The Lunacy of Lego Investors

[danth]

So now scalpers force you to buy LEGO at gunpoint, or do you get the free will to decide how you're going to spend your money? Do you NOT see the difference? The comparison is absurd.

All I'm hearing from you is "Waah, Danth is making absurd comparisons." Have you ever though about manning up, or thinking like an adult?

[UsernameMDM]

I don't buy this argument because it can be applied to anything.

Someone came up to you on the street and beat you with a baseball bat? Waaah, quit whining. Man up and learn how to fight and protect yourself. You could have beat him with a bat before he got you, but you didn't.

Someone broke into your house, stole all your Legos, then burned the place down? Waah, quit whining, you should have had better security and had your house built out of asbestos.

It's like you don't believe in the concept of someone doing something bad to other people, because waaah, quit whining, those people should just man up.

BWAHAHAHAHAHAAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! :laugh: :laugh:

But, yeah, pretty much. You are responsible for yourself, no matter what anyone else does. What a unique and utter foreign concept!

I thought we were talking about scalpers? You know, other people.

So now scalpers force you to buy LEGO at gunpoint, or do you get the free will to decide how you're going to spend your money? Do you NOT see the difference? The comparison is absurd.

(not you fred)

All I'm hearing from you is "Waah, Danth is making absurd comparisons." Have you ever though about manning up, or thinking like an adult?

That's pretty much what we are doing here: advocating for people to be responsible for their decisions and not blaming others. Novel, really.

Edited May 30, 2014 by UsernameMDM

[danth]

But, yeah, pretty much. You are responsible for yourself, no matter what anyone else does. What a unique and utter foreign concept!

I'm going to man up and take responsibility for my own happiness. Do you know how? By laughing at you for agreeing with what I said and then calling me stupid for saying it. :D Classic!

[UsernameMDM]

I'm going to man up and take responsibility for my own happiness. Do you know how? By laughing at you for agreeing with what I said and then calling me stupid for saying it. :D Classic!

Context. It's all about context. Something it seems you don't have a grasp of in this situation, unless you are just a poor written communicator.

The comparisons you made are completely out of context in this situation, but the overall statement that we, as individual, are responsible for ourselves is true. I think it's funny you resorted to those examples and sarcasm to try to paint Lego resellers (or greedy, evil scalpers) as some sort of ruthless criminal enterprise that is threatening the very fabric of the Lego hobby.

[emilstorm]

@danth, I think everybody but you got the point...

[danth]

The comparisons you made are completely out of context in this situation, but the overall statement that we, as individual, are responsible for ourselves is true. I think it's funny you resorted to those examples and sarcasm to try to paint Lego resellers (or greedy, evil scalpers) as some sort of ruthless criminal enterprise that is threatening the very fabric of the Lego hobby.

What you're missing is that your actions also affect other people. If a scalper buys up all the local supply, ensuring that kids who wanted that set won't get it, guess what? He has just negatively affected other people. It's not illegal, it doesn't make him evil, but it is a dick move.

Now put that together with your ideas of responsibility: Scalpers are responsible for their actions, too. If a scalper buys up all the local supply of something to drive up prices, he is responsible for his negative effect on the hobby. Nobody else.

So stop trying to blame US for the actions of scalpers.

Hopefully you now realize that my examples were intentionally absurd to illustrate that the person negatively affecting others is also responsible for his actions.

Edited May 30, 2014 by danth

[SMC]

I don't really get it, if a Lego set is for sale you can buy it at the best price you can find, if it is retired and there are no people buying to sell on at a profit then you can only get one bnib if someone buys it and changes there mind so there wont be a lot out there at all.

[fred67]

@UsernameMDM: I think the answer is a little of both... with a little lack of maturity thrown in for good measure.

[emilstorm]

What you're missing is that your actions also affect other people. If a scalper buys up all the local supply, ensuring that kids who wanted that set won't get it, guess what? He has just negatively affected other people. It's not illegal, it doesn't make him evil, but it is a dick move.

Now put that together with your ideas of responsibility: Scalpers are responsible for their actions, too. If a scalper buys up all the local supply of something to drive up prices, he is responsible for his negative effect on the hobby. Nobody else.

