Well, you see, there is another guy interested...

[Garf]

I guess my take on this is a little different from the rest. I have seen it all in regards to negotiations... and I mean 'all'. Nothing suprises me anymore, but honestly, not much offends me either... at least from collectors. I just know in my head what I am willing to pay for a piece and it all boils down to that. Collectors are fickle so I try to move fast, but in the end $ talks. If you are willing to pay more than the next guy, you are in a pretty good position. If someone else wants to pay more, then not so much. If the collector wants to set a price with the use of shills, friends, phantoms or the like, it still all boils down to how much I want the piece and the final number in my head. I have bought from transparently dishonest folks and I have walked away from the most upstanding sellers....simply because the numbers either added up or they didn't.

 

 

More and more, what was once generally affordable to most folks has rapidily given way to who can afford to pay for.

Collecting decent OA pieces will soon become the wealthy man's hobby

 

umm...how about right now???

 

come to think of it I used ot be wealthy, but the more art I buy, the less I am

 

Quite right. Go and google median household income and there won't be many quality pieces you could buy before you would have to downsize... or think about where your next meal was coming from.

[alxjhnsn]

Collecting decent OA pieces will soon become the wealthy man's hobby

I would say that vast majority of people on this board would be considered "wealthy/rich" by 2/3 of the population.

 

 

For most folks, spending even a couple of hundred dollars on art is a big extravagance.

[Doc Joe]

Collecting decent OA pieces will soon become the wealthy man's hobby

I would say that vast majority of people on this board would be considered "wealthy/rich" by 2/3 of the population.

 

 

For most folks, spending even a couple of hundred dollars on art is a big extravagance.

 

the chart is wrong, remember the top 1% dont pay any taxes.

 

I know cause I read it in the newspaper.

 

 

I remember when I was very poor, a time when I purchased 3 DVD's when they just came out, it was $60 and I was like, holy f'ing what have I done!!!

 

Its ridiculous how quickly you can get used to a fancy lifestyle

[DocR]

Collecting decent OA pieces will soon become the wealthy man's hobby

I would say that vast majority of people on this board would be considered "wealthy/rich" by 2/3 of the population.

 

 

For most folks, spending even a couple of hundred dollars on art is a big extravagance.

 

the chart is wrong, remember the top 1% dont pay any taxes.

 

I know cause I read it in the newspaper.

 

 

I remember when I was very poor, a time when I purchased 3 DVD's when they just came out, it was $60 and I was like, holy f'ing what have I done!!!

 

Its ridiculous how quickly you can get used to a fancy lifestyle

 

Whats even more telling form that chart is the top 5% make 34% of all the income but pay 56% of all taxes but apparently are still the problem.

 

I watch the news and I feel like I'm the problem in this country. I grew up sleeping in the basement with no door on my "bedroom" because there was no room for me on the main floor. Maybe I buy so much art because i'm nostalgic for the 1980s after all.

 

I promise this will be my only political post.

[Pirate]

that's called being Boras'ed in the baseball circles

[mrpunch0]

I think I'll just say, see where the other guys maximum is and I will pay 1K more...

 

that should work out well

 

 

 

I hope he buys you dinner and flowers. ;-)

[delekkerste]

The sad truth is that the more people that desire an item or class of items the higher and higher the price will climb. It is simple economics. Combine that with the increasing popularity of comics in the pop culture, the prime earning years of people that came of age in the 60's 70's and 80s and the underwhelming selections of other places to put free cash and this is what happens. If you could still buy florida ocean front homes for 200k then I would have to think a lot harder about sinking so much money into comic art. As it is if I am earning barely any return in traditional investments and like looking at pretty pictures on my wall, comic art isn't a bad place to be.

 

I'm not sure what you've been buying, but the Dow Jones Industrial Average returned 29%, S&P 500 32%, the Nasdaq Composite 40% and the Russell 2000 39% in 2013. Real estate rebounded strongly in most U.S. markets as well. Bonds didn't fare all that well for the most part (though the only bond fund I own was actually up 16% last year as it was focused on bank loans and special situations which both did great), cash did nothing and gold was down, but, overall, you'd have to say that traditional investments have largely done pretty well the past few years.

 

The way I see it, there are many reasons to buy comic art, but lack of opportunities in traditional investments sure hasn't been one of them. In fact, it's precisely because traditional investments have done so well that I was able to spend so much on OA last year!

[Bronty]

yeah, I don't follow the markets like you do, but I do see a lot of people's investments in the course of my work, and everybody's done great this year. Anybody that did so-so in fact did terrible. Of course, that's based on buying a year or two ago so whether those opportunities still exist is open for debate.

[DocR]

The sad truth is that the more people that desire an item or class of items the higher and higher the price will climb. It is simple economics. Combine that with the increasing popularity of comics in the pop culture, the prime earning years of people that came of age in the 60's 70's and 80s and the underwhelming selections of other places to put free cash and this is what happens. If you could still buy florida ocean front homes for 200k then I would have to think a lot harder about sinking so much money into comic art. As it is if I am earning barely any return in traditional investments and like looking at pretty pictures on my wall, comic art isn't a bad place to be.

 

I'm not sure what you've been buying, but the Dow Jones Industrial Average returned 29%, S&P 500 32%, the Nasdaq Composite 40% and the Russell 2000 39% in 2013. Real estate rebounded strongly in most U.S. markets as well. Bonds didn't fare all that well for the most part (though the only bond fund I own was actually up 16% last year as it was focused on bank loans and special situations which both did great), cash did nothing and gold was down, but, overall, you'd have to say that traditional investments have largely done pretty well the past few years.

