A way to predict winner sets. May be ?

[brickology101]

Hi, I am new here posting but been around reading forums, buying and reselling for about a year. What do you think of the following ?

Based on the simple rule of supply and demand and critical timing, for nearly retired set, I mean the sets that are only available at Lego SH, just before they go poof everywhere.

Can we say that those sets which have the highest price ratio from Amazon to retail are the most promising ones to invest in ?

So, in that case let's see as an example,

PC -> 214/150 = 1.43

PS-> 229/150 = 1.53

TB-> 350/240= 1.46

Then, if what I say here holds water, it seems that one should get more PS than TB or PC.

And more TB than PC

What do you think?

Cheers

 

[Ed Mack]

How do you calculate the Amazon price?

[tacsniper]

How do you know how much supply is out there when majority of the re-sellers have not begin to unload their inventory yet? There is a high chance 90+% of PS, PC, TB, SoH sales over the past 6 months are hoarded by re-sellers. If everyone floods the market at once, maybe its not the best set to invest in vs something not massively hoarded

[Kenxxx]

It's a nice idea, but will likely not hold water.  When I first started investing, I sought similar magical metrics... i.e. % discount from retail vs. piece count vs. number of minifigures vs. age.... etc. (Actually I like your idea better than any of mine). But still, this is just one metric based on dozens of variables to try and predict the unpredictable. And the figures you've come up with: 1.43 vs. 1.46 vs. 1.53 ... they are pretty close together really.  I bet that - even if your hypothesis were proven valid - the difference between these values would be within the "margin of error", i.e. insignificant.

Of any of those sets, the best performer in the near term will be the one that goes EOL first. Calculate the answer to that question, and then you'll really have something there. 

[Grolim]

I don't understand.  What does this bit mean " the highest price ratio from Amazon to retail ".  Isn't the Amazon price the retail price or a discount below that?  I guess you're talking the secondary market price of Amazon 3rd party sellers, at a time when Amazon have none themselves but it's still at S@H.

Interesting hypothesis.  Though plenty of sets go out of stock or retired at Amazon or even S@H that are still available at other retailers.

 

To me that price gap represents sellers just trying to get some quick flip profits by clearing out other retail sources and putting them on Amazon who have no stock themselves.  Capturing that market of shoppers who just want to buy something off Amazon without looking around for other options.  There is also probably a decent international factor in there as well in that those 3rd party sellers are shipping to countries that have already gone retired.  Also the price at Ebay is likely similar to the Amazon one, so why not use their asking prices.

So many variables...

 

 

[BrickU]

Hi, I am new here posting but been around reading forums, buying and reselling for about a year. What do you think of the following ?

Based on the simple rule of supply and demand and critical timing, for nearly retired set, I mean the sets that are only available at Lego SH, just before they go poof everywhere.

Can we say that those sets which have the highest price ratio from Amazon to retail are the most promising ones to invest in ?

So, in that case let's see as an example,

PC -> 214/150 = 1.43

PS-> 229/150 = 1.53

TB-> 350/240= 1.46

Then, if what I say here holds water, it seems that one should get more PS than TB or PC.

And more TB than PC

What do you think?

Cheers

 

You are really splitting hairs with your theory.  You are likely picking 3 winners to start.  Even if this there was a slightly larger gap, would you really want to go all in on one pick or would you want to hedge your bet?  Its easy to pick a winner when sets retail for $150 or more & almost EOL. 

 

I think a better comparison is to hand select 1 or 2 each from various themes and compare those to supplement your easier more expensive picks to have some diversity.  You could definitely use your criteria along with 2 other theories to form a solid conclusion.  Maybe add in the "eye test" & some opinions from others on brickpicker? 

 

Gosh, I think I just explained my own reasons for how I do my picking!  That & when sets go over 50% locally.  lol

Edited June 26, 2015 by Kodiak10

[brickology101]

Sorry I stepped away from my computer for a while.

I got the amazon prices quickly from the lego stock alert. What a wonderful tool. Thanks Jeff.

I don't know how much supply is out there. I just looked at a the lowest price tag on amazon like and I make a prediction. However, it is just a prediction.

Agreed that it is an hypothesis and agreed that there isn't much of a difference between the ratios I highlighted as an example. I am not pretending it is working. Actually, it probably won't work. Just putting out there one interesting analytic.

Highest price ratio from amazon to retail means, take the lowest price from Amazon, take the retail price from Lego SAH for the same set, divide the first by the later and this is it. The higher, the better, well at least that's the theory.

I could use eBay prices for the same analysis but the Amazon prices were more accessible when I put these numbers together.

 

[Jules_K]

Sorry I'm confused what the prediction is here? Could you provide some examples and figures to make it clearer?

[Robb]

Sorry I'm confused what the prediction is here? Could you provide some examples and figures to make it clearer?

I think he's comparing the Amazon.com in stock price to the Amazon.com out of stock third party price. This is a cute system, but still flawed as they all are. The best idea seems to be: buy sets that are more than a year old and diversify.

