10225 - UCS: R2-D2

[Ed Mack]

Hi guys

 

Lets put some perspective to this thread:

 

Whilst I respect people speculating when sets will retire, that doesn't mean I buy everything that is mentionted. It doesn't even influence my acquisition model much. 

In general I stick to the following buy/sell rules for exclusives (Normal sets, I buy when there's a steep discount at the end of its life):

 

1. Never buy sets the year they have been released. Unless it's of the "Lego Ideas" / Seasonal collection it's too soon to lock up capital. 

 

     => if you do, you'll have a stock of sets that need at least 3 years before really starting to appreciate. This lifts your working capital to unsustainable level and                reduces your RoC. The tumbler therefore is too soon to stock up. It will stay live another 2 years at least unless there's a design flaw. 

 

    => this also reduces the risk of having too many DS, TB (and SSD)  for too long for example. 

 

2.  Buy the best exclusives released > 2 years ago according to your own evaluation model: this means appreciation potential based on sales, stock, personal preference, regional segmentation, ... This site is full of advise on the matter, so do some reading  . I pick all these sets up at a regular rate. Emazers has a very successful system doing so, and I do take his advice in the matter. The 'Macks' also promote this way of buying and show you when and where the discounts are to pick the sets up at the best timing. (like last month for example)

 

   => There's also ample time to accelerate the buying when sets start to phase out. Regular screening of reseller sites and this one should help improve the timing           even more.  

 

3. Buy the exslusives you missed out on after they have retired if you feel they can appreciate. Even though that means you'll miss out on the discount effect, if the sets is really strong, you'll be able to go for the long-term appreciation. The surprise exit of TH might be a, interesting target. It's stats are good and the retirement earlier than expected. (at the same time of GE) You can still get it on BrickLink at a very good price

 

For info BL at 215E: http://www.bricklink.com/search.asp?pg=1&q=town+hall&sz=10&searchSort=P

 

4. Buy exclusive rare sets that have very limited stock left but very high collector value. I rarely do this, but had some success in the matter (buying some Marina Bay Sands for example at MSRP +100%) It means you are speculating more money on even more appreciation, so the work to put in and risk analysis is higher. But so are the returns. 

 

For info: http://www.bricklink.com/search.asp?pg=1&q=bay+sands&sz=10&searchSort=P

 

All these comments are with one final purpose:  reduce your working capital and improve the returns on capital. Too many people have too many sets stocked away that are still produced by TLG. They have only limited space, and tend to sell too soon, just to free up space and money to get into another set. This pressures again the CAGR and RoC. Make your business model lean and mean. And be careful when you buy: know when you pull the trigger. Once you have a set, selling it will always be more difficult. 

 

I hope this helps. 

Sorry...LEGO is out to destroy your business model.

[Val-E]

I think that we can learn from all the posts on this set and the town hall is that the business model is "eyes to the sky nose to the ground" and be prepared to be flexible with your strategies. Also get a feel of how the market is in your territory (zone, country, region, town or village) and see what is best for that area. LEGO do that with their EOL system and supply chain management so investors have to  also. Visit toy shops and stores, observe and see who is biting and who isn

[ZULU]

Sorry...LEGO is out to destroy your business model.

 

I'm not sure what you mean with that. 

Seems to me that reducing your working capital on recently released sets is good advice. 

Edited November 9, 2014 by bjiri

[dcdfan]

I'm not sure what you mean with that.

Seems to me that reducing your working capital on recently released sets is good advice.

Have you ever heard the saying "a bird in the hand"?... Edited November 9, 2014 by dcdfan

[speedsausage]

I'm not sure what you mean with that.

Seems to me that reducing your working capital on recently released sets is good advice.

Simply, this is the business model of old. It looks like TLG is now trying to combat resellers with unpredictable EOL with sets. Pretty much the only option now is to decide early on what sets you think are winners and don't procrastinate on buying them. Scheduled EOLs of sets looks to be in the past.

[Grynn]

I have no doubt this set will do very well.

 

I do have serious doubts about how long it will be available. I would have dozens and dozens of these right now if my finances permitted it, regardless.

 

FWIW, my girlfriend has always been "Luke" warm on Star Wars, but this is the first set she picked out that she wanted when exposed to what Lego is today. Everyone loves this little droid.

I was present for most of the build and can't really find fault with the finished product. It's awesome.

 

Next choice was the T1, btw.

[LegoManiacc]

Simply, this is the business model of old. It looks like TLG is now trying to combat resellers with unpredictable EOL with sets. Pretty much the only option now is to decide early on what sets you think are winners and don't procrastinate on buying them. Scheduled EOLs of sets looks to be in the past.

