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A sad tale of how other collectibles bubbles have burst...

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  • VorpalRyuVorpalRyu Member Posts: 2,318
    Will be interesting to see where things lead in the next few years, I suspect unlike many other products that have gone through this cycle, the Lego market will be more likely recover quickly.
  • catwranglercatwrangler Member Posts: 1,894
    edited June 2016
    CCC said:
    I find it a little sad that the lego that gets played with most in out house is:

    Random stuff I buy on BL (two types, general box and castle box)
    Classic (bucket) boxes, mainly mixed in with general box above
    PAB cup finds, again mainly mixed into general box above

    The sets (many of them) get built, and occasionally played with, but not much. Otherwise, the play seems to be in the building and then they are just displayed. In this sense the best value sets are the 3-in-1 creator ones, as at least they get broken down and rebuilt.

    Where the general bucket lego is what comes out most days. The kids build, think, take apart, think, rebuild, think, modify, ....

    One Christmas I bought about £30 worth of greys and other castle colours, bricks, doors, rock pieces, panels, etc. And a dozen castle soldiers, king and queen, etc. That has been played with so much more than any set. I think just because there is no right way, they don't care how it is built and always try to improve each time it gets destroyed.

    I was like that as a kid - I played imaginary games with other toys (particularly my Thundercats and StarCom collections), but the real appeal of Lego was in building - first the set, and then (mostly) MOCs. I only realised this was unusual while playing with a friend when we were about ten - after we'd built our spaceships, he wanted to play with them and I just wanted to build something new. "You're supposed to play with it - it even says in the ads, 'It's a new toy every day,'" he said reprovingly. 

    Mind you, that was around the time I noticed that when I built a really cool spaceship, it just happened to get smashed up by his in the ensuing game, so maybe there was method in my madness...
  • piratemania7piratemania7 Member Posts: 2,146
    ^I just remember building set after set and everything collecting dust - even then I was more into displaying more than anything.  Although, I did take my pirate sets outside in the summer and placed them amongst the greenery pretending to be on a stranded island somewhere...
    catwrangler
  • KingAlanIKingAlanI Member Posts: 2,342
    TLG seems to be managing their brand pretty intelligently, similar for Hasbro/Wizards of the Coast and Magic the Gathering.
    The baseball card bubble burst because around 1990 most companies were vastly overprinting mediocre cards.
    I got first generation Pokemon cards on clearance, but that didn't seem to rise and fall as dramatically as some bubbles.
  • PeteMPeteM Member Posts: 447
    If a collecting bubble bursts, the value shrinks back to that of what 'the thing' can be used for. So to use the example from another thread, if the collectable value of #10197 Fire Brigade collapses as a set, it will fall back to the value of the 2230 bricks inside the box which, while Lego continue to make compatible system, will always be something. However, if the value of #6176782 Space Slug collapses back to the value of the bricks in the box because no-one wants to collect it, it has further to fall and less worth due to it being small and mostly common pieces. While it would be unfortunate, it isn't really comparable to most other 'collectable' brands and products.

    The other thing is that, on the whole (there are exceptions) Lego isn't producing a collectable product in itself - their product will be designed and priced to what the market can bear and, on the whole, they seem to get it right (again, some exceptions!). I'm not sure of their impact on sales figures, but I imagine that any collectable market bubbles that burst will primarily hurt resellers rather than TLG.
  • CCCCCC Member Posts: 20,526
    ^ if the bubble bursts, then parts may also drop in price too.

  • dougtsdougts Member Posts: 4,110
    edited June 2016
    ^ sure, but unless LEGO changes the system, or people stop wanting the parts, that value is going to be something greater than $0.00 per piece.

    It's where the comparison to comic books, baseball cards, and beanie babies falls far short.  The baseline value of the component parts of those items is essentially $0.00.  While it is easy to envision scenarios where the value of boxed sets drop as low as 50%-75% of RRP, it is hard to envision a scenario, outside of complete global economic meltdown, where the value of the parts themselves ever drops below, say 50%, of the RRP of the set.  

