The Anti-BrickPicker Effect

[brickolodon]

Great reading...after all that I have nothing to say to any of you. LOL

 

P.S.

1. First of all, First-timers need to learn a lot of stuff on their own (I do not like when somebody ask: What I need to do? Make your own decision, sometimes at least) and its means practice....practice to sell (with profit) not just to buy. This is only way to become pro (semipro) in this packed fields.

2. Second, I know the impact...last year was easy 2012 for selling (kind of...its never easy) and now I need work harder, much harder to even reach that level...and one more..if prices not going up for retired set what I can Do???...Nothing, only wait more to get some profit.

3 I will always enjoying collecting/building LEGOs but most I do like whole process picking correct sets and get rewarded if my predictions correct.

[Guest ph4tb0i]

Wow, can't believe I missed this thread but some great points in here. 

 

As for me I started out as a Lego investor in the beginning not knowing what the heck I was doing either. But as time went on I learned that the advice people were giving on the BP forums could be applied to selling other products and holding things for a shorter term to resell (e.***. flipping). As a result I now have a growing business on eBay while doing my full time business, and the great part about it is I'm paying all my taxes on my profits in order by setting a solid business plan while minimizing costs. So yes, I would agree on the "anti bp effect" as OP stated, but it's not necessarily a bad thing as it's helped me diversify the products I sale and helped me build more capital while I learn how to continually grow my online business. 

[Alcarin]

I think I realized (in the last 6-9 months) that I have more fun playing bets though on soccer/football than investing LEGO so LEGO sets only represent 20% of my money investment. But then again I am small time with around 3000$ invested all around and 5000 tied on Banks for risk free return type of investment lol

[brickmaster]

Well the one thing I would like to ask, is anything really any different at all, or is it really just the fact that there is a place that actually talks about this.  I look at Brickpicker as a price guide and resource to talk differently about things than the same boring stuff that is on Brickset and Eurobricks where I have spent much of my time over the years.  Yes there are definintely new people in the game, but like others have said, this has been something that has been known for a bit, just some more people paying attention.  Yes it may take a bit longer to get your money back that you are used to, but I don't think anything overall has changed that much.

[Anakinisvader]

That's it.  No more LEGO for me, its all Mega Bloks, and Knex. 

 

Actually, Mos Eisley, you hit the nail on the head.  I have been trying to elude to this point without coming out and saying it but seem to get called a "bubble thread starter" or "chicken little sky is falling" person.  I have been doing this too long and have seen too much with other collectible markets.  I'm not saying this market will go bust like the others but I will stick to my guns:  within a year, 80% of LEGO investor newbies will have moved on to something else.  I'm just afraid of the damage to the secondary market that will be done in the mean time.

[Curtis]

The exact reason I have been reintroduced back into Lego. My kids. I have a 3 and a 5 year old, the five year old is playing with Lego's as I type. This site, along with investing in bricks, is also a great way to get kids involved in how a market works. The time spent building Lego's with my children is priceless, but allowing them to see how Lego's are invested in the future is educational in its own right.

I agree 100%. It's because of this that my risk is exactly zero and the reward is priceless. My son is 6 months and my daughter 3. If none of my "investment" sets sell so what, my children, nieces and nephews will enjoy them when they hit the right age. Chances are they will sell though, and if they sell for expected value, they will fund the rest of the collection and then some. The real value for someone in my position is that LEGO is an amazing tool for children who's parents don't let the TV do the parenting. I consider my fairly recent involvement in LEGO as amassing a large intellectual and creative bank account for the whole family. I've had a child on the edge of tears tell me "it's too hard to use my imagination" when I suggested they build something new out of a set. Broke my heart. If building LEGO with my children prevent that struggle then it was all worth it at twice the price.

What I'm trying to say is, bubble or not / investment reduction or not, I'm not going anywhere.