 

Their retirement schedule has already been all over the board the last 5-6 years though. Just off the top of my head, MMV, FB, GE all took too long to retire.  DS, TB, KJ, Batcave are also on that list. Even small sets are getting in on the action, 6862 will be a good one to stockpile with the DS before they both retire in 2020.

 

Besides 10219 Maersk Train, there have been very few big sets that retired "early' that I can think of...If that's where they are headed, it seems like it would be a case of doing more damage to themselves than anyone else could possibly manage to do in regards to aftermarket pricing. Take the Tumbler for example if we are going to speculate that it will face a shortened surprise EOL schedule. Who does TLG do more damage to, themselves with upset customers who only had a shot at a set that's often out of stock for less than a year, or resellers? Those early bird resellers now get to price their retired sets even higher due to the increased demand while almost everyone else loses in that game including TLG, consumers and most resellers.

Edited November 9, 2014 by LegoManiacc

[Ensche]

The opinion of changing the business model now is only based on the fact that TH (that perhaps was a poor seller so far) went (probably) EOL too soon.

What about all the other sets? There is no regular schedule we know about... To end production of sets early sometimes happens, see B-Wing. Why should TLG suddenly come up with a random set-EOL to irritate resellers, what contrariwise brings more disadvantage towards their regular buyers...

 

I think there's more proof to be provided before we can talk about a serious shift in investment habits.

Edited November 9, 2014 by Ensche

[speedsausage]

Their retirement schedule has already been all over the board the last 5-6 years though. Just off the top of my head, DS, MMV, FB and GE all took too long to retire. TB, KJ, Batcave are also arguably on that list. Even small sets are getting in on the action, 6862 will be a good one to stockpile with the DS before they both retire in 2020.

Besides 10219 Maersk Train, there have been very few big sets that retired "early' that I can think of...If that's where they are headed, it seems like it would be a case of doing more damage to themselves than anyone else could possibly manage to do in regards to aftermarket pricing. Take the Tumbler for example if we are going to speculate that it will face a shortened surprise EOL schedule. Who does TLG do more damage to, themselves with upset customers who only had a shot at a set that's often out of stock for less than a year, or resellers? Those early bird resellers now get to price their retired sets even higher due to the increased demand while almost everyone else loses in that game including TLG, consumers and most resellers.

This is true about all the sets you mentioned but nobody said anything about the tumbler retiring early, just pick up the ones you believe in and don't wait till the last minute. For all we know the tumbler could be around for 3 years but only at B&M stores (I don't believe this). I also agree cutting the tumbler loose early would be a poor business decision. This set is the equivalent to TLG printing themselves money! Edited November 9, 2014 by speedsausage

[Ed Mack]

My opinion is different, the opinion of changing the business model now is only based on the fact that TH (that perhaps was a poor seller so far) went (probably) EOL too soon.

What about all the other sets? There is no regular schedule we know about... To end production of sets sometimes happens, see B-Wing. Why should TLG suddenly come up with a random set-EOL to irritate resellers, what contrariwise brings more disadvantage towards their regular buyers...

 

I think there's more proof to be provided before we can talk about a serious shift in investment habits.

But there is a regular schedule.  You just don't know about it.

[LegoManiacc]

But there is a regular schedule.  You just don't know about it.

 

Ah, well than nothing has changed for me, lol. I've never known any schedules.

 

<edit, I take that back, I do believe I know one schedule or "pattern" with the Winter Sets...but that's about it at this point, and if they changed those up after having the same pattern the last few years, it wouldn't surprise me either. It would be hard to shorten those much though, if anything, it would probably be lengthened>

Edited November 9, 2014 by LegoManiacc

[Ed Mack]

This true about all the sets you mentioned but nobody said anything about the tumbler retiring early, just pick up the ones you believe in and don't wait till the last minute. For all we know the tumbler could be around for 3 years but only at B&M stores (I don't believe this). I also agree cutting the tumbler loose early would be a poor business decision. This set is the equivalent to TLG printing themselves money!

There is no indication that the Tumbler will be retired early.  The only reason I mentioned it was to answer Cross's question about the best current LEGO set for investment.  That being said, there is also no way I can tell you that the Tumbler will be around for another 3 years either.  The recent activity around that set is unique.

[Ensche]

But there is a regular schedule.  You just don't know about it.

Of course there is one for each model. But we don't know about it. And also there is the possbility to change this schedule whenever TLG wants to (e.***. for poor selling sets). But my point is that it makes absolutely no sense to change running periods of sets to a more randomized system.

