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    Brickpicker blog articles on LEGO investing, news, reviews, evaluations, discounts and more...
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    • Fcbarcelona101
      Most often than not, we see people asking in the forums whether a particular currently available set is a worthwhile investment or not. Usually, that question is either preceded or just after the asking whether the set will be EOL soon or not.
      That is the strategy most of us follow in this site. Grab currently available sets at good discounts and hold them until retirement to start enjoying some growth in value. However, I think that we are underestimating the power of investing in already retired sets that continue to present some high growth even years after they have been retired. In this article, I will try to give you some examples about how doing this may benefit you in a shorter period of time and in some instances make this type of investment preferable to the traditional strategy followed by most of us.
      There are several things that we need to take into account when we invest in currently available sets; some of them include checking out for good discounts, long term storage, expected EOL wait, uncertainty about future performance and a bunch of other different things. The great thing about investing in already retired sets is that you remove several of these variables from the equation. There is no need to speculate about EOL dates as it has been retired already, you will be needing storage for a shorter period of time and in most cases you will be able to at least gauge how the set has been performing in the secondary market without having to "guess"
      Let's now look at an example of what I described above:
      I know a lot of people always kick themselves for not getting into LEGO investing in what some considering the good old days (Cafe Corner, MF, etc.), but in reality there are still ways to profit from sets released on those years. Let's say I decided to invest in the modular Green Grocer in 2012, when the set had already been retired for a couple of years:


      So, I was able to make a return very close to 29% on a $500 set that originally retailed for only $ 150, that's pretty good in my book especially considering that the moment I bought it the set started generating a return for me without the long wait that usually precedes selling currently available sets.
      As with the Green Grocer, there are just dozens of examples that present the same kind of short term benefit for investors willing to take a higher risk. One of those would be the 10189 Taj Mahal:


      Impressive. Investors who shelled out the almost 4 times retail price for this set in May 2012 would be able to sell it now for almost $1,600, a ROI of almost 45% in a 12 month period. You will be hard pressed to find a traditional investment out there that will present the same amount of reward for a level of risk similar to what LEGO traditionally carries.
      These past two examples are about sets that have been retired for at least two years already, and if you are willing to give this strategy a try I would suggest you do so in the first year of a set going EOL. Sets don't rise forever, and even if as you see above buying these sets in the second year after they had been retired nets you some very nice profits, the idea of an strategy like this is to capitalize on the fact that the set will start growing as soon as you purchase it. If you purchase this set within the first year of it being retired, then your profits will be even better while still capturing the growth as soon as you get them. Just as a reference, this is the ROI you would have gotten by purchasing these sets in 2011 (A year or so after retirement for both sets)
      Green Grocer May 2011-May 2013 ROI = 104.22%
      Taj Mahal May 2011-May 2013 ROI = 143.79 %
      Pretty cool. Now, you may be thinking that these two sets are just too expensive or that it have been retired for so long that it no longer makes sense to put money in them (I'll let you decide if that's the case), but there are several examples of sets that have been retired in the past year or so that still make sense to get at current market prices. I will give you just one example: 10212 Imperial Shuttle.
      This set has been retired for just a few months now and it has already soared in value, something that being a UCS set was not unexpected. But what about if you missed you chance to get one of these while it was still priced at retail at your local store? No worries, you can still benefit from the long term growth this set will be presenting in the coming years even if you invest at current market prices.
      For the sake of argument, let's assume you got into LEGO investing in the month of February when the market value for a new one of these was about $ 300, so $40 over retail. Had you invested your money in the set at that price, this would have been your results:


      17.7% ROI in around 4 months. Not bad at all.
      You can see that even paying a lot over retail, something that is discouraged in this forums a lot, can result is some very substantial returns and keep you from waiting years or several months to start seeing some growth in the sets you own. Having said that, I am not encouraging that this is the only strategy you put to use, as I believe that mixing this up with the more traditional "buy at discount and hold" can help you diversify some of the risk and produce some great returns in the longer term than by using one of them in isolation.
      Thanks for reading.
      *Special thanks to Grolim for mentioning this topic time and time again in his comments*
       
    • Quacs
      Just a quick blog article for today. For those who haven't read my Chima Evaluation Corner article, I believe Chima has the potential to be successful for investors if the TV show continues its previous success. That said, I want to point you in the direction of what I believe can be a potential investment sleeper from the Chima line along the lines of Ninjago's Spinners, 70107 Skunk Attack (click the link for the Brickset review):

      <image courtesy of Brickset>
      This is the ONLY way to get a minifig from the skunk tribe, and while I have been critical of the high MSRP on Speedorz, the exclusivity of the Skinnet, the Chima skunk, could make this a winner.
      Before plowing a bunch of money into these, watch the show's ratings to see if they maintain their current 1.5M US viewers per show. The show starts in earnest in July, and I have a sneaking suspicion kids will eat this theme up with the new episodes coming to Cartoon Network.
      As an aside, I also like Gorzan's Gorilla Striker, the new Gorilla vehicle being released this summer, but Lego is releasing a gorilla Speedor as well named 70109 Whirling Vines so Gorzan will not be an exclusive in either one.
       
    • Fcbarcelona101
      Modular buildings. Considered by some investors as the gold standard of LEGO investing along with the UCS line of Star Wars, have been around since 2007, when LEGO decided to release the first one of the line, the coveted 10182 Cafe Corner. The story of how this line of sets became a reality is a very interesting one, and very different to what usually happens when LEGO decides to produce a new theme. Let’s go back a few years and see how this really popular line was conceived.
      Most of you probably already know this, but back in 2006 LEGO decided to run a poll to figure out what the AFOL community would be interested in seeing developed next. Something that would appeal mostly to them and maybe TFOL as well, in a way giving LEGO that broader appeal they were interested in having. So, out of that poll came a variety of suggestions from the community, mostly related to the desire for a very realistic and minifigure scale “every day” building, something one would find by walking down the street, as well as a variety of other features on that same line. Finally LEGO got their design team to work and, along with some fan feedback, finally released 10182 Cafe Corner in early 2007.
      What do these sets offer that makes them so popular with both TFOL and AFOLs all over the world? There are actually a handful of different factors that we need to keep in mind:
      First and foremost, these are sets that are designed to target adult fans and not the usual LEGO customer (kids). Pretty similar to what the Architecture line does on a smaller scale. Large and heavily detailed models of buildings that are not product of imagination, but rather structures that every single person has at some point of their life seen in their own cities. The architectural design resembles those of decades past, giving all of the sets a more charm full appearance. All of the sets are designed to minifigure scale The sets offer great value for the price paid, even MSRP. Good for MOCers Inclusion of very hard to find pieces in most sets. Most of the buildings present several different and more advanced building techniques that are not usually found on some of the other LEGO themes. Even more, they are highly customizable if you know what you are doing. Even though the first couple of buildings included most of their few play features on the outside, as the theme has progressed the newer buildings have started to show some interesting features also on the inside. Lastly, they are perfect display models, mostly because the fact that they are completely compatible and connect each other to recreate a complete street. So, you see, there a lot of very interesting features included on all of the sets in this theme, and to all that you still need to add the amazing price appreciation the already retired sets have been presenting over past few years, something we will be analyzing next.
      Retired Modular Sets and their performance:
      10182 - Cafe Corner


