Investissement pop culture: Vos jouets d'enfant valent de l'or - Bilan.ch
Héritage de la pop culture des années 80 et 90, la niche autrefois réservée aux collectionneurs se transforme en marché structuré.
«Lego: The Toy of Smart Investors»
Avec son étude <anchor>«Lego: The Toy of Smart Investors»</anchor> paru en 2019, Victoria Dobrynskaya, professeure associée en finance de l’Université de Moscou, apportait un autre élément de réponse. En observant dans le temps - entre 1987 et 2015 - l’évolution du prix de 2000 boîtes de Lego, elle a été capable de prouver que le rendement moyen du géant du jouet - 11% sur la période - était supérieur à celui de l’or, des obligations ou des actions.
LEGO: THE TOY OF SMART INVESTORS - ScienceDirect
Search ScienceDirect

## Article preview

## Research in International Business and Finance

# Full length Article  LEGO: THE TOY OF SMART INVESTORS

Author links open overlay panelVictoriaDobrynskaya, JuliaKishilova

Show more

Add to Mendeley

Share

Cite

## Highlights

- •
  LEGO is an iconic toy with diminishing over time supply and high collectible value

- •
  Investments in LEGO yield high returns on the secondary market

- •
  LEGO outperforms large stocks, bonds, gold and alternative investments

- •
  LEGO returns are not exposed to risk factors and provide diversification benefits

- •
  LEGO investments are long-term and yield positive returns in 2-3 years after retirement

## Abstract

We study financial returns on alternative collectible investment assets, such as toys, using LEGO sets as an example. Such iconic toys with diminishing over time supply and high collectible values appear to yield high returns on the secondary market. We find that LEGO investments outperform large stocks, bonds, gold, and alternative investments, yielding an average return of at least 11% (8% in real terms) in the sample period 1987–2015. LEGO returns are not exposed to market, value, momentum, and volatility risk factors but have an almost unit exposure to the size factor. A positive multifactor alpha of 4%–5%, a Sharpe ratio of 0.4, a positive return skewness, and low exposure to standard risk factors make the LEGO toy and other similar collectibles an attractive alternative investment with good diversification potential.

## Graphical abstract



## Section snippets

## INTRODUCTION

Increasing globalization and networks between various asset markets limits the opportunities for diversification. Therefore, investors resort to alternative nonfinancial assets to reduce their risks and increase potential returns. A Barclays (2012) survey showed that the average high net-worth individual holds about 10% wealth as collectible assets, such as artworks, antiques, jewelry, fine wines, rare automobiles, and other luxury items partially to diversify their portfolios and hedge their

## WHY LEGO?

What makes the LEGO toy a special investment asset with high expected returns besides just being the “toy of the century”? Why shall we expect high returns in the future? Several features make LEGO bricks different from ordinary toys and create an investment potential.

First, the adult audience, owing to the brand’s long history and compatibility of all sets ever produced by the company. “A lot of the buyers are people who are in their 30 s and 40 s, and they are looking for something that is

## AN OVERVIEW OF TYPICAL ALTERNATIVE INVESTMENTS

Collectible assets (so-called emotional assets or investments of passion) form an important part of portfolios of high net-worth investors around the globe.

For several decades, studies have focused much on returns in art markets, which is the most popular and traditional “emotional asset.” Early studies of the art market (e.g., Baumol, 1986; Goetzmann, 1993; Pesando, 1993) have analyzed art performance in the 17th to the 20th centuries and obtained controversial results. Although Goetzmann’s

## A PRICING MODEL

How are the prices of collectible toys expected to change over time? We use the model of Dimson et al. (2015) to illustrate this point. The model was proposed to explain the prices of collectible wines, which can easily be adjusted to collectible toys because both goods are similar in terms of properties: both have consumption values and long-run investment potential due to decreasing over time supply.

