Scoop...the Market Crisis

[The_End_At_Last]

Market Crisis

 

An interesting quotation from the above :

 

"With the booming prices and definite potential for the market to go even higher, Snyder said that collectors should beware the prophets of doom.

 

'There is always someone who is trying to make a mark for himself by saying 'the sky is falling.' It's important to keep in mind that most of these people have an agenda other than what they might indicate. They love to pit one category against another, or one period against another.'"

 

Jesus Christ, who could they mean?

[joe_collector]

 

In a few years, I'll be more than happy to compare predictions with this "prices will move even higher and NEVER fall!!!" bozo.

 

Also, the quote was from John K. Snyder, Jr., President of Diamond International Galleries. Hmmmm.

 

Speculator City Babeeeeee!!!!

 

 

What he fails to outline (naturally) is that there are far more people out there working to artificially pump the market up (this dope-head dealer of "investment collectibles" included), due to the fact that they are 100% biased and stand to gain financially from a continued speculator-based market.

 

P.S. Do a search on his name, and the guy shows up in a zillion Scoop articles, promoting comic investments, comic values, CGC multiples, projected comic investment profits, etc., etc., etc.

 

You'd think Scoop was his PR agency.

 

I have nothing to gain financially from a market crash, I'm not a dealer, and my collection would lose value, so what's my angle?

[The_End_At_Last]

Actually JC, I was only having a little laugh at your expense - I believe that a lot of your 'predictions' will come true. It's just a matter of when. Let's face it, the introduction of CGC did not increase, or decrease, the number of high grade comics into the world. Thus the price for a slabbed comic should only really be the original raw cost + slabbing etc. As soon as people realise this then CGC prices will crash to a moderate amount above raw comics - the better for everyone (oh, except the speculators).

 

Having said all that, computing power has doubled every 18 months for the last 35 years. I've read many times that this had to end by 1990, 1995, 2000. And it hasn't. Perhaps if the number of insufficiently_thoughtful_person speculators doubles every 18 months then prices WILL still increase dramatically !

[fazman]

' While there is a lot of material on eBay, only a small percentage is of the highest caliber."

 

Yeh, and what is, is probably a scam !!

[RedRaven]

I'm pretty much in agreement with JC on this. I havent bought a key in 3 years and dont see myself buying one in the forseeable future ... BTW: Im strictly a collector , I sell nothing , when it goes into my collection it is basically out of circulation until the day I die .... That being said , there is no way I would spend what I see as ridiculous sums on these books... An ebayer/speculator could/can realize a profit if they move but for people buying books for the long-term, its just plain insane to pull the trigger these days.

[sterlingcomics]

I definitely agree here. Sounds like a song and dance to the speculators.

 

"The end....my only friend, the end..."

[JiveTurkeyMoFo]

Thus the price for a slabbed comic should only really be the original raw cost + slabbing etc. As soon as people realise this then CGC prices will crash to a moderate amount above raw comics - the better for everyone (oh, except the speculators).

 

Just ask Supa (or so many others) what happened when they submitted their raw Comic-Keys acquisitions to CGC.

 

The equation was more like: Original Shilled Auction Cost + Cost of Slabbing = fraction of the original selling price.

 

The restoration aspect of the certification process (especially for pre-1966 books) is so incredibly vital that it cannot be overstated.

 

 

 

 

[SilverAgeGuy]

The restoration aspect of the certification process (especially for pre-1966 books) is so incredibly vital that it cannot be overstated

 

I absolutely agree with this. The idea that CGC books should only sell for raw+the slabbing cost is silly. If you buy 100 high grade raw books and submit them, there is a good chance you will get burned on at least one resto. Thats added value for the CGC books that many of you are ignoring. And lets not forget you can sell CGC graded books on internet much easier than raw... more added value.

[Freiherr]

I do not slabed books going for more than book + fee a huge problem. I see the huge price difference between a 9.6 and a 9.8 the problem. Those prices are on toothpick foundations and show every characteristic of something that is inevitably going to fall.

 

I am only a collector, but I have much to gain thanks to the cheap prices a “crash” would bring.

 

[SilverAgeGuy]

I see the huge price difference between a 9.6 and a 9.8 the problem

 

I have to agree with this as well. I own a lot of high grade CGC books, but none higher than 9.6. In my opinion the difference in quality dosent come close to the difference in price. The same overly large price break can often be seen between 9.2 and 9.4, at least in my area of collecting. 9.4's usually go for about 5x the price of a 9.2. Therefore it makes sense to buy 9.2's with good eye appeal over 9.4's, since you get 5 of the one instead of 1 of the other.

[Aman619]

I do not slabed books going for more than book + fee a huge problem. I see the huge price difference between a 9.6 and a 9.8 the problem. Those prices are on toothpick foundations and show every characteristic of something that is inevitably going to fall.

 

I am only a collector, but I have much to gain thanks to the cheap prices a “crash” would bring.

 

Bingo, mein Freilheir. Its the extra multiples spawned by CGC slabbing that is the excess in the current comics market equation.

 

But HG keys in great demand with lasting value (not a flash in the pan demand) will endure. John Snyder has a vested interest in collectibles continuing to be in demand and their values increasing, and, YES, the SCOOP actually IS his PR agency (its all Diamond) (maybe you were being sarcastic, sorry) But only a fool speculator would interpret his optimistic comments to mean "all comics" are "cheap" and will increase wildly in value from here on out.

 

Caveat Emptor doesnt mean that a crash is coming.

