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    Brickpicker blog articles on LEGO investing, news, reviews, evaluations, discounts and more...
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    • MartinP
      As you know, there are now two X-Wing Fighters in the UCS(Ultimate Collector's Series) line. One was released in 2000, has 1,300 pieces, and has a retail price of $149.99 USD. The other one was released in 2013, has 1,558 pieces, and retails for $199.99. There are various affects of having another X-Wing fighter out in the market. There could be less interest in the older X-Wing because of its avalability and its current price. The newer one is more available and it has a cheaper cost. This may mean that the value for 7191 may go down, and the 10240 value mat go up. In the up coming months the data for both these sets will provide a clearer look at this.
    • Fcbarcelona101
      I decided to start a new kind of feature or at least semi-regular type of article that will focus in the impact of re-released models on their predecessors. I intend to at least do one of these per month as a minimum, but may increase the regularity based on how much time I have available from time to time. Also, I can only do this with sets that have been released over the past 12 months, as that is the only data I have available from Brickpicker, but I consider that is more than enough time to evaluate the effects of remakes most of the time.
      I will be starting this section of my blog with one set that has been talked about a lot on Brickpicker's forums, the 10226 Sopwith Camel.
      Back in 2001 Lego released its first version of the Sopwith Camel, a somewhat famous plane from the World War 1 era. The set included almost 600 pieces and was the first of a series of several advanced models dedicated to famous aircrafts (the other two being the Red Baron and the Wright Flyer). The model was very well done, for its time, and in the end performed very well in the secondary market. More specifically, it currently has a CAGR of almost 10% and a Holding Period Return of close to 210%, great numbers when we consider it has been retired for almost a decade at this point.
      Fast forward 12 years and LEGO decides to bring back a larger and more detailed model based on the exact same plane. The newest version released last year includes 883 pieces and looks just so much better than the older one. From the fresh color scheme to the vast collection of details and features, this set really proves that LEGO has stepped up its game in the past few years. The 10226 Sopwith is one of those sets most investors expect will do great, but that it's a completely different conversation.
      So, what has been the impact of this newest release on the older 3451? Let's take a look at the numbers of each set compared in the graph below:

      So, I don't know if you can notice it very well on this graph, but I think you can see that since the newest Sopwith was released the older version has been on a downward trend as far as value is concerned. It has not been a sharp 30% drop, but it has been somewhat significant. In fact, If you take a look at the numbers in the Price Guide, the 3451 has lost almost 8.4% from where it was last year and it seems to keep going down.
      These results are hardly unexpected. Who would really want to pay more than $150 for an older and inferior model when there is a clearly superior and more affordable one currently on the market based on the exact same plane?. Other than some serious collectors, there are probably very few individuals that would for the older one. The older Sopwith will not, of course, lose value indefinitely.
      Even though in this case the re-released version has cause a dip on the older set, we can't really assure that this will always be the case. And we will see if this holds once we get to our 2nd Edition of the Re-Make Impact Evaluation.
    • Fcbarcelona101
      When it comes to LEGO investing, the investor usually has to deal with several different questions that make things more complicated; box condition, shipping and taxes are just some of those factors. However, the most important choice they usually have to make is about what specific sets are going to be better performers than the rest in either the short or long run, depending on their objectives. Even more, most investors are not really satisfied by following the herd and investing in only those sets that are popularly considered as good choices, think Vampyre Castle, Helm’s Deep and others, but rather look for something more than escapes the eye of the rest and may produce abnormal returns in the future. These sets are usually called “sleepers” and I will spend some time analyzing what they are and some of the most recent examples.
      Even though there is not a perfect definition about what a sleeper set really is, I do have two factors under which I am willing to categorize any specific set as one, and those are the following:
      Category 1: A set that is not talked about much on the LEGO investing community that, once EOL, produces outstanding returns in a short period of time. Example: The Burrow or The Zombies Category 2: A set that, even though is talked about in the community as a solid choice, surpasses most of the investor’s expectations, especially in the short term. Example: Imperial Shuttle The factors named above are not universal, just my personal criteria for determining what a sleeper is. Either one of them will prove to me if a set was indeed a sleeper. Category 1 are the most difficult sets to pinpoint, but also the ones with the highest reward, while Category 2 are sets that probably many investors have in their Brickfolios as probable good performers that will end up being outstanding performers.
