1985-1989 Coin Market = 2000-2004 Comic Market?

[fantastic_four]

I dont know anything about coins. So the article was filled with foreign jargon to me. So I still dont know which "comics" got killed in the coin crash... Some of them were old and considerd rare (3-cent nickels??? no-name Morgans??) But what about the AF15 coins, and the Action1 coins?? Were the very best coins in the hobby ALSO affected? Or just Detective 44s and Batnman 13s or Cat America 21s?

 

In other words, SA and GA commons or keys?

I think we all agree the Modern and Bronze and late Silver got hammerred.....

 

Yea I'm also having trouble translating it...are there any coinee translators out there?!!?!? A buffalo nickel = WHAT--maybe an All-Star #8?

[Aman619]

I think Buffalo Nickel would be All Star Comics, and #8 would a certain better year to collect.

[kryptonitecomics]

I have heard all the talk of the coming crash, read all of the articles posted on here about other collectables etc so here's my 2 cents.

 

I lived thought the coin and sportscard crashes, I did not come through unscathed. My $40,000 baseball card collection ended up being worth between $5,000-$10,000 when it came time to sell. Sure it wasn't an investment source for me as I enjoyed collecting so the fact they their were worth a fraction of what I paid for them wasn't as big a concern as it probably should have been.

 

I know that some agree and disagree, but the professional grading of Coins, Cards, and now comics to me signals the downfall of that collectable from an investment standpoint, but not a collector standpoint.

 

If you soul reason for collecting is the thrill of the hunt, the passion for the art or stories etc....then grading services pose no risk to your enjoyment of the hobby at all. Let's face it it's not the certification companies that are driving the markets up and off the cliff, it's speculators pure and simple.

 

Prices can not continue to climb at the rate they are going in the comic market without the market hitting an adjustment period in the near future. Crash? I don't know what you want to call it, but for true collectors they welcome it, and for investors they try to time it just right to get out on top.

 

I think there are some similarities between what happened to Coins and Cards and what will most likely happen in comics and we can all learn from them. It really comes down to your motivation for collecting. I also agree that the comic characters, movie hype, nostalgia what ever you want to pick will sustain the high prices in Comics longer than the drivers in the other markets.

 

Coins have history on their side and I loved to collect them, but I found it hard to part with hundreds of dollars for a beat up penny that could handle a lot of wear and tear over the centuries and still be in tact (not so with comics made of paper). They were made of metal so that they would be durable and withstand decades of use and handling by the public.

 

With sports cards once a player retired a portion of the collector base moved on and they were forgotten to a degree. Sure the Hall Of Famers still pulled cash, but it's not like Joe Dimaggio or Mickey Mantle came back 30 years after retirement to play again so younger collectors were less enamored with these player. Now think about Spider-man and his appearance in movies which has continued to help that characters fan base grow. Additionally, cards were printed on Cardboard and as such were still more durable than comics so survivorship is still not as much of an issue as we see in comics. Have you ever seen a brown and brittle baseball card? I never did in 20 years of collecting.

 

These are all my own opinions of course and while I agree that the comic collecting hobby is very healthy at this time. I just don't feel like we can reasonably assume that prices can continue to rise at the rate they are going without a market correction.

[drbanner]

If you think today's Bronze/Moderns are rare enough to be investment assets or if you think your precious Golden/Silver Age comics can weather any decline...

 

Will these people, the so-called Pollyannas, please identify themselves? Are there people active on these boards that think that buying high-grade, slabbed books at "market prices" (ebay, Heritage, Comiclink, etc.,.) are good investments over the short, or long-term?

 

Slabbed modern books (post-1975) have surged and collapsed in a fashion similar to the way "hot" character/artist books have always collapsed. In place of "1st Jim Lee" or "Death of Superman", in '01 and '02 you just had to have "CGC 9.6, 9.8, etc.,." Those days are gone though as far as CGC 9.6/9.8's are concerned, unless you're able to combine the grade with a key, brand-spanking new book (Origin 1, Ultimate ASM, etc.,.)