So stop trying to blame US for the actions of scalpers.

Hopefully you now realize that my examples were intentionally absurd to illustrate that the person negatively affecting others is also responsible for his actions.

Isn't this starting to get blown a little out of proportions? How big is this problem in real life? And isn't this mostly happening to sets mostly bought by adults?

[UsernameMDM]

What you're missing is that your actions also affect other people. If a scalper buys up all the local supply, ensuring that kids who wanted that set won't get it, guess what? He has just negatively affected other people. It's not illegal, it doesn't make him evil, but it is a dick move.

Now put that together with your ideas of responsibility: Scalpers are responsible for their actions, too. If a scalper buys up all the local supply of something to drive up prices, he is responsible for his negative effect on the hobby. Nobody else.

So stop trying to blame US for the actions of scalpers.

Hopefully you now realize that my examples were intentionally absurd to illustrate that the person negatively affecting others is also responsible for his actions.

Lots of needy kids buying 100$+ sets aimed at collector's & adult builders?

No buyers = no 'scalpers'. Again, they are only charging prices buyers are willing to pay. If anything, blame the collectors for facilitating the high prices.

@UsernameMDM: I think the answer is a little of both... with a little lack of maturity thrown in for good measure.

Yup, most def.

Isn't this starting to get blown a little out of proportions? How big is this problem in real life? And isn't this mostly happening to sets mostly bought by adults?

Whatevs! THIS.IS.LEGO!

Edited May 30, 2014 by UsernameMDM

[TheLegoDr]

I can understand the logic that you buy what you are comfortable with. If the prices seem high, but someone is willing to pay it, then the sets will sell at those prices. You do have to consider, this is a child's toy, yet the adults are the people most often buying them (parents, grandparents, AFOLs, etc). Yes, kids buy their own toys after they have saved up, but most of the time they drool over the large sets they can't afford and the parents either buy them or don't buy them. I've read on this forum many times about how as kids we wanted certain sets and never got them and then as adults we found them in the aftermarket or bricklinked them. Without resellers we wouldn't be able to do that. I'm not condoning anyone's business practice, but that is a fact.

It is the same way now. If a kid wants this large exclusive set, chances are they won't be able to afford it anyway. If you are going to blame anyone, blame TLG for releasing the interesting large scale (read: expensive) sets that kids likely can't have and only adults can afford.

I buy what I want, when I am able to. Just make sure you have all other financial obligations in order and buy what you can. I know lots of people who "over-pay" because their financial situation allows them to and they still feel like they got a good deal. It's all about perspective. If I am only willing to spend $100 on a $150 set, chances are I will be disappointed because sales don't happen like that too often. If I'm able to sit around and wait for a good sale that I feel is acceptable, then I still get the set at a price I find reasonable and it's considered a win.

Edit: To follow up, if I wait for that good sale, but it never comes and I miss out on the set altogether, then it must not have meant as much to me as I originally thought. If I truly wanted the set, I probably would have paid full price for it. But since I buy mostly just exclusives, I know they tend to stick around a bit longer.

The main problem are the sets that have a short production run (the Monster Fighter Zombies set). I think it was available for 2 months and then disappeared. Luckily I bought one right away and didn't miss out, but there are those situations where it isn't "scalpers" from what I can tell. Just a hot seller with a short production run and they weren't able to justify a second production run, I assume because of the time of year it came out.

Edited May 30, 2014 by TheLegoDr

[Doom2099]

This has been an interesting thread!

Coming out of my dark ages (again) recently, I couldn't believe how much recently retired sets were selling for. It's easy to find people online on all sorts of sites selling the Medieval Market or Maersk Train for $300 for better or for worse.

Though I may be disappointed by the prices, the one thing I can say with certainty is that I'd rather have the option than not. Now I'm one click away from buying any set ever on Bricklink or eBay, if I decide the price is worth it. Can you imagine in 1995 deciding "I want to buy the 7745 High Speed Train!" Where would you go, besides asking around, or desperately searching at garage sales?

