Reddit Comment against LEGO investing

[Jeff Mack]

Someone posted a link to the USA Today article on the LEGO sub-reddit on reddit.com.

http://www.reddit.com/r/lego/comments/15menn/usa_today_wrote_a_great_story_on_lego_as_an/

There really hasn't been much love for this site on there in the past, but I noticed we were getting a good amount of traffic from there today and wanted to see what was going on.

I noticed a comment that I have seen on this site before and a few other forums.

"This is why we can never find clearance lego or the larger sets on Buy 1 get one. These aholes hoarde all the sets at the expense of our children. Screw them , wont be buying their 129 dollar asking price for Minecraft lol."

I honestly don't care about being called an "ahole", but its the fact that I have read several times that the children are the ones being affected by LEGO collecting and investing. Maybe I am missing something, but does anyone really feel that this is true in anyway? I personally think there is more than enough supply during production periods to cover any LEGO lover to get the set they want. Even the Minecraft set was available on the LEGO shop for the past several days.

Anyhow, I was just blown away again with the fact that I read this type of comment again (maybe have seen it 5 times before this as well). I was glad to see a few other users told them it was a stupid comment, just wondering what anyone else thinks

[wintersun]

It's not only reddit, some people on my local LUG don't really like lego investor. People like to complain on everything without thinking too much, especially on the internet. The main reason I (re)started collecting Lego, it was because of my son (born last year). I want to offer him a Death Star in 6-7 years and many others sets, depending of what he like then. Lego are great, and I want a big collection for him, but I don't want to spend too much money, so I started investing to pay his collection with Lego. People have plenty of time to buy all the sets they want. And they can find deal exactly like we do. I don't understand where's the problem.

[Ed Mack]

It's not only reddit, some people on my local LUG don't really like lego investor. People like to complain on everything without thinking too much, especially on the internet.

The main reason I (re)started collecting Lego, it was because of my son (born last year). I want to offer him a Death Star in 6-7 years and many others sets, depending of what he like then. Lego are great, and I want a big collection for him, but I don't want to spend too much money, so I started investing to pay his collection with Lego.

People have plenty of time to buy all the sets they want. And they can find deal exactly like we do. I don't understand where's the problem.

People like to complain and want somebody to blame if they can't afford a LEGO set. As you stated, there is plenty of time and sales to buy sets at retail. Maybe a better paying job would solve issues for a lot of these whiners. ;-)

[Doofy McGee]

Lol...better paying job. Great one Ed. The sad truth is, you could do the most noble deed in the world, and someone somewhere will speak out against you.

[stephen_rockefeller]

H8terz gonna H8!!

[Formula]

I think it will all even out in the end. As LEGO investing gets more and more popular a crash will almost inevitably follow. It's happened over and over and over again. Baseball cards. Comics. Beanie Babies. Precious Moments. Action Figures. On and on. Sure, you can draw theoretical differences between LEGO and any one of the past bubbles, but there are a lot of similarities too, and history repeats itself. The USA Today story is probably the early beginnings of the peak before the fall. Publicity ramps up. As more and more people grab up sets because "These will be worth something some day", fewer and fewer people will be on the buyer side of the secondary market, supply outstrips demand, and prices drop like a lead balloon. People who collect because they like to collect LEGO sets will be fine. People already sitting on thousands of dollars of paper profits and unhatched eggs should really start paying attention if they want to ensure a profit. The people who are going to be coming into the LEGO investing game over the next few years are the ones taking big risks, in my opinion.

[Talon]

I think it will all even out in the end. As LEGO investing gets more and more popular a crash will almost inevitably follow.

I totally agree, many people tend to move as lemmings, including in the stock market where we have recently seen bubbles in emerging market stocks, internet stocks, educational stocks, etc.

I am usually waaaay too early out of a bubble. While it is almost impossible to predict the peak, you can be sure when you read lots of articles on it and you hear random acquaintences investing in it then it is certainly getting scary and there isn't much upside left! Especially if many people say you 'can't lose' then you'd better run!

If you really are a Lego investor then you need to make sure only a small portion of your investing is in collectibles like Legos, something like 5% or less of your investing.