      My Analysis: This is the set that started it all. Just take a look at the CAGR this set has been presenting over the course of its retirement period. It has already been three years and the figure has maintained very high. The percentage change with respect to the last month is almost 4% even after all this time, so you can be sure this model will continue its high speed growth for at least the rest of this year, probably well into 2015 as well. This incredibly detailed corner building will probably mature in a couple years, but I really see it going all the way to $ 1,800, maybe even more.
      10190 – Market Street


      My Analysis: Here we have the smallest, and in my opinion least appealing modular building released by LEGO that also happens to be the most profitable one in the secondary market. Market Street has the particularity that it was designed mostly by a LEGO fan and not a professional LEGO designer, something that is not likely to be repeated any time soon. This is probably a factor that has caused this set to rise so significantly above what the Cafe Corner has so far. Market Street’s CAGR is an outstanding 55 %, and is currently $40 more expensive to acquire on the secondary market than Café Corner. Even more, the set’s last month percentage change is up by more than 5%, showing that even after several years this is one investment that will continue to grow, perhaps above $ 2,000! In fact, if it continues to show a percentage increase of 5% each month, it will be reaching around $ 1,800 by the end of this same year.
      10185 – Green Grocer


      My Analysis: The last one of the modular that has been retired, so far. From the description it is pretty obvious what the main difference between this set and its two predecessors is: the detailed interior. The first two modulars were outstandingly detailed on the outside, but they lacked a designed interior that would make them even more appealing, and that is something that was included in the Green Grocer. The building consists of three floors, all of which have at least some detailing inside; some examples are the stairways, a fireplace, furniture, detailed inside flooring, etc. As if that was not enough, this model also presents the lowest price per piece of the already retired buildings, while at the same time having one of my favorite outside designs of the entire line. If I had to pick a favorite among these first modulars, this would be the one without a doubt.
      Taking a look at the investment numbers, you will notice that this set has not presented the same level of growth the previous two did. This of course does not mean its performance has been substandard; a CAGR of close to 35 % is a number every investor wishes to see in any set that it’s part of their Brickfolio. A reason for this somewhat lower number may be the increase in popularity of the theme both with collectors and investors, especially the latter. By the time Green Grocer had retired, a lot of people had probably seen the amazing returns of Market Street and Café Corner, so that an increase in the supply of Green Grocers is more than likely the reason its growth has been somewhat slower. Even more, check the percentage change of the Green Grocer compared to that of both previous sets, and you will see that while those are still growing very fast, 10185 presents a lower, but steady, increase in value. If this trend continues, the set will probably get over $ 700 by the end of this year.
      ----------------------------------------------------------------------------------------------------------------------------------------------------------------
      And those are all of the sets in the theme that have been retired so far. What’s interesting about all of these sets is that you can still make the case for each and every one to be a good investment pick even at current prices. Just by projecting the current trends as I did above, you can see that if they keep going the way they are, especially with the first two, there is money to be made as soon as the end of this year if so you prefer, but even more long term. Of these sets, the Green Grocer will set you back the least amount of money, but at the same time it will probably appreciate at a slower rate. Less risk, less return.
      Since 2010, none other of the modulars has been retired, so it is really hard to say at this point how they will be going to perform, especially with the awareness factor and longer production runs going against them. Let’s now go ahead and analyze these sets you can still get from the shelves.
      Current Modulars
      10197 Fire Brigade

      My Analysis: Fire Brigade, worrying and frustrating investors since the year 2009. In all seriousness, you will be hard pressed to find a set that produces so many different emotions as this one, excluding the 10188 Liv..Death Star of course. This modular was the fourth one to be released, one year after Green Grocer, and if it had followed the trend set up by its predecessors, it should have been out of the market at some point in 2011. But here we are, 2 full years later and this set is still readily available pretty much everywhere.
      After the success of the previous modulars, it is pretty clear that a large portion of the LEGO collecting and investing community caught on the investment potential of the whole theme, having as an unintended consequence the more than likely higher number of sales for 10197 than for the older models. It is probable that this increased popularity is the reason LEGO has still not decided to pull Fire Brigade’s plug at this point.
      Having said all that, as all past modulars this model is very great looking, larger than most and includes a number of exclusives pieces/colors along with the first vehicle of the series that could prove to be a helping hand in this set’s quest to glory. The interior of the set is very detailed, even more than the Green Grocer, and the fact that it is a fire station pretty much guarantees that everyone who is considering starting or completing a modular city will need to acquire it at some point. For more specific information about this set, check out Jeff Mack’s EC article on Fire Brigade
      Value Prediction: I think it would be very naïve to expect a performance similar to Café Corner or Market Street. In a way, Green Grocer already proved to us that these sets will still show strong growth in the secondary market, just that it will probably be at a slower pace. Considering the extended production run, it is my opinion that this set will grow at an even lower rate than Green Grocer, probably presenting a CAGR of around 13 % by the time it has been retired for as long as 10185.
      *Graph assumes retirement by the end of 2013 (Let’s all hope)
       

       
      10211 – Grand Emporium

      My Analysis: Released in 2010, Grand Emporium is the fifth set of the series and only the second corner building. This is another great looking building that resembles a large department store, with several different types of merchandise on each of the three different floors. The inside details will completely blow you away, there is even an escalator that looks almost perfect!
      The price of this set is completely consistent to that of most of the series, so no issues there. As it happens with Fire Brigade, the set has presented a longer production run than those that have already been retired, getting closer to three years now. However, one of the things this set has going for it that Fire Brigade does not, is the fact that it is a corner building. Grand Emporium is only the second corner building of the entire theme after Café Corner (now three with Palace Cinema), and as you can probably imagine, having a couple of corner buildings in your modular town is the only way to keep it from becoming only an incredibly long street. Even more, if you missed out or only purchased one Café Corner, this was your only choice until not so long ago.
      With the release of the new Palace Cinema, I honestly think this, and not Fire Brigade, will be the next modular to retire. This would be good news to investors as the set would only be on the market for a while longer than average, and not a lot more like 10197. For more specific information about the set, check out Arock68’s EC article on Grand Emporium.
      Value Prediction: Assuming this set retires at some point this year, there is the possibility for a stronger growth trend than exists with Fire Brigade. Even more, being a corner building will probably allow this set to command a higher price in the secondary market, especially considering the high price of a Café Corner at this point. I see this set presenting a CAGR of around 17 % by the time it has been retired for as long as the Green Grocer.

