Non-Billionaires Discussing Billionaires They Will Never Meet Who Buy Art To Show Other Billionaires 4 4

[Xatari]

Guilty.  I couldn't add anything of value to the conversation but wanted to chime in and thank everyone for sharing.  I truly appreciate hearing from those who have walked before me in this regard.  Thank you, all, for your contributions to this thread.  

[John E.]

On 7/6/2024 at 9:45 AM, Aahz said:

So let's add an extension to this question.  Leaving out "modern" art ... let's randomly say since 2000 ... is those pages from the 60's-90's have had that 10-30x run up, how much further can it go?  There is a lot of art of all types out there, and we have seen special pages go for 10's-100's, but what about a run of the mill 80's DC cover?  A run of the mill Gill Kane cover from the 70s?

I generally don't care because I don't sell, but like most people I don't want to overpay either.  Are there categories that have topped out?

How much further can art go? I guess we are limited by our imagination. I never in my life would have thought to appraise this Bagley cover from ‘93 as $126k. Is this a $226k cover next year? Probably not but why not 10 years from now?

If something is run of the mill then what two people are going to run it up? If you bought a run of the mill cover for $975 and you held it for 35 years, I’d like to think there’s a floor for covers and a collector is not going to let a cover go for less than $x,xxx. The hard part is holding on to a run-of-the-mill cover for 35 years. Vintage covers don’t pop up on eBay nearly as often as they did 10 years ago. That should tell you something.

This month I paid $20 for a personal-size pepperoni pizza at California Pizza Kitchen in LAX. I bought two of them actually. Days before, i bought the same pizza, only 18 inches for $15, minus whatever rewards coupon we earned on the app. Did I feel good overpaying for the pizza? No. Would I have felt worse letting my family go hungry for three hours on the flight because I refused to be pricegouged on principle? But you know what’s a worse feeling? Having to go to the only pizza dealer on the flight who’s selling that same $20 personal size pizza only with a price tag of “Inquire” and everyone on that flight gets a different price but yours is $180. Now no one in your family will get to eat pizza. So overpaying is just a matter of how hungry you are and if you can make the three hour flight without eating.

Are there categories that have topped out? Absolutely yes. But I also thought mom jeans would stay in their crypt and skinny jeans were here to stay.

 

[thethedew]

On 7/7/2024 at 10:10 PM, John E. said:

That was 17 years ago.

Oi.  Thanks for the mortality reminder.  Wow.  Sure doesn't feel that way.  A traumatic time.

[Rick2you2]

On 7/8/2024 at 2:26 AM, John E. said:

How much further can art go? I guess we are limited by our imagination. I never in my life would have thought to appraise this Bagley cover from ‘93 as $126k. Is this a $226k cover next year? Probably not but why not 10 years from now?

If something is run of the mill then what two people are going to run it up? If you bought a run of the mill cover for $975 and you held it for 35 years, I’d like to think there’s a floor for covers and a collector is not going to let a cover go for less than $x,xxx. The hard part is holding on to a run-of-the-mill cover for 35 years. Vintage covers don’t pop up on eBay nearly as often as they did 10 years ago. That should tell you something.

This month I paid $20 for a personal-size pepperoni pizza at California Pizza Kitchen in LAX. I bought two of them actually. Days before, i bought the same pizza, only 18 inches for $15, minus whatever rewards coupon we earned on the app. Did I feel good overpaying for the pizza? No. Would I have felt worse letting my family go hungry for three hours on the flight because I refused to be pricegouged on principle? But you know what’s a worse feeling? Having to go to the only pizza dealer on the flight who’s selling that same $20 personal size pizza only with a price tag of “Inquire” and everyone on that flight gets a different price but yours is $180. Now no one in your family will get to eat pizza. So overpaying is just a matter of how hungry you are and if you can make the three hour flight without eating.

Are there categories that have topped out? Absolutely yes. But I also thought mom jeans would stay in their crypt and skinny jeans were here to stay.

 

Bring sandwiches into the airport or onto the plane. 

