So, ARE comics a decent investment?

[LordRahl]

This topic has been much discussed on this board. CGC books are bringing multiples of guide but the detractors think it's speculators driving up the prices and the CRASH is coming. The optimists seem to think that the craze will last forever. In reality noone knows what will happen in the future. So I decided to actually put up some numbers. I picked out a bunch of random Golden Age books and compared 1993 guide and 2003 guide prices. I'm talking strictly GUIDE not CGC multiples here. So if you factor in the current CGC market for 9.4 books the percentages will actually be much higher. I purposely didn't pick any Silver or Bronze because I'm certain that Gene and JC will have been jumping all over me with the- it's speculator, movie hype driven, CGC concspiracy theories. So here goes; title and issue#, 1993 NM guide, 2003 NM guide

Action #33 $600, $2000

Adventures Into The Unknown #1 $540, $2400

All American #25 $3500, $11500

Amazing Mystery Funnies #8 $625, $1475

Captain America #59 $900, $3700

Flash Comics #24 $750, $2400

Marvel Mystery #13 $1350, $6300

Phantom Stranger #1 $700, $2200

Planet Comics #12 $840, $2300

Vault Of Horror #13 $550, $1265

Weird Fantasy #14 $385, $1150

Worlds Finest #7 $750, $2200

 

Total 1993 guide is $11,490 and total 2003 guide is $38,890. 338% growth in 10 years or about 34% per year. Not bad for some funny books. Once again this is not taking into account the multiples paid for CGC NM books. You can probably double that growth percenatge if you were to take CGC into account.

[aardvark88]

IMHO I don't see much future in back issue appreciation over the next 5 years. We are missing the young generation of comic collectors NOW needed to mature & become hardcore fanatics 5 years from now. Saddle stitched comics have been supplanted by internet (eBay, email, chatrooms), PS2/X Box games, dvd rentals, satellite tv as young ppl's entertainment.

Buy what u like, but I would not "invest" $10k into comics today.

[delekkerste]

So, ARE comics a decent investment?

 

A fair question, but you answered the WRONG question. Your table is better suited to answering the question, "WERE comics a decent investment between 1993 and 2003?" If you were smart enough to cherry pick HG Silver and Bronze and not get caught up in the new issue speculator hype of the 1990s, the answer is yes, they WERE. Now, since we presumably aren't relying on 20/20 hindsight to make *future* investment decisions, what should we do in 2003?

 

 

In reality noone knows what will happen in the future.

 

This is a misleading statement. Of course, no one knows *exactly* what will happen, but some people have the skills & information to make more educated & better guesses than others. No one is really sure how all these global conflicts are going to play out, but my guess is that Colin Powell or Condoleeza Rice probably have a better idea than the passed-out wino I passed on the way home today. Likewise, might it be possible that some people have superior analytical skills that can be applied to the forecast of future comic prices?

 

 

Total 1993 guide is $11,490 and total 2003 guide is $38,890. 338% growth in 10 years or about 34% per year.

 

Your math is off. That works out to a 12.97% compounded annual rate of return, not 34%. Look, I'm sure you're good at whatever it is you do, but your ignorance of investment math tells me that what you do for a living is not figure out how to make money for you & your clients.

 

Look - you can't buy at 1993 prices today - heck, you can't even buy raw HG books anywhere near 2003 Overstreet now that everyone has caught onto the CGC game - what does that say about comics as an "investment" if you bought right now, not 10 years ago, at prices that are hundreds, sometimes even thousands/tens of thousands of percentage points higher than they were in 1993? Tell me, if I want to make a lot of money, should I buy before or after something rises 500% - 1000% - 10,000% in a decade? Ever hear of the term "mean reversion"?

