Reevaluating the Value

In my life, it seems to be the case.  No matter what I am trying to sell, it has very little value for those that are buying,  However, the exact reverse is true.  When I go looking for something, I can usually only find high prices for what I am looking for.  Toy, or collectible trains and associated accessories are prime example.  Although there seems to be an overall glut in the marketplace of trains, i don't ever seem to find a real bargain when I am a purchaser.

I used to say that I always bought high and sold low.  But I made up for in in the volume.  

Well I tell people my trains have no monetary value to me, because it's my hobby and I don't buy them as an investment. I buy them because I like them and I like to run them, not for what they may be worth someday in the future. I enjoy my toys and I enjoy playing with them. We worry so much as to why these items do not hold their value as some put it, yet we are all content with buying a brand new car and having it lose 25% of value or more in some cases, the minute we drive it off the showroom floor. No complaints there, we just accept that, really?? We're content with losing a quarter of what we just paid for a brand new vehicle just because " oh everybody knows that" yet we worry as to why a model train does not hold it's value. Beauty is in the eye of the beholder, as is value. That's just like asking why is a "one off" mistake worth more than a perfect model, you'll get the answer, "because it's a one off", okay then using that logic why aren't all one off's worth their weight in gold? Simple, it's what people aka, us, place value on. I used to collect old Lionel and shun the new stuff, MPC. Yet when MTH, entered the picture, I took a hard look at them and realized I could get way more for my money and pleasure rather then saying, "that's a collectable, the more you run it the more it's value goes down, so we don't run that." Going back to what I said above with cars. I buy a car to run it to it's full potential and enjoy it, not as an investment. I would rather have the new updated models rather than paying the same amount or more for old collectables. But that's me, your mileage may vary. When I was young I bought the 50th Anniversary Hudson thinking someday it would really be worth a lot. It's worth now is less than half of what I paid for it. So be it for value, I learned a hard lesson there, so much for being rich. . .

Interesting discussion.

Collectibles exist, but they are not predictable.  One cannot know right now which model train will ultimately go up in value.  Some of mine have increased stunningly - freight cars I paid $25 for have brought $300 each in unsolicited sales.

I paid $15 each for my Lionel 700 freight cars.  Even 2-railed, they have gone up.  I had no idea when I bought them . . . My 1964 Mustang convertible came for $188. Again, I had no idea . . . My Piper Cub -$1200.  Even with inflation it is worth way more than I paid.  

I have done well with this, but I promise - I did not expect to.  Best way to not lose big bucks, in my opinion - buy used stuff.  

Just ran across this; not going to read all of the responses (I scanned them), and this has been discussed before.

Nothing new below:

1 - why should "toy trains" be expected to keep their value (price)? They are products and they get old, as do we. These modern things may one day, indeed, attain collectibility, but I'll never live to see it. Those PW pieces in 1956 were not valuable, either, in 1960.

2 - some are lured away by the latest electronics, leaving the "old" to be unloaded cheap. (I am not; quite the opposite - I actually avoid a lot of those features, now. (Any old car guys who know what a Plymouth Road Runner was? That's where I live, philosophically. 383, 4-speed and a bench seat - and off you go.) 

3 - mainly, though, by some measurements there are now ore of Them (the RR equipment) than there are of Us. So, the obvious thing happens. With a couple of exceptions, I would no longer, at this point, pay 4-figures for any locomotive or set (I've done that a handful of times). And I'm trying to unload some of my stuff. I "brag" about only losing 50% at a train show. (This is why capitalism is greatly flawed...is it not?)

Buy what you like and like what you buy ...... the item owes you nothing ....if you bought it because you like it / need it / just had to have it .... enjoy owning it ...   play with it , admire it ,  share it with  friends and loved ones  ,  take it to your grave 

stocks and pork bellies are better to gamble with .... ( but do not look very interesting on shelving )  

being part of several "collectible " fields in the  retail world  for over 40 years ...has taught me if it is a "limited edition" , has a "certificate"  or needs to have a  "box"  .....  forget about any ROR ......

fact of life ....   anything that has gone up has the ability to come back down  ...

