Comic Book Investing

[RockMyAmadeus]

I seem to have outlasted my sleepy threadmates.

 

 

I look forward to what the morning can do with this conversation.

 

Cheers!

[dupont2005]

The SEC disagrees with you. Any investment comes with a risk. Saving money in FDIC accounts is simply that- saving, not investing.

If it's interest bearing, it's an investment. Some things carry higher risks than others. The United States has never defaulted on a bond in the history of the Union. It's possible, but VERY unlikely.

 

On the other hand, a conservative figure of 99.9% of all comics lose about 80% of their sticker price the second you pay for them. If you manage to hold onto it long enough, and keep it in pristine condition, maybe in twenty years it will be worth cover price again. Then again, maybe not.

 

If you only have four dollars to invest, an Image #1 isn't going to ruin your life, but we all know what happens when someone dumps ten grand into multiples of the same hot new issue. You end up with crates of drek you couldn't give away thirty years later. Might as well burn them, cheaper than storing them.

 

As far as buying slabbed GA, like I said earlier, generating wealth requires wealth. If you don't have five figures to spend, you're not "investing" in comics, you're gambling on them. If I only had six hundred dollars a year to invest annually, I wouldn't bother with comics. In fact, if I had ten grand a year to invest I wouldn't bother with comics either, but I can see how that could be relatively safe (compared to day trading at least) and possibly perform better than current interest rates.

[RockMyAmadeus]

The SEC disagrees with you. Any investment comes with a risk. Saving money in FDIC accounts is simply that- saving, not investing.

If it's interest bearing, it's an investment. Some things carry higher risks than others. The United States has never defaulted on a bond in the history of the Union. It's possible, but VERY unlikely.

 

On the other hand, a conservative figure of 99.9% of all comics lose about 80% of their sticker price the second you pay for them. If you manage to hold onto it long enough, and keep it in pristine condition, maybe in twenty years it will be worth cover price again. Then again, maybe not.

 

If you only have four dollars to invest, an Image #1 isn't going to ruin your life, but we all know what happens when someone dumps ten grand into multiples of the same hot new issue. You end up with crates of drek you couldn't give away thirty years later. Might as well burn them, cheaper than storing them.

 

As far as buying slabbed GA, like I said earlier, generating wealth requires wealth. If you don't have five figures to spend, you're not "investing" in comics, you're gambling on them. If I only had six hundred dollars a year to invest annually, I wouldn't bother with comics. In fact, if I had ten grand a year to invest I wouldn't bother with comics either, but I can see how that could be relatively safe (compared to day trading at least) and possibly perform better than current interest rates.

 

THIS.

[delekkerste]

All investing is speculating. Nobody invests with the expectation or hope that their investment decreases in value. At least with comics there is an additional and intrinsic entertainment value that you do not get with stocks and bonds.

 

-J.

 

Intrinsic value? I do not think it means what you think it means. Stocks and bonds have intrinsic value. Bonds have a mathematically computable value of interest payments and principal repayment over time. Stocks are more subjective, but companies can be valued on their asset value, free cash flow, dividend streams, etc. so there is at least some basis for an intrinsic value computation. RMA is correct in saying that the intrinsic value of any comic book is close to zero.

[The-Collector]

I seem to have outlasted my sleepy threadmates.

 

 

I look forward to what the morning can do with this conversation.

 

Cheers!

 

Not quite. I will figure something to disagree with you on in a minute.

[blazingbob]

I knew I'd find you in here.

 

 

[delekkerste]

How many times would you have to repeat this to make real money? Therein lies the problem with comics as an investment. I'm looking for income to live the rest of my life off of when I turn 60, not a one time sale that will allow me to buy groceries for 2 weeks.

