Why Does Chuck Hammer on CGC?

[comicinvestor-migration]

I have my own ideas on this (and no, they don't revolve around MH's poor grading) but I'd like to hear some theories from the peanut gallery.

[Hensley300]

First thing that comes to my mind CI is after reading his rants. Most of his complaints are about CGCs ever increasing or decreasing grading critiera regarding modern books. He'll send in many moderns and either receive alot of 9.8's or as of recently (according to his website), not receive many 9.8's at all. Since most of his inventory revolves around presenting and selling modern 9.8's, seeing a constant standard is critical to him retain inventory and cost return.

[Guest]

which chuck are you talking about? The guy from tropic comics? CI, you're talking about mile high chuck?

[awe4one]

Call me naive but....

 

I think Chuck has finally seen the damage that CGC is doing to the common collector. Most collectors have been priced out of the most desirable issues. It's hurting comic collecting. Now the dream of owning a nice run of ASM is squashed and only the high rollers (who have an image of not caring for them other than investments) can play.

 

And before anyone says that Chuck is against CGC because it's hurting his business (and I'm sure that has to be a factor somehow), this is a guy that completely railed against Marvel Comics in the early 90s. Wouldn't promote their product and cut his orders to a minimum. Why? Because he felt that their over-exploitation of characters and blatant catering to speculators was bad for the industry. He lost big money by not promoting Marvel. And you know what? He was dead-on about the effect Marvel's actions would have on the market.

 

The guy has demonstrated that he has some convictions where comics are concerned and "I" believe his current crusade is heartfelt vs. money driven. If you've ever met the guy (and I did once years ago), his enthusiam for comics is almost contagious.

 

 

Jim

[murph0]

Two theories

 

First one, this is based on that he does grade some of the books and can't grade for [!@#%^&^] like the rest of his company, he doesn't like CGC because it's proving his books are overgraded and it takes away from his customer base as they can now buy a more solidly graded book at a price similar to his.

 

Second one, this is based on he has no idea how poorly his company grades, he thinks comics are for reading and doesn't like what a graded collectible does to the market (usually placing unrealistic high prices on a lot of books) and realizes that a lot of these books will cause some people to get out of the hobby altogether.

 

I dunno which one is more true as I have no idea if he has any hand in grading or not.

 

Brian

[Guest]

Chuck has stated that he feels people's collections will be worth less due to CGCs grading.

 

What can this mean? Is Chuck concerned that longtime customers of MH will get their 'NM' books back at 7.5 and 8.0? Possibly. Is his interest altruistic? Could be... he does seem to be a strong advocate for the health of the hobby.

 

I'm not sure... I'm interested in your theory, CI. The one consistent theme I get from Chuck's CBG comments is the discussion of devaluation of collections.

[Joanna]

In a way, he does have a point. Books that I bought several years ago that were graded, and at the time, it seemed fairly, are now coming in with lower grades. For one thing, any book being sold new was automatically considered NM or even Mint. If they remained unread, you could resell them as Mint, as well. This may not have worked with the ultra-condition freaks of the time, but it was so accepted, it was rarely questioned. Now that just isn't the case anymore. Now it's all about finding 'perfect'. Meanwhile, the older books were also being graded, and the scale was a lot looser. I still have grades on a lot of my older books (written on the bag or mylar by the person who sold it), and very few of these would coincide with CGC's grades. I bought a VF book that graded as VG/FN, for example. But at the time of purchase, I thought the grade was very fair. I have lots of books with grades on them that would never get anywhere near that grade from CGC. So in effect, my entire collection has suddenly -- with the appearance of this grading company -- lost a big chunk of its book value.

 

We also used to use the guide as an actual guide. If you bought a VG/FN comic, the dealer would look up the grade and offer a price that was near or at that number (not all dealers, but many of them). Now, to sell a raw book, you have to list it as way below guide, and count yourself lucky if you get even get half that much for it. Maybe not on high grade keys, but it's true on most of them -- the vast majority of books for sale aren't keys or high grade in the older issues. Of course, I'm talking about ebay sales, and becausse there was no ebay, it's not a fair comparison. But it does count toward the devalulation of the collection.

 

Basically, you paid at one grade, CGC means you have knock down that by a grade or so, then you sell it for half or less. Pretty swift loss of value for the ordinary collector.

 

-- Joanna

[Hensley300]

Now that I think about it, CI must be talking about MH's Chuck (too much Ice House on a Friday night for me ). In this case, I believe it is because most of his inventory has been over graded and since many dealers and collectors are starting to send in their books to see how the grade stacks against cgc's NM+ and NM/Mt criteria. Since most of his inventory is overgraded, he is finding his overall worth and inventory value has decreased substantially. After all, if there was a company promoting a new criteria that would result in you losing thousands of dollars of perceived worth of your businesses inventory, you would rail against it too.