 

And, let's not forget the high research & transaction costs in the comic market - going to conventions, buying packaging materials, eBay fees, networking, etc. Not at all like clicking your mouse button if you want to unload 10,000 shares of stock. If you want to make good money like BronzeBruce13 or Greggy, you really have to put in a lot of hours, which eats into your true economic return, making the correct investment return framework a part-time job, not an investment. Also, we'll see how market liquidity holds up if/when the market rolls over - even in the Internet era, comics are not the most liquid of assets, and in a down market, transaction costs and "slippage" will eat further into your returns.

 

Buy low, sell high...it's the investment principle that's worked for thousands of years and will for thousands more to come...

 

Gene

[LordRahl]

You are absolutely right, I'm not very knowledgeable about investment math. I have no clients to make money for. I let people like you try to make money for me. Key word being TRY. I don't want to think about the amount of money my investment brokers' advice has lost me in the last couple of years. So in your "educated" opinion, and I'm not entirely sure how you're more educated about the comic book market than I am, do you think the books that I listed will not hold their value and go up in value in the next 10 years. Remember this really has nothing to do with the CGC craze you're so set on crashing. Will the CGC market see an adjustment, prbably, especially for Bronze and more common Silver.

 

And, let's not forget the high research & transaction costs in the comic market - going to conventions, buying packaging materials, eBay fees, networking, etc. Not at all like clicking your mouse button if you want to unload 10,000 shares of stock. If you want to make good money like BronzeBruce13 or Greggy, you really have to put in a lot of hours, which eats into your true economic return, making the correct investment return framework a part-time job, not an investment.

 

Aren't you kind of missing the point of collecting. The thrill of the hunt is the part I enjoy. Of course you have to put time into it, as with any hobby. But the time I put into collecting I enjoy, it doesn't feel like a job. The fact that comics have historically risen in value and at least in the last 10 years have been a good investment is gravy since I'd collect even if that wasn't the case.

Just exactly what do you forsee happening in the next 10 years that will have scarce Golden Age books dropping in value?

[FlyingDonut]

The aging of the populace will cause a movement away from all but the most "key" of key titles. It is already happening, as "off" titles (Fawcetts, westerns, romance books) from the period are seeing significant price drops.

[LordRahl]

I've heard that argument before but I'm not sure I'm buying it. Also depends on what you mean by the most key of key titles. Planet is not the most "key" title yet they command above guide prices regularly. Just one example. You may be right about the aging populace but I just can't believe that the majority of Golden Age collectors are about to start spontaneously dying off.

[Foolkiller]

Lord Rahl:

 

I think that the way you look at the comic market is very general way of looking at it... will the comics maintain or rise in value. I think that there's a possiblity over the next two years for there to be a stabilization and small increase in certain areas of prices for comics. I think after that, there will a plateau of sorts for a while... but over the long term will probably not see the kind of increase we saw in the last 10 years. CGC was one of the big reasons for the boost, and we could be heading for another downturn again. that's not to say that comics will hit the floor completely, but I don't see comics as a good investment. I like comics as a hobby, and if they happen to be worth more when I sell it great. it's always nice to see.

 

One thing I'll say about Gene's analysis: he's applying his knowledge of investment finances to the comic book market and analyzing in using a similar model you would any other investment. In this respect, I think his knowledge is actually more extensive than most. He's applying a mathematical formula (in my simplistic understanding) and calculating a rate of return as well as various other factors which go into the analysis. In this respect, he's considering far more data than just raw price guide numbers and guesstimates about the ebb and flow of the market. You're right that no one can predict what's going to happen in the future... but Gene's analysis on this subject seems to be very well thought out using a logical model. Is it 100% accurate... I'm sure he'd even admit that's not the case, but it is well thought out.

[500Club]

To coin a phrase:

 

Past performance is not a guarantee of future returns.

[greggy]

To coin a phrase:

 

Past performance is not a guarantee of future returns.