[Rich B]

I think it will all even out in the end. As LEGO investing gets more and more popular a crash will almost inevitably follow. It's happened over and over and over again. Baseball cards. Comics. Beanie Babies. Precious Moments. Action Figures. On and on. Sure, you can draw theoretical differences between LEGO and any one of the past bubbles, but there are a lot of similarities too, and history repeats itself. The USA Today story is probably the early beginnings of the peak before the fall. Publicity ramps up. As more and more people grab up sets because "These will be worth something some day", fewer and fewer people will be on the buyer side of the secondary market, supply outstrips demand, and prices drop like a lead balloon.

People who collect because they like to collect LEGO sets will be fine. People already sitting on thousands of dollars of paper profits and unhatched eggs should really start paying attention if they want to ensure a profit. The people who are going to be coming into the LEGO investing game over the next few years are the ones taking big risks, in my opinion.

I do believe a bubble could burst at some point and that is a risk we all take when investing in Lego, or anything else for that matter. The more people that find out about Lego investing, the harder it will be for investors to make money. But that isn't just the case with Lego, that's the case with anything you invest in, in this crazy fast-paced world we live in. I agree that people who collect Lego sets because they like to collect Lego will be fine. This is because even if/when the bubble bursts and the sets are no longer valuable, the sets can still be built. For people like myself it's a win-win because I love building and collecting Lego so even if/when this so called bubble bursts I will still have all those sets to build one day or possibly pass on to my kids if/when I have kids. Those who don't like Lego and only purchase it to resell for profit are the ones that have to be the most careful, because if their inventory rapidly decreases in value one day, they won't have that plan B option of building their sets that I and many others have. My best advice to new investors is to purchase what you like! If you don't like a set, don't buy it! You can't go wrong with that in my opinion.

[TheOrcKing]

It is not the fault of investors or collectors that certain sets do not go on clearance. It's the dang retailer's fault! They are the ones that make the decision whether to actually put something on sale or not. There are so many sets that sit there FOR-EVER and never go on clearance or have a decent price cut! (Like a lot of those CITY or GAMES sets.) "The Zombies" flew off the shelves cause everyone had to have it. It was not mine or anyone else here's fault that it became almost impossible to find in a physical store. I was lucky enough to find the one I had. Look at that "Elrond" debaucle. The half-assed supply of those minifigs was LEGO's doing, not ours.

Even if every investor and collector stopping buying LEGO, retail stores will still charge what they want for them.

That $50 set will still cost $50, unless the store decides to reduce it down to a paltry $45. Whoopee....

Maybe a better paying job would solve issues for a lot of these whiners. ;-)

It should, but that's what every 'shopaholic' says. Especially the ones in a relationship. "If you had a better paying job, we wouldn't have this problem." No, if the 'bread-winner' had a higher salary, the 'shopaholic' would only get them both into worse debt! I can't afford every bloody set in the aisle. I wish I could but I simply can not do it and I am not getting myself into insane debt because of it. Collecting LEGO is just for fun. So I take my time and space things out between paydays as it were.

H8terz gonna H8!!

Yeeeep.

[Ed Mack]

My main pet peeve is people blaming investors/resellers that their "little Johnny" can't buy a LEGO set because we suck them all up. That is complete BS. There are ample sets, time and opportunities to buy any and all LEGO sets at retail and even discounted prices. Resellers make up a tiny portion of the customer base and have no effect on the ability of non-investors to buy a set. As for a LEGO bubble, this article might bring some fresh faces into the hobby, which will only make current Brickfolios more valuable. The one difference between LEGO sets and Baseball cards and the rest of the collectibles is that LEGO sets are bought primarily by children, which could care less for ROI and CAGR values. LEGO keeps their inventories in check as of this date, as well as prices. If the primary market remains stable, the secondary market should follow suit. LEGO prices in the secondary market have remained stable over the past two years. There are plenty of sets that appreciate into the Stratosphere, then other sets are just investment terds. It has balanced out so far. Let's hope for moderate and continued growth...

