Are key comics good investments?

[Paddy_McShillihan]

[rjrjr]

But, it does suggest that looking at historical growth patterns from a minuscule base, over the course of three decades where the hobby matured from a fragmented cottage industry to a mature hobby with Internet distribution, third party grading, huge demographic and financial tailwinds, etc. is probably pretty meaningless.

 

I'm interested in understanding what you mean by this, particularly the demographic part... Can you elaborate?

 

That both the demographic and financial climate has been beneficial for the (price) development of the hobby. Demographically the people who grew up with these characters are perhaps more likely to buy when they are better off in their 40ties or later. In 1980 few people really had early memories of Spiderman.. and at the same time was at an age where they could afford to splash out... this is the situation today, and will continue to be the situation.

 

I agree that is the situation today, but long term, the demographics work against the current values for many comics. Even though everyone today knows who Spider-Man is, very, very few children or teenagers are buying comics. They are not going to make the decision to start buying comics in their 30s or 40s if they were not exposed to them when they were younger. I suspect the average comic reader today is probably in their 40s. Once that generation retires or dies off, the generation afterwards won't have enough collectors to support the current prices. Luckily (or unluckily) for most of us, we are in that generation bubble. Lucky if you cash out before that generation quits collecting, unlucky if you decide to stay in it beyond that.

 

Of course things can change, but I'm doubtful. There was speculation at one time the rest of the world would pick up the slack for the U.S. younger generation's lack of interest in comics or for that matter, many material things. Unfortunately, that no longer seems to be the case. I suspect we are probably at or close to the peak interest that U.S. comics will have. This is not to say that current prices will fall off a cliff anytime soon just that I wouldn't bet on the huge multiples on keys that we've seen in the past decade.

[The-Collector]

How many people here lost money when the Savings And Loans went under because of their bad investments? They got away SCOTT FREE,... but you lost!

 

How many people here think the $50,000 they have built up in their 401k isn't going to go under 5 years from now because Vanguard or some other 401k institution makes bad investments?

 

These people have their bases covered,.. and you lose!

 

If I had $50,000 to drop on an investment, it would most definitely be a cherry AF15. At least I have a sure thing investment in my hands and it's not in some thieving *spoon* hole's pocket.

 

 

 

 

I think I can guess why you don't have 50,000 to invest, with this sort of thinking.

 

My thoughts exactly.

[rjrjr]

Ten years ago a poll there was a "how old are you" thread on the boards and most people were in their 30's and 40's. Five years ago there was another thread and the ages seemed to be mostly in the 40's and 50's. Another thread this year and we're back to 30's and 40's. It seems that people who buy comics are generally in their late 30's to early 50's. Peak earning years.

 

On the one hand this is promising as it says we are getting new people into (back into?) the hobby. On the other hand it would seem to speak to an issue with baby boomers getting to the selling age through retirement from the hobby or retirement from this world. They bought their collections for thousands and they are now worth tens or hundreds of thousands. There is just not enough money to buy up those collections without a pyramid type of number of new collectors coming into the hobby. Mitch has suggested that foreign collectors could be the next thing that expands the base and allows prices to rise, but I'm not sure. And once they are in what next? Further we are getting to the point where people in their 40's weren't comic readers anymore. After the big independent/variant push of the 90's video games and cable kind of gobbled up all the kids time.

 

There has been a perfect storm in the last 20 years of third party grading, internet auctions, and movie exposure to explain the growth of the last 20 years. I have yet to see a convincing explanation of where the similar growth will come from in the next 20 years.

 

EDIT: Darn it i wasted my 4000th post on this.

 

You and I had the same thoughts. I think your post is more elegant than what I wrote. Simple fact is, there isn't a huge influx of comic collectors coming into the hobby, either domestically or foreign.

[delekkerste]

I'd have to think that were true of most of the "best" collections out there. A point that I think we've both been making for years is that the current market activity, in addition to being a product of the "perfect storm" conditions of demography, CGC grading, internet commerce, the CPR game, and the mainstream success of comic-related films, is also fueled in no insignificant way by the collection equity built up by long time collectors in the decades preceding CGC. Some of the earliest record prices for very high grade material, particularly non-key SA books in super high grades, were set by long-time collectors looking to upgrade already existing high grade runs. When you're a Brulato type character, and your ASM 1 is a 9.8 bought raw pre-CGC, it's not unreasonable to go ham running up the price on an ASM 55 in 9.8 to replace a 9.4. And these price spreads for high grade set a precedent, and new collectors bought right in out of context and lacking perspective.