[John E.]

On 7/8/2024 at 6:23 AM, Rick2you2 said:

Bring sandwiches into the airport or onto the plane. 

I did! That was our departure from home. Returning, on our layover, a little harder 

[cstojano]

On 7/8/2024 at 7:21 AM, John E. said:

I did! That was our departure from home. Returning, on our layover, a little harder 

Is mayo a liquid though? Is there less than 3 ounces of mayo on a sandwich? Not if you go to Burger King there isn't (inventor of the mayo caulk gun needs to repent). 20 dollars for a personal pizza is wonderful though. I was about to order some Rubios on their app and saw a basic fish taco is now 4.99. we really do eat out less because of the prices and the completely distorted value for cost.

[PhilipB2k17]

On 7/5/2024 at 8:58 AM, delekkerste said:

Here's the truth about what happened with the OA market in 2007-09 unlike the revisionist history you will hear in many corners of the hobby nowadays .

The OA market stayed white hot through the summer of 2008. I remember SDCC 2008 where there was a bidding frenzy on the floor for that Steranko S.H.I.E.L.D. #7 cover that was being offered privately and that Albert ended up winning, while everyone was in full buy buy buy mode to an extent that I've never seen outside of parts of the past few years. And why not? Even though some banks had collapsed and housing had already started turning down in parts of the country, NYC housing prices were hitting fresh all-time highs, as was the price of many commodities and hard assets (and the stocks of the companies that produced them). Remember, that was the summer of $147/bbl. crude oil. 

It was not until the fall of Merrill Lynch (bought by BofA) and Lehman Bros. over the course of one fateful week in September 2008 that the Great Financial Crisis really took hold and that all the things that had held out (NYC real estate, commodities, energy & materials shares, etc.) had the rug pulled from under them as well. The (in)famous Damien Hirst direct-to-consumer sale at Sotheby's on the same day of the Lehman collapse proved to be the high water market for the fine art market for several years (and only because his dealers/collectors had a vested interest in propping up his prices, which collapsed in the secondary market along with everything else soon after). Heritage had a record-breaking illustration art sale in the summer of 2008 and then there was an absolute fire sale in early 2009 where prices just imploded.

And now...comic art. Did prices crash? No. Was the market unaffected? Also no. People were nervous and closed their pocketbooks, adopting a wait-and-see attitude. I remember picking up the first Red Sonja page from Conan #23 during this period. I told the seller that I was so confident that he wouldn't find another cash buyer in the market at the time that he should feel free to shop my offer around (he did, I was right, and he sold the page to me after a couple of weeks). 

The reality is that there was only about a 6-month period where this climate persisted because the money printing really kicked into high gear and reflationary forces soon turned every asset class except for real estate (which did not bottom until 2011-12 in most markets) around in dramatic fashion. I have no doubt that if the malaise/recession had lasted another 6 months that we would have seen more of a visible impact in the OA market than we did. As it was, the very real impairment of value was masked by people largely waiting it out. 

All of which is to say that if we get another macro-level downturn, people will very likely pull in their horns first as opposed to dumping their art, especially since there are a lot stronger hands and fewer speculators in this hobby than we saw in comics, sports cards, etc. I agree that anyone who is overextended should get themselves out of that position, because liquidity will dry up quickly in such an environment and you don't want to be a forced seller at a time people are shutting their pocketbooks. That said, I think it would take a much more prolonged downturn than 2007-09 (really just those 6 months in 2008-09 where things actually got to the point of affecting many assets, including comic art) to really bring the sellers out.  

What if it were September, 1929?

[PhilipB2k17]

On 7/8/2024 at 2:26 AM, John E. said:

How much further can art go? I guess we are limited by our imagination. I never in my life would have thought to appraise this Bagley cover from ‘93 as $126k. Is this a $226k cover next year? Probably not but why not 10 years from now?

