In this article, I am sharing how I am using my own sales data to improve my comic book investment game.
I am sure many of your track your own sales and purchases using excel. However, most collectors I know just used them for record purposes. They used it to know what books they have purchases and what kind of profits they have made.
However, depending on what kind of date you entered, you can draw a lot of useful insights just by analyzing your own sales. These insights come from summaries that you can create from your own data.
Below are 3 summaries that I encourage every serious comic collector to have.
1. Overall portfolio performance
The basic and easiest thing to do with your sales data is to compute the total cost, revenue (less fees) and the resulting profit.
While all of us have scored some great investments on a per book basis, what is your performance across everything you bought?
From these 3 data points, you will know:
- How much is your net outflow or inflow? i.e. have you recovered all the cash you have put into comics
- If not, how much negative cash are you out?
- How long will you need to recover every dollar you put into comics?
Doing these gives you clarity into your portfolio.
Why is that important?
It is to address our problem of excessive buying that all comic speculators or investors suffer from. We are so busy buying and selling that we might lose sight of how our portfolio is doing.
Since you already have the sales data, all you need is to sum them up and compare.
2. Portfolio performance over time
This is a more tricky function to perform but essentially, below is what you can do for your portfolio.
If you have been in this game for some years, the above is how your summary can look like over time.
- Cost: cost of your purchases in that year, including shipping
- Revenue: what you have earned selling your comics that are bought for that year, less shipping and fees
- Balance: This is the net cash position for that year
- Profits: Profits for that year
For example, if you bought 2 comics for $5 in 2019 but sold one of them in 2020 for $8, below is how the table will look like
The important thing is to credit the sales to 2019, instead of 2020 even though the sale was made in 2020. This is because your performance is almost 100% determined by what you buy, rather than when you sell.
By allocating your sales this way, you can see if you were buying the right books, based on your sales performance.
The purpose of doing this yearly is to analyze your yearly performance. Believer it or not, there can be big differences in how much returns you get between years.
If you see such a discrepancy, you can then analyze the comics you bought and see what causes the poor performing years. Possible reasons I have experienced:
- Portfolio allocation differences: some poor performing years might be due to allocating too much resources to speculative books, rather than undervalued ones
- Bad price entries: Either I FOMO or got in too late, resulting in either lower gains or even losses
- Lack of big wins: The Pareto principle governs our returns as well. If you hit a big win, it will improve your overall performance greatly. The converse is true. If you didn’t hit one, your performance for the year will be poorer.
3. Segment analysis
The last thing you can do is to form different comic segments that reflect your investment thesis. This is done by simply grouping some of your books into a common investing theme.
By comparing the segments performance, you will know which of your investment thesis has yield better results. For the thesis that perform poorly, you can then reflect on why is your thesis wrong? What part was overlooked? How to improve on it?
As example, below are 2 segments that I track. I usually pick a handful of books that can add up to least $1000 in value to make it easier to track.
The first is my Batman family segment
The second is my Marvel young heroes segment
First, some explanation on the terms:
- Cost: cost of buying comics including shipping
- Value: current Ebay value
- Value Adj: Value adjusted for Ebay and Paypal fees
- Target: What I hope these books can achieve
- % to Target: How far is the vale adj to the target. 100% means target has achieved
- Profits: Value adj – cost
You can see that these 2 segments perform drastically different.
The young heroes segment has yield almost 350% returns so far while the Batman family has returned a -1%.
As an investor, I have to asked why did the Batman Family segment do so poorly? Did I get in too late especially for the Batman #655 variants? Should I wait to see some momentum for Batman Family before investing in the related issues?
Conversely, I want to ask myself on how to repeat the performance of the Young Heroes segment. Did I ride on the right trend? Was it because I got in early enough? Is it because all Marvel books are good investments etc.
Also, the segment analysis also reveals one of the attractive things about comic investment. If one of your segment performs well, it will achieved so much returns that it can cover the losses from other segments.
This asymmetry in losses and profits is the hallmark of any good investment assets , i.e. small losses but potentially big returns.
The above are just 3 examples of how you can make use of your own sales data to derive additional insights to your investment performance.
Of course, if you treat this whole thing as just a fun side hobby, such analysis might be an overkill.
However, if you desired to sharpen your comic investment skills, such analysis can force you to analyse what went wrong and how to fine tune your investment models to achieve higher returns in the years to come.