 

I can't even imagine a new collector today trying to put those kinds of runs together from scratch, let alone some kid trying to do it couple of decades from now.

 

Agreed on all points.

[1950's war comics]

How many people here lost money when the Savings And Loans went under because of their bad investments? They got away SCOTT FREE,... but you lost!

 

How many people here think the $50,000 they have built up in their 401k isn't going to go under 5 years from now because Vanguard or some other 401k institution makes bad investments?

 

These people have their bases covered,.. and you lose!

 

If I had $50,000 to drop on an investment, it would most definitely be a cherry AF15. At least I have a sure thing investment in my hands and it's not in some thieving *spoon* hole's pocket.

 

 

a textbook example of someone willing to commit financial suicide

 

[rjrjr]

It's sad when I would bring comics to school to give away lots of kids wanted them-there's a demand there but hardly any kids get to go to comic stores so they won't grow up with a love for comics that creates collectors. Once comics were no longer available in stores kids stopped getting exposed to them and that could affect the future of collecting.

 

Could? It already has. The lack of interest by kids has resulted in higher prices and lower print numbers for new comics. Every 5-10 years for the past 20 years, we see less and less new comics sold (but more and more money in comics because of the rising prices.)

 

I don't think kids are as interested as you think. Sure, some would pick up comics to read, but the vast majority would rather spend their time playing video games, listening to music, etc. I've said it before, you could give away comics for free and the vast majority of people still wouldn't read them.

 

This wasn't the publishers fault for not distributing to mass retail stores either. It just happened and they adjusted to keep themselves afloat. In fact, the push into movies is just another way they have kept themselves going. Time Warner didn't always own DC and Disney didn't always own Marvel. Those relationships came about because they had to.

[shadroch]

It would be great to have a map to follow, but we don't. Sans a map, I am forced to use past experience as a guide. While past performance is no indication of future results, would you pick Mike Trout or Stephen Drew to pinch hit for you?

 

I use past experience all the time. If I didn't, I wouldn't know what a boom and bust looked like.

 

The analogy about pinch-hitters doesn't make any sense in this context. You can look at batting averages from the current season or recent seasons to make an educated guess about how an individual will perform if you put him in now. On the other hand, the comic book market has gone from early stages (yes, it had been around for a long time, but it was a fragmented, undeveloped mess with AF #15s trading for 2 cents on today's dollar) to maturity over the past 30 years. The next 30 years will show the market go from maturity to late maturity or maturity to decline. Either way, it won't look anything like the past 30 years - you can throw out your historical roadmap and bet your bottom dollar on that.

 

Thank you for all your brilliant analysis , each and every one of your posts deal out solid financial wisdom , unfortunately many on these chat boards are drunk from the kool aid around here.

 

 

 

 

 

If the question had been- Are comics a good investment for thirty years from now, I'd say probably not.

But that wasn't the question. Are comics a good investment today? I say they are, if you buy at the right price.

Does anyone want argue that the AF 15 I purchased three years ago from Dr Carl wasn't a good investment?

Paid under 10 for a book that goes for 25 or more? How about the TTA 27 for 1500 that recently sold for over 5K?

I have no idea what any of these books will sell for in thirty years, or do I care. Just as I have no clue what a share of Tesla may be worth in thirty years.

[rjrjr]

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!

 

Oakman, when you purchased your copy of AF15 in '83 for $500, were the naysayers proclaiming the same thing then as they are now? That the market will fizzle out in 20-30 years, rendering your comics practically worthless? I'm just curious as to how long this kind of thinking has been going on for.

 

Funny thing about the early 1980s, the comic market was in decline. It wouldn't be until the mid 80s and afterwards that comics climbed out of the situation. Great time to buy comics because if I recall, many comics were going down in prices, not going up in Overstreet.

 

DC and Marvel had begun converting to the direct market, but hadn't finished with the newsstand at that point. That conversion to the direct market is what brought comics back from the brink.

[rjrjr]

Back in the eighties no one would say it was a crazy investment, because in the eighties no one considered comics an investment. They might have said you were crazy to pay that kind of money for a comic, but you paid it because you didn't know when you would see a copy for sale again. If you did have to sell you would be selling back to the store you bought it from for 50 cents on the dollar. The comoditization of comics came with eBay CGC and the other auction houses. Now you can buy one whenever you want, as long as you can afford it and can get much better than 50 cents on the dollar if you have to sell. Collecting is slowly dying out and investing is taking over.