      Category 1 sleepers are extremely hard to select while the sets are still available, just like it happens when stock pickers think back to the time when Apple was under $ 100 years ago. It is very easy to determine sleeper sets once they have been retired, but there is really not much value in it, since the rewards have by then escaped the investor. Anyway, the most we examine them, the more information we will have and the better chance to select at least some of them in the future.
      With the above information in mind, let’s examine some of the recent examples of sleepers in both categories.
      4840 The Burrow

      Comments: The Burrow is a typical Category 1 sleeper. Retired only around a year after its original release, the set had already doubled in value in less than 6 months and has since continued its rapid increase in value. As you see from the price guide information, the change from the last month was almost 7%, and from what I have been able to see in the most recently sold listings, the set will be reaching $ 200 probably before the end of this year. In fact, several of the most recent sales have gone for around $ 160.
      The Burrow included some exclusive characters and variations, but lived under the shadow of the bigger HP sets like Hogwarts Castle, Diagon Alley and Hogwart’s Express. Now that it has been retired for a while, most investors wish they had bought a lot more of this set than they actually did.
      10212 Imperial Shuttle

      Comments: The UCS Imperial Shuttle is a perfect example of a Category 2 sleeper. The set is part of perhaps the most popular line of sets with both collectors and investors, yet didn’t received the same love as some of the other sets in the line. Having said that, most investors did consider this set as an investment winner before it retired, and invested accordingly, but I am sure no one really expected the set to jump so much in value in the short term like it ended up doing. Bear in mind, the Shuttle was retired only a few months back, and it has already increased close to $ 100, with the trend probably continuing and hitting around $ 400 by the end of the year.
      The Shuttle was definitely a nice surprise. Based on my own categories, this set might warrant the sleeper nomination that is so often thrown out in the forums, but not in the most traditional sense of the term (Category 1).
      9465 The Zombies

      Comments: Another perfect Cat.1 sleeper example. The Zombies set is part of the more than likely short lived Monster Fighters theme, was a Target exclusive and only lasted around 4 full months on the shelves before being retired. Even more, zombies are extremely popular at this time, so add that to the mix as well. It’s been only close to 7 months since the set retired, and it is already selling for close to three times retail! Talk about some nice short term returns. When people ask about what a sleeper set is, this is most of the time used as a reference, and for a very good reason.
      2260 Ice Dragon Attack

      Comments: I wanted to include this set for a couple of reasons. First, the set experienced some great short term growth, with a CAGR of close to 100%. It did have a relatively short run of only one year, but the explosion in value has been far more than most people were expecting. Another set that went under the radar for a big chunk of the investment community.
      Now, the second reason I wanted to talk about this set is because the Ninjago theme as a whole can be described as an overall sleeper theme, though not anymore of course. The theme came a couple years ago and really not many people expected it to do very well, or at least not as well as it has so far. Perhaps it was the perception that it was targeted to kids to much and that it would be just a short term fad, but whatever the reasons the theme proved a lot of people wrong and it currently sits at the top of Brickpicker’s table of average theme CAGR with a figure of almost 45%.
      As you can see, not only specific sets can be sleepers, but also a whole theme can prove to be one as well. If you want to read more about a theme that at this point has some similarities with Ninjago when it first was released, then you may want to read Quacs’ EC article on Chima.
      The sets above are just a few of the most recent examples of sleeper sets in both of my categories. As you can see, I selected a lot more from Category 1 than I did 2 because they are often the most talked about once they confirm their potential in the secondary market, and are the ones that investors really don’t take into account as much while they are available.
      So, what are some of the characteristics that we can use to determine if a set will end up being a sleeper well before they go into retirement? That is a really hard question, especially considering LEGO is not fond of giving away too much information about sale number or upcoming retirements. Of course, if we did have a way to help determine the sleepers before they retire, they would end up not being a sleeper after all!
      I do think that there are some characteristics that help some to identify potential sets of this type:
      Exclusive sets. Not so much LEGO exclusives, but rather retailer exclusives like Target or Walmart. Sets with shorter than average runs, but this is very hard to guess. Sets not talked about much in LEGO related forums. Sets from unconventional or unproven themes. Chima, Creator, Architecture. Very broad and general aspects, but that is probably the best we can do.
