10179: The Worst Thing to Ever Happen to Lego Investing

[Will 4]

Lego can only go up and up just like dot com companies. but at least you have an asset which hold some form of value as opposed to the example given

[ironbrick]

2 minutes ago, Will 4 said:

Lego can only go up and up just like dot com companies. but at least you have an asset which hold some form of value as opposed to the example given

I'm not so sure of that last part. I encourage anyone on this forum to experiment with Bricklink selling. I am sure a great many already do! That being the case, don't you think the market has gotten extremely competitive? The market would not be able to support a mass influx of new sellers all selling similar items competing in an open market. Prices are already starting to come down and stagnate on Bricklink as it is. Not to mention it is very time consuming to part out items on Bricklink!

[Val-E]

18 minutes ago, ironbrick said:

I'm not so sure of that last part. I encourage anyone on this forum to experiment with Bricklink selling. I am sure a great many already do! That being the case, don't you think the market has gotten extremely competitive? The market would not be able to support a mass influx of new sellers all selling similar items competing in an open market. Prices are already starting to come down and stagnate on Bricklink as it is. Not to mention it is very time consuming to part out items on Bricklink!

It´s beyond debating that the market as a whole is not growing like it used (or even growing at all) and this can be seen from the updated brickfolio prices.

There are still places for investors to make money, it just takes more time and effort than before I feel parting out is a huge PITA for what it´s worth in the same way that many buyers can´t be bothered to bricklink a 10179.

[KShine]

While I believe today's "poster of concern" is correct (to a point) about most of their concerns - I think the question becomes more a question of just how bad could things get?

My impression is that there are more people jumping off the train at this point, than than there are jumping on. The majority of posts nowadays seem to have a negative view of things (as opposed to the days of irrational exuberance, when every day seemed to be posts full of woo-hoos and high fives).

Hopefully, this is just the hangover (after the long night of partying), and we'll all start feeling better as the day goes on.

 

[Ed Mack]

There is no investment or collectible that goes up forever.  There are Bear markets for every investment and collectible.  Point is, smart people make money in Bear markets as well as Bull markets.  Data indicates that not much has changed if you look at the overall LEGO secondary market, with only a small decrease in average growth.  But some of that is seasonal, so I have to see where we are in 6-7 months before making any sort of analysis.  Some sets appreciate very well, some don't.  Maybe the old old reliable sets are not that special anymore, but others have stepped up and still appreciate well.  

Yes, competition has increased, but there are many people still doing very well and they keep their mouths shut.  Those who invested heavily in Ant Man's Final Battle, the Sea Cow, the Tumbler, the Ghost and others are not complaining.  Is it as easy to pick guaranteed winners today as it was three years ago...no...but maybe it's time for the dilettante investors to move onto those "Funko" thingys.  

As for Bricklink, MOCs are the main reason it exists.  It is quite possible the massive amount of new LEGO sets being released annually does put a damper on the MOC market.  If people can buy hundreds of different sets every year, why try to make your own?  Just a thought...

[ironbrick]

6 minutes ago, KShine said:

While I believe today's "poster of concern" is correct (to a point) about most of their concerns - I think the question becomes more a question of just how bad could things get?

My impression is that there are more people jumping off the train at this point, than than there are jumping on. The majority of posts nowadays seem to have a negative view of things (as opposed to the days of irrational exuberance, when every day seemed to be posts full of woo-hoos and high fives).

Hopefully, this is just the hangover (after the long night of partying), and we'll all start feeling better as the day goes on.

 

Not sure I agree with your assessment. I think I have a realistic (if albeit a little pessimistic) view of the situation and I am by no means 'jumping ship.' I just merely think that things are getting moderately hard (note not impossible) and these risks should be mentioned more often than they are.

Just my two cents...nothing more. 

Edited May 22, 2016 by ironbrick

[ironbrick]

3 minutes ago, Ed Mack said:

There is no investment or collectible that goes up forever.  There are Bear markets for every investment and collectible.  Point is, smart people make money in Bear markets as well as Bull markets.  Data indicates that not much has changed if you look at the overall LEGO secondary market, with only a small decrease in average growth.  But some of that is seasonal, so I have to see where we are in 6-7 months before making any sort of analysis.  Some sets appreciate very well, some don't.  Maybe the old old reliable sets are not that special anymore, but others have stepped up and still appreciate well.  

Yes, competition has increased, but there are many people still doing very well and they keep their mouths shut.  Those who invested heavily in Ant Man's Final Battle, the Sea Cow, the Tumbler, the Ghost and others are not complaining.  Is it as easy to pick guaranteed winners today as it was three years ago...no...but maybe it's time for the dilettante investors to move onto those "Funko" thingys.  

