USA Today Video/Article on LEGO investing

[legotrader]

There is an article in today's USA today on LEGO investing and the website www.brickpicker.com. There is also a video of some of their collection (http://www.usatoday..../12/24/1789695/)

[LEGO Historian]

Am I the only one not really happy here??

Granted, I hope for all the success in the world for these guys.... but.... are pure LEGO speculators what we want in the hobby... because this sends a message to folks who are not at all interested in LEGO... but interested in profiteering. And I'm not talking about folks who buy 2 sets 1 to play with and one for the future (whether to trade or sell).

And when I think speculations of the past... I think of things such as modern sports cards... Beanie Babies, Hummel Figurines... going all the way back to the Tulip Mania of the 1630s.

There's a part of me that is happy that the LEGO secondary market is such a thriving business... but then there's the speculators... who are a fickle group... who once they think LEGO profiteering has reached its' limits go off to some other commodity, thus leaving the true collectors who went along with the frenzy.... left holding the proverbial bag of LEGO.

The CMFs are another worrisome area... TLG made millions and millions of each series... and yet look at the exuberance of the prices of these...

Like with anything else... tread carefully... and don't put too many eggs in 1 basket...

[LEGO Guy Bri]

This is a very nice report, and these guys run a VERY nice unique site. Brickset only went so far, but Brickpicker is way more comprehensive.

Am I the only one not really happy here??Granted, I hope for all the success in the world for these guys.... but.... are pure LEGO speculators what we want in the hobby... because this sends a message to folks who are not at all interested in LEGO... but interested in profiteering. And I'm not talking about folks who buy 2 sets 1 to play with and one for the future (whether to trade or sell).There's a part of me that is happy that the LEGO secondary market is such a thriving business... but then there's the speculators... who are a fickle group... who once they think LEGO profiteering has reached its' limits go off to some other commodity, thus leaving the true collectors who went along with the frenzy.... left holding the proverbial bag of LEGO.

I'm not sure which way I lean on this matter. On the one hand, I LOVE easy money, but it's kind of "dirty", in a sense that you are doing this to fellow new collectors or returning collectors, I see this. I am not big into collecting to resell, I do have some sets I have to resell, but only to pay for future sets, I know I'll want. As we all know, this can be an expensive hobby... On the other hand, I look at it as a way to get what you missed. Had it not been for people reselling sets, I wouldn't have many, that I otherwise, would not have. That said, I am not one to drop hundreds over RRP on one set (except for 4999 Vestas Wind Turbine, thankfully acquired for under $350), but I'd never pay much more than that for another retired set. Those who hold these sets for resale give a second chance for those who missed it first time around. Quid pro quo: all good things, come at a price.I'd just like to see where some of these sets (modulars, UCS, etc) will be, price wise, in 20-30 years.

...going all the way back to the Tulip Mania of the 1630s.

Those poor fools... I just saw that on a History show 'Mankind' a week or so ago. I don't think I'll be forgetting that anytime soon.

Edited December 27, 2012 by LEGO Guy Bri

[Jargo]

I detest profiteers. Scum of the earth. Seriously.

[LEGO Historian]

I just had a longer look at their website... and I have to say that what these guys are doing (coming up with prices as found on EBAY)... is not a problem for me. It's actually a good idea, in the sense that you would want to know if you're paying too much for some LEGO item. The only thing I have a problem with is it being used by speculators... and I guess there's no way to root out a serious LEGO collector from a non-LEGO speculator. So they are providing a valuable service for collectors...

[BrickG]

I've tried this with a whole 3 sets. I'm just not patient enough. I hate it. The sets are still in my closet after over a year waiting to go up in value (2 have somewhat, the other two haven't yet).

Even if I make a +100% profit eventually I hates it, and I'm not rich like these guys who buy rooms full of Lego (at that point I'd just retire off my wealth). :)

[draganb]

That's all well and good, but anyone who's into lego knows better than to shop on ebay. The prices there are totally dubious. I see sets still in production being sold for 3x their value.

[Faefrost]

I hate to say it, but didn't we live through this exact stupidity with comic books in the 90's?

[Andy D]

LEGO might be hot for profiteering right now, but if LEGO produces more sets and the folks buy them and more folks think this is a good idea, pretty soon there will be more people trying to make money off of LEGO that there will be a flood of sets availble on the secondary market and pretty soon nobody is making any money off the LEGO collectable craze, as faefrost just mentioned about the comic book craze. I really wouldn't want to even think of funding my retirement with LEGO or comic books or any other sudo investing fad that happens along.

To the folks trying this, good luck, but I hope they know when to get out.

Andy D

[eurotrash]

However much you either detest the idea of speculators, fully support them, are ambivalent either way, or whatever if a story has made it to USA Today then it's probably already peaked.

