Emerald Night & Maersk- an investment?

[22kane]

I'm always amazed as I poke around eBay on the going rates for certain Lego items. The Santa Fe and BNSF loco's are very popular items when they go to auction and usually end up getting about $100 to $150 U.S. Many times I see other things included with the loco's which drive the cost up. Many of the Buy It Now items are usually priced way too high to see any action. There are several other trains that fetch a high price like the Holiday Train and so on.

Recently I've been watching auctions on some current trains like Emerald Night and the Maersk set. I'm quite surprised on the amount that people are willing to pay for one item from the set. The EN passenger car usually goes for about $70 in America when the whole set is only $99! These two sets are definitely one of a kinds and will be sought after years after their production runs. So do you stock up now and sell later down the road? Or maybe it's not an investment but you're just happy to have one.

I have bought two Emerald sets, one sealed one opened and two Maersk sets, both opened. I think I might buy one more of each just to see what happens 5 years from now ( keep them sealed of course). I figure if your going to invest on any lego trains these are the two to do it with. With all of the Lego trains out there it just seems these two are really going to increase in value, so how many will you own?

[peterab]

LEGO as an investment has traditionally been pretty bad, since the return over time has generally been less than inflation. Part of that is due to a limited number of collectors of the right age group, but as time marches on that may change.

On the other hand sets like the Modular buildings are jumping in price after they are discontinued. There has been some discussion among the LEGO ambassadors about re-issuing Cafe Corner and Green Grocer due to the high prices on the second hand market, so if that happens I guess the potential profit is limited.

Given you can sell the carriages of the Emerald Night right now at a good price resulting in some other very nice parts very cheap (some of which get very good prices on Bricklink) I'd suggest it's smarter sell now rather than wait for a future profit.

The Maersk train is still relatively new so there's little point in buying these for investment for a year or two.

[hoeij]

Prices can go up but they can also go down. The safest bet is if you buy a set that (a) you're willing to sell if the price goes up, and (b) you'd be happy to keep for yourself if the price doesn't go up.

The train 7897 went way up in price after it sold out (for a while, lego wasn't selling any train sets). But its price has come down since then (probably because there is a great selection of new trains out there right now). So to make good money on that one, you'd have had to sell it say half a year after selling out. Some other sets, like Cafe Corner, have been increasing in price for a much longer time, so to make the best money on that one, you should not have sold it after half a year. So, how long you have to hold on to a set is not always the same.

Still, if you buy them low enough (say at buy one, get one 50% off, at TRU) it seems like a pretty safe bet that you'd make money, provided that you buy top-end set, the best ones out there (like the modular houses). For lego trains, the top-end sets are clearly the Emerald Night and the Maersk.

If you buy some to sell at a profit, you probably do not want to keep them for a very long time (say 10+ years) because you have to factor in the cost of storage, and there are many wonderful old sets that are quite cheap (e.g. even a legendary set like 8868 air claw still sells often for less than $100 on eBay).

[22kane]

Both of you have interesting points and many I agree on. With trains however, they seem to hold and increase in their value. Most of the 9v products sell quickly and high regardless of condition at times. It seems on average most of them go for double their original price. Part of this is because many collectors have a good amount of 9v stuff and need parts or don't want to convert entirely to PF. All together it's a crap shoot, like playing the stock market if you buy to make a profit. Many of the sets are obvious in that they won't be worth anything like World Racers. But really when it comes to trains you really can't lose.

[peterab]

But really when it comes to trains you really can't lose.

Well that depends on when you look. A few years back before the end of 9V, many discontinued sets were selling MISB at below retail. 4560 is a good example. After the metroliner was re-issued its price also plummeted.

Even the Santa Fe coaches were a bad investment, since they were clearanced at about US$20 a piece. The price has taken a long while to come up to a profitable level again, and in the mean time you could have had your money in a term deposit for a better investment.

Many things that appear to be good investments turn out to be otherwise. Check out the number of people who bought up series four collectible minifigs. Obvious sure things tend to attract a lot of people trying to profit, so the profit becomes much less due to over supply.

While I agree trains are better than world racers, and the Maersk and EN are probably the lowest risk, that doesn't make them good investments. There may be a profit to be made, but I think it's far more sensible to buy extra of sets you wouldn't mind being stuck with extras of and sell them if you feel the profit is better than the parts are worth to you. I sold my extra Cafe Corner and Market St when the prices shot up, but I only bought extras because they had very usefull parts and I got them at good prices. Had they not gone to silly prices I would have been very happy to keep them.

I'm not sure for example that the Fire Brigade will shoot up when its discontinued since the supply has been much better (at least here in Australia) and it has been regularly discounted. I'd still buy extras if I could since the dark red parts are rare and useful to me, and if it did shoot up I'd have the option of selling it later.

Edited August 3, 2011 by peterab

[paul_delahaye]

I think any flagship set is a fairly safe bet if you are willing to wait long enough, take any of the 80's and 90's flagship sets, MISB, 6399 Airport Shuttle, Technic Air Claw Rig, Technic Shuttle, Technic car, and any of the 12v trains,

Whether they are holding their value so well because back in the 80's no one saw an online trading market, so very few people actually purchased them as an investment. I'm sure they will be worth money in the future, but as there will be many more around, it's a good question, I've bought 5 Maesrk trains, 2 for me and 3 to put in the loft for the future, I have a few other MISB sets tucked away, but not many as I like to open sets too much and build them, I just wish I could find some of the 12v sets a little cheaper :-(

[AndyC]

Whether they are holding their value so well because back in the 80's no one saw an online trading market, so very few people actually purchased them as an investment.