I think the bigger issue is Lego having the ability to rerelease kits at any time. We've already seen different takes on this, like continuously updated X-Wings and other popular Star Wars vehicles. Or the Legends line with faithful recreations, and one-offs like Enchanted Island and Century Skyway.

As Lego has to do is drop the bricks into a new box, so when they see the demand for older sets and all the profits going to resellers, why not just sell them again?

[Bobskink]

Interesting topic indeed. Don't have much to ad. I also don't really like those reselers/investors, but collectors should know that by now that you have 2 years to buy a set, if you really want it, don't wait and buy it straight away, don't give those reselers a chanse.

Couldn't we spice this topic up with a poll?

[Slobey]

At the end of the day if you don't like the prices don't buy... As Bobskink says you have plenty of time to buy whatever set you want at market price. If people want to hoard sets to sell later at a profit, then good luck to them. The are the ones taking the risk of storing sets for years at a time.

I thnk as AFOLs we have to get out of the mindset that resellers must sell to us at or below market price.

[human panda]

Being a toy captialist, I'm not ashamed of reselling old retired sets, I was smart enough to see the need at the time I was out getting the misb sets I couldn't afford when younger, I have no issue storing sets in a climated control storage room at home for later sale. I do think some usa and european seller these days do take the piss out of buyers with the high prices retired sets are commanding these days due in part to there economies being in the toilet, people are supplementing there incomes reselling. I've always priced lower then most on ebay and the mean avg off bricklink, alot of ebay buyers are unware of bricklink and so items as sold quick not hanging around. I have no issue in "hordering" sets until the time comes to sell them to people who missed out the first time round for what ever reason, also it helps living where I live I can see how the usa and euro markets are trending and the fact lego stocks my country last with there product means I can take advantage of what AFOL are after and store sales when other parts of the world are out of stock . Also I might add and making a good profit on it to. It's help paid for the deposit on a house and the extras in life, you might not like it but our hobby we live is a capital consumer western life style it's a want not a need, fact of life harden up.

[Laphroag]

Though I may be disappointed by the prices, the one thing I can say with certainty is that I'd rather have the option than not. Now I'm one click away from buying any set ever on Bricklink or eBay, if I decide the price is worth it. Can you imagine in 1995 deciding "I want to buy the 7745 High Speed Train!" Where would you go, besides asking around, or desperately searching at garage sales?

Interesting discussion, but this basically sums up my own view of it. Sure, there will probably always be those who try to artificially increase prizes and fraudulent resellers. But that's the prize you pay for the opportunity of getting retired sets. This is not different from any other hobby that includes buying collectibles (I think, I don't collect anything else really).

[Phrea]

if you look at that video he CLEARLY states that they are for the Philly Brick Fest GIVEAWAY. and he is not going to part them out.

You should really watch the video again or at least 1 hour and 4 minutes in where he says what the bags are for.

EDIT:

I have talked to Chris about his video mentioned above, and this is what he wanted you all to know:

Hey all, that YouTube video in question is mine. 4 times per year, Target cuts the price on seasonal polybags by 50%. The company I work for who runs Brick Fest Live and Philly Brick Fest goes to all of the Targets in our area and buys what we live to call "#allthebags." We then use them for games and giveaways at our conventions. By no means do we sell them or part them out.

Fair enough, I forgot about that bit.

But I still think some kids will be very disappointed tho.

[legoman666]

I'm what most of you would consider a casual Lego investor mixed with a hobbyist. If I see sets on clearance at retail stores or online, I buy as many as I can. About 80% of the time, I open these sets, put the minifigs together to sell on eBay, and keep the pieces for my MOCs. I sell the figs at the current going rate. Sometimes I end up making money over what I paid for the set. Sometimes I break even. Sometimes I lose money. Regardless of the outcome, it doesn't matter to me because I end up with a bunch of brick that I either paid very little for, paid nothing for, or got paid for. Win-win-win. Plus, if someone on eBay can buy my minifig for $5 rather than the whole set for $40, I'm sure he's happy too. I also apply the same method to buying large lots from eBay and Craigslist. For example, a woman sold me 1 Fire Brigade, 1 Green Grocer, 1 Cafe Corner, 1 Town Hall , 2 Pet Shops, 1 Market Street, 1 Palace Cinema and 2 Grand Emporiums and about 50-100 other less valuable sets.... all for $700 USD. It took 2 trips to get it all home. I sold $700 of the less valuable sets on eBay to cover my purchase price and now I own every single modular released and it didn't cost me a dime.

