Comics as an investment for retirement 2 2

[Mr.Fantastic]

47 minutes ago, Mercury Man said:

Between March 2020 and now, if you put money into the SPDR ETF, you are at almost a 60% profit.   Now it took a pandemic to do it but.....that's a huge jump in about 10 months.  It may never happen again in our lifetime, but it did happen. 

if you look at it from Jan-Feb until now it is not nearly up as much.  Plus, you would had to have picked the absolute bottom to have gotten in to make that return.

[the blob]

43 minutes ago, Mercury Man said:

Between March 2020 and now, if you put money into the SPDR ETF, you are at almost a 60% profit.   Now it took a pandemic to do it but.....that's a huge jump in about 10 months.  It may never happen again in our lifetime, but it did happen. 

Hindsight is always 20/20. If you had timed the market and predicted March was the bottom you would have been brilliant. I was sitting on cash in my 401K (I don't have a 401K, my version is a little more flexible in terms of withdrawals (no penalties, I just pay taxes). Wish I had the cajones to jump back in with a vengeance, but I was worried this was the start of a 3 year depression and stock crash, possible layoffs for me and the wife and really liked the idea that, if push came to shove, I had a few years of living expenses that were liquid. Timidity.

 

 

[namisgr]

2 minutes ago, the blob said:

Hindsight is always 20/20. 

So true.  And true for comic valuations as well.  

[Mr.Fantastic]

3 minutes ago, namisgr said:

So true.  And true for comic valuations as well.  

This got me to wondering.  Have comic valuations in general seen the kind of volatility that the SP 500 did this year? I'm sure over time some comics have lost close to that in value, but if someone had a so called "balanced portfolio" of comics across multiple genres, ages, and titles would it see that kind of volatility?

[the blob]

2 hours ago, Artboy99 said:

my figures came directly from GPA, took an average instead of hi-low.

While I don't think buying comics is a great idea as investments, I do feel I have to point out the possible returns which in some cases like the mentioned AF15 can outperform even after tax considerations.

I purchased a cgc 3.0 AF15 in 2013 for $5000, and today gpa for that book is $23500. Very good return for 7-8 years.

Do we dare talk about Mask Comics 1 and 2? @thehumantorch

Nobody is doubting that most blue chip books bought in 2010-2013 have appreciated nicely. There may be some 9.8s of late SA/BA that have not because they had low census numbers that eventually got evened out, but most of those are not genuine blue chip books (though the Mask comics you reference elsewhere appeal to a pretty narrow group of wealthy collectors). But do we think that AF 15 is going to be $50K book in 10 years? At some point all these relatively common books can't all be six figures in mid grade, can they? 

The OP said this:  "So maybe including some tangible assets wouldn't be a bad idea. I would think you couldn't go wrong with some Golden age classic covers and silver age keys in mid to high CGC grade over that time period."

If you have an IRA/401K, I'd make sure you make your contribution, in full, to those vehicles using more traditional investments.

If you have spare mad money, sure, why not? I would not stake your 65 year old standard of living on expected returns from these things though. This is what I would tell a friend if they asked how I felt about this. At least after I sold him 25 copies of the ultimate investment book, Thor 339.

 

[Math Teacher]

5 hours ago, Artboy99 said:

sure, but what is the return on an AF15 over the same time period?

I just checked this, using a CGC 3.5 as my example.

2010: High - $6,000, Low - $4,183
2020: High - $21,500, Low - $16,800

If you use the two highs, AF #15 3.5 has shown 258.3% growth, or 23.5% per year.
If you use the two lows, AF #15 3.5 has shown 301.6% growth, or 27.4% per year.

This only applies to a CGC 3.5 book. Other grades would probably be different.

[the blob]

5 minutes ago, Mr.Fantastic said:

This got me to wondering.  Have comic valuations in general seen the kind of volatility that the SP 500 did this year? I'm sure over time some comics have lost close to that in value, but if someone had a so called "balanced portfolio" of comics across multiple genres, ages, and titles would it see that kind of volatility?

Well, remember, the stock market only went down like 10-15%, and then it started going back up and then exceeded its previous highs. There wasn't a lot of time when it was in the krapper. I feel like there were about 2 weeks where folks here thought ebay was dead and there were deals, and then there weren't any.

 

[the blob]

15 minutes ago, Math Teacher said:

I just checked this, using a CGC 3.5 as my example.

2010: High - $6,000, Low - $4,183
2020: High - $21,500, Low - $16,800

If you use the two highs, AF #15 3.5 has shown 258.3% growth, or 23.5% per year.
If you use the two lows, AF #15 3.5 has shown 301.6% growth, or 27.4% per year.

This only applies to a CGC 3.5 book. Other grades would probably be different.

I believe that is not how you calculate an investment return over a period like that where you are looking at two end points, etc. and trying to determine what % you'd need to earn each year to get to the end point. Not that your numbers don't have their own validity, but if we are trying to compare AF 15 growth to S&P 500 investment returns, we need to use the same methodology.

27.4% a year on the $4,183 book would mean $47,117 at the end of 10 years: https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=4183&cyearsv=10&cinterestratev=27.4&ccontributeamountv=0&ciadditionat1=monthly&printit=0&x=0&y=0

A $4,183 to $16,800 book would be about a 14.5% annual return:

https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=4183&cyearsv=10&cinterestratev=14.5&ccontributeamountv=0&ciadditionat1=monthly&printit=0&x=0&y=0

14.5% is terrific, of course, and if you were able to flip the $4,183 into the $21,500 sale that is nearly an 18% return:

https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=4183&cyearsv=10&cinterestratev=18&ccontributeamountv=0&ciadditionat1=monthly&printit=0&x=0&y=0

Edited January 24, 2021 by the blob

[Math Teacher]

23 minutes ago, the blob said:

 If you had timed the market....