As for Bricklink, MOCs are the main reason it exists.  It is quite possible the massive amount of new LEGO sets being released annually does put a damper on the MOC market.  If people can buy hundreds of different sets every year, why try to make your own?  Just a thought...

This is a very fair assessment and to be brutally honest, much better than your initial ending summarization that Lego is the best toy ever produced. Again, I mean no disrespect as I am sure a lot of forum members take issue with my analysis as well. 

The first and last sentences of your reply say it all (in my humble opinion). To those thinking they can just easily dump their stock on Bricklink and sell sets as parts, I can assure you that it is not that easy. 

I am often amazed when I hear non-lego collectors and want to be investors talk about buying sets and parting them out simply based on the inaccurate part out values displayed by Bricklink. It should be noted that while these are valid numbers, it does not state how long it took to sell the items at that listed price and it also does not take into account the amount of sellers who undercut other sellers until prices inadvarently drop to the point where it is almost no longer worth it.

I (and I am sure those more experienced than myself at Lego speculation and investing) have seen a dramatic rise in speculators attempt to enter the market at both ends (i.e. in sealed sets and sets to part out). Most will never make it long term...nor should they. 

[Val-E]

I beat you hands downin the pessimism stakes but you can still sell lots if your price is right and you picked stuff the horde forgot about. One day the horde will be so big that nothing will be passed over, but until then there are gains to be made. Pre 2012 sets are still doing just fine too.

[Ed Mack]

11 minutes ago, ironbrick said:

This is a very fair assessment and to be brutally honest, much better than your initial ending summarization that Lego is the best toy ever produced. Again, I mean no disrespect as I am sure a lot of forum members take issue with my analysis as well. 

The first and last sentences of your reply say it all (in my humble opinion). To those thinking they can just easily dump their stock on Bricklink and sell sets as parts, I can assure you that it is not that easy. 

I am often amazed when I hear non-lego collectors and want to be investors talk about buying sets and parting them out simply based on the inaccurate part out values displayed by Bricklink. It should be noted that while these are valid numbers, it does not state how long it took to sell the items at that listed price and it also does not take into account the amount of sellers who undercut other sellers until prices inadvarently drop to the point where it is almost no longer worth it.

I (and I am sure those more experienced than myself at Lego speculation and investing) have seen a dramatic rise in speculators attempt to enter the market at both ends (i.e. in sealed sets and sets to part out). Most will never make it long term...nor should they. 

I think you are greatly underestimating the popularity and intrinsic value of the LEGO brick in this whole equation.  It's not so cut and dried.  Regardless of whatever resellers and collectors stockpile, that will have little affect on the primary LEGO market.  LEGO is designed for kids for the most part and they will drive the entire market, both current and future.  LEGO controls the primary market and overall, they are producing some dynamic sets and products.  Sure, there are some retreads and turds, but overall, their product line has never been better and more varied.  If the primary market remains strong, the secondary market should remain relatively stable.  

[ironbrick]

2 minutes ago, Ed Mack said:

I think you are greatly underestimating the popularity and intrinsic value of the LEGO brick in this whole equation.  It's not so cut and dried.  Regardless of whatever resellers and collectors stockpile, that will have little affect on the primary LEGO market.  LEGO is designed for kids for the most part and they will drive the entire market, both current and future.  LEGO controls the primary market and overall, they are producing some dynamic sets and products.  Sure, there are some retreads and turds, but overall, their product line has never been better and more varied.  If the primary market remains strong, the secondary market should remain relatively stable.  

I would venture to say some of your assumptions are faulty at best. Your ending statement is very telling...let me explain...

Quote

"If the primary market remains strong, the secondary market should remain relatively stable."  

But at what price? You are again assuming that if the primary market remains stable this in turn will equate with a healthy secondary; which is usually true. However, the price point at which those sets on the secondary market are going to be sold is very much in question. Again, an oversaturated market can still be healthy in nature, but yield no returns (or even negative returns) on the secondary marketplace. 

I think that the Lego Super-Heroes set Arkham Asylum Breakout (set 10937) is an incredible set! However, the returns have been sparse and almost nonexistent when one factors in eBay and PayPal fees, storage, etc. Ironically, the excellent Monster Fighters theme put forth the incredible Haunted House set that was not hoarded en masse. As a result, it yielded better returns on the secondary marketplace. To be fair though, could a set like that slip through the proverbial cracks today? It is highly doubtful in my opinion...which means nothing in the long term scheme of things. 

