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

[vodou]

On 7/5/2024 at 5:04 PM, 1classics said:

...the entire story to TOS 39 art from Sotheby's in '96 for $35k range(?)...

On 7/5/2024 at 5:04 PM, 1classics said:

...I think he's made over $1m+ net and still is holding maybe 5-6 left from the story including the splash page, which is rumored now to be valued at $600-800k+ on it's own??? I'm sure someone will say that was nearly 30 years ago of holding, but the whole point was to hold and...

I'm not disagreeing with any of the above, I only want to add that if you're not getting 30x (or more) ROI on any Marvel superhero art today bought at FMV 30 years ago...you're doing something really wrong 

TOS 39 isn't a particularly noteworthy example. Sal Buscema Cap panel pages that were $50 each easily hit $1,500 - $2,000 today (30-40x), and that's even on the downswing from the 2021-22 highs. The only differences are you had to sit on a much larger stack and never worry about any visitors stealing them 

[Nexus]

I remember the 2008-2009 period well. OA values may have held, but the overall sentiment was worry. I had two good friends who were convinced that a correction for comic art was imminent. Both guys I respect a lot. One worked for Steve Cohen and had his ear to the ground. The other was just someone I considered one of the smartest people I'd met in collecting. He was so convinced that values would go down by half, that he sold some key pieces to hedge. It wasn't just talk, he put his money where his mouth was.

That definitely got me thinking about what I should do. I thought about selling some things like my friend. Just in case. Ultimately, though, I liked the art I had too much to sell. I'd rather own it, even if its value went down by half, than not own it. Once I came to that conclusion, I was at peace. And haven't really considered macroeconomic factors since.

Not only did I not sell anything key, I ended up making my two biggest purchases to that point in 2009:

Not sure either of these would have been available if not for the climate at the time. I also passed on this great Miller DD poster art (from my friend who was hedging):

This is the published image, I don't have the art scan. All three were around the same price. I passed on this because I already had a DD page. Looking back, I'd make the same choice. In terms of values, though, the Miller DD probably comes out ahead.

I also got two unsolicited offers around that time for my Y: THE LAST MAN #1 cover that would have paid for the Miller. I decided that was a trade I didn't want to make. No regrets, although again, the Miller comes out ahead.

In retrospect, of course it's easy to say now that I should have just paid for the Miller. But I was pretty stretched already. And overall, very glad I went against the pack and still picked up the WATCHMEN and Neal Adams Supes. Anyway, went through all that back then. It won't be a new test if it happens again.

Edited July 6 by Nexus

[Stefanomjr]

On 7/5/2024 at 8:24 PM, Nexus said:

 

Not only did I not sell key, I ended up making my two biggest purchases to that point in 2009:

 

 

Not sure either of these would have been available if not for the climate at the time. I also passed on this great Miller DD poster art (from my friend who was hedging):

 

@Nexus The pieces you did acquire. Did you seek them out, or did the sellers come you (like your friend who hedged)?

[Nexus]

On 7/5/2024 at 5:36 PM, Stefanomjr said:

@Nexus The pieces you did acquire. Did you seek them out, or did the sellers come you (like your friend who hedged)?

They were both essentially private auctions. Both pretty healthy numbers for the time.

[1classics]

On 7/5/2024 at 1:54 PM, vodou said:

I'm not disagreeing with any of the above, I only want to add that if you're not getting 30x (or more) ROI on any Marvel superhero art today bought at FMV 30 years ago...you're doing something really wrong 

TOS 39 isn't a particularly noteworthy example. Sal Buscema Cap panel pages that were $50 each easily hit $1,500 - $2,000 today (30-40x), and that's even on the downswing from the 2021-22 highs. The only differences are you had to sit on a much larger stack and never worry about any visitors stealing them 

Yes to your point and a more realistic valuation of the art from the last 30 years, the same doesn't apply for most investments. The same house you bought in 30 years ago hasn't 30x or more ROI, but the right comic art has in a lot of cases. In some cases far more than that amount. Even when you look at the last decade, if you bought $1m home in the Bay Area (where I'm from), perhaps it's doubled? In some area 2.5 to 3 ROI where as if you bought the right Kirby and Ditko and put $1m into the right comic art 10 years ago you're maybe not 30x or more but I would say you're still far greater than 2x-3x ROI.

Now I'm sure our finance guys here will argue the tax benefits, write offs, while still having appreciation with your home vs the art. Furthermore, our stock guys will say you invested in Tesla 10 years ago you'd have a similar ROI, but let's be honest 99% of investors bought the car for $100k and not the stock at the time. With art we're buying it cuz we love it and hope to hold it at any cost. Again, so enough about the sky is falling every year, the numbers don't lie, either sell and make your profit or if you love it enough like Felix said, don't sell it even if it's a short term down market. 

[Carl Elvis]

Between AI and cheap solar, I think we’re headed for an age of abundance. The days of cheap art may never return.