If something is run of the mill then what two people are going to run it up? If you bought a run of the mill cover for $975 and you held it for 35 years, I’d like to think there’s a floor for covers and a collector is not going to let a cover go for less than $x,xxx. The hard part is holding on to a run-of-the-mill cover for 35 years. Vintage covers don’t pop up on eBay nearly as often as they did 10 years ago. That should tell you something.

This month I paid $20 for a personal-size pepperoni pizza at California Pizza Kitchen in LAX. I bought two of them actually. Days before, i bought the same pizza, only 18 inches for $15, minus whatever rewards coupon we earned on the app. Did I feel good overpaying for the pizza? No. Would I have felt worse letting my family go hungry for three hours on the flight because I refused to be pricegouged on principle? But you know what’s a worse feeling? Having to go to the only pizza dealer on the flight who’s selling that same $20 personal size pizza only with a price tag of “Inquire” and everyone on that flight gets a different price but yours is $180. Now no one in your family will get to eat pizza. So overpaying is just a matter of how hungry you are and if you can make the three hour flight without eating.

Are there categories that have topped out? Absolutely yes. But I also thought mom jeans would stay in their crypt and skinny jeans were here to stay.

 

Since I have absolutely no interest in Mike Bagley art, I really don't care. 

[PhilipB2k17]

On 7/6/2024 at 10:59 PM, stinkininkin said:

I feel like I didn't get the memo. Is something happening in the next few years specifically that is going to put the world in a zombie-apocalypse level recession? There is a sense of certainty about some of these prognostications that I would like to know about so I know what to prepare for (outside the normal fiscal gyrations we're all familiar with). 

That would require delving into politics, which is verbotten.

[PhilipB2k17]

On 7/7/2024 at 11:52 AM, Latverian Tourism Board said:

Yep, I don’t really think we are going to devolve into radioactive zombies that are killed by aliens. 😄

I’m interested, too, just posting something to amuse myself. 

Well, if there's a zombie apocalypse, Walking Dead art might go back up in value.

[John E.]

On 7/8/2024 at 1:53 PM, PhilipB2k17 said:

Since I have absolutely no interest in Mike Bagley art, I really don't care. 

I don’t care if you don’t care. I was addressing user aahz. 
 

I’ve been reading your posts for years. I don’t remember them being so negative all the time. 

[delekkerste]

On 7/6/2024 at 10:59 PM, stinkininkin said:

I feel like I didn't get the memo. Is something happening in the next few years specifically that is going to put the world in a zombie-apocalypse level recession? There is a sense of certainty about some of these prognostications that I would like to know about so I know what to prepare for (outside the normal fiscal gyrations we're all familiar with). 

Just my  on this whole conversation - don't read if you just care about comic art:

I wouldn't say I'm totally on board with downturn thesis presented in this thread, but, count me in the camp that looks at this and thinks it's eventually going to end very, very badly:

We're adding $1 trillion to the national debt roughly every 100 days at a time when the pandemic is over and we aren't in a hot war with anyone. And that doesn't include all the debt at the state and local government level, much of which has been taken on at an unsustainable rate for decades and where the can just keeps getting kicked down the road. You know Poway Unified School District, just a hop from where you are in San Diego County, Scott? In 2012, the district borrowed $105 million and will owe nearly $1 billion when the debt comes due in 2051. At some point, it won't be possible to keep extending and pretending like this. 

Also note that the debt shown above doesn't include all the unfunded liabilities which could end up being multiples of the debt figure.  

Now, I fully understand that people have been warning about this for the past 35 years and there hasn't been a debt reckoning yet, as governments have used every trick in the book to kick the can and extend and pretend, whether it be quantitative easing (money printing) or suppressing interest rates (financial repression) to keep the compounding of this debt down. And no one wants to see the party end so the "bond vigilantes" of the '80s and '90s are dead - everyone is on board with keeping the party going for as long as possible.

