Are you Paying Too Much For That Collectible?

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magicam
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Re: Are you Paying Too Much For That Collectible?

Postby magicam » September 21st, 2004, 9:16 am

Bill Hallahan: Miraculously, our wordy debate hasn't yet killed this thread. So even though you haven't convinced me (and perhaps directly answered some of my questions), I've left you with the last word! :D

Bill Mullins wrote:
*****
Anytime someone says that some collectible is a good investment, I wonder if they have really invested in them. Just because the current retail selling price is greater than some former retail selling price, does not mean that the item is a good investment.

Bill, if you are saying that a higher price now is no guaranty of that price in the future, then I agree. John LeBlancs comments echo this, if I have read his post correctly. And his example of a reprint killing the demand for an earlier edition is excellent. But from what little I know of investing, an inflation-adjusted annual return of 7% is considered a good (though certainly not great) investment. Thus, if the price of a magic item equals or exceeds such a return no matter when you bought it or for how much Id tend to say that such item has been a good investment. Of course, as others have pointed out, purchasing magicana for investment purposes is risky and at odds with the spirit of why some people collect. But in the final analysis, the motivation behind purchasing an item can be divorced from the concept of calculating return on investment (ROI) if need be.

Return on investment has to reflect the transaction costs. With an illiquid collectible (like magic items), this means you have to compare the price you purchase at (usually retail) with the price you sell at (usually much, much less than retail).

Compared to cash and similar things, yes, a magic item is not liquid. But liquidity is relative, no? The more fungible an item (like copies of a book printed in a large print run, and Im assuming no special inscriptions, etc.) though, the more liquid the item is (assuming there is some demand for it), regardless of the price it fetches. One VG copy of Jays CARDS AS WEAPONS is just as good as any other, and despite what the knuckleheads on Ebay claim, there are plenty of copies of Jays book out there and its not a rare book (people often confuse high prices with rarity rarity and price are often related, but not always, as the high prices recently fetched for Jays book prove).

With truly liquid commodities, like stocks, precious metals, financial securities, the transaction costs are small relative to the selling price. With magic items, they are huge (50% and up), greatly eating into the return. But you say you can sell it yourself on ebay. That means it's a month or more from the day you decide to sell it to the day you have cash money in your hand. Plus you have to factor in the costs of selling, shipping, etc, and something for your time (this is the opportunity cost which has been lost -- if you could have spent the time cutting the neighbor's grass at $10 an hour, you have to deduct the value of your time from the selling price). Even though selected items have grown in value, it is hard to say that magic is a good investment compared to traditional investments.


Im not sure I agree with all of what you say here. For one thing, storage costs for precious metals are fairly high, arent they? And with magic items, how do you arrive at the 50% and up transaction cost? The only way I can think of such a high percentage transaction cost is if you are selling a $5 book on Ebay, or if you are selling your items to a dealer, who will want to pay less than half of the retail price. Yes, of course, the time value of money and the value of your time must be factored in in order to arrive at the true cost of selling. But for those who purchased the Thurston Workbooks for $225 (I think the total original selling price) and who sold their set for $1400, the transaction cost for most of us (unless you are one of those who gets paid $2000/hour for your services, etc.) is far less than 50%, no? Although Im quibbling by using specific examples, I do agree that purchasing magicana for investment purposes is a risky business! All that said, Ill still stick to what I wrote: those items of [b] quality (emphasis added) magicana that Mario sold 20 years ago are, generally speaking, indeed worth much more today, beating inflation soundly, but I will add the qualifier that when I write quality magicana, I mean items which are either unique, relatively rare, or in outstanding condition. [/b]

Cheers!

Clay Shevlin

Bill Hallahan
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Re: Are you Paying Too Much For That Collectible?

Postby Bill Hallahan » September 21st, 2004, 9:58 am

Thanks Clay. I enjoy debating, but sometimes I'm overly argumentative and I lack the sense to stop.

For the record, I have never invested in any magic related items. Anything I sold related to magic was always sold for less than I originally paid for it, at least so far.

I've lost in many eBay auctions, especially when the items were related to magic. My funds are limited.

I didn't bid on this, but just last week a friend sent me this link.

http://cgi.ebay.com/ws/eBayISAPI.dll?Vi ... 6117139044

Amazing.

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magicam
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Re: Are you Paying Too Much For That Collectible?

Postby magicam » September 21st, 2004, 10:40 am

Well Bill, anybody reading my posts on this thread might accuse me of being overly aggressive or too argumentative. But its been fun and all in the spirit of a good, friendly debate. Glad you share the same feeling. And hopefully its provided some food for thought (or at least entertainment or sleep-inducing drowsiness) for others

As to the Ebay link you provided (a copy of NEGROMICON OF MASKLYN YE MAGE was sold for $1,500), I too am amazed, but this sort of magic theme has never appealed to me. Guess it proves that different things appeal to different people.

