Combined investment will cause Golden Age (Collectors) to explode 3 3

[valiantman]

On 8/30/2021 at 6:44 PM, sfcityduck said:

Here's my thought exercise on this topic.  What would you rather pay $20 for: (1) a tiny tiny fractional share of an Action Comics 1 or (2) a mere photo of the Mile High Action Comics 1 owned by DA.  For me, the answer is a no brainer because I know which would satisfy the collector in me.

Which one is closer to satisfying my desire to own 100% of Action Comics #1?  The first one.  You can't own 100% until you can afford 1%, then 2%, and if you wait until you can afford 100%, you'll be dead.  Such is life.

[valiantman]

A new thought experiment: 

You agree to time payments on a very expensive comic book.  You make regular payments, but do not take possession of the book until it is 100% paid off. 

When you have paid 40% of the cost, the owner decides to sell the comic to someone else.  He pays you 40% of the sale price, which is quite a bit more than you paid.

You did what you could to purchase the comic outright and to add it to your collection, but it didn't happen. 

Rather than "just do without" completely, as suggested by comments like "you can't afford it, you just do without" you receive a benefit from the market movement on the book, which isn't your ideal but it's better than "do without".

What's the downside?  When the goal is A, but the reality is B, and both A and B are better than "do without", where's the problem?

[sfcityduck]

On 8/30/2021 at 4:58 PM, valiantman said:

A new thought experiment: 

You agree to time payments on a very expensive comic book.  You make regular payments, but do not take possession of the book until it is 100% paid off. 

When you have paid 40% of the cost, the owner decides to sell the comic to someone else.  He pays you 40% of the sale price, which is quite a bit more than you paid.

You did what you could to purchase the comic outright and to add it to your collection, but it didn't happen. 

Rather than "just do without" completely, as suggested by comments like "you can't afford it, you just do without" you receive a benefit from the market movement on the book, which isn't your ideal but it's better than "do without".

What's the downside?  When the goal is A, but the reality is B, and both A and B are better than "do without", where's the problem?

If I was the victim of your scenario, I'd be pissed off, very very unsatisfied, and suing for breach of contract.  But, that may just be the attorney in me.  My damages claim would be for the lost time value of my payments, the loss of my upside on the comic, and the loss of the expected possession.  And I would expect that any dealer who did that would see that the "problem" would include that he'd never again be able to sell a book with time payments.

[valiantman]

On 8/30/2021 at 7:02 PM, sfcityduck said:

On 8/30/2021 at 6:58 PM, valiantman said:

A new thought experiment: 

You agree to time payments on a very expensive comic book.  You make regular payments, but do not take possession of the book until it is 100% paid off. 

When you have paid 40% of the cost, the owner decides to sell the comic to someone else.  He pays you 40% of the sale price, which is quite a bit more than you paid.

You did what you could to purchase the comic outright and to add it to your collection, but it didn't happen. 

Rather than "just do without" completely, as suggested by comments like "you can't afford it, you just do without" you receive a benefit from the market movement on the book, which isn't your ideal but it's better than "do without".

What's the downside?  When the goal is A, but the reality is B, and both A and B are better than "do without", where's the problem?

If I was the victim of your scenario, I'd be pissed off, very very unsatisfied, and suing for breach of contract.  But, that may just be the attorney in me.  My damages claim would be for the lost time value of my payments, the loss of my upside on the comic, and the loss of the expected possession.  And I would expect that any dealer who did that would see that the "problem" would include that he'd never again be able to sell a book with time payments.

So your objections would be assuaged by a clause at the beginning which states the owner may sell the book at any point before you have made 51% of the payments?

[sfcityduck]

On 8/30/2021 at 5:05 PM, valiantman said:

So your objections would be assuaged by a clause at the beginning which states the owner may sell the book at any point before you have made 51% of the payments?

That would be honest, but I wouldn't ever do that deal because I would not want the lost opportunity cost of giving someone my money for no reason.  After all, what happens if they sell the book for the same price to someone else or for less?  At best, I've lost the use of my money for no benefit, without obtaining what I wanted.  

[tth2]

On 8/31/2021 at 5:02 AM, MrBedrock said:

And I absolutely would not consider my run somehow complete because I have a fraction.

You do realize we're in a hobby with people with so much OCD that they reslab their books just because they need the labels to all look the same, right?