[Anakinisvader]

I think I realized (in the last 6-9 months) that I have more fun playing bets though on soccer/football than investing LEGO so LEGO sets only represent 20% of my money investment. But then again I am small time with around 3000$ invested all around and 5000 tied on Banks for risk free return type of investment lol

 

You really shouldn't use: tied on banks and risk free investment in the same sentence

[Alcarin]

You really shouldn't use: tied on banks and risk free investment in the same sentence

 

While recent events surely suggests otherwise (cyprus) my poor 5000$ are pretty safe in the bank i use (its the only one making profit in the whole region/country ...

 

So ye its risk free return really... unless cash goes down the toilet overall

[El Guapo]

I agree 100%. It's because of this that my risk is exactly zero and the reward is priceless. My son is 6 months and my daughter 3. If none of my "investment" sets sell so what, my children, nieces and nephews will enjoy them when they hit the right age. Chances are they will sell though, and if they sell for expected value, they will fund the rest of the collection and then some. The real value for someone in my position is that LEGO is an amazing tool for children who's parents don't let the TV do the parenting. I consider my fairly recent involvement in LEGO as amassing a large intellectual and creative bank account for the whole family. I've had a child on the edge of tears tell me "it's too hard to use my imagination" when I suggested they build something new out of a set. Broke my heart. If building LEGO with my children prevent that struggle then it was all worth it at twice the price.

What I'm trying to say is, bubble or not / investment reduction or not, I'm not going anywhere.

But what are you going to do if your sone comes up to you one day and says "Daddy, I want the new Kreo for my Birthday"?  Ha ha...just kidding, we know you will instill a healthy amount of contempt for non-Lego toys in your kids.  It has served me well. 

[brickolodon]

That's it.  No more LEGO for me, its all Mega Bloks, and Knex. 

 

Actually, Mos Eisley, you hit the nail on the head.  I have been trying to elude to this point without coming out and saying it but seem to get called a "bubble thread starter" or "chicken little sky is falling" person.  I have been doing this too long and have seen too much with other collectible markets.  I'm not saying this market will go bust like the others but I will stick to my guns:  within a year, 80% of LEGO investor newbies will have moved on to something else.  I'm just afraid of the damage to the secondary market that will be done in the mean time.

+1, agreed.......50% that's for sure and another 30% never even started as an "investor" ( buying 10 sets is nothing)

[Curtis]

But what are you going to do if your sone comes up to you one day and says "Daddy, I want the new Kreo for my Birthday"? Ha ha...just kidding, we know you will instill a healthy amount of contempt for non-Lego toys in your kids. It has served me well.

HAHA! That's easy. I'll send him to St. John's Military Academy. Problem solved!

[Mos_Eisley]

I highly respect Mos Eisley and his opinions on LEGO investing.  He is a valued member on this site as indicated by his Moderator status and I know he speaks from experience.  His collection far exceeds mine and he is one person I always look to for wise tips and comments.  But don't let his perspective dampen your view on LEGO investing.

 

Mos Eisley is a "one percenter."  In other words, he owns more LEGO sets than 99% of the AFOL population.  He is at the top of the LEGO investment food chain.  So what's my point?  My point is that  Mos Eisley has been doing this for quite some time, long before it was coined "LEGO investing."  He has seen the days where any person with a pulse could buy an exclusive LEGO set and flip it quickly for a profit.  His point of view is an extreme one, from the very top, so his risks are greater than most on this site.   With LEGO investing becoming more mainstream, it would appear to be more difficult to make quick profits, so I cannot blame him for being at least slightly pessimistic on the future of LEGO investing.  But is the pessimism really warranted for the average investor?

 

One only has to look at the recent Minecraft and SE Crawler as examples of the health of LEGO investing.  I know that Mos Eisley is referring to other large sets, like the Fire Brigade and Tower Bridge, when he speaks of the market being saturated with sets.  In the "good ole' days," those sets would be easy peasy LEGO investment winners, but with the mass amounts in storage across the world, who knows what will happen to these sets after EOL.  Also, with more restrictive rules from retailers, it is harder for the big time investor like Mos Eisley to buy multiple exclusive LEGO sets at discounted prices.  

