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Sunday, November 9, 2014

The 90s Comic Crash and the Future of Investing in Comics!


I keep hearing about it and you probably have to. Some out there are expecting another comic crash just like in the 90s. Some you hear it from are by those who are basically just pissed off cause a lot of comics they want are way too expensive, and some you hear it from are basing it off the what goes up must come down theory.

We have only had one major comic crash, and that was the 90s crash. In order to rationalize a future comic crash, we have to look at what really caused that crash. As always, I'm going to give my take on the reason of the 90s crash.

Now, if you ask some people, they will say it was because of the comic publishers over-printing the market. There's some truth to that, but why were the comic publishers over-printing the market to begin with?

Some history first: The Overstreet Price Guide first began publishing in 1970. It was a saddle-stitched book of about 218 pages and had a print-run of 1000 with a 2nd print run of 800.

One thing it did not have was national distribution. That came in 1976. It wasn't until the mid 80s, however, when the knowledge comics could be extremely valuable entered the collecting world on a big scale. By the 90s, this permeated most of the comic collecting culture and hasn't gone away since.

This gave rise to the Speculator Boom. The 90s Speculators had it in their minds that comics would one day be valuable, so they came in droves to lay their money down on comic investments. The only thing was that they were investing on new, fresh off the rack comics with no clue to why comics were inherently valuable in the first place.

If you grew up during this time, you remember. 90s Comic Speculators were buying up multiple copies of #1 issues and hoarding them, thus making the comic publishers think that there were actually more readers in the market at first. This made the comic publishers over-print the actual market.

After a while, the comic publishers knew that speculators were causing the increase in demand, but greed took over so they still over-printed the actual market. Many think this is the main reason that caused the big 90s comic crash, but I say nay.

If you grew up during this time like I did, you'd remember quite a few differences between then and the market today. Just to give you a hint, eBay didn't hit the market until 1995! Another hint is that a majority of the households in the U.S. didn't have internet by that time.

Back in the late 80s and early 90s, the center of your comic collecting universe was your local comic shop. This was one of the only places to really buy comics at the time. Also, and a huge important factor, this was also the major place to sell your comics as well. Sure comic cons were around at the time, but not that many knew of them like they do today nor were they as big as they are today.

Everyone reading my site should know that comic dealers pay you well lower than guide value. I'm actually really, really being super nice when I say 30% of a comic's grade value. They usually pay out much lower and further suppress what they're really worth.

So, now you have a bunch of speculators with a bunch of comics. The first problem is what they could've controlled, and that's they wasted their time hoarding new, fresh off the rack comics. The second problem which they had no control over is that they had no place else to sell them besides their local comic shop.

Now, aside from new comics which have proven to be a waste even with eBay around, let's look at the back issues market back then. If you had some pretty valuable Silver Age comics, there was no eBay to connect you to other collectors. Nope, chances are you had to sell to a comic dealer.


Let's look at the back issues market then since comic dealers dominated it during the era. So, not only did they sell you new comics, they also sold you old back issue comics. Where did these back issues come from?

You, me, and others like us! How much did they pay for them? Pennies on the dollar. Your $100 comic was bought for $30 if you were lucky to get 30% of guide, Then they were re-sold at 80 to 90% of it's graded value.

However, dealers could very well undermine the grade of your comic as well, further suppressing what you'll get for them. No third party grading services back then either.

So they got your Silver Age or Bronze Age and newer Copper Age comics for super cheap, and you walked away with next to nothing back then. So during this time, the only two entities making any money off comics were the comic publishers and the comic dealers.

Here's where both of these two groups screwed themselves and didn't give it a second thought until it was too late. Speculators during the 90s drove the market then. Even more comic shops were opening up at the time too. During the Speculator Boom, I had three comic shops all about 15 minutes away from me.

However, when nobody else was making money besides the comic dealers and comic publishers, you can guess what happened. The speculators said, "The hell with this!"

They pulled out of the market, and whom can really blame them? When that happened, comic shops started closing in droves and even regular comic collectors were affected. No comic shops, no where to buy comics. Marvel Comics also filed for bankruptcy in the later 90s as a result.

This all happened. No work of fiction. Speculators pulled out of the market and dumped their comics back into the market while comic dealers, all happy and unknowing, kept ordering boat loads of new issues expecting them to come in and buy multiple copies. They also had repurchased a lot of comics for cheap, but had little people to sell them to. Crash!

Now let's look at the market now. Why is there another big boom in comic investing? Sure, movies and television has something to do with it, but it's not the real reason.

The real reason is that the average comic collector can now make money! Regular people, not just dealers, are making money from it. Reasons why?

A bigger market place outside of just comic dealers or your local comic shop to suppress what's paid for them. Now, you can connect with other collectors around the nation or world and sell to them at places like ComicLink and eBay and get close to 100% of guide or even more with high grade CGC copies.


