lego investing ?? LOLOL wet blanket from old geezer

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C&T
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lego investing ?? LOLOL wet blanket from old geezer

Post by C&T » Mon Oct 07, 2013 10:37 am

So I've spent several hours recently poking around amazon, ebay, craigslist, eurobricks, here & a few blogs reading about the price of legos, whether they are a good "investment" LOLOLOLOL etc and wanted to share my negative thoughts about this topic

Firstly, if you want to "invest" $$$ please spend some quality time reading about mutual funds, large cap, small cap, reits, bonds, stocks, avoiding scams like options & futures and so on. I believe this is a much better use of your time & $$$ than trying to make $$$ buying/selling lego kits.

About 10 years ago when I went thru a lego madness phase buying lots of star wars kits I was still actually playing with the bricks, building things, going to a few LUG meetings and had no idea people were trying to make $$ buying/selling legos. Back then looking at ebay & sorting by price, if my memory is correct, all the higher priced items were lots, lots, lots, more lots of lbs lbs lbs of legos and the general price for legos was by the lb, assuming they were in bins. Occasionally somebody would be selling "new" kits that were "collectible" but I only remember very few lines like "retired set" or "difficult to find".

Today looking at ebay the transformation from toy to bubble is complete. Search ebay for legos & sort by highest price. Kits are priced in the $1000's of dollars. People this is ridiculous. Those things are boxes of little plastic pieces with an intrinsic value (ie, cost to manufacture, advertise, sell, profit margin) about 70-80% for a current set on amazon, ie. $20 for a kit with 150 pieces AND NOTHING LIKE $3000 FOR A STAR WARS KIT. There is even some clown group AFA that "rates" boxes of plastic pieces like rare coins & stamps are rated, including the protective plastic enclosing box for the ever so precious lego kit.

I wish all of y'all involved with this investment bubble the best, but my recommendation is to start selling now & unload as much as possible & put your hard earned dollars into something useful like a short term bond mutual fund or a large cap bond mutual fund.

Anyway here are some links about the beanie baby bubble if any of y'all remember that, the parallels to lego bubble are unmistakable to this old geezer. Yes alot of people made alot of $$ "investing" in beanie babies but I'm guessing several times that many people lost all too much $$$ & now regret it. DOn't let this foolishness happen to YOU with legos...

query for many more articles
https://www.google.com/#q=beanie+babies+bubble" onclick="window.open(this.href);return false;

http://theweek.com/article/index/247125 ... aby-bubble" onclick="window.open(this.href);return false;

http://online.wsj.com/article/SB1000142 ... 16806.html" onclick="window.open(this.href);return false;

http://seattletimes.com/html/businesste ... ble31.html" onclick="window.open(this.href);return false;

here's a lego person seeing the light & blogging about it

http://brickupdate.com/becoming-jaded-a ... vestments/" onclick="window.open(this.href);return false;
http://brickupdate.com/letting-go-of-some-lego/" onclick="window.open(this.href);return false;

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by ricefields » Mon Oct 07, 2013 3:55 pm

Few misc. comments in regard to lego investment below. More to add later.

If you did not start collecting/investing lego in the early - mid 2000s (say no later than 2008) then I agree those coming in late may not be spending their time worthwhile compared to other investments unless you can play the game like emazer.

I agree there is way too much lego stock now and I think the value of most sets will not appreciate to the prices we have seen in the past but I don't think you can equate this to beanie babies! There will always be some sets each year that will have low production and be a very good investment. lego will never depreciate to the percentages you see in the beanie babies.

I disagree that 10 years ago there were mostly lots and few were selling new and collectible sets. The sets people were selling on ebay in 2004 (since I started in 2004) were either new or intact complete lots with minifigs and they mostly all became investment for me - I was focussed on star wars so I was building up my collection by obtaining the 1999-2003 sets. In around 2006, when the minifig craze began, sets were then being sold parted out. I remember the first set that ebayers started to part out in mass was the 7261 clone turbo tank; before that set very few sellers parted out minifigs and this set had many to offer. The minifig craze started another wave of investment that was for a different "breed" of investor.