[LordRahl]

I'm definitely looking at it in a general way. I don't have Genes' background in finance, and in fairness to Gene, his opinions are well thought out and based on his experience. I would have to argue with your statement about CGC being a large reason for the boost in prices of the books I listed. Overstreet guide has not really taken into account CGC multiples being paid. I didn't factor in that a CGC 9.4+ of any of the books I listed would probably go for double guide or more. If I had the figures would be much loftier. I'm talking about books that are truly hard to find. I'm also looking at this from the standpoint that this is a HOBBY and the fact that they appreciate in value is a bonus. Not strictly from a financial/investment standpoint.

[LordRahl]

By the way, for anyone that is convinced that these books will be either worth less or the same in ten years, put your money where your mouth is. I'll buy any of the books I listed or any superhero Golden Age raw NM books you may have for current guide price. Because after all, these books will likely be worth less in 10 years even if guide stays the same adjusting for inflation so you may as well make money on them now.

[Foolkiller]

I think the OS has taken into account somewhat the multiples, just not at the rate sales actually reflect. Look, I definitely don't have any more information about the direction of the hobby than you do, but I look a the past trends and I think to myself, this seems an awful lot like the early 90s, and there was a drop off there for a while. It's certainly not the same factors as it was then, but I'm wary of investing in books. I agree with you from the standpoint that this is a hobby, but although some really disagree with Gene's approach, his systematic breakdown and credentials give his analysis credibility, and I believe are more than worthy of careful consideration.

[shadroch]

Speakng only for myself,comics have been a great investment for me so far(twenty years and counting) and I see no reason why that will change in the near future.

When I was finishing school I sold my original collection,bought off newstands and at local shows a few dollars at a time, and bought a two year old car.If I hadn't been buying my 10-15 books aweek at 25cents each, I would have pissed it away on LPs or beer.

When I got out of the Army a short time later and didn't know what to do next,a $1,000 dollar purchase of a friends older brothers books gave me the bulk of my backissues for the store I opened.Buying and selling books has given me a steady part-time income since I sold my stores and has also allowed me some great travels,to meet some of my heroes in life and make great friends.How many investments allow you to do that?

[shiverbones]

it all depends on how you are buying & who you are selling to. if you are dropping uber $1,000's on the highest of end then you may be in trouble, if you are buying comics and selling to collectors, not investors, i think you will make money. It takes knowledge to know what people truly want, ability to find the books cheaply and ability to get them to the people who want them. People will always want comics, these readers-collectors are not affected by trends, they are compelled to buy comics!

[MMMarvel-migration]

I don't think you have to be an expert to figure out that some comics have been, are, and will continue to be a great investment over time.

 

Like a lot of people, I collect/invest in key Marvel Super-Hero Silver (if I can afford it), Bronze, and select Modern comics (i.e., Am Spider-man #238, 300, Gambit 1st app. in X-men #266). For the most part, comic prices have gone up in value almost every year. In my opinion, key issues from silver and bronze are a great investment.

 

As far as current modern comics go, I buy what I enjoy reading. Ultimate line comics are a great read, but I would NOT pay hundreds of dollars for USM #1. Too many people have probably stockpiled hundreds, if not thousands of issues. How high does anyone really think Jim Lee's X-men #1 (no matter which cover) or Todd McFarlane's Spider-man #1 (almost any cover except platinum and gold with UPC) will go? There were only about 50 million copies made. To me it is too risky to invest in any of the current stuff unless you can get them really cheap and have the room to store them away for 30 years. And of late Marvel has started to drift back to their stupid business practices of the early 90s ways with gimmicks such as re-launch of Ultimates with a volume 2, and multiple covers like FF #500. I am waiting for Spidey Maximum Clonage II next. I am sure a lot of people probably disagree with me, but to each their own.

[dad-migration]

 

Total 1993 guide is $11,490 and total 2003 guide is $38,890. 338% growth in 10 years or about 34% per year.

 

338% growth over ten years is NOT 34% per year---its about 13% per year. Try multiplying 1.13 x 1.13 etc. for ten times. 'tis the miracle of exponential growth...

