5 ms·

Ok, interesting as a curiosity, but: > In one extreme case, a kit for Star Wars Darth Revan that retailed in 2014 for $3.99 went for $28.46 on eBay a year late

Ok, interesting as a curiosity, but: > In one extreme case, a kit for Star Wars Darth Revan that retailed in 2014 for $3.99 went for $28.46 on eBay a year later -- a 613 percent premium. Say I'm really prescient, and know exactly which kit to collect.... can I expect to invest 400K and get that 600% return? I doubt it. Sure it's possible for 4$, or 100$, but is it possible at any kind of significant scale?

hjnilsson 8y ago
Yes. This is the problem with this as an investment strategy for anything but hobbyists. In addition; it would require quite a lot of labor to auction and send all these sets around, as well as paying for storage space. Something which is not accounted for in the 10-20% return figure.
- benj111 8y ago
  I would have thought depth of market would be the problem. Presumably no one bought the set, which is why it wasn't selling for very long. If you buy 1000s of sets you run the risk of Lego increasing production to compensate. Second you can't just sell all your sets at once. There might be demand for one set at $28. What about 2? 10? 100? So even with a 'winner' you may be only able to sell them in dribs and drabs, and even then only at an average of $14.
- empath75 8y ago
  Obv something that can be solved with futures.
  - virgilp 8y ago
    That's right (and also a direct application of the fundamental theorem of software engineering).
- mipmap04 8y ago
  So my dream of an LBS ETF will remain a dream.
  - Scoundreller 8y ago
    Local Bike Shop Exchange Traded Fund? I’d think there may be an opportunity for a buying group or banner type consolidator though. Or just straight up acquisitions, like independent pharmacies getting bought for 2-4x earnings, then sold as a package to public investors at 10x+ earnings.
    - monktastic1 8y ago
      Lego-backed security?
3chelon 8y ago
Of course not, it's an insane argument. To end up with a decent retirement fund, say $1.5m, you'd need to buy 50k units and store them for years. Whether you could even get hold of such a large quantity would be questionable, but when it came to shifting them you'd encounter a huge liquidity problem as you single-handedly flooded the market and watched the asking price plummet. I think the only feasible way would be to use them as retirement income rather than a lump sum, by trickling them onto the market at the rate you needed for your weekly income.
- pawelk 8y ago
  Niche collectible markets can be really fragile. Just a few people interested in a particular topic can skew the price expectations, and then someone trying to liquidate a large collection while prices are high can single-handedly burst a bubble. > I think the only feasible way would be to use them as retirement income rather than a lump sum, by trickling them onto the market at the rate you needed for your weekly income. I know of a guy who has inherited an ENORMOUS collection of old hand tools. He's been dripping them into the market via online auction website for well over two years now. Every week he just lists a few chisels, some hand planes, a saw or the like netting, by my estimate, around the average salary. While this is a good strategy - he gets the fair market value of each and every tool, instead of selling in bulk at a huge discount - this is also almost a job: taking pictures, setting up the auctions, accounting, packaging, and sending the packages, possibly resolving disputes.
  - pmiller2 8y ago
    What do you mean “almost a job”? That is a job by any reasonable definition. He’s effectively operating an online store, but he just doesn’t have to source inventory.
dspillett 8y ago
> and know exactly which kit to collect.... can I expect to invest 400K and get that 600% return? I doubt it. You are correct to doubt it: there are a limited number of collectors so as soon as you start selling the supply/demand curve bends away from your favour. To keep the curve in a good place you would need to buy many individual kits (or perhaps one or two of each at most) and there won't be enough good candidates to build a 400K portfolio. Very few kits will see that sort of return over just one year. I'm guessing not many more will see that order of return over several years, and once you get into multiple years you have inflation to account for when comparing purchase and eventual re-sale prices. Also, you have the cost of storing the kits and ensuring they are safe from (and/or insured against) damage/theft/etc.
- ikeboy 8y ago
  You don't need to only buy Legos. If you diversify across more toys, electronics, etc you can certainly get to over 400k in inventory. I know people selling more than that every month.
le-mark 8y ago
I worked at toys r us in the mid 90's and snagged a bunch of "rare" action figures. I've been sitting on them for 25 years now. They aren't worth anything more than what retail price back then. My lesson was to stay away from collectibles. It's too much like gambling, may as well take your money to Vegas.
- shiftpgdn 8y ago
  I like buying my kids weird old collectible toys from ebay, usually for about 50% of their original MSRP. I recently snagged a set of early 90s Star Wars action figures for damn near nothing in their original boxes. My kids had a blast opening them.
- dsnuh 8y ago
  I worked at a competing toy store in the mid 90s also. It always brought me great joy that Beanie Babies ended up being a bad investment. We had to call the cops the day we got our shipment of Princess Diana bears. I'd say about 90% of our BB sales were to adult buyers speculating on huge returns. Care to share what action figures you held onto? My guess is Star Wars reissue figures from the 20th anniversary theater releases. Maybe some early McFarlane toys? :) Fun fact: The small toy store chain I worked for is the toy store that Arnold goes to in Jingle All The Way. I make sure to watch it every year for a little trip back in time.
sigi45 8y ago
If you don't forget the storage cost and shipping effort. Sure.
castlecrasher2 8y ago
yeah Revan was an exclusive "buy $75 worth of LEGO, get a free Revan." I don't believe it was available at retail by itself
ikeboy 8y ago
You can certainly scale it to make a comfortable full time living and I know multiple people that do that. Easier if you branch out to other stuff that's not Legos.