    So, unless you are investing by buying sets at 3x RRP, you are probably pretty well insulated from  huge losses.  You might not make gains, and you might take small losses, but there isn't a realistic scenario where that set drops to $0.00 in value.
    pharmjodMattDawsonBumblepantsBrickDancerTheLoneTensorMattsWhatDedgecko
  • pharmjodpharmjod Member Posts: 2,916
    @dougts I think you just summed it up perfectly. As always, purchase price is more important than sale price when it comes to risk and rewards in this game.
  • piratemania7piratemania7 Member Posts: 2,146
    It's whole argument I have heard before about those who are even on the fence about opening a set or not; for fear of not recouping what they bought the set for if they go to resell it.  As far as I am concerned, even if you open a set and build it (thus enjoy it as LEGO intended) and keep the box, instructions and everything really nice then you should still recoup most of was spent on the set (again, varying on what you bought it for, discounts, etc.)
    Mordoor
  • CCCCCC Member Posts: 20,526
    dougts said:
    ^ sure, but unless LEGO changes the system, or people stop wanting the parts, that value is going to be something greater than $0.00 per piece.

    It's where the comparison to comic books, baseball cards, and beanie babies falls far short.  The baseline value of the component parts of those items is essentially $0.00.  While it is easy to envision scenarios where the value of boxed sets drop as low as 50%-75% of RRP, it is hard to envision a scenario, outside of complete global economic meltdown, where the value of the parts themselves ever drops below, say 50%, of the RRP of the set. 
    If the bubble has burst, then that suggests that people in general stop wanting lego.  There will of course still be fans wanting lego, but if lego are mass producing bricks (at the same rate as now) that few people want then prices of new sets will drop AND so will the variety of new sets. Plus the market will also be flooded with cheap sets / parts from people (including but not exclusively resellers) wanting to get rid of what they have. So while bricks may still be worth a percentage of RRP, RRP itself may drop.
  • dougtsdougts Member Posts: 4,110
    Right, but even in that scenario buying a $100 RRP set for $75 is going to leave you pretty well insulated from a huge loss. Even if the set never appreciates and later sells for only $50, you've only taken a 33% loss on your investment. It's a far far far cry from paying hundreds of dollars for a single beanie baby that later becomes worth $1 or even paying $15 for a single baseball card that devalues to a $1

    Lego would have to drop in worth to the point of only being able to sell the ABS for slag to be a comparable situation.

    of course it's a different game if you are buying FROM the aftermarket at 2 to 3 times RRP. Much riskier there. Speaking of, anyone check in on the guy who bought up hundreds of special edition crawlers at 3x RRP? 
  • TheLoneTensorTheLoneTensor Member Posts: 3,937
    dougts said:

    it is hard to envision a scenario, outside of complete global economic meltdown, where the value of the parts themselves ever drops below, say 50%, of the RRP of the set.
    You need to extend that to the zombie apocalypse, where in fact the "value" would go up.  Lego could become near currency.  Seriously, TV, radio, internet all gone?  What else are you going to want to do, read?  Ha.
    CCC said:

    If the bubble has burst, then that suggests that people in general stop wanting lego.
    I don't see how it would suggest that at all.  All it would suggest is that they aren't going to pay as much for it, which is why inflated things (like the UCS MF, exclusive figs, et al) are risky, and could plummet instantly if there were a bubble bursting of some kind.  That FB in your closet is relatively safe.
    MattDawson
  • nhyonenhyone Member Posts: 145
    MrShinyAndNew said:

    Tl;DR: Lego doesn't act like a company that wants to encourage, or even cares about, the secondary market.

    IMO, TLG has done quite a few things in recent years to "combat" the secondary market.

    There has been an explosion of sets and themes. It is hard to keep current. Of course, that still doesn't help you if you just need to have a discontinued set/theme.

    There are now bigger and more detailed sets. There are more and more sets over, say US$120 (pick your own number), which are aimed at AFOLs. Sets like the US$350 GBHQ exist because TLG knows AFOLs are willing to pay for it (as evidenced by secondary market prices).

    Some Exclusive sets are also kept way past their expected shelf life. This is a pleasant surprise for me cos some of the 2013 sets are still available -- I missed them in a mini-dark age -- and I'll be getting them slowly.
    MattDawsondougts
  • CCCCCC Member Posts: 20,526
    edited June 2016
    TheLoneTensor said:

    CCC said:

    If the bubble has burst, then that suggests that people in general stop wanting lego.
    I don't see how it would suggest that at all.  All it would suggest is that they aren't going to pay as much for it, which is why inflated things (like the UCS MF, exclusive figs, et al) are risky, and could plummet instantly if there were a bubble bursting of some kind.  That FB in your closet is relatively safe.
    I guess it is necessary to define what "the bubble" is. Is it (i) any LEGO items bought on the primary market for investment / later resale, (ii) just LEGO items that have already risen above RRP on the secondary market, (iii) as (ii) but only those that have risen significantly above RRP, (iv) any LEGO that has been bought on the secondary market for later resale on the secondary market (as in tulip-mania) or (v) a more general popular craze that dies down, affecting not only the people investing but also the company (over)producing the product. All of these are currently going on at the moment. While there might be a crash at the higher end of the secondary market if lego do something like re-release the high value retired sets, I cannot see the whole secondary market crashing without the general popularity of lego itself crashing. If lego remains popular, then people will always want things that they missed if they are not available. There is then the problem of a cut-off of what is in the bubble and what isn't. If LEGO re-release the UCS MF (and re-release it exactly, so nobody could tell the difference) then its secondary market price will drop. Has that burst the bubble? If they re-release a similar model, then the price will drop, but probably not as much. Yet if prices for CC (and many other sets) remain high then the bubble is not burst, it is just the UCS MF bubble that will have burst.

    In that sense, every set is its own bubble. And in fact, we have seen the effects of such a bubble burst recently, with the re-release of the CMF chicken man. His price has plummeted on the secondary market, yet the prices of the bumblebee, bunny guy, etc have remained stable. It was a small, individual bubble burst that has had no effect on very similar sets.

    The only way I see the whole LEGO bubble can burst is if LEGO does something that makes LEGO unpopular in general.
    catwrangler
  • TigerMothTigerMoth Member Posts: 2,343
    CCC said:

    I cannot see the whole secondary market crashing without the general popularity of lego itself crashing.
    If the clones up their game sufficiently, elevated prices will be less sustainable without  anything crashing. Some people will remain die-hard supporters of the brand, but many will not. Attitudes are changing - slowly, but a lot faster than might have been imagined a few years ago.
    catwranglerRecce
  • VenunderVenunder Member Posts: 2,659
    Something which has not be mentioned very often is the change in society over time.
    As middle aged AFOL I can remember when toys were quite a scarce commodity for most of society, who generally had less disposable income. Although there were also far fewer sets produced my family certainly never had enough spare money to buy them all.
    Getting Lego was quite difficult because it was expensive. 

    This has changed over time, In the 80's, 90's and millenium there were more people and more people had more disposable income, but there were also more Lego sets to buy. 
    So more people were buying lego for their children, children who have now grown up to be AFOL's and parents who buy lego for their children.
    The Lego market is not a bubble but an expanding spiral.
    The Market for Lego has expanded with the population who can afford to buy more of it.
    As the world becomes progressively less poor. The market for all luxuries including Lego is rising. 

    TLG have spotted this and are filling the market with hundreds of new products each year and yet this is still not enough to fill the demand?

    In 10 years time the market for Lego will be even stronger because more of the world will be less poor and the children who have lego now will be AFOL's or parents who buy lego for their own children.

    The only end to this will be ?


    catwrangler
  • CCCCCC Member Posts: 20,526
    edited June 2016
    TigerMoth said:
    CCC said:

    I cannot see the whole secondary market crashing without the general popularity of lego itself crashing.
    If the clones up their game sufficiently, elevated prices will be less sustainable without  anything crashing. Some people will remain die-hard supporters of the brand, but many will not. Attitudes are changing - slowly, but a lot faster than might have been imagined a few years ago.
    So how much does a less-sustainable elevated price have to drop before it is considered a crash?

    I cannot see clone brands reproducing, for example, The Zombies. And even if they did, how many collectors would buy that and feel they had a complete collection? I doubt very many of those sold now are going to kids as play objects. So I don't think the clones will have much effect on the sets market.

    For minifigs, I agree that clones will have an effect on the secondary market. But only really on the cheaper (as in from regular retail sets) figures. These sort of figures are significantly cheaper if you buy the clones, so this affects set sales and secondary market sales of those figures. Many kids (and adults) want the general release figures and are possibly willing to pay the $20 or whatever for those figures. Thus being able to buy a fake $20 figure for $1 does affect the market. However, I don't believe that clones really affect the market for the exclusive figures. Although these figures might be cloned, I don't think anyone buying the cloned version was ever really in the significantly different market for the original. Kids and adults may want the exclusives (just as they want the general release figures), but if they are not willing to pay the $500 asking prices for those figures, then they are not really in the market for originals anyway. So in that case, clones have little effect on the market for the originals. Thus being able to but a fake $500 figure for $1 doesn't affect the market, as they were never in the market in the first place.

  • cheshirecatcheshirecat Member Posts: 5,331
    @Venunder  I'm not so sure, I think that we might be at the peak of LEGO's popularity - although that's little more than a gut feel.

