When will the comic book bubble burst?
The world of collectibles has seen an unimaginable amount of growth in the past year. From video games, to sports cards, to non-sports cards, to sports memorabilia, sales and prices have been off the charts. Comic books have been no exception! In fact, while we have started to see some collectibles begin to cool off (Marvel Universe Series 1 trading cards from Impel - sealed boxes were going for over $3K in February, now can be had for a measly $1,000 on ebay), most blue chip comics continue to grow in value week over week.
Let's look at an example:
Daredevil #1, which happens to be one of the fastest growing key issues in the world right now, is breaking records in almost every grade. This happens to be the 1st Appearance of Matt Murdock as Daredevil. For this example, we will focus on a CGC 7.0 grade (see chart below - compliments of GPAnalysis). In early January of 2021, a 7.0 sold for $5,050. Two weeks later, on January 18, another sold for $6,544. Nine days later...$8,506. That's a growth of almost 70% just within the first month of the year. But it doesn't end there! Fast forward to March 13, and we see a sale of $10,313. And finally, two weeks later, another record-smashing sale of.....$16,200. So, during the first three months of 2021, Daredevil #1 CGC 7.0 value has skyrocketed by over $300%.
Want another example??? Let's looks at Fantastic Four #5, the 1st Appearance of Doctor Doom! This time we will focus on a CGC 7.5 grade. The results are no less spectacular. The first sale on January 8 was for $17,230, followed by another sale one week later for $20,400, and finally the most recent sale (as of the writing of this blog) on March 26 for $28,500. Considering the last sale in 2020 was $8,598, that's an increase of over 230% in the past year.
So, you may be asking yourself...why is this happening? Well, there are many theories floating around, but most revolve around the following concepts:
The US Government continues to give away free money. Strange this keeps happening when you can find "Now Hiring" signs on so many local businesses. Why does nobody want these jobs? Hmmmmm....
With COVID restrictions still in place in many states, keeping people at home, many are bored and finding other ways to spend their money
Interest rates have dropped dramatically, causing investors to seek other means to make money. As we just saw, the growth in comics is providing a ridiculous return on investment...much better than the 0.05% interest rate on your savings account!
With all this money being thrown at buying and selling comic books, we all are wondering the same thing...."When will it end?". I don't think there is a simple answer to this, and while I don't believe there's anyone on this planet who truly knows the answer, here are my thoughts on what we can expect to see.
First, let's look at the sales of some major online auction houses for collectibles over the past five years (2015 through 2019). The data in the chart below was supplied from the Hiscox 2020 online trade report and includes comics, art, cards, action figures, games, and "other" collectibles. As you can see, even without including the "COVID factor" of 2020, every year since 2015 has shown a significant increase in online sales of collectibles. I think this is a good sign that even when things get back to "normal", we can continue to expect steady growth in the coming years.
People throw out the term "market correction" often, and to be quite honest, it's probably way overused. What is a market correction anyway? According to Schwab, a market correction is a market decline of at least 10% but no more than 20%. A decline of more than 20% is considered a bare market. When was the last time we saw a 10% to 20% decline in the comic book market. There are definitely certain books that have shown decline from one year to the next (after a movie has come and gone...like Marvel Super-Heroes #13), but I challenge anyone to come up with any blue chip examples that have gone through a market correction in the past decade. I think the answer will be...there are none. The major keys have steadily grown in value since CGC was introduced 20 years ago, and there's no reason to believe they won't keep growing. In fact, Schwab states that 2020 and 2007 were the last two times we saw a bare market for stocks (>20% decline), and both of those years still saw blue chip comic books grow in value. I don't think this was accidental. The comic book market seems to always weather the toughest of storms. COVID is just becoming another one of it's many defeated opponents.
All this being said, just like the past year, where we've seen collectibles rise in value more than we ever have in the past, it's always possible something else unpredictable will happen when the hype is over.
So, before you invest too heavily in comic books, maybe the best course of action is to ensure you're able to hold onto those books, in case we do see some kind of a market correction. As most collectors will tell you...don't put yourself in a situation where you NEED to sell. If that happens, you won't have that investment down the road when the books start rising again in value. And mark my words, they will rise in value.
Hopefully you enjoyed this little article. It's really just one person's opinion on what the future holds for this wonderful hobby. Feel free to comment or send me a message if you'd like to chat more about this.
Until then....enjoy the ride!!!