CASHING IN ON CAPES AND COWLS
The nerdy niche of comic books has built some investing cred
Vincent Zurzolo may not have been standing in the shoulder-toshoulder sea of sweaty nerds that got the first glimpses of the Iron Man trailer at San Diego ComicCon in 2007, but his smile was just as wide.
As fans poured out of the convention centre’s Hall H, Zurzolo, the world’s foremost comic book dealer, heard rave reviews from dozens still glowing about the redand-gold armoured centurion’s debut on the big screen. Iron Man launched a series of 14 films that has grossed US$10.9 billion for Marvel Studios LLC, but it wasn’t alone in thinking about profits.
At the next convention Zurzolo visited, he bought every copy he could find of Tales of Suspense # 39, Iron Man’s 1959 Marvel Comics debut, paying between US$1,000 and US$1,500 each for more than a dozen copies.
“I paid full retail and in less than a month, I had a markup of 30 per cent,” he said. “If I held them a couple more months, I would’ve made even more.”
If Zurzolo still had those comics in 2017, he could sell his pristine copies for upwards of US$16,000 — a 966-per-cent increase over the past 10 years. By comparison, Apple Corp.’s stock rose 955 per cent over the same period, albeit with a couple of big dips along the way.
Such price surges in the comic book industry are why investors should consider adding them as an alternative to more traditional portfolios made up of stocks and bonds, Zurzolo said. Most of his customers are fans, but those who have never read a comic book in their lives are beginning to invest as well, lured by a market where the right moves can earn them millions.
The comic book market has been “on fire” and steadily growing for the last 45 years, Zurzolo said. Not even the global recession affected the prices of books from the 1940s, 1950s and 1960s, which have continued to increase by hundreds of thousands of dollars — in some cases, by millions — since 2001. Today, more than $100 million is spent per year in buying and selling vintage comics in the U.S. alone.
“I don’t think there’s a bubble,” he said.
“People say all the time, ‘How much higher can (the market) go?’ My company sold the first comic book for $1, $2 and $3 million.”
Zurzolo specializes in selling books from the Golden Age (1930 to 1950) and the Silver Age (1950 to 1970) of comics. Issues from these eras are scarce and come from a time when no one knew they would retain any future value, even in the unlikely event they were kept in good shape.
Comic books are graded on a zero-to-10 scale from poor to mint. Florida-based Comics Guaranty Co. can spend up to six weeks inspecting, grading and sealing a comic within a plastic sleeve for a fee that can sometimes equal three per cent of its fair market price.
The process is worth it, Zurzolo said, because it allows buyers to feel safer about potentially dishing out thousands of dollars for one book — and they will have to spend that much to get one of value.
Investors looking to nab a 9.2 graded copy of Amazing Fantasy #15, the first appearance of Spider-Man, can expect to pay US$ 260,000, according to the Overstreet price guide, an annual publication that provides a yearly update on the retail prices of such books.
Five years ago, the same book could’ve been bought for US$125,000.
At an auction on March 20, Zurzolo sold a 9.0-grade copy for a world-record US$395,000.
“There is a comic book for every budget and a budget for every comic book,” he said. “I bought my copy of Amazing Fantasy #15 in 2000 for US$100,000. It’s probably worth US$500,000 now.”
Even comic books printed in the 1990s and 2000s have shown the potential to be rewarding investments for collectors.
Fuelled by the popularity of a hit TV series, Walking Dead #1 already fetches US$1,050 despite only being printed in 2002. The first appearance of Deadpool in New Mutants #98 is now worth US$300, thanks to the character’s Hollywood debut and resulting explosion in popularity, but it sold for a mere US$5 in 2006.
Investing in comics gives collectors the option of buying for a quick flip or letting them appreciate long term.
The health of older issues is secure, according to Zurzolo. The prices of modern comics aren’t.
“You have to be ready to move fast on modern comics,” he said. “(The prices) are all speculative.”
Blockbuster films and television shows can be the determining factor behind skyrocketing prices, but they also add to speculation and valuation risk.
As soon as there is a hint of a new film or television show based on comic book characters, Zurzolo immediately sees price increases from sellers looking to get ahead of the competition.
But investors should know that there’s more to the game than buying up comic books at a garage sale or from bargain bins, warns manager Doug Rowat, a portfolio manager at Toronto-based Turner Investments.
Only the prices of key issues — those featuring the first appearance of a character, a major death or a storyline depicted in a film — will significantly rise in value.
Buying Batman comics from the Golden Age and allowing them to appreciate over decades may provide traditional investors with a tasty retirement bonus, but Rowat recommends they only focus two to three per cent of their portfolio on comic books.
“Buy older,” he said. “It makes sense to me to spend money on a Batman comic, but it doesn’t make sense to spend tens of thou- sands on a Walking Dead comic.”
Growing up as an X-Men fan, Rowat amassed a collection of more than 100 issues from the 1970s and 1980s.
He made a profit when he decided to sell his collection five years ago, but learned an important lesson.