Cheers Carey 

Well I see a lot of items on the forum priced at close to .75 of new. Even tmcc engines seem to be routinely listed for more than half the cost. Where are those 25 percenters?

Well I see a lot of items on the forum priced at close to .75 of new. Even tmcc engines seem to be routinely listed for more than half the cost. Where are those 25 percenters?

Do they sell at 75% of retail? Folks can ask any price they wish.

Here's what I found to be true in life:  If I want, it worth alot, if I'm trying to sell it, it's worth little to nothing.  Words to live by when buying.

So, if you really want it, get it.  If you think it would be nice to have, don't buy it.

C W Burfle posted:

PJB posted:

C W Burfle posted:

Pjb - the drill can be a 1 - 2 years old, new in the box model without a warrantee. What would you pay? Don't forget, the odds of needing that warrantee are lower for the drill.

I agree that electric tools with moving parts are a little risky with no warranty.  But I'm not talking about only locomotives.  So, what percentage of your entire collection of trackage, freight cars, buildings, passenger cars, etc. have you sent back for warranty claims?  I'm only one example, but in almost 6 years in this hobby and owning roughly 30 buildings, 60 freight cars, 80 passenger cars and about 900 feet of trackage, guess how many warranty claims I've made for all this stuff combined so far - not one.   0% warranty claims.  So how much would I pay for no warranty on any of these items?  Exactly the same amount I was willing to pay for that same item a day earlier from the dealer - or worst case, almost the same price.  Are you saying the lack of warranty on these things is the cause of the 40-60% price difference?  That seems absurd if you ask me.  

You clearly don't like what people are telling you. The secondary market is what it is. How do you explain it?

IIRC, this member started a similar thread awhile back, and didn't like the replies on that thread either.

Doug

JC642 posted:

With new prices today sky high and  with growing price disparity between new & used,, wouldn't  it be nice if there was a shop close by where you could drop off older trains on consignment so others can see them on display and test them out?  There has to be tons of it out there waiting to move.   The cost would be a small percentage of the transaction and cheaper then Ebay.. Folks could  barter, trade or sell with others.. No different then the many resale shops all over the country that do well.   I'm sure if done right it would take off big time, maybe give a boost to the hobby as well....

joe

That would be Eastside Trains in Kirkland, Washington state.

Bogie

I suppose the reason new trains lose value so quickly is that the manufacturers have made a point of trying to identify how many people are willing to buy a product at the price the manufacturer needs  / can get away with. Then it makes that many of them.

So if there are 500 people willing to buy a particular model for $1500 each, Company L would like to make exactly 500 of them. Fewer, and they're leaving money on the table. More, and they don't sell them all. So let's say Company L does really good market research (or builds to order, whatever) and makes exactly 500, one for each person who wants one at that price. Good for company L. But if you are one of the 500 who likes that engine at that price, who are you going to sell yours to? Not to one of the other 499 people who think it's worth $1500 - they all have one already! No, you get to sell it to someone who didn't like it enough to pay $1500 for it. And if your buyer was not willing to give $1500 to Company L, they're not going to give it to you either.

In the far past when this hobby just got kick started again you could buy old Lionel or AF for almost nothing and resell it at a profit. There was a small window when the average person didn't know there was a market for old trains. That time of course is long gone. Try to resell a vcr, dvd machine, car, computers, almost anything. You buy because of it's value to you. Don

bob2 posted:

Interesting discussion.

Collectibles exist, but they are not predictable.  One cannot know right now which model train will ultimately go up in value.  Some of mine have increased stunningly - freight cars I paid $25 for have brought $300 each in unsolicited sales.

I paid $15 each for my Lionel 700 freight cars.  Even 2-railed, they have gone up.  I had no idea when I bought them . . . My 1964 Mustang convertible came for $188. Again, I had no idea . . . My Piper Cub -$1200.  Even with inflation it is worth way more than I paid.  