 

And while I don't personally think pre-1975, high-grade books are a good investment, I don't see the bottom falling out of this market like happened with cards/coins. There's a fundamental difference in the environment that the collapse of the coin/card market occurred in when compared to today:

 

1) the internet and ebay have made collectibles highly liquid and weren't around back then; and

 

2) every collector can spend 5 minutes on the net and become a dealer.

 

I think the liquidity offered by the 'net and the collector-to-collector selling dynamic will be a moderating factor preventing drastic price reductions like outlined in the article. Nobody has seemed to mention this facet of today's market when comparing it to the "crashes" of yore, so I thought I'd mention it for your ponderance!

[delekkerste]

But from all accounts the coin market is on fire right now.

 

"On fire" is relative. If you lost 70-90% by buying graded coins at/near their peak, you'd still be far under water even if they rebounded 200-300% from the lows (which hasn't happened), even moreso if you consider that other asset classes like equities and real estate are up multiples of their 1989 levels. True, some of the best examples are reaching record highs these days, but the vast majority of the market is still under water from the 1989-1990 high water mark (as an aside, this is also true of some artwork from the 1989-1990 bubble market - the Wall Street Journal reported in January 2004 that works by the French Impressionist Alfred Sisley have fallen 55% since 1988 while Julian Schnabel's works have declined 39% since that time).

 

Also, how much of the rebound in coins has been fueled by the outsized wealth creation since the mid-1990s? Will similar conditions prevail to pump comics right back up if a substantial decline occurs? My Magic 8-Ball says no. In fact, I'm betting that poor macroeconomic conditions will be one of the primary drivers of such a decline in the first place.

 

 

Also older comics are, for the most part much more rare in high grade than coins. New comic market is susceptible (and has alredy cooled off duite a bit) but pre-1965 market is insulated

 

Rarity is only one factor to consider. The fine art and real estate worlds have shown that you can lose big money on even one-of-a-kind items (it doesn't get any more rare than that) if you pay too much for something. Most of these poor purchasing decisions are due to the buyers extrapolating recent price trends linearly and indefinitely into the future ("rear view mirror analysis"). IMHO, the next 40 years for the comic market won't look anything like the past 40. Instead of assuming that returns will look similar, it is a much better bet to assume that returns will regress towards the mean. In layman's terms, what does that mean after the parabolic price performance of the past decade? Pain.

 

Gene

[delekkerste]

I think the liquidity offered by the 'net and the collector-to-collector selling dynamic will be a moderating factor preventing drastic price reductions like outlined in the article. Nobody has seemed to mention this facet of today's market when comparing it to the "crashes" of yore, so I thought I'd mention it for your ponderance!

 

NOOOOOOO!!!!!!! The real-time action of eBay, e-commerce, e-mail and all other electronic communications will only FACILITATE a decline. Has the Internet "moderated" the parabolic price rally we've seen? NO IT HASN'T! Will it "moderate" any price decline? ABSOLUTELY NOT! When prices fall, EVERYONE will see it and act on it. It will only accelerate and exaggerate any movements of the market, just as it has done on the way up.

 

Gene

[drbanner]

I think the liquidity offered by the 'net and the collector-to-collector selling dynamic will be a moderating factor preventing drastic price reductions like outlined in the article. Nobody has seemed to mention this facet of today's market when comparing it to the "crashes" of yore, so I thought I'd mention it for your ponderance!

 

NOOOOOOO!!!!!!! For the umpteenth time, the real-time action of eBay, e-commerce, e-mail and all other electronic communications will only FACILITATE a decline. Has eBay "moderated" the parabolic price rally we've seen? NO IT HASN'T. Will it "moderate" any price decline? ABSOLUTELY NOT. When prices fall, EVERYONE will see it and act on it. It will only accelerate and exaggerate any movements of the market, just as it has done on the way up.