Just to prove my ignorance, can I ask if anybody can briefly summarize here the genre of magic represented by this book, NEGROMICON OF MASKLYN YE MAGE? When I see a pentagram, I think real witchcraft, and when I think of magic as I know and love it, I do not think of witchcraft.

All the best, and I look forward to another debate with you down the road.

Clay

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Re: Are you Paying Too Much For That Collectible?

Postby John LeBlanc » September 21st, 2004, 10:44 am

Originally posted by Bill Hallahan:
I didn't bid on this, but just last week a friend sent me this link.

http://cgi.ebay.com/ws/eBayISAPI.dll?Vi ... 6117139044

Amazing.
"Amazing" -- yes, that's one way to put it.

In a phone chat with my pal Jim Sisti yesterday I mentioned the only book that tempts me right now is the book, "Magic of Robert Harbin". (A legitimate copy, thank you very much.)

John LeBlanc

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Re: Are you Paying Too Much For That Collectible?

Postby Jim Maloney_dup1 » September 21st, 2004, 11:15 am

Originally posted by Magicam:

Just to prove my ignorance, can I ask if anybody can briefly summarize here the genre of magic represented by this book, NEGROMICON OF MASKLYN YE MAGE? When I see a pentagram, I think real witchcraft, and when I think of magic as I know and love it, I [b] do not
think of witchcraft.[/b]
Bizarre Magick. Generally speaking, magic presented in a real fashion using occult presentations.

-Jim

Bill Mullins
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Re: Are you Paying Too Much For That Collectible?

Postby Bill Mullins » September 21st, 2004, 3:12 pm

Originally posted by Magicam:
[b] And with magic items, how do you arrive at the 50% and up transaction cost? The only way I can think of such a high percentage transaction cost is if . . . you are selling your items to a dealer, who will want to pay less than half of the retail price. [/b]
Yes, this is exactly what I mean. An investment must be something you can easily turn back into cash. I have a room full of magic books. The only way I can get money out of them quickly is to sell the lot to a book dealer, like Richard Hatch. Who will only give some small (but not unfair -- I'm not slamming Richard here) percentage of retail.

If I want to sell them at retail prices, I must sell them on the retail market. And I then immediately turn from an investor, to a bookseller. Some of the money I receive as a bookseller must be attributed to the service I provide, and the labor and other expenses that go with providing that service. I can't attribute all the return on the books to appreciation on the money I've "invested" in them. That doesn't make economic sense for several reasons, mainly that it attributes no economic value to the real cost of piecing out the collection to interested buyers.

Simply because I could take the copy of "Cards As Weapons" that I paid retail for, sell it on ebay for ~$75 bucks, deduct from that $10 in transaction costs, and show a "profit", doesn't change my point about the collection of books as a whole. The Jay book is not representative of my book collection; a 1999 issue of Linking Ring is somewhat moreso.

There is no way I can sell my magic collection at anything like the "retail" value within the next 48 hours. Can't be done.

On the other hand, I could cash out some of my 401k plan and have the money in my checking account tomorrow, with minimal (a couple of %) transaction costs.

The difference in the transaction costs of the two transactions is real, and the magic collection bears a much higher one. I think I'm being generous when I say that the cost is 50%. (It takes ten years at 7% appreciation to recover it -- and my magic collection, as a whole, doesn't grow at 7%).

The discussion above would apply to most any group of collectibles, particularly those from pop culture (comics, baseball cards, autographs, movie posters). To a lesser extent, it applies to stamps, coins, fine art, antiques.

WRT your comment about precious metals, yes, the storage cost is high. But most people who invest in precious metals don't actually buy the gold -- they buy stocks in mining companies, or futures, or some other paper security whose value ties to gold's, for just that reason -- to minimize the cost of ownership.

All that said, Ill still stick to what I wrote: those items of quality (emphasis added) magicana that Mario sold 20 years ago are, generally speaking, indeed worth much more today, beating inflation soundly, but I will add the qualifier that when I write quality magicana, I mean items which are either unique, relatively rare, or in outstanding condition.
"Good" items are always a better investment than common ones. But I still disagree with your statement, because it implies that the rate of retail appreciation is the growth of the investment -- it doesn't account for the real cost of turning the quality magic items back into cash, or the fact that it takes a length of time to do so (decision to sell, to cash in pocket). It also doesn't account psychologically for the fact that _no one_ who buys quality magic items doesn't also buy junky ones, and the cost of the junky ones, for which one may reasonably expect _zero_ return, must also be factored into the analysis. For every "good" (investment-wise) magic book I own (Ricky Jay, 1st editions of Kaufman books, etc.), I also own crapola (retail value) magic notes, which I paid money for, and money to attend the lecture as well.