I have done well with this, but I promise - I did not expect to.  Best way to not lose big bucks, in my opinion - buy used stuff.  

I buy used models most always. All of the models that I have acquired weather 2 or 3 rail are in excellent shape. Most haven't even been run much. Some I have converted to 2 rail, and a few I decided against converting them. Most of you folks in model railroading take pretty darn good care of your models. So a used model is usually a good buy. I am not up to speed on the electronics, and quite a few of the models I have bought used were sold because something new and better became available.

So I am very glad that Lionel and Mth and Sunset keep improving there products. What they did before are still great models in my humble opinion. 

Franky-Ogee

Matt,

Your correct, I bought the KCS Southern Belle & BNSF ES44ES for around $550.00. The same two engines were on EBay for $900.00 today.  I also saw the Naked Belle going for $675.00 prices are all over our the map and you need a willing buyer and a willing seller. I don’t see how these will sell at those prices, They were BTO which means limited supply. On the forum a few months back one was up for around $500.00.

Lets also look at the Lionel CC I & CCI II offering. I bought them all figuring they would certainly be an investment. Theses were essentially build to order when Lionel made the offering. What happened? Lionel reissued those engines at a lower price and the value dropped by 80% or more. In fact, many of these beauties sell, if they sell, for significantly less. Supply, Demand and Quality drive price.

Toy trains are Not and never will be an investment for gains. If your looking for investment buy old gold and silver coins, stocks, bonds or an old Corvette, not toy trains.

PSU1980 posted:

Matt,

Your correct, I bought the KCS Southern Belle & BNSF ES44ES for around $550.00. The same two engines were on EBay for $900.00 today.  I also saw the Naked Belle going for $675.00 prices are all over our the map and you need a willing buyer and a willing seller. I don’t see how these will sell at those prices, They were BTO which means limited supply. On the forum a few months back one was up for around $500.00.

Lets also look at the Lionel CC I & CCI II offering. I bought them all figuring they would certainly be an investment. Theses were essentially build to order when Lionel made the offering. What happened? Lionel reissued those engines at a lower price and the value dropped by 80% or more. In fact, many of these beauties sell, if they sell, for significantly less. Supply, Demand and Quality drive price.

Toy trains are Not and never will be an investment for gains. If your looking for investment buy old gold and silver coins, stocks, bonds or an old Corvette, not toy trains.

Absolutely agree! 

The OP has a great point which is overlooked in the vast majority of replies, he is not speaking to an investment -- which one enters into with an expectation of a return on the original investment. He is speaking to why should one reasonably expect to see the value of a brand new item fall by 50% upon purchase, or within a very short period of time. 

His example of "find me a one year old car with less than 500 miles which is priced at 50% of the prior years sale price" is accurate, it doesn't exist, the car would have a lower value but not $.50 on the dollar paid. 

The supply and demand comments bear some truth, there is generally a larger supply than demand, especially during the summer months.

But there is a secondary issue at play to, that train lovers love one thing more than trains, being able to get a deal worth bragging about....how many stories have we all hear about buying something great for nothing, the rare pre-war set at the yard sale for $10, etc. This mentality carries over to all not from a dealer transactions, everyone wants a bargain and thus the one month old train is worth half because we collectively push hard for that reality, hopefully the seller needs the money and will take whatever pennies I am willing to give him..... 

To the OP, the answer is many train folks are cheap, and hope like heck that they can get someone to take a bath so they can get something they otherwise cannot afford or are unwilling to buy because they aren't getting an incredible deal. In my experience a reasoned amount of push back results in sales to real buyers (people who actually complete transactions) which bring prices much closer to 75% of original street prices for new in the box goods with the current technology (PS3 or Legacy). 

challenger3980 posted:

C W Burfle posted:

PJB posted:

C W Burfle posted:

Pjb - the drill can be a 1 - 2 years old, new in the box model without a warrantee. What would you pay? Don't forget, the odds of needing that warrantee are lower for the drill.

