Investor, Speculator or Gambler?

Are you buying comic books focused on the possible financial returns they may bring?

If so, do you consider yourself an investor, speculator or are you just gambling? Do you know the difference?

In over thirty years in the hobby unfortunately I would say many people are gamblers. Why? Let’s define each term and their behaviors so you can see where you fit in.

What’s an Investor?

Investors expect a certain degree of safety and a return on their capital, many times as dividends, interest or rent. A problem with comic books is there is no cash flow – no dividends or interest. At best you are hoping your comic will keep value relative to inflation, and hopefully increase in price. Your degree of safety can be gained best by researching past and current selling prices for a specific issue and even then, past performance is no guarantee of future results.

What’s a Speculator?

Speculators spend (or part) with their capital with an expectation of capital appreciation. Quite simply, they expect to be paid in return more than they put in. A very simple example of this would be buying for resale. A speculator doesn’t expect interest payments or dividends, their holding time is too short.

What’s a Gambler?

Gambler’s are looking primarily for entertainment. The thrill of the game is what makes them happy. Many times gamblers have no plan to speak of, they just enjoy playing the game.

So why do I call most comic book “investors” gamblers? Because they have no real plan and are in denial that they enjoy the “game” of potential returns in comic books. They buy books based on hunches that they will go up in price. Without solid research and planning this is a fools game. You are rolling the dice.

The Best an “Investor” Can Do

Since comic books pay no interest, dividends or rent, technically “investors” are speculators. But, there are two things you can do to help the situation – do your research and have a plan. Do you know the price history of the comic you are purchasing? How much do you hope to gain? Do you have an exit point for both positive and negative gains? Answering these questions and having solid responses will increase your chance for success. At the very least you can help limit your downside.

Should You Still Submit Books to CGC?

The CGC ad in the most recent Comic Buyer’s Guide really caught my attention. The typical CGC ad shows a raw or ungraded comic book and the seller’s description compared to a CGC graded comic book. Both prices are shown and inevitably the CGC graded comic sells for far more. What caught my attention in this ad was how close in price two of the comics were.

The ad features an Avengers #4 (described Fine vs. CGC 7.0). The difference in price was $995 raw vs. $1,311 for the CGC 7.0. Pretty straight forward. The modern comic in the ad was a Lady Mechanika #1 described Near Mint vs. a CGC 9.8. The prices? $7.99 compared to $37.00 CGC.

But all is not as it seems. Let’s look at the math:

CGC Modern grading fee: $17
Postage (both ways): approx. $10.00 (postage is no longer trivial, especially if dealing with one issue).
Cover Price of a Lady Mechanika $2.99

Grand Total: 29.99
Profit for a CGC comic: approx. $7.01 (not including selling fees).
Profit for a “raw” comic: $5.00

This doesn’t include the risk you take sending a comic to CGC that may come back less than a 9.8.

What can you take away from this?

First, make sure you do the math on your comic with submission fees and postage. Include selling fees if you are flipping the comic.

Second, I highly recommend GPAnalysis if you play this game so you have some concrete sales to compare.

Third, be very sure you know how to grade accurately. CGC doesn’t reveal their standards so you could end up submitting a book and it could come back lower than 9.8. You’d take a bath on the comic in that case. You probably want to ship several modern books at once so you can save on shipping and also use the prescreen service at CGC so you don’t full price to get a lower grade book back.

X-men First Class Trailer

A new X-men First Class trailer has been released. Make sure to check out the copies of the X-men First Class #1 comic for sale below the video and keep track of sales prices.

X-men First Class #1 For Sale