       
      10218 Pet Shop

      My Analysis: Very nice building and concept. As you can imagine the Pet Shop includes an assortment of animal pieces. One of the most appealing features in my opinion, is the appearance of the exterior where it looks as if they were two different buildings right next to each other, something that we have not seen tried before with other modulars. Inside, the details are once again great looking, full of pet related things as well as some nice architectural features like a very tall fireplace. Even more, you can separate the buildings if you prefer and set them up any way you want!
      The set was released on 2011, so it could still retire within the two year average for modulars. Even more, this is one of the least talked about sets of the whole theme, perhaps because it is expected to last a long time on the shelves or just because it seems to be even harder find discounted that some of the others. Either way, if I had to pick one set to over perform the rest of the ones available, it would be this one. It is just a very different concept, and something I honestly did not expect LEGO to produce. Most of the other buildings were pretty easy to expect, but this one is very unique and in my opinion that will help it produce higher returns in the future. Hopefully it will last around two years as the older ones used to do.
      Value Prediction: Love the set. I find it very unique and well designed. Plus, it has to do with pets, and who does not love them? The inside REALLY looks like a real pet shop, with several different animals and other details included. This is my top pick of the currently available modulars and if you check the eBay activity you will see that it’s very popular as well. I see a CAGR of around 23% by the time it has been EOL for two years. (Assumes retirement by the end of the year)

       
      10224 Town Hall

      My Analysis: The tallest of all the models in the theme, you just can’t have a town without its own Town Hall. Besides being the tallest building, this set also contains the largest amount of pieces, more than 2700 that earn it a place on the top 15 largest LEGO sets ever produced. The Town Hall comes with some interesting features like a working elevator, meeting rooms, and pretty much everything you need to take care of the most important aspects of your town. There is even a balcony from where the Mayor can give speeches to the adoring masses below.
      The Town Hall was only released a little over a year ago, so it is still pretty early to speculate about when it will be retiring. Something else worth mentioning is that this is the most expensive LEGO set from the modular theme ever released when considering raw MSRP (its price per piece is still in line with previous models). This might be a positive aspect when considering the future appreciation of the set, since the price is probably a little steep for some people that will end up missing out on the set, or even for investors who may not stock up as many copies as with some others. Hopefully, this will translate in smaller supply once it goes EOL, something that if everything works out we hope happens sometime next year.
      Value Prediction: As said before, sheer amount of pieces may give this set a bump once it goes EOL. Plus, I would say that a Town Hall is just a must have building in any realistic town scene. Assuming this set retires sometime next year, I think it will follow the same trend of some of the other current modulars and present a CAGR of around 20 % by the time it has been retired for 2 years.

      10232 Palace Cinema

      My Analysis: The newest of all the modulars, the Palace Cinema was just released a couple of months ago. It is the third corner building of the whole theme, and a great looking one it is! This is the first modular to include the usually dreaded sticker sheet, but I actually think that they make the set look a lot more realistic, just a little bit more tedious to build. As of today, this set is currently one of the top sellers in LEGO, but that is to be expected with a new release, so it is really hard to gauge the popularity of the model thus far. It is getting mostly positive reviews, so I would say that is probably well received.
      The inside details are just really good, some of the best looking ones yet. The Cinema is also the second set of the entire line to include a vehicle, so that may be something to consider when making your investment decision. Even more, it is another of those highly popular corner buildings that are vital for any realistic looking town, and for someone who just can’t afford a Café Corner and does not want to have two Gran Emporiums at each end, this comes at the perfect time.
      Value Prediction: It is really hard to tell at this point where this set might be going once it is retired, or even to speculate about a possible retirement date. In my opinion, this won’t be going on a very different path than some of my earlier predictions for other sets, so expect a CAGR between 17% and 23%.
      10230 Mini Modulars

      I really was not sure if I wanted to include this set in this article, since they are technically not modulars, but I felt that they deserved at least a short comment. The mini modulars set is a very interesting twist on the larger theme, where you are able to build the first five modular buildings on a mini, but still detailed, scale. I feel they will do very good once retired, especially since they make great companions for its larger counterparts.
      I would say that, depending on the success of this little set, LEGO may be planning to launch a second version including the last modulars that have been released over the course of the years, so keep your eyes open for that.
      ---------------------------------------------------------------------------------------------------------------------------------------------------------
      Congratulations if you made it this far, I just have a couple of closing comments before letting you go.
      From reading the article and comparing the first three modular releases and all the subsequent ones, along with my value predictions, you may be thinking that I am some sort of “bear” or at least not one of the most optimist people regarding this theme, but that is hardly the case. What I am is aware of some of the signals the performance of the Green Grocer is giving us investors every day: the time of completely crazy returns for modular buildings is coming to an end. Now, that is not to say that they won’t be making you A LOT of money, just take a look at my projections again and you will see that is not what I think. The issue now will be that sets of this theme will start growing at a slower rate than did those first ones. Just take a look at Green Grocer numbers and you will already see what I mean. It is growing at a slower rate per month and already has a considerably lower CAGR, even though it has been retired for way less time than the others.
      Still, you can be sure most of these sets will be doubling your money a couple of years after they go into retirement, even the very talked about Fire Brigade. Modular collecting is something that, once you start, then you just can’t stop. The first modular building most people purchase will more than likely not be their last, and a considerable number will probably want to go ahead and own a complete collection. For that, they will need to go over to the secondary market and get their Town Halls and Fire Brigades from investors like you, that even knowing that you would not get $1,000+ in a couple of years from this sets, decided to go ahead and stock up some and make a still very nice profit in what really is a short term holding period.
      Modular investing’s rapid growth period may be coming to an end, but we are still in the phase of getting very considerable and steady returns. Hold on to those Fire Brigades!
      Thanks for reading
      *Entry image from: Lego Wikia*
       
    • Quacs
      For three years, I worked downtown and on my way home from work I would occasionally pass by a hot dog vendor named Ray who would stake out a corner near the entrance to the train station. Because I'm a sucker for a good Chicago-style dog (tomato, pickle, onions, neon green relish, mustard, celery salt, sport peppers, and NO KETCHUP), I would occasionally stop by Ray's cart for a dog, and he and I would chat for a couple minutes while I finished it. One day, we got around to talking about his business, so I asked him what separated his hot dogs from the cart across the street. At first he gave me a line about how his have magic, so when I challenged him on it he looked at me and said, "You know, there's no difference between mine and his but one thing – my voice. I was blessed with pipes…he wasn't."
      "Get your rrrrrrrrrrrrrred hots here!"
      thanked Ray for the hot dog and headed home, hearing his "red hots" call echoing off the buildings as I walked toward the train station. On the train home, I pondered Ray and his little business and began to appreciate his simple, effective business model. Essentially, he had two critical components: a location with thousands of potential buyers and an effective sales pitch: his signature call.
      "Get your rrrrrrrrrrrred hots here!"
      Lego resellers are similar to Ray: both are looking for lots of buyers and a great sales hook. To get buyers, every Lego investor has easy access to "park their cart" on the most prolific market in the world: eBay. Yet to succeed, sellers also need to develop their hook, and the easiest way to do this is by creating an effective eBay listing. Posting effective listings will yield more sales and higher selling prices for the Lego investor. With these tips, the beginner Lego reseller will maximize returns on all their eBay listings.
      Lego Listing's Key Ingredients
      Let's say a new Lego investor purchased 10228 Haunted House around Christmas last year at a shockingly steep discount and now, to free up some capital, has decided to sell it. What's the best thing he can do to maximize return on your sale? Write a great listing! Fortunately, eBay wants to help you list your merchandise, so they have created two tools to help sellers complete their listings: the quick listing tool and advanced tool. The quick listing tool is a guided process that prompts sellers for specific information, while the advanced tool is a self-guided process that provides the seller more options to customize the listing's information. For new sellers, I would suggest using the quick listing tool for the first few sales to develop a familiarity with the listing process. The advanced tool can always be used for future listings once the new seller is comfortable with the format.
      For now, we will discuss the quick listing tool. The quick listing tool includes four steps:
      Describing the product Setting the price Selecting the shipping options Reviewing the listing Each has its own considerations and challenges, so here is a description of each:
      Describing the Product
      There are three main areas that must receive special attention when describing your merchandise in a listing:
      Listing Title Product Category Photographs Product Description Listing Title
      The listing title is the first input a seller must make when crafting a listing. This title is important because most eBay buyers use eBay's search engine to find merchandise, and this search engine searches only for words in listing titles. A well written listing title will increase views of your product, and the more buyers look at your product, the higher the probability that someone will bid on it. The listing title is limited to 80 characters including spaces, so the title must be condensed, accurate and informative. For Lego selling, follow these simple rules:
      Assuming you are selling a Lego brand product, always include LEGO at the beginning of your title without exception. If selling a Lego set, always include the set number, name and theme and the term "set". Try to avoid abbreviating the name and never miss including the number. If selling a group of Lego bricks, always include "lot" in the name and the defining characteristic of the lot. For example, if you're selling a collection of tree pieces, include "Lego lot tree pieces" in your listing title. If selling minifigs, always list the fig name if there is one, the term "minifigure", and the number and name of the set it came from. If parting out a set, be sure to list the set number and name, and what is missing or parted out. For example, if you're selling the dragon only from 70503 Golden Dragon, including the phrase "Dragon figure only" in your title will bring you the best chance of hitting your target buyer. If you're selling Bag-End with no minifigures from 79003 An Unexpected Gathering, be sure to include "no minifigs" in your description. If the set comes with everything but the box, include "no box" in your description. If there's room, always provide the condition of the set or part. Common modifiers include: MISB: Mint in Sealed Box – appropriate if the box is flawless NISB: New in Sealed Box – appropriate if the box is sealed, but there are flaws in the box such as folds, crush marks or wrinkles. This note is not appropriate if the box is open in any way, or if the original seals aren't in their original condition. New - appropriate for pieces being parted out that haven't been assembled. Gently Used – appropriate if pieces or set has been assembled once and all pieces are in good shape Here is an example of a strong listing title:

      If there are still available characters in your description, it will help your Lego listing if you provide other descriptive words. For the 10228 Haunted House, adding additional appropriate descriptors like "vampire" or "mansion" in your title will give your listing extra hooks for the search engine:
      Lego 10228 Haunted House Monster Fighters MISB vampire mansion
      Also, I suggest NOT using hyphens in your titles since they tend to be wasted characters. If you feel like you really need to use them, separate the hyphens with spaces. The listing title "Lego 10228 Haunted House-Monster Fighters-MISB-mansion" may not provide a match with any of the individual search words "house", "monster", "fighters", "misb" or "mansion" since the search will read the hyphenate phrase as one word.
      There is also a subtitle option available to add to your listing for an additional $.55. This subtitle will not be searched for keywords by eBay's search engine so I don't see a lot of use for this, especially for commodity-type listings like lots and common minifigs. Returns from low cost listings will also suffer from this additional fee, so it's not worth using this feature for small sets either. I suggest keeping the $.55.
      Product Category
      The product category is also a small, yet important piece of information to provide for your listing. For buyers that don't use the search engine, the only other way to find a listing is to navigate eBay's product categories. The eBay product category database is an entire hierarchy of categories and subcategories that can quickly refine a search without keyword input. As you may have guessed, there is a "Lego" product category that is a subcategory of the "Toys and Hobbies" category and "Building Toys" subcategory. The Lego subcategory is also segregated into a variety of themes including Bionicle, Technic, Duplo, Mindstorms, Lego sets, and an all-encompassing "Other" category. It's important to provide the most applicable subcategory since the listing will show up in all the categories and subcategories that are marked. For example, a 10228 Haunted House set that is only labeled in the "Lego" category will only show up in a Lego category search, while the same set that is labeled with the "Lego" category, "Sets" and "Other" subcategories will show up in all three category searches. Fortunately, eBay quick listing tool will suggest categories/subcategories if you enter the set number and name when prompted.
      I have circled an example of a strong Product Category selection:

      EBay will also offer the option to list your Lego product in a second category, but I wouldn't recommend spending the money as most Lego merchandise will almost always fit into a specific subcategory.
      Photographs
      Like a good bun to a hot dog, a good photograph will really complement your listing's text. There have been many discussions on the Brickpicker forum about buyer frustration from getting stock photographs with listings. While Power Sellers can leverage their track records to establish a buyer's trust, the new Lego investor must use all tools in his arsenal to establish buyer's trust. Posting pictures of the actual set is a way to prove the condition of the merchandise and establish that buyer trust crucial for getting a bid. EBay allows sellers to post up to 12 pictures, so always start with a general shot of the box, and use the remaining pictures to establish box condition or to show the assembled set if selling used.
      When taking pictures, be sure to provide enough light while avoiding glare on the box. Also, always use a light background (a sheet can work in a pinch), and as Brickpicker members have seen, never use the bathroom as a setting for your photographs! Finally, avoid confusing pictures such as this one:
       

      This picture confuses the buyer, mixing a stock black and white photo from a different set with the actual set in bag and assembled form.
      Product Description
      The product description is probably the most crucial part of the Lego listing. While a good title and a targeted subcategory label will bring in the potential buyers, the product description will sell a product. The Product Description is the only place to provide specific details of the Lego merchandise being sold, and the more information that is provided to potential buyers, the better a chance there is for a bid. All descriptions should be written conversationally, and have a positive tone. If you are proficient in HTML, you can add graphics and backgrounds to your listings, but don't feel pressured to provide this, especially if it's outside your comfort level or skill set. If you elect to use graphics, keep them clean and minimal.
      The best Product Descriptions include the following four sections:
      Introduction Lego S@H Description Listing Specific Information Personal Touch Introduction
      The introduction should introduce the buyer to what you are selling. It's important to make an impression, so make it fun and keep it light, but always include the quantity, set number and name, piece count and a quick description of the model and its highlights. For our 10228 Haunted House example, something like this would work well: "The_lego_closet presents Lego 10228 Haunted House – a frightfully wonderful building model that will have you screaming for more! This 2,064 piece Lego set is an old, rundown Victorian mansion that's been haunted by a vampire, his bride, zombie assistants and even a ghost! The Lego model house swings open to show the scary contents of this vampire couple's home including a variety of rooms, spooky accessories, furniture, and a fireplace among other delightfully ghoulish details."
      Lego S@H description
      For Lego sellers, the actual Lego description provides a wealth of knowledge, and should always be included in the product description if it's available. Brickset.com has Lego's description listed under their "Descriptions" tab for each set's information page, so always check Brickpicker for this copy. For 10228, the copy is:
      Lego's Description for 10228 Haunted House
      "Enter the haunted house at your peril!
      The crooked Haunted House is home to the scariest ghosts and monsters. Tremble in fear as you open the gate, go weak at the knees as you step onto the porch and gasp in horror at the fireplace, kitchen, office, folding staircase, bedroom, potion room, music room and collection of other creepy objects. Dare you enter the Haunted House?!
      Add to your LEGO® Monster Fights Collection with the first officlal LEGO® Haunted House!
      Includes 6 minifigures: 2 glow-in-the-dark ghosts, Vampyre, Vampyre's Bride, Zombie chef and butler
      Features unique ‘crooked' design featuring boarded up windows and working front gate.
      Haunted House opens to reveal detailed interior with 3 floors.
      First floor features fireplace that swings open and displays a ship in a bottle on the mantle.
      Cook up a ghoulish meal with the Zombie chef in the kitchen complete with old-style stove, jars and table!
      Write letters from the Vampyre's haunted office!
      Pull the lever hidden in the chimney to release the drop down staircase and access the top floor!
      Top floor features gramophone, records and newspaper LEGO® elements.
      Customize the Haunted House with new stickers for wall hangings, spider webs and curtains!
      Measures 15.4" (39cm) high, 9.4" (24cm) wide and 7.5" (19cm) deep"
      Some overlapping information between your introduction and the Lego description isn't an issue, but it's important not to just repeat everything included in the S@H description in your introduction.
      Listing Specific Information
      Every strong Lego listing should include a section that discusses information specific to the listing. For example, if you are selling a part of a set, or a minifigure, this is the place to tell the buyer this. Be sure to thoroughly explain exactly what the buyer is bidding on here. Don't hesitate to format words or sentences differently for emphasis or effect, but make sure the emphasized text doesn't look ridiculous. Also, be sure to state the set comes from a pet free/smoke free home if applicable.
      This section can also include any specific shipping, insurance or bidding information as well. While some refer to this as the fine print, it's very important to clearly communicate any information that would have an effect on bidding to the seller. This listing does a very good job of explaining listing specific information:
       

