He understands micro and macro markets and how current news influences them. He tells me what market indicators to watch for so I get a better understanding of my corporate clients' needs as well as what will impact my readers. He has told me one number to watch is the jobs creation market report. He also said that good news there is actually now bad news for my clients and comic book hobbyists. This was realized in my office a few days ago. During a meeting recently, one of my clients screamed 'there goes a a million dollars to our bottom line' as a good job report came out. Here's why this was bad news for businesses AND comic book collectors and investors.
But they say it is good news?
Today, the jobs growth report came out with very good news. The US economy created 336,000 jobs in September, according to the Bureau of Labor Statistics. This was double the growth that economists predicted. Increases were made across the board in hospitality, health, and other sectors of the economy. In contrast, wages rose less than what was expected. That still is a sign of strong economy, so why is this bad news for EVERYONE reading this column. It all relates to the fed and those pieces of plastic.
Tapping the brakes
The chairman of the Federal Reserve, Jerome Powell, has stated that the job market has to slow down in order to combat inflation. This is achieved by raising the rate that they charge banks to get money. The fed raises the money it charges banks, and in return banks raise their rates. This results in corporations re-evaluating their plans to expand and/or hire more workers or provide raises to current staff. This translates to fewer jobs being created.
The ability to lend money will also be impacted. Banks will be more selective in how companies receive money. Start-ups may dry up because they will be left out of the process for all practical purposes. If they do receive loans, they will have to pay through the nose with very high interest rates. This is now more certain than a mere few hours ago (on Friday, October 6). The ability to loan money to businesses to drive down employment will also spill over to the personal lives of individuals.
Whose hand is on my wallet?
Banks will soon be raising interest rates again. The interest rates for buying cars, houses, and personal items on credit will again go up. Interest increases will coincide with the increases businesses will see. As a result, McDonald's will be forced to either raise the price of their Big Mac or the burger will shrink in size. That is because businesses must eventually pass the price to do business onto the consumer. The consumer's fee increases for swiping that card to make the purchase will also raise the cost of a Big Mac to the purchaser.
Household price increases may make it hard to justify to a spouse, or even oneself, that purchasing that $400 hot comic is better than paying for heating the house in the winter. This increase in costs makes being prudent and getting the right information now all the more important when buying and selling collectibles. 'Winter is coming' does not describe just the seasons, but for comic book buyers and sellers that saying is more like the warning in Game of Thrones. The unknown is a scary enemy.
Motor City Comic Con
The Motor City Comic Con ("MC3") is scheduled for November 10-12 this year. Some of the guests already announced are David Harbour (Stranger Things, Black Widow), Billy Dee Williams, Jimmy "Mouth of the South" Hart, Xolo Mariduena (Blue Beetle), and Ralph Machio, among others. More guests will be announced as it comes closer to the convention.
It is an event that has really been building up to the point where one show a year could not contain the fans' hunger for the event. The show has gotten larger and the guests more substantial. Fans should definitely attend this event. Besides a nice social event, it is a rare opportunity for buyers and sellers to gather data that should not be squandered. Sadly, many will miss out on the chance to expand their understanding of the current comic book market.
That does not make sense, Joe
The MC3 is a convention that is in the middle of the country. Most of the people who attend are your typical middle-class patrons. The way they respond to economic changes is a good indicator of what is happening elsewhere. GoCollect attends these conventions to glean information on how the collectible market is health-wise. A few books may appear in sales data but the way people think is very important as well.
Vendors are interviewed who have been selected because of their honesty and frank revelations of their sales. Buyers are interviewed to see what their expectations and targets are as well as how they are paying for those items. Buying limits are also uncovered. GoCollect does its best to provide a broad review of the event, but individuals who attend the event can see how their own interests are being impacted much more precisely. The price of a ticket is well worth the intel it provides. That is why GoCollect attends these conventions.
Why ignoring reports from conventions is very bad
This reporter can say for a fact how he observed a buyer he knows and was shocked at some of of what this journalist saw at the last MC3. These were things that really troubled me. The buyer knew an assessment of the whole transaction is very important to review the thinking behind the numbers. That may seem inconsequential, but he reasoned that fewer buyers conducting credit card sales because of higher interest rates might mean fewer higher-end books being chased by the majority of the market. The price people pay for books is not $500, but $500 with an interest rate of 20% tacked on to that price until paid off.