      I did not want to conclude the article without giving a couple of my choices for potential sleeper sets that are currently available. Most are what I consider to be Category 2, since they are talked about some in the forums, but I expect their performance to be superior to what most people are expecting.
      10227 B-Wing: Another UCS set even less talked about than the Imperial Shuttle (leaving aside the May the 4th talks). A lot of people see this set not performing as good as some other UCS sets given the lack of popularity of the ship, structural issues, and the current round of deep discounts. I am of the complete opposite camp, expecting that the set will be a top performer especially because a lot of people keep dismissing it as a good choice, along with the fact that it is a great model and part of the always popular UCS. 8110 Unimog: Technic sets overall are really not one of the most talked about in the forums, but as a previous article by Ed Mack suggested, they are really great performers in the secondary market. Plus, this is the largest Technic set ever released. Architecture: In my opinion, there is not enough discussion about the Architecture sets but, in my opinion, these sets will prove to be great performers once they start retiring. In fact, the only set that has retired so far has presented some very nice returns in a very short time (John Hancock Center) Chima: This theme can go either way, but if it does end up performing it may very well follow on the footsteps of Ninjago and become one of the most popular themes in the shelves. As with any investment, higher the risk, higher reward. And there you have it, my view on sleeper sets, analysis on some previous sleepers and some of my picks for the future. I really hope you found this article interesting, and that maybe it will incentivize you to take some risks on sets that not many people talk about, you may be very grateful you did so in the not so distant future.
      Thanks for reading.
    • Darth_Raichu
      I found myself in an airport in a faraway land. Walking aimlessly from gift shops to gift shops until I saw a sign with 4 familiar letters in white against red rectangular backdrop. To my amazement, the store had a section full of brand new sets, like the Republic Gunship, Jabba's Sail Barge, Friends' Dolphin Cruiser, and Heartlake High. The beats of my heart were slowly calmed with a few glances on the price tags which were about 45% over US RRP. My heart almost stopped when I saw my old friend, 9465 The Zombies on a corner. I quickly grabbed the two boxes, paid the 50% over US RRP price and walked away with a smile on my face. Here we go again....
      Moral of the story, open your eyes, you never know what you can find.
    • Grolim
      It is probably the most widely discussed topic on this website – discounts! Some of the most popular forum threads are about specials and deals at various retail outlets, and the volume of topics is huge. There are even specific sub-forums for discussing deals and discounts. It is such an ingrained logical mantra that any investment purchase is considerably enhanced by obtaining said investment for the cheapest possible purchase price. Everyone knows this and everyone tries to do this, but I have wondered how many people have the thought or knowledge about just how much a discount on purchase quantifiably affects the possible investment return?
      We all like getting a set cheaply but how much difference does a 20% discount make compared to a 25% discount? Well 5% isn’t it? Actually no, it’s more than that. The price you pay sets the starting point for your investment and paying 5% less can make a greater difference than you may think. The easiest way to explain the maths behind this is to look at a few examples. I’m going to take a couple of popular well known sets, one recently retired, the 10212 UCS Imperial Shuttle, another longer EOL set, the darling of the investment world 10179 UCS Millennium Falcon, and a lesser know set that has performed pretty poorly investment wise in comparison, the 7259 ARC-170 Starfighter from 2005.
      Here is a table that looks at each of the 3 sets and compares the CAGR and ROI you would have if you purchased the sets at various levels of retail discount in 5% increments:

      The “Retail” column shows the current CAGR that you can find listed on each sets respective Brickpicker information page. Working across we have the returns you would actually have if you purchased the sets at 5%, 10% etc discount off retail. The results are fairly staggering. Lets look at a common discount – 20%. If you got 20% off the 10212 Imperial Shuttle then your current ROI would be 65.33% not 32.27% that’s more than double! Plus your CAGR, which remember is an average annual compounding percentage, would be 18.25% compared to 9.77%
      It’s early days in the post retail life of the Shuttle, but the effects of discounts on the already hugely successful 10179 MF push it further into unbelievably good levels. Perhaps even more interesting is the effect on a mediocre investment like the 7259 ARC-170 Starfighter. With just a 2.36% CAGR over the 8 years since release this set could be considered a flop, but if you had managed to score a few sets at 50% on a clearance deal then that would turn this flop into a solid investment with an 11.36% CAGR.