It is interesting to note that you feel as though I am greatly underestimating the popularity of Lego. Nintendo is also a popular product and those who speculated in Amiibo figurines lost their proverbial arse when Nintendo ramped up production to meet demand. During the time of the short, but speculative bubble I had collectors and so called investors tell me that I don't understand the popularity of the toy. Anyone holding a set of every single Super Smash Bros. Amiibos ever made in factory sealed condition will yield a very small profit if they go to sell. Again, it should be said that popularity and speculation are not mutually exclusive. Saturation of mass produced items occurs more often than not even on items that appear to be limited in production (i.e. is the Lego At-At 75054 really that different from set 8129)?

In conclusion, if I am overestimating the popularity of Lego I think you are misreading what the popularity of Lego means in regards to the secondary market going forward. As for intrinsic value, I think we have already mentioned the difficulties of parting out sets on Bricklink and the risk versus possible reward. If you are referring to something else, please clarify so we can discuss further. The part out values listed are very misleading at best. 

This is a great discussion and I think one that will cause a great deal of thought on both sides of the discussion. 

[Guest brickcrazyhouse]

why are you even trying ed?

[Ed Mack]

Amiibos are no LEGO sets.  Just like Beanie Babies are no LEGO sets.  The Super Hero theme is a weak one for the most part.  The counterfeiting of Super Hero minifigure is a factor.  Not every set is a winner.  I thought the AA would be a winner as well.  Might be...one day.

2 minutes ago, brickcrazyhouse said:

why are you even trying ed?

Slow day at work.

[doon73]

Going back to the OP no-ones mentioned the elephant in the room - this site.

Im not sure how many tens of thousands of members there are but for anyone wondering what brickvesting is all about then a quick google search will lead you here, and there you have it, pretty much all the information at your fingertips. Long gone are days of using your own initiative, searching sold prices on eBay and taking your own risks - it's all here and most are success stories. All you need is the cash and away you go. Why wouldn't anyone want a piece of the action?

Maybe it's time this site went subscription only?

(I'll get my hard hat!!!)

 

[ironbrick]

1 minute ago, Ed Mack said:

Amiibos are no LEGO sets.  Just like Beanie Babies are no LEGO sets.  The Super Hero theme is a weak one for the most part.  The counterfeiting of Super Hero minifigure is a factor.  Not every set is a winner.  I thought the AA would be a winner as well.  Might be...one day.

Slow day at work.

You are absolutely right, but all speculative bubbles share some similarities. You may consider me overtly pessimistic just like I probably consider you to be overtly optimistic. In the end there is nothing wrong with a healthy discussion on the topic at hand. 

 

As to the person who asked 'Why are you even trying?' Why would having this conversation merit that response? If you are that confident of the overall market and health of it this discussion should merely reflect that; not cause concern.

[yang]

I actually stopped buying for investments for now. I still buy sets for my personal use. But for investments, even if there's a good discount, I still won't buy. Nowadays, discount means bad seller, means over supply, way over supply. Look at idea sets birds, Big Bang; look at train sets, 60052, 60051.

[KShine]

9 minutes ago, ironbrick said:

As to the person who asked 'Why are you even trying?' Why would having this conversation merit that response? If you are that confident of the overall market and health of it this discussion should merely reflect that; not cause concern.

Maybe because you seem to be disagreeable.

As an example - I pretty much responded, saying that I agreed with you (in general), and your response to my post was that you didn't really agree with my assessment.

Edited May 22, 2016 by KShine

[ironbrick]

8 minutes ago, KShine said:

Because you seem to be disagreeable.

As an example - I pretty much responded, saying that I agreed with you (in general), and your response to my post was that you didn't really agree with my assessment.

But I do disagree with your statement that more people are jumping off the train than coming on. The problem at this point is an over saturation of people thinking that investing in Lego is the key to easy riches. Most of these people have yet to start cashing out their holdings. If and when that happens there is going to be more problems then just discussing the probability of a speculative bubble. 

If by your definition that means I am being 'disagreeable' then I guess you are correct. I do not mean to come off that way, by the way; as it is hard to ascertain tone and intent through a post. No offense is meant.

 

Edited May 22, 2016 by ironbrick
spelling and grammar

[KShine]

6 minutes ago, ironbrick said:

But I do disagree with your statement that more people are jumping off the train than coming on. The problem at this point is an over saturation of people thinking that investing in Lego is the key to easy riches. Most of these people have yet to start cashing out their holdings yet. If and when that happens there is going to be more problems than just discussing the probability of a speculative bubble. 