I agree as investor you have to recognize when to start selling but you go through phases. but you don't need to dump everything now. Everything I sold in the past has gone even higher thinking I sold at the peak but the peak keeps rising for certain iconic sets to my suprise. but its definitely time to sell some sets to pare down (time to get rid of UCS and the first three modular buildings to maximize investment profit, and by now an investor should have already sold their batman, indiana jones, mars mission, harry potter as both IJ and mars mission has dropped from their peak), except the falcon of course. Last year I started dumping my pre 2005 UCS and large set but cannot get rid of the UCS falcon though. Bought new at 170 and sold at 1000, then bought new for 1500 and sold for 2000, then bought new for 2000 and sold for 3000. I think now I am done flipping the ucs falcon!

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by stevebuscemi » Mon Oct 07, 2013 7:25 pm

In the last 13 years the Dow Jones has gone up 27%. That's around 2% annually. Not even keeping up with inflation. So investing in the stock market is by far the worse investment....well for almost anything. Even bond funds have their risks and with inflation always peering around the corner, are an awful investment. Sure, you can use TIPS bonds, but you still are buying "a promise" that the US gov. won't collapse and ALL bond holders will take a haircut like in Europe. No thanks.

LEGOS, while at first glance, are a hilarious "investment". But they are inflation protected. Those that bought the 1st Jabba Sail Barge will tell you this! LEGO costs and prices continue to climb right along with inflation. So older sets are always cheaper than newer sets. There is almost no risk other than say a complete collapse of the world economy where the only thing worth anything will be food. Then we are all screwed unless you are a farmer.

So if you are good about buying LEGOS cheaply, i.e. 30-40% off MSRP, I think they will net you far more than 2-5% you'll get in the markets right now. And better yet, they won't lose you money like the US stock market is headed for when the US's debt issues catch up to it and it's forced into serious austerity measures. And I won't even get into the taxation savings.

LEGOS have been around for 40+ years, they are not beanie babies. LEGOS will always be interesting to kids and adults a like. Will every set be a motorized AT-AT or a Falcon UCS? No. Is it safer than the majority of the stock market, yes.

The only benefit to stock market is space. LEGO has a limited upside only due to space concerns. And of course no one should retire on lego investments or something stupid like that unless you live in a warehouse.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by SpaceViking » Mon Oct 07, 2013 8:13 pm

^ well said, @stevebuscemi.

My one thing to add is that if the 'investment' doesn't pan out, and the gains are minimal, the bricks themselves still hold basic value. If buying at a discount, the risk is small if you can use the bricks inside the set for MOCs; or give them away to kids that need them. The same is not true with stocks or bonds, where when things sour the value is less than the certificate is printed on (or bits in a brokerage account).

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by crazybirdman » Tue Oct 08, 2013 9:54 am

C&T wrote:Firstly, if you want to "invest" $$$ please spend some quality time reading about . . . avoiding scams & . . . trying to make $$$ buying/selling lego kits.

Fixed! Investing in LEGO is just like investing in anything else (board games, baseball cards, comics, stocks, web domains, art). Anyone who just jumps in and starts buying is a fool. You have to know what you are doing, and you have to know the risk. And there are always risk you can't foresee. LEG may re-release a set, or a rare part. Your storage area may flood or burn. But like many others have said, LEGO seems to be more profitable than many other option lately. I would argue that some people may be better off investing in LEGO since they know way more about it than some other investment options.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by C&T » Tue Oct 08, 2013 10:58 am

well I could be wrong... :) LOLOLOL but I still contend it is easier & safer to make a reasonable return on $$ by using basic mutual funds compared to buying, storing & selling lego bricks. Seriously how many of y'all are going to put $10,000/year into lego blocks in your 30s/40s hoping to use that $$ during retirement in 50s/60s ? and if you did, how to store them, protect from loss, etc etc. And yes, I still believe that with so many more people involved with lego "investing" that bubbles will & are happening. How else to explain a $200 set selling for $3000 ? Will it hold its value for the next 5 years or crater ? And yes, legos will hold some value because they are a fun & appealing toy to play with, even for adults :)

I should have done a better search before posting, here are a few more interesting links & snippet quotes about this topic search "lego price bubble"

http://www.usatoday.com/story/money/bus ... t/1732525/
Just as stock investors have portfolios of all different sorts of stocks, Lego investors hold massive collections of Lego sets. Schooley, for instance, has more than 3,000 Lego sets piled high in a climate-controlled storage facility. Most of the sets he bought years ago, with the plan of selling them a year from now for a profit. Doing this again and again generates Schooley a tidy 10% to 15% annual profit, he says. That tops even the 10% long-term average return of stocks.