I can definitely see some people shifting from collecting the comics themselves to collecting ownership certificates:  "I now have a complete run of 1% ownership certificates in Action 1-500!" 

It'll then be only a matter of time before they start grading and slabbing the certificates.  

[batman_fan]

On 8/30/2021 at 5:48 PM, MrBedrock said:

or (3) a petrified dog turd.

what are the physical dimensions of the turd?

[valiantman]

On 8/30/2021 at 7:11 PM, sfcityduck said:

On 8/30/2021 at 7:05 PM, valiantman said:

So your objections would be assuaged by a clause at the beginning which states the owner may sell the book at any point before you have made 51% of the payments?

That would be honest, but I wouldn't ever do that deal because I would not want the lost opportunity cost of giving someone my money for no reason.  After all, what happens if they sell the book for the same price to someone else or for less?  At best, I've lost the use of my money for no benefit, without obtaining what I wanted. 

But there is a reason.  The goal is to obtain a book on time payments which you would not be able to otherwise afford. 

There is a risk associated with the deal because the owner can sell before you get to 51%, but the reason for the deal and the original goal remain. 

[kazoo]

But but but ... if this is such a great idea and would appeal to so many collectors ... why is there no one else on the boards who is attracted to it in the least?

[valiantman]

On 8/30/2021 at 8:45 PM, kazoo said:

But but but ... if this is such a great idea and would appeal to so many collectors ... why is there no one else on the boards who is attracted to it in the least?

Several have supported the idea in this very topic.  I assume your username is kazoo because you make ridiculous noises and are only slightly amusing?  

I agree. 

Edited August 31, 2021 by valiantman

[eschnit]

On 8/30/2021 at 4:37 PM, valiantman said:

And thank you for speaking on behalf of everyone.  Anyone who doesn't agree that fractional investing is a certainty will look like a fool now, thus sayeth @MrBedrock

However, it will make the value of said comics implode. Why? Because I’ll happily sell you 99% of any comic I own for 80% of the value, as long as I decide when I want to sell it, and I always possess it.  

[valiantman]

On 8/30/2021 at 10:24 PM, eschnit said:

On 8/30/2021 at 4:37 PM, valiantman said:

And thank you for speaking on behalf of everyone.  Anyone who doesn't agree that fractional investing is a certainty will look like a fool now, thus sayeth @MrBedrock

However, it will make the value of said comics implode. Why? Because I’ll happily sell you 99% of any comic I own for 80% of the value, as long as I decide when I want to sell it, and I always possess it.

Sounds good.  All you have to do is build a 24/7 digital exchange, secure it, hurdle the SEC obstacles, tackle the legal documents, and advertise your service.  But that's all.  Just that.

[Cat-Man_America]

Just catching up on this fractured fairy tale thread.  The longer I read the sillier it looks to me, but I've been imbibing beer so the rationality of my perspective might be skewed (I need more ale!)

Anyway, knowing the collecting hobby as I do, it seems more likely that collectors would time share their spouses than time share their comics.

[eschnit]

On 8/30/2021 at 10:39 PM, valiantman said:

Sounds good.  All you have to do is build a 24/7 digital exchange, secure it, hurdle the SEC obstacles, tackle the legal documents, and advertise your service.  But that's all.  Just that.

That’s your job

...I don’t have an Action #1 anyway

Edited August 31, 2021 by eschnit

[MattTheDuck]

On 8/30/2021 at 8:53 PM, Cat-Man_America said:

 

Anyway, knowing the collecting hobby as I do, it seems more likely that collectors would time share their spouses than time share their comics.

Depends on the grade.

[Aman619]

Bedrock, you are NOT the target audience for this kind of opportunity. You can stroke a check for anything you want..  You dont speak for the little guy who this might appeal to.  Im not the target either.  But that doesn't blind me to its appeal to others.  But I do see the issues, or complications in us "knowing" what others might want to put their money into.  Collectors who realize that they are putting money into comics who also see that money as increasing over time when they sell, could see that putting some money into fractional shares of something that they feel will increase in value is somewhat that appeals to them.  Especially AF 15 which just seems to have no limit as it prices nearly every collector out of any decent looking copy.

[fifties]

On 8/30/2021 at 5:34 PM, valiantman said:

But there is a reason.  The goal is to obtain a book on time payments which you would not be able to otherwise afford. 

There is a risk associated with the deal because the owner can sell before you get to 51%, but the reason for the deal and the original goal remain. 

