Are key comics good investments?

[delekkerste]

Even if we accept your premise, wouldn't that "massive influx of physical currency" also be inflating the values of comics as well as stocks?

 

Fair question. It depends on which portion you're talking about. The massive physical currency influx that got dropped into the market with nothing to back it up with (even future production) or the policies of inflating our way out of a currency deflation? I think they both would have an impact, but I don't know how much or little either have (I don't know if anyone could honestly answer that with any degree of certainty since what we've been doing with our markets & currency is something nobody has ever actually done in practice in history & we've been just kinda crossing our fingers & hoping the theories are correct)

 

Regardless though, it would certainly have an impact that would contribute in part to the inflation of comic prices, but since literally ALL of that money was pumped into the market (on one level or another), and only a portion of that left the market to then be re-invested into comics, it would only be inflated by a fraction of the amount that the market has been. Only way it would be an equal impact would be if 50% of the market moved into comics, and I think we can all agree that that didn't happen. Or if the money that left the market for commodities did so with something relatively close to uniformity.

 

First, there was no massive physical currency influx. The Fed didn't run the printing presses in a literal fashion; it bought bonds in the open market and paid for them electronically.

 

Second, this linear relationship you speak of ("if 50% of the market moved into comics...") doesn't actually exist. Did anyone buying comics since 2008 do so because of extra physical currency in their pockets? No. From a purely economic/financial perspective, they bought comics because interest rates went to near-zero (and they didn't want to hold cash) and they felt flush from reflated asset prices and the rebound from the dire economic conditions of 2008-09 - not because they had helicopter-dropped extra money in their pockets.

 

Holding rates low through ZIRP and QE causes capital to move to where it is perceived to be treated better, whether that's stocks, real estate or collectibles (of course, gains in the former two can also cause people to feel flush and buy the latter). What this is actually doing is bringing future returns forward. Gains in stocks that might not have been realized until several years from now get realized now as P/E multiples expand to reflect the lower rates. Money that might not have been spent until down the line gets spent now on AF #15s. If and when interest rates normalize, so will asset prices. Everything is interconnected.

 

As for the original question of whether key comics are good investments, the answer is that they have been good investments to date. Not just due to financial policies, but also due to demographics/nostalgia, TV/movies/games, third-party grading, Internet distribution, the economy, globalization, etc. The question you have to ask yourself, though, is how much is embedded in current prices and will they continue to be good investments. My bet is that they won't be, as I think the hobby is going to lose a lot of collectors and buying power during the next generational transition (demography is destiny, and demographics are a lot easier to predict that most other data series), not to mention all of the one-time factors above (like the advent of third party grading and modern distribution) which are already in prices and other factors (like demographics and movie hysteria) which are likely to turn negative at some point and won't be strong tailwinds forever. Doesn't mean the gravy train is going to end now, but I think a lot of people buying books at current prices thinking they'll be a lot higher when they retire will end up being bag-holders.

 

There is no asset so inherently attractive that it can't produce bad financial returns if bought at too high a price. It's stupid to look at historical returns out of context because future returns are wholly dependent on your entry price/valuation. And, from where I stand, mean reversion is much more likely to occur than continued financial outperformance.

[Robot Man]

My collection has been built very slowly over a LONG period of time. I have rarely paid a large sum of money for any of them. I have never really looked at them as an "investment". I bought what I liked for my own enjoyment. I have always felt the market would drop out any way and have am constantly surprised at what they continue to sell for. When the time comes for me to "cash out" I will make stupid money.

 

My advice would be to spread your investments out a bit putting very little into collectibles unless you get an outrageous deal. Stocks, Bonds and especially Real Estate will always be a far better return on your money.

[zuulioso]

Even if we accept your premise, wouldn't that "massive influx of physical currency" also be inflating the values of comics as well as stocks?