 

The way I see it, there are many reasons to buy comic art, but lack of opportunities in traditional investments sure hasn't been one of them. In fact, it's precisely because traditional investments have done so well that I was able to spend so much on OA last year!

 

All true, in posting my repsonse rather quickly I should have stated cash positions. I don't view long time horizon investment accounts as available money for art purchases because I don't consider art an investement. I buy it for my enjoyment and as a hobby. I have enjoyed great returns in the market as you summarized above and having that in your back pocket certainly helps to make the decision to pull the trigger on a large art purchase. What I was trying to say was holding art and hanging it on my wall versus watching my cash accounts literally do nothing as you stated. If you have a certain dollar amount in cash and its doing nothing whether cds, money market or savings account it is much easier (for me at least) to put that money into art. You can make the argument that if all you care about is long term investment strategy then you should add that money to your risk on investements but I guess I view this money separately, as disposable income after I have fully funded my longterm investment strategy

 

Follow up question:

Say rates go up to early 1980s level, at some point do you say I would rather take my risk free 14% returns and defer further art purchases? , Inflation, I know but the question remains?

[delekkerste]

I don't view long time horizon investment accounts as available money for art purchases because I don't consider art an investment. I buy it for my enjoyment and as a hobby. I have enjoyed great returns in the market as you summarized above and having that in your back pocket certainly helps to make the decision to pull the trigger on a large art purchase. What I was trying to say was holding art and hanging it on my wall versus watching my cash accounts literally do nothing as you stated. If you have a certain dollar amount in cash and its doing nothing whether cds, money market or savings account it is much easier (for me at least) to put that money into art. You can make the argument that if all you care about is long term investment strategy then you should add that money to your risk on investements but I guess I view this money separately, as disposable income after I have fully funded my longterm investment strategy

 

I hear what you're saying about not considering art an investment and not viewing long-term investment accounts as available money for art purchases. But, I have to say, isn't art much closer to being a long-term investment than being a cash substitute? I mean, after you've funded your long-term investment accounts, you have a pile of cash left over that you stick into CDs, money market or savings accounts. I understand if you don't want to add more risk (i.e., add to your long-term investment accounts) with this money, but, haven't you essentially done so anyway by buying a relatively illiquid and risky asset (art) in lieu of accepting the prevailing interest rates on a safe savings account?

 

I guess what I'm saying is, however one rationalizes art as not being an investment and cash being cash, at the very least what is happening when someone buys art instead of accepting these low rates on cash equivalents is that they've swapped out of a safe, liquid, asset into a a relatively more risky and illiquid one. That said, I know where you're coming from, as the combination of low rates and an outsized cash position definitely influenced my ramped-up art spending in 2011 (with the benefit of hindsight, I'd say perhaps unduly so).

 

 

Follow up question:

Say rates go up to early 1980s level, at some point do you say I would rather take my risk free 14% returns and defer further art purchases? , Inflation, I know but the question remains?

 

Rates won't have to go up to early 1980s levels for spending habits and market valuations to change dramatically. All assets are priced either implicitly or explicitly off of interest rates, which measure the opportunity cost of buying and enjoying now or saving now and enjoying later. Given that interest rates have been artificially suppressed for years now, asset prices have been bid up to incorporate the cheap price of money. It has caused people like you to buy art instead of holding cash you might otherwise would have, and it has caused people like me to buy art because of the windfall of profits from other investments that have soared in price. Others still have benefited from cheap borrowing costs, extra money from refinancing, stock options going up in value, bigger bonuses from profitability being boosted by lower interest costs, etc. etc. Directly or indirectly, cheap money has helped to distort all asset prices, whether explicitly (as in the case of bonds) or implicitly (as in the case of OA, art and other collectibles). Yes, other factors have contributed to OA price inflation (demographics/nostalgia, superhero movies, maturation/growth of the hobby, etc.), but easy money in all its manifestations has been the gasoline that's stoked the proverbial fire.

 

Forget 14% rates; if and when rates get back up to even 3-5% from the current 0%, all the factors above that have contributed to a virtuous cycle of asset price inflation will reverse and turn into a vicious cycle of asset price deflation. People will defer OA purchases because money will be harder to come by, investment portfolios will go down, alternatives will look more attractive, and, most importantly, there will be a growing expectation that prices won't keep galloping ahead every year - heck, people might actually expect prices to even deflate, if not in nominal terms, then in real terms (e.g., vs. inflation or vs. the return on cash equivalents). No, it hasn't happened in the past, but, then again, OA has never been priced at the vertiginous levels of the past couple of years before during a downturn.

 

That said, who knows when interest rates will ever normalize. I'm just telling you what you can expect when they do.

[DocR]

Agree with all your points except about art being a substitute for cash. I agree it is not and what I'm trying to say is I view art as an expenditure. It is a luxury expenditure to me along the lines of a nice new car or my wife going on a mall outing. My point is I would be less likely to make extravagant expenditures in general if I had my money sitting somewhere earning a decnet rate of return in cash. Since I don't I would rather as you put it "enjoy it now" If I were getting 5% on excess capital in a guaranteed cash holding than I might not be so quick to spend. I will agree that even though I say I view it as an expenditure it is easy to think about the profit or loss on the whole art portfolio in a need to sell situation. Just because it isn't viewed as an investment holding by me doesn't negate the fact that it does hold some value and could be liquidated at some price.

 

I agree with the whole response regarding rising rates and just hope a lot of our fellow collectors realize this is a likley scenario if rates go up.