 

Great points. While quality/key vintage comic books have been going up in value for decades, the "market" remained hugely illiquid, inefficient and structurally undeveloped until the Internet and third-party grading facilitated peer-to-peer sales. Which is why, to me, it's a bit laughable when people extrapolate price increases forward indefinitely because they've been going up since they were priced at 10 cents in 1938 - comic book prices may have gone up since then, but it was barely a real market and wasn't considered to be a serious investment for most of that time.

 

You're right - some here are too young to remember what the comic book "market" was like in the '80s. Getting 50 cents on the dollar back on resale at your local store is probably wildly optimistic from my recollection and experience!

 

That is how I recall that period as well. A new comic came out and you'd be lucky if someone else was interested in it.

[1950's war comics]

 

One of the most famous and desirable US coins is the 1916 standing liberty quarter, mintage 52,000. It is valuable, has demand and is a known rarity, The numismatic collector base is probably 10 to 50 times larger than the comic collecting fan base, a nice NGC graded example in uncirculated condition with around 1000 known can now be had for about the same price as a CGC 4.0 AF 15 which means one of two things,, either the 1916 SLQ MS 60 is way underpriced or the AF 15 CGC 4.0 is extremely overpriced.

[october]

These threads are always a little funny. I have no idea where the comic market will be in 20 years, and neither does anyone else. These same points can be found in these same type of threads going back at least a decade. The same dire warnings, the same pie in the sky optimism, the same everything. Nobody predicted that the key market would be this strong ten years ago, and I am sure the market 10 years from this point will be different than people imagine, for better or worse.

 

The best advice I have heard on here is pretty simple, and has served me well. Buy the comics you like and don't spend any money on comics that you can't afford to lose. If you do that, you won't have to trouble yourself with booms, busts, movie hype, hockey stick graphs, demographic tailwinds, the strength of the Yen, inflation, deflation, stagflation or the LIBOR.

[thunsicker]

These threads are always a little funny. I have no idea where the comic market will be in 20 years, and neither does anyone else. These same points can be found in these same type of threads going back at least a decade. The same dire warnings, the same pie in the sky optimism, the same everything. Nobody predicted that the key market would be this strong ten years ago, and I am sure the market 10 years from this point will be different than people imagine, for better or worse.

 

The best advice I have heard on here is pretty simple, and has served me well. Buy the comics you like and don't spend any money on comics that you can't afford to lose. If you do that, you won't have to trouble yourself with booms, busts, movie hype, hockey stick graphs, demographic tailwinds, the strength of the Yen, inflation, deflation, stagflation or the LIBOR.

 

While I agree with everything you've said if people followed your advice the bottom would drop out of the market. How many people could afford to lose $25k for a mid grade AF 15. Or $725k for a midgrade Detective 27. I try to never spend more than 5% of my take home income on comics. I have a great job that puts me in the top 10% of wage earners in the US and there are tons of comics that are just out of range for me at 5% of take home.

[oakman29]

These threads are always a little funny. I have no idea where the comic market will be in 20 years, and neither does anyone else. These same points can be found in these same type of threads going back at least a decade. The same dire warnings, the same pie in the sky optimism, the same everything. Nobody predicted that the key market would be this strong ten years ago, and I am sure the market 10 years from this point will be different than people imagine, for better or worse.

 

The best advice I have heard on here is pretty simple, and has served me well. Buy the comics you like and don't spend any money on comics that you can't afford to lose. If you do that, you won't have to trouble yourself with booms, busts, movie hype, hockey stick graphs, demographic tailwinds, the strength of the Yen, inflation, deflation, stagflation or the LIBOR.

 

Amen.

[delekkerste]

These threads are always a little funny. I have no idea where the comic market will be in 20 years, and neither does anyone else.

 

What happens to the comic market over the next 3-5 years is anybody's guess. Paradoxically, it's much easier to predict what will happen 20-30 years out because the number of people who grew up reading comics who will be in their prime earnings years then will be much smaller than it is now. Demography is destiny.

[october]

These threads are always a little funny. I have no idea where the comic market will be in 20 years, and neither does anyone else. These same points can be found in these same type of threads going back at least a decade. The same dire warnings, the same pie in the sky optimism, the same everything. Nobody predicted that the key market would be this strong ten years ago, and I am sure the market 10 years from this point will be different than people imagine, for better or worse.

