics..? I buy what I like, I like what I buy, and I like to help out others.. That may or may not go with the ideas of some guy who's sat in a lab for most of his life coming up with some formula for the way the real world works or it may not..doesn't matter to me either way.

This would be like me coming on here and arguing about sound quality from component speakers in cars...and then when you say you don't care, me trying to push it upon you.

 

Brian

[murph0]

If 97 percent of my money amounts to the 4,000 dollars that I paid to Clark McLeod in late 95 (almost a year before it went public) then sure why not.

Let me guess, you got burned on this stock and hate a guy that you have never met? How about this..you ever come to Iowa..I will call him up and take you over to his house and you can discuss this to death. In the meantime, I'm really tired of this and so I'm stopping..

 

Brian

[FlyingDonut]

No, I did NOT buy McLeodUSA's stock. In the interest of full disclusure, I did buy Lucent and lost my shirt.

 

I'd love to talk with him, since I do know just a bit about the LEC/ILEC market. I'd love to hear his rationale for expanding so fast. I would also ask him why he no longer has an active role with the company after being its public face as the rocket ship went up.

 

No, what I object to is when people bust their and put their hard earned money into an "investment" that turns out to be overly hyped and they basically lose everything. If you gave Clark McLeod $4K in 1995 pre-IPO and haven't cashed out, your money is gone.

 

I have NO objection to your continuing to invest/believe in the company because it provides Iowans jobs and is a source of revenue for the state. In fact, that's probably one of the better reasons to continue to believe in the company. But I don't see why you don't agree that a 97% negative return on investment for Iowans (or anybody) is a bad thing.