Collectibles As Investment Assets
“Comics provide a lot of entertainment, I find my imagination taken to another level when I read them.” – Aman Ashraff, Founder of Ashraff Associates
Their otherworldly qualities attract investors. Alternative or unconventional asset classes –including the art, vintage cars and comic books that we’re covering in this section – are markedly different from financial assets because they’re also collectibles. These collectibles help investors diversify risks while enjoying something connected to their passion. Other popular unconventional assets include wine, stamps, coins and musical instruments like violins and guitars.
The uninitiated should ponder a few things before acquiring these assets for their long-term return potential. Firstly, because Sri Lanka’s market is small, these usually illiquid assets are even more difficult to dispose. Finding a buyer for a rare vintage car is far more challenging here than it would be in a larger market. Transaction costs are often higher than for financial assets, and collectibles incur insurance, storage and maintenance costs. Secondly, some collectibles, like vintage cars, can’t benefit from foreign demand because they can’t be shipped overseas, and other types of collectible assets may have limited appeal to overseas investors. Comparatively, buying, managing and disposing of financial assets is more straightforward, irrespective of the investor’s country of origin.
However, investors derive an enjoyment from collectibles than they can never derive from a share certificate. Art can be displayed in the home and a classic car can be driven during the weekend – albeit carefully.
More recently, the definition of alternative assets has grown to include investments like private equity, venture capital and hedge funds. But these new alternative investments are all financial assets.
Besides diversification, non-traditional investment valuations tend to move in the opposite direction to financial markets, helping a portfolio sustain volatility better. Since there isn’t always a market, a sharp investor can seek out more arbitrage opportunities because alternative assets are often mispriced.
SUPERHEROES AS INVESTMENTS
Comic books, usually a childhood passion, can also be an investment. But there’s more to this geek passion than mere accumulation.
A few years ago DC Comics, one of the two top comic publishers, pressed the reset button. Every one of its 52 series restarted from scratch, including the storyline. Aman Ashraff, a Sri Lankan fan of all lycra-clad heroes and villains obtained the issues he expected to be later sought after, including the new No.1’s of Batman, Superman, Action Comics, Swamp Thing and the Detective Comics. Ashraff thinks each of these issues are worth $100 now and that their prices will appreciate.
Cartoon superheroes aren’t mere childhood fantasies. Millions of their fans are now paying premiums for collectibles from rare and important comics to action figures and statues. A declining industry in the 1990’s has also reversed course due to a string of blockbuster movies that have won millions of new GenY fans. A geek fantasy has now gone mainstream.
Comic book collectors start as fans. A gift of a comic or one lent by a friend sparks a journey into a fantasy world, but they soon discover there is more to heroes and villains than is obvious to the uninitiated. Soon they start identifying with the superheroes that share their own insecurities, complexes and strengths. When fans start bartering for stuff they want and learn what drives prices up and down, they turn from purely comic book fans into investors. This often happens when they are young.
In 2013, a copy of Action Comics No. 1 – the first appearance of Superman, published in 1938 – sold for $175,000. In 2002, Hollywood actor Nicolas Cage found himself in a financial tight spot and sacrificed his comic book collection. An auction combined with private sales brought in a whopping $2 million. But not all comics are created (or preserved) equal. While some can be sold for thousands of dollars, others trade hands for mere dimes and pennies.
The writers and artists who create them determine a comic book’s valuation in the future. Usually a comic sells for about $3 in the US, but if a famous comic book artist like Greg Rucka or Stan Lee signs it, the price skyrockets. New York’s top comic book vendor sells a Stan Lee autographed comic for $500 per issue.
Comic issue number also matters. Those very first issues from the 1930’s are valuable because wellpreserved copies are rare. Fewer copies of a title were printed then and, because children were the main consumers, they were easily damaged or lost. The few preserved by collectors – or discovered decades later in someone’s attic – are valuable.
Limited run special issues and ones that launch a character – for instance, the issue in which Wolverine appears for the first time in a Hulk comic – tend to appreciate in price much faster. Like in all book collecting, the comic’s condition matters too. A pristine copy and one with a minor tear of the same issue can fetch vastly different prices.
Ashraff who is Chief Creative Officer of Ashraff Associates – a design studio and advertising firm – was a child when he became a fan and investor. After moving to the UK and discovering specialty stores for comics and related collectibles, he became an avid collector. As he collected, he gradually learned the different values attached to items and the art of collecting comics as an investment rather than just a hobby. Most regular issues – even in a decade – will be relatively worthless, he says.
Today, Ashraff has a vast collection housed in a cave-like room at the top of a tower that rises from one corner of his home. Filled with floorto-ceiling shelves of comic books and red-painted walls lined with movie posters, the space doubles as his own studio and the office of his business, Ashraff Associates. Questioned about keeping his collection in a space through which many people walk in and out, he says that he needs to be around what inspires him – and inspiration plays an important part in his line of work. “If I was in a conventional office, I wouldn’t be as inspired as I am when I work here,” he says.
For Ashraff, part of the pleasure in collecting comic books and related collectibles is also people seeing and admiring them. “If I got a number one issue signed by Stan Lee, I’d put that in a bank vault, as it’s too valuable to keep,” he says. “But part of the pleasure in collecting comics is having them around me. Everyone who comes here thinks it’s a really cool office. Sometimes when I’m bored in the night, I come up here and read one of them. If they were preserved in a bank vault, I wouldn’t be able to enjoy them.”
Ashraff points out that there’s a misconception that comic books are for kids, which isn’t true. Of course, many of them can be enjoyed by children too, but some storylines are purely for more mature audiences. “Comics provide a lot of entertainment,” he says. “I find my imagination taken to another level when I read them.”