Investing Terms Every Comic Book Buyer & Seller Should Know

by Joseph Overaitis

041123D2-1024x536 Investing Terms Every Comic Book Buyer & Seller Should KnowIf a person buys comic books, they are an investor.  Collectors might think they are not investors, but one day either they or someone they know will have to sell their books. Comic book collecting can be for fun AND profit.  That is the reason comic books are considered by financial planners as alternative investments.

Alternative investments are commonly defined as investments that are not cash, bonds, or stocks.  Defining the purchasing and selling of comic books as an alternative investment should make one realize that there are, in fact, other investment terms that also should be applied to the hobby.  Being able to understand these terms and how they are applied makes it easier to succeed in the comic book marketplace.

Commonly Confused

The following terms are constantly used by hobbyists and are often misapplied to individuals or events. These errors could drastically impact one’s success in buying or selling books.

1. Investor

Investors want to see a return on their purchases with relatively little to moderate risk.  Investors use research to eliminate as much risk as possible.  The more they can control or understand, the less the risk.  If there is risk, the investors want to spread it out to avoid disaster. They plan on holding the asset for at least a year to see a good return.  Finally, investors accept that smaller returns will be the result of their risk avoidance strategy.

Comic Book Implications

Investors buy a comic book first appearance AFTER a film is announced.  The timing eliminates risk.  Most investors plan on getting in on the ground floor at a good price and hold until the second demand cycle when a movie trailer is dropped. Investors use their knowledge of both comics and research to make sound decisions. The more information unearthed that impacts the comic book market, the better equipped the investor will be to avoid risk.

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2. Speculators

Speculators use their research to predict possible outcomes.  They are not gamblers.  Speculators use as much information as possible to anticipate future market swings. These individuals do not want to get in when others are already driving up prices. The higher the risk, the greater the reward.

An ideal transaction is one where a speculator can get in and out quickly while realizing a profit.  Long-term soundness is not their primary concern. The key to identifying a speculative purchase is buying a book on a hunch and hoping for certain actions to make the purchase successful. Speculators are prepared to risk it all to obtain a record-breaking payday.

Comic Book Implications

People purchased Nova #1 before the first Guardians of the Galaxy was announced.  These individuals looked for any cheap cosmic first appearances they could find that MIGHT appear in a future MCU property. They were not speculating on confirmed knowledge (investing), but rather on hunches.  Speculation is more easily identified in buyers of variants who purchase several releases each week in hopes a few pay off.  These books have no proven track records.  Instead, the speculator’s purchases are based on past successes and then extrapolated to current releases.

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Many investors would be happy with a Nova #1 purchase pre-GOTG that never materialized for speculators.  If these books were purchased by investors, they could be held for the long term because of the low-cost risk associated with the purchase. As a result, a purchase of the same book but for different reasons defines if one’s actions are from a speculator or investor perspective. The key is to determine the risk assessment by each buyer.

3. Volatility

The rapid value movement upward or downward is said to be indicative of a volatile investment.  A stable market is constantly correcting itself in small increments of time. F.O.M.O. of what could happen eliminates any thorough assessment of the facts.   As a result, wide price corrections are made based on rushed value assessments.

Some investors sell out of fear of losing more while others overpay buy because of a perceived limited opportunity for a windfall.  A proper asset evaluation must find the reason behind the volatility. The high volatility of a single investment in a stable market should be a warning sign.

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Comic Book Implications

GoCollect regularly reports on books that are moving in the comic book marketplace.  On March 31, Marvel Premiere #1 was one of the most volatile books in the market.  It moved up 43 spots (position #34) in the Bronze Age for the past 30 days.  That may make people think that the book is in play and should be purchased for a premium.

A 9.6 book lost $700 in value in roughly 30 days. The 9.4 books lost roughly $1000 from 1/3 to 3/20. Grades 8.5 and 8.0 were also seeing high losses. The other grades were not as volatile.  The market had this book as a mover but the reason for that volatility was not a good one. Do not mistake volatility as a guarantee, but rather a reason for further investigation.

Need to Know

Every comic book buyer and seller should know these terms. Not knowing them can drastically improve a hobbyist’s ability to navigate the marketplace.

4. Blue Chip Investments

These are investments that are well-known among market participants.   They generally perform well over long periods of time and thus can withstand the ups and downs of the market. Investments of this type generally see less volatility than other investments.  As a result, these types of investments usually sell at a premium.  The reason is because of the reasonable certainty they bring to hold their value. Investors look at these books as a hedge against risk.

Comic Book Implications

The age of the comic book does not impact its ability to be a blue chip comic book.  Marvel Super-Heroes Secret Wars #8 was only released in 1984 but it has withstood the test of time.  The problem is it is hard to identify all blue chip comics on sight unless one does their homework.

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Crime Patrol #15 is a blue chip comic that has long been sought after by comic book investors.  Most investors do not realize “why” this book is a blue chipper.   EC Comics are always desirable but that is not the reason this book is a blue chipper.   Be honest,  how many people reading this article did not know why this book is a blue chipper? The reason is that it has the first appearance of the Crypt Keeper!