MC3 had a lot of books that were priced below the FMV and still not moving. He saved a thousand dollars waiting to add a book to his collection because of this intelligence gained from just watching what was happening in person. The data said buy but the total picture said wait. The reason people respond to a set of factors is very important to understanding why the numbers are what GoCollect reports.
The Last MC3 could tell the future
The last MC3 was very prophetic earlier this year. Major books that were once in demand were not moving. Key players who would attend were not buying, but still there observing the market. These buyers saw a greater shift from comic book buying to the celebs and seminars that were provided. This fact was seen in the September jobs report which displayed a great increase in jobs in the hospitality sector. People locked up during COVID-19 wanted to be entertained but weren't necessarily looking to buy major acquisitions.
Those who were buying comics at MC3 shifted to segments of books that were long ignored but gaining transaction. Buying strategies like this are still happening right now. Attending events like MC3 is something the majority of people would not deem to be that important, but it is an important methodology for avoiding bad outcomes.
An attorney who can leap a briefcase in a single bound!
Most attorneys who review a real estate transaction stick to the four corners of the document. That is a good start. I, however, pull data such as crime statistics, accident reports, and sex offender registries as well. That house may seem like it is priced well below the fair market value until one finds out that your potential new neighbor is a recently released violent sexual predator and the main reason the owner is moving (happens more than you think).
Data collection is what I will be doing at MC3, but it will go beyond merely reporting. Interviews will be analyzed involving different socioeconomic statuses groups to see if the economy is impact these groups differently when it comes to comic book sales. If our readers attend the MC3 please look for me; I'd love to talk shop.
What does the future hold?
Comic book hobbyists have to stop relying upon what happened in the past to predict the future. This tends to eliminate the human element altogether. Economists with decades of experience are dumbfounded as to how current factors will shape the future and yet comic book websites are screaming buy buy buy! The question they never answer is the why right now.
Readers need to go right to the numbers to see if that is a call that is advantageous to them. Remember, the hobby is fighting more than a micro market, but a Fed chair who is trying to slow all markets down. From blue chip mega keys to common books, all are seeing price drops because of his actions. All socioeconomic groups are being impacted by rising interest rates, and comic book buyers are not immune. The key is how much are they being effected.
Fishing for deals instead of buying fillets
GoCollect tries to tell collectors how to fish rather than to fish for them. Market assessment is always part of recommendations. The rationale behind the numbers is just as important as those numbers. The small price one pays for admission to MC3 and other events is in this writer's opinion more important than spending the same amount of money on a book. Millionaires and successful innovators I have observed believe that information is the most important component to having a successful outcome, and they are willing to pay for it.
Collectors and investors beware
The temperature of the market is very important. In comics, it can mean holding off on a very expensive key merely because you observe other competitors who are usually into that book walk away. That might mean a potentially motivated seller in the future. Items like this cannot be determined if one only sits on the sidelines. Now is the time for collectors and investors to get into the game and see what is truly happening.
Collectors may not like to say it, but paying more for their books is not smart if it makes you lose the ability to add other books. A collector can thrive if they make prudent purchases in a bad market. In addition, market intel will indicate when investors should be buying/selling. Not understanding market conditions only will hurt both of them. Translating the global economy and how it impacts the collectibles market for comic book hobbyists is now more important than ever.
UPDATE AFTER THIS ARTICLE WAS WRITTEN THE JOURNALIST WAS PERSONALLY INVOLVED WITH A SALE OF AN ICONIC MEGA KEY THAT WAS IMPACTED DIRECTLY BY THE ECONOMIC INDICATORS MENTIONED IN THIS ARTICLE. A FUTURE ARTICLE WILL PROVIDE INFORMATION ON THAT SALE AND THE FACTORS THAT EFFECTED THE POTENTIAL BUYERS. THE SALE OCCURRED ONLY ONE DAY AFTER THE ECONOMIC DATA WAS RELEASED! PLEASE LOOK FOR THAT ARTICLE.
