Investing potential in low grade comics?

[the blob]

Not to mention that finding these old books in NM isn't such an easy task and was harder buying them "live" pre-ebay.

[the blob]

ok, donut called those superboys "lower grade good" copies ... I'd read that to mean "Good or below". I too would be hesitant to use "Fair" as the grade given that it isn't listed in OPG (other than in the definitions section, not the pricing section) and that may confuse people.

 

What is fair supposed to be, 1/2 of good?

[uclapeterg]

ok, donut called those superboys "lower grade good" copies ... I'd read that to mean "Good or below". I too would be hesitant to use "Fair" as the grade given that it isn't listed in OPG (other than in the definitions section, not the pricing section) and that may confuse people.

 

What is fair supposed to be, 1/2 of good?

 

I think so. But it really depends.

[jbud73]

The Donut Empire was founded on buying at $1 and selling for $5.

 

Hey Arch can we change Donut's Title to this please, then he can just say see my Title and not have to post it so often. Thereby clearing the way for him to post more auctions - which he will of course shamelessly plug in numerous threads throughout the week and I will ultimately bid on. I think this best serves everyone involved.

[Rob]

Might be fun to watch

[uclapeterg]

Might be fun to watch

 

I was interested until I saw the big chip out near Mr. Fantastic.

[whomerjay]

You can definitely make money doing what Donut is doing and I applaud him for doing it, but I'll still take my $300 hourly rate for legal fees. Takes less time to make money. (and, yes, I know I am opening myself up for nasty lawyer jokes!).

 

In any event, I, too, interpret the question to be one of long term holding rather than flipping. I would also then respond in the negative. Just let the facts do the talking. We'll use Donut's example of Superboy #67 which he certainly made a nice short term profit on. Let's examine how the value of this book changed over the last 23 years.

 

1982 (OS #11)

Good = $5; Mint = $15

 

1984 (OS #13)

Good = $3.50; Mint = $20

 

1987 (OS #16)

Good = $3.70; Mint = $26

 

1996 (OS #26)

GD25 = $13.50; NM94 = $95

 

2000 (OS #30)

GD2.0 = $13; NM9.4 = $110

 

2004 (OS #34)

GD2.0 = $17; NM9.2 = $170

 

Someone else can apply the statistical percentages, but I rest my case.

 

Ahh... time for a little cross-examination.

 

Donut reinvested the $ from that book in 5 more books of the same kind, sold those in a month, reinvested those $ in 25 more books, etc. He compounded his initial profit 5000 times from 1982 to 2004 and can now buy approximately 200 of the same book in NM 9.2 IF he wanted to pay full retail.

 

If you don't sell, you have limited ability to buy and sell again. Turnover is the name of the game. Most comic dealers never learn that, that is why they tote the same [#@$%!!!] to shows over and over again.

 

Granted the man works but the system is much more foolproof than lazier "investments" as defined in this thread.

[esquirecomics]

You can definitely make money doing what Donut is doing and I applaud him for doing it, but I'll still take my $300 hourly rate for legal fees. Takes less time to make money. (and, yes, I know I am opening myself up for nasty lawyer jokes!).

 

In any event, I, too, interpret the question to be one of long term holding rather than flipping. I would also then respond in the negative. Just let the facts do the talking. We'll use Donut's example of Superboy #67 which he certainly made a nice short term profit on. Let's examine how the value of this book changed over the last 23 years.

 

1982 (OS #11)

Good = $5; Mint = $15

 

1984 (OS #13)

Good = $3.50; Mint = $20

 

1987 (OS #16)

Good = $3.70; Mint = $26

 

1996 (OS #26)

GD25 = $13.50; NM94 = $95

 

2000 (OS #30)

GD2.0 = $13; NM9.4 = $110

 

2004 (OS #34)

GD2.0 = $17; NM9.2 = $170

 

Someone else can apply the statistical percentages, but I rest my case.

 

Ahh... time for a little cross-examination.

 

Donut reinvested the $ from that book in 5 more books of the same kind, sold those in a month, reinvested those $ in 25 more books, etc. He compounded his initial profit 5000 times from 1982 to 2004 and can now buy approximately 200 of the same book in NM 9.2 IF he wanted to pay full retail.

 

If you don't sell, you have limited ability to buy and sell again. Turnover is the name of the game. Most comic dealers never learn that, that is why they tote the same [#@$%!!!] to shows over and over again.

 

Granted the man works but the system is much more foolproof than lazier "investments" as defined in this thread.

 

Redirect.

 

What makes answering the underlying question difficult is that the original post doesn't qualify what is meant by "investing". I've been taught to understand that investing, in the stock market sense, typically means buy, hold and ultimately sell, without emotion. Don't micromanage the stock portfolio by watching hour by hour or even day by day.

