So, ARE comics a decent investment?

[joe_collector]

Making money from investments, whether it's in comics or anywhere else, takes a lot of skill, hours, work and luck.

 

I think making money in comics is quite easy in 2003, but investing in comics is virtually impossible.

 

Dan the Donutman illustrates this quite well. He buy comics and then markets them at the proper time, and makes a profit on each sale. Is he investing? Nope, but he's got a nice ROI through hard work and consistent EBay auctions and clientele. He's at it constantly, and then turns that profit into more books, which are transformed into more profit. Shampoo, and repeat.

 

Investing in 2003 has come to mean buying high-grade CGC comics at ultra-high prices, and then sitting on them hoping for a profit. JP even recommends this on his website, and pleads for investors to hold their books for the "maximum return". This is a fool's errand, as there are few comics that have jumped in value since the CGC highs of 2000-2002, and that cash is locked in and could be working for you in other investments. This "hold and wait" mentality also ensures that the"liquid pool" of available books remains artifically low, making sure that JP can sell the other 10 copies he's got in storage.

 

If you want to make money through buying and selling comics, then ask Dan, Rob, Darth or any of the boyz for advice. If you want to invest long-term in funny books, then you deserve all that you will receive.

[MMMarvel-migration]

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.

 

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

 

I disagree. Here is my thesis. There are only so many high grade copies of issues from GA, SA, key BA and key Modern pre-1990. They are not infinite. Comics are also not doomed to lose a fan base like the Big Little Book craze where now the pool of people that read them as a kid and collected them as an adult are 80yo or more and slowly passing on. I say that because kids growing up in the late 30s and 40s enjoyed reading DCs Superman, Batman, Wonder Woman etc... comics and so are kids nowadays. Kids in the early 60s grew up with Spider-man, Hulk, Fantastic Four etc... and so do kids nowadays. The characters have spanned generations (unlike BLBs). Added to that you now have big budget Hollywood movies bringing more people into the comic book hobby. What I am trying to say is that there will be a market for investing in comics because there will be people collecting stuff from their youth or even stuff older than themselves related to the characters they loved as a child for the foreseeable future. Even if DC and Marvel went bankrupt tomorrow and never printed another single comic you would still have kids now who when they turn 30 or 40yo would want to collect/invest in the comics they enjoyed in their youth.

 

True, there might be better ways to make a buck in investing (real estate comes to mind), but there are far worse ways as well ( weekly lotto). At least that is how I look at things.

 

 

[joe_collector]

I disagree. Here is my thesis.

 

Wow! You seem to have it all worked out, so spend freely and reap the rewards of following the mainstream crowd.

[Foolkiller]

The basis of your principle relies on the fact that kids today will remember the characters and then want to collect the comics of their favorite characters they remember over the course of the next few years... which is a problem because many are never even exposed to the format these days, and when they are, don't have an interest in it. The kids who grew up in the 60s didn't just relate to the characters, but the artform itself. Today, if the kids are interested, they are more apt to pick up the trade paperbacks than be interested in the comics themselves. I've never been a proponent of the idea the market will fall all to hell, but I don't think there's going to be the same jump in growth because over the course of the next 25 years or so, many collectors will leave, die off, etc., will there be the same base of new collectors with money who want to spend it on comics... or other things they remember from their youth. Video game consoles, old toys etc. Most didn't grow up on comics. And no matter how wildly successful Spider Man and X-Men the movies were... how much of a spike did you see in sales of those books? Kids going out to buy the books? there's a lot of collectors in their late 20s early 30s who remember comics... but I wonder if we might be part of the last grouping who read comics... ?

 

I'm still very much against the idea of trying to make money off of comics as investments unless it's an ancillary effect of your collecting anyway. That is, if you enjoy the books, great if they go up in value. The problem is that all too often, there's an emotional attachment to comics as an investment that isn't as present in other investments... plus, I really think it's difficult with all the work you have to put in to predict and be ahead of the curve. As with anything, you could be successful... but... there's other investments where the information is more available and the research involved less strenuous.

 

If you're selling comics for a living, that's a little different, as you're not looking to invest in one or two or a group of books, but rather looking to profit on any kind of book (i.e. Donut's theory of buying $5 books at $1 and then sell, which is a good model).

[MMMarvel-migration]

I disagree. Here is my thesis.

 

Wow! You seem to have it all worked out, so spend freely and reap the rewards of following the mainstream crowd.