Personally the idea of Lego as an Investment vehicle seems sketchy to me. At anytime TLG could reissue any old sets and undermine the 'value' of your Brick portfolio, the trading market is thin and illiquid - just how many collectors want a Mint Condition UCS 'thingy' and what happens when the demand exceeds the supply?

You want evidence? What about the Minecraft Set. As soon as it ceased availability through the Lego website prices on Craigslist went north of $100, then they reappeared on the Lego website and the Craigslist prices plummeted.

Edited December 29, 2012 by eurotrash

[Lego_Hero]

LOL, as a comicbook collector in the 80's and 90's, I can identify with the sentiment. My brother and I bought thousands of comics, part out of hobby and part out of hopes we would get rich off of it in the future. My collection is worth thousands, but hardly retirement level.

Not one to learn my lesson, I bought one each of the Star Wars Phantom Menace action figures when they came out in'98. Big waste.

None of it amounted to anything because I didn't understand the scarcity aspect of speculating. I worry about these guys because they are at the mercy of Lego's own desire to make profits. It's just a matter of time before many of those sets are re released. Luke's landspeeder, different versions of the Melinneum Falcon, minifigs from CMC series and even vintage minfigs being released as promotional pieces; all examples of Lego going back to the well. This means their investments drop everytime their sets become a little less rare.

Still, more power to them for doing what they love.

[Yatkuu]

Let he who never thought of making a small extra cash out of LEGO cast the first stone!

That being said, making living out of it is something else entirely and as many have pointed out very risky - after all it's only ABS.

As for the point of taking advantage of other people's passion... I try to be cool and tolerant about all this, no one of forcing you to buy anything. The only thing that bugs me is when I see so many sellers in LUG meetings... merchants of the temple, to quote another verse.

[Faefrost]

My biggest concern with this level of speculators is the ultimate harm they do to the hobby and the companies they are speculating on, when the artificially padded market that they create crashes. In the 90's the crazy buying for investment nearly buried most of the comic book publishers when the numbers finally rebalanced around their actual consumer base, and not the crazy get rich quick artists. How many of Lego's accountants are planning for a future production that isn't inflated by a 20% boost in purchasers who just happen to be trying to make a quick buck because of a USA Today article? This sort of speculation pushes companies to increase production capacity beyond actual productive demand. In the end it burns them when the bottom drops out of the market, and all the speculated product rushes back into the open market to compete with new.

[Flipz]

Bottom line: if you really love LEGO and you have the cash to spare, then I'd say pick up a few extra sets to sell later; if you're not a real fan, then don't bother.

Everyone else here has already explained why LEGO as a pure investment vehicle for an outsider is a really bad idea, so I won't re-hash their arguments. On the other hand, if you truly love the brick, then it's a win-win situation; if the investment becomes valuable, then you've made yourself some extra money to spend on your hobby, but if not, you can always just tear the thing open and have more building supplies. Either way, you win.

[Vindicare]

LEGO might be hot for profiteering right now, but if LEGO produces more sets and the folks buy them and more folks think this is a good idea, pretty soon there will be more people trying to make money off of LEGO that there will be a flood of sets availble on the secondary market and pretty soon nobody is making any money off the LEGO collectable craze, as faefrost just mentioned about the comic book craze. I really wouldn't want to even think of funding my retirement with LEGO or comic books or any other sudo investing fad that happens along.

To the folks trying this, good luck, but I hope they know when to get out.

Andy D

I'm rather curious myself on how many people bought extra 10197 Fire Brigades(and how many extras) because people have seen how the ones released before it are doing on the secondary market. I think the majority of them are going to be having a case of buyers regret.

But, as Flipz said, if you were already a fan and hoarded away a few extras on hopes they increase in value and they end up not doing so, you're not really out anything.

[LEGO Historian]

Although Beanie Babies are not a great analogy.... some lessons from their hype can be learned by LEGO speculators and buyers alike...

http://www.worthpoint.com/blog-entry/collectibles-boom-bust-rise-fall-beanie-babies-empire

However, unlike Beanie Babies, LEGO has at least intrinsic value as separate parts that can always be parsed out for sale, rather than as a collectible whole.

And for those folks who gamble with highly priced LEGO sets or parsed... I am reminded of 2 LEGO items... one a part and one a set...

1) the Maersk blue construction helmet for minifigs.... at one time they were selling for up to $600 each... only ever found in the 1980 1651 Maersk Truck. But in 2011 the Maersk 10219 Train caused the bottom to drop out in their price when that set contained 3 of these helmets. Now granted... the 2 types can be separately identified, but the older one now only commands a price of $80... if they sell... and the new one can be had for less than $2 each.