"You start to realize these are worth a lot of money," he says. "It's more of an investment."


http://thebrickblogger.com/2012/10/lego ... ent-guide/" onclick="window.open(this.href);return false;
Image

In the past few years investing in LEGO has become a trend and hot topic amongst LEGO fans. Previously people bought LEGO for their children or their own enjoyment, and only considered selling their collection when they wanted to move on from the hobby or had to sell their collection due to financial or other issues. However especially since the use of the Internet it has become quite apparent that LEGO sets, minifigures and parts (especially the discontinued or rare ones) are in fact a hot commodity that can bring significant gains.


http://www.brickpicker.com/" onclick="window.open(this.href);return false;
Image

The mission of BrickPicker.com is to educate the LEGO enthusiast, collector and investor of the most up to date and current prices of new and used LEGO sets. Through a partnership with eBay, BrickPicker.com has access to countless current and past auction results from the thousands of various LEGO sets sold on eBay each day. By utilizing this information and putting it into easy to understand charts and graphs, BrickPicker members can make intelligent and cost effective choices when making their next LEGO purchase.


http://therealityprose.wordpress.com/20 ... with_lego/" onclick="window.open(this.href);return false;
Image

bottom line, if you are going to read all these links, understand the concepts & invest serious $$ in legos, that seems like an equivalent amount of effort compared to going the mutual fund route.

sure you can point to a few lego-superstars who have made tons of $$ but you can also do the same thing for stock-pickers, mutual fund pickers etc. I knew several peeps who tried to make a fast buck during the stock runup late 90s & then surprise, a few of them lost major $$ when everything crashed. Do you people really think legos are any different ? yes believe !!! the price will always keep increasing !! LOLOLOL

anyway it's YOUR $$$ so read/agree with my post or not :) :)

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by crazybirdman » Tue Oct 08, 2013 11:25 am

Doesn't matter what people believe. The facts matter. And right now, the fact is that LEGO is not a bad investment. Would I use it as my only plan for retirement (is anyone doing this)? Heck no, just like I'm not putting all my eggs in the IRA basket.
Just like other markets, it has highs and lows. Anyone trying to make a quick buck is more likely to get burned, no matter what the investment method is.
Also, for some people LEGO is a lot more fun than the stock market. I'm already at the store anyway, so . . .

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by condor » Tue Oct 08, 2013 12:44 pm

I see my Lego "investment" as a hobby that pretty much sustains itself. I keep an eye on what I've spent vs. what I've sold to determine how much it's costing me. At any given moment, I can sell a few of my larger sets and I will be at a break even point.

If you have any mutual fund tips, please do share. I have seen my funds drop 5% within the past few months :cry:

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by Kodiak10 » Tue Oct 08, 2013 1:43 pm

Fact- The Lego Group is the 2nd Largest Toy Maker in the World.

Trying to compare Investing in Legos and the Stock Market is like comparing Apples to Oranges. Not sure where you get where buyers are hoarding Lego's only to resell them in 30 Years.
Last edited by Kodiak10 on Tue Oct 08, 2013 2:07 pm, edited 2 times in total.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by zztoy » Tue Oct 08, 2013 2:01 pm

This guy/gal, the original poster has done an excellent job squeezing out tips and tricks from some of you. I was about to defend here too when I read the post and decided not to. I don't know his or her purpose or what they are trying to gain here for info, be careful what you divulge.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by Kodiak10 » Tue Oct 08, 2013 2:06 pm

Well Said! :clap: I have edited my post. Thank you!
zztoy wrote:This guy/gal, the original poster has done an excellent job squeezing out tips and tricks from some of you. I was about to defend here too when I read the post and decided not to. I don't know his or her purpose or what they are trying to gain here for info, be careful what you divulge.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by zztoy » Tue Oct 08, 2013 3:28 pm