      Personal Touch
      It always helps to bring a human element to your listing by adding some personal observations or opinions about the set as long as they are positive. Also, always thank buyers for considering your listing. See below for a listing with a nice personal touch:
       

      Things to Avoid In reviewing eBay listings for this article, I came across a number of listings that were utter disasters. Here are a few to consider for what they've done incorrectly:

      Don't use loud backgrounds like this. They're an eyesore!

      This description is too overwhelming and confusing – what is with all those set numbers?
      Setting the Price
      There are three primary decisions to make when setting your price:
      Selecting Auction or Fixed Price sale Determining the price Determining the auction duration Selecting Auction of Fixed Price sale
      Sellers need to determine whether they want their sale to be an auction or a fixed price. Auctions typically garner higher prices, but there is always the risk of not getting what you feel you deserve for your set. Sets garnering significantly higher secondary prices should be safer auction bets than ones that are selling close to MSRP, so consider a fixed price sale if flipping unretired sets, and an auction for well performing retired sets.
      Determining the Price
      The most important decision a seller will make is the selling price of their merchandise. If the seller has selected an auction, eBay recommends that setting a $.01 starting price will garner more bids and yield a higher sales price. EBay also gives you the option to set a "Buy it Now" price. If selected, BIN has the effect of setting an anchor price, which can be good and bad: good because it gives buyers an idea of what you want to get for the set, but bad because it will cap bids at this price. While it's the seller's option, I would suggest not setting a Buy it Now price.
      Determining the Auction Duration
      The final part of setting your price is to determine the length of the listing. EBay claims the longer the listing, the more likely the merchandise will sell at a higher price. Also, eBay gives you an option to schedule a start time, which is really a way to set your finish time. This is critical because you typically want your auctions to end when there is the most traffic on the website. If you're in the United States, this would likely be between 8 -10 PM Eastern. To finish it at this time, be sure to start the auction at this time.
      Selecting the Shipping Options
      EBay gives you two options for shipping: the eBay suggested option which in the US is USPS first class for US domestic packages, and the "create your own shipping" option that allows you to customize your shipping. Some sellers require a signature for expensive shipments, and first class shipping provides this as an option for an additional fee.
      The Create Your Own shipping option is good if you are savvy or experienced with shipping. Before doing a significant amount of shipping on eBay, I would suggest new sellers review the cost of each of the shipping options eBay provides to learn your preferred shipping option.
      For pros and cons of different shipping options and carriers, stay tuned for another blog entry!
      Finally, eBay also offers you the option of including free shipping with your order. I would only suggest providing free shipping if you set a fixed price sale and build the shipping cost into the fixed price. Otherwise, I would always have the buyer pay shipping.
      Reviewing the Listing
      This is your last chance to check everything in your listing. Be aware – this is EXTREMELY important. For proof, check out this forum post:
      http://www.brickpicker.com/forum/index.php/topic/3315-lol-ebay-whoops/?hl=ebay (sorry eRacine)
      Needless to say, always check everything on your listings. You don't want to risk a mistake that could wind up in a canceled listing or, worse yet, bad feedback from a buyer.
      Seller's Rating
      While writing a good listing is crucial, it's also important to understand the importance of a seller's sales rating. The number in parentheses next to your seller name is a count of the ratings a seller has received from past transactions. Someone with hundreds of positive sale ratings will always be considered a low risk seller for buyers, and will usually command top dollar for their listings. For the new Lego investor, I suggest selling small Lego sets such as polybags or sets under $10 to increase your sales ratings. That way, once your large sets appreciate, your strong sales rating, combined with a good listing, will get you top dollar for your listings. If you have more than 10 ratings (hopefully all positive), you will receive a number in parantheses next to your seller name. This will allow buyers to easily review the feedback and hopefully provide them with a higher comfort level that you will deliver what you are selling.
       

      It's a Shame About Ray
      Crafting and posting an effective eBay listing is critical to attracting buyers to your eBay auctions. Buyers will appreciate the accuracy, detail and relevance of a good listing and will be more willing to place a bid an auction with one.
      I haven't seen Ray in ages, and I miss hearing his signature "red hots" call - it always reminded me I was on my way home. While eBay buyers may not have this same emotional connection, positive feedback from good sales will grow your reputation, much like Ray's voice did for his business. In a sea of thousands of Lego auctions, make sure yours stands out.
      As always, invest accordingly.
       

       
    • Fcbarcelona101
      If you have taken a look around BrickPicker's home page you have probably noticed a tab that reads Theme CAGR. What you will get by clicking it is a list of every major LEGO theme in order of highest to lowest CAGR, that unlike for individual sets encompasses the whole product line of a specific theme. We can use that list as a proxy for theme popularity and overall investment performance in a variety of ways. However, I want to take that list and twist it a little bit to get some different insights on very similar information.
      As the list is calculated using a simple average of the CAGR of all sets in a particular theme, the weight assigned to each set is exactly the same whether we are talking about a small $3.99 Polybag or a $200 modular. This is perfectly fine as measure of the overall popularity of the theme, but what if a particular investor's strategy focuses around selling only medium to large size sets? Well, in that case a simple average may not be the best approach. If interested in calculating a more appropriate measure in a case like this, we could use the Weighted Average approach to the CAGR.
      A CAGR weighted average does better is giving more weight to those sets on the theme that are more valuable, and less weight to those that are less valuable (like Polybags), effectively resulting in a figure that represents better the popularity and investment performance of the larger sets. Let me give you a quick example of what I mean first before showing you how you would go about calculating a weighted CAGR.
      Theme X