      Bear in mind that these calculations take the release year as the starting point for the growth of the set, just the same as the Brickpicker data page for each set does. An interesting and perhaps more accurate point would be looking at taking the year of EOL as the starting point, but that’s a topic for a whole other blog post… Also at an individual level many investors would be wise to utilise the date of purchase as their starting point in doing their own calculations.
      The effects can be represented better on a graph. Here is the above table in a more visually intuitive presentation:

      The graph shows nicely the increase in CAGR returns for each of our three sets as ratchet up the discount levels. What it illustrates is that the relationship is non-linear i.e. each line is not straight, in fact they all have distinctive upwards curvature. This means that the discount levels have exponential growth effects on your investment returns. The difference between a 30% and 40% return is greater than the effect between a 10% and 20% return.
      What is also evident is the difference in the slopes of each sets’ lines. Sure they all start from different point reflecting the current disparities between each one in terms of great to poor investment. But the exponential slope growth mentioned above is more evident for the 10212 Shuttle than the others, the 10179 MF is second and the 7259 is the flattest. This is due to the age of the sets, and nothing else. Because the 10212 Imperial Shuttle is the new set it only has to spread the returns across 3 years, whereas the MF and ARC-170 have 6 years and 8 years respectively. The older a set then the lesser effect a change in purchase price will have on the CAGR because it is averaged across a greater number of years.
      Many of you investors out there know all this information already, but it’s good to have things quantified a little and hopefully some of the newer members or starting investors will find a nugget of info here that shows them why we are always seeking out good deals. Discounts have the power to transform poor investments into average ones, average ones into good ones, and good ones into great ones! Keep seeking those discounts, and keep sharing them here on Brickpicker!
    • Quacs
      <links to sourced websites are embedded in the text for reference>
      I just saw an interesting story pop up on Brickpicker's front page from the website brickultra.com. In it, they explain that an expansion to TLG's current Czech Republic factory is in the works. This comes on the heels of stories released earlier this year that Lego is planning an expansion to their Hungary factory, another expansion of their Connecticutsite, and construction of a new factory in China.
      That's four expansions announced in the last year!
      While this matches TLG's explosive growth chronicled in their 2012 Annual Report, this information should raise an eyebrow for investors. Only TLG can control the supply of sets in the market, and if they overproduce, unsold sets could lower the secondary market prices, and depress investor secondary market gains for future investment sets.
      However, a closer look at the expansions should provide a little relief to investors. First, the Hungary and Czech Republic expansions are linked: the Hungary facility is primarily a Lego molding facility, while Czech Republic is a packaging/distribution facility. The Hungary expansion necessitated the Czech Republic expansion, so Lego will not increase their capacity by a factor of two.
      The Connecticut expansion appears to be primarily for their Research & Development team (hopefully with some new, exciting designs coming our way!) and, perhaps, their US Sales department. More complex and appealing sets should provide some new, exciting and hopefully investable sets.
      As everyone knows, China and East Asia are burgeoning markets for TLG. A new China factory will attempt to capitalize on Lego's popularity in these markets and aim to provide them with the Lego sets they're so eager to purchase. I don't see this as a negative for either European or United States Lego investors. To the contrary, new Lego enthusiasts may look to sellers in established markets for sets that were not available to them a few years ago. Any increase in demand in Asia can only be good for investors in established markets in the short term.
      Surprisingly, the news on most of these expansions appear to be good for investors with the Hungary/Czech Republic expansions the possible exception. More production for European markets may increase the number of sets available to retail buyers, however TLG would typically expand only if there was significant unmet demand at their current price points. I don't see this increased capacity drastically increasing secondary market demand, so investor prices should remain stable.
      What do you think?
      I'm particularly interested to hear from Australian investors. Since their Lego pricing tends to be very expensive, a new Chinese factory coming online may decrease some of the freight costs and lower Lego prices for Aussies. Or, if TLG feels their price point is competitive in the market, they could pocket the freight cost savings.
    • LowestFormOfWit
      Even if you claim you don't care about box quality, you do. Presented the option, which box do you take? The crushed, creased, drawn on, over-stickered heap or the glossy, hot off the press from the factory work of art?
