LEGO Technic Investments: On the Fast Track or In the Shop? Part 1

Lego enthusiasts come in all shapes and sizes, and over the years TLC has been great at finding and catering to non-traditional toy enthusiasts. For gearheads, mechanics, and Mr. Fix-Its, the Technic theme is manna from heaven. Consisting of gears, pistons, shocks, struts, hydraulics, motors, and remote controls, Technic models move, squeeze, light, and pull in a variety of ways to showcase hundreds of mechanical functions. Technic was introduced back in 1977, and has become a staple of TLC's product line with over 330 sets released since inception. Because of their complexity, Technic sets are typically "geared" to teens and adults. This just happens to coincide with the majority of secondary market consumers. As a result, Technic sets have traditionally performed well after retirement.

Let's dive into the wonderful world of Technic returns. To compartmentalize the analysis, I have split the Technic sets by release year, and have broken down each into the following characteristics:

Release Year
Set Number
Set Name
Retirement Status
Power Functions
MSRP
ROI
CAGR
Set Type
Set Subtype.

I wanted to target Technic sets with data relevant to the current secondary market, so I chose to analyze sets released back to 2005, starting with the most recent and working back. All of the data is available in Excel at the end of the article.

2011 - Average Non-Weighted ROI = 37%

Since 2011 includes our most recent retirees, the returns from this year are still growing. Accordingly, the average 2011 returns are the lowest among the years we've assessed, checking in at a low 37% ROI. In 2011, TLC maintained the expanded, ten set Technic line, and gave us the only set with a negative return (8069) among all of the Technic sets released since 2005. Three items to note among this year's releases:

• I was surprised the Lift Truck was such a dud - it's a neat set at a mid-level price point. Perhaps the expanded product line introduced in 2009 has oversaturated the Technic retail market, causing 8071 (and 8069) to wither on the vine.
• 8081 Extreme Cruiser was a limited edition release, yet it sports a seemingly small 52% ROI. However, given it's 23% CAGR, we can expect this one to keep climbing.
• Two of the sets from this year have yet to be retired: 8065 Mini Container Truck and 8110 Unimog U400.

The retired sets of note from this year are the two Power Function sets, 8070 Super Car and 8019 Flatbed Truck, and one of the small sets, 8067 Mini Mobile Crane. All three of these have had great secondary market sales and sport CAGRs over 20%. Continued success will continue to propel these, along with 8018, to higher gains. 2011 is also the only year to feature three Power Function sets.

2010 - Average Non-Weighted ROI = 74%

2010's ten set lineup has provided decent EOL performances across the board. With the exception of 8041 Race Truck and 8046 Helicopter, all the year's releases sport ROIs greater than 35%. Here are my notes on this year's releases:

• There were two excavators released this year, and while both have provided returns in the black, the smaller 8047 Compact Excavator, with a 120% ROI, has been much stronger than 8043 Motorized Excavator. Purchasing eight Compact Excavators for the same price as one Motorized Excavator would have returned $440 instead of a "measly" $282.
• My surprise dud from 2010 is 8041 Race Truck. It looks great and it's got a neat flip-top cab to expose the working internals. Unfortunately this set's Brickpicker Value is essentially MSRP, so demand for this has been dreadful.
• 8051 Motor Bike is also a surprise winner here, and highlights a trend of strong performance from this set type. An ROI/CAGR of 118%/29.56% is incredible performance for any set, let alone one with a middling $40 price point.

The Power Function sets this year were nice performers. 8043 Motorized Excavator will likely continue to climb in value, and the slick 2010 Container Truck has almost doubled in value from MSRP. Yet, neither were tops on ROI or CAGR; this honor belonged to 8047 Compact Excavator and 8053 Mobile Crane, an impressive feat for two construction sets that were both remakes.

