Successful investors see opportunities that others fail to notice. Investors want deals. Their goal is to minimize their costs to increase their Return on Investment. One way that you can minimize your costs is by buying lower grade, undervalued books. The key for a buyer is knowing what would make a lower-grade book desirable to collectors and other investors. Let’s dive into some comic book investing basics!
I. Older Mega Keys
If you are looking to buy lower-grade books, I would advise you to start with comic book investing basics. Buying “Mega Keys” is one way to go. These books will always draw collectors’ and investors’ interest. Mega Keys may include such books as Avengers #4, Batman #181, and Amazing Spider-Man #14. Your ROI may be smaller, but you will reduce the risk of seeing the book lose value. The key thing is not to look for the next great speculation book. You are looking for blue chip books with a long and proven track history. There are two types of books you can look for with mega keys.
1. The Fixer Upper
Every person wants to own that million-dollar perfect house on the lake. The problem is that most buyers’ budgets will prevent them from paying top dollar for a book with the expectation to turn a profit. In real estate, investors buy fixer-upper homes or lots with the expectation to improve the house or property to see a modest ROI. There is a risk, but there also can be a reward. This process also applies to comic book mega keys.
You can find raw comic book mega keys every day online. These books have some risks. Buyers must factor in a book being not graded into their cost analysis. This will allow some wiggle room if the book does not grade as high as you thought it would. In addition, buyers should be looking for books with slight imperfections that can be improved with a proper cleaning and pressing. This is one way to keep your costs down in hopes of seeing future comic book investing profit.
Real estate buyers want to own the house in the best neighborhood they can afford. It amazes me how a high sale of the best home in the neighborhood can impact the worst home down the street over time. The FMV for these houses usually goes up with the sales of the other homes in the neighborhood. This same observation can be seen in the comic book investing marketplace.
Hulk #181 is a perfect example to observe this theory in the real world. On July 5, 2013, the GoCollect Analyzer indicates that a 2.5 copy was sold on eBay for $375 in an auction with 22 bids. Fast forward to April 3, 2021, where 56 bids were received for a 2.5 copy that sold for $2,950. As the price for better-condition books rose, these lower grade books became more desirable. That is because they wanted the first appearance of Wolverine and would settle on the best book they could afford.
II. The Rising Star
Books that start to rise in price rapidly draw most investors to the highest grade book they can afford. The problem is that many investors have expenses such as a mortgage, children, college, spouses, credit card debts, and other bills that limit what they can invest in a comic book. These hobbyists must aim lower in their purchases. That does not make this a bad choice. In fact, sometimes it may be the best choice if the timing is right.
I reviewed Ultimate Fallout #4 to see if a current book with a lot of high-grade copies in the CGC census would have investment potential in lower-grade books. Using the GoCollect DIVE DEEPER search function, I set the date parameters as 9/30/11 to 8/4/21. I was shocked to find that the books with the best trending numbers were the 8.0 (+476.9%) and 8.5 (+391.5%) when compared to the 9.8 (+256.7%).
Once a book has its high-grade top out in value, the lower grade books become more desirable to collectors. These books may not have had the sales volume as the higher grade books but there is a market for these books. This is something you may want to remember!
III. Long Term and Different Grades
The one caveat with buying lower-grade books is that you may be required to hold these books for a longer period of time. The reason for this is that you are buying them cheap and wanting to sell them for a marked increase. In addition, different grades for different books may be the ones that are currently undervalued and in need of price adjustments. That means that for one issue you may be looking for 8.0 copies and for others you are looking for 6.5. Only the data knows. I try to track the sales and see books that seem to be lagging in price. Those are the books that you may want to target.
I want to stress something to the GoCollect Readers. Each of you should review more than the sales price of the books in lower grade conditions. You need to also review the type of the sale; was a reduced offer accepted; the number of bids or bidders; and where was the book sold? All these factors may impact the best lower-grade book to purchase. This is true with all books….
IV. The Exception
There is always an exception to the rule. The exception to the ‘investing in lower grade books for profit’ rule is that this does not always apply to Golden Age books. The reason is that these books are so rare and come to auction so infrequently that most books are considered to collectors as “High Grade”. If you do not believe me you probably have not bought many Golden Age books.
I have chased Golden Age books for years. There are many books that I have seen come up for auction very rarely. Many Golden Age investors and collectors have seen books maybe once in their lifetime come to auction. When these books do come up for sale, bidders bid on them as if they were the last comic book in the world. Even if you see a book come to auction several times, people bid on them as if they are there for the first time. The reason for this is that some of these books are so rare that a 1.5 may be the highest condition book you will ever see come up for sale and the demand for these books will be intense.
V. The GoCollect Trick
I use the DIVE DEEPER function on many comic books that rise in value quickly. These books could be rising in value because of movie news or because of a major comic event. I set the parameters of my search to the date of the event and try to see what the most recent sales of the book are to determine if a pattern is present.
Many times you can see books that are rising in value so quickly that it might be wise to stay clear of these books. Instead, you may see lower grade books of that same issue that are not drawing interest right now. The potential is that they will be drawing interest in the future as the price of higher-grade books increases. These $100 books may rise in value in the future to make you some money. If they do not, then at least you limited your risk exposure.
Books of any condition may be worthy of your investment dollars. The key to achieving a good ROI is if you sell it for a good price while keeping your costs down. The first thing you must do is study. Books that are primed for a rise in value will be revealed in your data analysis. The key is looking at the right books with the proper grade and selling them at the proper time. This may sound confusing, but once you see the data and review the trends it will be much easier for you.
Best wishes as you play the comic book investing game! Let us know your own advice in the comments!