With Hard Asset Prices Plummeting, What's Next for the OA Market?

[Bronty]

 

You can add me to that pile.

 

When it comes to most of the market, I wouldn't agree except for all the crack press resub shenanigans. If comics are relatively overvalued as compared to comic art, to me its because of the fact that you can't trust the grade on a slab anymore, if you ever could.

 

That being said I wouldn't call comic art undervalued in absolute terms, at all. 5k doesn't really go very far. Neither does 10, for that matter.

[suspense39]

In that way it depends on the collector, In the old days the grades were poor, fair, good very good, fine and mint for me that was good enough. I could care less about the tiny differences in a mint book....it was mint, the same goes for all the other grades, But that's me. I know there are only a few in most cases( silver age or golden age books) that are in great condition, but there are still usually thousands that still exist, I have never had a hard time getting a particular comic once I had the money for it..

 

That said,I love comics but the art is ONE of a kind. Maybe under valued isn't just in relation to the monetary part of it. As I observed at wondercon, there are a lot of comic fans that don't even know what it is, really I saw this. And I spent hours at different tables, often having them to myself......

 

Sorry getting off topic, ill end there

[delekkerste]

Y'know, this is a great way to scare off some folks from bidding in the upcoming auctions

 

 

his ruse has been discovered

 

I assure you, a few more days like the past couple, and I won't be going after anything aggressively in the May auctions. People here and in a similar thread in Comics General keep listing reasons why art/collectibles won't go down, and yet many of those arguments apply to other hard assets which are going down anyway.

 

As it is, I'll be ratcheting down my bidding proportionately with how much the gold price is falling (e.g., if I was going to bid $16,000 on a piece, now I'll bid $13,500). To me, it makes no sense to pay 2013 prices for OA when other hard assets are quickly rolling back to 2010 levels. If I'm ahead of the curve, that's fine by me - y'all will figure it out eventually.

[dgarthwaite-migration]

I got to see Jack Lew last month from about 40 feet away. Secret service were maybe 10 feet from me. He was optimistic about the economy and evidently doing a huge PR campaign for the economy.

 

DG

[Bronty]

Y'know, this is a great way to scare off some folks from bidding in the upcoming auctions

 

 

his ruse has been discovered

 

I assure you, a few more days like the past couple, and I won't be going after anything aggressively in the May auctions. People here and in a similar thread in Comics General keep listing reasons why art/collectibles won't go down, and yet many of those arguments apply to other hard assets which are going down anyway.

 

As it is, I'll be ratcheting down my bidding proportionately with how much the gold price is falling (e.g., if I was going to bid $16,000 on a piece, now I'll bid $13,500). To me, it makes no sense to pay 2013 prices for OA when other hard assets are quickly rolling back to 2010 levels. If I'm ahead of the curve, that's fine by me - y'all will figure it out eventually.

 

I was just kidding Gene

 

I knew you meant what you said as I don't think I've ever seen you joke around about the markets

[delekkerste]

But wouldn't you say that metals, especially Gold, were bloated to begin with and that the bloating combined with a short term panic sell are what put the numbers where they are?

 

Why would you say gold was bloated? It never went parabolic like silver in 2011 (or like high-end OA in 2012). Even from its absolute lows of 1999 to its absolute high in 2011, it compounded at about 18% a year (while the adjusted monetary base compounded at about 14% per year). I'm sure high-end OA has appreciated even more, especially since the 30% decline in gold over the past 19 months will have greatly reduced its compounded annual rate of return.

 

So, no, I don't buy the argument that prices were bloated. If there is anything more bloated than high-end OA prices, I've yet to find it.

[Bronty]

But wouldn't you say that metals, especially Gold, were bloated to begin with and that the bloating combined with a short term panic sell are what put the numbers where they are?

 

So, no, I don't buy the argument that prices were bloated. If there is anything more bloated than high-end OA prices, I've yet to find it.

 

Are you feeling OK Gene? As you buy some of that material it seems like a curious statement?

[dgarthwaite-migration]

But wouldn't you say that metals, especially Gold, were bloated to begin with and that the bloating combined with a short term panic sell are what put the numbers where they are?

 

Why would you say gold was bloated? It never went parabolic like silver in 2011 (or like high-end OA in 2012). Even from its absolute lows of 1999 to its absolute high in 2011, it compounded at about 18% a year (while the adjusted monetary base compounded at about 14% per year). I'm sure high-end OA has appreciated even more, especially since the 30% decline in gold over the past 19 months will have greatly reduced its compounded annual rate of return.