2009 - Average Non-Weighted ROI = 116%

2009's lineup was a tale of two returns: 7 of the 10 sets had returns over 90%, while the other three sets didn't provide an ROI over 30%. There were also some significant changes to the Technic lineup in 2009: the theme expanded by 40%, from 7 to 10 sets where it has remained since, and after a one-year hiatus, a $150 MSRP set returned to the lineup with 8258 Crane Truck. Finally, a very unique model was introduced: 8263 Snow Groomer, a machine found on ski slopes that maintains snow depth and quality for ski resorts. Other notable aspects of this year's release include:

• Two tractors were included among the year's offerings, similar to 2010's excavators. Similar to 2010's excavators, these tractors have gone in opposite directions. Also similar to the excavators, the smaller model performed well while the larger model struggled: 8063 Tractor with Trailer has barely broken a 20% ROI, while 8260 Tractor sports a 180% ROI.
• Two quads were also released together this year: 8256 Go-Kart and 8262 Quad Bike. While the Quad Bike has languished at a 28% ROI and a subpar 6% CAGR, the Go-Kart became the star performer of 2009's lineup with a 213% ROI and 33.05% CAGR.
• The small sets were smash hits: 8259 Mini Bulldozer (150% ROI/25.74% CAGR), 8256 Go-Kart (213%/33.05%) and 8260 Tractor (180%/29.36%) all performed really well. That said, 8261 Rally Truck, at $20 MSRP, fell short of small set expectations with 30% ROI / 6.78% CAGR.

The Power Functions sets once again performed well. 8258 Crane Truck and 8264 Hauler returned ROIs/CAGRs of 107%/20%, 97%/17.41% respectively. Given the size of the sets ($150 and $70 respectively), these were both nice buys.

2008 - Average Non-Weighted ROI = 114%

In 2008, TLC expanded the Power Functions sets to two, the same number TLC has released every subsequent year. Otherwise, this year's releases provided consistent returns with a range from 55% to 163%. A couple of interesting nuggets from 2008:

• 8290 Mini Fork Lift and 8295 Telescopic Handler, while similar in function, highlighted two very different mechanical functions. Interestingly, both did well with 163%/21% and 68%/11% ROI/CAGR respectively.
• Another motorcycle, another nice return: 8291 Dirt Bike continued a positive trend for motorcyles with 128% ROI and 18% CAGR.

The Power Functions sets followed previous year return patterns: 8297 Cherry Picker and 8297 Off Roader were TLCs selections for 2008, and they sported ROI/CAGR of 133%/18% and 122%/17% respectively

2007 - Average Non-Weighted ROI = 147%

The overriding trend for 2007 Technic sets was very positive, with only one set providing an ROI less than 60% and two thirds of the year's releases returning over 140%. The Farm and Snow sets, small subthemes within the Technic line, were both represented this year, and gave the lineup some uniqueness. A few other items of note from 2007:

• The only other snow-related set, 8272 Snowmobile, was a winner with 143% ROI/16% CAGR. One of the four retired farm sets, 8274 Combine Harvester, also scored well after retirement with 204%/20%.
• Three of the six sets released in 2007 were construction sets. Two of them were phenomenal successes: 8270 Rough Terrain Crane and the aforementioned Motorized Bulldozer sport ROIs of 150% and 303% respectively.
• The only true dud from 2007 was 8271 Wheel Loader that was priced at the dreaded $20 MSRP. It's currently valued at $24 with a paltry 20% return.

2007 brought a powerful new extension of the Technic theme to Technic enthusiasts: Power Functions. The first Power Functions set, 8275 Motorized Bulldozer, eventually became one of the biggest hits of the entire Technic theme and the best performing Power Functions model ever. The first Power Functions set also propelled 2007 to the second highest average ROI of the last eight years.

2006 - Average Non-Weighted ROI = 165%

2006 returned the highest average ROI among the Technic year releases since 2005. While the average 2006 set provides a whopping 165%, the year's releases are really bipolar: the high flyers are phenomenal, while the lesser performers are dogs. The highest return among all Technic sets (since 2005) is also from 2006: 8288 Crawler Crane has an astronomical 426% ROI! The Tow Truck was also a great investment with an ROI of 324% on an initial purchase price of $120. Two other tidbits I gleaned from the 2006 sets:

• The only set whose title includes the main build and an alternate build comes from 2006: 8284 Dune Buggy/Tractor. Unfortunately, the schizophrenic nature of the title may have hurt its investment options as it only provided a 52%/6% ROI/CAGR.
• Within this year's releases, there are three service trucks and two quads. Only the Mini Tractor (Farm) and Crawler Crane (Construction) didn't fall into either category.