If by your definition that means I am being 'disagreeable' then I guess you are correct. I do not mean to come off that way, by the way; as it is hard to ascertain tone and intent through a post. No offense is meant.

Possibly so, but I still believe that the net sentiment is jumping off. 

No offense meant here either.

[ZULU]

1 hour ago, Ed Mack said:

There is no investment or collectible that goes up forever.  There are Bear markets for every investment and collectible.  Point is, smart people make money in Bear markets as well as Bull markets.  Data indicates that not much has changed if you look at the overall LEGO secondary market, with only a small decrease in average growth.  But some of that is seasonal, so I have to see where we are in 6-7 months before making any sort of analysis.  Some sets appreciate very well, some don't.  Maybe the old old reliable sets are not that special anymore, but others have stepped up and still appreciate well.  

Yes, competition has increased, but there are many people still doing very well and they keep their mouths shut.  Those who invested heavily in Ant Man's Final Battle, the Sea Cow, the Tumbler, the Ghost and others are not complaining.  Is it as easy to pick guaranteed winners today as it was three years ago...no...but maybe it's time for the dilettante investors to move onto those "Funko" thingys.  

As for Bricklink, MOCs are the main reason it exists.  It is quite possible the massive amount of new LEGO sets being released annually does put a damper on the MOC market.  If people can buy hundreds of different sets every year, why try to make your own?  Just a thought...

For a while I'm switched over to MOC-ing my house... 

Can't say all the new releases are pulling me back into building from plans... Except for learning new building techniques, it's just more fun to create your own stuff.

As to the thread: I hope the exclusives in my stock will get bought by the many Asians that are becoming the new middle class. For the purpose of this debate: I'm selling down my stock to 1/4 of original value. The easy game is over indeed. What I buy is because I'm addicted to some collections (or for my kids)

[Will 4]

You know what we should do a database based on what we own and see the extent of oversupply on are small cross-section of users

[c_rpg]

17 minutes ago, Will 4 said:

You know what we should do a database based on what we own and see the extent of oversupply on are small cross-section of users

That would be very valuable information. I'm sure there exists some data (brickfolio), but it is not available to normal users afaik ☺️

[Fenix_2k1]

15 hours ago, doon73 said:

Going back to the OP no-ones mentioned the elephant in the room - this site.

Im not sure how many tens of thousands of members there are but for anyone wondering what brickvesting is all about then a quick google search will lead you here, and there you have it, pretty much all the information at your fingertips. Long gone are days of using your own initiative, searching sold prices on eBay and taking your own risks - it's all here and most are success stories. All you need is the cash and away you go. Why wouldn't anyone want a piece of the action?

Maybe it's time this site went subscription only?

(I'll get my hard hat!!!)

 

I've only been around since Jan but i don't think any of what you're saying holds true.  Lots of people come to the site and say "what should i buy" and get told to do some research. 

In general if there's a good news story on a set, it's usually too late to buy in.  The sets are long retired before you realise which ones are performing. So you still have to do your research, come up with your own strategy and take a punt.

Occasionally people give tips on what they think may sell well in the future but a: its a guess, maybe educated but still a guess b: if it's out in the public domain with sound reasoning then it will be hoarded like mad and show little profit. The lazy will make no money and move on, while those who really spend time on here, have patience, have a passion for the product and can spot the less obvious opportunities will still do well.

Edited May 23, 2016 by Fenix_2k1

[king156]

Does Emazers want to chip in yet......

[Mos_Eisley]

1 hour ago, Fenix_2k1 said:

I've only been around since Jan but i don't think any of what you're saying holds true.  Lots of people come to the site and say "what should i buy" and get told to do some research. 

In general if there's a good news story on a set, it's usually too late to buy in.  The sets are long retired before you realise which ones are performing. So you still have to do your research, come up with your own strategy and take a punt.

Occasionally people give tips on what they think may sell well in the future but a: its a guess, maybe educated but still a guess b: if it's out in the public domain with sound reasoning then it will be hoarded like mad and show little profit. The lazy will make no money and move on, while those who really spend time on here, have patience, have a passion for the product and can spot the less obvious opportunities will still do well.

Doon73's point is correct. When people are told to do research, where are they doing the research?  This site lays out every piece of information anyone needs to invest in LEGO.  Before this site, you had to figure it all out on your own. The barriers of entry for new people were greater before this site because there was no place to go where you would be told exactly what to buy, when to buy it, how to sell it, etc. Sure, it isn't a perfect science, but this site makes it way easier for an inexperienced person to come along and gather more than enough information to get going.  

[KShine]

Sometimes, it seems as if there are posters whose sole purpose in life is trying to make my head explode.