CAGR by Theme

[davelin]

Does it make more sense for this number to be calculated by using a weighted average rather than a simple average? For example the Monster Hunters number looks a little inflated because of the existence of a couple of smaller sets which as a % have a high CAGR. Just a thought...

[Jeff Mack]

If you have a suggestion on how this can be done we are open to it. Ed and I are not statistics majors and the entire CAGR idea was brought to us by another Brickpicker member that is a finance person. If you want to help explain an accurate way of doing this, I will put the extra research and development time into doing it. We want to give the best information possible, so we are open to suggestions.

[legoman666]

Instead of averaging the CAGR for all the sets in a theme, sum the current value of each set and divide by the sum MSRP to get your rate of return.

[Ed Mack]

How would you calculate a weighted average for an entire theme when the CAGR is set specific. What I mean is, an important portion of the CAGR formula is YEARS? Some themes have sets that have been released over several years(STAR WARS). A simple average is all that "I" know how to do. As for ROI(return on Investment), yes, we could do a theme ROI, but how does that relate to CAGR? They are two different things. Somebody smarter than me needs to help out here...

[hengchibrick]

Does it make more sense for this number to be calculated by using a weighted average rather than a simple average? For example the Monster Hunters number looks a little inflated because of the existence of a couple of smaller sets which as a % have a high CAGR. Just a thought...

That is cool idea. If possible, we should keep both data and see if there are clear difference of the two.

The calculation method mentioned by legoman666 should work.

[Doofy McGee]

I certainly mean no disrespect to anyone's ideas here, but Ed and Jeff already do an awful lot of work to keep this site up and running. Everybody (me included) loves data and all the numbers we can get our hands on, but people should feel free to apply their own formulas and calculations too. If you want the most accurate numbers possible, you will get that by taking the best existing ideas from this site, and combining it with your own ideas and research methods. A very good way to be successful at this is to do your own homework and due diligence. Just saying...I'm not trying to ruffle any feathers.

[davelin]

How would you calculate a weighted average for an entire theme when the CAGR is set specific. What I mean is, an important portion of the CAGR formula is YEARS? Some themes have sets that have been released over several years(STAR WARS). A simple average is all that "I" know how to do.

As for ROI(return on Investment), yes, we could do a theme ROI, but how does that relate to CAGR? They are two different things. Somebody smarter than me needs to help out here...

I took a similiar idea to Legoman666's which I think gets around the years issue (again I think).

I took

(sum (1 + CAGR) * MSRP)

divided by

(sum MSRP)

to get an overall weighted CAGR. For Monster Hunters this number came out to 23% which seems about right.

[davelin]

I certainly mean no disrespect to anyone's ideas here, but Ed and Jeff already do an awful lot of work to keep this site up and running. Everybody (me included) loves data and all the numbers we can get our hands on, but people should feel free to apply their own formulas and calculations too. If you want the most accurate numbers possible, you will get that by taking the best existing ideas from this site, and combining it with your own ideas and research methods. A very good way to be successful at this is to do your own homework and due diligence. Just saying...I'm not trying to ruffle any feathers.

And I completely 100% appreciate all of the work that is already being done. Just giving a suggestion on how to expand the amount of information available, there is certainly more than enough room for folks to do their own research or homework.

[Ed Mack]

I took a similiar idea to Legoman666's which I think gets around the years issue (again I think).

I took

(sum (1 + CAGR) * MSRP)

divided by

(sum MSRP)

to get an overall weighted CAGR. For Monster Hunters this number came out to 23% which seems about right.

You need to fill in the blanks so I can work backwards and see how you came up with it. I would also like other feedback from members here that might have more experience than Jeff and I in statistics and financial data.

[Jeff Mack]

Its important to note that any new equation that gets brought up needs to be verified for credibility. When CAGR was introduced to us, it was very easy to look up, figure out the formula and add it to the site. We want to give as much data here as possible as long as we can reference how we are figuring it all out.

[davelin]

I took a similiar idea to Legoman666's which I think gets around the years issue (again I think).

I took

(sum (1 + CAGR) * MSRP)

divided by

(sum MSRP)

to get an overall weighted CAGR. For Monster Hunters this number came out to 23% which seems about right.

You need to fill in the blanks so I can work backwards and see how you came up with it. I would also like other feedback from members here that might have more experience than Jeff and I in statistics and financial data.

See the attached file if that helps.

[Ed Mack]

I took a similiar idea to Legoman666's which I think gets around the years issue (again I think).

I took

(sum (1 + CAGR) * MSRP)

divided by

(sum MSRP)

to get an overall weighted CAGR. For Monster Hunters this number came out to 23% which seems about right.

