Why has AF15 exploded in value? 9 9

[ComicConnoisseur]

On 6/3/2017 at 9:32 PM, showcase22gr1959 said:

This time around will be different. There will be pullbacks and outlier along this dramatic sharp increase. There is so much more new money entering the Vintage Comic market with increase worldwide demand. I see AF15 will continue to increase with the inflation rate (yes, there may be slower growth at times).  It's an asset one can enjoy and have the privilege to own one of the famous "Stan the Man" creation.

Totally agree with this. Comic books are now considered to be a better bet than most other hobbies. What few modern stamps or coins have exploded in value from the last 50 years compared to comics?

Comic keys from the 1940s and up have much better growth than stamps and coin keys that have come out since the 1940s.

The key with the comic characters is some of them are in away the top movie stars of Hollywood now.

It is hard to beat the publicity that Marvel and DC characters get with Disney and Warner hyping them.

No other hobby has big blockbuster movies and tv shows promoting them.

The only other hobby that could give comics a run for their money in the future is videogames, but other than that comic books is becoming the king collectible. 

Edited June 5, 2017 by ComicConnoisseur

[paul747]

I dont know whats going on and not trying to hate but something is just not right with the price increase.   Look at the 4.5 for sale here that same book was 16,000 last year and 23,000 2 months ago and now it's a 40,000 plus book?... not buying any of it and I personally would never ever buy into this confusion.  Someone is pulling the puppet strings on this book.   Its definitely a great book worthy of praise and appreciation but there is some voodoo going on.

[showcase22gr1959]

2 minutes ago, paul747 said:

I dont know whats going on and not trying to hate but something is just not right with the price increase.   Look at the 4.5 for sale here that same book was 16,000 last year and 23,000 2 months ago and now it's a 40,000 plus book?... not buying any of it and I personally would never ever buy into this confusion.  Someone is pulling the puppet strings on this book.   Its definitely a great book worthy of praise and appreciation but there is some voodoo going on.

The market moves very quickly these days and it's really pricing out a lot of folks and causing a lot of confusion. This increase is for real and watch for a entry level/price that is comfortable for you.

[Gotham Kid]

7 minutes ago, paul747 said:

Look at the 4.5 for sale here that same book was 16,000 last year and 23,000 2 months ago and now it's a 40,000 plus book?.

And I'm sure those watching are more keen on its sale than its purchase.

Edited June 5, 2017 by Gotham Kid

[showcase22gr1959]

4 hours ago, ComicConnoisseur said:

Totally agree with this. Comic books are now considered to be a better bet than most other hobbies. What few modern stamps or coins have exploded in value from the last 50 years compared to comics?

Comic keys from the 1940s and up have much better growth than stamps and coin keys that have come out since the 1940s.

The key with the comic characters is some of them are in away the top movie stars of Hollywood now.

It is hard to beat the publicity that Marvel and DC characters get with Disney and Warner hyping them.

No other hobby has big blockbuster movies and tv shows promoting them.

The only other hobby that could give comics a run for their money in the future is videogames, but other than that comic books is becoming the king collectible. 

+1 The popularity of Super-Heroes has increased demand for this hobby and billions of dollars are spent on related movies and merchandises worldwide.

[G.A.tor]

39 minutes ago, paul747 said:

I dont know whats going on and not trying to hate but something is just not right with the price increase.   Look at the 4.5 for sale here that same book was 16,000 last year and 23,000 2 months ago and now it's a 40,000 plus book?... not buying any of it and I personally would never ever buy into this confusion.  Someone is pulling the puppet strings on this book.   Its definitely a great book worthy of praise and appreciation but there is some voodoo going on.

Keep in mind, anyone can ask anything they want for a book...doesn't mean it is worth that to all, but only has to be worth that to "one"...

on a side note, I just sold a 4.5 this week, in the low 30's, and thought that was "strong" (the offer came relative to highgrades 27K asking on a 4.0? recently on his site-bob, you can correct me if my memory is wrong)... and I found another 4.5 I didn't even remember I had! So I am watching this latest 4.5 for sale on the boards, with interest...

[AnonymousAF15]

As an outsider just getting into this market I thought I would share:

I ran an analysis on all the keys from the 1960s and looked at their 5-year annual returns since 2002 (first year with real data) at every grade level. I found some interesting insights I'm acting on, but thought I would publicly share some basic stuff about AF15 to get people on the same page:

- AF15 has increased in value at every grade level at the same rate - so the ratio in price between a 4.0 and 9.0 has stayed basically flat the whole time. So there hasn't been an acceleration in the top or the bottom. Everything is increasing in tandem. This is what you would expect if there wasn't a big new source of supply (i.e., someone finds a bunch of 9.0s - that should change the price ratios). Since I don't have supply numbers over time I can't test this (does anyone have that?)