 

So, no, I don't buy the argument that prices were bloated. If there is anything more bloated than high-end OA prices, I've yet to find it.

 

Mining is BIG business right now. Expect production to increase, but keep in mind that there are limited amounts of precious metals in the Earth.

 

DG

[Bronty]

Say your post made me look at your CAF quickly and I just noticed that the sign on the background of your ASM 125 is not "motel" or "hotel" but "mortel".

 

Any idea what that's about? Presumably just "atmosphere"?

[Kevin76]

Yes, the sky is falling, Gold and Silver are down so therefore all hard asset must be going down too!..or at least it's only a matter of time!

 

Sell off The Rembrandt paintings on your walls, auction off your italian sports cars and hope you all break even...

 

This is where buying quality comes in. Some guys buy some OA, then the price drops so therefore it must be happening across the board. Not all OA is the same. Prices can stabilize on say a Frazetta, but it is eventually just going to be another painting you have to sell at a yard sale because no one wants it? Of course not!

 

Leave your finger off the panic button people! The economy isn't in the best of shape as we all know, so people aren't going to be so quick to throw record prices at everything they see right now, It's a buyer's market right now, as Warren Buffett once said "When people are fearful, be aggressive"

[delekkerste]

Are you feeling OK Gene? As you buy some of that material it seems like a curious statement?

 

Well, take a look at what I'm buying. My last purchase was the McSpidey ASM #299 cover for 35% below where the cover traded hands in the spring of 2012 and probably 50% or more below where it would have sold in the overheated July 2012 Heritage sale. If people want to offer me top-tier art at 35-50% off, I will buy it all day long. Similarly, my big 2012 purchase was the BWS Conan #13 cover. Well, guess what - I got it for almost 25% lower than where it had offered it to me earlier in the year, and even less than where it was offered to me in 2010 or 2011 when I inquired about it then. Again, if people want to offer me top-tier art at 2010 prices, I will buy it all day long, because that's where I think a lot of this material should be priced. In hindsight, I feel like I dodged a bullet by not winning the ASM #121 cover.

 

Of course, I paid up for things like my brick gag Krazy Kat Sunday and the ASM #125 cover (the latter is looking like a bit of a bargain anyway given where dealers are pricing inferior covers from the era). Some things I just want, overpriced or not - obviously the hobby is not just about dollars and cents. And, hard asset deflation or not, most pieces are going to remain tough to pry loose from owners' collections, and certainly not at lower prices. But, I suspect that you may see some softening in the public sales data IF this deflationary shock continues to take hold.

 

 

Say your post made me look at your CAF quickly and I just noticed that the sign on the background of your ASM 125 is not "motel" or "hotel" but "mortel".

 

Any idea what that's about? Presumably just "atmosphere"?

 

One of the inkers was Tony Mortellaro...it was an inside joke.

[Bronty]

Yeah I guess, I'm just a believer that OA prices are at least as much about timing on the specific piece as on the market as a whole.

 

It sounds like your timing on your last two purchases was good as a buyer.

 

In general I think every auction has pieces that go for too much and pieces that go for a bargain and that never changes.

 

If you feel like current indicators are telling you it might be a good time to hold onto cash, well I can understand paring back buying (or bids) accordingly but something tells me you'll find something to buy anyways

[Bronty]

thanks for the intel re Mortellaro, I love it when a piece of OA has little inside story like that

[DocR]

I agree with the premise of this thread generally but would caution there are many things that distinguish OA and precious metals form each other. Everything is relative. So when comparing OA and gold one will be comparatively overvalued. That doesn't mean that in the scheme of all assets they can't both be undervalued. I think the price of gold after today's events and the last 2 months is extremely undervalued. I was thinking about buying some more today before Gene posted his question. Now considering gold's status as a reserve currency and being a much more liquid and tradable asset as well as preventing government monitoring of wealth (with physical gold at least); I would argue it has much more appeal to the general masses and also given the continued devaluation of the dollar is a very good buy at current prices and an even better buy (like everything else) if prices continue lower. However I think over the very long term original art also continues to be undervalued. So, is gold a better buy than OA, Yes possibly. But hey I think timber is the best investment of all but I don't put all my money into timberland. At some point it comes down to dollars in the bank versus something else. There is no incentive right now to having dollars in the bank and the fed seems intent on pushing everyone into equities. I tend to be contrarian and I believe when govt distorts markets like they are doing right now disaster tends to follow. That being said, I'm lightening up on equities, adding to my gold and silver as prices go lower, buying oa that adds to my collection at prices that I think can at least break even with inflation and keeping an eye on all these moving parts. Wow, living in 2013 is exhausting.