      Do you take milk that's about to expire, or do you pull from the back?
      Do you buy the candy bar that's been callously crushed into bits, or the perfectly whole one?
      The shampoo bottle that looks like it's filled more to the top than the next?
      I am the latter, in every case. If you're in this business, you're probably also trying to get the most for your money.
      "But LFoW, the box doesn't matter, as long as the bags inside are sealed!"
      Well, not exactly. While I should point out that it is true that the value of your set won't really suffer because of your box condition (unless it's been through the seven hells), to say it doesn't matter is ignorance.
      Look at it from your buyers perspective: Why would I pay $120.00 for your set when this other guy has the same set at the same price and his box is prime shape?
      That small factor, one you insisted played no role in the value of your set, just lost you the sale to someone else.
      While having a perfect box doesn't matter to some sellers, again put yourself in the buyer's shoes; it isn't about you. Some buyers want to display their sets, or their boxes. Some want to encase them in plastic or get them graded. Some even resell the boxes aftwer building the set to recoup a little cost. Any way you slice it, the box matters to these types of people, so it should matter to you.
      On the flip side, buying a set with a damaged box has one very important advantage to consider: Some retailers will discount your product.
      This will instantly change the game for you, as you can afford to go lower than your competitors and make the same profit.
      fAside from that, and maybe not having to worry as much about keeping the box in good shape, there's no real reason to not hunt out the best box possible.
      One last tip: Some retailers like Walmart or Target will occaisionally allow you to exchange an item for an identical item, sometimes without even asking for an ID. I have done this to get slightly better boxes before. YMMV.
      So find that gloss, heat gun those stickers, and seal it up in a waterproof, airproof bag. your next buyer wants an AFA 9+!
    • Quacs
      Here is a link to the new article. Hope you enjoy it! This and the myths/truths articles really were my favorite to write, but stay tuned for more...
      There are a few key points I wanted to stress in both of these articles:
      1. Don't follow the herd when selecting sets. Make your own decisions based upon data. Instincts can play a role in investing, but good instinct is usually based upon experience. For those that have never experienced a sales cycle, your instinct has not been honed well enough to use it exclusively. USE THE DATA this website provides and build intuition.
      2. Be SYSTEMATIC in your porfolio construction. Understand what you're buying and make rational, informed decisions based upon data. Run each opportunity through your selection process/criteria systematically rather than making a run for the next sale.
      3. Feel free to listen to others giving advice on this site, but never use it as gospel. There are few, if any, that would try to provide bad advice in the forums, but all investors have different investment profiles.
      I have been impressed with emes' investment strategy, and it embodies all three points above. He uses information from this site to systematically select sets that fit his investment strategy. His strategy is based upon his desired risk/return investment profile, not by chasing the next hot Amazon deal that pops up. I urge everyone to read his posts to understand what an alternate (and perfectly legitimate) investing strategy can look like, and how it's executed.
      Good luck with your investing!
    • Quacs
      "Greed, for lack of a better word, is good."
      These are the immortal words of Gordon Gecko, a fictional maven from the movie "Wall Street" who made millions "parting out" struggling companies with asset-rich balance sheets. As I peruse Brickpicker on a daily basis, these words always echo in my head. For most members, BP is part of their Lego hobby: the Pricing Index, Discussion Forum, and blog articles provide outlets for members to share, enrich and supplement their Lego hobby. Yet Brickpicker is, at its core, a powerful tool that’s been crafted and honed to fulfill one primary mission: to give members a better opportunity to make money.
      While the word “greed” may be a little unsettling, the spirit of Gordon Gecko’s infamous mantra should be embraced. Whether members use their Lego investment income to supplement their Lego habit, their mortgage payments, or 401Ks, more money is better! Yet, day after day, I read posts on the Discussion Forum that espouse uninformed purchasing decisions, and cringe when other BP members echo in agreement. The goal of this blog entry is to educate readers on the fundamentals of portfolio management and investing to help BP members build a better portfolio.
      Portfolios – what are they, and why do we use them?