      A 20% CAGR for a whole theme is actually a pretty good number, but as you can see most of that comes from the two polybags. If you are a big set seller, you would make a very bad choice by purchasing a large set expecting a CAGR of anything even remotely close to 20%.
      On the other hand, the weighted CAGR figure is significantly lower, clearly depicting the fact the larger sets of the theme are not performing as well as the smallest. An investor focusing in medium to large sized sets will now expect a CAGR closer to 8% instead of 20% and will therefore be able to make a more informed decision.
      Weighted CAGR is a very useful calculation that along with the simple average one calculated by BP can help you paint a more accurate picture about the popularity and overall performance of a particular theme.
      --------------------------------------------------------------------------------------------------------------------------------------------------
      Appendix: How to calculate weighted CAGR:
      Step 1: Add the MSRPs of all the sets on a particular theme
      In the example above you would do: (3+5+20+50+150) = $ 228
      tep 2: Divide each set's value for the total amount calculated above
      For example, you would do 3/228 = 0.013 for the first polybag, 5/228 for the second and so on.
      Step 3: Multiply each value you got in Step 3 above for the individual CAGR of each set.
      For example Polybag 1 weight (from above) is: 0.013, you would then multiply that by its CAGR: 0.013*40%= 0.53%
      Step 4: Once you have done Step 3 for every single set of the theme, you would proceed to add the results to get the final Weighted CAGR: 0.53+0.66+1.32+2.19+3.29= 7.99%
       
    • Quacs
      "This is your Lego captain speaking...on behalf of the flight crew, I would like to welcome you to BrickpickerAir. During your flight, I invite you to enjoy our in-cabin service that includes free Brickpicker access, worldwide Lego discounts, and of course the option to purchase Lego's most exclusive sets, the Airline Exclusives, only sold here and in a few other airline magazines. Once again, welcome to the flight."
      Brickpickers, please be aware that while the Macks have no intention of starting an airline, there is one aspect of our Lego captain's announcement that is true: Lego's Airline Exclusive sets do exist. Every year Lego produces an aviation-themed set to sell only on select airlines. Some airlines sell these exclusive sets through the catalogs stuffed in every seat pocket, and some sell it through in-flight carts that are trucked through the aisles by stewardesses. Needless to say, these are fairly rare models given their limited distribution channel.
      Does this rarity translate to investment profits for these sets? Normally, I would say yes. Lego Exclusives are typically very collectible, almost always commanding a premium on the secondary market. Yet, these sets have two fundamental problems: they aren't advertised well (if at all) so VERY few people know they exist, and they tend to be plain (no pun intended) with no exclusive minifigs and a no-frills aircraft.
      So, theoretically, these sets wouldn't provide great returns if bought at MSRP. Yet, as we know, theory and practice are different, so let's try to prove my instinct with data. Unfortunately, there was one major issue I encountered: when I tried to calculate ROI, there were no listed retail prices for the vast majority of these sets anywhere. The latest one, 4473, had a list price of £15 on the Virgin Atlantic site, and last year's set, 4442, was also priced at £15 on Brickset. The only other price I saw was for the 2007 set, 2064, priced at €18. So, assuming MSRP on these are £15 (or €18) and shipping is another £5 (these are small sets), our all-in cost on this set would be £20. Here are the yearly models from the last eight years from earliest to latest, and their ROIs:
      *Note - A few set values may appear off by $1, but it's strictly due to rounding. Exchange rates assumed were £1 BP = $1.5 USD = €1.17*
      2928 - Airline Promotional Set (2006)

      Current UK Value and ROI - n/a (there have been no recent sales of this NEW set)
      Current US Value and ROI - $69 (£46 / €54) / 130%
      Current European Value and ROI - €27 (£23 / $35) / 15%
      2064 - Airline Promotional Set (2007)

      Current UK Value and ROI - £31 ($46 / €36) / 45%
      Current US Value and ROI - $37 (£25 / €29) / 25%
      Current European Value and ROI - €21 (£18 / $28) / -10%
      2230 - Airline Promotional Set (2008)

      Current UK Value and ROI - £25 ($38 / €29) / 25%
      Current US Value and ROI - $45 (£30 / €35) / 50%
      Current European Value and ROI - n/a (there have been no recent sales of this NEW set)
      7643 Air-Show Plane (2009)

      Current UK Value and ROI - £12 ($18 / €14) / -40%
      Current US Value and ROI - $32 (£21 / €25) / 10%
      Current European Value and ROI - €19 (£17 / $25) / -15%
      7688 - Lego Sports Plane (2010)

      Current UK Value and ROI - £14 ($21 / €16) / -30%
      Current US Value and ROI - $31 (£21 / €25) / 5%
      Current European Value and ROI - €25 (£22 / $33) / 10%
      7696 - Commuter Jet (2011)

      Current UK Value and ROI - £21 ($32 / €25) / 5%
      Current US Value and ROI - $36 (£24 / €28) / 20%
      Current European Value and ROI - €16 (£14 / $21) / -30%
      4442 - Glider (2012)

      Current UK Value and ROI - n/a (there have been no recent sales of this NEW set)
      Current US Value and ROI - $51 (£34 / €40) / 70%
      Current European Value and ROI - €1256 (£21 / $33) / 5%
      4473 - Police Helicopter (2013)

      As you can see, this year's set has no sales information yet since it is so new.
      What does this information tell us about the Airline Exclusive series? First, we must caution you against using the data above as gospel since it can suffer from a small number of data points. That said, if you're in the UK, don't expect to make any money investing in these sets. For every set that has a small gain, there is another that has a negative ROI including the awful 7643 Air-Show plane bringing up the rear at -40% ROI. EU investors likely should stay away from these sets as well since there wasn't an ROI over 10% among the bunch, and three sported negative ROIs. There are a couple of US winners here, likely due to the lack of availability on US airline flights, and the corresponding rarity in the market. 4442 and 2928 are the big US winners with ROIs of 70% and 130% respectively. A word of caution for US investors: there are still two underperforming sets among these seven sets. 7688 and 7643 barely made a profit from their estimated $30 MSRP/shipping price. All in all, I would caution all investors to pass on these sets for investment.
      "Hello, folks. From the flight deck, we see some storm clouds ahead for these Airline Exclusive sets. If your looking for big returns, fasten your safety belts as the seat belt signs have been illuminated. We expect some turbulence ahead for these sets, so try to steer clear of them as much as possible. As always, invest accordingly..."
       