And I suspect that is very much the case. Buying a set back in the 80s with the sole intention of making a profit would have seemed a risky business, since you'd be relying on finding a good toy auction with the right kind of buyers present. With the Internet and the likes of ebay, selling things on is a much more common practice.

And if the success of the Emerald Night convinces TLG to produce more AFOL oriented train sets, you may well find that people will prefer to pick up whatever the current steam train(s) are, rather than paying an exceptional amount for an out of production model. Alas the only way to really guarantee a good investment is to buy sets that aren't particularly popular at the time, but whose appeal rises considerably later on. Predicting what those sets will be is rather more difficult however.

[peterab]

Whether they are holding their value so well because back in the 80's no one saw an online trading market, so very few people actually purchased them as an investment.

I think this is critical, it all depends on how many people hang on to them, and for how long. If lots of people think it will be a good investment, it probably won't be as good an investment unless the market grows :-) All that being said there does appear to be a collectors market in Hong Kong, where people are trading in MISB sets for stupid prices. I'm not sure if this has something to do with perceived rarity, or conspicuous consumption but I suspect it might.

I just searched compounding interest and did a calculation based on 30 years, $150 dollars investment, 20% interest (what a successful conservative long term investment on the stock market should return). After 30 years you should have $35,000. On the other hand had you bought 7740 for $150 and you still had it MISB you could list it (and maybe even find a buyer) for $3000. Not so good in comparison. That's a huge difference, so even though my figures are pretty much wishful thinking and guess work, LEGO has a long way to go to be a good investment.

Edited August 3, 2011 by peterab

[roamingstop]

If lots of people think it will be a good investment, it probably won't be as good an investment unless the market grows :-)

With the success of places like Ebay and other auction sites, and people being able to readily see that some items sell for a lot of money, there are more and more people who think they can buy now, and sell in 5 years to make a profit. This kills the market potential. I know I did this with the Winter Toy Shop - I had a strong hunch it would prove very popular... but I also got stung as Lego re-released the model last year, and again this year.

Maersk ships got re-released with slight changes, which for all but the most MISB collector, are no different. The modular houses etc became a surprise hit, so the early ones sell for a lot now; but that was more luck. Look how many times (different) Hogwarts castle has been released!.

As mentioned above, buy MT / EN if you think that you will always like to have multiples of that model, even if it never goes up in price. I bought a few EN's for the carriages; and sold the locomotives (+tender) for about 60% the purchase price; which I believe to be fair. Similar with those selling the Maersk loco. I will shortly buy some more EN's - not for investment but I have a MOC of a 0-6-0 which uses the similar colours and pieces; the rest will be BL'ed.

Edited August 3, 2011 by roamingstudio

[hoeij]

Well that depends on when you look. A few years back before the end of 9V, many discontinued sets were selling MISB at below retail. 4560 is a good example. After the metroliner was re-issued its price also plummeted.

...

I sold my extra Cafe Corner and Market St when the prices shot up, but I only bought extras because they had very usefull parts and I got them at good prices. Had they not gone to silly prices I would have been very happy to keep them.

Recent years have seen large price increases, in particular Cafe Corner and Market St. I think the rise in those prices is partially due to the overal rise in lego sales. Lego has seen increases in sales in the last couple of years, so that means that there are now more lego buyers then there were a few years ago. That in turn means: more people interested in buying the sets from a few years ago.

As long as the total number of lego buyers is steadily growing, you are likely to make a profit if you buy lego flagship sets. If the lego costumer base stops growing, then it's not so clear if prices will still go up enough to make it worthwhile.

Coming back to Cafe Corner: the newer modular end up increasing the price of Cafe Corner because the modular houses are so nice that when people buy them, they get a taste for more. On the other hand, when the new passenger train came out, it caused the previous one (7897) to go down in price. Somehow, you have to know to hold on to Cafe Corner until the price became insanely high, while 7897 should have been sold as soon as you get a good profit.

Trends usually do not stop very quickly, but also don't last forever. In the last couple of years, buying lego flagships would have been profitable, so it seems likely that this will still be true right now. I don't think this will always be the case though, if lego overall sales starts to flatten out, then demand for the sold-out sets will reduce as well.

[lowbike1]

I just searched compounding interest and did a calculation based on 30 years, $150 dollars investment, 20% interest (what a successful conservative long term investment on the stock market should return). After 30 years you should have $35,000. On the other hand had you bought 7740 for $150 and you still had it MISB you could list it (and maybe even find a buyer) for $3000. Not so good in comparison. That's a huge difference, so even though my figures are pretty much wishful thinking and guess work, LEGO has a long way to go to be a good investment.

I've been wondering about how the numbers worked, and I'm glad you did the math, good info to know

thanks

[Pingles]

Just like any investment these things usually depend on how much work you want to do with them.

I had a friend who made a ton of money on the stock market but he LIVED AND BREATHED nothing but stock market for several years. He was reading every newsletter, investment site, etc. and pretty much disappeared behind his PC for several years until he announced he had made enough money to retire.

If you want to monitor prices and trends and you enjoy it go for it. But be prepared to spend some time doing it and also be prepared for some decisions to go horribly wrong.

[Kaila]

To the OP - I really hope you ignored the naysayers and bought 10 of the Maersk and went with what obviously was your gut feeling when you posted this.. 2 years on and you would have what.. almost tripled your investment..

I could kick myself for only buying 2 (recently payed $250 AU for the second).