On the other hand, occasionally, I will buy multiples of a set for the explicit purpose of reselling later. You all would call this investing. Typically I do this when sets are nearing their EOL, like the most recent Harry Potter sets did ~1 year ago. I just sold them recently to help pay for the down payment on a house. I made between 50% to 300% profit on all of them and I only held on to them for 1-2 years. The thing that blew my mind is when I sold every piece unique to the Grand Carousel for $425. That included the 48x48 green baseplate, the cloth sails, the sound brick (valued at $100! WTF!) and all of the pieces with stickers. It was less than 100 pieces. I was absolutely blown away that someone paid that much for the lot.

Anyway, if people didn't pay for these things, the sellers wouldn't be here trying to make a buck. They are fulfilling a market niche, if Lego gave a shit, they'd re-release old sets occasionally. Clearly they do not, seeing as how there have been .... 10? http://lego.wikia.com/wiki/Legends sets that saw an identical re-release years after their original. As for the limited run sets I've seen people complaining about in this thread, a la 41999, the Mars Rover and such, if Lego cared, they would have released more after the initial run sold out, like they did for Minecraft.

[SuvieD]

Buy a ton, sell a bunch, enjoy almost none. That was my LEGO motto for years without even realizing it. This is why I rarely do much with LEGO and certainly have not done much for three or four years. It is not investors or scalpers or anything like that, it is taking what was once a joyful hobby and monetizing every aspect of it to the point that I can't build a MOC without having little $ in my mind float over the pieces like some crazy google glass Twilight Zone episode.

I just want my LEGO to be LEGO again!

This whole topic drives me a little nuts. When I was little I would practically drool over the LEGO booklets advertising all the newest sets. I would make wish lists of the sets I would want and every once in a while fantasized about winning the Toys R Us shopping spree in which I would sprint to the LEGO aisle and load that cart down to overflowing. But . . . somewhere in all that I still spent hours playing with my blocks rather than just wishing for them. After years of finding ways to fill up those wish lists as they grew and changed with me, I found that LEGO as a hobby died and hocking plastic blocks had become my part time job. If that is okay for you guys then have at it. It was insanity for me. I kept thinking if I could sell a little more or get some extra sets on clearance to sell the joy of the hobby would return. It was killing it. Like a fire nearly snuffed out, I have had to tend it gently for a while now. I don't want it to die, I an not ready for that part of me to end.

I can honestly say that my entire collection of LEGO is either "paid" for or "free" depending on how you look at it after selling stuff off for years. I am a #3 type of seller. Or at least I was. I have more than enough LEGO to be content (a large basement roomful to be exact) and anything I buy going forward will be fairly sparse. I think I would rather trade than deal with the crazy that LEGO resells for.

The bit that always bothered me was in talking with someone that has the $ in their eyes. I want to find a few people who will trade or sell parts they don't want for what it cost them not what they can make off of them. More of a community of builders built on friendship rather than the business that it is lately. People like that seem hard to find. I am not saying I wouldn't or won't buy up some sets to scavenge parts I want and sell off the extras hoping to break even or with a pinch of profit. I did just buy 7 LotR sets with that purpose. I would just rather buy them and trade parts with someone who wanted what I didn't and might have something they could trade in return.

As a recovering investor, I hope to enjoy this hobby for years to come and I look forward to sharing it with my still too young children. I just want them to enjoy building and imagination like I did when I was little rather than training up little investors with their own little $ floating in front of their eyes. Buy a little, sell a little, enjoy a lot! is my new motto.