[mtlevy1]

On 7/5/2024 at 8:27 PM, 1classics said:

Yes to your point and a more realistic valuation of the art from the last 30 years, the same doesn't apply for most investments. The same house you bought in 30 years ago hasn't 30x or more ROI, but the right comic art has in a lot of cases. In some cases far more than that amount. Even when you look at the last decade, if you bought $1m home in the Bay Area (where I'm from), perhaps it's doubled? In some area 2.5 to 3 ROI where as if you bought the right Kirby and Ditko and put $1m into the right comic art 10 years ago you're maybe not 30x or more but I would say you're still far greater than 2x-3x ROI.

Now I'm sure our finance guys here will argue the tax benefits, write offs, while still having appreciation with your home vs the art. Furthermore, our stock guys will say you invested in Tesla 10 years ago you'd have a similar ROI, but let's be honest 99% of investors bought the car for $100k and not the stock at the time. With art we're buying it cuz we love it and hope to hold it at any cost. Again, so enough about the sky is falling every year, the numbers don't lie, either sell and make your profit or if you love it enough like Felix said, don't sell it even if it's a short term down market. 

Houses are a bit unique because most buyers live in them and put down a small % and thus get a lot of leverage; you control that $1M house for say $100k....when you sell it for $2M in 10 yrs, your $100K has made you $1M...of course, you have also had to pay the mortgage/et al in the interim but you saved a lot of rent. That said, not saying it beats the top-performing comic art bought decades ago.

[Kevn]

On 7/6/2024 at 10:51 AM, mtlevy1 said:

Houses are a bit unique because most buyers live in them and put down a small % and thus get a lot of leverage; you control that $1M house for say $100k....when you sell it for $2M in 10 yrs, your $100K has made you $1M...of course, you have also had to pay the mortgage/et al in the interim but you saved a lot of rent. That said, not saying it beats the top-performing comic art bought decades ago.

If you look at the broader housing market, and look at it over many decades, it becomes clear that houses are not an investment but a store of wealth, and a very time consuming store of wealth. When you factor in the costs of maintenance, property taxes, remodeling costs, insurance, mortgage expenses, and the substantial transaction costs of both buying and later selling, the net cash out is usually not far off the rate of inflation, and often not even that good. When you factor in the hundreds/thousands of hours the average homeowner does on their homes (compared to the renters), and how illiquid homes are, it really doesn't make sense to consider it at an investment, it's more like a job or, if you enjoy that, a passion project. And all of that doesn't touch of the huge cost (financial, time-wise, and emotional) a putting a home on the market, finding a new home, fixing up that home, moving, settling in, changing schools/commutes, etc., etc.

I've been though 5 or 6 cycles of buying/selling a home. It's miserable and exhausting, and each time I think "we're not doing that again for a looong time!" Looking at the big picture it's been a lousy financial investment when the actual costs are appropriately factored in.

Circling back to the discussion of 2007-2008, what I remember regarding housing is that asking prices went down a modest amount, and the rapid growth in housing prices stalled, but mostly the inventory of available houses dried up. People stopped buying or selling. There were a lot of foreclosures because thousands of people who should never have qualified for a home loan (i.e., subprime mortgages) were upside-down on their loans because they'd literally paid zero or a trivial amount as part of a down payment. If you "paid" $350,000 for a house by getting a mortgage for $340,000 and contributing $10k yourself, and now you owe $340,000 on a house that has a FMV of, say, $280-300k, then you may have a big incentive to walk away. Folks taking out subprime mortgages were always high risk, and before the financial crisis the default rate on these loans was, as I recall, around 5%. During the crisis this increased about 4-fold. What goes unsaid in looking back at this time is that there were a lot of people using subprime mortgages to buy second and third homes, with the plan to hold them for a year or two and flip them for a fast 20% profit.

I remember thinking in 2008 that maybe I should consider scooping up one of these defaulted homes at a bank sale. The funny thing is that these defaulted homes didn't really tank the general market that much. There were a lot of shady people involved in mortgage banking and real estate who swooped in and bought up these defaulted homes from clueless banks that just wanted them off their books. Those people either turned them into rentals or held them for a bit before putting them back on the market at prices far above what they'd paid the bank. It was mysteriously difficult to get involved in these bank foreclosure sales, to the point that the LA Times had a long investigative report trying to figure out who was buying these homes and why the banks were practically giving them away. At the time it seemed like a modern version of Chinatown. Anyway, as Felix recalls, there was a huge amount of angst, and fears that the entire economy would be broken. In retrospect it was that big a deal for the vast majority of people, especially in terms of home values and investment values and OA values.
 

[Stefanomjr]

On 7/4/2024 at 9:23 AM, KirbyCollector said:

Just a thought exercise for those who remember what happened after the market started cratering in Oct 2007... the collapse....

 

This is solely about YOU and managing your collection in what I believe to be a fairly rough patch for the economy starting late this year or early next. Will you be ready to take advantage of buying opportunities? Or will you be the one forced to sell at a loss? 

 

The default mindset is to equate our collections to  investments.

How will *I* manage my collection during the "rough patch".