 

Now, I deal primarily in GA and PA, not SA. No doubt there are different approaches to making a profit. I also focus primarily on HG GA and PA that can be quite pricey. In that sense, my business approach is similar to my stock market approach. I buy a comic, set it aside, bide my time, let it increase in vale and sell when it hits the price I want, whatever amount of time it takes (unless, of course, a factor of necessity intrudes).

 

Now, what our pal Donut does is perhaps more akin to day trading, i.e., flipping over a short term. As we all know, day trading can be unbelievably risky but lucrative as well. In that sense the comparison does not appear apt, except by analogy. Day trading of comics, particuarly low grade can be worthwhile but you need to obviously focus on inventory rather than price, i.e., mass sales rather than the individual sale that would be more than fine to me.

 

At the end of the day, which manner of investment you wish to focus on depends on the money you have available and the time you wish to devote.

[FlyingDonut]

I've been taught to understand that investing, in the stock market sense, typically means buy, hold and ultimately sell, without emotion. Don't micromanage the stock portfolio by watching hour by hour or even day by day.

 

I don't think I'm day trading, but I will grant that there's a lot of room for error in the stuff I'm selling - if it doesn't sell, I'm out a quarter. Also, I'm definitely selling without emotion. With very few exceptions, everything is for sale.

[esquirecomics]

I've been taught to understand that investing, in the stock market sense, typically means buy, hold and ultimately sell, without emotion. Don't micromanage the stock portfolio by watching hour by hour or even day by day.

 

I don't think I'm day trading, but I will grant that there's a lot of room for error in the stuff I'm selling - if it doesn't sell, I'm out a quarter. Also, I'm definitely selling without emotion. With very few exceptions, everything is for sale.

 

That's why no doubt you are doing well. Don't get me wrong, you're business model is working. You put in the time, you get the dime, and another, and another, and another. All adds up. More power to you.

 

I just don't see that as "investing". I see it as a success story though, but it requires real work.

[Rob]

You put in the time, you get the dime...

 

Is that a subtle slam on the small profits found in low grade flipping?

[esquirecomics]

No, no. I should've said "quarter". Sorry.

[uclapeterg]

No, no. I should've said "quarter". Sorry.

 

When a lawyer makes gobs of money, I can see how you see making $5 as a "dime"

[delekkerste]

I've been taught to understand that investing, in the stock market sense, typically means buy, hold and ultimately sell, without emotion. Don't micromanage the stock portfolio by watching hour by hour or even day by day.

 

I don't think I'm day trading, but I will grant that there's a lot of room for error in the stuff I'm selling - if it doesn't sell, I'm out a quarter. Also, I'm definitely selling without emotion. With very few exceptions, everything is for sale.

 

That's why no doubt you are doing well. Don't get me wrong, you're business model is working. You put in the time, you get the dime, and another, and another, and another. All adds up. More power to you.

 

I just don't see that as "investing". I see it as a success story though, but it requires real work.

 

It's not investing and it's not day-trading. It's something that millions of stores around the world do every day. It's called RETAILING. Dan just happens to use a lot of different suppliers and he has some pretty nice margins compared to Shop-Rite or K-Mart.

[Zonker]

Yeah, retailing is pretty close except for this fact:

 

If Donut had to pay himself and his lovely Mrs. for the hours they put in haggling, buying, managing inventory, promoting on ebay, selling & shipping, would the margins look good at all compared to Rite-Aid, etc? (where the customers come to you). I wonder if the Vast Donut Empire has ever run those numbers just for fun?

 

Don't get me wrong: Hats off to Dan! I've bought from him and will again. I'd love to do more of what he does, because [/i] it'd be fun. [/i] And that's it: It's a hobby. We put our time in for free because it's mentally accounted for as recreation time, not work time. If at the end of the day we wind up with a few hundred dollars to plow back into our collections, well then:

 

But we also need to keep our day jobs....

[whomerjay]

You can definitely make money doing what Donut is doing and I applaud him for doing it, but I'll still take my $300 hourly rate for legal fees. Takes less time to make money. (and, yes, I know I am opening myself up for nasty lawyer jokes!).

 

In any event, I, too, interpret the question to be one of long term holding rather than flipping. I would also then respond in the negative. Just let the facts do the talking. We'll use Donut's example of Superboy #67 which he certainly made a nice short term profit on. Let's examine how the value of this book changed over the last 23 years.

 

1982 (OS #11)

Good = $5; Mint = $15

 

1984 (OS #13)

Good = $3.50; Mint = $20

 

1987 (OS #16)

Good = $3.70; Mint = $26

 

1996 (OS #26)

GD25 = $13.50; NM94 = $95

 

2000 (OS #30)

GD2.0 = $13; NM9.4 = $110

 

2004 (OS #34)

GD2.0 = $17; NM9.2 = $170

 

Someone else can apply the statistical percentages, but I rest my case.