Suppose the representative investor’s wealth grows at a constant rate z: Wt=W0*(1+z)t. The

## DATA

We collect price data for LEGO sets from the website Brickpicker.com and the book The Ultimate Guide to Collectible LEGO Sets (subsequently referred to as “price guide”) written by the founders of Brickpicker.com Ed and Jeff Maciorowski. Brickpicker.com was launched in 2011. With more than 38,000 registered members in 2014, it has become a premier LEGO community on the internet. This site is the main source of information on current secondary market prices for new and used LEGO sets for

## DESCRIPTIVE STATISTICS

Table 1 reports the average yearly nominal returns on LEGO sets released in different years. The returns are calculated using the initial primary market prices in the years of release and the final secondary market prices in 2015. Therefore, they represent the average returns during the circulation of the sets up to 2015. For each year of release, the average return is the equal-weighted average for all sets introduced in the respective years. The table also reports cross-sectional standard

## Methodology

Given the limitation of the data that for each LEGO set, we can only observe its return between the year of release and the final year in 2015 (i.e., for several years in a row), we construct the LEGO chain index as follows. We start with all LEGO sets released in 2014 and calculate their cross-sectional average return for 2015.15

## DYNAMICS OF SECONDARY MARKET PRICES AFTER RELEASE OF SET

This section is based on the monthly data set for a sub-sample of 320 LEGO sets in 7 themes. Although we picked a priori attractive for collectors themes, they proved to deliver moderate returns (Table 2). Hence, this sample of themes is nearly random. The average return of this sample on the secondary market was 6.2% pa in 2016–2018.18 We use these monthly data to trace the

## A NOTE ON TRANSACTION COSTS

The returns estimated earlier do not consider the transaction costs. However, similar to alternative investments, trading LEGO sets are associated with relatively high transaction costs.

eBay is the most popular trading platform for LEGO sets, whose prices are used in this study. eBay charges listing and final value fees when products are listed and sold, respectively. Whereas in many cases, the listing fee is absent because sellers receive a certain number of free listings per month depending

## CONCLUSION

This study presents a novel analysis of financial returns on collectible toys using the example of LEGO secondary market. LEGO is not just a toy but also a reasonable alternative investment with average returns comparable to stock returns, low market and crash risks, and a positive alpha. Indeed, a huge global secondary market for new and used LEGO sets has developed over the past 30 years.

We manually gathered unique data on the primary and secondary market prices for a sample of 2,322 LEGO

## Author Statement

Victoria Dobrynskaya: Conceptualization, Methodology, Validation, Formal analysis, Resources, Data Curation, Writing - Original Draft, Writing - Review & Editing, Visualization, Supervision, Project administration

Julia Kishilova: Methodology, Software, Formal analysis, Data Curation

Recommended articles

## References (29)

- B.R. Auer et al.

### Diamonds–A precious new asset?

### International Review of Financial Analysis

(2013)

- P. Erdös et al.

### Pricing of collectibles: Baedeker guidebooks

### Economic Modelling

(2012)

- E. Dimson et al.

### Ex post: The investment performance of collectible stamps

### Journal of Financial Economics

(2011)

- E. Dimson et al.

### The price of wine

### Journal of Financial Economics

(2015)

- K. Koford et al.

### The market value of rarity

### Journal of Economic Behavior and Organization

(1998)

- A. Kourtis et al.

### Wine price risk management: International diversification and derivative instruments

### International Review of Financial Analysis

(2012)

- R.K.Y. Low et al.

### Diamonds vs. precious metals: What shines brightest in your investment portfolio?

### International Review of Financial Analysis

(2016)

- B. Lucey et al.

### Was wine a premier cru investment?

### Research in International Business and Finance

(2015)

- L. Renneboog et al.

### Hard assets: The returns on rare diamonds and gems

### Finance Research Letters

(2012)

- Barclays
  (2012)

W. Baumol

### Unnatural value or art investment as a floating crap game

### American Economic Review: Papers and Proceedings

(1986)

D.G. Baur et al.