[comicinvestor-migration]

Okay, here are my theories:

 

1) Chuck is a dealer, and as such, looks at a more long-term market view than most of us and sees CGC as a bad influence. Sure, he's made some short-term money on CGC, but his comment that kids come to shows with magnifying glasses to look over their comic buys, hit me pretty hard and I could just feel his comtempt for this "grading grenzy" and the long-term pain it will usher in. Most dealers (unless they're going out of business on a CGC high) would like to see stable profits, rather than a big CGC score now, and losses as more collectors get fed up and leave.

 

2) Remember that fable about the magician who conjures up a demon to devour his enemies? The demon's last words were "when I'm done with them, I'm coming back for you". Initially Chuck was pro-CGC, but I think now he sees it as a demon out of control that is bound to devour dealers as it sees fit. Basically, CGC could make even my great-grandmother a big-time dealer, assuming she had high-grade stock and submitted it to CGC. Before CGC, dealers got the "confidence vote" from potential buyers, but now some stiff with some Silver Age CGC 9.8 can rake in big bucks on EBay. CGC started out as a dealer tool, but will evolve into a "power for the people" mechanism as dealer HG stock dwindles.

 

Those are my two pet theories, and although Chuck's stock is over-graded, he still seems to be doing well, and I believe his "grading" columns have a underlying theme, rather than him getting lower-than expected grades, or his collection being devalued by CGC.

[Hensley300]

Yea, I actually enjoy reading his thoughts on his column. I haven't noticed any kids with magnifying glasses looking over books but that would probably make a big impression on my as well. I believe we are beginning to see a sort of stability now with collectors and dealers noticing the "speculator" trend on certain new or important moderns. But integration of a sound cgc base of high grade books into a comic stores regular inventory may eventually be the norm for all comic shops. Though, if you look at chucks stock of cgc's, his inventory is rather random with a wide variety of grades, and not many of them are high grades.

[Guest]

I believe his "grading" columns have a underlying theme, rather than him getting lower-than expected grades, or his collection being devalued by CGC.

Can you clarify this? You see a different theme? And/or disagree with the theme of collection devaluation?

 

I'm not sure that there's room to disagree about Chuck's concern about people's collections being devalued. He flat-out stated this was how he felt in about 3 consecutive CBG columns. He also offered that it seemed wrong that OS was approaching CGC to streamline grading standards; he felt this was the tail wagging the dog.

[comicinvestor-migration]

I just think that's the way Chuck feels he can stir up support from the collector community, but I don't think that's his main concern.

 

He sees (and correctly so) that CGC is eroding the power of dealers and that in a new world order, Mile High may not even be a required business model. Read his columns closely, and you'll also see that he mentions less nice books coming in for purchase (why sell to MH when you can CGC/EBay them?), a potential loss of the "real collector" in the face of insane CGC prices, and an almost predatory demand for ultra high-grade books.

 

These are horrible market trends if you want to still be a profitable comic dealer in 20 years.

 

Just as a sideline, there used to be 20-30 sportscard dealers in this end of the city, then after the speculator boom/bust, about 50% went out of business, and once PSA took off, the rest soon followed. There are now none, zero, nada and I do all my Xmas buys on EBay or through huge online dealers.

[Guest]

I see your point, and have to agree. But, politically, using that argument to stir up support would be very smart. I don't know Chuck well enough to decide if he's capable of that kind of political shrewdness. As far as losing sales and collections to buy, you'd have to think that eBay and the internet age have done more to eliminate the middleman, though. CGC may be just one more facilitator.

 

Personally, I don't agree with the devalution angle.... if you ask greggy, he'll tell you that one ASM 101 9.8 will even out a whole bunch of 9.0s that were bought as stickered 9.4s.

 

Moving on to your sideline, a development like that would be worse for comics than sportscards. At least sportscards still have a presence at 7-11, and Denny's and McDonald's giveaways. Comics losing their specialty store base would be a disaster; one less outlet for comics exposure.

[Darthdiesel]

Basically, CGC could make even my great-grandmother a big-time dealer, assuming she had high-grade stock and submitted it to CGC

 

From what you've described at what goes on at family reunions, I believe she does have that hi-grade stock, longboxes worth or Silver and Bronze keys.

[comicinvestor-migration]

Lucky no one asked me to sell of their classic car or you'd think we were millionaires with fleets of them sitting in storage.

 

Note to self: no more references to anything personal while Darth is around.