Now, there are some people who think that because nothing too terrible has happened yet, that it will never happen. Kind of like the "boy who cried wolf" parable - they heard people warning about the debt in the late '80s. '90s, 2000s, etc. and now have become inured to any and all warning signs. Count me in the camp that believes that limits to unreality still exist, even if those limits were farther out than we once thought. There have been some very prominent voices (e.g., Stanley Druckenmiller, in the conversation for greatest of all-time investor) saying that we are now at levels where a cataclysmic debt crisis is no longer a 20-25 year away type of event. Some, like Jeff "The Bond King" Gundlach think it could be as little as 3-5 years away. 

Me, I don't know and don't think it's terribly useful to make predictions like this far in advance. But, it is in the back of my head as something I expect to see happen at some point in my lifetime. That said, I don't know that it's necessarily terrible for comic art, as I think the ultimate response to an ultimate debt reckoning will be massive money printing/debt monetization/currency debasement, which is why, in the big big picture, I want to be an owner of high quality assets whose nominal values will be supported by such policy action.  

Edited July 9 by delekkerste

[tth2]

Doesn't our fiscal laboratory in Japan show that debt can not only go to 200% of GDP without any discernible problems, but interest rates and inflation will actually decrease as a result?  So if the results of the Japanese experiment prove to foreshadow where the US is going to go (and so far they've been unerringly prescient), then with US debt currently representing only 122% of GDP, we've got a whole lot more partying debt to go.

[PhilipB2k17]

On 7/8/2024 at 3:23 PM, delekkerste said:

Just my  on this whole conversation - don't read if you just care about comic art:

I wouldn't say I'm totally on board with downturn thesis presented in this thread, but, count me in the camp that looks at this and thinks it's eventually going to end very, very badly:

We're adding $1 trillion to the national debt roughly every 100 days at a time when the pandemic is over and we aren't in a hot war with anyone. And that doesn't include all the debt at the state and local government level, much of which has been taken on at an unsustainable rate for decades and where the can just keeps getting kicked down the road. You know Poway Unified School District just a hop and a skip from where you are in San Diego County, Scott? In 2012, the district borrowed $105 million and will owe nearly $1 billion when the debt comes due in 2051. At some point, it won't be possible to keep extending and pretending like this. 

Also note that the debt shown above doesn't include all the unfunded liabilities which could end up being multiples of the debt figure.  

Now, I fully understand that people have been warning about this for the past 35 years and there hasn't been a debt reckoning yet, as governments have used every trick in the book to kick the can and extend and pretend, whether it be quantitative easing (money printing) or suppressing interest rates (financial repression) to keep the compounding of this debt down. And no one wants to see the party end so the "bond vigilantes" of the '80s and '90s are dead - everyone is on board with keeping the party going for as long as possible.

Now, there are some people who think that because nothing too terrible has happened yet, that it will never happen. Kind of like the "boy who cried wolf" parable - they heard people warning about the debt in the late '80s. '90s, 2000s, etc. and now have become inured to any and all warning signs. Count me in the camp that believes that limits to unreality still exist, even if those limits were farther out than we once thought. There have been some very prominent voices (e.g., Stanley Druckenmiller, in the conversation for greatest of all-time investor) saying that we are now at levels where a cataclysmic debt crisis is no longer a 20-25 year away type of event. Some, like Jeff "The Bond King" Gundlach think it could be as little as 3-5 years away. 

Me, I don't know and don't think it's terribly useful to make predictions like this far in advance. But, it is in the back of my head as something I expect to see happen at some point in my lifetime. That said, I don't know that it's necessarily terrible for comic art, as I think the ultimate response to an ultimate debt reckoning will be massive money printing/debt monetization/currency debasement, which is why, in the big big picture, I want to be an owner of high quality assets whose nominal values will be supported by such policy action.  

Heard this from Ross Perot in 1992 and 1996. We increased taxes in 1993 and due to economic growth were on track to literally pay off the national debt by 2018, and were running budget surpluses by 1999. Instead of doing that, our politics changed, taxes were cut, and 9/11 happened and economic growth slowed. Here's what will happen. Eventually the political impasse we are in will be resolved, and taxes will go up and spending will be cut, There, will be temporary pain for a few years but we will get back on track. The biggest risk is the rest of the world going off of the dollar as the world's reserve currency. As long as that doesn't happen, we're fine because we pay all our debts in dollars. And as long as China is an authoritarian state that nobody trusts, the remnibi isn't going to be that currency. Maybe the Euro down the road, but that continent is too politically fractured and doesn't invest enough in their military budget. But regardless, it will cause problems for state and local governments who can't just print money (see California right now). 