 

Gene

 

YEESSSS!!!! The intersection of the 'net, ebay, and CGC all combined simultaneously to result in the parabolic increases, it wasn't due to just one factor. The point being, you would have to take away ebay, the internet, and CGC to have such a comparable dramatic drop in the price/value of the good stuff. If you (in a generic sense) didn't have access to these venues, you would certainly expose yourself to the whims of an offer from the LCS or a big mail-order dealer, but in 5 minutes I can put a book on ebay that will be available to tens of thousands of collectors world-wide instantaneously.

 

Please feel free to hypothesize as to what MIGHT happened in the future Gene, but don't tell me what WILL happen b/c despite what HAS happened in the past, we're not living in the past, we're living in the present and the collectible infrastructure has changed dramatically in the last 10 years.

[FlyingDonut]

I think the liquidity offered by the 'net and the collector-to-collector selling dynamic will be a moderating factor preventing drastic price reductions like outlined in the article. Nobody has seemed to mention this facet of today's market when comparing it to the "crashes" of yore, so I thought I'd mention it for your ponderance!

 

NOOOOOOO!!!!!!! The real-time action of eBay, e-commerce, e-mail and all other electronic communications will only FACILITATE a decline. Has the Internet "moderated" the parabolic price rally we've seen? NO IT HASN'T! Will it "moderate" any price decline? ABSOLUTELY NOT! When prices fall, EVERYONE will see it and act on it. It will only accelerate and exaggerate any movements of the market, just as it has done on the way up.

 

Gene

 

Again, I'd like your opinion on the 98% of comic sales - the everyday, ordinary, non-slabbed sale of books.

[jbud73]

But from all accounts the coin market is on fire right now. Also older comics are, for the most part much more rare in high grade than coins. New comic market is susceptible (and has alredy cooled off duite a bit) but pre-1965 market is insulated.

Vincent

 

I would like to address this quote as it plays on a few aspects I think are prevalent in comparison market collectables. At face value I would agree that, as Timely I believe has sugggested, that comics are rare in grade than coins. IT would seem to follow, because paper is harder to preserve than metal. And yet with my not so vast kowledge of the coin market, I think the eras ARE comparable as a rare coin often originates from Pre-1935 ish does it not, while the comic market rarity threshold is more pre 1965 as Vincent has suggested. So coins and comics of the same rarity in era are displaced by 30 or more years in actual age???

 

Um i will quote my economics professor here for a moment and diagree with Vincent in that NO MARKET IS INSULATED, um otherwise it loses definitions of Market, I believe/ Im sure Gene can again go into the macro economic theory behind this. A much more accurate statement would be that the pre-1965 market has better RESISTANCE built into it, BUT I'm sorry I must disagree with you on that point VIncent as it is not insulated from the laws of diminishing returns, based on overall market movement towards equilibrium.

 

You know what I have been doing over the past few weeks just out of curiousity and nostalgia?? Reading the OS Market reprts from 1991 - 1995, every collector should do it, its good for a laugh. Even when the market was at its worst - the contributors, whom I by and large respect in this industry would not acknowledge it. Look at the muted language, the generalization and avoidance of true market indicators that things were in the tank and the holding out of a few rare examples to the contrary as fodder to insulate, or flame a belief that things were either turning around, or werent really that bad.

 

So I find myself at a curious place, ready and able to purchase a few select higher grade key books for more $$$ per book - but I am balking at the cost and MORE IMPORTANTLY the Utility of those purchases.. I think I meet all the qualifications of a nostalgic collector - An appreciation for the history and the pure artform as well as a farely large lexicon of jargon / knowledge, both artistic driven and comic market driven. Yet unlike the OS advisor who said buy BA put em away and you will have your kids college tuition, I think that key to lesser key SA, BA books in the $500 to $5000 dollar range are just bad buys for the collector right now. I cant shake that feeling, I wish I could. So I guess its back to HOM and HOS generic issues - which hey are and Im not gonna touch the Batman 232 CGC 9.6, or GS X-men #1 in the same grade with a ten foot pole right now.