- The 5-year CAGR (% increase in value per year) on AF15 across all grades from 2002 to present (data available) is +15% per year. That is a FANTASTIC return. And it has consistently been +15% for every grade level for every 5-year span available. That doesn't mean it will continue. It is also a pretty small data set. Given the correlation between the grades that's only 14 years of data

 

...Based on that if you believed that things would continue the way they are, you should be buying AF15s as fast as possible. If everyone realized this and started doing it the price would be driven up. So how high should you be willing to buy? If you think the OLD CAGR rate will hold, then it depends on how long you are willing to hold for.

 

Let's assume the price last year was  $100 (feel free multiple by whatever integer you like). Then the expected value over time will be (without bubble effects and without any change in the 5-year CAGR):

2017: $115

2018: $132

2019: $151

2020: $174

2021: $200

...

2026: $400

2031: $800

(15%/year means a double every 5 years - which is nice and simple)

 

So let's say you were planning to hold until 2031. And let's say you wanted to make a 10% return per year (VERY good). You think that it will sell for $800 in 2031. You will be holding for 14 years, so if you buy for $200 in 2017 (2x the 2016 price), your asset still makes you 4x in fourteen years - or a CAGR of 10.4% per year...

 

I know a lot of people on here talk about quick flips, but as asset classes get more sophisticated quick flips stop working (at least consistently). And transaction costs kill you. So the only reason to buy an appreciating illiquid asset is if you plan to hold for a long time. And if you are planning to hold for a long time AND last year's prices are about right AND last year's prices will continue to increase at the rate they have been increasing for the last 16 years AND you are ready to hold for 14 years AND you want to make a 10% return per year (less transaction fees) - then 2x last year's prices are about right.

 

If you want to hold longer - say 24 years, then you should be willing to spend even more. If you are willing to take a less than 10% return then you should be willing to spend more. If you think it will increase in value faster than 15%/year (based on last year's prices) then you should be willing to spend more...

 

AND you have the additional positive impact of the value of passing on to next generation. If you pass down an asset like this to the next generation - they don't pay capital gains tax. That's a huge savings.

 

So: The longer you want to hold the less crazy these prices should seem.....

 

My 2-cents. Hope that was valuable.   

 

[peewee22]

You're too smart for us. 

[showcase22gr1959]

26 minutes ago, AnonymousAF15 said:

As an outsider just getting into this market I thought I would share:

I ran an analysis on all the keys from the 1960s and looked at their 5-year annual returns since 2002 (first year with real data) at every grade level. I found some interesting insights I'm acting on, but thought I would publicly share some basic stuff about AF15 to get people on the same page:

- AF15 has increased in value at every grade level at the same rate - so the ratio in price between a 4.0 and 9.0 has stayed basically flat the whole time. So there hasn't been an acceleration in the top or the bottom. Everything is increasing in tandem. This is what you would expect if there wasn't a big new source of supply (i.e., someone finds a bunch of 9.0s - that should change the price ratios). Since I don't have supply numbers over time I can't test this (does anyone have that?)

- The 5-year CAGR (% increase in value per year) on AF15 across all grades from 2002 to present (data available) is +15% per year. That is a FANTASTIC return. And it has consistently been +15% for every grade level for every 5-year span available. That doesn't mean it will continue. It is also a pretty small data set. Given the correlation between the grades that's only 14 years of data

 

...Based on that if you believed that things would continue the way they are, you should be buying AF15s as fast as possible. If everyone realized this and started doing it the price would be driven up. So how high should you be willing to buy? If you think the OLD CAGR rate will hold, then it depends on how long you are willing to hold for.

 

Let's assume the price last year was  $100 (feel free multiple by whatever integer you like). Then the expected value over time will be (without bubble effects and without any change in the 5-year CAGR):

2017: $115

2018: $132

2019: $151

2020: $174

2021: $200

...

2026: $400

2031: $800

(15%/year means a double every 5 years - which is nice and simple)

 

So let's say you were planning to hold until 2031. And let's say you wanted to make a 10% return per year (VERY good). You think that it will sell for $800 in 2031. You will be holding for 14 years, so if you buy for $200 in 2017 (2x the 2016 price), your asset still makes you 4x in fourteen years - or a CAGR of 10.4% per year...

 

I know a lot of people on here talk about quick flips, but as asset classes get more sophisticated quick flips stop working (at least consistently). And transaction costs kill you. So the only reason to buy an appreciating illiquid asset is if you plan to hold for a long time. And if you are planning to hold for a long time AND last year's prices are about right AND last year's prices will continue to increase at the rate they have been increasing for the last 16 years AND you are ready to hold for 14 years AND you want to make a 10% return per year (less transaction fees) - then 2x last year's prices are about right.

 

If you want to hold longer - say 24 years, then you should be willing to spend even more. If you are willing to take a less than 10% return then you should be willing to spend more. If you think it will increase in value faster than 15%/year (based on last year's prices) then you should be willing to spend more...

 

AND you have the additional positive impact of the value of passing on to next generation. If you pass down an asset like this to the next generation - they don't pay capital gains tax. That's a huge savings.

 

So: The longer you want to hold the less crazy these prices should seem.....

 

My 2-cents. Hope that was valuable.   

