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

[Aman619]

Fractional ownership feels inevitable at this point.  I agree with Valiantmans initial basic take on it: since you can’t afford to own the actual object you believe strongly will appreciate in value, why not invest in the object and profit from the increase in value.  We no more own Apple, Amazon or Microsoft when we own a few shares, but when the stock goes up, we make money.  Same approach to investing, albeit that Wall Street has gotten a 200 hundred year (?) head start..

[sfcityduck]

On 8/24/2021 at 5:12 PM, Aman619 said:

Fractional ownership feels inevitable at this point.  I agree with Valiantmans initial basic take on it: since you can’t afford to own the actual object you believe strongly will appreciate in value, why not invest in the object and profit from the increase in value.  We no more own Apple, Amazon or Microsoft when we own a few shares, but when the stock goes up, we make money.  Same approach to investing, albeit that Wall Street has gotten a 200 hundred year (?) head start..

Except "investing" in art and comics is not the same cat as investing in a stock.  You invest in a stock based on certain economic fundamentals.  A stock certificate is a fractional ownership interest in a business.  And businesses generate income without the necessity of selling the business. And stocks like Apple, to use your example, pay a dividend to the holder of the stock.  So you can make money off of a stock without having to sell the stock (and without the business having to sell itself).  In contrast, you buy art and comics based on either your personal preferences or your bet on other people's personal preferences.  Art and comic prices are only supported by taste.  And art and comics normally only generate income when you sell the art and the comics off.  So fractional ownership of art or comics is different in kind from fractional ownership of a business.  

Which begs the question:  What does drive art and comic prices to such absurd heights?  I believe a significant factor is boasting rights (especially when the comic is entombed in plastic). And fractional ownership is going to erode that aspect of collecting.  If everyone's special, than no one is.  

[Aman619]

Well, you’re just picking out minor details that are different. Yes aspects of this kind of invest,ent don’t match the sophistication and flexibility of more legitimate investments.  Surely though, if the idea takes hold, that is all easily added on as competition comes into play to improve the process.  At heart you can make money on a new class of objects that you are willing to bet will increase in value. But can’t buy the whole thing by yourself. Let’s be wary but not luddites to new ideas… we didn’t want slabbing either. 

[valiantman]

On 8/25/2021 at 1:40 AM, sfcityduck said:

On 8/24/2021 at 7:12 PM, Aman619 said:

Fractional ownership feels inevitable at this point.  I agree with Valiantmans initial basic take on it: since you can’t afford to own the actual object you believe strongly will appreciate in value, why not invest in the object and profit from the increase in value.  We no more own Apple, Amazon or Microsoft when we own a few shares, but when the stock goes up, we make money.  Same approach to investing, albeit that Wall Street has gotten a 200 hundred year (?) head start..

Except "investing" in art and comics is not the same cat as investing in a stock.  You invest in a stock based on certain economic fundamentals.  A stock certificate is a fractional ownership interest in a business.  And businesses generate income without the necessity of selling the business. And stocks like Apple, to use your example, pay a dividend to the holder of the stock.  So you can make money off of a stock without having to sell the stock (and without the business having to sell itself).  In contrast, you buy art and comics based on either your personal preferences or your bet on other people's personal preferences.  Art and comic prices are only supported by taste.  And art and comics normally only generate income when you sell the art and the comics off.  So fractional ownership of art or comics is different in kind from fractional ownership of a business.  

Which begs the question:  What does drive art and comic prices to such absurd heights?  I believe a significant factor is boasting rights (especially when the comic is entombed in plastic). And fractional ownership is going to erode that aspect of collecting.  If everyone's special, than no one is.  

Turn back the clock... it's February 2001.

Traditional "investing" says 100 shares of Enron at $7,000 is absolutely preferable to $7,000 in Golden Age ten cent comics in a plastic tomb from a new slabbing company.

Now it's 2021.  Traditional "investing" would have lost all the money, but you'd likely have $70,000 in those comics.

The difference between "businesses generating income" and "comics increasing in value" is that businesses go bankrupt regularly and Golden Age desirable comics keep on being Golden Age desirable comics.

What's more, I didn't spend decades of my life wishing I could own Enron (or wishing I owned stock in any blue chip companies, much less new companies).  I did, however, spend decades of my life wishing I could play in the big leagues of the comic market.  There's meaning behind the investment.