2006 was a banner year for Technic, and I don't think there will ever be another that will match its returns.

2005 - Average Non-Weighted ROI = 129%

While 2005 had some nice returns, it's average ROI isn't as robust as either of the following two years. The flagship from his year didn't disappoint: 8421 Mobile Crane had a phenomenal 255% ROI, and still maintains a 17% CAGR 8 years later. The other six sets in the theme were also solid performers: five of the remaining six had an ROI greater than 100%, while the lowest still appreciated 50% over MSRP. The nuggets from this year's releases:

• Two thirds of the year's releases are construction sets, an unprecedented majority form 2005. That actually helped propel the theme's average higher than normal.
• The only loser this year is 8415 Dump Truck, although it sports a 50% ROI. For the worst performance of the year, it's still has given a decent return.

After all that...

We've mined a lot of data in the paragraphs and tables above, so let's pick out the items that will help you with your future investments. To start, the average non-weighted ROI for a Technic set since 2005 is 107%, an impressive return by any standards. Because the models have all been categorized by set type, let's see if there are any with better than average ROI/CAGR:

As the chart shows, the Snow sets have the highest returns at 161% over MSRP. I would guess this is due to their novelty in the Technic line with only two released. I was surprised by how well the Construction sets have performed. The most released set type still maintains a strong 137% average ROI. Of the Construction sets, five have an ROI less than 60%, while twelve have a return over 100%. Drilling down even further, the average return on the Construction Crane subtype (with a total of six sets) is a whopping 195%! Farm equipment also appears to be a great investment with an average return of 149%, good for the second highest earning set type.

On the flip side, the Service Trucks appear to be hit or miss, with their average ROI of 102% settling in around the theme's average. The Quads look to be terrible investments providing an average return of 69%. Interestingly, the Quad ROI is pulled up by one strong winner, 8256 Go-Kart. Removing this from the average would drop the Quad score to an even more dreadful 40%. Pulling up the rear are Air, Car, and Sport Truck sets. I was shocked to see the Sport Trucks among the bottom perfomers as the sets tend to be big, brawny and impressive. That said, a 49% average ROI is terrible, and much lower than the 107% Technic average.

Beyond set type, the Power Functions is a subcategory to the Technic line that is worth analyzing. Interestingly, a PF set provides an average return of 112%, with a range of 40%-303%. I was very surprised to see little difference between the performance of PF sets and the Technic average (107%), so PF should not be used as a must have investment criteria. That said, these are Technic's most expensive sets with an average MSRP of $125, and none have provided less than a 40% return, so PF sets will provide some investment cash when sold after EOL.

Finally, analyzing the models by price point also provides some insight. There are two price points that have provided mostly underwhelming results: $20 and $40 MSRP. The $20 MSRP is easily the worst performing price point with an average return of 41%. Eliminating 2005's well performing 8419 Excavator drops the $20 price point's return even further to a paltry 30%. For whatever reason, people don't buy $20 Technic sets after they retire. While the $40 MSRP has only four data points, it only provides an average ROI of 55%. The ROI of $40 sets is also supported by one well performing set, 8051 Motor Bike. Without its performance, the other three sets provided a measly 34% gain.

There are also price points with proven winners. All sets with an MSRP of $15 and under have all performed phenomenally with an average ROI of 156%. While these are smaller sets that won't provide large per set returns, they can still provide great diversity to a portfolio stocked with only large sets. The worst performer of this group is 8045 Mini Telehandler at 80%, while the best is 8281 Mini Tractor with a studly 190% ROI. Also, all sets over $100 have provided an average ROI of 147%.

As you can see, Technic sets perform well after retirement. Only one set out of seventy eight released since 2005 has failed to return a profit, while the average return is just over 100%. Technic should become a part of any serious Lego investor's portfolio, and with careful selection, these Technic sets should produce returns over 150%.

As always, invest accordingly...

Part 2 of this Evaluation Corner series will review all 24 unretired Technic sets, including the unreleased ones, and provide an estimated return for each based upon the past returns we've just analyzed.