    • TheOrcKing
      Like the ever classic tune performed by The Who playing during the intro of that TV show, CSI: Crime Scene Investigation, “Who are you?” except in this case, who am I? After a rather ridiculous amount of posts and topics starting with my very first one titled “Stargate in LEGO?”, I realized me of all people has yet to actually introduce himself whatsoever and figured what better way than to blog about it now? Perhaps this will get me better acquainted with everyone here as well as helping you understand what goes through my oddball mind. Ahem….
      A long time ago in the state of sunshine, I was born in a year when Medicare came into effect for Australia and John DeLorean was acquitted of all eight charges on possessing and distributing cocaine. Well, enough of the history lesson; let’s jump ahead about four years later. After playing with Duplo since the ripe old age of one and finally being considered mature enough, I was given my older sister’s collection of Lego and there was the start of my brick addiction, friends. Starting out with sets such as the original 6075 Castle, 6375 Exxon Station, 6373 Motorcycle Shop, and even a couple Fabuland characters, it took little time at all before I found myself hooked. Now I hardly built anything one could even consider to be a ‘real’ MOC in today’s traditional sense as it were but more like a bunch of bricks that just so happened to be lying around and got slapped together for the heck of it. The best I can recall of anything semi decent far as builds go was a small store built on a 32x32 baseplate featuring a billboard across the front reading “LEGO MART” with a very yellow color scheme from all those Castle bricks and an interior consisting of a couple checkouts and some odds & ends stuck on shelves, and then there was a storybook opening type tree/fort/home for my favorite minifigure at the time, Majisto the wizard, mainly comprised of parts included from 6048 Majisto’s Magical Workshop.
      Surprisingly enough despite having so many City related sets, I always found myself drawn to all outer space and castle themes and still have a fondness for them. I must confess back in the day, City was my least favorite area. The builds seemed rather plain and uninspiring compared to most anything else honestly which was a completely different outlook from today seeing how I found my reason and passion for all things City some years ago and has since become one of my top themes. In my opinion, the current City builds bear a closer resemblance to anything from the real world way more than in years past and designs seem to keep improving all the time. Now if only they would release more housing units for pedestrians. Ah well, that is what Creator is for now, isn’t it?
      To give a brief highlight of my collective habits and help speed things along to present day, I have purchased or in the past been given a number of sets under various themes over time. While I don’t quite have all of any single theme on average, I am pretty close to for many like Ice Planet, the first run of Adventurers, or more recently Ninjago. I certainly enjoy smooshing my way into finding a complete set of all Collectible Minifigures in a series which for me is a must; no if’s, and’s, or but’s about it. I also try and purchase a good number of extras for potential custom ideas down the road and a little kitbashing for fun although I still am not a decent or serious MOCer by any means. If anything I am always learning all the interesting tips and unique tricks you would typically see on Flickr and other related websites. My skills lay elsewhere within the realm of drawing, writing, and computers which in a way goes with my profession.
      I am a videogame tester who is working his way on learning to be a designer for himself. I will not speak of whom I work for as it really is not impressive anyway unfortunately and would rather keep that bit to myself. To help clarify on what I do basically, if you think all a videogame tester does is sit on his or her butt all day and just play videogames then let me give you a slight reality check. Yes, it does have a rather daily requisite to essentially ‘play’ a videogame but imagine ‘playing’ the same exact area and/or part a thousand times over and over again. Oh, and don’t forget to write down every little odd thing you come across no matter how insignificant it may seem because chances are it isn’t. Then add the part where a good majority of all the time you typically perform this debugging there is a whole bunch of numbers and variables sprawled across the screen which must also be kept track of. Now imagine this whole process going on for weeks or even months on end, and guess what? That was only level one. Still at the end of the day, it is my job as well as a hobby and passion so it isn’t all that bad. Perhaps tiring day in and day out but beats working at a job I would absolutely loath to no end.
      You already know a good number of my musical preferences so there is no need to go back down that road, and with the newly started Flick Picks you should eventually get a feel as to what I enjoy watching in my spare time when I have some to spare to begin with. To form a quick summarization for anyone not willing to go through something like probably half a billion posts by now, I will simply say I enjoy music with nicely harmonic rhythms and mostly watch cartoons and comedy films with a couple horror and suspense movies on the side. To name but a few of my top bands, on the guys’ side are The Doors, Billy Joel, and Judas Priest, while for the girls it is Stevie Nicks, Garbage, and Evanescence. Some of my favorite films of all time are Spaceballs, Wizards, and Rear Window, cartoons would be The Real Ghostbusters, Ren & Stimpy, and Samurai Jack, and animes are Guyver, Ghost in the Shell, and Cromartie High School. To end my ‘quick favs’, some top video games would be Mega Man (any of them), Red Asphalt, and Doom.
      Well, that was a rather long winded and overdue introduction, wouldn’t you agree? For everyone that actually managed to read my entire ‘great wall of text’, to Ed and Jeff for creating BrickPicker, and to my fellow moderators, I thank you. Every one of you has made me a better person than I was before and I honestly cannot think of a greater gift.
      Thank you my friends,
      TheOrcKing
       
    • MartinP
      The best of the best. The Millennium Falcon is the biggest Lego Star Wars set ever produced to this date. The set has 5,195 pieces in the set. The set has 5 minifigures with it. That is a rare feature. I have only seen a few UCS sets that have minifigures. This is my favorite set. I have built this set. It took me a really long time to build it and it was really fun. Here is the Lego.com description of the set:
      Build the ultimate Millennium Falcon™!
      This is it - the biggest, most spectacular LEGO® model ever! Straight out of the classic Star Wars movies comes the Ultimate Collector's Millennium Falcon, Han Solo's famous smuggling starship. Every detail of the modified Corellian Engineering Corporation YT-1300 freighter is here, all constructed to scale with LEGO minifigures. At almost 3 feet (90cm) long, it's the ultimate centerpiece to any Lego collection!
      With over 5,000 pieces, this is the biggest LEGO set ever made! Model is built completely to minifigure scale - minifigures can sit inside and man the controls! Landing gear provides a stable base for model to stand on! Ship is over 33" long, 22" wide and 8" tall! (84cm long x 56cm wide x 21cm tall) Radar dish rotates and elevates and boarding ramp extends! Top and bottom quad-laser turrets rotate for realistic play! Cockpit top can be removed to access minifigures! Includes 5 minifigures: Han Solo, Chewbacca, Obi-Wan Kenobi, Luke Skywalker and Princess Leia Organa! This special set also includes a display card with detailed ship specifications! Let's talk about the investment of this set.
      There are two different editions for this set. A first edition and a second edition.
      The 1st Edition is the regular set with a special Certificate of Authenticity. People got the COA by being one of the first people to order it online or in stores. The 2 nd Edition is just the set. No COA. The 1st Editions are the rarer ones. From what I have heard, there are only about ten thousand first edition made. (This information may be incorrect). There are far more second editions than first editions.
      Here is a big problem. What is the difference between the value of the first edition and second edition models? To answer this question, I am not sure about the values for the different editions. For a fact, I know that the First edition is a lot more valuable than the Second Edition.
      Every day on Brickpicker.com, I check the UCS 10179 page, and most of the time see the exact same set for sale for the same price. Here is the link: http://www.brickpicker.com/bpms/set.cfm?set=10179-1
      There are various sellers for this set. And there are a lot of buyers for this set. I see that some people are trying to sell their first or second edition UCS Millennium Falcons for tens of thousands of dollars. The set has retailed for $499.99 USD and some people are asking for twenty-five times the retail price. Yet I have to see if anyone has bought these sets.
      I do not own this set, but I really want it. If I has the money, I would buy one of them, but I do not have the money. In that case, I was wondering, what would happen if I bought a MISB 10179 First Edition and waited for a few years and then sold it for a big profit? We know that the value will continue to go up. The set has a CAGR of 31.81%. Last month, the set has a CAGR of 32.75%.
      There is not much difference for the two CAGR in the begining, but as time progresses, there is a noticable difference. At the current rate, which is 31.81%, the Millennium Falcon will be value at around $5000 in 2015.
      If the CAGR and the values are like the chart says, buying it now at a higher price may be an good investing strategy for the future. (I am not suggesting buy this set at a higher price)
      If a person decides to go that way there is a BIG risk for going this way. The set may not get valued as high in the future, so that would make it an investment faliure.
      If you do want this set as an investment, my suggestion is to look at the value of the set first, then see if any of the secondary market listings are within the value, and espcially below. I would buy anything at a low price, wait a few years, and then sell it. It is a good strategy. It has worked many times for me.
      If you bought a MISB Second Edition, 10179 Millennium Falcon for $1000.00. You could sell it the next day for $2500.00 and above. If you bought one at $2500.00, you might have to wait some time before you can make a decnt profit.
      There is a good and bad affect buying a set at a certain price. The values for this set is based upon the sold listing on eBay.com. If you buy the set at a low price, then the value might drop a little, but, then it should regain in the near future. This holds the same if you buy a set at a higher price.
      In the end, there is a great investment oppertunity for this set. It can bring you big bucks, but you can also lose some with it too. If you are going to invest in this set, be very careful. There is a lot of potential risk and reward hiding every where.
      On a side note. Do you think that Brickpicker.com should have different values and CAGR for the different editions for the UCS 10179?
    • Fcbarcelona101
      Ever since this since was founded, the CAGR figure has been the go to number in order to determine relative performance as well as forecasting future set growth. The topics addressed previously about this matter are broad in range, but there is one in particular that so far has not been discussed.
      As you know, the CAGR of a set is the figure that averages year to year returns of an particular set, but as you probably know the growth trends of LEGO sets after retired do not follow a smooth pattern, as they usually present high volatility as soon as they go EOL and up to a period of around 5 years for most sets, when they traditionally seem to mature. One way to account for this is determining what I call the Two Period CAGR, something that some of you may have seen in some of my reviews for currently available sets.
      What does this mean exactly? Well, what we are basically doing when calculating the Two Period CAGR is determining the rate at which a particular set will grow the first few years after it has been retired, while then adding that up to the second growth stage of more modest growth that traditionally follows once a set matures. This calculation has a variety of benefits, but to me the most important one comes down to being able to take the set investors are considering purchasing and comparing it to some similar sets that have already been retired. If investors are able to find at least two comparable sets, one that is still experienced high growth (< 2-4 years) and one that has already matured (> 4 years), then the future value projection can become a lot more accurate and a lot more useful. This is a lot simpler to see with an example, so let's get to it.
      (Following numbers are not actual figures, just used for illustrative purposes) (We will assume that all sets are released and retired on the same year)
      Let's say you are considering investing in 79003 An Unexpected Gathering, released and retiring on 2013. What you would want to do is go ahead and do some research for similar sets retired on the same theme or at least a theme that can be accurately compared with the LOTR. When researching for these sets, what you want is to find at least two different ones, one that has been retired for around 3 years and one that has been retired for more than 4 years.
      Assume that the 2 sets you selected for comparison are:
      The Burrow: retired in 2010 and with a current CAGR of 20% Chamber of Secrets: retired in 2007 with a current CAGR of 10% If you really believe these two sets are comparable to An Unexpected Gathering, then you can make an educated guess that probably the set will experience a high growth period with a CAGR of around 20% for its first 3 years and a more modest 10% CAGR once it has been retired for 6 years. Let's now show step by step what you would need to do next:
      1- Set up a table in Excel or a similar program where you will project the future value of the set using the long term growth rate and the longest time period. In this case, those numbers would be the ones for the Chamber of Secrets (10% - 6 Years)

