Bubbles Bursting 8 8

[sfcityduck]

Interesting past week.

Stocks are down and Bitcoin is trending the same as stocks (except much worse).  Why?  Seems mostly due to a fear of inflation and speculator jitters.  So much for Bitcoin being a hedge against inflation! 

Net impact is that the Bitcoin crowd has lost a LOT money at the start of 2022.  Over $130 billion as of yesterday, and the fall continues (down another couple thousand dollars per Bitcoin today and overall down over 50% from highs).  Which sucks if you are a Bitcoin investor planning to cash in to pay taxes for last year's realized gains put into other uses - like comics.

I am super curious to see if this has an impact on the purported "new money" buyers who have come into the comic market the past year.  If these "new money" buyers are speculators, they may need to sell off to right their portfolios.

I remember hearing, and maybe someone here can confirm, that the MH Flash run sell-off bloodbath was initiated due to a downturn in the owner's real estate investments.  

Is the past an indicator of what will happen?  We'll see.  It may have no impact, or maybe there will be less crazy buyers (I'm looking at you $3.3M OA buyer), or maybe we'll see a relatively quick sell walk of shame.

Should be interesting.

 

Edited January 24, 2022 by sfcityduck

[adamstrange]

On 1/24/2022 at 12:08 PM, sfcityduck said:

I remember hearing, and maybe someone here can confirm, that the MH Flash run sell-off bloodbath was initiated due to a downturn in the owner's real estate investments.  

 

Both Keller and Geppi ended up selling off large chunks of comics due to the real estate bubble and collapse.

[jimbo_7071]

I think that the Covid bubbles will burst this year, but I also think that GA will be less affected than other segments of the hobby.

Many crypto investors have pobably cashed out already (at least partially). I doubt many guys were buying comic books with gains that only existed on paper (or in silicon chips?). That would be awfully reckless.

[sfcityduck]

On 1/24/2022 at 10:40 AM, jimbo_7071 said:

I think that the Covid bubbles will burst this year, but I also think that GA will be less affected than other segments of the hobby.

Many crypto investors have pobably cashed out already (at least partially). I doubt many guys were buying comic books with gains that only existed on paper (or in silicon chips?). That would be awfully reckless.

I think you have it backwards.  The risk for a crypto investor is that they cashed out Crypto in 4Q last year when prices were high (as high as 67K a bitcoin in November), to buy other investments like comics or real estate, but did not set aside money for taxes. This is not unusual.  They may well have thought they could sell in 2022 to pay 2021 taxes.  (If you wait to fund the taxes in 2022 then you do not have to pay taxes on that transaction until 2023.)  If so, such a crypto investor may be in a bit of bind and facing selling while underwater if they bought crypto any time other than the month of July last year.  It may well be more palatable to unload part of the investment they bought than to sell more crypto at this point.

[manetteska]

For whatever reason, I never bought in to the idea all of this "new comic money" was coming from crypto offshoots (I don't have another viable option; I'm still confused).

I don't know if this dip will tip any hands as to what was happening, but it will be interesting to see what, if anything, happens next -- large sell-offs (which will be difficult to track on a per-person basis), lower buy prices, etc. -- through Q1/April of this year.

[50YrsCollctngCmcs]

On 1/24/2022 at 11:07 AM, manetteska said:

For whatever reason, I never bought in to the idea all of this "new comic money" was coming from crypto offshoots (I don't have another viable option; I'm still confused).

I don't know if this dip will tip any hands as to what was happening, but it will be interesting to see what, if anything, happens next -- large sell-offs (which will be difficult to track on a per-person basis), lower buy prices, etc. -- through Q1/April of this year.

Good point, the stock market has been on a tear for almost two years so that could have easily funded some big purchases as well.

[sfcityduck]

On 1/24/2022 at 11:07 AM, manetteska said:

For whatever reason, I never bought in to the idea all of this "new comic money" was coming from crypto offshoots (I don't have another viable option; I'm still confused).

 

I've been suspicious as well.  But, I've heard second hand that Heritage has been talking about how Promise has brought in "new money."  The last year seems to have been stupid money.  So I'm thinking that we are seeing a new kinda cat, not the type of traditional collectors who have dominated the hobby (who seem to be increasingly priced out of the market).  But, I'm open to theories and evidence.  

[fifties]

On Crypto, the largest, Bitcoin, has a value of 6.7% higher today than it did at the close of January, 2021, so about in concert with the government's assessment of inflation over the past year.