[pickleboy]

My guess is you wasted a lot of time doing math and stuff....   just a guess.

 

[Brickson]

Then, if what I say here holds water, it seems that one should get more PS than TB or PC.

 

I have no opinion on your analysis other than to point out that the 0.1 difference isn't significant enough to be convincing of any argument. Like others said, they are likely all "winners" as long as we don't flood the market, because it's widely hoarded.

[Val-E]

I´ll provide an alternative prediction theory - Sets that have less than 5 pages of thread or no thread at all on this site before reaching SOLD OUT or RETIRED status are winners because they have flown under the radar of the horde. Case examples are Town Hall, Arctic Plane and Chi Lion Temple.

[Brickson]

I´ll provide an alternative prediction theory - Sets that have less than 5 pages of thread or no thread at all on this site before reaching SOLD OUT or RETIRED status are winners because they have flown under the radar of the horde. Case examples are Town Hall, Arctic Plane and Chi Lion Temple.

Surely that must apply to a lot of bad ones as well ;D

[Val-E]

That´s where the tea leaves come in! Actually, a lot of the stinkers don´t even have threads at all so there seems to be a fine balance in what is totally ignored and what is picked up on by only a few.

[Brickson]

That´s where the tea leaves come in! Actually, a lot of the stinkers don´t even have threads at all so there seems to be a fine balance in what is totally ignored and what is picked up on by only a few.

For sure. That's an interesting theory I'd like to see more support for/against it. Let me play devil's advocate. Ghost Train, regarded as a winner here and by The Brick Show but can still be attained at MSRP. Some people backed Vampyre Hearse too, as best set of 2012, which I can still find on shelf, dusty from 2012. Yet some of the other Monster Fighters have doubled or more.

The Ghost Train. 4-5 pages before retirement. http://community.brickpicker.com/topic/1368-9467-the-ghost-train/ 

The Malevolence. 5 pages before retirement. http://community.brickpicker.com/topic/2170-9515-malevolence/ 

In hindsight, generally the Lone Ranger stuff seemed like a bad idea but during the time there was some optimism and balanced threads. You'd think at least the train would do well, but alas.

On the flip side, 60 pages and being the #1 most hoarded set hasn't stopped R2-D2 from doubling in price in less than a year.

Then there's Jabba Palace, Jabba Sail Barge, what happened? Discounts, availability, the actual set and who it markets to, etc.

I guess post count/activity could be used as one of so many valuable variables and unknown variables, but the weight alone seems so minor due to its unpredictability, or it needs to be better defined to be reliable only under certain circumstances (when other variables are present/not present).

Your turn valenciaeric!

Edited June 26, 2015 by Brickson

[brickology101]

Remember that there is a timing associated with looking at these price ratios between third party and retail.

It is supposed to be monitored when the set is no longer available at target, wallmart and Toysrus, only available at Lego SAH, with limited quantity.

The same analysis on sets that are still available at retail makes no sense.

I put together the example for PC, PS and TB very quickly.

I agree that this needs to be looked at on many more sets, not just the stellar ones.

I will follow it this metric, see how it pans out with my own sales and will expand on this in a while once I have actual data to confirm or not.

For now this is just a prediction / hypothesis.

But it surely triggered a lot of feedback which is great.

Thanks.

 

 

 

[Ed Mack]

Picking LEGO sets is like picking sports winners. Every year is a new year, yet you have the consistent winners that usually are near the top, regardless of opinions and player changes. Then you have your surprise teams. Basically, they come out of nowhere to surprise everyone. Then you have the perennial losers which are consistently bad. On occasion a bad team can surprise you and have a good year and the good teams can have an off year, but there is an art to picking winners in both the LEGO and sports world and those who have the vision can make more money than the average Joe.

[biking_tiger]

LEGO is not the stock market (exactly... that BP logo is nice), but some of the same adages apply:

"It's not the timing of the market, but your time in the market." 

I've been around this site for nearly a year now, and it seems *most* of the successful investors aren't those chasing something in magic crystal ball or the the winning lotto ticket. They have strategies and stick with them. They have patience and stick with it. 

Sure, LEGO can eff with your plan with (cue music) CHAOS, but if your plan mitigates for that risk, you should be fine in the long run. I don't plan to get rich with LEGO, but I am (already) growing my money. PS, PC, and TB will all be winners, given time and a solid strategy. 

[TheBrickMeister]

Remember that there is a timing associated with looking at these price ratios between third party and retail.

It is supposed to be monitored when the set is no longer available at target, wallmart and Toysrus, only available at Lego SAH, with limited quantity.

The same analysis on sets that are still available at retail makes no sense.

I put together the example for PC, PS and TB very quickly.

I agree that this needs to be looked at on many more sets, not just the stellar ones.

I will follow it this metric, see how it pans out with my own sales and will expand on this in a while once I have actual data to confirm or not.

For now this is just a prediction / hypothesis.

But it surely triggered a lot of feedback which is great.

Thanks.