    I also think that LEGO has actually become (bizarrely) less of a significant part of children's childhood than it was when I was young. My kids have FAR more lego than I had, they have a parent enabling it for them in a way I never had. Yet, at the age of 10 my oldest is currently showing very little interest in LEGO sets any more (there weren't any sets on his birthday wish list at all), my youngest at 8 even too. Whilst kids now have a lot of LEGO they also have a lot of other toys/distractions/hobbies as well and honestly I don't think they are as occupied with it as I was. Now that might just be myself and my kids, but I suspect not.  

    I don't expect a bubble to burst, although I can see a slow decline to the point where used sets can no longer be sold at near to what they were bought for new. At that point it might be interesting to see how much of LEGO's growth has been sustained by the knowledge that its an unusual toy in that it holds its value. With that its possible (if unlikely) you see a knock on more serious drop. A bursting of the minifigure bubble is entirely possible just because the prices are crazy and in no way represent the value of the item. 

    However, the most likely issue is a terrible decision or number of poor decisions from LEGO management. If the LEGO brand becomes diminished to the point that its just another toy brand then the desire to collect it falls away for all but the strongest.
    catwrangler
  • TigerMothTigerMoth Member Posts: 2,343
    CCC said:

    So how much does a less-sustainable elevated price have to drop before it is considered a crash?
    The secondary market may, indeed, crash. However, that is independent of the popularity of the brand in the primary market. It's popularity doesn't have to decrease and yet the secondary market can crash.
    I cannot see clone brands reproducing, for example, The Zombies.
    Why not? There's a clone Cafe Corner - and which has some people licking their lips.
    And even if they did, how many collectors would buy that and feel they had a complete collection?
    Be careful with that. There are people who BrickLink to get "complete collections". There are people who make substitutions to get "complete collections".

    The primary ingredient for a collection is the design, although some people aren't too bothered about precise colours. Some people want all the rest of the bits - the instructions and the box, but some don't. Others want them to have all come together (as an original set), but some don't. There's no reason to assume that some people will be happy if the pieces, or some of them, aren't LEGO.

    I can't put a number to any of those; neither can you. But each of them influences the secondary market.
    SumoLego
  • CCCCCC Member Posts: 20,526
    cheshirecat said:

    I also think that LEGO has actually become (bizarrely) less of a significant part of children's childhood than it was when I was young. My kids have FAR more lego than I had, they have a parent enabling it for them in a way I never had. Yet, at the age of 10 my oldest is currently showing very little interest in LEGO sets any more (there weren't any sets on his birthday wish list at all), my youngest at 8 even too. Whilst kids now have a lot of LEGO they also have a lot of other toys/distractions/hobbies as well and honestly I don't think they are as occupied with it as I was. Now that might just be myself and my kids, but I suspect not.
    It's probably true of many things. The more you have access to, the less you appreciate what you have.
    dougts
  • cheshirecatcheshirecat Member Posts: 5,331
    ^ Totally, not just a LEGO thing, a more general thing. I don't think this generation will have the same attachment to toys, games, tv programmes that those of us who grew up in the 80s did, purely because its diluted across far more toys, games and tv channels plus new stuff like you tube. My kids certainly couldn't comprehend kids tv being limited to weekday lunchtimes, a couple of hours after school and saturday mornings on at most two channels.  

    ^^ I suspect most LEGO collections, certainly not all, are based around the brand rather than the design.
    dougtscatwrangler
  • prevereprevere Member Posts: 2,923
    The more LEGO inches away from its core by diversification of products (like it did in the early 2000s), it's going to run the risk of serving too many masters. And that is not a good thing.
    catwrangler
  • pharmjodpharmjod Member Posts: 2,916
    I downloaded the Alibaba app out of curiosity and had a looksee. The sheer number of counterfeit LEGO products is staggering, as are the prices. I am sure they are using actual LEGO marketing images but the products themselves are largely being reviewed positively. I am actually curious to see a side by side comparison of a smaller new set just to see exactly what the differences are. Of particular interest to me was that you can buy all of the sand green parts for Green Grocer in one knock off lot for $89 shipped. It was only the sand green parts and not the full set. Sure they are counterfeit, but if that is all you used (ie bought the rest of the pieces through bricklink), there is almost no way someone just looking at the set could tell the difference. For me, that could possibly be good enough if I'm just wanting the set for play. If the counterfeit quality continues to improve to the point where aside from having LEGO printed on the top of the bricks you can't tell the difference, that could be a game changer in this global market.
  • SumoLegoSumoLego Member Posts: 15,229
    prevere said:
    The more LEGO inches away from its core by diversification of products (like it did in the early 2000s), it's going to run the risk of serving too many masters. And that is not a good thing.
    There is a notable distinction - Lego is not trying to be their own multimedia/merchandising company as it did in the early 2000's.  