[tth2]

Thoughts?

Given that you've made some splashy big ticket OA and illustrative art purchases over the past couple of years (and actually, within the past couple of months), how are YOU feeling?

[Mmehdy]

So, gold prices have plunged more than $500/oz. since hitting their all-time high in September 2011, while silver prices have plummeted 52% since April 2011. Commodity prices are at a 9-month low (and look to be heading lower), while the Commodity Research Bureau (CRB) Index is 40% off its 2008 all-time high. The U.S. Dollar Index has been rallying since May 2011 and is not far away from highs last seen in 2010. Housing prices have firmed of late, though, of course, they were starting from a very depressed base. OA prices of course surged to records last year and, though they may have backed off a bit from last summer's frenzied levels, remain near all-time highs (at least for the most coveted material).

 

My question is: how long before the deflationary pulse running through the financial markets and the real economy spills over into our hobby? Now, I'm sure that most people in the hobby don't actively track the price of gold or oil or copper or grains. But, the fact is, many investors in those markets bought for similar reasons people feel confident about buying OA - (1) prices have been going up, so I'm going with the flow; (2) I'm not earning anything on cash in the bank, so the opportunity cost is minimal; and (3) I'd rather own something tangible after what's happened in the stock and real estate markets over the past 5-7 years; and (4) the Fed is printing funny money, the dollar is going down the toilet and I'd rather own something tangible as a store of value or investment.

 

Anyway, the Fed is still printing money and interest rates are still de minimus (the dollar is strengthening anyway, though), but hard asset prices are tumbling nonetheless. How long before the desire to hold cash outweighs the desire to own art at current prices? Personally, I'd be more inclined to put my marginal dollar into gold at 2010 prices than OA at 2013 prices, except for exceptional pieces that fill real holes in my collection. Even if it's not an either/or decision for most collectors, I'm sure that there is a general awareness that OA is at record prices even while prices in other parts of both the financial and real economy are tumbling...surely that will eventually lead to some cognitive dissonance and disconnect at some point. I don't think nostalgia always trumps economic reality - I think people are more keenly aware of prices than ever with where the market is these days.

 

I know that I, for one, will be tempering my bidding for the May auctions if this hard asset deflation continues.

 

Thoughts?

 

One cannot ignore the hard cold reality of the economy.

 

 

You can put your head in the sand

 

But deflation, inflation, affects EVERYTHING.

 

 

If you buy art now....enjoy it....you are not gonna get what you paid for it later on in the future.....so be it....

 

I agree 110% with you if you buy at 30% below market you take less of a chance...but as the advice that has followed my all my life. to Joel..since I saw Risky Business...sometimes you gotta say ....what the FFFF

[romitaman]

Where were all these doom and gloom comments about the sky falling in the fall of 2008 when the economy was "REALLY" tanking?

 

I had several co workers at my hospital scared they were all going to lose their jobs in the fall of 2008..... same with everyone else I knew in all other work fields back then..... (andyes..alot of people did lose jobs

 

The U.S. economy today I feel is 200-300% BETTER now than it was in the fall of 2008.

 

Our comic art market stayed the same and actually went up substantially from 2008 to 2009 to 2010 (compared to when the ENTIRE world economy almost tanked in 2008!)

 

it doesn't take an economist to know this information now.

 

I had several friends in 2008 and 2009 who know nothing about comic art, ask me if I was getting out of the comic art hobby when they were losing their behinds in the stock market and buying real estate...and I told them I don't notice a thing wrong personally...

 

I told them that things were just fine in our hobby and from everyone else I know who collects comic art avidly!

 

was there a severe lull in auction sales and values of comic art in 2008 and 2009? I sure didn't notice it....

 

If it didn't happen then...I "REALLY" doubt it will happen now.

 

the private market has over 3 TRILLION DOLLARS they are just sitting on and not spending.... This has been known for 3-4 YEARS.....(banks and wealthy rich businesses)

 

As soon as these companies start spending, everything will be better in the USA (when it comes to disposable income with art and collectible hobbies)

 

Just my 2 cents

 

Mike

[delekkerste]

Given that you've made some splashy big ticket OA and illustrative art purchases over the past couple of years (and actually, within the past couple of months), how are YOU feeling?

 

I am happy to have assembled the collection I have. That said, if I were in an earlier stage of my collecting career today, I certainly would be setting my sights a lot lower given the current pricing environment.