[abri123]

I think what's being said is that if you want a set that you think is going to be good investment potential, you should start buying it early so that you have enough when they do retire, as it's hard to blow thousands of

[Ed Mack]

Of course there is one for each model. But we don't know about it. And also there is the possbility to change this schedule whenever TLG wants to (e.g. for poor selling sets). But my point is that it makes absolutely no sense to change running periods of sets to a more randomized system.

Why not?  If the traditional first produced, first retired process becomes more randomized or even based of slow sales, many small time resellers with limited resources and space could be sitting on the wrong set for a long time, thus forcing them out of the flipping business.  Would they lose money in the long term, probably not, but their interest in LEGO reselling might decrease, causing them to stop  reselling.

 

This random process will "thin the reseller" herd, this is a given in my opinion.  It also changes the psychology of the market.  People can no longer plan long term.  While they are hoarding one set, another disappears right under their noses.  It has happened recently and history will repeat itself.  Those choosing the right sets will prosper, those who don't...well, I guess they will become "long term" LEGO investors.  LOL

[Grynn]

...and the regular customer doesn't really lose out, do they?  How many pay close attention to when a set "should" retire?  They get it when they want it and/or can afford it, not when it is most advantageous to do so, from a value-over-time perspective.

 

Meanwhile, resellers who can adapt, will. Then spending on any given set will be more spread out over it's shelf life. This, in turn, gives a better indication earlier on which sets will continue to do well and which won't.

 

Resellers who are only willing or able to panic buy at EOL will, along with the problems they cause, die out fairly quickly.

 

Win/win strategy for Lego, I think. I also have a feeling there is more going on than just less predictable retirements, but we shall see.

 

Meanwhile, steady, prudent investing will continue do well. Exceptional returns will come only from high risk speculation on poor selling sets, which most will not be able to afford. Thus the advice being dispensed on these forums on a regular basis lately.

[MartinP]

I think what's being said is that if you want a set that you think is going to be good investment potential, you should start buying it early so that you have enough when they do retire, as it's hard to blow thousands of

[Guest davewager78]

I'm still not convincing that TLG change their plans around resellers. I think sometimes people have delusions of importance. Does anyone actually know enough about TLG sales numbers? 

[ZULU]

Simply, this is the business model of old. It looks like TLG is now trying to combat resellers with unpredictable EOL with sets. Pretty much the only option now is to decide early on what sets you think are winners and don't procrastinate on buying them. Scheduled EOLs of sets looks to be in the past.

 

That seems a rather pessimistic view of things. 

I can't believe TLG would put so many ressource in a Tumbler to retire it shortly afterwards. 

 

The forst 2 years are rather "safe" - predicting retirement afterwards has become more of an art/work indeed. 

Working capital management is nonetheless important. If not a lot of pple on this forum agree with that - fine.

 

Obviously I agree that nobody wants to miss out on the next best EoL exclusive

[ZULU]

Have you ever heard the saying "a bird in the hand"?...

Hold a bird in your hand for 10 years and it's (a) dead(star)

 

[Ed Mack]

 

I can't believe TLG would put so many resources in a Tumbler to retire it shortly afterwards. 

 

I really don't think LEGO will retire the Tumbler after a short production run, but it sure would shake the foundations of the LEGO investment world if it did disappear in less than a year, would it not? 

[johnwray]

If I were Lego and I really wanted to weaken the reseller population, I'd never retire the Death Star. People have a c***-ton of money tied up in that leviathan, and if it ever did retire, it would put that money back into the pool with which resellers can invest. But if it never retires, TLG slowly bleeds the community of resellers of their usable capital.

 

#&#)%#(*&@#!!!

[emazers]

For all you guys that still think the "Death Star" is a Flop and will never buy one, well alot of you guys thought the same about the SSD,HH,TH and look over the last few months most have been panic buying, and take my word the same will happen with the Death Star, I don't understand why people think the set will be big bucks, 3 new movies coming out, and there will be millions of new Star War Lego fans out there. So do yourself a favor and get a few. But I am sure most will wait til the end.   Ed

[LegoManiacc]

I really don't think LEGO will retire the Tumbler after a short production run, but it sure would shake the foundations of the LEGO investment world if it did disappear in less than a year, would it not? 

 

 

If I were Lego and I really wanted to weaken the reseller population, I'd never retire the Death Star. People have a c***-ton of money tied up in that leviathan, and if it ever did retire, it would put that money back into the pool with which resellers can invest. But if it never retires, TLG slowly bleeds the community of resellers of their usable capital.

 

#&#)%#(*&@#!!!

 

Yes, not to give them any ideas, if TLG really wanted to shake the reselling world by it's foundation, they would put the "retiring soon" label on 10188...then take the label off after 6-12 mos and continue to sell it for another 10 years.

[Miami Bomb Squad]

Mack.
Why are you scaring these folks on a nice Sunday Afternoon.