It looks like most of us have a very difficult time defining what kind of collectors we are; we seem to be opportunistic and have erratic buying habits. If we can’t be more focused on what we buy let us at least try to be smarter when we buy. I hope the following can help.
I’d like to switch focus over to a common and avoidable mistake I’ve seen buyers make countless times over the years. The topic is a bit technical and may not affect your type of collecting but bear with me, I want to explore as wide a range of topics as possible with these posts.
Scarcity is a very important value driver in comic book collecting: it lies on the supply side of the supply and demand equation and it is not just limited to the total number of copies available.
Variations of scarcity include regional scarcity; the Canadian Price Variants (CPVs) of the 1980s are an obvious example of regional scarcity. Most of the supply has been in Canada and once a collecting community evolved for these CPVs and increased their demand regional scarcity (lack of available copies in the USA) drove prices higher. Another variant of scarcity is local scarcity. Just think about the old Mile High Comics model: they’d have as many books as possible available at any time but at a price much higher than the price you’d pay locally. But who’s got time to dig through bargain bins for a $1 copy of alpha Flight #53 (that you need to finish your run); it’s easier to “buy it now” at eight times the local price. Local scarcity happens because nobody has their Alpha Flight #53 available for sale. It’s way easier to go to a local con or a local comic book shop and pick up a Spawn #1 than it is to grab an Alpha Flight #53.
I’ve included the two variations of scarcity above to highlight some of the different forms it can take. Another form is scarcity of grade and it’s the topic I want to discuss in-depth right now. Scarcity of grade has been around for as long as I’ve been in the game and goes back even further to the very beginnings of comic collecting. It has always been a given that we pay more for a nice crisp, clean and glossy copies of comics we want. I remember back in the 80s when upgrading copies in one’s collection was serious business: we’d trade in our VG for a VF and pay some sort of difference that the Overstreet Price Guide had us convinced was fair. We knew that the VF was nicer to look at but we also knew that it was way harder to find. Scarcity of grade was this concept that we could not quantify back then but we knew it was real and we were willing to pay extra for it.
With the advent of grading companies like CGC, scarcity of grade became a quantifiable thing thanks to the CGC Census. With the CGC Census, we had a tool that told us just how scarce a high-grade copy of a specific issue was. Quickly a pattern developed where buyers got themselves into trouble because they were adhering to the CGC Census data. The problem is that the CGC Census data is not static; it is in fact very dynamic. Back in the day when we were upgrading from a VG to a VF, we gauged scarcity by feel, by how many copies of the issue we saw around. Yes, there were some fluctuations between issues due to black covers, other aesthetic factors and distribution but this was mitigated a bit by the fact that we grouped high grade into one or maybe two tiers. Today there can be eight tiers of high grade depending on the era.
Let’s get back to the dynamic CGC Census. Back in 2010, I bought a nice clean copy of X-Men #94 off a shop in New York: the guy had $1,000 on it and I talked him down to $800. CGC grading was relatively new at the time and not all shops were using the service. By this time I was a pretty good grader and I thought my new acquisition could score a CGC 9.4, a grade that might net me almost double what I paid – if I lucked into a CGC 9.4. I sent the book down and it came back a CGC 9.8 White Pages. Mine was the fourth 9.8 on the CGC Census. GPAnalysis was just starting up back then and excitedly I jumped on to see what CGC 9.8 X-Men #94s were getting, CGC 9.4s got about $1,500 and I was hoping maybe triple that. I almost fell when I saw the last sale was $29,589. I sent my copy down to an auction house and my copy closed at $26,500. Damn, that was easy! I told myself I had to do that just once a month and I’d be fine. Fast forward three years to 2013. There were three sales that year for X-Men #94 at CGC 9.8: the first got $9,501, the next one got $8,089 and the last one got $6,988. Yikes. What happened? There may have been a slight drop in demand; I’m not sure of what the movie release schedule for X-Men movies was back then so I can’t speak with certainty about demand. I can tell you that supply did grow causing the scarcity of grade value driver to greatly diminish. Today a copy can get close to $15,000 which is a nice correction from 2013 and as of this post, there are 33 copies graded Universal blue 9.8 on the CGC census.