    If Lego opens their own animation studio or trys to develop games or make its own T-shirts, then I'll be worried.  Their core business is blocks.  And blocks is what they sold billions of dollars worth...
    catwranglerAanchir
  • brumeybrumey Member Posts: 1,002
    CCC said:
    ^ if the bubble bursts, then parts may also drop in price too.

    wuhuuu.
    MattDawson
  • MattDawsonMattDawson Member Posts: 1,486
    edited June 2016
    brumey said:
    CCC said:
    ^ if the bubble bursts, then parts may also drop in price too.

    wuhuuu.
    Who's up for bulk-buying everyone's old Maersk trains and UCS Millenium Falcons for reasonable prices?!?
    Rainstorm26catwranglerVorpalRyu
  • TigerMothTigerMoth Member Posts: 2,343
    pharmjod said:

    The sheer number of counterfeit LEGO products is staggering, as are the prices.
    It's easy to forget that people here tend to come from countries that collectively represent only something like 10% of the world population.

    Whilst that doesn't necessarily mean TLG doesn't have significant interests elsewhere, it shouldn't surprise us that there many other companies doing much the same thing in the other 90%.
    catwrangler
  • AanchirAanchir Member Posts: 3,037
    SumoLego said:
    prevere said:
    The more LEGO inches away from its core by diversification of products (like it did in the early 2000s), it's going to run the risk of serving too many masters. And that is not a good thing.
    There is a notable distinction - Lego is not trying to be their own multimedia/merchandising company as it did in the early 2000's.  

    If Lego opens their own animation studio or trys to develop games or make its own T-shirts, then I'll be worried.  Their core business is blocks.  And blocks is what they sold billions of dollars worth...
    Also, LEGO manages their actual core business a lot more carefully than they used to. Back in the late 90s and early naughts a lot of parts of the LEGO Group had literally no idea how much certain initiatives were costing them. That's how you had parts like the micromotor and fiber-optic parts that cost more to produce than the sets were being sold for, not to mention the number of different colors, designs, and elements in use at any given time exploding out of control. Nowadays LEGO takes much better care to eliminate waste and hold each department accountable for keeping things within a tightly controlled budget.

    If the LEGO Group's profitability, even in a specific theme or category, begins to decline, it's safe to say that they're now in a position to notice and respond accordingly. And while it might frustrate people who think their personal favorite theme deserves a bigger budget (I've seen this from Bionicle fans, Castle fans, Space fans, train fans, you name it), LEGO is probably better off now that they're paying closer attention to how much each theme is costing them versus how much it's bringing in.
    Rainstorm26SumoLegosklambcatwranglerRonyar
  • KingAlanIKingAlanI Member Posts: 2,342
    Yeah, the intended use of the product means it retains some value. This is a problem for particularly high value LEGO, but not the product in general. Similar goes for trading card games.

  • VenunderVenunder Member Posts: 2,659
    edited June 2016
    I have to say I am surprised that TLG do not seem to be expanding into India 
    Maybe TLG prefer to work with partners like Yellow Giraffe? 
    There must also be a market in South Africa and possibly other capital cities of the African continent.
    South America also seems to be under exposed to TLG?
    But it seems like a Lego store in the capital cities could work.

    I guess they have looked into it and decided there are just too many problems and uncertainties?
    China is a whole other story.
  • catwranglercatwrangler Member Posts: 1,894
    Maybe they want to focus on their growth in one country at a time, or a few, and then apply the lessons of that to other countries, rather than trying to progress on too many fronts at once. But I say that without knowing much about where they're currently expanding...
  • piratemania7piratemania7 Member Posts: 2,146
    At the end of the day as much as we love LEGO, it's not everything.  Ultimately, just like anything else - the tide will ebb and flow and desire for LEGO will come and go.  I think depending on where you are in the world, what sets are currently available (and about 100 other factors) all determine this.  But I think whatever "bubble" you want to call it for me came around 2011/12/13 - lots of cool new sets - mostly exclusives - were available and I purchased them - now, not so much.  So for me the bubble is over.
  • LusiferSamLusiferSam Member Posts: 574
    dougts said:
    ^ sure, but unless LEGO changes the system, or people stop wanting the parts, that value is going to be something greater than $0.00 per piece.