My financial advisor has told me repeatedly, "You can't time the market." Half of the time you will be right, but half the time you will be wrong.

If you think you can time the market, then you should also be buying lottery tickets.

[the blob]

1 minute ago, the blob said:

I believe that is not how you calculate an investment return.

27.4% a year on the $4,183 book would mean $47,117 at the end of 10 years: https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=4183&cyearsv=10&cinterestratev=27.4&ccontributeamountv=0&ciadditionat1=monthly&printit=0&x=0&y=0

A $4,183 to $16,800 book would be about a 14.5% annual return:

https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=4183&cyearsv=10&cinterestratev=14.5&ccontributeamountv=0&ciadditionat1=monthly&printit=0&x=0&y=0

14.5% is terrific, of course, and if you were able to flip the $4,183 into the $21,500 sale that is nearly an 18% return:

https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=1000000&cstartingprinciplev=4183&cyearsv=10&cinterestratev=18&ccontributeamountv=0&ciadditionat1=monthly&printit=0&x=0&y=0

Of course, you probably need the 18% return to make up for the higher taxes you pay for collectible capital gains vs. equity cap gains/dividends as the stock market made about 13.5% during this period ... and yes, i am totally pulling that out of my rear, some financial type can tell me if I am right or wrong or close

 

[Math Teacher]

1 minute ago, the blob said:

I believe that is not how you calculate an investment return.

I did this just for a quick and dirty example. I certainly didn't take the time to calculate compound interest.

Using the compound interest formula for interest compounded continuously - EV = BV * e^(r*t), I found that the average return for the high value of the books was 12.5% per year. Using the same formula, I found that the average return for the low value of the books was 13.9% per year. Those numbers do look quite a bit different than my initial calculations.

EV = Ending Value, BV = Beginning Value, e =2.71828182......, r = rate, t = time in years

[the blob]

1 minute ago, Math Teacher said:

I did this just for a quick and dirty example. I certainly didn't take the time to calculate compound interest.

Using the compound interest formula for interest compounded continuously - EV = BV * e^(r*t), I found that the average return for the high value of the books was 12.5% per year. Using the same formula, I found that the average return for the low value of the books was 13.9% per year. Those numbers do look quite a bit different than my initial calculations.

EV = Ending Value, BV = Beginning Value, e =2.71828182......, r = rate, t = time in years

I was just guestimating with the investment calculator, quick and dirty, my days of actually knowing how to run these numbers are long gone

[the blob]

Of course, we can't do this with the stock market so easily as the S&P going from 1500 to 3500 is only part of the equation, your reinvestment of dividends is a huge part of it, and whether those dividends are being kept in a tax deferred setting or not is also huge ... if you're paying taxes on your dividends every year, you're not getting as much of the benefit of reinvesting them. OF COURSE, your income tax rate when you start withdrawing from the tax deferred account is going to matter a lot as it may be higher than your capital gains/dividend rate would have been, but I still think all those years of not paying taxes on the dividend income (and capital gains if you move money around) probably makes up for that. 

 

 

[thehumantorch]

3 hours ago, Artboy99 said:

my figures came directly from GPA, took an average instead of hi-low.

While I don't think buying comics is a great idea as investments, I do feel I have to point out the possible returns which in some cases like the mentioned AF15 can outperform even after tax considerations.

I purchased a cgc 3.0 AF15 in 2013 for $5000, and today gpa for that book is $23500. Very good return for 7-8 years.

Do we dare talk about Mask Comics 1 and 2? @thehumantorch

Why torture yourself    My return on those is so good I can't calculate it on a sliderule

 

 

[Mr.Fantastic]

Ok.  I never meant for this to turn into a Comics vs the stock market type of debate.  Although it has been very interesting to hear some of the opinions expressed here.  If and when I decide to do this, it will be a portion of my overall retirement investments.  Of course I already have my 401k, an IRA, Social Security, and a pension where I work. The comic portion I would most likely buy after receiving settlements from my parents estate (after both passed this year) that should settle some time this year.  Not a huge amount of money overall, but enough to buy some very nice books that should yield a decent return over time and give me something to do after my working years. 

[piper]

2 minutes ago, thehumantorch said:

Why torture yourself    My return on those is so good I can't calculate it on a sliderule

 

 

Be nice to Karl! I’m sure you miss your FF1?

[thehumantorch]

1 minute ago, piper said:

Be nice to Karl! I’m sure you miss your FF1?

[thehumantorch]

4 minutes ago, Mr.Fantastic said:

Ok.  I never meant for this to turn into a Comics vs the stock market type of debate.  Although it has been very interesting to hear some of the opinions expressed here.  If and when I decide to do this, it will be a portion of my overall retirement investments.  Of course I already have my 401k, an IRA, Social Security, and a pension where I work. The comic portion I would most likely buy after receiving settlements from my parents estate (after both passed this year) that should settle some time this year.  Not a huge amount of money overall, but enough to buy some very nice books that should yield a decent return over time and give me something to do after my working years. 

Sounds pretty rational.  Make sure your retirement will be comfortable and dabble in comics. 

[Hamlet]

7 hours ago, shadroch said:

 Also you need to know your audience.

When selling a $100,000 book, you have a pretty small pool of buyers.

If you have 100 $1,000 books, the buying pool is much bigger.

Have 1000 $100 books and your buying pool  is the size of the ocean.

Imagine how big the buying pool is with 100,000 $1 books 😀

Actually, I do think books in the $100-$200 range would be a pretty good sweet spot for liquidity, diversification, and ease of selling.  

[piper]

12 minutes ago, thehumantorch said:

You can’t keep them all.