[VK-318]

I have recently begun Bricklinking parts for a MOC/Mod that happens to require some fairly rare parts and parts that have not been released in sets for many years. This project would not have been possible without Lego investors. On the whole, this has worked well; most parts cost only a couple of cents. A couple are so rare that they cost over ten dollars apiece. But - they are available, thanks to Lego investors who buy these sets and hold onto them to sell the parts later. Could this work better? Certainly I would like not to have to spend $50 on three dark red large motorcycle wheels. Certainly it would be nice to pay less for parts. But without these parts dealers, my project would be impossible, so I complain very, very quietly. There's no such thing as a free lunch: investing in Lego's has to be profitable for people to do it, so if we want to be able to purchase these parts after Lego discontinues them, we have to be willing to put up with investors.

[feed]

Little anecdote for you. My girlfriend is an underwriter for a high end insurance company, the kind of company that usually insures Maseratis and Mayfair flats, that sort of thing. A few months ago she was asked for a quote to insurance a £1Million of Lego. All box fresh. As best as I could make out, this was all star wars and most likely all UCS, but what I couldn’t figure out was if this was RRP or current market value.

Point is there is some serious money involved in “investing in Lego”. And the people making serious money are those with serious money to start with. The guys buying a handful of cuusoo, for a Christmas flip are picking at the crumbs.

And the reason why real money is involved is that the margins are massive. I work in corporate finance and have invested and speculated in pretty much every market you could think of over the last 15 years or so, from dotcom through to property. For a number of years I was a semi-professional gambler, until the books all got wise, but that’s another story. And I have never seen a market that’s so soft, so easy to operate in and that is as lucrative as the Lego secondary market. Whether it’s parting out, flipping this seasons must have set or fig, the buy and hold, or counterfeiting/cloning.

A household named brand; that in its very nature is family friendly, it’s unregulated, there is no barrier to entry and has a massive market with massive demand.

The margins will shrink over time, as more people become aware and are prepared to operate for less. But for now, expect the resellers and investors to increase.

I came to Lego due to the profit opportunities, but it’s not why I’m here (on EuroBricks), and that’s probably something you should consider. How many people end up becoming fans after starting on the investment path?

[SMC]

Maybe the topic should be The Lunacy of Lego Buyers

[emilstorm]

Maybe the topic should be The Lunacy of Lego Buyers

I agree

Little anecdote for you. My girlfriend is an underwriter for a high end insurance company, the kind of company that usually insures Maseratis and Mayfair flats, that sort of thing. A few months ago she was asked for a quote to insurance a £1Million of Lego. All box fresh. As best as I could make out, this was all star wars and most likely all UCS, but what I couldn’t figure out was if this was RRP or current market value.

This insurance story sonuds really weird. Somebody buying 1 million pounds worth of Lego is not going to sell it set by set on ebay or BL. It must be a regular retailer. But I have never heard of one insuring a specific part of their inventory that way. And I am pretty sure it would have to be current market value if the insurance company has any sense to it. It could be some really eccentric collector, but he would have to have a shizzleload of doubles in his collection to get to a million pounds. To the best of my knowledge there are no SW product so rare or special that an insurance company would insure it to anything above current market value.

[feed]

I agree

This insurance story sonuds really weird. Somebody buying 1 million pounds worth of Lego is not going to sell it set by set on ebay or BL. It must be a regular retailer. But I have never heard of one insuring a specific part of their inventory that way. And I am pretty sure it would have to be current market value if the insurance company has any sense to it. It could be some really eccentric collector, but he would have to have a shizzleload of doubles in his collection to get to a million pounds. To the best of my knowledge there are no SW product so rare or special that an insurance company would insure it to anything above current market value.

The company declined, as it’s not the sort of thing they cover, which is why I didn’t get any more detail.

But it’s unlikely this was a collector, the customer base for the company is very much the kind of people that will sit on wine/fine art/antiques for ten/twenty years and then sell it to someone who would sell it retail. Pure speculative investments, with the search for yield what it is, it’s no surprise.

[emilstorm]

Well I say, good luck to this investor, I think he will need it. I am pretty sure any increase in value will pretty much be eaten up by having an insurance policy running for that long and expenses for storage and the likes. And if your sales taxes are anything like DK, he will finance a whole lot of school books :) I would assume that somebody making that kind of investment for resell purpose would have to have his business registered, so he probably won't be able to make his way around taxes. And I just don't think SW value will increase so much that this size of investment will be worthwhile. But who knows :)