No more undermining your comics, and no more only having to sell your comics for 30% and under your comic's graded value. eBay and CGC, PGX, CBCS put the power of buying and selling in the general populations' hands, not just the few comic dealers.

Not to say that your local comic shop back in the 90s was making money hand over fist either. No, their market was pretty regulated to just local buyers as well. However, they did come out on top a lot more over the average collector or speculator during the time until eBay popped on the scene and helped to further push many of their demises during the later parts of the 90s crash.

If people are making money from investing in comics, they're gonna buy and invest. If not, they're gonna pull out like the 90s speculators did. Nobody would invest in stocks if they weren't making money from them. Not rocket science there.

This brings me to the future of investing in comics. Just because dealers don't dominate the selling and buying of the back issues market anymore and the market is more open for us to reach out to other collectors or investors doesn't mean we don't have problems in the system today.


If you look at the market now, especially on eBay, some of the prices are skyrocketing so fast, it might make you puke up your lunch. Some comic sells for $600 by some fluke and you'll see new listings soon after placing the comic at $650, $700, $750, $900 like there were only 10 copies in existence for that key. Then an auction will pop up and will most likely sell for it's average value or a little higher or lower.

If it's natural demand, meaning there's more actual buyers wanting a specific key than there are copies in the market or in existence, then it's all good. It's not all good when the prices are artificially inflated by some sellers.

Many of the major Golden Age keys have out-priced most comic collectors long before this era of the comic movie hyped them up. It's called demand and rarity. That's just the way it goes in the back issues market. It will be the same way for many major Silver Age and Bronze Age keys as well. As time goes on, this is just what happens.

Nothing to get pissed about, but I do have to admit that comics have never seen such dramatic value increases so fast as today. With the older comics, it took a good long marinating before they got out of reach for most collectors back in the day.

I'm not entirely against greed. Who doesn't want a little more, right? Excessive greed I do see as a problem. Just because one copy of a comic sells at $600 dollars doesn't mean it's the average value for that key issue at that grade, but too many are buying into this, causing many comics to over-bloat too fast.

Some might think this a good thing, and can you blame them? We are finally able to make money off our comic investments! However, when prices get out of reach for the average buyer too quickly, it could be a problem.

Remember, it's not the Eminems or the Nick Cages or Gene Simmons keeping the back issues market chugging along. They already have a huge and impressive collection of comics sitting in their vaults already. It's the average buyers like you and me who do.

When most of the average comic investors or collectors can no longer even afford most comic investments this may lead to what's called out-pricing the consumer, and the best example I can give of that is the very first Macintosh computer by Apple. They out-priced the consumer so most consumers went and bought IBMs. Apple lost a huge amount of money on the first Macintosh back in the day.

Sure, there is the Trickle Down Effect, and many more will start to have to look into lower grade copies eventually or give more importance to 2nd, 3rd, 4rth and 5th appearances of major characters. That's a normal progression also by the way, but in the past, it was never sped up to the degree it is now.

Movies can boost the demand for comics that were once over-looked and not all that cared about. There's nothing wrong with that. Demand is demand, but let's be truthful here. Comic book movies can only last so long. There will be a time when people tire of comic book movies and they'll fade out for a period of time. Who really knows when that will be though? Box office earnings actually show the contrary.


The real skinny is as long as people are able to invest and make money in comic investing, they'll continue to do so. First it was Golden Age, then Silver Age, then Bronze Age, and then after that, more will turn to Copper Age and after that Modern Age and whatever comes after that.

In this day and age, both comic dealers and regular comic collectors are able to make money with comic investments. People will only pull out of investing in comics when it stops becoming profitable like with the 90s crash.

When the hype of comic book movies fade, comic investments will have to rely on natural demand like the old days. Nothing wrong with that or to get scared about either. I bet there will be a resurgence in comic book movies sometime down the road after as well.

I think most of the those who are talking about a comic crash are mainly pissed cause so many issues they want have become quickly out of reach. I can understand their view as well. It does suck, but that's just how it goes.

However, if the majority becomes frustrated enough for that very reason and they dump their comics in the market and pull out of comic investing or speculating altogether around the same time or within the same year or two, you just may see another comic crash.

There are other factors of the 90s crash for sure, but I think the core reason is what I've outlined in this post. You may not agree with it entirely, and that's cool. I'm not here to convince anyone of that, but if you look at the past market compared to the market today, you will see there is a connection to what I'm saying.




9 comments:

  1. You're right on the nose here. I think the bubble will burst sometime in the near future. Between Marvel, DC, and Image we have nearly 10 prime time TV shows (with more in the works!), several animated shows, and about 6 major films yearly. It's undeniable that entertainment industry has expanded the consumer base of the source material but I can easily see the general public tiring of super hero stories which will with no doubt shrink the number of consumers. This will also affect the number of new issues sold causing retailers hardships. I already said my piece on the way the distributors move product with enticing variants but make no mistake the current state of the market is primed for a crash.