I'm sure that George Daily, Mike Caveney, the late David Price, Bill Kuethe, and others would agree.

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Re: Are you Paying Too Much For That Collectible?

Postby Robert Allen » September 21st, 2004, 3:17 pm

The Negromicon is as noted above a sought out collectable for "Bizarre" magick. This area of magic encompasses a few things including Halloween type magic, shamanic magic, and ghost-story/seance magic, along with some mentalism. It was quite popular in the 80's for a time but is not as popular as it was. As you note, part of the problem with it is marketability, and also, there area lot of practioners of it who are simply not entertaining at all. Big names in it included Tony Andruzzi, Eugene Burger, Jeff Mcbride (shamanic), and um, others :) .

If you look through Eugene Burgers Spirit Theater I believe, you will see the Negromicon and Scroll used as props in some of the photos.

The Negromicon is a completely handmade, numbered book of which 250 were made? It was made by Tony Andruzzi, aka. Tom Palmer, aka. Maskelyn ye Mage. He was the editor for The New Invocation among other things, and produced the Negromicon, a handmade Scroll, and the handmade Grimoire of the Mages. In the late 1980's these were relatively inexpensive (well, sort of). Bizarre magic took off though and the prices shot through the roof. When I first saw one for sale in the 80's it was in the $500 range. Now they're up to the 1.5k range. I can't believe these can sustain that price, but perhaps they're limited enough that they can. I have the Grimoire of ye Mages and I saw one of these sell a while back on Ebay for 1.5k I think? That may have been a super special version but even the regular one is close to $1k supposedly. It's a fun little book, and I value mine, but in no way 'worth' that much for the content alone. But all the "books" by Tony are both book and art item. Pages are silk screened in Black Letter on parchment quite often, with inset color Xerox pictures. Handbound leather covers often with strange decorations

Since Tony has passed on there will be no more of these, and I guess the few out there are avidly bid on by people (like me) who want to "Collect the whole set". The tricks in them are nothing to get fired up about; the rarity is the reason to collect them. The Negromicon in particular is a thin locked book, where part of the unlocked book can be used as a prop and I think as a force book, while the tricks are described in the locked section.

A similar book, but not as famous or worth as much, is the Necromantic Grimoire of Augustus Rupp, which is s small, hardbound, forcebook.

I have the Necromantic Grimoir, and the Grimoire of the Mages, but don't yet have the Scroll or the Negromicon (because I may be stupid, but I'm not crazy enough to pay 1.5k each for them, at least until I hit the lottery :) ). Oh yes, I also have a leatherbound "Necronomicon", first edition, signed to some friends by the (editor?) "Doc, H. Barnes". These books really dress up ones bookshelf ;)

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magicam
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Re: Are you Paying Too Much For That Collectible?

Postby magicam » September 21st, 2004, 5:24 pm

To Bill Mullins: I actually think we are each correct and in agreement here. You have emphasized the whole (correctly so, I suppose, since we all have some junk in our collections), whereas I was addressing the cream. I will stick to my guns, however, on my comments regarding investments in the cream. But since I have been quite argumentative in this thread, I will disagree with your statement that [a]n investment must be something you can easily turn back into cash. I can think of a few investments, in particular real estate, which are not easily (and quickly, I think you argue) converted into cash. Now, of course any investment can be easily and quickly converted into cash if the price is right, but going down that path, I think, would be contrary to the spirit of what you were saying here and would seem to ignore your point (distinction?) about investments versus non-investments.

To Jim Maloney and Robert Allen: Many thanks for the information on NEGROMICON OF MASKLYN YE MAGE and its ilk. Anent Roberts comments on the prices for this book, I am under the impression that bizarre magick is hot right now; if thats the case, look for prices to go down eventually. If it happened to Hoffmann and Goldston books, itll happen to bizarre magick books too. Of course, the handmade nature of NEGROMICON OF MASKLYN YE MAGE and books like it should help them to retain their value/price as time passes.

Clay Shevlin

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Re: Are you Paying Too Much For That Collectible?

Postby Bill Mullins » September 21st, 2004, 9:57 pm

To continue the discussion, two points:

1. You can't know what is "cream" until time has passed. For every XXX dollars you spend now as an investment, some will turn out to be cream (and potentially profitable), and some will be whey. The whey will drag down the investment as a whole.

2. Not much money is made in real estate by buying property, waiting passively for some length of time, and then selling. Most is made by: either buying a business property which throws off cash immediately, or in development. In either case, the profit comes from the work involved in managing the property or in development; little comes from appreciation of the base value of the land. There are exceptions, though.