[delekkerste]

Please feel free to hypothesize as to what MIGHT happened in the future Gene, but don't tell me what WILL happen b/c despite what HAS happened in the past, we're not living in the past, we're living in the present and the collectible infrastructure has changed dramatically in the last 10 years.

 

It's obvious you wrote this post out of spite because it makes no sense whatsoever. I never said eBay or the Internet caused the parabolic rise. And if you remove eBay and the Internet, all you are left with is CGC (i.e., slabbed comics), which is a direct comparable to slabbed coins. Your point that "you would have to take away ebay, the internet, and CGC to have such a comparable dramatic drop in the price/value of the good stuff" is simply not true.

 

I agree that a structural shift has occurred, but it in NO WAY protects or cushions against a decline - in fact, it is quite the opposite. All your example shows is that liquidity has improved tremendously and that collector/investor participation is greater than ever - does this make a boom/bust cycle underpinned by mass participation/psychology more or less probable?

 

Your reasoning is, unfortunately, not correct, so I suggest you take the advice that you always love to give J_C - give up now because YOU'RE WRONG.

 

Gene

[delekkerste]

Again, I'd like your opinion on the 98% of comic sales - the everyday, ordinary, non-slabbed sale of books.

 

Raw HG has absolutely been affected by trends in the slabbed market - the "arbitrage" between raw and slabbed HG doesn't exist to the same magnitude it once did. As for low-to-mid grade books that aren't as affected by speculation, I'm sure you'll do fine as this market isn't going away anytime soon.

 

However, while 98% of comic sales may be "ordinary, non-slabbed" books, the valuation and trading volume of the slabbed market as well as money flows into this sector more than justifies the focus and attention given to this niche, even though it may account for less than 2% of sales by volume.

 

Gene

[FlyingDonut]

Again, I'd like your opinion on the 98% of comic sales - the everyday, ordinary, non-slabbed sale of books.

 

Raw HG has absolutely been affected by trends in the slabbed market - the "arbitrage" between raw and slabbed HG doesn't exist to the same magnitude it once did. As for low-to-mid grade books that aren't as affected by speculation, I'm sure you'll do fine as this market isn't going away anytime soon.

 

However, while 98% of comic sales may be "ordinary, non-slabbed" books, the valuation and trading volume of the slabbed market as well as money flows into this sector more than justifies the focus and attention given to this niche, even though it may account for less than 2% of sales by volume.

 

Gene

 

I don't mind the focus and attention given to it, as I believe that you're right, because of the amount of money flowing in. And you are definitely right about raw HG - it used to be a tremendous arbitrage opportunity to buy and slab - that's just gone now.

 

I think a good comparison is in the non-graded sportcard market - what happened there? Joe?

[CentaurMan]

Gene's right. Increased liquidity in ANY market increases the speed at which parabolic price booms/collapses occur, due to reduction in frictional transaction costs. This is why more illiquid markets, such as fine art or real estate, can measure their cycles in decades.

 

History doesn't repeat, but it rhymes. Comics are no more insulated from the same centuries-old psychology-driven bouts of greed than any other asset class has ever been. And the ability to conduct rapid transactions only accelerates the process.

[delekkerste]

Gene's right. Increased liquidity in ANY market increases the speed at which parabolic price booms/collapses occur, due to reduction in frictional transaction costs. This is why more illiquid markets, such as fine art or real estate, can measure their cycles in decades.

 

History doesn't repeat, but it rhymes. Comics are no more insulated from the same centuries-old psychology-driven bouts of greed than any other asset class has ever been. And the ability to conduct rapid transactions only accelerates the process.

 

I could not have said it better if I tried.

 

Gene

[drbanner]

Please feel free to hypothesize as to what MIGHT happened in the future Gene, but don't tell me what WILL happen b/c despite what HAS happened in the past, we're not living in the past, we're living in the present and the collectible infrastructure has changed dramatically in the last 10 years.