I agree that electric tools with moving parts are a little risky with no warranty.  But I'm not talking about only locomotives.  So, what percentage of your entire collection of trackage, freight cars, buildings, passenger cars, etc. have you sent back for warranty claims?  I'm only one example, but in almost 6 years in this hobby and owning roughly 30 buildings, 60 freight cars, 80 passenger cars and about 900 feet of trackage, guess how many warranty claims I've made for all this stuff combined so far - not one.   0% warranty claims.  So how much would I pay for no warranty on any of these items?  Exactly the same amount I was willing to pay for that same item a day earlier from the dealer - or worst case, almost the same price.  Are you saying the lack of warranty on these things is the cause of the 40-60% price difference?  That seems absurd if you ask me.  

You clearly don't like what people are telling you. The secondary market is what it is. How do you explain it?

IIRC, this member started a similar thread awhile back, and didn't like the replies on that thread either.

Doug

Actually, Doug, that's a mischaracterization.  It's more like I voiced surprise at how items that are truly brand new have a significantly different value after the initial sale.  Rather than engage and comment on THIS topic, many people, like you, who are on autopilot or would prefer to speak without first thinking, provided responses  that have zero to do with this  topic. Responses like: (a) stop looking at toy trains as an investment; (b) let's compare reselling brand new toy trains to reselling much more expensive non-analogous things; and (c) let's compare resale prices of brand new toy trains to our perception of what we think a host of used and worn things would sell for.  No worries - don't let the facts confuse you. 

EDIT - Doug, as if on queue to illustrate my point in this post, take a look at the post that follows this one.  Yet another  perfect example of someone who likes to hear themselves talk. His huge post clearly took a lot of time to create - but has absolutely nothing to do with THIS thread. 

Over the years markets for commodities like coins and toys (including toy trains) wax and wane. In the 1960's U.S. coin proof sets jumped in value and everyone was scurrying to purchase them before the mint closed out ordering. Today, prices are about where they were in the 1960's (adjusted for inflation) except for the very rarest sets.

Commodity investing is very risky because so little of the investment value is intrinsic, most of it is perceived. In times of crisis the value of gold goes up. Has the supply changed? No. But the demand increases. When the crisis passes, the value of gold drops. When an investment becomes trendy (for example, emerging market stocks), investors will pile in trying to duplicate the high returns pioneer investors in the field captured. Valuations will be bid to prices far above what the market previously supported, then one day people will start selling to hold on to their returns. That starts a selling cascade and values drop. Exactly what we've seen in toy trains over the last 20 years.

Like it or not, for investment purposes, toy trains are commodities. Their value is subject to supply and demand, desirability, and whether trains are perceived as a hot commodity. Right now, we are in the midst of a selling cascade.

Several factors right now mitigate against toy trains as an investment.

1. The number of collectors is decreasing. (Fewer buyers.)

2. The supply of newer high quality trains has obsoleted the postwar period trains except as a nostalgia item to renew fond memories (I still have many of mine..).

3. The entrance of multiple manufacturers to the O gauge market in the 1990's exploded the supply of high quality trains, while the number of buyers decreased.

4. 1-3 above caused a collapse in the value of postwar trains except for those in mint condition.

5. Technological advances have produced rapid obsolescence of newer trains, sharply decreasing their value as well. We've gone from Proto 1, to Proto 2 to Proto 3, to bluetooth in 20 years. We have gone from Century Club to JLC, to Legacy to Vision Line, etc. The newest trains are amazingly realistic and keep improving. Bluetooth will likely simplify operations. For the most dedicated hobbyists who desire the most realistic model railroads there is a constant need to purchase the latest generation of models, resulting in a glut of the previous generation available, depressing prices.

6. The glut of supply and pressure to innovate has pressured the manufacturers into a cycle of adding new features and increasing realism at a time when there is a huge oversupply. The manufacturers have compensated by raising prices on the newest equipment. 

7. Long term the manufacturers will face a significant challenge as train hobbyists continue to age out and are not replaced.

8. As with all commodities, condition largely determines price, and only mint or like items new can command any value. 

9. This is just not a time to be looking at toy trains as an investment. Yes, there will be unusual exceptions here and there (the cast ES44AC), but these run the risk of being devalued when re-done with the next generation of technology.

