The Definitive Word On Grading Now Causing a Slump?

[homer-migration]

If a dealer had come up to me 15 years ago and said: "Myself and five other dealers have decided to form this company to grade books and therefore become the definitive word on grading " -" In fact, our grading will be so definitively accepted, so much so, that our high grades will establish records and revolutionize the whole industry". I would have naturally thought this person had gone slightly mad - But this is precisely what has happened - The first Group to think of the idea HAVE become the definitive (or most universally accepted) word on grading.

Now to be very fair to CGC, they enlisted the support of the various trade 'experts' to set up a universally accepted criteria - And the rest of us try to guess this criteria when looking at our ungraded books, trying to figure out if it's a 9.4 or 9.6. Just when we think, after hundreds of submissions, that we can predict their grades we get back a 9.2 which we were convinced would be a 9.8. And we complain that the goalposts must have moved.

 

But the fact remains that the industry needed a third party grading service, and in general I firmly believe that CGC grade fairly and add legitimacy to the Hobby. By the same token, Heritage Auctions have done the same - You may think their estimates slightly optimistic, but their catalogues are masterfully produced and very well-researched. They are in the most part a CGC auction House in that almost all of their lots are CGC graded.

 

I've heard all the detractors of CGC saying things like "it's reduced Comics to postage stamps", etc., etc., but I don't believe anyone ever sat in an armchair flipping through a high grade Mile High book (unless of course Edgar Church did).

 

I've read time and time on this Board that the industry is in a slump - One only need look at the latest Heritage Catalogue to realize that the industry has never been healthier - But as the CGC survey grows 9.0 for Silver-Age isn't looking that great anymore - and you better have at least a 9.6 (some would argue 9.8) Bronze Age if you are buying for future investment - This is what people are perceiving as a "slump' - Prior to CGC (and to be fair, the internet) we really did not have much of an idea how many high grade books of such and such were out there. In the early years of CGC Ebay prices on mediocre CGC books were ridiculous - Now that we're at the 4000 and rising CGC listing amount, it is becoming obvious that collectors are becoming more discriminant, and dealers are flooding the market with their mistakes (having a Bronze-Age book come back 9.2 is a mistake).

In this respect the success of CGC has raised the bar at the top end, but lowered it at the bottom - It certainly is not a slump!

[g-man]

i agree for the most part however some bronze age books in 9.2 still sell very well. Witness Luke Cage #1, Detective 400, Marvel Spotlight 2 & 5. Granted, most 9.2s do not get more than 3x guide but they do sell for usually over guide (nm) price.

[aardvark88]

Let's wait until AFTER the 3 Heritage auctions in Oct/02 to see if the mkt can absord so many choice cgc bks in 1 month. How many collectors/investors have entered or re-entered the comic bk mkt since the advent of cgc? We will know in a couple of weeks, if Heritage turned out to be a dumping ground for gold, silver cgc bks or not.

[comicinvestor-migration]

The initial graded collectibles fad is a lot like climbing a tree to escape a bear.

 

The higher you go, the safer you seem, but the bear keeps getting closer. Those unwilling to go higher get swallowed by the bear, but still some push on, and climb further. The branches start getting thinner and the more people that reach the tree top, the more tenous it gets for all involved, until finally everyone comes crashing down to Earth.

 

There are really only two choices for heavy CGC investors, you either get eaten or fall off the tree.

[homer-migration]

There is no doubt that their auction will break records, as each of their 'Signature' auctions have thus far. In their July auction, which was not much smaller in quality of content virtually nothing sold below their estimated price. Two Gaines File Copies sold for 17 and 26 times respectively Near Mint Guide Price - Shortly thereafter Chris Foss of Heroes And Dragons paid reportedly a mid six figure sum for part of their Gaines file inventory before it hit their next catalogue.