      In the high stakes world of finance, a portfolio is a collection of investments that are strategically selected to maximize a return at an estimated level of risk, or to minimize risk at a given level of return. Asset classes, or types of investments that professional portfolio managers buy, include stocks, bonds, real estate, commodities, and cash, among others. Interestingly, art and collectibles can also be part of a well-rounded investment portfolio, and I would be willing to wager a number of Lego investors already have a portion of their net worth wrapped up in this asset class! The market provides thousands of asset classes and investments to financiers, and shrewd portfolio managers target specific investments from all of these asset classes to build a portfolio.
      Within the Lego investing realm, the closest parallel to asset classes are themes since their sets share certain characteristics. Similar to a portfolio manager, the savvy Lego investor should target investments from different themes to build their portfolios. Why pick from a variety of themes? Like the old “eggs in one basket” analogy, there is value in diversifying the portfolio: when one theme or set size doesn’t appreciate as expected, there are other earners to pick up the slack.
      Investment Profiles - Risk and Expect Return
      Portfolio diversity is achieved by strategically selecting a variety of sets across themes and sizes, not just purchasing different theme sets at a discount. When targeting sets to purchase, the Lego investor must consider the risk inherent in the set, and the expected return on the investment. To adequately decide whether a set is right for investment, its risk and expected return should be always be estimated and compared to other options (sets) available to the portfolio.
      In finance, risk roughly correlates to the range of expected prices the set could realize after retirement – the wider the expected range of returns, the riskier the investment. Unfortunately, there’s no statistic or financial model that that quantifies risk of Lego sets, so other more subjective methods must be used. To assess risk, we can review the range of prices that similar retired sets sold for in the past. For example, let’s assume we are trying to assess the risk of investing in 7498 Police Station. Since it’s still on the market, the savvy investor will review the previous performance of similarly sized “base-type” sets from the City theme to build a risk profile for this set. Here are some raw numbers from comparable sets:
       

      What do these sets tell us about the risk profile of 7498? Incredibly, they have been very consistent performers, with returns from these comps (comparable sets) fluctuating between 83% and 97%, a nice tight window. Let’s contrast that with a risk profile for 79003 An Unexpected Gathering:
       

      The range of ROI for these comps provides a high risk profile for this set as comparable ROIs yield anywhere from a 14% loss to a 138% gain. The idea isn’t to estimate the value here, so I would assign 79003 a label of “high risk” while I would assign 7498 Police Station a “low risk” label.
      After assessing the risk of these two sets, we must create an expected return profile. Expected return is the amount of money the investor thinks the investment set will sell for on the secondary market. The two primary factors that affect secondary market demand are primary market set popularity and primary market availability, but because TLG keeps sales by theme and production numbers private, we must once again make subjective estimates for each to determine comps. Brickpicker provides eBay sales of the top 50 sets by month to give users an idea of what’s selling, and Lego S@H and Brickset can be used to determine the “Exclusive” and “Hard to Find” sets that are on limited production runs or are otherwise not readily available to all distribution channels. Investors must also consider the length of time a set has been on the primary market as a crude measure of production as well. These characteristics form a profile for the set that are then compared to other comps. Piece count and theme similarity should also be considered when finding comps for the investment set in question.
      Lego investors should also factor purchase price into their expected return metrics. If I buy 7498 Police Station for $75 instead of the $100 MSRP, I add an additional $25 to the expected return, making the set an even more attractive addition to the portfolio.
      To determine the expected return profiles for 7498 and 70003, let’s look again at the tables from our risk example. For 7498, I would drop 7240 from the comparison since it had significantly fewer pieces and a lower MSRP, so I would expect returns from 7498 to be around 90%. For 70003 An Unexpected Gathering, I would lean more toward performance of The Burrow and Mill Village Raid since the POTC and PoP sets were less popular themes and movies than HP and LOTR/Hobbit, and Mill Village Raid is a castle theme that’s quite similar in design to the LOTR/Hobbit themes. I would also peg the expected return of 70003 at 90%.
      While the low risk/90% return for 7498 appears to have a more appealing profile than the high risk/90% return for 70003, I want to be clear that the profiles this process yields are not absolute. Two intelligent investors assessing the same set can arrive at very different investment profiles. For fledgling investors, developing a habit of routinely assessing potential sets based upon risk and return profiles is more important than being in agreement with the analysis of other Brickpicker members. As new investors experience sales cycles from start to finish, they will begin to learn how and what sets sell, and through time and experience, can refine their profile assessment strategy accordingly.