X-Men #94 can actually serve as a dual example for my argument since it is showing some relative scarcity compared with say Giant-Size X-Men #1 (173 CGC 9.8s as of this post), a fact that explains why a much less important book (X-Men #94) can be worth more money than a key first appearance (Giant-Size X-Men #1).
The buyer reacted to the scarcity of grade that was highlighted by the CGC Census, the strong sales result for the book spurred owners with nice copies to sent their copies in for grading. The book now has over eight times the supply and is worth less than half the sale that came before mine even in one of the greatest decade of price increases ever seen in comic collecting. The lesson, of course, is to not treat the CGC Census as static: it is a very, very dynamic thing.
Thankfully we’ve now had two decades of CGC comic grading with millions of books graded, and the other grading companies CBCS and PGX have added to the inventory. You’d think that misinterpreting the Census was a thing of the past but it still happens, all the time.
Interpreting the CGC Census data is not an exact science and sometimes we have to “read the tea leaves” when making decisions. I’m relatively confident when I look at data for books like Amazing Fantasy #15 and Hulk #181, these books and books like them that have been valuable since the beginning of the grading era and have lots and lots of data we can examine. We can count the number of copies being added each year and spot patterns and trends that will help us with a long term picture. We can also look at the grade distribution within the issue we are looking at and make statistical assumptions, and maybe even CGC corporate mandate assumptions. Grade distribution assumptions are very important to our scarcity of grade topic. Giant-Size X-Men #1 has 173 CGC 9.8s out of a graded population of 7,780, 2.2% are 9.8s. From this data, I can make a statistical assumption that for every 1,000 new copies being sent in to get graded only 22 will come back 9.8.
I mentioned above that we’re still getting sucked into overpaying for scarcity of grade. It’s happening too much and one of the biggest causes is the instantaneous demand created by new movie announcement, actor casting announcements, unexpected demand for new comic issues etc. In these situations, there is a massive lag between demand and supply, especially in very high-grade CGC graded copies. Let’s just pretend that Marvel’s Tomb of Dracula #5 has the first appearance of some minor character, as of this post there are three CGC graded 9.8s, all likely belonging to collectors seeking out the run in high grade. Now let’s pretend that tomorrow news hits that this minor character is going to be the big villain in a new Marvel Studios Dracula movie. Gah! If I had one of the CGC 9.8s I’d be putting it up on an eBay auction that day. Massive demand for the book now exists and my CGC 9.8 copy is the poster child of scarcity of grade. I’ll do very well with that sale and once I do you’ll see what I got and send yours down for grading. I can’t tell you how many times I’ve seen this play out over the last ten years. So how can I know where Tomb of Dracula #5 will settle in scarcity of grade wise? With this example, I’ll look for an adjacent key issue, one that’s been an expensive key issue for a very long time and one that can give me some data I can look at. I’d look at the Tomb of Dracula #10 and see what’s going on with that book: Tomb of Dracula #10 is a key first appearance of a major character, Blade, that has been worth sending down for grading since there was grading. How many CGC 9.8s are there of Tomb of Dracula #10? What percentage of the total population is getting CGC 9.8? Time for some more “tea reading”. Take a look at Tomb of Dracula #5: does it have a black cover or anything else that might make it even more scarce than the tomb of Dracula #10?
Scarcity of grade is even more tricky in the already scarce Golden Age of collecting. A CGC 7.5 may be the highest grade in existence of a Golden Age book and the price it gets at market is not determined by its grade but by the fact that it is the nicest copy that exists graded. When a surprise copy pops up at CGC 9.2 the ultimate scarcity of grade that gave the 7.5 its value disappears and the price will drop dramatically the next time it sells. Surprisingly the CGC 9.2 usually does not get a lot more than the old 7.5 got; the value of highest graded can bring the book to a point but not much further, perhaps the insurance of a 9.2 grade is worth more than the insurance of a 7.5 grade when hedging that there won’t be a nicer copy coming around.
I’m rambling now so it’s time to stop. Scarcity of grade is a thing and it can make your comic worth a lot of money especially if there is any sudden uptick in demand. Be careful when buying based on scarcity of grade: does the scarcity look safe and sustainable?
Have you been bitten by this? Have you made a big score thanks to scarcity of grade?