 

But for the average LEGO investor, buying 20 of each LEGO set is not practical.  There are ample opportunities to make nice profits if you choose under the radar sets and on a smaller scale.  Who would have thought that back in 2007 that a rather unimpressive $89.99 set called Market Street would end up selling for $1300 six years later?   Maybe a handful of people, but point is that there are still Market Streets out there, you just have to be the one who is smart enough to find them.   Many long term LEGO investors have been spoiled by huge and easy profits, but there are still plenty of new and RETIRED sets that are viable investments.

 

I wrote about the Toy Story Construct-a-Zurg yesterday.  A year ago, it was the set with the worst CAGR in the entire catalog of LEGO sets, yet over the last six months, it appreciated over 40%.  Some smart people might have bought a couple and made some quick money.  This is just one example of many potential great investments out there.  It might be a little more difficult to predict winners and losers now and to make a quick buck, but the possibility is still there.  

 

Now I know what you are saying...Ed Mack owns a LEGO investing site, so his positive outlook is self serving.  Well, there might be a smidgen of truth to that, but I also know the impression that everyone owns 50 Fire Brigades, Haunted Houses and Tower Bridges is an exaggerated one.  I know that the internet enables people to lie and stretch the truth.  The perception that many members on this site go out and buy 10, 20 or 30 of each set is contradicted by actual sales data we see from LEGO, Amazon and eBay.  Just because you hear LEGO profits are up again, doesn't necessarily mean it is because of resellers and investors.  

 

In no way is this response an anti-Mos Eisley one.  I just wanted to explain where he is coming from and that many of you are not in the same boat as he is.  The smaller investor has more options and less risk, but there is still room to hit a home run on occasion.  Good luck...

Nice post, Ed.  I hope you know I mean no disrespect to the site or anyone who wants to invest in LEGO items.  I'll still be doing it, just not the way I was before.  2-3 years was an acceptable wait for me, but much past that changes my perspective.  I am not suggesting anyone else makes their investing decisions based on my opinions.

[DoNotInsertIntoMouth]

Nice post, Ed.  I hope you know I mean no disrespect to the site or anyone who wants to invest in LEGO items.  I'll still be doing it, just not the way I was before.  2-3 years was an acceptable wait for me, but much past that changes my perspective.  I am not suggesting anyone else makes their investing decisions based on my opinions.

 

With the way bonds and CDs are now, even making a 30% return on investment in 3 years isn't that bad, right? As long as you have fun.

[Darth_Raichu]

Nice post, Ed.  I hope you know I mean no disrespect to the site or anyone who wants to invest in LEGO items.  I'll still be doing it, just not the way I was before.  2-3 years was an acceptable wait for me, but much past that changes my perspective.  I am not suggesting anyone else makes their investing decisions based on my opinions.

I should have started my first reply to this thread with this: (better late than never )

 

Mos_Eisley, thank you for starting the topic.  What I gathered from your posts was a savvy businessman who recognized the changing marketplace, assessed his financial goals, and adjusted his strategy accordingly.  This kind of reality check is something I need to develop a habit of in my own business. So thanks again for the insights.

[Studebricker]

Interesting topic, and I pretty much agree when people say that a lot of new investors will soon be dropping out due to time, space, etc.  I will keep selling (partly because I have to support my Lego habit), but I have modified my buying habits also.

 

I read all the posts but did not see anyone mention what I think is key, and that is, the so-called Great Recession, and how it has lingered far longer than most of us would have imagined.  I have noticed the past couple of years that most of my shipments are going to, let's just say, upper class areas of the country.  I think a lot of middle America just doesn't have the disposable income to purchase retired Lego sets.  Perhaps it's just an anomoly, as I've never seen anyone mention a demographic shift in their customers.

 

If the economy came roaring back next year, I think it could possibly support all the new investors jumping in, but as it stands I see a lot of new people dropping out when they realize Lego investing is not as easy as it seems.