### Is gold a hedge or a safe haven? An analysis of stocks, bonds and gold

### Financial Review

(2010)

S. Cameron et al.

### Pricing the Groove: Hedonic equation estimates for rare vinyl records

### Applied Economics.

(2020)

E. Dimson et al.

### Investing in emotional assets

### Financial Analysts Journal

(2014)

View more references

## Cited by (3)

2024, Finance Research Letters

Show abstract

Whisky has entered the category of alternative investment assets, with particularly attractive returns on certain bottles. The literature has shown the diversification benefits of investing in collectible assets, such as fine wine, but analyses dedicated to whisky investment remain scarce. Using different causality tests – parametric, non-parametric, and time-varying – applied to whisky, wine, and the MSCI World indices, we analyze the connection/disconnection between rare whisky, fine wine, and financial markets over a 13-Year period, from January 2010 to January 2023, in weekly frequency. Our results show that whisky and wine respectively provide attractive diversification opportunities when combined with stocks, except during “hectic” periods. Conversely, the combination of whisky and wine appears to be riskier in terms of portfolio diversification, especially since the COVID-19 pandemic.

2022, Research in International Business and Finance

Citation Excerpt :

According to Bernales et al. (2020), statistics from 2017 indicate that the art and collectables market attracts more than 35% of high-net-worth individuals. Some passion collectables, such as diamonds and arts, are used as collateral for acquiring funds Bernales et al., 2020; Dobrynskaya and Kishilova, 2022). In addition to their utility as a store of value similar to that of gold, passion collectables are “emotional” consumption assets, thereby assigning them a dual utility role (as investment and consumption assets) generally appreciated by passionate investors and speculators.

Show abstract

This study provides the first empirical evidence on calendar anomalies in various passion investment markets for diamonds, fine wines, stamps, and fine arts. With several statistical techniques [e.g., average analysis, Student’s t-test, analysis of variance (ANOVA), Kruskal–Wallis, and Mann–Whitney tests] and a trading simulation model, the results show that the passion investment markets depend on the calendar anomalies, which challenges the efficient market hypothesis. However, calendar anomalies are not homogeneous across various passion markets. In general, Day-of-the-Week and Month-of-the-Year Effects are the most commonly detected calendar anomalies, and some prices generally follow the Halloween Effect. The markets for wine, diamonds, and art follow a seasonality. However, the Turn-of-the-Year and Turn-of-the-Month Effects are primarily absent in the passion markets. A simulation analysis of profitable trading strategies provided practical implications for exploiting opportunities arising from the calendar anomalies in the passion investment markets.

2023, A Research Agenda for Consumer Financial Behavior

We are grateful to Andrei Simonov, Lucio Sarno, Maarten Janssen, Luca Jelsomini, Emiliano Catonini, Madina Karamysheva, Evgenii Gorbatikov, and three anonymous referees for helpful comments and suggestions. We are indebted to Gaurav Thakur, Scott Storkamp and several other anonymous LEGO hobbyists and re-sellers for sharing their experiences and insights into peculiarities of LEGO investment business. Thanks to Arsenij Braslavskiy for an excellent research assistance

© 2021 Elsevier B.V. All rights reserved.

## Recommended articles

Emerging Markets Review, Volume 29, 2016, pp. 1-23

DouglasCumming, YelinZhang

Procedia CIRP, Volume 88, 2020, pp. 375-380

Alessandro ArturoBruzzone, …, IvanRosciano

Automation in Construction, Volume 113, 2020, Article 103161

YiBao, Victor C.Li

International Review of Financial Analysis, Volume 43, 2016, pp. 1-14

Rand Kwong YewLow, …, RobertFaff

International Journal of Child-Computer Interaction, Volume 31, 2022, Article 100361

LynneHall, …, DerekWatson

Research Policy, Volume 52, Issue 10, 2023, Article 104875

LinusDahlander, …, LarsFrederiksen

Show 3 more articles

## Article Metrics

Cookies are used by this site. Cookie Settings

All content on this site: Copyright © 2024 Elsevier B.V., its licensors, and contributors. All rights are reserved, including those for text and data mining, AI training, and similar technologies. For all open access content, the Creative Commons licensing terms apply.