You'd laugh if you saw what I wrote and pulled after second thought. Cheers.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by C&T » Tue Oct 08, 2013 4:29 pm

zztoy wrote:This guy/gal, the original poster has done an excellent job squeezing out tips and tricks from some of you. I was about to defend here too when I read the post and decided not to. I don't know his or her purpose or what they are trying to gain here for info, be careful what you divulge.
my purpose was to vent some thoughts/feelings about the ridiculousness of paying $3000+ for a box containing little plastic pieces, warning naive & gullible types to put their $$$ into something safer, then I did a better internet search on the topic & replied to ricefields

I think your paranoid streak may be a bit high yes ? squeezing investment tips out of you people ? there is enough info on the internet & even this forum for this topic where I would form my own opinions etc, especially where $$ is concerned :) :) and no I have zero desire at this point in my life (retired, health problems, the future was yesterday) to spend several $1000 on boxes of plastic pieces, try to store them in my apartment & then sell them to idiotic dweebs overpaying out their snotty little noses, while laughing at their loss & my gain. Worrying about that kind of crap is what I do with my mutual funds, quack doctors/dentists, car repairs, apartment ripoffs etc, but not legos, which I just want to build some mocs, coming soon...

otherwise blast away, this is cyberspace :) :)

as for mutual fund tips, I started back in the early 90s & picked my 2 favorites on a few criteria like low turnover rate (otherwise the mgr is just playing trends), low admin fees, rate of return, size plus some bond funds for balance. The 2 m-f's I picked VG 500 index & Dodge Cox stock fund did good enough for me over the decades enough to hopefully fund my likely too brief retirement. Yes the mnarket has sucked a few times over the decades, that is the nature of the problem, which again, is why I'm concerned about some of y'all pouring too much $$ into legos hoping to make $$$, good luck !!!
Last edited by C&T on Tue Oct 08, 2013 4:35 pm, edited 1 time in total.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by zztoy » Tue Oct 08, 2013 4:35 pm

Ok. I'm cool with that. Thanks for the honesty. I you read some more on these boards you will see the craziness. Btw I suck at stocks and bonds, but this works for me.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by stevebuscemi » Tue Oct 08, 2013 5:58 pm

lol at people who think you get an annual 10% from the stock market. Right now in the last 10 years it's less than 5% (compounded annually), so after inflation it's closer to 1-2%.

No one is retiring on LEGOS, or shouldn't be using it as a retirement vehicle, but as a way to make some extra money, I think it's a way better idea than the stock market.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by Kodiak10 » Tue Oct 08, 2013 6:17 pm

No offense, but if you are worried about short/ long return values, check out baseball and basketball cards. These guys open cases and spend 1000 a week only to get 30-50% back. Heck they are coming out with basketball product that is $1175 a box with only 9 cards in it! Its called PANINI FLAWLESS.

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by condor » Wed Oct 09, 2013 8:30 am

C&T wrote:
zztoy wrote: as for mutual fund tips, I started back in the early 90s & picked my 2 favorites on a few criteria like low turnover rate (otherwise the mgr is just playing trends), low admin fees, rate of return, size plus some bond funds for balance. The 2 m-f's I picked VG 500 index & Dodge Cox stock fund did good enough for me over the decades enough to hopefully fund my likely too brief retirement. Yes the mnarket has sucked a few times over the decades, that is the nature of the problem, which again, is why I'm concerned about some of y'all pouring too much $$ into legos hoping to make $$$, good luck !!!
Sorry to hear about your health issues...

I apologize if I am taking this thread off topic. I'm just getting now in my 30's (better late than never) to start learning about investing. Up until around 2009, I was getting a 5% interest rate from my savings account, so aside from my 401K, I didn't see a reason to invest in any stocks, funds, etc. My worry with getting started now is that it seems like the market is about to take a downturn and may take many years to recover. With everything that's going on in the world, I find it hard to believe it's going to keep going up.

https://www.google.com/finance?q=INDEXSP:.INX" onclick="window.open(this.href);return false;

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by C&T » Wed Oct 09, 2013 9:37 am

condor wrote:
C&T wrote:
zztoy wrote: as for mutual fund tips, I started back in the early 90s & picked my 2 favorites on a few criteria like low turnover rate (otherwise the mgr is just playing trends), low admin fees, rate of return, size plus some bond funds for balance. The 2 m-f's I picked VG 500 index & Dodge Cox stock fund did good enough for me over the decades enough to hopefully fund my likely too brief retirement. Yes the mnarket has sucked a few times over the decades, that is the nature of the problem, which again, is why I'm concerned about some of y'all pouring too much $$ into legos hoping to make $$$, good luck !!!
Sorry to hear about your health issues...