[Mos_Eisley]

This post has all kinds of stuff going on. People like to complain and blame other people for their choices. Most LEGO sets are readily available for 18-28 months (sets like The Zombies only being available for a few months is rare, but it does happen. I have a lot of Targets in my area and there were several copies of The Zombies in every one of them until Target had them on sale for $10 off. It wasn't until this sale that they were all bought, and then the fact they were gone is what got everyone in a panic to get it). If you missed it in that window, you didn't really want it, don't blame other people who bought it during that same time you could have. If you couldn't afford it during that time, then you should be thankful that there are people out there who were willing to buy extra copies to sell you now that you do have the money to buy the set(s) you missed. If people didn't buy and hold them, you wouldn't even have the ability to get an unused copy. It takes money, time and space to hold onto LEGO sets, so of course that will cost you extra. In regards to the USA Today article, I wasn't excited to see it. While it's great for the site and TLG, at least in the short term, I fear it is the beginning of the end of worthwhile LEGO investing. The reason the returns have been so high is because it was a niche thing so sealed sets were relatively rare. When people who have no interest in actually using LEGO products start buying them up just to sell them later, that's a bad sign. That article brought a lot of attention to something that needed to remain unnoticed. I don't think LEGO sets are like baseball cards or Beanie Babies because they have value and use outside of just sitting on a shelf so I don't foresee a complete collapse, but I think the days of buying almost any set, holding it for a year or two and more than doubling your money are gone. I think it could be like the baseball card market where older sets, maybe as recent as ones released in 2010-2011, will increase in value, but sets that are readily available in 2012 and beyond will likely become the valueless cards of the late 80's and early 90's as thousands of copies will be sitting in closets throughout the world. Again, I don't think LEGO sets will ever be worth nothing, they can always be parted out on BrickLink and will likely always be worth at least their original selling price, but I foresee most sets going forward having very modest gains for a very long time. I see posts on other sites where people are bragging about buying 40+ copies of Grand Emporium or whatever sets they're into to. Sets have increased in value so rapidly because there aren't that many of them available once they are retired. With everyone stockpiling the sets, it will take many years to make money going forward. People are going to read that article and think it's easy money. They are going to find out that it takes a great deal of patience, money and space to invest in LEGO sets. When the money doesn't come in so easy a year or two down the road, they are going to start dumping their sets which will only make it take longer for everyone else to see worthwhile returns. I've seen lots of people show up to this game, especially on BrickLink, thinking it was going to be so easy, and quickly discovering that isn't the case. I hate to sound so negative about it, it's been a fun run. I'll continue to collect lots of sets because I enjoy it and I'm willing to hold these things for the next 20 years. I think the smart sets to buy will no longer be the large, awesome sets - everyone will have 5 or 10 of those put away. The smaller, more obscure sets are going to be the ones that people will have missed.

[Rich B]

^^ I agree with many of Mos's points. While it is everyone's choice to purchase and invest in whatever sets they want, I think new investors that are purchasing 40+ Grand Emporiums or multiples of any set for that matter, need to make sure they are aware of what they are getting into. Like Mos said, investing in Lego is much harder than it seems. There are many things that new investors don't realize, like the space needed to store multiple sets, the fees associated with selling sets online, and the shipping headaches. The future for Lego investing will indeed be tougher. It will consist of investors doing even more research and understanding what they are investing in. It will no longer consist of purchasing $150+ sets and knowing the sets will double or triple in value. It is going to take more work, and only those who are willing to put in the extra work and research will be able to be successful. Mos, I'm sorry if this was a little repetitive of your comment, I just wanted to give my 2 cent, and I agreed with a lot of the points you brought up.

[Ed Mack]

As much as I am excited about the article and future articles, my first thought was that we can actually create the feared "LEGO Bubble." After some deep thought, I really feel that it will help all serious LEGO investors, even in the long term. This hobby or business or whatever you call it is HARD WORK. It takes time, research, money and a lot of space to make it work on any large scale. It also takes luck and a willingness to invest cash in some toys. There will be tire kickers and dilettantes entering the fray, but if they are not willing to store or wait for appreciation, they will lose their shirts. These failed investors will help the rest of us buy some reasonably priced sets. People forget all about commissions, taxes, shipping fees, packaging costs, storage costs. Only the serious investors will make it work. History has shown that not all LEGO sets appreciate well. I can tell people all day to buy Ninjago or Friends sets, but they say they are for kids or girls and won't bother. People will make wrong choices and not all sets are winners... and that's what makes this interesting. I get a feeling there is a lot of exaggeration on LEGO forums. Many people say they buy one thing, yet really do nothing of the sort. As they say on many internet forums, "Pics or it didn't happen." Well the same can be said for some wannabe players in the LEGO investment arena. This tendency by a few individuals to over-inflate their personal LEGO holdings makes other feel the need to compete or inferior in some way, but also gives a false sense of how many investors/resellers are really in the secondary market. It is my wish that these articles bring a positive spin to LEGO and LEGO investing. I am a firm believer in the product and will be in it for the long haul(Which might not be the best way to maximize profits mind you. Most sets have a sweet spot for selling 2-4 after EOL). But as I have stated before, you still have the sets to build, even if the market implodes. If you are a true LEGO fan, that is insurance enough to dabble in LEGO investing.