 

Just using logic and common sense. Being in the mainstream is exactly the place I would want to be. I would rather invest in mainstream Marvel and DC titles from the GA, SA, BA, and key Modern pre-1990 comics than obscure BLB, GA or SA comics that have a small collectors base which is probably shrinking due to the collectors that want them are passing on. I don't see too many people jumping at the chance to buy those obscure GA titles for 750k in another thread. Which would you rather have a mainstream Amazing Fantasy #15 CGC 9.8 (white) or obscure Namora #1 CGC 9.8 (white)? I rest my case.

[joe_collector]

There are two main points that are glossed over in these "investment" discussions: the power of Hype and Herd Mentality. Although there are many examples, the easiest for most to relate to would be the period from the late-80's to the early-90's.

 

Circa 1986-87, the comic book market was primarily collector-based, though there was some serious speculation in new issues. First-appearance comics that we view as Key, even back to the Silver Age, were not all that valuable. Examples include ASM 50 (First Kingpin) $10, FF 48 (First Silver Surfer) $20, Hulk 181 (First Wolvie) $20, ASM 129 (First Punisher) $5-$10, etc.

 

At this point in time, #1 Issues were all the rage, and first issue comics like Micronauts, ROM, GI Joe and others were far more important to collectors than a first appearance in a mid-run comic. Many say that "if only I had been a kid then, I would have bought up all the Hulk 181's and ASM 129's" without understanding that they would have greedily amassed a stack of ROM #1's instead. For example, the Punisher Limited Series #1 was higher-priced than ASM 129 during that era.

 

This all changed at around 88-89, and the sportscard mentality invaded comics, driving First Appearances through the roof. The herd mentality that drove First Issues disappeared, and left many of these comics virtually worthless, while driving key first apps through the roof. Both Hulk 181 and FF 48 were suddenly worth hundreds of dollars, and the other Silver and Bronze key first-apps (that were not part of the initial Marvel Silver Age wave - ASM 1, DD 1, FF 1, etc.) soon followed.

 

Then came the Batman movie in 1989, and this provided the Hype quotient for the speculative phase to really take off. Virtually all Batman comics skyrocketed, and other Marvel and DC keys followed suit. It was insanity for collectors used to the environment of the early and mid-80's, and many left the hobby before 1990. That didn't matter, as the speculators filled their ranks, with many saps hoping to parlay their new interest in comic book investing into serious cash.

 

Then came Valiant, Image, the million-print Marvel #1's, gimmick covers, special holo-foil editions, speculator comic cards, and all that we know and loathe of the early 1990's. The subsequent Batman movies didn't live up to the hype, the speculators got tired of getting hosed and the roof fell in on the industry. It was a bloodbath of epic proportions, with some speculators (who took loans for their "sure fire" investments) losing cars and homes, while others frittered away retirement savings and were left virtually penniless. Comic stores (who owned hundreds of thousands of suddenly-worthless comics) went bankrupt, and those that survived sold off serious collections at cut-rate prices to stay afloat.

 

This era demonstrates the folly of investing in comics, especially for those coming in at a period of insane hype and playing "follow the speculator" for a "sure fire" investment in comic books. The parallels are incredibly clear, from the movie hype to the rapid expansion of "new investors" to the fold.

 

The most telling facet of this experience is that hype creates heat, and that heat drives normally sane people to invest in comics. They may say they are "in it for the love of comics", but then why did many drop comics in 1992-94, and then suddenly come "back to the fold" when CGC turned up the heat for comic investment?

 

Those same high-grade issues many are paying thousands of dollars for, were available raw at fractions of 1994-96 Guide, yet these "high-grade collectors" seemingly had better things to do with their money. But once CGC and the Marvel Movies cranked up the oven, these same people are clamoring to pay incredible multiples to own these comics now. Doesn't that strike you as a tad strange?

 

Now what do you think will happen when the comic book movie machine stops cranking out the $300M hits (DD, Hulk and LXG have it on life-support right now) and the spotlight shifts away from comics?

[aardvark88]

Using your logic & common sense should lead u to investing big $$$ on what kids fondly remember playing with in the 80s & 90s: Atari, Coleco, Nintendo NES & PS 1.

I was at a 400 table fleamarket yesterday. Kids would stop & look for used Archie digest bargains at 50 cents each. Teenagers' eyes would really light up when a table was selling used Atari & NES game cartridges, handsets or game systems.