My conclusion is buy what you like, enjoy it, but don't consider it as an investment.

Actually, Trainfun's response is very germane to your original question. You asked why trains don't hold their value. Then you noted that it even applied to new trains.

You have heard from a lot of people during this thread who have given a lot of thought to the topic, but you keep dismissing those who explain why trains aren't investments.

So here is one more attempt, first on new trains.

Right now, if you try to buy a 2018 model of a new car, you will pay what the maker and dealer are asking, minus any promotions. One year from now, that same new car, still in the dealer lot, will cost you a lot less to make way for new models and because dealers understand that a significant portion of their buyers want the next model and don't care about the year-old equivalent. Also, models that aren't selling within that first year see discounts even earlier. Dealers know when the market isn't right for a model.

While the timeline might not be one year for toy trains, the same market dynamics apply. At some point, after everyone who was so excited about a new O gauge train's release bought one as soon as their dealer got it in stock, the market begins to slip away. Some people may not have liked the high price tag, but liked the model. Others simply may have had a lesser interest, so they acted more slowly, at which point the unsold stock exceeds the number of people still interested.

As for the first part of your original question, why don't trains (not just new trains) hold their value, it has been answered. They're now only considered toys, not investment pieces. There was a time in the 1970s and '80s when they were, because of the avid baby boomer market at the time, but that time is over as the nostalgia-induced buyers have sadly left us.

Some people have even hoped to find that one new toy that will skyrocket in price 20 years or more into the future. I have to tell you that when I worked at Collecting Toys magazine, we received plenty of phone calls and mail from folks wondering what they should go to the store and buy as such an investment. The answer was always that toys were never intended as investments, and while the market may elevate the price of some items temporarily, in the long term only those items of which too few remain against a demand that far exceeds that supply will appreciate in value. And that's rare and highly unlikely, especially when people squirrel away items and keep the supply way too big for any future interest.

Summation: The market drives the value of toy trains, old or new. You have your answer.

Jim - I find your post to be the best response on this thread.

I was operating from a logic only standpoint, assuming that if people wanted item X (originally offered at say $1,500) but the dealers sold out before these folks could buy one, then these same people would gladly buy item X at say $1,200 when NIB copies show up in the secondary market - rather than the greatly reduced prices at which these NIB items actually sell (generally speaking) in the secondary market.  Your point is that the initial price has a sort of "surcharge" in it that the hobbyist pays for the certainty of getting one, getting it now, and with a warranty.  Makes perfect sense.  

While I agree with your post, if I'm not mistaken, you focused on dealer pricing - but, my posts are specific to sales of NIB items in the secondary market, after the dealer is sold out.  And, from context, it also looks like you're talking about things that change from year to year, like locomotives and trainsets - but, my posts didn't only apply to locomotives or trainsets.  You'll note I also mentioned things like turnouts, trackage, buildings, etc.  Are you saying that year-old NIB boxcars, trackage, turnouts, or operating accessories (or whatever) are also things that have reduced value in a year, even though most of these things don't really change from year to year?  Again, I'm only talking about when these things - all these things, not just locomotives - are being offered for sale, NIB, in the secondary market - not when they are a year old and sitting on the dealer's shelf.  I don't think I've seen anyone respond to this.  

And, while you and a couple others have now accused me of things including "not liking" the answers I'm getting and thinking about toy trains as investments (something I don't believe to be true and never stated), I feel this is a mischaracterization.  In fairness, these accusations are plentiful, but I've yet to see cogent, on-topic comments to the broad topic of my query (not just the locomotive sliver) -  secondary market pricing on all types of hobby items.  After a while, it gets old brother.

Lol, still don't like the answers, and now you are insulting those who bothered to post a reply.

To paraphrase what you wrote earlier, we don't have to explain.

I think B.B. King got it right when he said "The thrill is gone." It's just not the same, a year or so later ....