[stephen_rockefeller]

"Pics or it didn't happen."

WORD!!!

[h311m4n]

Someone posted a link to the USA Today article on the LEGO sub-reddit on reddit.com.

http://www.reddit.com/r/lego/comments/15menn/usa_today_wrote_a_great_story_on_lego_as_an/

There really hasn't been much love for this site on there in the past, but I noticed we were getting a good amount of traffic from there today and wanted to see what was going on.

I noticed a comment that I have seen on this site before and a few other forums.

"This is why we can never find clearance lego or the larger sets on Buy 1 get one. These aholes hoarde all the sets at the expense of our children. Screw them , wont be buying their 129 dollar asking price for Minecraft lol."

I honestly don't care about being called an "ahole", but its the fact that I have read several times that the children are the ones being affected by LEGO collecting and investing. Maybe I am missing something, but does anyone really feel that this is true in anyway? I personally think there is more than enough supply during production periods to cover any LEGO lover to get the set they want. Even the Minecraft set was available on the LEGO shop for the past several days.

Anyhow, I was just blown away again with the fact that I read this type of comment again (maybe have seen it 5 times before this as well). I was glad to see a few other users told them it was a stupid comment, just wondering what anyone else thinks

To get back on topic (sort of), I find these comments ridiculous.

This is typically the kind of guy that wasn't able to get his hands on a 10179 when it used to cost 400$ and now whines about not being able to fork out 2000$ to get one. This has nothing to do with kids not being able to get the sets.

Well dude, that's just the very simple law of supply/demand. The rarer something gets and the more people want it, the more the prices will go up.

I for one also wished I picked on up but I wasn't out of my dark ages by then. I did hate the fact that this set could only be bought at twice the price it used to cost. So you know what I did? I BRICKLINKED MYSELF ONE!

And I kid you not I think it was even more fun to do so rather than actually buy one. First I gathered whatever pieces I could from my own legos and then spent about 3 months gathering parts from Bricklink shops. The end result is a beautiful looking, 5000 pieces spaceships that sits on a shelf. It's 99% accurate, it's using a blend of oldgrey/bley but I love it.

FInal cost? About 600

[StarCityBrickCompany]

LEGO prices in the secondary market have remained stable over the past two years.

Sorry Ed, but this is not true. I have been doing this for many years & since this past spring - things have changed.

[stackables]

I might be in the minority here but I agree with a couple of the complaints. We are in fact the reason why parents/kids cannot find anything on clearance. Just look at the thread "what did you buy today". Many members frequent the toy stores and clean them out of clearance lego. Hey, there are 5 black pearls on clearance, I think I will buy them all. Legos are an expensive toy so when they go on clearance, that may be the only way a child can get the set he/she wants. As far as secondary market goes. There should be no complaints about those prices. There is an abundance of places to buy lego sets. If you missed out then prepare to pay secondary market prices. If lego stops producing a set of course it will be move valuable, supply and demand. Fortunately, If you are a star wars collector, you are still in good shape. Just wait another year or two and buy the remake.

[stephen_rockefeller]

I think new investors that are purchasing 40+ Grand Emporiums or multiples of any set

I remember saying that it was ridiculous to do this, and it peeved a few people. I stand by my statement though, I feel there is absolutely no need to by that many of one set.

[Rich B]

I remember saying that it was ridiculous to do this, and it peeved a few people. I stand by my statement though, I feel there is absolutely no need to by that many of one set.

Exactly!!

[Rich B]

Sorry Ed, but this is not true. I have been doing this for many years & since this past spring - things have changed.

StarCity, I'm not arguing that things have changed since this past spring, but I'm just curious what you think has changed and what evidence you have that things are indeed different now?

[Formula]

My main pet peeve is people blaming investors/resellers that their "little Johnny" can't buy a LEGO set because we suck them all up. That is complete BS. There are ample sets, time and opportunities to buy any and all LEGO sets at retail and even discounted prices. Resellers make up a tiny portion of the customer base and have no effect on the ability of non-investors to buy a set.