 

 

If you told me I could make $100,000 on a $150,000 investment 3 months later, then you've got my attention. Making $100 on a $150 outlay, on the other hand, is a potentially costly distraction and waste of time that I could be using to make real money; I might as well apply for a part-time job bagging groceries at the local Whole Foods if I'm looking to make a hundred bucks, even if it is a 66.7% return on investment. Comic investing is not very scalable (in addition to all the other problems mentioned by RMA and others); only a handful of people have ever made anything resembling real money (which, in the grand scheme of things, is minuscule compared to what people can and have made investing in stocks, real estate and starting/owning businesses), and, let's face it, a lot of that was down to luck and not any great investing acumen.

 

Speaking of traditional wealth-building investments, people keep talking about near-zero interest rates, but are ignoring that we've been enjoying one of the best bull markets of all-time in stocks and (certain) real estate over the past few years! Heck, even the one bond fund I've been in (TFCIX) has returned 30% (including reinvested dividends - don't just look at the share price) over the past 18 months (and it took 2 seconds to scale that to my desired position size; putting that much cash into comics would have taken me a ton of time and effort). As for stocks, while I wouldn't disagree that many of them are now overpriced, there are many others that aren't (or at least weren't at the beginning of the year), but to find them requires putting in as much time as people put into comics.

 

Bottom line, using 0.15% rates as some kind of benchmark to beat is pretty when people have been earning huge returns in other traditional investments the past few years, even in plain vanilla ETFs and index funds. But, even setting that aside, sometimes it's better to make nothing in the bank than to lose 75% investing in Avengers #4 9.6s.

[delekkerste]

I knew I'd find you in here.

 

 

Me and my 3/4-length pants.

[delekkerste]

The above is not to imply that there isn't money to be made dealing, flipping and exploiting the weaknesses of your fellow man by playing the CPR game, but that's a whole other category entirely. Obviously, people have made good money there. But, the title of the thread is "Comic Book Investing", not "Manipulating Comic Books for Fun and Profit".

[OrangeNemesis]

Ill put my money in my 401k and use my comics for entertainment. Its easier on my wallet and my marriage

[delekkerste]

That's why there is only ONE Doug Schmell with his $3 Million (a pittance in terms of real investment!) comics sale, and ONE BangZoom with his beautiful GA collection, and ONE Tom Brulato, and ONE here and ONE there.

 

Where are the tens of thousands of millionaires who made their fortunes in comics....?

 

If it was as easy as some of you are putting it...there should be a wad of them coming out everyone's ears.

 

Instead, there are...15? 20? 30? 50? Who made their fortunes solely by selling the comics they had amassed?

 

Maybe.

 

Out of 300 million people in this nation alone.

 

Hardly sound "investing" strategy, folks.

 

, so true. How many Forbes 400 members made their fortunes by investing in comic books? Zero. How many of the nearly 10 million millionaires in the U.S. made their fortunes through comics (or any other collectible or other non-interest bearing asset), as opposed to stocks, real estate and owning businesses? A minuscule proportion.

 

Some of the bullish arguments that people are making here are purely backwards-looking. No serious conversation is going to talk about returns from 10-15 cent cover prices to where prices are today - that's obviously not repeatable. Mean reversion anyone? Market efficiency?? Demographic/generational factors??? The law of diminishing returns? People ever think about the fact that it's not what you buy, it's when you buy and at what price that matters??

 

Anyway, thanks for fighting the good fight, RMA.

[Bronx]

Comics can be a good investment if:

1. You have some knowledge and love for the hobby and are willing to learn more

2. You can spot trends that effect prices

3. You have patience and are willing to wait for the right moment to sell

4. You have invested money you can afford to lose

5. You don't get lost in the hype and use common sense

 

These are the same sound strategies that dictate success in any investment area. And sometimes dumb luck can be nice too. Just ask the person who picked up a few Hulk 271 issues out of the dollar bin just because there is a funny raccoon on the cover.