PJB posted:

Why do toy trains not hold value?  Check out the "for sale" forum here or any of the auction sites.  Even brand new, still sealed locomotives and rolling stock sell for a fraction of original price.  I've been paying attention to this for a while and brand new passenger cars sets that had an initial street price of say $750 usually don't get one bid when priced at even $475!  Brand new freight cars are regularly selling at 40-50% of street prices.  Brand new, still sealed in box scale locomotives that are 1-3 years old routinely fetch 50-60% of initial street price.  Similar for many structures, trackage and turnouts.  There are a few items that will sell near or above original MSRP, but that's truly an exception.  The default is that the seller takes a bath.  I've seen the argument that these products don't come with warranty, but that doesn't come close to accounting for the huge discrepancies.  It's made me much more thoughtful when it comes to deciding on what I might buy.  If I'm not 100% certain that we will definitely have long-term use of the item I want to buy, I think I'm a whole lot less likely to buy it. 

I read through the entire thread before quoting your original post. Let's take a different tack:

For what reason do you feel toy trains in particular should hold or increase in value as time passes? 

---PCJ

C W Burfle posted:

Lol, still don't like the answers, and now you are insulting those who bothered to post a reply.

To paraphrase what you wrote earlier, we don't have to explain.

Yep, pretty much explains why I didn't bother to respond to the reply to my last post.

Basically a rehash of the earlier thread, different words, same idea, same results, Giggles and Grins if you AGREE with the OP, doesn't like answers that don't agree with his premise.

Doug

RailRide posted:

PJB posted:

Why do toy trains not hold value?  Check out the "for sale" forum here or any of the auction sites.  Even brand new, still sealed locomotives and rolling stock sell for a fraction of original price.  I've been paying attention to this for a while and brand new passenger cars sets that had an initial street price of say $750 usually don't get one bid when priced at even $475!  Brand new freight cars are regularly selling at 40-50% of street prices.  Brand new, still sealed in box scale locomotives that are 1-3 years old routinely fetch 50-60% of initial street price.  Similar for many structures, trackage and turnouts.  There are a few items that will sell near or above original MSRP, but that's truly an exception.  The default is that the seller takes a bath.  I've seen the argument that these products don't come with warranty, but that doesn't come close to accounting for the huge discrepancies.  It's made me much more thoughtful when it comes to deciding on what I might buy.  If I'm not 100% certain that we will definitely have long-term use of the item I want to buy, I think I'm a whole lot less likely to buy it. 

I read through the entire thread before quoting your original post. Let's take a different tack:

For what reason do you feel toy trains in particular should hold or increase in value as time passes? 

---PCJ

Don't feel they should necessarily increase in value. Just not sure why NIB items drop so much value the moment after the initial sale.  Per Jim's post above, I understand the dynamics for why this could happen with locomotives.  Was also hoping for thoughts on why this is the case with other hobby stuff, like trackage, turnouts, etc.  

No worries, it seems a lot of folks (not saying this includes you) are content with assuming I don't like the answers when in fact no one has really provided any answer on this broader topic.  Such is life ...  

My opinion is that  there are a million new choices out there meaning what was state of the art last week is a cold week old sandwich today.  Are there exceptions, sure.  Things that are old and worth  more now than then are so because they are in demand or far superior to similar things.  They don't necessarily even have to be rare so to speak.  IF demand is great enough the price will come up.  It is what it is.

After almost 50 years of buying trains I estimate that it would take over $70K to go out and replace them all.

As mentioned above, $.25 cents on the dollar is a reasonable expectation .

If I could get $.25 cents on the dollar I believe it would be an occasion to dance in  the street wareing my baby suit  : )

Richard

PJB posted:

I also mentioned things like turnouts, trackage, buildings, etc.  Are you saying that year-old NIB boxcars, trackage, turnouts, or operating accessories (or whatever) are also things that have reduced value in a year, even though most of these things don't really change from year to year?  Again, I'm only talking about when these things - all these things, not just locomotives - are being offered for sale, NIB, in the secondary market - not when they are a year old and sitting on the dealer's shelf.  I don't think I've seen anyone respond to this.