 

Fair question. It depends on which portion you're talking about. The massive physical currency influx that got dropped into the market with nothing to back it up with (even future production) or the policies of inflating our way out of a currency deflation? I think they both would have an impact, but I don't know how much or little either have (I don't know if anyone could honestly answer that with any degree of certainty since what we've been doing with our markets & currency is something nobody has ever actually done in practice in history & we've been just kinda crossing our fingers & hoping the theories are correct)

 

Regardless though, it would certainly have an impact that would contribute in part to the inflation of comic prices, but since literally ALL of that money was pumped into the market (on one level or another), and only a portion of that left the market to then be re-invested into comics, it would only be inflated by a fraction of the amount that the market has been. Only way it would be an equal impact would be if 50% of the market moved into comics, and I think we can all agree that that didn't happen. Or if the money that left the market for commodities did so with something relatively close to uniformity.

 

First, there was no massive physical currency influx. The Fed didn't run the printing presses in a literal fashion; it bought bonds in the open market and paid for them electronically.

 

Second, this linear relationship you speak of ("if 50% of the market moved into comics...") doesn't actually exist. Did anyone buying comics since 2008 do so because of extra physical currency in their pockets? No. From a purely economic/financial perspective, they bought comics because interest rates went to near-zero (and they didn't want to hold cash) and they felt flush from reflated asset prices and the rebound from the dire economic conditions of 2008-09 - not because they had helicopter-dropped extra money in their pockets.

 

Holding rates low through ZIRP and QE causes capital to move to where it is perceived to be treated better, whether that's stocks, real estate or collectibles (of course, gains in the former two can also cause people to feel flush and buy the latter). What this is actually doing is bringing future returns forward. Gains in stocks that might not have been realized until several years from now get realized now as P/E multiples expand to reflect the lower rates. Money that might not have been spent until down the line gets spent now on AF #15s. If and when interest rates normalize, so will asset prices. Everything is interconnected.

 

As for the original question of whether key comics are good investments, the answer is that they have been good investments to date. Not just due to financial policies, but also due to demographics/nostalgia, TV/movies/games, third-party grading, Internet distribution, the economy, globalization, etc. The question you have to ask yourself, though, is how much is embedded in current prices and will they continue to be good investments. My bet is that they won't be, as I think the hobby is going to lose a lot of collectors and buying power during the next generational transition (demography is destiny, and demographics are a lot easier to predict that most other data series), not to mention all of the one-time factors above (like the advent of third party grading and modern distribution) which are already in prices and other factors (like demographics and movie hysteria) which are likely to turn negative at some point and won't be strong tailwinds forever. Doesn't mean the gravy train is going to end now, but I think a lot of people buying books at current prices thinking they'll be a lot higher when they retire will end up being bag-holders.

 

There is no asset so inherently attractive that it can't produce bad financial returns if bought at too high a price. It's stupid to look at historical returns out of context because future returns are wholly dependent on your entry price/valuation. And, from where I stand, mean reversion is much more likely to occur than continued financial outperformance.

 

And this is why I read the Gold thread in the Water Cooler.

[Doktor]

Even if we accept your premise, wouldn't that "massive influx of physical currency" also be inflating the values of comics as well as stocks?

 

Fair question. It depends on which portion you're talking about. The massive physical currency influx that got dropped into the market with nothing to back it up with (even future production) or the policies of inflating our way out of a currency deflation? I think they both would have an impact, but I don't know how much or little either have (I don't know if anyone could honestly answer that with any degree of certainty since what we've been doing with our markets & currency is something nobody has ever actually done in practice in history & we've been just kinda crossing our fingers & hoping the theories are correct)

 

Regardless though, it would certainly have an impact that would contribute in part to the inflation of comic prices, but since literally ALL of that money was pumped into the market (on one level or another), and only a portion of that left the market to then be re-invested into comics, it would only be inflated by a fraction of the amount that the market has been. Only way it would be an equal impact would be if 50% of the market moved into comics, and I think we can all agree that that didn't happen. Or if the money that left the market for commodities did so with something relatively close to uniformity.

 

First, there was no massive physical currency influx. The Fed didn't run the printing presses in a literal fashion; it bought bonds in the open market and paid for them electronically.