While on a macro level I agree that LEGO investors currently have a minimal effect on the ability of children to obtain a set, on a zoomed in scale there are almost certainly situations in which investment activity ruins an end users day. Where an investor might spend hours combing stores and sites, a parent looking for a Christmas present doesn't have that sort of time, and they may well see a stack of Black Pearls pulled out from under them by someone planning on putting them in storage. As a parent personally, I'd say "Oh well" and find a different present for "little Johnny", but I can understand the individual frustration of others.

Heck, I myself spent a fair amount of time trying to get a Minecraft set at retail and never scored, even though I've seen posts by people claiming they swooped up multiples even though the LEGO webstore claims that isn't allowed. I'm not whining about it, but I can see where others might.

The one difference between LEGO sets and Baseball cards and the rest of the collectibles is that LEGO sets are bought primarily by children, which could care less for ROI and CAGR values. LEGO keeps their inventories in check as of this date, as well as prices.

There was once a time when the primary buyers of baseball cards, comics, and beanie babies were childred as well (or parents buying for children). My fear for LEGO investing is that the ratio is moving too much too fast. You can't deny that a larger percentage of LEGO sets are bought today as investment vehicles then was the case even 5 years ago. As that balance shifts a tipping point is approached.

Personally, and by this I mean personally and in no way a recommendation or a comment for or against the strategies of others, I don't put any true investment money into LEGO sets. My retirement portfolio, my kids' college funds, my goal savings accounts, etc. None of those contain money in LEGO speculation. I buy sets that I would have no hesitation opening myself if they can't be sold for profit. I only rarely buy multiples of anything, and even then it's only of sets that I could use as gifts for others if the price falls below the profit point.

[h311m4n]

Thing is, how many of us spend several thousand bucks a month in investing in Lego? Are you guys all millionaires? Are there really that many people here who hoard 10-20 items of the same sets? Lego has always been an expensive toy and I can't see anyone having like 10 SSD or 20 GE sets and if there are, they are few. I also think there are people who just throw themselves in Lego investing without really thinking about what they're doing, like one of the members here I saw here that just spent 2K on TMNT sets and is sure he'll triple/quadruple his money in 3 years time. I would never spend that much in Lego at once and in one theme, just doesn't sound smart to me. I think, and I might be wrong, that most members here might get max 4-5 items of the same set. Personally, I usually get 2, one I plan on building and one I plan on reselling. This way I pay for my hobby. I don't buy sets I don't like even if they are investment winners. For instance, I don't like Ninjago or Harry Poter so I won't buy them, just like I'm not keen on buying the regular SW sets and I'd rather spend my money on the larger cooler sets. You gotta love Lego before you invest in it for all the reasons that were stated before (Storage being the main issue).

[Ed Mack]

Sorry Ed, but this is not true. I have been doing this for many years & since this past spring - things have changed.

I'm curious as to what proof you have of this. I have data to back my statement up. ;-)

[Mos_Eisley]

WORD!!!

The guy had pics of tons of stuff that he had just bought, sitting in his living room or something. I don't believe people on the internet or LEGO employees, but this guy had pics so he was legit. Sure, everyone can't afford to buy 10-20+ of large sets, but all it takes is hundreds or thousands of people each holding on to one or two and the future supply will be far greater than what has been put away up until this point. I'm not sure what the current USA Today readership is online and in print, but in March of 2011 it what 3.2 million daily readers (not sure if that includes online). Sure, a lot of those people probably just skipped the article or didn't think too much of it, but even if a very small number of those people start picking up one or two of each set they like, that's going to create a very different selling landscape in the future.

[Rich B]

Correct me if I'm wrong, but when this so called bubble does burst, and it certainly could eventually, won't we see sets that are EOL drop from msrp or remain around msrp on sites like Amazon? For example, as of right now we know sets like 10219, QAR, 10216, 10231 are pretty much EOL, and their prices on Amazon have all increased in value from their original msrp. What I am saying is as of right now things are okay IMO (at least with most sets) but when they start to get bad, won't we be able to look at a large online site like Amazon and notice that the prices aren't increasing? The prices on Amazon are increasing on these just Eol'ed sets that I mentioned. This is because there is clearly still demand for them, right? This may not always be the case in the future however if too many people start investing. I could be completely wrong with the example I just gave about Amazon, but that's just my opinion (if prices on Amazon are increasing on recently Eol'ed sets, it's because there are still people willing to pay the higher secondary market price).