I can't buy 100 different $10,000 Golden Age comics that I might want, but I would happily "invest" $10,000 to own 1% of a $1,000,000 collection, if all the other aspects of the investment (security, trust, confidence) were satisfactory.

The bottom line is... $10,000 isn't my retirement fund.  It doesn't make much difference to me if I lose it all, as long as I made the choices willingly, and I would willingly join the "big boys" in this comic chess game at 1%, even if they laugh at my pawn.  We'd be advancing across the board together, and while I might just sit beside the board and watch... we'd win together.

Getting back to the topic itself, if there are enough pawns at 1% each, ready to play the chess game with the biggest comics in this industry... the supply of desirable Golden Age comics will run out... but the pawns might not.  Then what would happen to the prices?

Edited August 25, 2021 by valiantman

[valiantman]

On 8/24/2021 at 6:00 PM, sfcityduck said:

Crypto currency only has real tangible value to criminals and terrorists.  That's where the value comes from.  Everyone else is just along for the ride.  It has no analogy to a stock or fractional ownership of a tangible asset.  

Crypto technology has lots of tangible value for use as a tool, most obviously in the realm of security. But that's an entirely different animal from the currency.

You seem to be repeating news headlines from 2014.

Cryptocurrency is literally a public ledger with the full history of every transaction that has ever occurred.  Criminals and terrorists should pick cash over crypto.  Cash has a serial number on it.  Cryptocurrency has a serial number with the complete history of every transaction involving that serial number... in public.

Now, if you want to rail against cash having no real tangible value except to criminals and terrorists, you might be on to something.  Particularly when cash is printed with no limits, untraceable, and there will never be more than 21,000,000 individually numbered bitcoins with a public ledger.

 

[sfcityduck]

On 8/25/2021 at 7:05 AM, valiantman said:

Turn back the clock... it's February 2001.

Traditional "investing" says 100 shares of Enron at $7,000 is absolutely preferable to $7,000 in Golden Age ten cent comics in a plastic tomb from a new slabbing company.

Now it's 2021.  Traditional "investing" would have lost all the money, but you'd likely have $70,000 in those comics.

The difference between "businesses generating income" and "comics increasing in value" is that businesses go bankrupt regularly and Golden Age desirable comics keep on being Golden Age desirable comics.

 

Bad analogy.  I'm an attorney who was involved in the Enron Litigation.  The problems with Enron were legion, predominantly business structure aided and abetted by accounting firms and investment banks. It didn't help that the business model was based, in part, on a fraudulent manipulation of the energy market. Which is why Enron devolved into litigation and the plaintiff shareholders who sued Enron, its directors and officers, its accountants, and its banks ultimately recovered billions of dollars in settlements.  During that same time period, I could name a host of stocks which have out-performed Action 1.  If you asked me whether a fractional ownership business is closer to Enron or closer to the solid companies whose stock price legitimately has boomed, I'd be saying "Enron."

[sfcityduck]

On 8/25/2021 at 7:05 AM, valiantman said:

Getting back to the topic itself, if there are enough pawns at 1% each, ready to play the chess game with the biggest comics in this industry... the supply of desirable Golden Age comics will run out... but the pawns might not.  Then what would happen to the prices?

Investment banks have looked at creating "comic book mutual funds."  If I recall, board members have been consulted in connection with such schemes.  But, the conclusion is that the market for comics is far too tiny to make a mutual fund viable.  There's simply not enough value in comic book assets to make that play profitable or significant enough.  So the answer to your question is not what you'd expect - supply drives up price - it is a stagnant market.  We see this is in comic collecting all the time.  Lots of comics are much rarer than an Action 1.  You can make arguments that they should be much higher priced than they are because of that rarity.  But, rare comics are rarely bought or sold, so prices don't get laddered up the way we've seen with more plentiful comics (e.g. a Hulk 181).  Lack of supply can have the opposite effect from that which you view as inevitable.

[valiantman]

On 8/25/2021 at 10:10 AM, sfcityduck said:

On 8/25/2021 at 9:05 AM, valiantman said:

Turn back the clock... it's February 2001.

Traditional "investing" says 100 shares of Enron at $7,000 is absolutely preferable to $7,000 in Golden Age ten cent comics in a plastic tomb from a new slabbing company.

Now it's 2021.  Traditional "investing" would have lost all the money, but you'd likely have $70,000 in those comics.