 

Second, this linear relationship you speak of ("if 50% of the market moved into comics...") doesn't actually exist. Did anyone buying comics since 2008 do so because of extra physical currency in their pockets? No. From a purely economic/financial perspective, they bought comics because interest rates went to near-zero (and they didn't want to hold cash) and they felt flush from reflated asset prices and the rebound from the dire economic conditions of 2008-09 - not because they had helicopter-dropped extra money in their pockets.

 

Holding rates low through ZIRP and QE causes capital to move to where it is perceived to be treated better, whether that's stocks, real estate or collectibles (of course, gains in the former two can also cause people to feel flush and buy the latter). What this is actually doing is bringing future returns forward. Gains in stocks that might not have been realized until several years from now get realized now as P/E multiples expand to reflect the lower rates. Money that might not have been spent until down the line gets spent now on AF #15s. If and when interest rates normalize, so will asset prices. Everything is interconnected.

 

As for the original question of whether key comics are good investments, the answer is that they have been good investments to date. Not just due to financial policies, but also due to demographics/nostalgia, TV/movies/games, third-party grading, Internet distribution, the economy, globalization, etc. The question you have to ask yourself, though, is how much is embedded in current prices and will they continue to be good investments. My bet is that they won't be, as I think the hobby is going to lose a lot of collectors and buying power during the next generational transition (demography is destiny, and demographics are a lot easier to predict that most other data series), not to mention all of the one-time factors above (like the advent of third party grading and modern distribution) which are already in prices and other factors (like demographics and movie hysteria) which are likely to turn negative at some point and won't be strong tailwinds forever. Doesn't mean the gravy train is going to end now, but I think a lot of people buying books at current prices thinking they'll be a lot higher when they retire will end up being bag-holders.

 

There is no asset so inherently attractive that it can't produce bad financial returns if bought at too high a price. It's stupid to look at historical returns out of context because future returns are wholly dependent on your entry price/valuation. And, from where I stand, mean reversion is much more likely to occur than continued financial outperformance.

 

I said that I wasn't going to get into a big thing about this and I won't. I will just say that there was somewhere along the lines of $500B more physical currency printed and added into the economy through 2008/2009 than there was prior to the crash. Whether you want to believe it or not, there was a LOT of physical currency printed & pushed into the economy (though most of it never hit consumer hands & was held by banks). There was much MORE though that was generated as just electronic funds that got dumped into inflating the economy.

 

I think we agree in some regards, but not all. I am just not getting into a big thing here. Just pointing out that inflating the market doesn't necessarily translate into an equally inflated comic market because not much of the market money got moved into the comic market.

[Noodlez]

Sure your comics are investments,if you buy a book for several thousands of dollars how can you look at it any other way?

With that in mind,it's my hobby,not my retirement

 

Diversify!

 

 

Agree with this.

[1950's war comics]

Key comics are not a "good" investment long term from this point in time on.

[JazzMan]

Comics are not a "good" investment long term from this point in time on.

 

Why?

[1950's war comics]

Comics are not a "good" investment long term from this point in time on.

 

Why?

 

some of the many reasons include

!. they are not liquid,

2. they are fragile, even graded.

3. they are currently at historic highs

4.there is no interest or dividend of initial investment

5. reasons 5 through 10 are even more obvious than 1-4

[kav]

But 1950s comics were at an all time high 10 years ago and 20 years ago what makes you say the climb stops here and now?

[Robot Man]

I have thought my whole life that comics were at an all time high, then some auction comes along and proves me crazy. I can remember being offered an Action #1 for $300. when I was a kid then before I knew it, it was $1,000 then $10,000 then a million. Who would ever have thought? The roof just keeps getting raised.

[oakman29]

Comics are not a "good" investment long term from this point in time on.

 

Why?

 

some of the many reasons include

!. they are not liquid,

2. they are fragile, even graded.

