How I use My Data - 2015 Edition (to be updated as needed)

    How I use my data 4_10_15

This blog is a vehicle to get out to the public my analytical data I use for speculation and investing into comic-books.  Note the word speculation, which implies an educated guess. I hypothesize that two worlds exist in the comic-book investment market.  We have INSIDERS and OUTSIDERS. I have developed a method to parse out those two worlds and compare them through any major run of comic-books. I have a method to gather and produce a comic-book database that contains both I and O worlds.  I can produce at least 3 levels of data analysis, B Score, I/O SLN, and ADFs across 3 Comic-book grades (9.4, 8 and 6). B Score is the Bias Score that each comic-book Issue has to be based on its bias value. These scores are adjusted to account for extreme value issues. A positive number represents a Bias in the value noted by the Insiders while a negative number represents a Bias in the value by the unsophisticated outsiders. I focus my efforts on the Insiders biased comic-books. The I/O SLN is the slope of the combined bias values in both databases within the three grades, 9.4, 8, and 6.  ADFs is the adjusted average differences of the I/O bias data for each issue at the three selected grades.  

Introduction: the Birth of Bias Comic-Book Investing

First concept is there are no rules! No rules to investing in comic-books and there maybe many ways to go at it. So as I was considering other arenas of investing such as the stock market, I was educated by the literature in that world that inside information gives an investor the advantage. I next considered then the main question “would knowledge of what serious investors were liking/buying/selling in a comic book run given me an advantage?  If that advantage does exist, then how could I measure that “Insider Bias (I-Biased)”? If an issue of a comic-book was not I-Biased was is neutral or was the issue being biased by less-informed collectors “Outsider Biased” (O-Biased)? As a scientist then these questions are really hypotheses to be measures and tested.

So as I was preparing to explore a way to answer/test my questions, I have also been developing a total investment plan. Call it a collection of approaches that I wanted to add to any Bias methodology I found. So each approach needs to be thoughtful. I suggest you write “it” out. Each approach must be defined. The writing it down on paper helps the learning curve. Come back to these approaches and read them fresh to see if they need changing.

I present two examples from my previous buying spree from 2013. Approach one I think (thought) that the character of Loki will be around for a long time and would have great significance. So I bought 4/2013 a Slabbed Copy of JIM 85 6.5 for 569$ Cert# 0206869003.  1 year out its 2014 was at of average of $977. This year’s 2015 average so far is $956. JIM 85 is 1st appearance of Loki, Heimdall, Asgard and Odin (cameo).  Key! Update one sold for 1600$ at end of March WTF! The second approach was based on the thought that that superman and batman will have a movie together and learn of each other’s IDs. So I bought in 6/2013 Superman #76 Slabbed CGC 4.0 Cert# 0073634011 for $360. This issue is the first issue where Superman and Batman learn each other's secret identities. 2014 average is at $983.

So how does Bias information blend into the approach systematics above.  As I look into the Bias data seen in the data chapters, I would gather several solid approached/angles to use with my data on to see if any leverage is possible! Also with the Bias data, I believe you can receive alerts to issues with a significance that has escaped you or you have valued too low as compared to Insiders. Thus at least two uses are available with these data I present in this book. I can think of other uses. Maybe the Bias data can prevent you from investing in a common book. You have made money by not doing something. Remember your money is tied up in all your issues and not available for future investments. So a comic bought is less money for you to invest with in the short term. This leads to the next question in the next paragraph. (Question asking is always a more dynamic way to for problem solving than merely stating a “fact”).

How long is your investment window?  Is your window a Day-to-Day, 1 Month, 1Year (Flipping books?) or longer (Long Term- 10 years?). I think this is a big question? I am thinking over next 20 years for myself. So I have seen the newer books go in and out. If you are heavily invested in new issues then you need to flip and that will most likely you make you sub-optimal profits. We will never see the 1960s again, as it was a quite time of few investors. The idea of buying everything and hold is not the best way to invest as well. That’s why I have developed my "methods" to “see” a different way. I wish to buy smarter.  A person who invests successfully in comic-books for the long term must have / or develop opinions of their own and must have the strength to stick to these opinions no matter what they hears, "feels" or sees. Having visited the horse racetrack down the road, it can be very hard to bet against the crowd. That horse is hot. It’s a sure thing! That variant is going to be hot! The movie is going to drive the price up. It’s too easy to make all this money. Hum, is that right? Ask beanie baby collectors about their sure things! FYI as with the racetrack everyone has a story of a BIG score. Are you chasing that big score again? Dr. Taleb’s book “Fooled by Randomness” discusses our investment biases etc. I suggest it as a good read as well as his other books.

So moving onward, my data provides a platform for analysis of the Biases in Entire Runs, Collections of Issues and single Issues. If there is not leverage now (see my data) then delete that approach and place it into the inactive files. You must be ahead of the crowd! Certainly focusing on movies is the current hot driver of price moves! So you have to be awake and move quickly. But also think long term as well. You might combine short term flipping of books to fund your long term investments!

Now before total walking away from my target issue, I would also assign Buy It now price point or range on the issue(s) identified in your approaches as well. So if the average sale price is $500 and range is $400 to $600 then I would set my point at $450 or less or no buying. So I use my analysis of my data in combination with my approaches, I go about setting price points to seal the deal!

In this journey you must fight your inner collector and buy smart! Given all the variation in the comic-book investment world, just keep moving! When you are not buying you should search the web for ideas. You should practice grading your comics etc. You must have quite time to consider approaches/angles to use and think about it some more. Your time is what you have the most of and you need to schedule some focus time on your collection. I do that by having a journal that I write Ideas down as I think about them. Be specific about your approach is and why it’s a good one. It you come back and reread it and it still seems a good one then go for it. 

I believe if you do not work for something it will not be valued by you. If it seems I am not spelling out everything, I am not! I can not as everyone has a different journey in comic book investing. You need to develop your plans etc. I am not pointing out everything in my blog posts or in this book. 

Here are some general questions I thinking currently about? Are some runs due to move up while others will not? Are silver-age or older a better buy than newer runs? Are Silver-age runs that are good investments the ones that have major characters in movies etc.? Are we in a bubble for movie driven pricing? So think of these as hypothesis and now how would be test the data to eliminate the question! You can not every prove a hypothesis you can just disprove it. Another way is "what would the data look like or show us to give us insight into our hypothesis? Can we test these hypotheses? I am thinking about this as well.

My last thought concerns the efficient market hypothesis as described for the stock market. Is the comic book arena an efficient market? If it was then would everyone pretty much know the value of each issue and the prices to be paid would have an average at each “slabbed” condition and should therefore have a tight range around that average. So look at a history of prices paid for a few issues and see the average and range. Based on my analysis of these data, I propose the comic book market is biased and insiders have a sharp focus while fans may not. Insider investors should be more efficient. Note that outsiders can overpay or just not do not pay and that non-efficient behavior will alter the investment landscape. Exposing those issues that have strong insider bias should give you a built-in edge!