2) the USS Constellation Hobby Set... the original 398 set of 1978 was produced in limited numbers, and could sell for over $1000 in MISB. When the set was re-issued under the "Legends" line of sets in 2003 as 10021, the older sets dropped very sharply in price, and the newer one can still be found for about $125 in MISB.

So, these are all things to take into account when thinking about speculating in rare LEGO sets and parts.

[Hey Joe]

I believe it says in the article something to the effect that the price usually peaks out about five years after it's been discontinued? Sounds like the best time to sell to me.

Sellers at LUG meetings? Doesn't sound too kosher.

[paanjang16]

I feel that there is some truth to the article as I see some sets go up in value such as the Cafe Corner, Green Grocer, UCS X-Wing, 8421 Mobile Crane and even the latest 8258 Crane truck. It all depends if TLG will reissue the set or make a new set to make the original set out of date.

The biggest example I see the re-issuance of the Batman sets under the DC superhero line where you no longer have to pay through your nose for a simple batman figure. However there are some exception to the Batman case as TLG has not issued another full size tumbler. The one in the Batman and Bane set is tiny compared to the one in the Joker Ice-cream truck set. So unless TLG decided to burst the bubble for the UCS MF, UCS X-wing by re-releasing or by releasing a whole new model, the prices for these set will continue to rise. I would love TLG to re-release the Cafe Corner and Green Grocer for example.

Some set will always go up in value like the flagship Technic sets which are hard to find and command a premium price even at retail. I still feel the 8421 Mobile crane will still command a high price unless its successor can beat it eg. more advanced, have pneumatics, remote control etc. Another example is the price for the 8880 supercar due to its rarity and how advanced it is compared to present Technic set. Take note that the value increases if you keep it MISB, which is something I find very hard to do if I am lacking space.

[Nintendawg]

It's a bit misleading showing a UCS X Wing as an example. Someone casually skimming through may assume 5x the profit in 4 years is now possible or even the norm. Which it certainly is not.

[Luke Styer]

The real takeaway from this article is the fact that the word "Legos" didn't appear even once.

[BrickPicker]

That's all well and good, but anyone who's into lego knows better than to shop on ebay. The prices there are totally dubious. I see sets still in production being sold for 3x their value.

The asking price has nothing to do with the data on the BrickPicker site. The BrickPicker data is based off of "sold" eBay auctions and is quite comparable to most Bricklink sold listings.

The reason why some sets sell above current retail prices is that many eBay sellers sell internationally and get paid a premium for this. The resellers will send LEGO sets into parts of the world where even TLG won't sell. I like to think of it as a needed service to the LEGO fans worldwide that don't have the ability to walk into a LEGO store and buy a set.

[LegoDad]

The real takeaway from this article is the fact that the word "Legos" didn't appear even once.

??? Maybe I'm illiterate, but I see the word 6 times just on the first page of the article, and obviously it's in the title of the article. smh

As a member of the site, it is full of information that is extremely useful for both buying and selling. Ed and Jeff provide all of this at no cost, and spend tons of their own time on the site. Most of the members are people just like me, they may have 1 or 2 of a single set, but certainly not dozens or hundreds, as some of the misguided on here think everybody is. I am looking to make a profit, no bones about it, if that makes me the scum of the earth JARGO, than so be it. But I prefer to think of scum as pedophiles, murderers, and rapists, not someone that has a couple Lego sets in their basement.

I'm not looking to retire on it, my Lego collection is less than 5% of my entire portfolio, but it's a lot more fun than getting quarterly statements from my financial advisor.

[L@go]

??? Maybe I'm illiterate, but I see the word 6 times just on the first page of the article, and obviously it's in the title of the article. smh

Maybe you are? The word in the title is "Lego". The word Luke Styer is talking about is "Legos", the plural form that is generally frowned upon by most adult fans of LEGO.

[BrickPicker]

The real takeaway from this article is the fact that the word "Legos" didn't appear even once.

I instructed Matt Krantz, the USA TODAY Financial writer, not to use the term and that LEGO bricks and sets were the proper terms. As for the article itself, my brother Jeff and I had discussions with Matt that amounted to about 3 or 4 hours in total, on a wide range of topics. From "parting out" sets to LEGO bubbles, we covered a lot, but not everything was written exactly the way we said it or was included in the article. Overall, Matt did a nice job explaining the basics of LEGO investing IMO.

I was honored to be asked to do the article and knew it would stir some pots, but overall, I feel it helped promote our site and the LEGO brand very well. It will bring new people into the LEGO hobby and that is a good thing.

Edited January 3, 2013 by BrickPicker

[LegoDad]

Maybe you are? The word in the title is "Lego". The word Luke Styer is talking about is "Legos", the plural form that is generally frowned upon by most adult fans of LEGO.

Ok, whatever, I didn't realize that adding an "s" to Lego what blasphemy. No harm done I guess.