3. they are currently at historic highs

4.there is no interest or dividend of initial investment

5. reasons 5 through 10 are even more obvious than 1-4

 

Except that some comics are in fact good investments,they are liquid. Maybe not 50's war comics,but I think I made a pretty good investment back in 1983 when I purchased my AF15 for 500.00.What does a 5.0\5.5 going for now? 25-28K? I am pretty sure I can sell that book in a heartbeat if I needed to. Let me see....at the least I made 24,500.00 on that initial 500.00,not bad I'd say!

 

[Hamlet]

Comics are not a "good" investment long term from this point in time on.

 

Why?

 

some of the many reasons include

!. they are not liquid,

2. they are fragile, even graded.

3. they are currently at historic highs

4.there is no interest or dividend of initial investment

5. reasons 5 through 10 are even more obvious than 1-4

 

Except that some comics are in fact good investments,they are liquid. Maybe not 50's war comics,but I think I made a pretty good investment back in 1983 when I purchased my AF15 for 500.00.What does a 5.0\5.5 going for now? 25-28K? I am pretty sure I can sell that book in a heartbeat if I needed to. Let me see....at the least I made 24,500.00 on that initial 500.00,not bad I'd say!

 

One thing I would like to point out is that something can be a good investment while not being liquid. Many terrible investments are extremely liquid, and many good investments require a good deal of work to buy and sell. Real estate is a classic example of a relatively illiquid investment. It's lack of liquidity is a drawback, but it doesn't prevent real estate from being an investment.

[1950's war comics]

But 1950s comics were at an all time high 10 years ago and 20 years ago what makes you say the climb stops here and now?

Kav for how many years until 2005 was buying a house a can't lose scenario?

[kav]

But 1950s comics were at an all time high 10 years ago and 20 years ago what makes you say the climb stops here and now?

Kav for how many years until 2005 was buying a house a can't lose scenario?

true but the government is not forcing banks to give loans to people without jobs to buy comics

[wombat]

But 1950s comics were at an all time high 10 years ago and 20 years ago what makes you say the climb stops here and now?

Kav for how many years until 2005 was buying a house a can't lose scenario?

 

You can lose money on any investment. Are you saying you should stick your money under your mattress?

[1950's war comics]

Many of the replies to this thread and others like it remind me of some of my co-workers who spend waaaay to much time at the casinos and anytime someone asks them how they did they always say they won !...

we all know better and ironically many these same people only put the bare minimum into their 401K

[BarryAllen]

But 1950s comics were at an all time high 10 years ago and 20 years ago what makes you say the climb stops here and now?

Kav for how many years until 2005 was buying a house a can't lose scenario?

true but the government is not forcing banks to give loans to people without jobs to buy comics

 

 

Maybe that is what the guy in the other thread is doing?

[oakman29]

Many of the replies to this thread and others like it remind me of some of my co-workers who spend waaaay to much time at the casinos and anytime someone asks them how they did they always say they won !...

we all know better and ironically many these same people only put the bare minimum into their 401K

 

I don't spend any time in casinos. What I do do is nearly have my home in Anaheim Hills,Calif. nearly paid off,invest in stocks and bonds,have a nice 401K with the max of 10% of my income invested,own a classic 1929 Oakland three window business coupe,and guess what? I collect comic books. Did you need to have me give you an itemized list of my investment portfolio?

[Paddy_McShillihan]

Comics are not a "good" investment long term from this point in time on.

 

Why?

 

some of the many reasons include

!. they are not liquid,

2. they are fragile, even graded.

3. they are currently at historic highs

4.there is no interest or dividend of initial investment

5. reasons 5 through 10 are even more obvious than 1-4

 

People still pay a nice sum for a fragile low grade AF 15 ....

[Steviehuv66]

 

A question I have tossed around with a co-worker. I know you are not supposed to take out 401 K loans from your account. Let me ask this. If you are young enough to pay back a loan to your 401k account, would it be wise to take out $25,000.00 to purchase that key issue whether it is an AF 15 or a Hulk 1 and just pay yourself back?