In terms of actual equity - we've heard from those that bought more stocks during the 2007-2008 period and came out ahead.

In terms of OA...

 

@Nexus navigated the gauntlet, decided to buy, and came out the other end with a stronger collection and a strong sense of what to do next time. 

In simple terms you 1. Buy 2. Sell 3. Hold.

I will HOLD - possibly buy (if cash flow allows) and won't sell. 

 

I enjoyed this exercise, and the history lesson. 

 

 

Edited July 6 by Stefanomjr

[KirbyCollector]

Personally, I am going back to work after being retired for 2.5 years b/c I want to have as strong a cash position as possible for what lies ahead. After just experiencing a catastrophic health event no one believed would ever happen ever again, it is not unreasonable to think a financial or economic crisis along the lines of the Great Depression could also happen again. One side of my family lost a factory and all their wealth in 1929; the other side spent the Depression eating baked beans once a week on Saturday and considering that luxury. Perhaps we have all forgotten what true hardship is like, but I'd rather not wait for the event to happen, find out I am short funds and be forced to sell anything.

Edited July 6 by KirbyCollector

[John E.]

On 7/4/2024 at 11:31 AM, John E. said:

In July 2007 I was 28 and broke. So not much has changed except my age. 

When I say I’m broke, what I really mean is I feel broke. Wife and I make more money every year and it’s one step forward, one step back. Inflation cancels out our gains. My money has no purchasing power. And less so at HA Signature. 
 

I don’t see myself panic selling. What I see myself watching all this great art become available and not moving on it because of more important priorities. I’m squirreling away money in the war chest just in case. I have art to sell to trade up but it’s a buyer’s market right now so I’m very conservative about when I do that. Collectors are griping how they’ve taken baths on auctions recently and that talk doesn’t seem to grow legs for discussion. 
 

I was browsing through my CLink tracking bids and noticed some resells:

The Buscema was a successful flip. Albert Moy had it on his site for $1750 or so.

[tth2]

On 7/6/2024 at 11:27 AM, 1classics said:

Furthermore, our stock guys will say you invested in Tesla 10 years ago you'd have a similar ROI, but let's be honest 99% of investors bought the car for $100k and not the stock at the time.

It's not so much that people didn't buy the stock, but that they sold it way too early and missed all of the subsequent run-up.  And to the extent they got back into it again, they probably sold it too early again.  It's easier for many people to buy and hold OA than stocks. 

[tth2]

On 7/6/2024 at 10:19 PM, KirbyCollector said:

Personally, I am going back to work after being retired for 2.5 years b/c I want to have as strong a cash position as possible for what lies ahead.

Perhaps you never should have retired in the first place if after only 2.5 years you're unsure enough of your cash position that you need to go back to work already. 

[Aahz]

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?

[KirbyCollector]

On 7/6/2024 at 10:43 AM, tth2 said:

Perhaps you never should have retired in the first place if after only 2.5 years you're unsure enough of your cash position that you need to go back to work already. 

Unsure? No, I am doing just fine. I just know that for those who had cash in 2008-2012, there were unbelievable opportunities across several asset classes. I'd rather use new funds for whatever may present, as opposed to making tax disadvantaged withdrawals from a retirement account.

 

Edited July 6 by KirbyCollector

[vodou]

Be right and sit tight.

https://acquirersmultiple.com/2017/08/reminiscences-of-a-stock-operator-men-who-can-both-be-right-and-sit-tight-are-uncommon/

Very few understand this and even fewer have the willpower to pull it off.

Everybody will be challenged the next two years but even more so the next eight. I wish the best to all of you.

As far as this "blood in the streets..." business, well to paraphrase, the streets can bleed a lot longer than you can stay solvent 

I hope some of our more energetic posters in this thread will comment on how things are working out for them in the not too distant future when all credit disappears and almost no personal liquidity exists? Maybe you, the distinct individual, will still have some personal liquidity and "could" buy but...will you actually when you definitely cannot sell and know it?

[oldwhy]

On 7/6/2024 at 4:48 PM, vodou said:

in the not too distant future when all credit disappears and almost no personal liquidity exists?

Apologies if this sounds ignorant, but why would credit disappear over a period of eight years? What scenario do you have in mind? 

[vodou]

On 7/6/2024 at 6:39 PM, oldwhy said:

Apologies if this sounds ignorant, but why would credit disappear over a period of eight years? What scenario do you have in mind? 

It will disappear overnight, sometime in the next eight years, not to return for quite a while. More than that strays too far OT from what people come to this board for.

[John E.]

On 7/6/2024 at 8:39 PM, vodou said:

It will disappear overnight, sometime in the next eight years, not to return for quite a while. More than that strays too far OT from what people come to this board for.

Will the balances disappear with it?  Asking for oldwhy.

[JC25427N]

On 7/6/2024 at 6:39 PM, oldwhy said:

Apologies if this sounds ignorant, but why would credit disappear over a period of eight years? What scenario do you have in mind? 

I've started rereading The Walking Dead since this thread started so I can prepare, I would recommend you do too

Edited July 7 by JC25427N