 

 

[500Club]

I don't think you have to be an expert to figure out that some comics have been, are, and will continue to be a great investment over time.

 

This depends on a continuing established fan base. I think I'd be inclined to agree, but there is a lot of evidence and trends to suggest that comic books are a slowly dying hobby, following in the footsteps of coins.

[joe_collector]

Buy what u like, but I would not "invest" $10k into comics yoday.

 

Anyone that would doesn't deserve the $10K in disposable income.

 

All you need to know about comic values in the future comes down to two words: Reader Demographics.

[dad-migration]

Here is a short and to-the-point answer to the original question.

 

Yes, if you buy the right books and hold them long enough....say, at least ten years.

 

All markets go through periods when they are under- and over-valued. I have been following comics now for 35 years, and have seen the long-term trend. Cyclical trends aside, comics will continue to go up in value for one simple reason: the supply of back issues is fixed. As someone explained to me a long time ago, the reason real estate is usually such a solid investment is that the existing supply is all there is, and there ain't ever gonna be no more.

 

Having said that, I think the best advice for most people is to buy for the purpose of collecting, not investing. However, I do believe if you have millions to spend and get some good advice, you ought to be able to get a very good return on your investment. The truth is that the financial community at large still looks very askew at collectibles as investments. If there was ever even a small move of mainstream investment funds into comic books, it would be like trying to empty a swimming pool with a soda straw. It would be the greatest bubble of all time.

[delekkerste]

Like a lot of people, I collect/invest in key Marvel Super-Hero Silver (if I can afford it), Bronze, and select Modern comics (i.e., Am Spider-man #238, 300, Gambit 1st app. in X-men #266). For the most part, comic prices have gone up in value almost every year. In my opinion, key issues from silver and bronze are a great investment.

 

I know a lot of people on these Boards feel the same way (maybe not about Moderns, but about GA, SA and/or BA). "Investing" in comics is very seductive - you enjoy collecting & reading comics, Overstreet & Wizard show steadily rising prices, eBay shows a handful of eye-popping sales each week...plus, it's "fun" to collect comics and you think your years of hobby involvement give you an edge over the thousands of other collectors/speculators out there.

 

However, I think that people are lulled by all these factors into a false sense of investment security. They think subscribing to GPAnalysis, tracking eBay auctions and reading CBG qualifies as "due diligence" and "research". And, it doesn't seem like "work", so you're happy to spend time doing this "research" (as opposed to pouring over SEC filings or tracking all the latest economic indicators). I get the feeling that, because of their familiarity with the hobby, people are unwilling to put forth the effort to study other investments like stocks, bonds, real estate, etc.

 

Unfortunately, there is no free ride in the comic market or anywhere else. If you run with the herd, you will make or lose the average (less slippage/transaction costs/etc.) on balance (and I think the "average" is going to look very ugly for demographic & other reasons that I've detailed in the past). If you want to really make money in the comic market, you're going to have to put forth incredible amounts of effort (like BB13 or Greggy) - you can't rely on "fortune cookie" investment advice like "Buy pre-63 Marvels in high grade", "Buy mid-grade Golden Age" or "Buy Hulk 181 - it'll be worth $20K in 19.5 years".

 

Making money from investments, whether it's in comics or anywhere else, takes a lot of skill, hours, work and luck. Oftentimes, the more of the first 3 qualities you have, the more of the fourth you will have as well. Other times, it's simply better to be lucky than good. However, while you could have relied on luck the past 25 years in the comic market (since certain segments have pretty much gone straight up), I think a lot of people realize that, hundreds/thousands of percentage points of price appreciation later, the low-hanging fruit/easy money is long gone and that making real money from 2003 price levels will take more skill, hours, work and luck than ever before.

 

All things considered, I think there are better and easier ways to make a buck...if you're willing to work at it.

 

Gene