Don't mind me for jumping in feet first, W/O reading the preceding 20 or so pages.

  It seems that this "investment" is a combination of an installment sale for sole ownership eventually, and a group investment for appreciation of principal.  The gamble involved, of course, is that the object of desire might be retailed off before whatever agreed on percentage of ownership is attained.  The counterbalance (salve) for that is the assumed appreciation and therefore increase in return over what was initially invested.  Would this scheme involve more than one investor hoping to eventually own the book?  If so, methinks there would be problems sooner or later.  Is it that the first one to get a majority ownership is then "king of the mountain"?  But 51% doesn't give him leave to gain possession, does it?

Fractional investment is done all the time in trust deeds, but the investors don't expect to own any greater percentage than that which they originally invested.

[waaaghboss]

On 8/30/2021 at 5:34 PM, valiantman said:

But there is a reason.  The goal is to obtain a book on time payments which you would not be able to otherwise afford. 

There is a risk associated with the deal because the owner can sell before you get to 51%, but the reason for the deal and the original goal remain. 

isn't the whole scheme predicated on the hope that the book, and therefore the shares, continually increase in price?  your timed payment idea doesn't seem to work when the cost of shares for the book you already can't afford continually increase as you buy each one at a higher and higher price.  imagine back when I put an snes copy of mortal combat away on layaway as a kid.  If every time I went in to make a payment, the cost of the game and hence what I still owed kept going up, the whole point falls apart.  

[MyNameIsLegion]

On 8/30/2021 at 5:11 PM, valiantman said:

Since I've been accused of being a RallyRd cheerleader, I'll let Otis have this one.

https://help.withotis.com/en/collections/2284931-for-investors

 

On 8/30/2021 at 5:09 PM, MyNameIsLegion said:

Ok I have questions, I've read a lot fo this thread, and the more I think about it, the sillier it all seems.

If I own a share of Action 1, who decides if the actual copy of the book can be sold. Whoever has a controlling interest? say 51%. What if a group representing 51% decide they want to sell? Am I forced to sell?  How does the Action 1 go up in value?  Only though the exchange of shares in this particular copy, or all copies of action 1? what is the market for action 1, or all 7.0 action 1s, or only  a fractionally owned 7.0 Action 1? If a privately held, wholly owned copy of Action 1goes to auction, can a group of investors buy it via shares? Who keep sthe physical artifact? Is it insured? What if I die, and I have multiple heirs, does that mean they each own a fraction of a fraction? Am I the first to make a "get a piece of the Action" joke? This whole idea sounds pretty farfetched for it to ever take off in s serious way beyond individually drawn up private equity agreements in advance of a sale or auction.

[Gatsby77]

On 8/30/2021 at 8:02 PM, sfcityduck said:

If I was the victim of your scenario, I'd be pissed off, very very unsatisfied, and suing for breach of contract.  But, that may just be the attorney in me.  My damages claim would be for the lost time value of my payments, the loss of my upside on the comic, and the loss of the expected possession.  And I would expect that any dealer who did that would see that the "problem" would include that he'd never again be able to sell a book with time payments.

+1.

I've only paid more than $2,000 for a comic book 4x in my life, and only once have I taken time payments. The book was a CGC 4.0 copy of Startling # 10 (first appearance of the Fighting Yank), bought from Heritage back in 2013. I basically paid $700 / month over 3 months for the book.

I would have been both irate and litigious if Heritage had backed out on the deal mid-way through, even if they paid me back more than I'd pay in.

Why?

It's a legitimately rare book and was a grail for me at the time.

There were (then) just 8 unrestored copies on the census; today (8 years later) there are just 15.

Was it a great investment?

No - as @sfcityduckpointed out pages back it's appreciated far less than nearly any Silver Age key precisely because (in addition to the obscurity of the character) it's not liquid - the book itself is so rare that it trades hands - in any condition - only once every 2-3 years or so.

Last sale of the book in 4.0 was last December for $3,450 - a mere 60% gain over 7 years - and just a 22% total gain over that period once you subtract Heritage's fees and the Capital Gains tax.

 

Why would I be so pissed if someone reneged partway through?

Because it wasn't about the money - it was about my owning the book itself.

What would I pay for fractional ownership of the same book?

Zero.

No - that's a lie. I paid $12 once for a coverless copy, a few months before I bought that 4.0.