AFA taxation goes, be aware of how digital currency is managed; it is stored in a digital wallet, or multiple wallets, held at an exchange, such as Coinbase.  When sold, the proceeds are held in the wallet, with no tax consequences.  That only occurs when the proceeds are then converted to dollars.  That triggers Coinbase to send the owner and the government a Form 1099.

[SuperBird]

On 1/24/2022 at 2:58 PM, sfcityduck said:

I've been suspicious as well.  But, I've heard second hand that Heritage has been talking about how Promise has brought in "new money."  The last year seems to have been stupid money.  So I'm thinking that we are seeing a new kinda cat, not the type of traditional collectors who have dominated the hobby (who seem to be increasingly priced out of the market).  But, I'm open to theories and evidence.  

This. 

[sfcityduck]

On 1/24/2022 at 12:53 PM, fifties said:

On Crypto, the largest, Bitcoin, has a value of 6.7% higher today than it did at the close of January, 2021, so about in concert with the government's assessment of inflation over the past year.

AFA taxation goes, be aware of how digital currency is managed; it is stored in a digital wallet, or multiple wallets, held at an exchange, such as Coinbase.  When sold, the proceeds are held in the wallet, with no tax consequences.  That only occurs when the proceeds are then converted to dollars.  That triggers Coinbase to send the owner and the government a Form 1099.

Yep.  My view is that crypto currency is a potential tax problem when you sell it to get $$ to buy other investments like cash or real estate, but don't keep cash reserves to pay your taxes.  Last time I looked, Heritage did not take crypto currency, so if you have been buying promise books using crypto wealth you had to be selling your crypto.

[fifties]

On 1/24/2022 at 1:01 PM, sfcityduck said:

Yep.  My view is that crypto currency is a potential tax problem when you sell it to get $$ to buy other investments like cash or real estate, but don't keep cash reserves to pay your taxes.  Last time I looked, Heritage did not take crypto currency, so if you have been buying promise books using crypto wealth you had to be selling your crypto.

Actually one can manipulate the tax situation when liquidating any part of their crypto.  If it's sold high, or at a profit, any portion can be converted to dollars, which are then taxable.  The remainder could be reinvested in the same or other coins, intact from any taxation.  The only other tax dodge when liquidating an asset that I know of would be a Starker 1031A exchange in Real Estate, and even that has a 180 day limitation.

[thehumantorch]

On 1/24/2022 at 12:07 PM, manetteska said:

For whatever reason, I never bought in to the idea all of this "new comic money" was coming from crypto offshoots (I don't have another viable option; I'm still confused).

I don't know if this dip will tip any hands as to what was happening, but it will be interesting to see what, if anything, happens next -- large sell-offs (which will be difficult to track on a per-person basis), lower buy prices, etc. -- through Q1/April of this year.

We've set up at shows in Western Canada for years.  I've learned that the local economy has a large effect on sales, especially the price of oil since were an oil rich and oil sale dependent economy.  When the oil price is high and there are lots of high paying jobs and people are feeling good we sold tons of stuff and there seemed to be little resistance to prices.  When the oil price is low and there are lots of people out of work sales are much more difficult.

If people are doing well through the local economy, the price of their home, the stock market, cryptocurrency, or whatever asset they're in they're much more likely to spend and spend more.  And thanks to all of the comic book movies some of that spending has been in our hobby.

[Randall Dowling]

On 1/24/2022 at 12:53 PM, sfcityduck said:

The risk for a crypto investor is that they cashed out Crypto in 4Q last year when prices were high (as high as 67K a bitcoin in November), to buy other investments like comics or real estate, but did not set aside money for taxes. This is not unusual.  

This is also common with tech start-ups (I'm sure you're aware) where a new company will get bought by a bigger one or they go IPO and the founders get a huge payday with a cost basis of zero.  It's less common now, but back in the 90s and 00s, you'd see a bunch of guys driving around exotic cars, only to have to sell them when their taxes were due.  

I knew one guy who had 7 figure tax bill due and had less than a hundred thousand in cash.  And he couldn't sell more shares for another year.  Tough position to be in.

[zosocane]

On 1/24/2022 at 12:08 PM, sfcityduck said:

I am super curious to see if this has an impact on the purported "new money" buyers who have come into the comic market the past year.  If these "new money" buyers are speculators, they may need to sell off to right their portfolios.

Is the past an indicator of what will happen?  We'll see.  It may have no impact, or maybe there will be less crazy buyers (I'm looking at you $3.3M OA buyer), or maybe we'll see a relatively quick sell walk of shame.

