LEGO Profit Is DOWN! (LEGO Investing Tip)

LEGO just released their 2023 financial report and there are a few very interesting data points! Let's talk about what the future of LEGO could potentially look like and how this could potentially affect LEGO investing in the future and how you should look at pivoting.
LEGO Investing info on this channel is strictly for entertainment and should not replace advice from your financial advisor. I am NOT a financial advisor and all opinions are my own.

[@tomm2213]

Lots of people started buying lego during lockdown and are now busy again + running out of room.

[@TheBrickQuest]

True. There was a big rise in popularity during Covid.

[@brickloverbrad]

I remember back just a few years ago LEGO would release 1-2 much larger, more expensive sets geared towards AFOLs. Now it just feels like they're releasing way more high-end sets and it's hard for hobbiest to keep up! It used to feel attainable to just collect them all, but now I feel like I at least have been more selective of which sets I buy

[@TheBrickQuest]

Definitely. I think as the prices have steadily gone up, we have all had to be selective on which we buy, which we leave. We will see if LEGO changes this strategy with this new data from buyers.

[@williamokeson2154]

I would rather buy 30 Speed Champions than one Eifel Tour...

[@TheBrickQuest]

Speed champions do have a very good track record!

[@TGNova04]

​@@TheBrickQuestba dum tss

[@kenchu5900]

for investment, I agree with 30 Speed Champions. For personal collection, I prefer one huge Eiffel Tower.

[@Markusx26]

I see the problems will come in the future. Our Granddad´s had a model train in a room and this business declined rapidly in 10-20 years. Most of the stuff in the model train world is trash when the person dies, maybe the loks are the money thing. Then came the area of Carrera and Gaming Consoles up. Now these areas decline and more and more people switch to Lego. The problem with Lego is that the plastic stones are produced and sold in a huge amount of tons per month and they will last at least for 30-50 years. You can rebuild everything and when the actual generation trips out of Lego you will see the same like in the 2000s. At every little market/Garage sale you will find bags and bags of Lego stones but no one wants to buy it. When this happens many people will sit on piles and piles of plastic stones which are hard to sell when you have piles and piles available everywhere.

[@TheBrickQuest]

Very interesting take on the matter! Thanks for the feedback. I guess time will tell the full story of how LEGO and its plan play out.

[@glennbrown2704]

Last year definitely had deeper discounts for Q4 sales. Lego overproduced sets, customer demand was down or both of these things occurred last year. In general I would like Lego to return to building more medium size sets($35-$80) I've generally liked investing in that price range more than a $200+ set.

[@TheBrickQuest]

Yes. I guess it was nice from the consumer standpoint to see big sets like the UCS Razor Crest, Castle etc go on discount since that typically hasn’t happened in past years.

[@joshalvarez298]

100%. UCS sets are cool, but I'm never going to be able to buy one of those, I'll buy 5 or 6 medium sized ones though.

[@Watts1983]

I know that I cut back two years ago. I used to buy every set from Star Wars, castle, pirate, Jurassic park, and Harry Potter. Now I buy every set in the castle/castle related theme and I’m picky about Star Wars sets, and I don’t buy any Harry Potter or Jurassic sets anymore. Things were just getting way too expensive. I also think that a lot of the people who got into Lego during Covid are slowly getting out of the hobby and going back to the things they used to do for fun prior to Covid.

[@TB-fz6jh]

There are 3 expensive sets I want but they are all big. Space for storing them is rough. I want the avengers tower, Rivendell, and the new lotr coming.

[@TheBrickQuest]

I believe you’re right. I think this happened to a lot of people. They had to cut back somewhere in life and LEGO was and is getting more expensive.

[@plpa8250]

I bought a lot of brick sets this quarter, but not Lego. Alternative brands like Funwhole, Pantasy, and Cada have high quality builds for 1/3 of the price and a lot of their sets come with LED lights. The problem with Lego is not just the price point, but the value. The X-Men blackbird jet is an 80 dollar set. And that launching as it is is proof that Lego is betting heavily that their fandom is enough to move mediocre sets.

[@TheBrickQuest]

Very interesting. I definitely agree on the price of some of these sets being way too high. Black bird is a great example.

[@aaronnelson9920]

The one thing I have noticed is, there seems to be now a flood of cheap knock off lego sets on the market like eBay.

[@TheBrickQuest]

Interesting. I hadn’t noticed that but good to know. I have noticed more off brand popping up in Walmarts which is unusual.

[@dragonshadow1902]

Off brands that are of just as good quality and 1/5th the price.

[@sammystephens7892]

Not only this, but the quality in knock off lego has also improved drastically over the past few years. Don’t see it overtaking Lego just yet though, but if it ever did, these large UCS style sets will be the first to go

[@patricksquires77]

For the first time in 4 years my local lego retail isles are completely full - no missing sets.

[@TheBrickQuest]

Yup. Things are changing. I guess we will see how much they change as time goes on.

[@pandasontheroad]

Whats important is to differentiate between several target groups you sell your lego to. An average consumer does not translate into your buyer automatically. Most of ppl buying older lego sets are either collectors or builders who are always willing to pay more money for them so i will still be investing into bigger more expensive sets bc there will always be the right market for them.

[@TheBrickQuest]

Very good input! The sets the fall more into the high dollar collector realm are typically the best overtime and eventually will garner some profit. Also diversifying what sets you buy and getting the sets on sale is critical.