    It's where the comparison to comic books, baseball cards, and beanie babies falls far short.  The baseline value of the component parts of those items is essentially $0.00.  While it is easy to envision scenarios where the value of boxed sets drop as low as 50%-75% of RRP, it is hard to envision a scenario, outside of complete global economic meltdown, where the value of the parts themselves ever drops below, say 50%, of the RRP of the set.  

    So, unless you are investing by buying sets at 3x RRP, you are probably pretty well insulated from  huge losses.  You might not make gains, and you might take small losses, but there isn't a realistic scenario where that set drops to $0.00 in value.
    I have no idea how to even start to explain how wrong you about this, so whatever. 

    Comics, cards and beanies are not and never have been worth zero.   You can always sell them for something.  That something may be less than what you bought it for, hence a loss, but even a "give away price" is something.  There's also no "component parts" to this items, so it's silly at best to even bring the concept up.  While I agree that an absolute comparison is hard to make, a bubble market is a bubble market.

    So the point of all of this is:  Is the whole greater than the sum of its parts or less than? I've done this calculation before and people didn't get it, so here's another crack at.  Let's take the CC as an example.  Bricklinking it cost around a $1,200 vs. $2,100 for a sealed one vs. the orginal price of $140.  Now if the market collapses and all you can do is sell it for parts and we assume the current reasonable minimum prices of these parts it works out to be around $65.  That's $75 loss. 
  • MattsWhatMattsWhat Member Posts: 1,643
    LusiferSam said:
    dougts said:
    While it is easy to envision scenarios where the value of boxed sets drop as low as 50%-75% of RRP, it is hard to envision a scenario, outside of complete global economic meltdown, where the value of the parts themselves ever drops below, say 50%, of the RRP of the set. 
    That's $75 loss. 
    You started by saying how wrong he was then went on to agree with him...
  • CCCCCC Member Posts: 20,526
    LusiferSam said:

    So the point of all of this is:  Is the whole greater than the sum of its parts or less than? I've done this calculation before and people didn't get it, so here's another crack at.  Let's take the CC as an example.  Bricklinking it cost around a $1,200 vs. $2,100 for a sealed one vs. the orginal price of $140.  Now if the market collapses and all you can do is sell it for parts and we assume the current reasonable minimum prices of these parts it works out to be around $65.  That's $75 loss. 
    That is only if you bought it at $140. That scenario is not really a bubble, that is an investment that increased in value then suddenly crashed. If you bought it on the secondary market at $1K or $2K then your losses are more significant. The person buying at $140 at retail didn't buy in a bubble, the people at $1K or $2K on the secondary market did. Of course, they only know it was a bubble when it bursts.
    dougtspharmjodcheshirecat
  • dougtsdougts Member Posts: 4,110
    LusiferSam said:
    dougts said:
    ^ sure, but unless LEGO changes the system, or people stop wanting the parts, that value is going to be something greater than $0.00 per piece.

    It's where the comparison to comic books, baseball cards, and beanie babies falls far short.  The baseline value of the component parts of those items is essentially $0.00.  While it is easy to envision scenarios where the value of boxed sets drop as low as 50%-75% of RRP, it is hard to envision a scenario, outside of complete global economic meltdown, where the value of the parts themselves ever drops below, say 50%, of the RRP of the set.  

    So, unless you are investing by buying sets at 3x RRP, you are probably pretty well insulated from  huge losses.  You might not make gains, and you might take small losses, but there isn't a realistic scenario where that set drops to $0.00 in value.
    There's also no "component parts" to this items, so it's silly at best to even bring the concept up. 

    Let's take the CC as an example.  Bricklinking it cost around a $1,200 vs. $2,100 for a sealed one vs. the orginal price of $140.  Now if the market collapses and all you can do is sell it for parts and we assume the current reasonable minimum prices of these parts it works out to be around $65.  That's $75 loss.  
    I bring up the component parts issue, because it is EXACTLY the point of why the constant comparisons to those bubbles aren't good ones.  People equating Sealed LEGO sets to cards, books, and beanies are completely ignoring the component part advantage that LEGO holds over those items.

    As far as your second example, that $75 worst case scenario still represents only a ~50% loss on investment.  If you invested $10,000, and the worst happens, you are still going to recoup $5000 in a liquidation.  How much did a $10,000 beanie baby investment end up being worth when that market collapsed?
  • KingAlanIKingAlanI Member Posts: 2,342
    maybe there's not enough of a market in the 3rd world, though venunder has a point about trying the big cities. Expanding too much too fast can really blow up in a company's face - outright doesn't work, ties up too capital, etc. TLG needs to be careful to kepe the quality up.