The difference between "businesses generating income" and "comics increasing in value" is that businesses go bankrupt regularly and Golden Age desirable comics keep on being Golden Age desirable comics.

 

Bad analogy.  I'm an attorney who was involved in the Enron Litigation.  The problems with Enron were legion, predominantly business structure aided and abetted by accounting firms and investment banks. It didn't help that the business model was based, in part, on a fraudulent manipulation of the energy market. Which is why Enron devolved into litigation and the plaintiff shareholders who sued Enron, its directors and officers, its accountants, and its banks ultimately recovered billions of dollars in settlements.  During that same time period, I could name a host of stocks which have out-performed Action 1.  If you asked me whether a fractional ownership business is closer to Enron or closer to the solid companies whose stock price legitimately has boomed, I'd be saying "Enron."

No, the point is that you had the OPTION to choose Enron or solid companies.  You didn't have the option to invest $7,000 in Action #1 because it wouldn't have purchased one outright.  I want the option to buy a share of whatever I choose.

[sfcityduck]

On 8/25/2021 at 7:54 AM, valiantman said:

 

Cryptocurrency is literally a public ledger with the full history of every transaction that has ever occurred.  Criminals and terrorists should pick cash over crypto.  Cash has a serial number on it.  Cryptocurrency has a serial number with the complete history of every transaction involving that serial number... in public.

Now, if you want to rail against cash having no real tangible value except to criminals and terrorists, you might be on to something.  Particularly when cash is printed with no limits, untraceable, and there will never be more than 21,000,000 individually numbered bitcoins with a public ledger.

 

This post is flat wrong.  Cryptocurrency has NO public ledger tying owners to the currency.  That is, in fact, the whole point.  It is a "currency" which is tradeable with no tracing to owners.  Which is why bitcoin is the the preference for criminals and terrorists who want pay-offs for cyber crimes.  An example, several years ago hackers took over remote control of a dam.  They threatened to open the flood gates if they were not paid $Xmillion in bitcoin.  Dam company tendered to its cyber insurer who made the payment.  This is not a rare event, although most escape the public eye.  One that didn't is this: https://www.wsj.com/articles/colonial-pipeline-ceo-tells-why-he-paid-hackers-a-4-4-million-ransom-11621435636

Let me ask you this: What value does cryptocurrency have other than its suitability for "dark web" activities and engaging in criminal tax avoidance?  What do you think is driving its "value"? 

[valiantman]

On 8/25/2021 at 10:16 AM, sfcityduck said:

Investment banks have looked at creating "comic book mutual funds."  If I recall, board members have been consulted in connection with such schemes.  But, the conclusion is that the market for comics is far too tiny to make a mutual fund viable.  There's simply not enough value in comic book assets to make that play profitable or significant enough.  So the answer to your question is not what you'd expect - supply drives up price - it is a stagnant market.  We see this is in comic collecting all the time.  Lots of comics are much rarer than an Action 1.  You can make arguments that they should be much higher priced than they are because of that rarity.  But, rare comics are rarely bought or sold, so prices don't get laddered up the way we've seen with more plentiful comics (e.g. a Hulk 181).  Lack of supply can have the opposite effect from that which you view as inevitable.

Why are companies valued at $10B?  Because they just sold for $10B?  No, because 0.01% of the shares traded yesterday for a price that would valuate the whole company at $10B.

When 0.01% of the shares of an entity can trade daily and the entity's total value can skyrocket in weeks, you don't need whole copies of rare Golden Age books to trade hands.  The shares trade hands.  The valuation of the whole explodes because the shares are in demand daily.  Not 100% of the shares.  Not even 1% of the shares.  Just trading the shares creates a dynamic market even if 99% of the shares don't have activity for 20 years.

[sfcityduck]

On 8/25/2021 at 8:16 AM, valiantman said:

No, the point is that you had the OPTION to choose Enron or solid companies.  You didn't have the option to invest $7,000 in Action #1 because it wouldn't have purchased one outright.  I want the option to buy a share of whatever I choose.

And I'd like a Winter home in Martis Camp.  Sometimes we don't get what we want.  And for good reason.  An Action 1 is a luxury item.  It is not an income producing business.