 

The best advice I have heard on here is pretty simple, and has served me well. Buy the comics you like and don't spend any money on comics that you can't afford to lose. If you do that, you won't have to trouble yourself with booms, busts, movie hype, hockey stick graphs, demographic tailwinds, the strength of the Yen, inflation, deflation, stagflation or the LIBOR.

 

While I agree with everything you've said if people followed your advice the bottom would drop out of the market. How many people could afford to lose $25k for a mid grade AF 15. Or $725k for a midgrade Detective 27. I try to never spend more than 5% of my take home income on comics. I have a great job that puts me in the top 10% of wage earners in the US and there are tons of comics that are just out of range for me at 5% of take home.

 

Those are totally extreme examples of books that A) the vast, vast majority of collectors will never be able to touch and B) books that will never lose a significant amount of their value in our lifetimes. Even so, I think my point stands. If that AF 15 or Tec 27 represent a big chunk of your net worth, you might want to think twice before buying them.

 

[delekkerste]

If the question had been- Are comics a good investment for thirty years from now, I'd say probably not.

But that wasn't the question. Are comics a good investment today? I say they are, if you buy at the right price.

Does anyone want argue that the AF 15 I purchased three years ago from Dr Carl wasn't a good investment?

Paid under 10 for a book that goes for 25 or more? How about the TTA 27 for 1500 that recently sold for over 5K?

I have no idea what any of these books will sell for in thirty years, or do I care. Just as I have no clue what a share of Tesla may be worth in thirty years.

 

Yeah, but 3 years ago isn't today. I'd love to buy some NFLX, AAPL and ALXN or a Ferrari F40 or a condo in Marina del Rey at 2012 prices, but I can't. Also, by the "right price", do you mean at a discount? I mean, sure, if you're a hustler who can source books below market, then you have a built-in cushion/head start. And if you're a flipper, dealer, etc., what happens in 20 years doesn't matter if you're turning over marked-up inventory as fast as you can. I don't think anyone is disputing that. I think we're all only talking about investment as buying at FMV now and holding for the long-term.

[october]

These threads are always a little funny. I have no idea where the comic market will be in 20 years, and neither does anyone else.

 

What happens to the comic market over the next 3-5 years is anybody's guess. Paradoxically, it's much easier to predict what will happen 20-30 years out because the number of people who grew up reading comics who will be in their prime earnings years then will be much smaller than it is now. Demography is destiny.

 

It's not destiny. It's an educated guess, no different from the guesses a decade ago that predicted a peak in the market and a slow decline in sales prices....neither of which came true.

 

What difference does it make anyway? Not a whole lot of utility in predicting a crash 30 years from now. The majority of board members will be retired or dead by then.

[delekkerste]

It's not destiny. It's an educated guess, no different from the guesses a decade ago that predicted a peak in the market and a slow decline in sales prices....neither of which came true.

 

What difference does it make anyway? Not a whole lot of utility in predicting a crash 30 years from now. The majority of board members will be retired or dead by then.

 

It's an expression with much truth in it. Regardless, "an educated guess" is much different from "no idea". I don't know about you, but I don't throw darts at a board.

 

I don't think predictions now have much in common with those of 10 years ago because the hobby is much farther along in its development/maturity cycle than it was back then. In hindsight, we were in the early innings of the growth cycle back then, which is why many/most, including myself, were caught off-guard. We're arguably still in it now, but, obviously, much farther along. Who knows when it will end - a year, 5 years, 10+ years from now? Who can say, but the odds are pretty good that 20-30 years from now will have seen the onset of the decline phase based on demographics.

 

Funny you should question why we should care what happens 30 years from now when the majority of Board members "will be retired [true] or dead [unlikely]", since a lot of Board members are counting on their collections to fund a decent portion of their aforementioned retirement. I also highly doubt that it will take us anywhere near 30 years to tip over into secular decline; I'm just saying that it will be very obvious by then.

[VintageComics]

These threads are always a little funny. I have no idea where the comic market will be in 20 years, and neither does anyone else.

 

What happens to the comic market over the next 3-5 years is anybody's guess. Paradoxically, it's much easier to predict what will happen 20-30 years out because the number of people who grew up reading comics who will be in their prime earnings years then will be much smaller than it is now. Demography is destiny.

 

It's not destiny. It's an educated guess, no different from the guesses a decade ago that predicted a peak in the market and a slow decline in sales prices....neither of which came true.

 

What difference does it make anyway? Not a whole lot of utility in predicting a crash 30 years from now. The majority of board members will be retired or dead by then.

 

Nobody can predict the market. Period.