I think Jim R.'s post explains the phenomenon pretty well for the secondary market as well, at least with locos and rolling stock.

For track, scenery materials, and the like, unless the product has been discontinued, or is back-ordered, I am not going to pay full price for it on the secondary market. The secondary market offers the exact same product as the manufacturer or authorized dealer, but with more risk. A bad deal for the consumer. So the seller needs to offer something to sweeten the deal, otherwise it makes no sense to buy from him. That means a discount, maybe a significant one. If I can buy a switch from Steve at Ross for $70, or I can buy it from Joe Shmo on the for sale forum for $70, I'm going to buy it from Steve every time. If something goes wrong, I know where to find Steve. Joe? Who knows? What if Joe offers it for $60?  Is the peace of mind I get from buying from Ross worth an extra $10? Depends what I think of Joe Shmo, I guess. Maybe he should offer it for $50, or $45, to really ease my mind!

NICKAIX - good points.  I think I'm finally starting to catch on. In essence, you and Jim and the few others who are posting actual responses to my OP are saying that there is a premium, for several valid reasons, on much or all of this stuff when purchased from the dealer. And this accounts for the vastly different prices even on NIB purchased in the secondary market. This is good information because I've been buying things under the assumption that if it's NIB, a 20% discount is a great deal.  Guess I need to change my thinking on that.  

Thanks again. 

In summary: Anyone buying trains is a fool who would  better off burning $1 bills to keep warm over the winter, as soon as you click buy it or walk out of the shop it is worth $.25 on the dollar or depreciated 75% before it even got home. 

Seems odd that more younger folks aren’t flocking to this hobby, guess those millennials are a heck of lot smarts then the baby boomers, they can get more than 25% on a three year old used iPhone. 

PJB posted:

Jim - I find your post to be the best response on this thread.

I was operating from a logic only standpoint, assuming that if people wanted item X (originally offered at say $1,500) but the dealers sold out before these folks could buy one, then these same people would gladly buy item X at say $1,200 when NIB copies show up in the secondary market - rather than the greatly reduced prices at which these NIB items actually sell (generally speaking) in the secondary market.  Your point is that the initial price has a sort of "surcharge" in it that the hobbyist pays for the certainty of getting one, getting it now, and with a warranty.  Makes perfect sense.  

While I agree with your post, if I'm not mistaken, you focused on dealer pricing - but, my posts are specific to sales of NIB items in the secondary market, after the dealer is sold out.  And, from context, it also looks like you're talking about things that change from year to year, like locomotives and trainsets - but, my posts didn't only apply to locomotives or trainsets.  You'll note I also mentioned things like turnouts, trackage, buildings, etc.  Are you saying that year-old NIB boxcars, trackage, turnouts, or operating accessories (or whatever) are also things that have reduced value in a year, even though most of these things don't really change from year to year?  Again, I'm only talking about when these things - all these things, not just locomotives - are being offered for sale, NIB, in the secondary market - not when they are a year old and sitting on the dealer's shelf.  I don't think I've seen anyone respond to this.  

And, while you and a couple others have now accused me of things including "not liking" the answers I'm getting and thinking about toy trains as investments (something I don't believe to be true and never stated), I feel this is a mischaracterization.  In fairness, these accusations are plentiful, but I've yet to see cogent, on-topic comments to the broad topic of my query (not just the locomotive sliver) -  secondary market pricing on all types of hobby items.  After a while, it gets old brother.

 

Fair enough.

Hi there,

I've seen people who continually make mistakes buying trains and have to sell them cheaper in order to afford to get the latest and greatest. This happened to me some years ago when I was less focused on a specific railroad, month and timeframe for my modeling. I've known people whose lack of focus and turnaround in this regard seems perpetual. It could explain some of what you are referring to.

Trains can indeed be an investment, I've done it. However, just like any other investment vehicle, values go up and values go down. There is a right time to buy and a right time to sell. The right time to buy vintage trains was in the 1970's and 1980's. Before the prices went through the roof. Buying when prices were high was suicide, that was the time to sell. Today the drop in prices is all but over, and the damage has been done, or not depending on where you were then and are now.