 

The primary concern with any comic over another investment is liquidity. In a hot market you can sell almost any hot comic at market rate or higher. The lukewarm books are not quite so easy to sell. That is why patience and timing is so critical. If you purchased that infamous GL 76 at a record price and the movie tanks than what do you do? You can sell at a significant discount or you can use your knowledge of the hobby to try to predict a return to popularity when a JLA movie comes out or another GL movie. You might not recoup the entire total but by waiting you may decrease the loss percentage. In the meantime, if you have diversified you can sell other winners to help offset the loss.

 

If you have purchased funny books that you happen to love than you can sit on your investment and stare at those beautiful covers and learn from your mistakes, And yes speculators, investors and comic lovers will all make mistakes and pay too much for something.

 

 

[blazingbob]

How many times would you have to repeat this to make real money? Therein lies the problem with comics as an investment. I'm looking for income to live the rest of my life off of when I turn 60, not a one time sale that will allow me to buy groceries for 2 weeks.

 

 

If you told me I could make $100,000 on a $150,000 investment 3 months later, then you've got my attention. Making $100 on a $150 outlay, on the other hand, is a potentially costly distraction and waste of time that I could be using to make real money; I might as well apply for a part-time job bagging groceries at the local Whole Foods if I'm looking to make a hundred bucks, even if it is a 66.7% return on investment. Comic investing is not very scalable (in addition to all the other problems mentioned by RMA and others); only a handful of people have ever made anything resembling real money (which, in the grand scheme of things, is minuscule compared to what people can and have made investing in stocks, real estate and starting/owning businesses), and, let's face it, a lot of that was down to luck and not any great investing acumen.

 

Speaking of traditional wealth-building investments, people keep talking about near-zero interest rates, but are ignoring that we've been enjoying one of the best bull markets of all-time in stocks and (certain) real estate over the past few years! Heck, even the one bond fund I've been in (TFCIX) has returned 30% (including reinvested dividends - don't just look at the share price) over the past 18 months (and it took 2 seconds to scale that to my desired position size; putting that much cash into comics would probably have taken me a ton of time and effort). As for stocks, while I wouldn't disagree that many of them are now overpriced, there are many others that aren't (or at least weren't at the beginning of the year), but to find them requires putting in as much time as people put into comics.

 

Bottom line, using 0.15% rates as some kind of benchmark to beat is pretty when people have been earning huge returns in other traditional investments the past few years, even in plain vanilla ETFs and index funds. But, even setting that aside, sometimes it's better to make nothing in the bank than to lose 75% investing in Avengers #4 9.6s.

 

This is true, I do spend as much time managing my portfolio/pension as I do with the comic business. You probably lose most people after Speaking. Now while we can't even get people to teach people how to grade are you going to explain to some what a reinvested dividend is? Bond fund? ETF versus index fund? People think comic dealers are sharks? Throw them to a broker or hedge fund manager if they even have enough money to peak his interest.

 

What if you were a buyer of HDY at $50, current price $3.21? Wouldn't be laughing at that Avengers #4 9.6 buyer.

 

Or for the technically challenged Blackberry at $140, current price $10.

 

I can find plenty of stock corpses, Patriot coal bankruptcy filings, etc.

 

[MatterEaterLad]

[234wallst]

[, so true. How many Forbes 400 members made their fortunes by investing in comic books? Zero. How many of the nearly 10 million millionaires in the U.S. made their fortunes through comics (or any other collectible or other non-interest bearing asset), as opposed to stocks, real estate and owning businesses? A minuscule proportion.

 

You can't buy 1000 or 5000 shares of AF 15 or TOS 39 like you can with DIS KO GOOG PG etc. Now if you could, the value of those items would drop tremendously, along with the liquidity (demand). That is the main reason why collectibles can be a good small one off "investment"; but not a true major long term investment; for real returns, you are going to be limited. It's all relative as well. If you have $20K to work with you're obviously not expecting a return of $10m, whereas if you have $2m to start you could realistically aim for $10m over a working lifetime.