You need to fill in the blanks so I can work backwards and see how you came up with it. I would also like other feedback from members here that might have more experience than Jeff and I in statistics and financial data.

See the attached file if that helps.

I PM'ed you. Can anyone else confirm this? Looking for help from some Finance geeks out there.

[Fcbarcelona101]

I just did it myself and got the same number.

[Jeff Mack]

I just did it myself and got the same number.

We are not talking about doing the actual equation and coming up with the same number. We are talking more about verifying if the method is correct. If so, where can we find "proof" that it is indeed the proper way to figure out this value.

[Grolim]

Davelin's file is good (I studied a bit of Finance). You don't need to worry about factoring in each sets age as you already do that with its individual CAGR. 10030 Example Year Set Value CAGR MSRP 298.99 11% 2002 331.8789 2003 368.385579 2004 408.9079927 2005 453.8878719 2006 503.8155378 2007 559.235247 2008 620.7511241 2009 689.0337478 2010 764.82746 2011 848.9584806 2012 942.3439135 = Todays market value (close enough) Using (Sum of (MSRP x (CAGR +1))) / (Sum of MSRP) Will give you a more accurate picture of the investment return of the whole theme if you are buying 1 of each set. Think of it as "what would be my CAGR or investment return if I had bought 1 of each set at MSRP". It weights the theme towards the bigger value sets, which is good because obviously a 50% return on a $5 set is not as got as on a $300 set. The straight average of the CAGR (which we have now) can still be useful though. It gives a value for what return we can expect from the theme if we purchased all the sets equally. e.g. we buy $300 worth of each set - so the $5 set we buy 60 units. I'm not advising Ed/Jeff to change methods or add it, I'm happy either way, just wanted to share the differences of each.

[hengchibrick]

We are not talking about doing the actual equation and coming up with the same number. We are talking more about verifying if the method is correct. If so, where can we find "proof" that it is indeed the proper way to figure out this value.

By looking at Davelin's attachment, I think it is a valid method for putting weight on the expensive set.

However, the original method can be informative to know if the majority of the theme are doing well and not considering more on the expensive set.

[Fcbarcelona101]

We are not talking about doing the actual equation and coming up with the same number. We are talking more about verifying if the method is correct. If so, where can we find "proof" that it is indeed the proper way to figure out this value.

Sorry, what I was trying to say is that I did it differently and came up with the same (same idea, same result). I just based the weights on the original retail value without adding the return as of now.

I believe It makes sense, big sets are weighted more and small ones less. So the set in the example that is only a few dollars and more than doubles in value is weighted very low and does not affect the theme result by as much as when its done equally weighted.

[Ed Mack]

Davelin's file is good (I studied a bit of Finance).

You don't need to worry about factoring in each sets age as you already do that with its individual CAGR.

10030 Example

Year Set Value CAGR

MSRP 298.99 11%

2002 331.8789

2003 368.385579

2004 408.9079927

2005 453.8878719

2006 503.8155378

2007 559.235247

2008 620.7511241

2009 689.0337478

2010 764.82746

2011 848.9584806

2012 942.3439135 = Todays market value (close enough)

Using (Sum of (MSRP x (CAGR +1))) / (Sum of MSRP) Will give you a more accurate picture of the investment return of the whole theme if you are buying 1 of each set.

Think of it as "what would be my CAGR or investment return if I had bought 1 of each set at MSRP". It weights the theme towards the bigger value sets, which is good because obviously a 50% return on a $5 set is not as got as on a $300 set.

The straight average of the CAGR (which we have now) can still be useful though. It gives a value for what return we can expect from the theme if we purchased all the sets equally. e.g. we buy $300 worth of each set - so the $5 set we buy 60 units.

I'm not advising Ed/Jeff to change methods or add it, I'm happy either way, just wanted to share the differences of each.

Help me clarify what is highlighted in red. SUM OF_______??? SUM OF CURRENT VALUES?

[Grolim]

Help me clarify what is highlighted in red. SUM OF_______??? SUM OF CURRENT VALUES?Brackets first, so take the MSRP of a set and multiply it by the CAGR +1 e.g. MSRP is $100 CAGR is 20% so $100 x 1.2 = $120. The "Sum of" means you then sum all those results for the theme in question.

[Ed Mack]

Help me clarify what is highlighted in red. SUM OF_______??? SUM OF CURRENT VALUES?Brackets first, so take the MSRP of a set and multiply it by the CAGR +1 e.g. MSRP is $100 CAGR is 20% so $100 x 1.2 = $120. The "Sum of" means you then sum all those results for the theme in question. I see now what the term "sum" meant. I didn't know it meant to add all the sets in the theme together. I need to take a remedial stats/finance class. Thanks...