[Foolkiller]

I basically agree with the model you've laid forth jc... but like anything else... had you been able to amass the ff 48 and hulk 181 back in the day, you would have been quite the rich man today... that being said, that's why I think a hobby should follow the maxim of buying what you like... then you haven't sunk all your money into something that may have the bottom fall out of it. i actually came into serious collecting during the 1994-6 period and remember being able to attain many books then for a fraction of what it would cost me now. the market has certainly changed. However, that does not seem to affect the fact that nowadays there seem to be people who are actively buying up the best available copy possible and driving high grade prices through the roof. But how long will it last? I just can't believe sky's the limit... that doesn't make sense. There will be a leveling out when some of the investors jump out because the books aren't that popular. I don't proclaim complete doom yet for the movies, some, like the x-men and spider man 2 will live on because they were good movies, but Hollywood's love affair with super heroes may soon end, because that'd be normal. Hollywood has trends, and it remains to be seen when the super hero trend ends.

 

It's silly to follow the trend investors, because it's hard to make long term money when everyone is doing exactly what you're doing, buying the same thing. then everyone has it. I guess the only thing I'll disagree with is that much of what caused the crash of the 90s was the intense speculation of new books that were readily available where supply far outstripped demand. There's only a finite number of Hulk 181s or GS X-Men 1s etc., so as long as there's enough fans of those books wanting a high grade copy, I don't necessarily see those books crashing. It does depend on many comic fans remain. And as I said earlier, I think the problem that the hobby will have is introducing or finding people with money to buy up the books in the future to keep the market moving. The comic market has its ups and downs, and crashes too, but it has and can rebound. But if you're following the crowd and investing huge sums into what everyone else, what happens when you try to sell off... you've glutted the market with the same product.

[Foolkiller]

odin:

 

you brought this point up before, and initially, i think i disagreed, but the more I thought about it, the more I think that this is a newish trend and that you're absolutely right about the video games etc. Every person my age (both guys and girls by the way) all remember the early video game systems and the games... especially fond of the NES and atari stuff... Now... not everyone is going to pay $400 for a new shrinkwrapped Castlevania... but the "collectors" out there in the age group certainly will. this is actually a great idea the more I think about it... but I have no specific interest in it... and my hobby money is staying where it is... in comics.

[joe_collector]

There's only a finite number of Hulk 181s or GS X-Men 1s etc., so as long as there's enough fans of those books wanting a high grade copy, I don't necessarily see those books crashing.

 

I see this "finite supply" comment posted a lot, and all it does is raise the stakes. It's still the price that is most susceptible to change, and it's much the same scenario buying a CGC 9.6 Bronze Key for $5K as it was paying $100 for a Valiant #1.

 

The lower supply has raised the bar significantly on prices, but it has done nothing to alleviate the potential for a hard crash.

[MMMarvel-migration]

Using your logic & common sense should lead u to investing big $$$ on what kids fondly remember playing with in the 80s & 90s: Atari, Coleco, Nintendo NES & PS 1.

I was at a 400 table fleamarket yesterday. Kids would stop & look for used Archie digest bargains at 50 cents each. Teenagers' eyes would really light up when a table was selling used Atari & NES game cartridges, handsets or game systems.

 

Apples and Oranges. I personally don't collect or play video games. Just not my thing. So looking at it from the outside I would ask why would anyone pay for old games and equipment when the latest stuff has graphics and sound a million times better? I don't think you can say the same about comics (i.e. the art and stories are so much better than they were back in the 60s and 70s).

 

I guess to determine whether or not comics are a good investment one would have to speculate on supply and demand. How many collectors/investors are there out there? How many copies of high grade keys are there? Marvels current print run of popular titles are 100-150k from what I understand. Does that mean there are that many Marvel Hulk, ASM, and X-men collectors? I dunno I would however be willing to guess based on those printing numbers that there is at least 10k or more serious collectors. I don't think there are 10k high grade copies of any GA, SA, or even BA Hulk, ASM, X-men comics floating around or even 1k of the keys for that matter. I think the math is there to invest if you have some money to risk. There are probably many better ways to make money, but not as enjoyable if you love comics.

[joe_collector]

I don't think you can say the same about comics (i.e. the art and stories are so much better than they were back in the 60s and 70s).

 

OMG! You have found a way to read CGC "investment grade" books without breaking the slab? Please let us in on the secret!!!

[Foolkiller]

You think there's 10,000 high grade collectors out there? No way. The bulk of collectors out there are not represented on this board... the ebay board is more the mainstream mentality of the collectors out there and although high grade is one facet of the market, and the one with the most money, I can't believe that there's that many collectors seeking 9.4s and better. The fact that we know many of them by name and recognize who they are should be some indicator there aren't 10,000 people out there who have the means and desire to drop even $1000 on a single book.

 

The problem as I said before is that in the future, kids today and even from the teenagers from the past 5 years aren't going to be as into comics because the form itself just wasn't that popular! Where are these new investors/collectors coming from? We remember comics as kids, but somehow, I don't think there's an influx of youth coming up who are going to have disposable income they want in comics. That's the primary problem with the future of the back issue market to me... but then again, it still won't stop me from buying.