 

 

[JiveTurkeyMoFo]

The same overly large price break can often be seen between 9.2 and 9.4, at least in my area of collecting. 9.4's usually go for about 5x the price of a 9.2. Therefore it makes sense to buy 9.2's with good eye appeal over 9.4's, since you get 5 of the one instead of 1 of the other.

 

100% agreement on this topic. I think the 9.2 vs 9.4 debate often breaks down along fiscal lines....better value with sharp-looking 9.2s vs. the Prestige/Exclusivity factor of a 9.4 or better.

 

 

 

 

[dam60]

Here's the definitive view of a crash.

 

The “Crash” Cannot Possibly Happen – There Isn’t Enough SUPPLY

 

Think about this: using the current census numbers for Fantastic Four #1 there is 1 copy in 9.6 (cheers to CT!), 3 copies in 9.4, 2 in 9.2 and 1 in 9.0. That is a total of SEVEN copies in true VF/NM or better to date. THERE IS SIMPLY NOT ENOUGH COPIES TO CAUSE A CRASH. A crash is defined as a “To undergo a sudden severe downturn, as a market or economy”. There simply isn’t a big enough SAMPLE SIZE to ever call it a crash!

 

Don’t try and kid yourself that the comic market is entirely made up of CGC books. The OS guide and Wizard are both showing steady appreciation of prices for books across the grade range and across the gamut of titles and ages. Furthermore, these books seem to have healthy sales and are extremely liquid. If all of a sudden people stopped buying comics altogether that would warrant a “Crash”. If a book that someone paid 8x guide for resells for 1x guide that isn’t enough of a sample size to warrant it a CRASH.

 

When buying a book for investment I would think of the two following things:

a – room for growth

 

There was a great discussion on the Silver comics about the merits of a Brave and the Bold 28 vs. a Showcase 4. I believe it was Timely who made the excellent observation that the BB 28 is at a fraction of guide price of the S4. This gives buyers the impression that it has room to run. Buying books at multiples of guide leaves one at the mercy of finding others of a similar mindset and hoping that the guide continues to show steady increases in price over time. Furthermore, just because a book is losing value does not mean that it will not go lower. Sometimes its better to sell for a small loss than to hold on for a big loss.

 

Furthermore at certain prices you will be catering to a very small group of collectors. For someone to be able to afford a comic they must have that amount of $$$ in disposable and or investment assets. I would feel more comfortable putting the $50,000 that a Batman #1 cgc 8.0 would cost and would rather park it into some real estate, bonds or stocks (the “traditional investments”) (although that is if I had that kind of money! )

 

b – relative scarcity in grade.

 

An Action #1 in ANY grade is scarce, I would estimate that there are no more than 500 in existence today. A X-Men #1 is by no means scarce with 7.5 million copies made. In the latter example condition becomes MUCH more important as with so many available replacement copies anything that is not a true NM or really a NM/MT becomes fodder for the quarter bins.

 

Something to think about.

 

DAM

 

[Freiherr]

Many SA and most GA keys will always be the exemption to every rule. It is apples and oranges when compared to BA/Moderns. In my eyes they are not the same product.

[Aman619]

good points Dam. I dont mean to criticize (at least not sharply since I agree with your basic stance) - - but you hit an offkey note at the end when you estimate the # of copies of Action #1. 500 is grossly overstating the reality and shows little awareness of the general consensus of experienced dealers and collectors of 20+ years standing that the correct estimate is more like 80 to 150 copies...some even say only 50 but IMO thats too conservative.

 

I especially agree with the part about prices above the mid 5 figures further affect future values. But as long as there a dozen big whales interested with the available means, there will be demand for the top keys in the top grades regardless of high the prices get. The very Best of the Best will survive for quite a long time.

[Freiherr]

Per Wizard

 

“The comic, which features the first Superman appearance, is extremely rare. With less than 100 copies known in existence, 27 of them have been CGC graded. Of those, eight have been restored, including the sole 9.0 copy. The highest graded unrestored copy is 8.5.”

 

[duncan36]

Ferraris were another 'bulletproof' collectible market that crashed, in the gravy years almost everyone buying collectible Ferraris was buying them solely to punt on at some point down the road, because the thought that Ferrari's could ever go down in price was ridiculous, preposterous. 'Theres only 250 of this Ferrari model made' A dealer would say smuggly 'with that kind of limited supply it'll never go down in price'.

Its as simple as this most of the people buying the big ticket comics are dealers who are 100% sure they can punt comics on for a gain down the road. Once that assured reality crumbles, comics will not be viewed in the same way they are now. Its a very difficult thing to imagine when you're not in the middle of it.

 

[murph0]

Bad comparison. How many people can afford 100,000-250,000 for a Ferrari to "collect"? Definately a far far far smaller number than can afford a 1,000-10,000 dollar comic to "collect".

 

Brian

[joe_collector]

Bad comparison. How many people can afford 100,000-250,000 for a Ferrari to "collect"? Definately a far far far smaller number than can afford a 1,000-10,000 dollar comic to "collect".

 

Or a $100 Beanie Baby?

[duncan36]

Bad comparison. How many people can afford 100,000-250,000 for a Ferrari to "collect"? Definately a far far far smaller number than can afford a 1,000-10,000 dollar comic to "collect".

 

Brian

 

The higher price of Ferraris is obviously a barrier to entry, however speculation is speculation whether its a 250k car or a 10k comic.

Personally I think that whats more important is the level of pure speculation on these $10,000 books, if the majority of people buying these $10,000 books sole motivation is to punt them on, then the majority of the comic market revolves around the ability of these speculators to make ever increasing profits. Something which is unsustainable.