 

With all due respect I think you underestimate the market and the amount of money out there. Comics are becoming a more mainstream high-end investment. If you compare it to the art-world, consider just one category - 'Impressionist Paintings' - of which Sothebys & Christies have each two Important Sales a year, each with over 50 paintings that individually sell (one painting!) for considerably more than the entire Heritage Auction will realize - This has been going on for years - There are probably another 20 categories of schools of Painting, and other forms of art with thousands of items bringing individually in the hundreds of thousands to the many millions (for single objects) - In fact, as someone who worked for one of the major auction houses for many years I can tell you that even the high end of comics are a very inexpensice collectible in comparison to other high end collectibles- You could purchase the next two Heritage Comics Auctions with what you would have to pay for a mediocre Monet; and there are no shortage of buyers for Monets of any quality.

 

I really don't think we've seen anything yet - We've had hints - Certain books bringing unprecedented prices - But as my first post most emphasized - The low end will continue to fall - The high end will get silly. I collect a certain period and genre of comic of which Heritage have quite a few in the up-coming auction. I intend to bid well over their estimate prices which are many times Guide - If I'm lucky I may get one book...

[blowout]

........but you can't seriously compare comics as an investment item with fine art...............they will never come close..............the fact of the matter is there is uncertainty about just how many copies of a given grade of book exist, buyers are paying for 'percieved scarcity' not actual scarcity...........

....on the other hand those spending big sums of money on a painting no for certain that they are buying a one of a kind, 'actual scarcity'..............

 

....that's the real stumbling block with buying high priced comics, you really don't know how many of the exact same thing are out there................

 

..........perceived scarcity is a much riskier proposition than actual scarcity..........

[Bronty]

The market gets 'flooded with mistakes' from another point of view as well. The books received back from cgc that are perceived to be overgraded are the first ones to be sold. The ones perceived as undergraded will be kept or sent in again for regrading. To me, this is the #1 reason that a grading company has to stay strict with its grading - because all of the worst examples of the company's grading will make it to market.

 

I know I have personally sold off some books I felt were overgraded that I would otherwise have kept and I very much doubt I'm the only one...

[homer-migration]

........but you can't seriously compare comics as an investment item with fine art...............they will never come close..............

 

I spent the better part of my life working at the top end of the art market in the World's most prestigeous Auction House - There are many historical precedents where mass produced works of art commanded and still command extremely high prices.

The prices that 'comic' artists already receive for drawings in Heritage for example, far outstrip similar mediums by artists of infinitely higher stature in the art world. I can tell you right now that for the price the Frazetta fetched, you could have bought a very good drawing by Arthur Rackam or Aubrey Beardsley. The art world has always made a distinction between 'illustrative artists' and 'non-illustrative' - the former have always been considered of lesser stature and price. Some have made the transition (say Maxfield Parrish in the US); but only because illustration was merely a part of his oeuvre. So why does someone pay the same amount for a Frazetta drawing as another person a Whistler sketch (approx the same amount) - When Frazetta is not known much beyond the world of comics, whereas Whistler is a household name, and very much cemented in art history?

 

I long ago stopped marvelling at the high prices people paid for what others deemed lesser quality. Price in the art world at any level is directly proportional to how many people collect and want certain objects - There's an old saying in the auction world "that something is worth what one person is willing to pay for it". In fact it may sound contradictory but the more of something there is, the more it is liable to realize - simply because there are more able to collect and compete for it. If you really believe the quality of comics to be less that a work of art, and therefore not of the same investment potential I urged you to grab any copy of a Sothebys or Christies 'Modern Art' catalogue - Have a look at the work of Louis Fontana - A man who whitewashed a canvas and then made three (usually three) random slashes with a knife - These sell in the high tens of thousands to hundreds of thousands - and there is no shortage of buyers - nor works by him so it seems.

[Darthdiesel]

There's an old saying in the auction world "that something is worth what one person is willing to pay for it".

 

Isn't this the golden rule? If more poeple believed this nugget of wisdom, then we wouldn't be so shocked/surprised by what current CGC auctions go for. Once slabbed for posterity, you might as well treat the slab as an investment in high priced art.