 

It's obvious you wrote this post out of spite because it makes no sense whatsoever. I never said eBay or the Internet caused the parabolic rise. And if you remove eBay and the Internet, all you are left with is CGC (i.e., slabbed comics), which is a direct comparable to slabbed coins. Your point that "you would have to take away ebay, the internet, and CGC to have such a comparable dramatic drop in the price/value of the good stuff" is simply wrong in that context.

 

I agree that a structural shift has occurred, but it in NO WAY protects or cushions against a decline - in fact, it is quite the opposite. All your example shows is that liquidity has improved tremendously and that collector/investor participation is greater than ever - does this make a boom/bust cycle underpinned by mass participation/psychology more or less probable?

 

Your argument is so far off-base that I suggest you take the advice that you always love to give J_C - give up now because YOU'RE WRONG.

 

Gene

 

It wasn't in spite Gene, but your "NOOOOOOO!!!!!!! For the umpteenth time..." comment was a pretty hair-trigger reaction to my post, as evidenced by how quickly you reconsidered what you wrote and edited it.

 

Anyhow, I was wrong when I said no one had brought up the dynamics I introduced...FF pointed them out just before I did. And if you don't think that the internet protects or cushions against a decline, I say YOU'RE WRONG. It does just that by opening up the consumer base to a cross-section of collectors 'round the world, moderating the effects of a recession here, a big convention there, a new collection surfacing over there, etc.,.

 

A simple example of this principle in play is the current strength of the pound and euro vs. the dollar, which obviously puts European collectors at an advantage. And from 1st-hand experience I can tell you they're buying US comics by the pound (or euro, as appro! ). I have one customer that even asks me if he can have a "window" of time to pay for his purchases as he chases the dollar!

 

Without the net a seller would only be marketing their product to those that they can contact in person, at shows, thru trade journals, or via mail-order catalogues, a somewhat limited audience. But as it is, the net has increased the collector/consumer base to such a level that it, in itself, would be enough to moderate prices against drastic reductions...

[fantastic_four]

Anyhow, I was wrong when I said no one had brought up the dynamics I introduced...FF pointed them out just before I did.

 

I was pointing out that it was a different variable in partial support of Timely's idea that the markets aren't comparable...I have no idea whether it will have a positive or negative impact. LOVE that phrase from Centaur, "history doesn't repeat itself, but it rhymes," I'll be remembering that one for a while!

[delekkerste]

And if you don't think that the internet protects or cushions against a decline, I say YOU'RE WRONG. It does just that by opening up the consumer base to a cross-section of collectors 'round the world, moderating the effects of a recession here, a big convention there, a new collection surfacing over there, etc.,.

 

My dear Banner, I'm afraid you're still wrong. On balance, the structural changes you have cited greatly increase, not decrease, the likelihood of a severe boom/bust cycle. I'm sorry, but a few Brits and Frenchies armed with some pounds and euros do not even come close to outweighing the overriding dynamics that I and CentaurMan have cited.

 

Gene

[drbanner]

Anyhow, I was wrong when I said no one had brought up the dynamics I introduced...FF pointed them out just before I did.

 

I was pointing out that it was a different variable in partial support of Timely's idea that the markets aren't comparable...I have no idea whether it will have a positive or negative impact. LOVE that phrase from Centaur, "history doesn't repeat itself, but it rhymes," I'll be remembering that one for a while!

 

Yeah, I was referring to your comment that the difference in the liquidity of collectibles today vs. yesterday makes comparison of what happened to the coin/card market not as applicable to today's comic market. As far as prices, I think the massive increase in customer base that the average collector has now vs. then is more of a moderating factor than anything else...

[Bonds25]

Gene, this article is about coins. What does it have to do with comic books?

 

[delekkerste]

LOVE that phrase from Centaur, "history doesn't repeat itself, but it rhymes," I'll be remembering that one for a while!

 

It's from Mark Twain - "History doesn't repeat itself - at best, it rhymes."

 

Literary Gene