  • LusiferSamLusiferSam Member Posts: 574
    MattsWhat said:
    You started by saying how wrong he was then went on to agree with him...
    One of us has completely missed the point.
  • TheLoneTensorTheLoneTensor Member Posts: 3,937
    edited June 2016
    There have been many attempts up there to lump all Lego investing as a whole into some kind of bubble argument.  It's not possible.  There are many investment strata, but the two major ones are:

    Inflated: UCS MF, CC, Grand Carousel, Taj Mahal, comic con figs, Mr. Gold, etc.
    Normal: Modulars, Maersk, CMFs, etc.

    The risk (i.e. potential for loss) between Normal and Inflated is exponential in size, which means that there's really no blanket statement you can use to cover both when it comes to some kind of crash.

    Inflated, bubble, it's not a coincidence those terms are used.
    dougtsVorpalRyugoshe7SumoLego
  • pharmjodpharmjod Member Posts: 2,916
    New knockoff town hall on Alibaba now. That makes cafe corner, brick bank, airjitzu temple, tumbler, town hall and ghost busters hq. Give it time. They will do ucs falcon I'd wager. Is it the same? Of course not. But it tells me Lego doesn't have a prayer in developing countries especially as prolific as Alibaba is getting. If the average American saw the price differences between the knock off and actual Lego and the apparent quality of the knock offs, that could spell trouble for LEGO in the USA. 
  • CCCCCC Member Posts: 20,526
    TheLoneTensor said:

    Inflated: UCS MF, CC, Grand Carousel, Taj Mahal, comic con figs, Mr. Gold, etc.
    Normal: Modulars, Maersk, CMFs, etc.
    Even then, these are just two bands of a continuous spectrum. And each set is in its own bubble. The Mr Gold bubble bursting would have little effect on the Taj Mahal, for example.
  • dougtsdougts Member Posts: 4,110
    ^ the recent discussions about their being a number of LEGO collecting bubbles, with the effects on one having minimal ability to impact others, has been a valued addition to the conversation, and so on point.

    To reference the baseball card market, it's not unlike how the collapse of the market in the bulk-produced crap of the 80s and 90s really had negligible or no impact on the long term valuation of the truly rare vintage cards.

    TheLoneTensorSumoLego
  • SumoLegoSumoLego Member Posts: 15,229
    I think the point that was attempting to be made is that a baseball card (or playing card MTG) is a rectangular piece of cardboard.  A comic book is a folded piece of paper.

    A Lego brick is a molded piece of plastic.  The relative utility value of a Lego brick is greater than a stuffed piece of cloth, or a ceramic figure.

    Regardless, I think the argument that my hobby is more valuable than yours is on a base level, silly.  Only coin collectors can really claim such a position.

    Frankly, I find the collection of mass produced specialty game cards completely absurd.  But I get that there is a market for it.  If I had a pile of cash to invest, it would not be there!

    (I also occassionally watch Antiques Roadshow and am amazed.)
    SprinkleOtterpharmjodchuckpBumblepantsbandit778VorpalRyu
  • eggsheneggshen Member Posts: 600
    edited June 2016
    SumoLego said:

    Frankly, I find the collection of mass produced specialty game cards completely absurd.  But I get that there is a market for it.  If I had a pile of cash to invest, it would not be there!

    I'm still kicking myself for selling my MTG Beta Black Lotus for a mere $500 back in 1998, which was the market value of the time. It's worth around $8000 now. 

    I haven't done the math, but I'm guessing the other MTG cards I sold for $1000 total (Moxes, Ali From Cairos, Juzam Djinns, plus boxes of others) back at the same time would get me at least $25,000 in the current market. 

    I thought I was robbing the guy. Ouch. Anyone got a time machine handy?
  • UltimateCollectorUltimateCollector Member Posts: 15
    Well, a good example is #10123. It was sold for $100, nobody bought it, it was removed, then EVERYONE wanted it. Now? It's selling for thousands. 
  • CCCCCC Member Posts: 20,526
    SumoLego said:
    I think the point that was attempting to be made is that a baseball card (or playing card MTG) is a rectangular piece of cardboard.  A comic book is a folded piece of paper.

    A Lego brick is a molded piece of plastic.  The relative utility value of a Lego brick is greater than a stuffed piece of cloth, or a ceramic figure.

    Regardless, I think the argument that my hobby is more valuable than yours is on a base level, silly.  Only coin collectors can really claim such a position.