[comicinvestor-migration]

If more poeple believed this nugget of wisdom, then we wouldn't be so shocked/surprised by what current CGC auctions go for.

 

Darth, there's never been any disagreement with this, only that experienced collectors have seen fads come and go and I for one seriously doubt that these prices (except for the most Key of Keys in ultra-high-grade) are in any way sustainable.

 

It's all a hype-driven, money grab, and comparing a mass-produced comic book with a one-of-a-kind piece of artwork is ludicrous. And I hate to think of the deep-pocketed who believe this.

 

 

[homer-migration]

Darth, there's never been any disagreement with this, only that experienced collectors have seen fads come and go and I for one seriously doubt that these prices (except for the most Key of Keys in ultra-high-grade) are in any way sustainable.

 

Comic Investor (Sorry don't know your name) - There is truth to what you say, but there is one particular variable which smashes any predictions. I have collected comics for, I hate to say it, 25 years. There have been wild fluctuations in price and certain titles have proportionately gone down (Action is the best example). The historically valuable titles, well before Ebay and certainly well before CGC were the cream of the Golden Age (Action, Detective, More Fun, Adventure, Batman, All Star, Mystic, etc). It's no secret that 15 years ago collectors (almost all men) collected the comics of their youth. The historical Golden-Age Collector is putting his collection to bed now. Silver-Age is riding high because Silver-Age youth are now deeply entrenched in the job market, and especially with all the new technology jobs have enormous disposable incomes - Bronze-Age will see its day 10-20 years from now. To many Silver-Age Collectors, a Golden-Age Batman looks like a dinosaur, and perhaps 15 years from now a Bronze-Age enthusiast might feel the same about early ASM.

 

This is all predictable, and I doubt few people would disagree that this is one predictable trend, based on history to date. However the two variables which have put the cog in the wheel are the internet (primarily Ebay) and CGC. The hobby is growing through Ebay's billion users, at a rate the industry has never before seen. It also allows people a wider scope for acquisition than we have ever seen. The types of collectors are changing - and the investor to collector ratio is higher than it has ever been, and still growing. Prior to the internet and the wealth of information now available to everyone, Heritage Auctions would never have achieved such instant success - Nor would have CGC.

 

As far as the art analogy goes, I don't think any rational person would ever say that a Whistler drawing is of similar quality to a comic book - But what determines value is the number of people who are looking for each and the frequency in which they have a chance to buy them. If you want to pay a competitive price I could find you a Whistler drawing without a shadow of a doubt - In fact probably a number of them to choose from - But ask me to find you an Amazing Fantasy 15 above 9.4, and I would know where to start looking, but I couldn't guarantee I'd ever find one for sale

[comicinvestor-migration]

The types of collectors are changing - and the investor to collector ratio is higher than it has ever been, and still growing.

 

That's the crux of the problem, as any type of investor expects a return, though as long as they live in a fantasy world of selling their CGC 9.6 comics (that they bought for 10-20X Guide) for a profit, the world keeps spinning, and the sellers keep raking in the dough.

 

What has caused every single comic market collapse has been a rapid influx of moronic investos (being fed a line of bull from those who stand to gain financially from their interest) buying everything in sight, then a continued buying pattern, followed by a somewhat soft market.

 

Then some of these bozos get a clue and actually test the market for their investment books, take a bath on the transaction, then get scared and flood the market with their . It's the same story in any crash, and prolonging the cash influx is inherent on these investors holding their books and not selling.

 

This may work for collectors, but to a group of investors up to their necks in CGC books, a return is expected someday. These "funny books" mean nothing to them but a big profit down the road. When that day comes, and the selling commences, all hell breaks loose.

 

To frame the question differently, name me one collectibles "investment craze" that has any long-term effect or a serious 10-year, consistent return on investment. Only the true collector with knowledge, experience and smarts can hope to really invest in collectibles, and the rest are simply cash cows to be milked as long as possible.