      This will give you the expected value after 6 years of retirement.
      2- Now that you know the long term final value, all you have to do is figure out the ending value for the short term high growth period using the numbers for The Burrow (20% - 3 years)

      At this point, you will now the expected value of this set by the end of the third year according to your calculations, $86 in this case, and will be able to decide if it is a worthy investment based on your holding period.
      3- Once you have the ending value for the high growth period, you will need to determine the growth rate the set will need to present on the remaining 3 years that will allow it to have a final CAGR of 10%. You will get that number by calculating the CAGR for the last three years using the following inputs:
      Beginning Value = The ending value of the high growth period (86)
      Ending Value = the ending value you got in Step 1 using the long term CAGR (89)
      Number of years = remaining years after high growth period (3)

      This will give you a lower CAGR that will get the long term figure to 10%. In this case this number is only around 0.83%, meaning that our set will grow at that yearly rate for the last three years. Usually, the second period CAGR is not as low as this for a number of different reasons, but I thought it would be good to make it as different as possible from the high growth period.

      You see that we end up with exactly the same market value after the 6 year have passed both with the 10% smooth growth and with the 20% and then 0.83% two period growth.
      4- You can put the results on a graph so that the results are easier to see.


      As said before, you will now have two values that you will use to make your investment decision:
      Value 6 years after EOL: $89 Value 3 years after EOL: $86 I know it looks complicated, but the more you play with it, the easier it will become. With this you'll be able to know the projected future value at different periods, and that is not only possible with two, you can actually do three or more if you prefer.
    • Fcbarcelona101
      A couple of days ago, Brianl3 published a great Blog Article where he described a very simple process to calculate the Compounded Annual Growth rate we use so much on this set. As most of you already know, this figure represents the smoothed growth a set has had over its entire life since being released, and can be usually used to get a fell of how well it has done compared to some of the others.
      Now, below you will find an attached Excel spreadsheet with an incorporated CAGR calculator, where you will be able to input the numbers you are interested in evaluating and the program will take care of the calculations for you. As Brianl3 mentioned in his article, you will only need to know and input the Beginning Value, Ending Value and the number of years the set has been on the market
      Also, I wanted to add just a couple of things that you may find useful when investing in LEGO that can be calculated from the same CAGR formula. First, by playing around with the formula you will be able to determine the projected future value of a set according to you what you expect its CAGR to be (Something Brian also mentioned in his article). This calculation can be extremely valuable especially if you take a look at comparable sets and are able to make an educated guess about how close a specific set may follow that performance. When doing this, it is extremely important to remember that CAGR is only a 1:1 comparison when the sets have been out for the same time period, otherwise you need to make adjustments to account for the variation.
      Another way you can utilize the CAGR formula is to determine how many years will it take for a set to reach a particular value given a specific CAGR. For example, by knowing the set's beginning value, expected final value and CAGR, you will be able to tell how long you would have to wait for it to reach that figure you are looking for. If you make realistic assumptions you will also be able to use to plan some of your holding periods or whether an investment is worth it to you or not.
      These two applications to the CAGR formula explained above are also included in the Excel spreadsheet you will find attached to this article. I hope the ability to just input the figures without having to worry about the math will allow you to use the statistic more often to make more informed choices in your future investments.
      One last thing I included there, even though it requires more calculations and it is a little more advanced than the rest, is the risk adjusted CAGR. What this calculation does is take into account the Standard Deviation figure you learned to calculate on my previous Blog Article into the CAGR formula, therefore involving the volatility of the set/theme into the ending results. For example, if the CAGR of the entire CITY theme is 20% and the standard deviation is 12%, then the actual Risk Adjusted CAGR ends up being slightly above 17.5%. As you can see, the higher the volatility (risk) of an investment, the lower the risk adjusted growth rate is going to be. This measure can be very helpful when considering the impact of risk in your expected returns and when comparing sets/thems using CAGR.
      I hope that most of you will at least take a look and start using all of these measures when planning and evaluating your investments. They can really make a difference
      . -----------------------------------------------------------------------------------------------------------------------------------------------------------------
      Note on Excel Attachment: As said before, you will find 4 different calculators in the spreadsheet. The inputs are self-explanatory and you have been dealing with them for probably a long time. The only thing you need to remember is to input the standard deviation as a decimal number when calculating the risk adjusted CAGR and you will be good to go.
      Note 2: Numbers in the Excel spreadsheet are current 10179 UCS Millenium Falcon figures. Except for the standard deviation.
      Thanks for reading!
       
      Calculator.xlsx (10.29KB) : 27


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