    Frankly, I find the collection of mass produced specialty game cards completely absurd.  But I get that there is a market for it.  If I had a pile of cash to invest, it would not be there!

    (I also occassionally watch Antiques Roadshow and am amazed.)

    The comparison with MTG type cards us interesting. Wizards of the Coast have done well in keeping that game alive, and not killing the secondary market. It is a lot like Lego. A card is just a piece of paper with printing on it. But then a Lego brick is just a piece of molded plastic. Is the intrinsic worth of a Lego brick more? Of course, someone into Lego can find many uses for the brick. But then someone into card games will find uses for the cards. So long as there are fans, there will he value. If WotC mass produced the old rare cards, or made many different new rare cards they could well kill the hobby, and also the secondary market. The full secondary market bubble only really bursts if the hobby becomes unpopular. The same could happy with Lego. If it became unpopular people would have a lot of plastic bricks. If they and others no longer have interest in them then the intrinsic value is very low.
    SumoLegomonstblitz
  • VorpalRyuVorpalRyu Member Posts: 2,318
    UltimateCollector said:
    Well, a good example is #10123. It was sold for $100, nobody bought it, it was removed, then EVERYONE wanted it. Now? It's selling for thousands. 
    Nope, no interest, if I were to come across one at a garage sale, I'd only pick it up if someone I knew was after one.
    SumoLego
  • SumoLegoSumoLego Member Posts: 15,229
    edited June 2016
    eggshen said:

    I'm still kicking myself for selling my MTG Beta Black Lotus for a mere $500 back in 1998, which was the market value of the time. It's worth around $8000 now. 

    See - it read that and say to myself - "Huh?"  A say-what-now was sold for how much?

    (And then I remember selling 10 or so Ken Griffey Jr. 1989 Upper Deck rookie cards for around $150.00 a piece.  And a non-sports card collector would have similar confusing thoughts.)

    It's just when the bottom of a market falls out and the $150.00 card isn't going to appreciate any further, and can be had nowadays for $20.00, then you really have nothing to bemoan or complain about.  If my UCS MF "declines" in value and can be had for $500.00 - I'll still be happy possessing what I've got.  If that $8000.00 MTG card is suddenly worth $50.00, then I'd be happy selling it for $500.00 - as you probably got it at a heckuva lot less than that!

    CCC said:

    The comparison with MTG type cards us interesting. Wizards of the Coast have done well in keeping that game alive, and not killing the secondary market. It is a lot like Lego. A card is just a piece of paper with printing on it. But then a Lego brick is just a piece of molded plastic. Is the intrinsic worth of a Lego brick more? Of course, someone into Lego can find many uses for the brick. But then someone into card games will find uses for the cards. So long as there are fans, there will he value. If WotC mass produced the old rare cards, or made many different new rare cards they could well kill the hobby, and also the secondary market. The full secondary market bubble only really bursts if the hobby becomes unpopular. The same could happy with Lego. If it became unpopular people would have a lot of plastic bricks. If they and others no longer have interest in them then the intrinsic value is very low.

    Although I think there are comparisons with the collector card market, there are significant differences - mostly in their mass market appeal.  If MTG were anywhere near as prolific as Lego, I'm sure their focus would not be propping up a secondary market, but instead selling as much as they can on the primary market.  (Lego does throw a bone out there from time-to-time - Bat-Pod and Mr. Gold - to whip up fervor in the secondary market.) 

    Fundamentally, if I'm really enthusiastic about the card game - I can make my own cards and forego the $8000.00 acquisition cost for the exclusive card.  Making my own Lego bricks would not go so well.

    This is coming from someone who has children that occasionally ask for Pokémon cards and do cartwheels when a Mega EX thingy pops up in a packet.
  • ryjayryjay Member Posts: 1,001
    After reading over this entire thread....a couple of times, too....I've concluded that everyone is 100% correct with their own opinion....finally we are all experts at something :)
    catwranglerMattDawson
  • SumoLegoSumoLego Member Posts: 15,229
    VorpalRyu said:
    UltimateCollector said:
    Well, a good example is #10123. It was sold for $100, nobody bought it, it was removed, then EVERYONE wanted it. Now? It's selling for thousands. 
    Nope, no interest, if I were to come across one at a garage sale, I'd only pick it up if someone I knew was after one.
    Um, feel free to get one for me.  Preferably NISB, I'll give your RRP plus a nice finder's fee.  (There's a Joker polybag with your name on it...)
    VorpalRyuMattDawsonPitfall69
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