Edited August 25, 2021 by sfcityduck

[Aman619]

Yeah.  All the comparisons of different investment vehicles is obviously valid.  Caveat emptor.  Do your research and buy, or pass.  Just as you’d select one stock over another.  This is just one more investment vehicle to choose from.  It may in fact be the worst choice for all the reasons stated. Right now it comes with less flexibility than stocks.  Stay away. But still, if someone choose to literally invest in a share of a comic they can’t afford, why not?  Market is too small for investment banks? Fine, opens the door for smaller firms with a higher risk tolerance. 

im not a buyer of it, but I can see it’s appeal to others. 

[valiantman]

On 8/25/2021 at 10:26 AM, sfcityduck said:

On 8/25/2021 at 10:16 AM, valiantman said:

No, the point is that you had the OPTION to choose Enron or solid companies.  You didn't have the option to invest $7,000 in Action #1 because it wouldn't have purchased one outright.  I want the option to buy a share of whatever I choose.

And I'd like a Winder home in Martis Camp.  Sometimes we don't get what we want.  And for good reason.  An Action 1 is a luxury item.  It is not an income producing business.

Unless you buy and sell Action 1 for a living.

It costs $500,000 to do so.  It could cost $50 to do so, if fractions were allowed into the game.

[sfcityduck]

On 8/25/2021 at 8:23 AM, valiantman said:

Why are companies valued at $10B?  Because they just sold for $10B?  No, because 0.01% of the shares traded yesterday for a price that would valuate the whole company at $10B.

When 0.01% of the shares of an entity can trade daily and the entity's total value can skyrocket in weeks, you don't need whole copies of rare Golden Age books to trade hands.  The shares trade hands.  The valuation of the whole explodes because the shares are in demand daily.  Not 100% of the shares.  Not even 1% of the shares.  Just trading the shares creates a dynamic market even if 99% of the shares don't have activity for 20 years.

Company valuation is far different than that.  We see it when there are mergers an acquisitions.  The company gets a valuation based on fundamentals, a valuation which is often different than the value your simple reference to stock price would indicate.  To be clear, stock price often moves based on investor views of future value.  That is different than present value. The classic "tell" is when a company beats its earnings projection and the stock price declines.

[valiantman]

On 8/25/2021 at 10:23 AM, sfcityduck said:

This post is flat wrong.  Cryptocurrency has NO public ledger tying owners to the currency.  That is, in fact, the whole point.  It is a "currency" which is tradeable with no tracing to owners.  Which is why bitcoin is the the preference for criminals and terrorists who want pay-offs for cyber crimes.  An example, several years ago hackers took over remote control of a dam.  They threatened to open the flood gates if they were not paid $Xmillion in bitcoin.  Dam company tendered to its cyber insurer who made the payment.  This is not a rare event, although most escape the public eye.  One that didn't is this: https://www.wsj.com/articles/colonial-pipeline-ceo-tells-why-he-paid-hackers-a-4-4-million-ransom-11621435636

Wrong again.  Cryptocurrency has a public ledger, which will be public forever.  There is no CURRENT way to tie every transaction to the owner, but the crime is recorded for public viewing literally forever.  It's not a cash transaction that criminals do a hundred times a second somewhere on the planet that vanishes into thin air.  Cryptocurrency is a public ledger permanent record.  The transactions are "hidden" like fingerprints at a crime scene.  Criminals will be caught eventually because the fingerprints can't be wiped away.

[sfcityduck]

On 8/25/2021 at 8:27 AM, valiantman said:

Unless you buy and sell Action 1 for a living.

It costs $500,000 to do so.  It could cost $50 to do so, if fractions were allowed into the game.

The guys who are buying and selling Action 1 for a living are not passive investors.  They work their buts off getting to know their market of buyers and sellers, developing that market by cultivating new buyers, developing their opportunities to acquire Action 1s or handle consignments by cultivating sellers, and doing other things which have grown the hobby for the average joe collector who does nothing more than buy/sell to a dealer or on eBay etc.  Guys like Fishler and several of the boardies on this site are "market makers" and "market cultivators."  

The best way to make money off of comics is to handle the transactions, not own the comics.  The company making the most money off our hobby is Heritage.  It is like the California gold rush, the minors made little, but the businesses selling those minors food, supplies, and providing services made a killing.

[valiantman]

On 8/25/2021 at 10:29 AM, sfcityduck said:

Company valuation is far different than that.  We see it when there are mergers an acquisitions.  The company gets a valuation based on fundamentals, a valuation which is often different than the value your simple reference to stock price would indicate.  To be clear, stock price often moves based on investor views of future value.  That is different than present value. The classic "tell" is when a company beats its earnings projection and the stock price declines.