[delekkerste]

was there a severe lull in auction sales and values of comic art in 2008 and 2009? I sure didn't notice it....

 

If it didn't happen then...I "REALLY" doubt it will happen now.

 

Actually, some of the best bargains of my collecting career I got in early 2009 (e.g., the Vampirella #1 complete story and the Conan #23 1st Red Sonja page). I highly doubt I would have been able to get these where I did had they been offered in, say, July 2008 when the market was at its then-zenith. Of course, the Heritage Illustration Art sale in February 2009 was nothing short of an all-out bloodbath.

 

The reason you didn't see a huge, obvious dropping off of the comic art market in late 2008 and early 2009 is that the downturn was so short-lived before the financial system and economy was flooded with liquidity again. I think many collectors just sat on their hands during this time, but if the downturn had extended another 6-12 months, I suspect the impact on prices would have been more pronounced. As it was, I suspect that a good number of sales that we saw in late 2008 and early 2009 would have been higher had they been offered in mid-2008.

 

One area we did see a big drop-off was in lower-end art. In mid-2008, it seemed like everything was flying off the shelves, low, medium and high-end art. In 2009-10, it seemed like low-end art barely recovered while high-end prices took off during the reflation. There's still a lot of lower-end art that is probably not too far above mid-2008 levels even while a lot of top-tier art has probably doubled or tripled in value since early 2009. And, given that huge price appreciation in such a short amount of time, I suspect that the price reaction to a downturn now would be more pronounced than it was in those 6 months of 2008-9 where the financial system locked up.

 

In any case, past performance is no guarantee of future results; asset-price returns are mean-reverting over time.

[otherworldsj33]

Outside of a few crazy macfarlane prices....this market still seems like small potatoes to me (overall). It's still possible to get impotortant and and influential original peices for a few thousand dollars..sometimes even a few hundred. Try getting an impotant peice of post war - contemporary art for that. This also a fairly new area of collecting, its only starting to grow and become appealing to a broader audience from what i can tell. I personally think there will be a small dip or correction and may be holding back a little in the next auction as well.

 

The market is still maturing, but, and maybe I am not looking in the right places, but what important and influential pieces can one get for a couple of thousand or less? Are you talking about modern art that might one day be in that category, or pieces that are already established? I have not seen anything from the copper age back that could be had for those prices. Again, maybe I am not looking properly, I just don't see it.

 

I guess it depends what you mean by "important & influential" but for example folks have been picking up Boys Ranch pages by Simon & Kirby (and mostly Kirby) in the 2K range. Some from the very first story, and Boys Ranch was certainly an influential title. Staying with Kirby, you can still get various 70's panel pages, even 4th World, in the same range. Silver Age superhero pages by Heck and Colan, not the best ones but certainly good ones. JLA large art panel pages. Kane Green Lantern & Atom. Lots of stuff.

 

 

Therein is the discrepancy. I looked up the defitions of both words, even though we all know what they mean, just to make sure we are on the same page, so to speak. Influential:The definition of influential is someone or something that has an impact on or shapes how people act or how things occur. Important:Strongly affecting the course of events or the nature of things; significant

So I wouldn't argue that Boys Ranch is important and influential in regards to how it influenced other artists in the field, and that it is a great piece of work in general. Same for a great Mr. Miracle piece or story other 4th world, or the Glory Boat story, or the whole work together as one big story. And as far as nice large art JLA, GL, etc., panel pages, for the most part, most of them are not important or influential, but certainly, especially the earlier issues, some of the singular pieces fall into the important, and influential catagory. So I won't offer a debate, based on the definitons of important and influential.

But in my view, what would be important, and/or influential is more along the lines of what many outside our hobby are at least a little bit famaliar with, and helped shape comic history, and had a impact on our culture. Such as Spiderman (Ditko or Romita), Kirby's FF's, X-Men, Thor, and the Avengers. The Superman 14 cover, and other DC GA covers still in existance, A fair amount of EC stuff. Showcase 4, 22, maybe 36. A lot of early to mid silver age DC stuff. Barry Smith's Conan, Berni Wrightson's Swamp Thing, to name a couple from the BA. A decent amount of Neal Adams work, especially covers and splash pages from the BA period. Dark Knight, Watchman, Sandman, Millers DD, and TMNT, to name a few from more recent times. Some of Mcfarlanes work on Spider-man, although I think a lot of it is overpriced. Anyway, I think that is enough examples to get the gist of what I consider Important and influential, even if it does not line up, technically, with the official definitions. I would very much like to know what others think about this.