[@stevenpetersen8530]

VERY interesting! Thank you for this!!

[@TheBrickQuest]

Sure thing! I found it interesting.

[@JoeFulano]

After many years of buying only Lego, I buy only China now...and guess what, I have lots of Goats now! Lego artificially created the Goat issue by gasligthing their consumers about broken and/or disappearing molds and what not...These Chinese are NOT the old cheap knockoff, these are of the highest quality copies of retired sets, I mean we're in the 2020's so ABS plastic molding isn't exactly rocket science anymore...Ans now they have theit own ip sets that will only get better...As far as mini figures are concerned, you can build armies of your favorite mini-figs factions, nah, you can build empires if you like, at a super reasonable price that will not cause issues. Plus they have their own factions like the knights of Jerusalem and others which are cheap, all printed body, best and most detailed minifies I have ever seen plus they come with their own accessories not done by lego...very cool whats coming....

[@TheBrickQuest]

Good to know. That’s great that you are able to get the pieces you want at a much more reasonable price!

[@tagator88]

We’re on a bull run right now in the stock market. I think the only direction Lego goes is up from here on out, interest is still there. Economy will 100% turn around. Not worried at all as a Lego investor, you just gotta be smart in what your investing in. That AT-AT once retired will easily fetch 4 figures and people will pay without a doubt. Amazon sales figures on retired sets is still very high.

[@TheBrickQuest]

I tend to agree. If you have a popular set that is retired and people want. People will find a way to get their hands on it.

[@grantcrawford823]

Interesting. I'm going to go against the trend here and suggest that this means bigger sets provide a better investment currently. Hear me out. Taken in the broader context of the economy, people are spending less currently on "luxuries". The family budget is a little tighter and budgets have been cut back. This impacts bigger sets that AFOLs want but can do without. Once the economy normalises over the next couple of years these sets can once more be on the agenda. If they're no longer in the market, they'll look to resellers. This won't make a bad investment a good one, but sets like the Cantina, Eldorado Fortress or NASA space shuttle might have an increased demand in a couple of years because people missed out. This is all speculation, but do is avoiding later sets because there's been a downturn in them over the last 12 months.

[@TheBrickQuest]

You make some good points. Great feedback! It’s highly possible they will be good over the long term because of lack of buying power now. I tend to lean towards the larger sets normally anyways so I will still continue to invest in them but I probably will be a little more cautious/calculating on how I spread out my funds.

[@stevesherwood2944]

The pandemic led to a big surge in investors, a big surge in the number of new sets, then we had the price increases, then recession. It's the perfect storm for a slow down, and over supply/lower demand. Lego investing is slowly reaching saturation point (at least in the UK), and unless you buy at big discounts and the set does well post-retirement, it's increasingly difficult to get anywhere near 100% return after 1-2 years. The number of new sets being released is mind boggling, and reduces the odds of picking a winning investment. Long term holds might be a better strategy, but it does feel like the bubble has already burst. On a side note - the reason Lego has released so many new sets in recent years (especially the 18+ sets) is due to global population trends. Apart from Africa, every other country has rapidly declining birth rates (some are at catastrophic levels), and toy companies will know they have maybe 20-30 years left before their markets gradually fall off a cliff (especially Asia and Europe). The adult market will offset this for a while, but the days of big profits from younger markets are numbered.

[@Marco1973est]

Over saturation- it’s a thing.

[@TheBrickQuest]

Very true!

[@cariad4297]

It would be interesting to know the average spend by region or even country, because a number of European countries are in recession. So it is quite possible that there has been no significant drop in the average spend of consumers in the USA. Also Lego sells set in Asia and especially China at a significantly lower price and if they have significantly grown their sales in Asia, then this may also have affected the average spend globally.

[@plpa8250]

I saw some of the Asian prices. Most of the time they are actually more expensive. I was even surprised that Lego China is higher than the US. Almost like Australian Lego prices.

[@TheBrickQuest]

True. That would be interesting data to have! That may put a brighter light on exactly why trends are going in that direction.

[@henribg1]

i cant waith foolr the chineese collectors to get in the game. many fakes trom there thow.

[@myplatinumlife]

Nice video with some good information

[@TheBrickQuest]

👍

[@TheBrickQuest]

Thanks!

[@thereallLp]

I WANT THEM ALL

[@TheBrickQuest]

Same here. lol money is the only hindrance.

[@jeffri_sworldoftanks486]

consider ahsoka

[@TheBrickQuest]

Great set!

[@martazedbricks]

Nothing suprise me.

[@TheBrickQuest]

👍 Same here.

[@georgeleorgebeorge2354]

Dude people with my to invest and spend at this very moment are into crypto. No one has any money let 😂

[@TheBrickQuest]

Crypto is on the rise which is great to see!

[@tranquilized13]

Lol Lego investor. No, what you're seeing is what's happened in every hobby since COVID. When people couldn't go anywhere or work they figured out they can buy a bunch of things in bulk and resell it for a profit. Now that everything is back to normal, that profit is gone and you might still make a few bucks here and there but making big bucks off of Lego or my other hobby, sneakers, those days are over.

[@TheBrickQuest]

Good thoughts. I think there is still plenty of money to be made you just are going to have to be more measured in your approach.

[@JackShackProductions]

Ok pal I just bought a $120 set 2 months ago and now it’s selling for $350, you don’t know what your talking about