 

Interesting Data and thanks for sharing. I find the buy an hold strategy worked well for AF15's holders since the inception of CGC. Timing the market could be a random walk for some. Many folks here have flipped AF15's did very well, for new buyers continue to influx into the market. Also, there were very strong growth periods in 2008 of AF15, and the last few years. AF15 didn't increase the 15% annual return between 2009-2014, so it was a more holding period then selling. This recent gap up increase has shocked everyone. Many copies of great eye appeal has sold very strong and has confirmed the new establish FMV. It's going to be hard to predict if this recent price increases will be hold or more increases will occur. This time around the demand has outstripped the demand and more real money entering the market.

Edited June 5, 2017 by showcase22gr1959

[AnonymousAF15]

2 minutes ago, showcase22gr1959 said:

Interesting Data and thanks for sharing. I find the buy an hold strategy worked well for AF15's holders since the inception of CGC. Many folks here have flipped AF15's did very well, for new buyers continue to influx into the market. Also, there were very strong growth periods in 2008 of AF15, and the last few years. AF15 didn't increase the 15% annual return between 2009-2014 and timing the market, so it was a more holding period then selling. This recent gap up increase has shocked everyone. Many copies of great eye appeal has sold very strong and has confirmed the new establish FMV. It's going to be hard to predict if this recent price increases will be hold or more increases will occur. This time around the demand has outstripped the demand and more real money entering the market.

You are right. When I said +15% through the entire time period I over-stated. What I should have said was:

It was +15% CAGR overall from 2002 to 2016. It was also +15% CAGR for most of the 5-year spans in-between.

But for the five years ended 2014 the 5-ear CAGR varied from 5% to 13% depending on the grade (better for the lower grades in that time period). That's still a pretty great return - but less than the 15% I was quoting. (the 5-year CAGRS ending 2015 were +17% to +23%, so it corrected pretty fast)

[Spyderfan]

[showcase22gr1959]

22 minutes ago, AnonymousAF15 said:

You are right. When I said +15% through the entire time period I over-stated. What I should have said was:

It was +15% CAGR overall from 2002 to 2016. It was also +15% CAGR for most of the 5-year spans in-between.

But for the five years ended 2014 the 5-ear CAGR varied from 5% to 13% depending on the grade (better for the lower grades in that time period). That's still a pretty great return - but less than the 15% I was quoting. (the 5-year CAGRS ending 2015 were +17% to +23%, so it corrected pretty fast)

Fair enough. Here's an interesting data point. AF15 grades between 4.0-9.0 were the worst performers in 2009-2014, and the last few years are performing much stronger then the lower grades.

[Bomber-Bob]

I think for your average collector, AF15 has priced itself out of their market. They will soon be turning to other books or venues to invest. I think we are already seeing this with the strong prices on ASM 1. It's funny but you can get a general feel for the marketplace from the WTB section of our own Boards. I am seeing a lot of requests for ASM 1 lately. I suspect other titles, most likely Hulk 1 will soon jump. In fact, I suspect Hulk 1 is already heating up.  Just like AF15, it has always been a fan favorite and has historically showed a disposition to pop in price.

[showcase22gr1959]

24 minutes ago, Spyderfan said:

Upgrading and holding worked well for you.

[Spyderfan]

9 minutes ago, showcase22gr1959 said:

Upgrading and holding worked well for you.

You got that right!  I just won't be able to upgrade anymore with these prices!  

[drbanner]

1 hour ago, Bomber-Bob said:

I think for your average collector, AF15 has priced itself out of their market. They will soon be turning to other books or venues to invest. I think we are already seeing this with the strong prices on ASM 1. It's funny but you can get a general feel for the marketplace from the WTB section of our own Boards. I am seeing a lot of requests for ASM 1 lately. I suspect other titles, most likely Hulk 1 will soon jump. In fact, I suspect Hulk 1 is already heating up.  Just like AF15, it has always been a fan favorite and has historically showed a disposition to pop in price.

I don't think AF15 @2016 prices priced itself out of the market, but these recent $8-10K/point sales of low/mid-grade are way above 2016 prices.

As far as Hulk 1, after the big runnup a few years back, prices pretty much stabilized in the low/mid grades and I think the same thing will happen with AF 15 at some point.

 

[Dark Knight]

It has to stabilize at some point. No way this book keeps setting record prices after every sale.

[Lazyboy]

2 hours ago, AnonymousAF15 said:

Since I don't have supply numbers over time I can't test this (does anyone have that?)

For CGC graded books? Yes.

[twmjr1]

Think any copy of AF #15, in any grade, will cost you less in a few years than it'll cost you now? LAUGH.

Edited June 5, 2017 by twmjr1
incomplete info

[Howling Mad]

2 hours ago, twmjr1 said:

Think any copy of AF #15, in any grade, will cost you less in a few years than it'll cost you now? LAUGH.

Lots of things go in and out of favor.

Many highly collectible silver and bronze age issues lost 50%+ their value 10 years back. AF15 is probably a pretty good bet, but you can't be a bull market forever.