      Personal Investing Profiles
      With our investment profiles established, we can begin to construct our portfolio. But before diving in, an investor must answer three key questions to define their personal investing profile:
      What is your monthly budget? What is your investment time window? Does it bother you to lose money on sets for the chance at higher returns? The answers to these critical questions must shape the types of sets selected for your portfolio. For example, if my monthly budget is $100, I have a three year time window before seeing profit, and I am risk averse (or don’t like seeing losses on my sets), I would select sets that fit these criteria:
      Small to medium sized sets (at least to start) Lowest risk profile at the expense of a little return Expected EOL within 1-2 years of the purchase date At $100 per month with a 3 year time window, the total budget is $3,600 to spend before returns on my first purchases will begin. Between the two Set Investment Profiles we’ve developed for 7498 and 70003, it appears 7498 fits well into my portfolio, especially if I can get this set at a good discount. On the other hand, the investment profile for 70003 probably will not work since the risk profile is on the high side.
      Each investor must track their portfolio diligently, and as many members already know, Brickpicker’s Brickfolio feature is an especially useful tool for this purpose. I would suggest including each set’s investment profile (risk/return) in the “Notes” section of each set’s “Edit Collection Details” page so that you always know the parameters you used when deciding to purchase.
      Once a Lego investor sells a set in the portfolio and realizes income, there are a few key steps to take before closing out the sale:
      Calculate ROI, or return on investment, for the set Calculate CAGR, or compounded annual growth, for the set Update the portfolio’s overall return Assess the set’s performance critically ROI is a simple percentage – subtract the purchase price from the sale price, and divide it by the purchase price. This simple metric provides you with a return on your investment. CAGR is a little trickier, but a thorough analysis can be found at the following Brickpicker page:
      http://www.brickpicker.com/index.php/blog/view/cagr_compound_annual_growth_rate_and_lego
      The difference between CAGR and ROI is that CAGR incorporates a time element, so you can quickly understand the average annual return from your set. A higher CAGR will tell you the set returned profit quicker than a set with lower CAGR. The Brickfolio doesn’t offer tracking of sales gains yet, so a separate spreadsheet or ledger should be kept for tracking and tax purposes at a minimum. Finally, performing an “autopsy” on a set after it’s sold will help educate the investor on how to better assess risk and expected returns for future investment sets. While we hope all of our sales net profits, often there is more to be learned from failure than from success.
      With the daily concerns raised by members about new entrants into the Lego investing community, it’s more critical than ever to understand who you are as an investor, and how you like to invest. Investing your money in Lego systematically will allow you to make better investment decisions and give you a leg up on less savvy investors. In the immortal words of another self-absorbed movie character, Jerry McGuire's Rod Tidwell beckons us all to, “Show me the money!”

    • Quacs
      On my trip to BrickWorld 2013 in Chicago this past weekend, I had a chance to see the new 10234 Sydney Opera House in person. While I love the size and scale of this new mega-build set, I have some mixed feelings about the new model. First, here is a picture of the set and a link to the Lego Design video introducing it:

      Pros
      Incredible detailed, and very realistic The nested band shells make the model - exquisite modeling for these Continues the world landmark sets Appears it will be a phenomenal investment set Smoky gray transparent bricks nicely mimics glass Cons
      The base, while a great source of rare dark tan bricks, is so monotone and frankly, boring There is very little to bring it to life - it is strictly a model Light poles appear too chunky for the scale of the model "Water lines" similar to the Tower Bridge model could have provided an additional realistic detail Model will be very difficult to display given its footprint Don't get me wrong, I still think this is an inspired model with a brilliant design, but the base really bugged me. Perhaps the designer wanted to feature the sweeping arcs of the nested bandshells, but I thought Lego missed a home run by not providing a little setting/detail for the base. One of the appealing details of the Tower Bridge was the designer's inclusion of the cars/lorry/bus for the bridge, and I just wish something similar would have been provided with this.
      I also think the price point is a little high. At $320, it's nearly $100 more than Tower Bridge, a fairly sizable discrepancy.
      10234 Sydney Opera House will be a no-doubt investment winner. Perhaps its high price point will depress sales and make secondary availability that much more appealing.
       


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