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Re: Are you Paying Too Much For That Collectible?

Postby Matt R » September 22nd, 2004, 12:08 am

I remember bidding on a copy of "The Magic of Robert Harbin" on eBay. I happended to know the high bidder on the item and he was doing exactly what Clay had mentioned -- putting in bids to keep the price up. I knew this guy already had 2 copies of the book. I bid the on it in an attempt to get but guy with 2 copies ended up being the high bidder. He didn't pay for the auction and I ended up getting contacted by the seller who wanted me to pay my high bid amount. I explained that this guy was just bidding up the price and negotiated a lower price and purchased the book. I think if the guy wants to bid up the price that his right, but he should follow through and actually buy the item if he is indeed the high bidder. After all, the logical consequence of the bidding up the price, should be that you may actually get stuck with and pay the over inflated price that you helped create.

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magicam
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Re: Are you Paying Too Much For That Collectible?

Postby magicam » September 22nd, 2004, 9:25 am

Bill: I think your three identical posts total to six points actually ... :)

In keeping with my politely combative ways on this thread, here are some comments on what you wrote - my comments are in bold text.

You wrote: "You can't know what is "cream" until time has passed. For every XXX dollars you spend now as an investment, some will turn out to be cream (and potentially profitable), and some will be whey. The whey will drag down the investment as a whole.

In a general way, I have no beef with what you say. I suppose that nobody really knows anything until the passage of time. But there are ways to identify the cream (just like porn, you know it when you see it), and true cream today will be true cream tomorrow. Matt mentions Harbin's book, which when it came out was correctly identified as a future classic. Taking it out of the dairy realm, a truly rare antique item today will be just as rare tomorrow and probably - quite probably - more valuable tomorrow. It's a matter of odds, I guess, but knowledgeable collectors (investors) are going to make money (if that's their focus) if they buy only truly rare collectibles. I'm not talking about Ebay rare, I'm talking about real rarities or unique items. I'm willing to bet that the first U.S. edition of Dean's Hocus Pocus will be worth more twenty years from now, and will beat inflation and transaction costs soundly.

You also wrote: "Not much money is made in real estate by buying property, waiting passively for some length of time, and then selling. Most is made by: either buying a business property which throws off cash immediately, or in development. In either case, the profit comes from the work involved in managing the property or in development; little comes from appreciation of the base value of the land. There are exceptions, though.

Yes, there are indeed exceptions, and a lot of it depends on demographics. If you live in the Midwest, your statement is probably true. But if you live in the urban and adjacent areas of California, for example, your statement is flat out incorrect, as odds are over time that you will make plenty of money by merely buying and holding income producing real estate. As a real estate broker and attorney, this is my business and I know what I'm talking about here.

Finally, Matt's experience with the Harbin book seems to prove the point that some people bid on items, not to add to their collections, but to drive the price of a good up. And that's something I don't like and seems 'on point' to my initial question on this thread.

Yours in spirited debate, Clay

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Re: Are you Paying Too Much For That Collectible?

Postby Brad Henderson » September 22nd, 2004, 11:03 am

As to the notion of investment:

I collect animation art. I remember the first time I went into a gallery to make my first purchase of a cel. I asked, which one would be the best investment. The lady gave me a piece of advice that has stuck with me for everything I have ever bought.

She said that the value of the piece comes from the happiness it brings when you look at it every day. If you don't like the piece, then regardless of what others think of its worth, it is a waste of money to buy it.

And you know what, she's right.

Whether it's a magic poster, a cool prop, or a rare book; its value comes from the joy one has in holding it, viewing it, and performing it even in front of the mirror for oneself.

It may go up in its market price, or down, but the enjoyment you have is solid.

So, I never look at pieces as an investment (unless my Dad finds out how much I paid for something, then its time to rationalize. I'm 34 years old now, and he still flips out at the cost of the things I buy).

But for myself, the question to ask is, will this make me happy?

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Re: Are you Paying Too Much For That Collectible?

Postby magicam » September 22nd, 2004, 11:37 am

Brad:

This thread has meandered through many topics, but when it comes to the bottom line for me and collecting, I couldn't agree with you more - and I gather that most of those who have posted here share the same sentiment. To me, collecting for investment sucks the fun out of collecting, because it shifts the primary (and most enjoyable) aspect of collecting away from pleasure and turns it into a money game. The fact remains, however (and sadly, IMHO), that many "collectors" focus unduly on the value of their collections, although in fairness it can be said that being aware of the value of one's collection is prudent in some respects - for example, for insurance and estate purposes.

Clay


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