[aardvark88]

The main reason collectors in our age bracket think comics from the 60s & 70s were better than they are today is because we actively read them as youngsters. Oh, sweet memories of innocent youth.

Youngsters today are spending their free time & money on PS 1 games, internet access (emails or downloading "free" music) & renting dvd's. Generally NOT buying new comics.

Depending on the age group, the collector in his 20s will having fond memories of spending hours on Nintendo & want to revisit their youth by seeking mint in box games. Similiar to collecting mint in box action figure/bisques or slabbed 9.0 up silver/bronze books.

[MMMarvel-migration]

I don't think you can say the same about comics (i.e. the art and stories are so much better than they were back in the 60s and 70s).

 

OMG! You have found a way to read CGC "investment grade" books without breaking the slab? Please let us in on the secret!!!

 

Shhhhhh Don't tell anyone, but Marvel and DC have been making tons of reprints of their old stuff. Everybody can afford to buy and enjoy reading many of the old classics without having to buy a CGC original and breaking the slab.

[delekkerste]

Your last post is absolutely spot-on, logical and supported by empirical evidence, to boot. I'm afraid there is just no reasoning with many comic collectors, though, as this thread has revealed. Some people simply cannot separate the "emotional/fanboy" component of the collecting hobby from the "investment" component. Their "investment thesis" seems to be, "I discovered comics, I enjoy the stories and the characters, I've made some money off of them...well, this process is probably repeating itself all the time and will continue to do so in the future, heck, just look at all the movies that are being made and they aren't printing any more back issues, so I'm safe paying these prices that are hundreds/thousands of percent higher than 10 years ago."

 

Unfortunately, that's not "analysis", that's just "making up". It is a distinction that will not be lost on many peoples' wallets going forward.

 

Gene

[greggy]

So...I can't go back in time and buy more High Grade Marvels?

[MMMarvel-migration]

You think there's 10,000 high grade collectors out there? No way. The bulk of collectors out there are not represented on this board... the ebay board is more the mainstream mentality of the collectors out there and although high grade is one facet of the market, and the one with the most money, I can't believe that there's that many collectors seeking 9.4s and better. The fact that we know many of them by name and recognize who they are should be some indicator there aren't 10,000 people out there who have the means and desire to drop even $1000 on a single book.

 

The problem as I said before is that in the future, kids today and even from the teenagers from the past 5 years aren't going to be as into comics because the form itself just wasn't that popular! Where are these new investors/collectors coming from? We remember comics as kids, but somehow, I don't think there's an influx of youth coming up who are going to have disposable income they want in comics. That's the primary problem with the future of the back issue market to me... but then again, it still won't stop me from buying.

 

Yes, I think there are 10,000 or more high grade collectors. Maybe not 10,000 that can afford to drop $1,000 on a single book, but surely some that can spend $100-300 or so. It can't be just the few people on these message boards that are buying everything, can it? Heck, there are probably at least a 100 or so major dealers that advertise comics in the Overstreet price guide. Are the few people in this message board supporting all those dealers? I think not.

 

As for the future, who is it that is buying all the new stuff at the local comic shops? I know I am not investing it the new stuff, but somebody is. Once again it has to be other people than the ones in this message board. That is unless some of you are buying thousands of copies of USM and hoarding them? If not, it has to be a bunch of different people, probably tens of thousands.

[delekkerste]

So...I can't go back in time and buy more High Grade Marvels?

 

Sorry...one's inability to go back in time is why they invented the qualifier, "past performance is no guarantee of future results"!!

 

Gene

[dam60]

You think there's 10,000 high grade collectors out there? No way. The bulk of collectors out there are not represented on this board... the ebay board is more the mainstream mentality of the collectors out there and although high grade is one facet of the market, and the one with the most money, I can't believe that there's that many collectors seeking 9.4s and better. The fact that we know many of them by name and recognize who they are should be some indicator there aren't 10,000 people out there who have the means and desire to drop even $1000 on a single book.

 

The problem as I said before is that in the future, kids today and even from the teenagers from the past 5 years aren't going to be as into comics because the form itself just wasn't that popular! Where are these new investors/collectors coming from? We remember comics as kids, but somehow, I don't think there's an influx of youth coming up who are going to have disposable income they want in comics. That's the primary problem with the future of the back issue market to me... but then again, it still won't stop me from buying.

 

Brian, what a great post. I was literally laughing out loud with the "we know many of them by name" comment - it's so true.

 

Your last statement is gospel - where are these new investors/collectors/speculators coming from?

 

DAM