The problem is a political one, not an economic one. So long as the current generations of taxpayers keep voting to avoid paying the bill, this will keep on going. But, the Fed did refinance its debt with lower interest rates for a while there. 

Edited July 8 by PhilipB2k17

[PhilipB2k17]

On 7/8/2024 at 3:54 PM, tth2 said:

Doesn't our fiscal laboratory in Japan show that debt can not only go to 200% of GDP without any discernible problems, but interest rates and inflation will actually decrease as a result?  So if the results of the Japanese experiment prove to foreshadow where the US is going to go (and so far they've been unerringly prescient), then with US debt currently representing only 122% of GDP, we've got a whole lot more partying debt to go.

And the Yen isn't the world's reserve currency. 

[PhilipB2k17]

Just one added point: Anyone know what year the percentage of the national debt held by the public in the post WWII era was the lowest? 1974. Was the US economy humming and things were great at that time? 

Edited July 8 by PhilipB2k17

[oldwhy]

On 7/8/2024 at 8:23 PM, delekkerste said:

That said, I don't know that it's necessarily terrible for comic art, as I think the ultimate response to an ultimate debt reckoning will be massive money printing/debt monetization/currency debasement, which is why, in the big big picture, I want to be an owner of high quality assets whose nominal values will be supported by such policy action

Is comic art really a high quality asset though? I would LOVE to believe that it is as I could view my spending as investing, but I’m really not sure that a lot of other people would share this view during a massive debt crisis. 

 

[vodou]

On 7/8/2024 at 2:48 PM, PhilipB2k17 said:

What if it were September, 1929?

I'm tired of typing too.

Note to Mods (and the very sensitive): the chart above is no more political than a clock. At a certain point "it's just time".

[delekkerste]

On 7/8/2024 at 3:54 PM, tth2 said:

Doesn't our fiscal laboratory in Japan show that debt can not only go to 200% of GDP without any discernible problems, but interest rates and inflation will actually decrease as a result?  So if the results of the Japanese experiment prove to foreshadow where the US is going to go (and so far they've been unerringly prescient), then with US debt currently representing only 122% of GDP, we've got a whole lot more partying debt to go.

Posted in the Water Cooler on March 28:

In the "you learn something new every day" department: 51 out of the 52 countries which have reached a 130% debt/GDP ratio since 1800 have ultimately defaulted. So, the track record is pretty clear about what happens. 

Not that we're likely to see outright defaults in the age of money printer go brrrr (and no gold standard), but things will get to the point where we see even bigger bazookas used to try and extend and pretend further (e.g., YCC) and eventually there will have to be direct monetization of debt IMO. The math is the math. 

Which is not to say that you should stuff your mattress and hide under your bed. If anything, it probably means that, over the long-term, you want to hold a diversified portfolio of very high quality assets including a healthy amount of currency debasement hedges. 

 

Obviously Japan is the only country out of the 52 that didn't ultimately default (again - the modern equivalent would be large-scale debt monetization)...yet. 

Like I said above - I believe there are still limits to unreality, they're just farther out than what was once believed. I'm not convinced that the U.S. can rack up Japan-like debt-to-GDP without something blowing up before then. But, in any case, the growth curve of the debt is now rising much faster than it had been between the continuous trillion-dollar deficits and the faster compounding due to (much) higher interest rates, so we may find out what those limits are sooner rather than later. I agree with Druckenmiller that this is no longer a 20-25 year away reckoning at the rate we're piling on debt.  

[CGC Mike]

On 7/8/2024 at 7:15 PM, vodou said:

Note to Mods (and the very sensitive): the chart above is no more political than a clock. At a certain point "it's just time".

Noted...