[MartinP]

With the way bonds and CDs are now, even making a 30% return on investment in 3 years isn't that bad, right? As long as you have fun.

That isn't bad. I watched some stocks for about 1 year, and if I bought them, I would have had a 22% return in a year.

As for Lego investing, many people will drop out of it because it is too hard for them and they cannot wait long enough to make a big enough profit.

[Alcarin]

That isn't bad. I watched some stocks for about 1 year, and if I bought them, I would have had a 22% return in a year.

As for Lego investing, many people will drop out of it because it is too hard for them and they cannot wait long enough to make a big enough profit.

 

Possibly...

 

I myself are limiting myself to about 1000$ invested at any point of my LEGO investing career... currently I am at 750$ with about 25% ROI on average but that is due to 30% of sets still not EOLed and have negative values.

 

 

 

I might drop out for a bit or only keep 3 sets for really long long term (5+ years) and just linger and enjoy the show whatever side might happen. 

 

Not enough time to invest LEGO with gambling and other stuff lol

 

 

 

But I think personally We came to a times of change... alot will change in the next 24 months is what I predict... And the announcement of that is LEGO banning people from their shops among of other things...

[Guest ph4tb0i]

Interesting topic, and I pretty much agree when people say that a lot of new investors will soon be dropping out due to time, space, etc.  I will keep selling (partly because I have to support my Lego habit), but I have modified my buying habits also.

 

I read all the posts but did not see anyone mention what I think is key, and that is, the so-called Great Recession, and how it has lingered far longer than most of us would have imagined.  I have noticed the past couple of years that most of my shipments are going to, let's just say, upper class areas of the country.  I think a lot of middle America just doesn't have the disposable income to purchase retired Lego sets.  Perhaps it's just an anomoly, as I've never seen anyone mention a demographic shift in their customers.

 

If the economy came roaring back next year, I think it could possibly support all the new investors jumping in, but as it stands I see a lot of new people dropping out when they realize Lego investing is not as easy as it seems.

 

I can say I've "partially" dropped out due to the fact that gains take a long time with Lego, so they're more like my long term investments rather than my flips. But it's definitely due to BP that I started becoming an online merchant rather than just for the annual garage sale I put out. 

 

To put it into perspective, I used to have no problems dropping 300 dollars onto something like a DS if it got to that. But by sinking 300 into something like that, I would capital to buy things at other places. An example is an auction yesterday where 300 dollars got me: 

 

8 pairs of new in tag Women's Lissette Pants. 

2 pairs of new club Monaco Pants

1 pair of new Ann Taylor Heels (will have a hard time prying this off of Wife's hands lol). 

4 Lenovo workstation docks

1 bag of brand new OEM yamaha bike parts. 

1 Macbook Pro Retina LCD

1 new Timbuk2 Backpack

1 new Wineguard Pre-Amp. 

+ misc items. 

 

Yes it would be more work to put that all up on ebay to sell compared to letting a super big lego set appreciate (or smaller sets), but I'll probably realize a significantly bigger profit than if I were to invest into Lego. TL;DR BP made me diversify and helped me look for way to make more money besides Lego.

[sadowsk1]

Any other people retiring soon?

[MartinP]

Any other people retiring soon?

I am not retiring, I am just taking a long break from investing. I am starting up high school, and I will not have a lot of time to look at deals, buy, and sell sets. I will occasionally do it, but not in the magnitude I have been doing before. After I am done with high school I will start up again hopefully. If the dark ages, doesn't get me,

[sadowsk1]

Hibernation then?

[MartinP]

Hibernation then?

Yep. For about four years.

[Fcbarcelona101]

I am not reitiring, but my strategy has changed significantly since I started...

[chinothegeeko]

I've cut way back on lego purchases. Not many deals for me. Have been buying other stuff and have tons to sell this x-mas. 

[turbomattk]

I am not reitiring, but my strategy has changed significantly since I started...

Care to elaborate on what your initial strategy was and what made you change?