 

 

 

Interesting theory....I'm always up for reading a possible investment strategy. My two cents to add to this conversation would be: even if your theory did work, if a set isn't available at Target, Toys R Us, Walmart, etc. anymore and it's only available at Lego SAH, it is still only marginally useful, because you've ruled out many avenues by which one would purchase a set. How would you accumulate a significant number of your predicted winners?

[mudcatsfan]

This 1.43-1.53 factor is really only a measure of the initial bump needed to turn a profit after fees and shipping on amazon. 

If any set had a huge initial bump factor (or IBF since we love our acronyms here) perhaps that would indicate that so few are in reseller hands that there isn't a market consensus on what the lowest price is where multiple sellers feel comfortable starting out.

Since we see a very close knit range on these sets, i'd say they're all similarly hoarded. If not the factors might be all over the place.

FallingWater has settled in nicely at 149.99 and i don't even need a calculator (#rainman) to see that's 1.49 ratio.

Does anyone remember what # the Death Star goes to when out of stock on Amazon? 549? something like that? if so that would be 1.38

 

Edited June 26, 2015 by mudcatsfan

[Val-E]

For sure. That's an interesting theory I'd like to see more support for/against it. Let me play devil's advocate. Ghost Train, regarded as a winner here and by The Brick Show but can still be attained at MSRP. Some people backed Vampyre Hearse too, as best set of 2012, which I can still find on shelf, dusty from 2012. Yet some of the other Monster Fighters have doubled or more.

The Ghost Train. 4-5 pages before retirement. http://community.brickpicker.com/topic/1368-9467-the-ghost-train/ 

The Malevolence. 5 pages before retirement. http://community.brickpicker.com/topic/2170-9515-malevolence/ 

In hindsight, generally the Lone Ranger stuff seemed like a bad idea but during the time there was some optimism and balanced threads. You'd think at least the train would do well, but alas.

On the flip side, 60 pages and being the #1 most hoarded set hasn't stopped R2-D2 from doubling in price in less than a year.

Then there's Jabba Palace, Jabba Sail Barge, what happened? Discounts, availability, the actual set and who it markets to, etc.

I guess post count/activity could be used as one of so many valuable variables and unknown variables, but the weight alone seems so minor due to its unpredictability, or it needs to be better defined to be reliable only under certain circumstances (when other variables are present/not present).

Your turn valenciaeric!

It was a comment made in jest because sometimes people overthink these things and if there was an easy way to calculate it we would all be driving real F40´s.

R2 thread had 13 pages before it sold out for good which is average in the same way that returns (in my zone) have been average. As the investor market gets ever more crowded, this can be an indicator as to how hoarded a set is and how overhyped (see IDEAS, T1, F40 soon etc etc)

[Kenxxx]

...Does anyone remember what # the Death Star goes to when out of stock on Amazon? 549? something like that? ...

My memory (which gets poorer all the time) says the last time DS was out of stock most places, it was about $528 on Amazon (almost exactly zero profit after fees & shipping for me).

[mudcatsfan]

My memory (which gets poorer all the time) says the last time DS was out of stock most places, it was about $528 on Amazon (almost exactly zero profit after fees & shipping for me).

Gotcha, I wonder if The Death Star might have a lower IBF due to the Barnes & Noble sales. I know i bought all mine at around $260

[Veegs]

LEGO is not the stock market (exactly... that BP logo is nice), but some of the same adages apply:

"It's not the timing of the market, but your time in the market." 

I've been around this site for nearly a year now, and it seems *most* of the successful investors aren't those chasing something in magic crystal ball or the the winning lotto ticket. They have strategies and stick with them. They have patience and stick with it. 

Sure, LEGO can eff with your plan with (cue music) CHAOS, but if your plan mitigates for that risk, you should be fine in the long run. I don't plan to get rich with LEGO, but I am (already) growing my money. PS, PC, and TB will all be winners, given time and a solid strategy. 

It is actually the sticking with my strategy part I find hardest. I often talk myself into investing earlier or perhaps more than I intended. Also the patience part is really hard. I sold early on Black Pearls and QARs when I first got into this racket (among other sets) and while making a little profit boosted my confidence and gave me some funds to reinvest, a little more patience would have really paid off. Must resist urge to buy more, sell early and open and build each and every cool set...

Oh, that brings me back to the topic - sets that I want to immediately build (or my kids or nieces/nephews and/or adult friends) are probably winners. I like to show the Lego designer videos to friends and work colleagues and those that elicit the most awesome feedback have done really well on the secondary market.

[redcell]

The only thing that price ratio tells you is that Amazon doesn't have any stock of the item and third party sellers have priced it above MSRP.  It doesn't give a good indication that the set will be a winner because it doesn't tell you what the demand level, supply level, or pricing will be after EOL.  Each of the sets you mention is sure to increase in price after EOL so, from that perspective, you could say that this is an effective formula, but I could have told you that each of those sets would increase after EOL without ever seeing the current Amazon price.  Indeed, I can save you a lot of time...rather than carefully scrutinizing and analyzing Amazon's prices, just search for "emazers" on this site and buy whatever he is buying.