 

 

[ComicConnoisseur]

Lets not forget most of these "investments" were originally priced at $.10-$.15. Even mid-grade JLA's and Sgt Fury's going for $15 have gone up 10,000%+. The majority of books get a 5-10% bump in the guide. I'm not saying to roll 20% of your 401k into a Showcase #4, but to say that books are a poor investment is inaccurate, especially when 5 year CD's are yielding 1.5%.

Your talking about comic books that came out 40 to 70 years ago. That`s a long time to hold onto something.

Also do you really think that the generic $3.99 cover priced book will go up in value like the generic 10 to 15 cent comic books did?

It won`t happen because there are so many different factors that are at play now.

Like someone said it`s more like gambling or playing a scratch ticket then investing.

 

[ComicConnoisseur]

An example of it is gambling with collectibles.

In 1993 while millions of comic books were being hyped and sold as a sure can`t miss hot collectible investment at the lcs it was the people who got lucky by buying the not hyped first Magic the Gathering sets who actually did very well.

Most of those early 90s comics are worthless, while those original Magic the Gathering cards will net you in the thousands.

It`s gambling. If someone at a lcs in 1993 told us to buy 50 Magic the Gathering sets instead of all the hyped Valiant, Image, Marvel, and DC Comics at the time we would have said no because we would have gambled that the Wizard top 10 list investment comic books were a better bet then the unheard of Magic the Gathering.

It`s gambling, and not investing when it comes to collectibles.

 

 

[Sqeggs]

Ah, one of the hearty perennials around here.

 

The main points have already been made, with the bottom line being that anyone who is spending serious money on comics today with the expectation of returns over the next 20 years that will be better than he would receive by buying a stock index fund is almost certain to be disappointed.

 

One point not made this time around, although I've made it in similar threads in the past: We have been in a long bull market for comics. The factors driving the market include:

 

1. The increase in selling venues that have made comics a national market (to some extent even an international one), thereby greatly increasing both demand and liquidity: eBay, HA, CC, Clink

 

2. CGC, which has greatly increased the liquidity of high dollar books

 

3. Baby boomers moving into their prime earning years

 

4. The immense popularity of superhero movies

 

To argue that comics will earn the same returns going forward as they have in the past, you have to believe that there will be additional sources of demand as important as those listed above. It is difficult for me, at any rate, to imagine what those might be.

 

With respect to points 3. and 4. above, baby boomers will soon be net sellers rather than buyers. Although superhero movies seem to go from strength to strength, eventually the public will tire of them -- as they have of other genres.

 

For comics to be a poor investment going forward, it's not necessary that interest in them collapses; it's only necessary that it fails to increase much from here. Apple at $700 per share turned out to be a lousy investment, but not because demand for iPhones collapsed.

[october]

The above is not to imply that there isn't money to be made dealing, flipping and exploiting the weaknesses of your fellow man

 

Only in America could someone on Wall Street say the above without a hint of irony.

 

Yes, the rules are rigged and the innocent are exploited in the comic selling game. Alas, it's not played on the twelve figure scale and there will be no government handout and golden parachute waiting after the market we created implodes in our faces.

 

 

[dupont2005]

An example of its gambling with collectibles.

In 1993 while millions of comic books were being hyped and sold as a sure can`t miss hot collectible investment at the lcs it was the people who got lucky by buying the not hyped first Magic the Gathering sets who actually did very well.

Most of those early 90s comics are worthless, while those original Magic the Gathering cards will net you in the thousands.

It`s gambling. If someone at a lcs in 1993 told us to buy 50 Magic the Gathering sets instead of all the hyped Valiant, Image Marvel, and DC Comics at the time we would said no because we would have gambled that the Wizard top 10 list investment comic books were a better bet then the unheard of Magic the Gathering.

It`s gambling, and not investing when it comes to collectibles.

 

The way I see it, as far as collectibles go, the ones that become valuable are the ones nobody was banking on when they came out. And the ones that are hyped from the start end up like Beanie Babies, or Tickle Me Elmo, or 90's comics.