“It’s a bit of an eye-opener for people who collect, but a lot of (the comics) are worthless,” he said. “Every comic you own isn’t turned into a movie. It’s part of the game.”
In the 1990s, whispers of comic books and their potential future value became mainstream and everyone from collectors to quick-flip artists looked to cash in. However, the buying patterns of collectors — purchasing multiples of the same issues — convinced publishers to print more copies. Without knowing it, collectors’ desire to cash in erased any potential chance they had of doing so.
For example, DC Comics published millions of copies of Superman #75 — an issue portraying the death of its title character — thereby overinflating the market. Today, Superman #75 is worth $10.
DC sold three million copies on the first day and would reprint the issue an additional four times and publish 11 different copies of the book, leaving those who bought dozens in get-rick-quick schemes in the lurch.
Publishers continue to print multiple versions at once with different covers.
Although print numbers have decreased, they remain on average between 100,000 and 150,000.
By comparison, there are only several dozen known issues remaining of Action Comics #1, the issue featuring the first appearance of Superman in 1938. Zurzolo in 2014 bought a 9.0-grade copy for a world record US$3.2 million.
There were no comics in Rowat’s collection that Zurzolo would drop six figures on without hesitation. As Rowat sold his collection, he realized that only a few of his books were drawing the attention of online buyers. To sell the ones that weren’t as appealing, he had to group them together.
“In order to get rid of the commons, I would often bundle them with a few more desirable issues,” he said.
Another collector, Andy Harper, who retired in 2012 and moved to Cedartown, Ga., lives with the same reality that Rowat encountered and often struggles to generate interest for comics published after the 1980s.
Harper, like many collectors, has a lot of comics and it has been a business concern of his since he returned from a tour with the U.S. army in 1970 and, ignoring his wife’s pleas, opened Vault of Comics in Gaithersburg, Md. Between 1975 and 1978, he scraped by.
“I was on a string and a prayer,” he said.
It was only in the store’s third year that he made a profit — US$1,500 — but it wasn’t enough for his wife, who told him that she was pregnant and that he needed to get a “real job.”
Harper closed the shop with 48,000 comics in inventory. He kept 18,000 for himself, went to school and settled into a government job. On his weekends off, Harper travelled the country and made sales at comic book conventions.
Today, Harper, 68, is living alone in retirement. His wife died last year and he’s opened up an eBay shop to pass the time.
Buyers can find just about any comic they’re searching for on eBay. As of April 4, there were more than 15 low-grade copies of Amazing Fantasy #15 available from US$10,511 to US$46,000.
On eBay, buyers avoid the 19.5- per- cent premium fees charged at auction houses where similar items can be available.
Harper still has to pay eBay fees, but they are much less than what comic dealers and auction houses charge for consignment.
Harper has 7,000 comics remaining in his personal collection for sale, though that number jumps up every time he snags a box of old comics at a flea market on the cheap. In total, he said they’re worth between US$20,000 and US$40,000.
He’s sold 1,100 comics since starting on eBay in June 2016.
But, like Rowat, Harper struggles to sell non-key issues, some of which spend more than four months on his eBay page before there’s a bite from a buyer.
A chunk of the profits he’s made have gone toward fuelling Harper’s collection of Dell Comics — a now-defunct publisher known for its Hanna-Barbera, Tarzan and Lone Ranger comic books from the Golden Age.
Like comic book investors, Harper has to constantly balance his emotional connections to the books with the desire to earn money.
Comfortable in his retirement, Harper isn’t relying on the funds from comic sales to pay bills, which is another reason why he struggles to sell some of his less desirable books, he said.
“If I paid a US$1.95 for a comic in 1993, I’m not going to sell it for US$1.50,” said Harper, explaining that his books are organized in boxes with tabs identifying how much he originally paid for each issue. “My need for money is nonexistent.”
Even so, money could be so much less of a problem had Harper held on to the right books.
In Vault of Comics’ last year in business in 1978, he sold a copy of Fantastic Four #1 for US$500.
Today, a near-mint copy of the same book is worth US$120,000.
Similarly, he remembers selling a copy of Amazing Fantasy #15 to a Canadian dealer in the 1980s for US$110.
Before going to the army, Harper also owned early copies of Amazing Spider-Man, Green Arrow and The Flash.
His younger brother had torn the covers off by the time he got home, decimating their value.
He still has a few gems in his collection: a Superman comic from 1944, Incredible Hulk #2 and a whack of Tarzan and Dick Tracy comics.
These issues would make his profits skyrocket, he said, but he can’t bring himself to sell them yet because he still sees them as investment pieces.
“It’s an investment for my kids and grandchildren,” Harper said.
“Whenever I open these boxes up, I say, ‘God, I just don’t want to sell yet. It’ll be worth more 20 years from now.’ ”
It’s a bit of an eye-opener for people who collect, but a lot of (the comics) are worthless. Every comic you own isn’t turned into a movie.