EXACTLY!  If you want to get into a company that you PERSONALLY value at $10B when it is undervalued at $5B, you can buy as many shares as you like... all the way down to a fractional share for $10.  You can sell at $20B and take your $40 out, because the company is overvalued.

Action Comics #1 is an asset that --- at any point in history --- it was theoretically possible to put $10 in, and then at any other point, take that $10 out, or $20, or $200, whatever the value.  Theoretically.  It could have happened, but it didn't.

It didn't happen because the mechanism wasn't there.  The concept was valid, the investment would have shown returns, but the mechanism wasn't there.

Add the mechanism, and it's a new market.  In when the book is undervalued, out when it's overvalued, hold on forever... whatever you want.  The fundamentals are the collector's perspective and the current share price.  Someone dumps their shares?  The price falls.  Someone decides to increase their holdings?  The price rises.

It's a valid concept... it's not traditional, but it's absolutely valid.

[valiantman]

On 8/25/2021 at 10:36 AM, sfcityduck said:

The guys who are buying and selling Action 1 for a living are not passive investors.  They work their buts off getting to know their market of buyers and sellers, developing that market by cultivating new buyers, developing their opportunities to acquire Action 1s or handle consignments by cultivating sellers, and doing other things which have grown the hobby for the average joe collector who does nothing more than buy/sell to a dealer or on eBay etc.  Guys like Fishler and several of the boardies on this site are "market makers" and "market cultivators."  

The best way to make money off of comics is to handle the transactions, not own the comics.  The company making the most money off our hobby is Heritage.  It is like the California gold rush, the minors made little, but the businesses selling those minors food, supplies, and providing services made a killing.

You're arguing against traditional stock ownership.  The employees work their butts off.  The CEOs make big salaries. The traders keep the trading fees.  If I am allowed to buy a share in that company, I could make money doing absolutely nothing.

[sfcityduck]

On 8/25/2021 at 8:32 AM, valiantman said:

Wrong again.  Cryptocurrency has a public ledger, which will be public forever.  There is no CURRENT way to tie every transaction to the owner, but the crime is recorded for public viewing literally forever.  It's not a cash transaction that criminals do a hundred times a second somewhere on the planet that vanishes into thin air.  Cryptocurrency is a public ledger permanent record.  The transactions are "hidden" like fingerprints at a crime scene.  Criminals will be caught eventually because the fingerprints can't be wiped away.

The only thing public is that a transaction occurred.  Who paid or received the "currency" is not public at all.  All paper currency also has serial numbers. There is no difference between the ability to record the serial numbers of an extortion payoff made with paper money and one made with cryptocurrency.  The point is that with bitcoin, there is no need for a physical exchange of the type we use to see in old movies about ransom/hostage exchanges.  Today, the money gets transferred digitally.  

[valiantman]

On 8/25/2021 at 10:41 AM, sfcityduck said:

On 8/25/2021 at 10:32 AM, valiantman said:

Wrong again.  Cryptocurrency has a public ledger, which will be public forever.  There is no CURRENT way to tie every transaction to the owner, but the crime is recorded for public viewing literally forever.  It's not a cash transaction that criminals do a hundred times a second somewhere on the planet that vanishes into thin air.  Cryptocurrency is a public ledger permanent record.  The transactions are "hidden" like fingerprints at a crime scene.  Criminals will be caught eventually because the fingerprints can't be wiped away.

The only thing public is that a transaction occurred.  Who paid or received the "currency" is not public at all.  All paper currency also has serial numbers. There is no difference between the ability to record the serial numbers of an extortion payoff made with paper money and one made with cryptocurrency.  The point is that with bitcoin, there is no need for a physical exchange of the type we use to see in old movies about ransom/hostage exchanges.  Today, the money gets transferred digitally. 

There is a big difference.  If I send cash from a PO Box to another PO Box, no one knows who did the sending and receiving, and no one knows what the serial numbers on the cash were.

Not only does cryptocurrency record the PO Box addresses, it records every single serial number, and it hangs onto those records forever, so that you know when the exact money went to a third PO Box, then it switched over to a UPS Drop Box, then it was exchanged at a specific location on a specific date for cash... and then when it was cash... the criminal finally got away with the crime.