 

 

What did that barber Occam say?  The simplest explanation is often the right answer.  Shortly after the pandemic started, besides the massive price gains on keys, esp Marvel SA keys, the other development in the hobby was significantly younger buyers, guys in their 30s, buying big/bigger books.  They seemed to parachute in during 2020 and 2021.  Their arrival and the massive price gains are not mutually exclusive.  Many of these younger guys were specking crypto early, when it was comparatively dirt cheap, and became very, very liquid in 2021 when crypto markets exploded.  Now, it is a blood-bath in the crypto markets.  The music is stopping for many in that sector.  It will be interesting to see how it plays out into our "hobby."  On on that $3.3 MM OA buyer?  My immediate thought was "crypto."

[jimbo_7071]

On 1/25/2022 at 12:07 AM, zosocane said:

What did that barber Occam say?  The simplest explanation is often the right answer.  Shortly after the pandemic started, besides the massive price gains on keys, esp Marvel SA keys, the other development in the hobby was significantly younger buyers, guys in their 30s, buying big/bigger books.  They seemed to parachute in during 2020 and 2021.  Their arrival and the massive price gains are not mutually exclusive.  Many of these younger guys were specking crypto early, when it was comparatively dirt cheap, and became very, very liquid in 2021 when crypto markets exploded.  Now, it is a blood-bath in the crypto markets.  The music is stopping for many in that sector.  It will be interesting to see how it plays out into our "hobby."  On on that $3.3 MM OA buyer?  My immediate thought was "crypto."

There could be a few guys like that who have entered the hobby, but I doubt there are enough to fully explain the recent trends. A lot of people are staying at home—bored to death—and spending their cash on everything and everything. In 2020, people were allowed to take $100K out of their 401Ks early without the usual 10% penalty, and a lot of people did. Interest rates are low, so some people are taking equity out of their homes. People are working from home and saving money by not paying for day care, not traveling, not eating out, etc., etc. They have money, and money burns holes in a lot of people's pockets.

Regardless of what's going on with crypto and the stock market, I don't think the various collectibles bubbles will be popping quite yet because the circumstances that helped to create them won't go away until the pandemic is in our rearview mirror.

With comics, moderns will probably be the canary in the mine. Other bubbles (BA, SA, GA, OA) will not pop before that one.

Edited January 25, 2022 by jimbo_7071

[Book Guy]

On 1/24/2022 at 11:58 AM, sfcityduck said:

I've been suspicious as well.  But, I've heard second hand that Heritage has been talking about how Promise has brought in "new money."  The last year seems to have been stupid money.  So I'm thinking that we are seeing a new kinda cat, not the type of traditional collectors who have dominated the hobby (who seem to be increasingly priced out of the market).  But, I'm open to theories and evidence.  

Watch the Documentary SAVIOR FOR SALE about the supposed Leonardo Da Vinci painting for some possibilities. Russian 'Oligarchs'; Saudi Royalty, Mafiosos... I had never heard of 'Free Ports' before. High Security warehouses in foreign countries that exist in a Tax and Legal no man's land. Apparently filled with Old Masters (and presumably lots more) bought to launder money and hide from the taxman. A copy of Action # 1 is a lot smaller than an Old Master Painting!

Edited January 25, 2022 by Book Guy
redundancy

[sfcityduck]

On 1/24/2022 at 10:35 PM, Book Guy said:

Watch the Documentary SAVIOR FOR SALE about the supposed Leonardo Da Vinci painting for some possibilities. Russian 'Oligarchs'; Saudi Royalty, Mafiosos... I had never heard of 'Free Ports' before. High Security warehouses in foreign countries that exist in a Tax and Legal no man's land. Apparently filled with Old Masters (and presumably lots more) etc bought to launder money and hide from the taxman. A copy of Action # 1 is a lot smaller than an Old Master Painting!

It would not be the first time that folks used comics to launder money.

[tabcom]

Back in 2012 I built a bitcoin mining rig. Just for fun! In 2020 I tried to get on the bitcoin blockchain. It took nearly a week. Exchanges are not easy either.
 

There are barriers to entry that most people that don’t understand crypto are not aware of. It is for this reason I don’t think there’s as many crypto comic collectors as one would imagine.

 

With respect to market trends, I don’t see any pullback for GA quality material.

[MrBedrock]

On 1/25/2022 at 12:35 AM, Book Guy said:

Russian 'Oligarchs'; Saudi Royalty, Mafiosos... 

I agree. It has been my suspicion since day 1 that this group has been messing with our hobby!

[Rob]

I assume those of us looking to acquire new books are hoping this will result in a correction in GA prices, and those who own valuable books are suspecting prices won't see a correction.