 

Ahh... time for a little cross-examination.

 

Donut reinvested the $ from that book in 5 more books of the same kind, sold those in a month, reinvested those $ in 25 more books, etc. He compounded his initial profit 5000 times from 1982 to 2004 and can now buy approximately 200 of the same book in NM 9.2 IF he wanted to pay full retail.

 

If you don't sell, you have limited ability to buy and sell again. Turnover is the name of the game. Most comic dealers never learn that, that is why they tote the same [#@$%!!!] to shows over and over again.

 

Granted the man works but the system is much more foolproof than lazier "investments" as defined in this thread.

 

Redirect.

 

What makes answering the underlying question difficult is that the original post doesn't qualify what is meant by "investing". I've been taught to understand that investing, in the stock market sense, typically means buy, hold and ultimately sell, without emotion. Don't micromanage the stock portfolio by watching hour by hour or even day by day.

 

Now, I deal primarily in GA and PA, not SA. No doubt there are different approaches to making a profit. I also focus primarily on HG GA and PA that can be quite pricey. In that sense, my business approach is similar to my stock market approach. I buy a comic, set it aside, bide my time, let it increase in vale and sell when it hits the price I want, whatever amount of time it takes (unless, of course, a factor of necessity intrudes).

 

Now, what our pal Donut does is perhaps more akin to day trading, i.e., flipping over a short term. As we all know, day trading can be unbelievably risky but lucrative as well. In that sense the comparison does not appear apt, except by analogy. Day trading of comics, particuarly low grade can be worthwhile but you need to obviously focus on inventory rather than price, i.e., mass sales rather than the individual sale that would be more than fine to me.

 

At the end of the day, which manner of investment you wish to focus on depends on the money you have available and the time you wish to devote.

 

Your point is a good one which I think underscores that success at low grade buying/selling is much more heavily dependent on good retailing skills. Having a system that allows you to flip large quantities fast is key. For many of us it's not worth the effort or time to develop that system (although we suspect it would pay off in the long run). For me, I'm even too lazy to set up an html template for my sales, and too lazy to set up web hosting for better, cheaper images. So I don't list as much as I could or would like.

 

Yes I would agree there is a line that is crossed where the definition of low grade buying/selling would be better described as retailing than investing. But investing in any type of comics does often take some work, more than calling your broker and calling him/her to buy/sell. If fact, the work involved in selling a high grade good book can often be substantial. Sometimes, I think you can pick up a low grade lot, and flip it quickly (by fractionating into 3 or four smaller lots) for more $ than than you get flipping a high grade book (in which you spent just as much time). I think this is true because, quite frankly, may more people seek the HG investment because it is perceived as lower risk, less time involved, and (importantly) less retail savvy is needed to play the game. Obviously one has limited ability to be successful at the low grade investment game unless they have decent retailing skills.

[Rob]

Yeah, retailing is pretty close except for this fact:

 

If Donut had to pay himself and his lovely Mrs. for the hours they put in haggling, buying, managing inventory, promoting on ebay, selling & shipping, would the margins look good at all compared to Rite-Aid, etc?

 

I never liked that argument. "Sure you made $10 on the comic, but how much time did it take you finding the deal, listing on eBay, shipping, etc.?" If I were doing this INSTEAD of a $40/hr job, yes that would be stupid. But if I wasn't spending my free time on my fun hobby of wheeling and dealing to make $10 here and $10 there, it would be spent doing some activity that doesn't make me a dime. So there is no opportunity cost.

[FlyingDonut]

Yeah, retailing is pretty close except for this fact:

 

If Donut had to pay himself and his lovely Mrs. for the hours they put in haggling, buying, managing inventory, promoting on ebay, selling & shipping, would the margins look good at all compared to Rite-Aid, etc?

 

I never liked that argument. "Sure you made $10 on the comic, but how much time did it take you finding the deal, listing on eBay, shipping, etc.?" If I were doing this INSTEAD of a $40/hr job, yes that would be stupid. But if I wasn't spending my free time on my fun hobby of wheeling and dealing to make $10 here and $10 there, it would be spent doing some activity that doesn't make me a dime. So there is no opportunity cost.

 

Exactly- I'd be doing this anyway. The money I make selling books allows me to buy MORE books.

[Zonker]

I don't think there is any disagreement here. Can money be made on low-grade books? Absolutely!

 

Is that "investing" in terms of the original question?

[jeff2004]

I think we are onto something here. Donut has a method here to what other people may think as a madness. It even looks like there may be opportunities in low-grade key books. It will be interesting to see how that low grade CGC Fantastic Four#1 auction goes..

 

Maybe the method is to buy pre-1965 low grade in collections. Then split the collections off.

 

Of course, in general, just buying collections and splitting them off can be lucrative.