Locating Lucrative LEGO Investments: A Step-by-Step Guide to Unearthing Holy Grail Sets from Youtuber- Brick Bucks
Title: How To Find Holy Grail LEGO Investments
Transcript:
Alright, this video is probably going to bomb, probably not going to get that many views because, honestly, I want to get really nerdy in this one and some of you are probably going to want to just go and watch some of my other content about return on investments and sets. But, for those of you who really want to take Lego investing seriously, you’re probably going to like more detail on how I pick winning Lego sets. So, this is me getting a little more nerdy on the things that I do to pick winning Lego sets as an investment – pick the right sets before they start to go up in value so that we can build a business.
Now here’s the thing, folks. When I first started as a Lego investor, I did not know what I was doing. I was just going into stores and picking sets off the shelf that I thought looked good or I liked the design. I had no real structure to how I was picking sets as an investment. And since then, I have built up a specific system. You may have heard of it before, I call it the winning set system. I wrote an entire book about that, called “Winning Set Secrets,” where I walk through everything that I do when I’m researching sets and picking my winning sets.
But the system and the things that I talk about in this book took years for me to develop. I started off small, I started just by researching similar sets and then I added another signal and another signal and another signal until I figured out what are all of the things that really matter when I’m picking a set and how do I use them in my decision-making. Now, honestly, I’m not going to be able to break down this entire book here in one YouTube video. I’m going to talk about some of the high-level concepts that I talk about inside “Winning Set Secrets” and what are some of the big categories that I look out for when I’m picking winning sets.
I’m not going to be able to go through everything, as you can see there’s a lot in here, but again, I’m going to give you some quick tips and quick things that you should be thinking about when it comes to picking winning sets right here, right now. And here’s the thing, this book, “Winning Set Secrets,” is broken down into categories. And there are different categories of signals, I call them signals, it basically just means things that I look for in a winning set. When I’m looking at sets, what are the things that I care about, what are the things that I don’t care about? Those are signals. And the signals fall into three categories, that’s how I structured the book here. And the categories that they fall into is what I want to talk about here today because I think that is a way for you to quickly see how you should structure your thinking when it comes to picking winning Lego sets. What are the big things that really matter with this?
So, what are these categories that I’m talking about? I’m going to draw them out for you. The way I kind of think about this is kind of like a triangle because there are three main categories, and they’re all equally important to each other when it comes to you picking a winning Lego set. On one side here, we have supply. On another side here, we have demand. And that’s where a lot of people would stop. They would think supply and demand, that’s all that matters in economics, right? You’ve got supply, you’ve got demand. If the supply is high and the demand is low, then the price will be low. If the supply is low and the demand is high, then the price will go up. This is what drives up the price.
But when we are picking winning Lego sets, there is another thing that we need to be considering, and it is the value. And what I mean by value is, what price can you get the set for and is it worth that price? Because even if the signals in supply and demand look great, and this set looks like a no-brainer, if the deal that is available to you is not great value, then you should not be buying it. Because as an investment, it won’t have a good return on investment. So, we need to think about value, we need to think about supply and demand. These are the three main categories.
So, let’s break this down a little bit more here, and let’s talk about each of these three things individually, and let’s start with supply. Supply with Lego investing is really interesting because what happens with Lego investing is we have a natural reduction of supply over time. When a Lego set stops getting manufactured, in other words retires, then from there forward, you can only see a reduction in the supply over time because as long as the set does not get re-released, then there will be no more manufacturing, which means over time, the supply that is available out there to be purchased in new condition or in used condition is going to be reduced. This adds a constraint on the supply, which really impacts the value of the set over time.
But here’s the thing, the supply when you think about the supply of a Lego set, there is the supply while it’s available, and then there is the supply in the aftermarket, and they are two different things. The supply when it’s available, we’re talking about the retail supply, and that can be influenced by things like how exclusive is the set, can you only get it in certain stores, is it only available for a short period of time, what is the shelf life of the set? These are things that determine the supply of the shelf while it is still being manufactured. But then, after manufacturing has stopped, the set has been retired, then we’re talking about the third-party supply. Those are sellers like you and me. How much supply is out there on the marketplace from third-party sellers?
And when we think about that as Lego investors, when we’re trying to pick winning sets, we want to make sure that we are buying sets that will have lower supply than alternatives. We want low supply in the aftermarket, so we don’t want to have sets that have been over-hoarded by every other Lego investor out there, and instead, we want to try and find the sets that are flying under the radar and are low-hanging fruit. So, those are some of the big things we need to think about when it comes to supply, both during shelf life and in the aftermarket. We want to find sets that are low in supply, and there are a handful of different signals we can look at, of course, but the big picture here is we want to find sets that will be in low supply in the aftermarket. And we can do that by thinking about the supply during the shelf life and expecting what might happen in the aftermarket.
So, that is supply. But on the other side, of course, we have demand. Now, when it comes to demand, we want to find sets that are in strong demand. We want to find sets that are very, very popular, that have sustained demand over time. They are selling like hotcakes. That is super important for Lego investing because as the price starts to go up in retirement, we want demand to stay strong. Now, if demand is weak before retirement, then if the price is 3x the MSRP, demand will be very weak. So, we need to have…
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