My purchases were two fold. I bought because I liked them, I enjoyed them, I had a ton of fun hunting them, and when the time came, a tad late, I had no problem selling knowing that I had made a good nest egg for myself. Most items I made money on, some I did not. Its no different than stocks or old cars. You have to invest based on what you think the market will do in the future. I had to wait a little longer to get the better money out of some of my items. If your patient and have the time, you can take them to shows and advertise them and eventually get better money for them. But just like coins, if your in a hurry, the dealer is going to get their cut and its usually bigger than if you had the time to say no I'll wait. With trains, E-Bay is the quickest sell platform. I find that most buyers on E-Bay do not want to pay what an item is worth 99% of the time. Everyone wants everything for nothing, most of the time. Many of the buyers are dealers wanting to turn the item around.

Modern equipment, depending on what it is, I never had any trouble moving the stuff at a fair price. But the market is so flooded with new product its killing the  value of the vintage stuff. Not a lot of new blood is coming into the hobby further eroding the market for sellers. The newer blood is gravitating to the new stuff with all the electronics and cool features. I still don't care for it except for a few pieces I like to run. From there on I'm a vintage train guy. Today my preference is to buy cheap basket cases, and repair them. This, I discovered after 40 years, is where I get the most enjoyment. But I have to get it cheap. I'm not going to drop $35 a pair on O22 switches that need a cleaning and lantern covers, rewiring, and bulbs, I'll never make any money. But I'll buy two pair for $25 well rusted and restore them, or should I say rescue them, then get $30 a pair and I'm happy as a bee in honey. I've saved an item, brought it back from the dead, and now it can be enjoyed by someone else for another 45 or 50 years, and I made a few bucks doing it.

Because the market is so soft today, trying to invest in trains is probably not a good idea unless you know where to keep picking them up very cheap, and selling them at prices they would sell at today. One of the biggest mistakes, and this is not only in trains, is buying new stuff that's manufactured as collectables, or special editions. Trains, beanine babies, pez dispensers, you name it, it rarely if ever goes up in value. Old cars continue to go up. An old big block MoPar keeps increasing in value. Gold has its up and downs. Buy when its down and sit on it. Investors always move from today's hot item to the next.

If you purchased in the 1990's and 2000's you bought too high and today's selling prices are way below those values. If you purchased because it was collectable then you bought wrong. Enjoy them, and then turn them for what you can get from them and move on.

Tin

C W Burfle posted:

Lol, still don't like the answers, and now you are insulting those who bothered to post a reply.

To paraphrase what you wrote earlier, we don't have to explain.

As usual C.W. hits the nail right on the head.

Keep doing the same thing over and over expecting different results?  There is a definition for that. 

Dave Warburton posted:

BMT-Express posted:

Who told you that toy trains were an investment?  'Cause they were wrong.

 

 

Back in the 1980's they were. Then new manufacturers, led by MTH joining the fray and K-Line ramping up, increased the supply of new offerings tremendously and bye-bye value appreciation. 

You are correct.  Prices started dropping around the very early 1990's. For about a decade before they were a lucrative investment in many cases. Other collectibles (comic books and baseball cards, for instance) went through a similar pattern and around the same time. 

LionelTin posted:

One of the biggest mistakes, and this is not only in trains, is buying new stuff that's manufactured as collectables, or special editions. 

Absolutely...  And as the boss says, 'If it's originally advertised as a "collectible", you can be darned sure it isn't and won't ever be!'

Can't tell you how many "collectible" Bachmann On30 sets licensed/decorated for everything from soda pop brands to first responders we (LHS) have had to disappoint their owners with a value assessment for their estate/garage sale.  Disappointment and disbelief are just a couple of the reactions.  

Ah, well, as wrongly attributed to P.T. Barnum, the famous quote...."There's a sucker born every minute!"...will always ring true...to the delight of Madison Avenue.