hjnilsson 8y ago

Yes. This is the problem with this as an investment strategy for anything but hobbyists. In addition; it would require quite a lot of labor to auction and send all these sets around, as well as paying for storage space. Something which is not accounted for in the 10-20% return figure.

benj111 8y ago
I would have thought depth of market would be the problem. Presumably no one bought the set, which is why it wasn't selling for very long. If you buy 1000s of sets you run the risk of Lego increasing production to compensate. Second you can't just sell all your sets at once. There might be demand for one set at $28. What about 2? 10? 100? So even with a 'winner' you may be only able to sell them in dribs and drabs, and even then only at an average of $14.
empath75 8y ago
Obv something that can be solved with futures.
- virgilp 8y ago
  That's right (and also a direct application of the fundamental theorem of software engineering).
mipmap04 8y ago
So my dream of an LBS ETF will remain a dream.
- Scoundreller 8y ago
  Local Bike Shop Exchange Traded Fund? I’d think there may be an opportunity for a buying group or banner type consolidator though. Or just straight up acquisitions, like independent pharmacies getting bought for 2-4x earnings, then sold as a package to public investors at 10x+ earnings.
  - monktastic1 8y ago
    Lego-backed security?

3chelon 8y ago

Of course not, it's an insane argument. To end up with a decent retirement fund, say $1.5m, you'd need to buy 50k units and store them for years. Whether you could even get hold of such a large quantity would be questionable, but when it came to shifting them you'd encounter a huge liquidity problem as you single-handedly flooded the market and watched the asking price plummet. I think the only feasible way would be to use them as retirement income rather than a lump sum, by trickling them onto the market at the rate you needed for your weekly income.

pawelk 8y ago
Niche collectible markets can be really fragile. Just a few people interested in a particular topic can skew the price expectations, and then someone trying to liquidate a large collection while prices are high can single-handedly burst a bubble. > I think the only feasible way would be to use them as retirement income rather than a lump sum, by trickling them onto the market at the rate you needed for your weekly income. I know of a guy who has inherited an ENORMOUS collection of old hand tools. He's been dripping them into the market via online auction website for well over two years now. Every week he just lists a few chisels, some hand planes, a saw or the like netting, by my estimate, around the average salary. While this is a good strategy - he gets the fair market value of each and every tool, instead of selling in bulk at a huge discount - this is also almost a job: taking pictures, setting up the auctions, accounting, packaging, and sending the packages, possibly resolving disputes.
- pmiller2 8y ago
  What do you mean “almost a job”? That is a job by any reasonable definition. He’s effectively operating an online store, but he just doesn’t have to source inventory.

dspillett 8y ago

> and know exactly which kit to collect.... can I expect to invest 400K and get that 600% return? I doubt it. You are correct to doubt it: there are a limited number of collectors so as soon as you start selling the supply/demand curve bends away from your favour. To keep the curve in a good place you would need to buy many individual kits (or perhaps one or two of each at most) and there won't be enough good candidates to build a 400K portfolio. Very few kits will see that sort of return over just one year. I'm guessing not many more will see that order of return over several years, and once you get into multiple years you have inflation to account for when comparing purchase and eventual re-sale prices. Also, you have the cost of storing the kits and ensuring they are safe from (and/or insured against) damage/theft/etc.

ikeboy 8y ago
You don't need to only buy Legos. If you diversify across more toys, electronics, etc you can certainly get to over 400k in inventory. I know people selling more than that every month.

le-mark 8y ago

I worked at toys r us in the mid 90's and snagged a bunch of "rare" action figures. I've been sitting on them for 25 years now. They aren't worth anything more than what retail price back then. My lesson was to stay away from collectibles. It's too much like gambling, may as well take your money to Vegas.

shiftpgdn 8y ago
I like buying my kids weird old collectible toys from ebay, usually for about 50% of their original MSRP. I recently snagged a set of early 90s Star Wars action figures for damn near nothing in their original boxes. My kids had a blast opening them.
dsnuh 8y ago
I worked at a competing toy store in the mid 90s also. It always brought me great joy that Beanie Babies ended up being a bad investment. We had to call the cops the day we got our shipment of Princess Diana bears. I'd say about 90% of our BB sales were to adult buyers speculating on huge returns. Care to share what action figures you held onto? My guess is Star Wars reissue figures from the 20th anniversary theater releases. Maybe some early McFarlane toys? :) Fun fact: The small toy store chain I worked for is the toy store that Arnold goes to in Jingle All The Way. I make sure to watch it every year for a little trip back in time.

sigi45 8y ago

If you don't forget the storage cost and shipping effort. Sure.

castlecrasher2 8y ago

yeah Revan was an exclusive "buy $75 worth of LEGO, get a free Revan." I don't believe it was available at retail by itself

ikeboy 8y ago

You can certainly scale it to make a comfortable full time living and I know multiple people that do that. Easier if you branch out to other stuff that's not Legos.