I apologize if I am taking this thread off topic. I'm just getting now in my 30's (better late than never) to start learning about investing. Up until around 2009, I was getting a 5% interest rate from my savings account, so aside from my 401K, I didn't see a reason to invest in any stocks, funds, etc. My worry with getting started now is that it seems like the market is about to take a downturn and may take many years to recover. With everything that's going on in the world, I find it hard to believe it's going to keep going up.

https://www.google.com/finance?q=INDEXSP:.INX" onclick="window.open(this.href);return false;
yes health problems are pretty guaranteed as people get older (whine) altho there are a few lucky types who seem to avoid many problems

yes I agree the stock market is not good right now but then it has definitely recovered since the most recent USA prez took office, when it tanked. I started buying shares in 500 in early 90s at around 45/50 share, now the share price is 150 or so. It's not really possible to trade in/out mutual funds because then the gubbmit taxman takes a hit, which is why its important to make a good choice at the beginning if you want a long term buy/hold strategy. otherwise trading around requires a higher return from the fund to make $$ etc. back in the late 80s I was getting 9.5% on 6month cds from the BANK & less stellar cds were even higher, then interest rates declined & I moved cash into mutual funds. today 6month cds from banks are what 1% ? not a good deal but safe. If I had to start saving $$$ now I would like put most of it into short term bonds because yes, the market situation is not good, the geopolitical climate is not good - too many wars, too much unrest, too much USA debt, too much trouble that doesn't look like it is getting better instead increasing. All this was not happening in the late 80s/early 90s which was a big runup in stock values. What helped me was to look at those 5-10-20-50 year charts for stock performances & seeing the lines go up/down, putting $$ in at the top likely would require several years just to get even returns, and also reading about bull/bear markets - a good line is "everybody is a genious in a bull market", fund managers make $$ whetehr YOU lose it or not & they come up with all kinds of spin to justify their b.s. after the fact

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by Zeya » Wed Oct 09, 2013 10:30 am

I get the impression from reading forums that the majority of Lego investors do it as a relatively small-time thing to sort of fund the hobby. I get the impression that it's on the level of a few thousand dollars. They're able to guess what product will maybe be worth %170 of its value in about 3 years. They store it in a room or attic and leave it sit for a while. I don't think there's very many people putting tens of thousands of dollars into Lego merchandise, like one might do with an IRA. I'm just saying, I don't believe people are putting serious retirement money into a Lego stash.

That all being said, the number one rule of building wealth is to diversify. Putting tens/hundreds of thousands into a Lego stash would be foolhardy. Just the scalability and logistics alone... protect it all from water/fire/theft. And then do you want to spend your life packing up boxes to ship off your ebay lots? Go ahead and read the "forum" area over on Bricklink. It's not easy being a seller. Buying stuff is the easy part. Turning a profit off selling is difficult and time consuming. I get the impression that only the biggest BL operations (think warehouse, staff, true business operations) operating as a full time operation are able to really be stable. A lot of BL sellers are more like hobbyists.

In short, I'm on the same page as C&T. :)

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Re: lego investing ?? LOLOL wet blanket from old geezer

Post by brickarmor » Wed Oct 09, 2013 10:36 am

Most (new) "LEGO investors" are undeniably seeing everything through rose-tinted goggles and are deluded by groupthink. The incredible gains of past sets are the result of much fewer hoarders. More hoarders = less gains. The Interweb is glutted now with people who think it's all blue skies and smooth sailing forever. They point to Zombies and 41999 as if they are self-evident and incontrovertible proof that "The Market" is fine. Everybody cannot be a winner. The people guffawing with their forum buddies about how many of this or that set they have will be the same ones next year scratching their heads as to why Helms Deep and Jabba's Palace are such "dogs." Yes, good sets will still appreciate once they are discontinued, but at the current and foreseeable rates it is absolutely not worth it. I might dip my toes back in after 3 or 4 more years, hopefully when the vapid illusions of easy money are gone, and with them the garrulous, clueless, credulous cabal of "nouveau resellers."

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