5. Penny Stocks

Penny stocks have lower sales volumes than typical stocks.  These stocks also have higher periods of volatility. The risk of reward/loss is great with these stocks while the opportunities to cash out when you want are rather small. The lack of sales volume and regulation makes these more prone to scams and manipulation. That does not mean penny stocks cannot produce. Apple Inc, Ford Motor Company, and the chip maker Advanced Micro Devices (AMD) are all companies worth billions whose stocks were once classified as penny stocks.

Comic Book Implications

One tends to think that there are no “penny stocks” in the comic book marketplace. A quick review of auction listings reveals bulk lots, the penny stocks in the comic book marketplace.  These lots are not itemized nor are there many pictures that one can identify individual books.

These types of listings can be indicative of an auction house unfamiliar with comics.  This could lead to a jackpot. This type of listing can also be the auction house trying to play to the bidder’s love of high-risk-reward purchases.  Both outcomes are like investing in penny stocks; highly risky but with the potential to produce significant returns.

Different Investment Strategies

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Investors and collectors should have a strategy to buy and sell books. Different strategies provide different benefits. Knowing which one is best is dependent on the needs of the investor collector.

6. Buy and Hold Investing

The Warren Buffet mode of investing.  This is a  strategy of buying investments and then holding them for long periods of time.  Market fluctuations and volatility are thus minimized over the long haul.  This type of investing also allows individuals to buy when others are selling.  When some panic then the buy-and-hold investors purchase these distressed assets for the long-term opportunities they present.  Investors thus buy low and wait for the market to re-correct the asset to the proper evaluation.

Comic Book Implications

Collectors and investors fit into this investing strategy even when they do not know it.  Collectors may buy books that are inexpensive and then keep them for long periods of time only to see these books appreciate in value. True investors also participate in this form of investing.

Books are purchased with the understanding that these books will see small appreciations in value that will offset ownership costs.  Panic sellers provide opportunities to purchase books once out of the reach of investors at discounted prices. These books are then held for the long term.

7. Dollar Cost Averaging

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This type of investing is where someone spends a regular sum during regular intervals of time.  In this way, the risk of buying at a negative time is minimized.  Buying at a bad time or good time is thus averaged over these intervals. This is similar to the “Buy and Hold” method but strict budgetary allocations are established to limit risks even further.

Comic Book Implications

Many comic book investors and collectors who spend on a budget participate in this form of investing.  Rather than buying a large group of books that may drop in price, only a few books can be purchased at one time.  This allows for re-assessing prices and interest in books.  A collector looking at a run of Amazing Spider-Mans may then alter their buying strategy on the fly.  Books that were once out of reach now could now be targeted while those books that are more affordable can be put on the back burner.

8. Value Investing

People are always looking for a deal.  Value investors are always on the hunt for undervalued and “buying on the dip” opportunities. They use their knowledge to find those investments that, for one reason or another, are not correctly valued – even if it does not their core investment target. The value of items sometimes has a humanistic element to them that breeds irrationality. These investors are looking for items that should be valued more but, for some reason, are not selling for their worth.  Long-term investors are ideal for this type of investment strategy.

Comic Book Implications

What once was hot, soon is not. Buyers who went all-in on books soon are dumping them to recoup their perceived losses. The value they see in those books is now gone and this shortsightedness provides opportunities for others. DC Super Stars #17 is one of two books that has the first appearance of The Huntress.

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This book was in great demand when the Birds of Prey film was announced. Now, it is not because of the film’s box office and critical failure.  The character’s pedigree as a Batman family character as well as the potential for future movie/television treatments are all but ignored.  Value investors love this type of book, even if they are not Batman or first-appearance investors.

9. Diversification

The do-not-put-your-eggs-in-one-basket type of investing strategy. This investment strategy limits exposure in the event that one of the investments depreciates in value. The key is to make sure that the items are diverse enough to not be subject to the same market influences.


The failure to not diversify one’s comics usually goes with those that identify as a collector.   The problem is collectors never realize that they can still diversify their collections, even if just a little to add a little protection. Buying what one likes is ok, but that does not mean a collection should be so narrow in focus. Remember that there will come a time when a collection will be sold and it might be nice to protect the value of those items.  A well-diversified collection spreads out the risk to avoid every book dropping in value.

Most Important Definition

This is a definition everyone should know.  The problem is that if not applied correctly it could prevent a problem for any investor.  This is the greatest tool and was meant to be a safety net, but so many misapply the concept that it creates a roadmap for failure.

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10. Financial Reserve

Funds that are set aside to be spent for future financial obligations. The funds are either cash or can be easily liquidated to meet the needs of the investor. Liquidity is necessary because they cover obligations that are unplanned.  Many consider this to be a rainy day fund that only should be used when absolutely necessary. The funds are never meant to be spent for routine purchases or obligations.

Comic book Implications

Purchases should be planned as best as possible.  Reserve funds should be used only for comic book opportunities that are very rare.  Opportunities like those only come around once in a while, so if missed the chance to purchase the books will not present themselves again. The problem is that many use financial reserve funds too many times to be justified as “rare”.  Using reserves too often will defeat the purpose for which the funds were intended.  They could also not be assessable if an even better opportunity presents itself before the funds can be replenished. This could mean a once in the lifetime purchase slips through one’s fingers because of no funds being available.

What would you add to the list? Let us know in the comments!

000080221A_Games_2-Footer Investing Terms Every Comic Book Buyer & Seller Should Know*Any perceived investment advice is that of the freelance blogger and does not represent advice on behalf of GoCollect.

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