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  2. We are just a few years into a comic boom (not bubble) . It 's a level playing field
    and everyone has equal chance to make money with comic investing.
    The problem with the 90s was that every guy was buying up every NEW comic
    as if was gold with no knowledge of rarity or demand. If you bought into the whole
    5 variants and glossy holographic covers, then you had it coming.
    BUT, if you had purchased Amazing Fantasy 15 (fine) in 1995 for 2k, you would
    now be a very happy camper! I recently attended the Albany Comicon
    and people were lined up from 8am-1pm just to get in! It was insane!
    The rest of the world is just starting to catch on so hang on tight...it 's
    gonna be a crazy ride!!!! L K

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    1. I'm more in agreement with LK on this matter. There are problems for sure with the market, and I agree with Jessie that new comics and those speculating in them and all the variant crapola will be affected a lot more harsher. Retailers may get bitten as well, but things will bounce back again.

      I don't think the crash, if there will be one, will be any thing as hard as the 90s crash. LK has it right, those who were buying up important keys, especially in high grades are definitely seeing the benefits from this current comic boom.

      It was that way at the Wizard World Con in Sacramento too LK. Line wrapped around the building. It was insane and AWESOME! Tons of people there - men, women, kids. I'm seeing a much more diverse group at comic cons now, especially a lot more ladies and teens and little ones.

      It will be a crazy ride for sure!

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  3. I personaly don't think it will bust it will slow turn a tad. but say 20 years time you will have a whole lot of new collectors buying up are investments/ collections. look what superman and batman films did for comics in the 20th. look how pricey batman keys are??

    Just think what the 21st will do for comic's full stop. our target market?? are these kids lapping up these films.

    Just think why and how you got into comics?? it's probaly due to film or televison right?? It's just history repeating itself

    j

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    1. I agree with this also. If it bursts, you may see it more with new comics and the variant market. I do see prices dropping for these over-printed comics that have gotten ridiculous boosts lately like New Mutants #98 and Amazing Spider-Man #300 when comic movies slow down.

      A lot of people on here agree that they wouldn't pay a grand for those issues. Bubbles may pop for certain books out there for a while, but not for other books. All those looking for sleepers just may get bitten in the butt also. X-Force #2 I think will take a dip if any of this happens.

      I do agree that it will rebound again. All the comics I've listed in the Values section have just done nothing but go up throughout the decades, even after the 90s crash, which is why I have the Values section on TCM to illustrate that little nugget of fact.

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  4. Great article! It is weird - I am 40 so to me, the "super valuable" comics are things like Amazing Spider-man #121 and #129. I recently bought Secret Wars #8 and Amazing Spider-man #252 because these are affordable but also "collector's items" for people my age. I think that for regular schmoes like me, many people want to buy something in the $100-200 range, and if it gets too expensive, they will look for something else in the $100-200 range (as opposed to saving for 5 years to buy a $4,000 book).

    It's tough to tell because there are so many collectors and so many different RANGES of collectors—take Green Lanter #76 for example. A NM+ 9.6 or 9.8 could be $12,000 for example. If it falls to $9,000, there are a lot of people who are not going to suddenly snatch it up. They aren't even looking in that range.

    I fear that Amazing Spider-man #121, 122 and 129 will have topped out—they are all in the $1,000 range and will just sit like that for the next 20 years. I hope I am wrong, but I wonder if the average person will just not even go after a book like that anymore. - Wiebes

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    1. Heya Wiebes. I hear what you're saying and I suppose it's an individual thing. Some prefer the range you're suggesting and some go a little higher and then there's a few with mad money who will pay 3.2 million for an Action #1 CGC 9.0.

      I'm not so sure about the Amazing Spider-Mans you pointed out. They are still rising in high grades. #121 is getting close to the $3000 mark. Wow!

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  5. Hey there TCM, I have a quick question, I collect G.A. & S.A. what grades would you recommend collecting? for ea era? thank you sir.

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    1. Depends on the actual key issue. Something like Brave and the Bold #28 or Showcase #4? Those at low grade 2.0s are fine. AF #15? Low grade is fine as well.

      The only eras I have concerns about are most Marvel and DC Bronze Age, Copper Age, and Moderns. Those I would get as high as possible as your budget allows. Copper Age and most Moderns, I wouldn't get anything below a 9.6.

      When you speak of Golden Age and Silver Age, it really depends on key issue significance, but I try to get the highest grade my budget allows me to.

      I usually don't like anything below a VG for most G.A. or S.A. keys unless it's a major one of course.

      I don't really have a set grade standard when it comes to those two eras. I usually try to find over-looked keys in the Golden Age like Flash Comics #24 for a steal, which I did, and got it at CGC 7.0 for quite a bit under guide value.

      Or, like a Brave and the Bold #54 GC 7.0 which I got a great deal on...$75 bucks off during the silly season. So, it's really what deals I can find as opposed to actual grade.

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