Subject:
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Re: level of interest in 7151 / Sith ?
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Newsgroups:
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lugnet.market.theory
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Date:
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Sat, 7 Oct 2000 03:10:13 GMT
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Viewed:
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937 times
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In lugnet.market.theory, Steve Chapple writes:
> Not exactly. A market order is when you buy at whatever the
> market is currently at. The closest analogy would be Larry's
> Streetcar. He's auctioning one to find out what price the market
> will support - The eBay auction will establish what the "market
> price" of a PCC is. He's offering some at what he expects will be
> below the market price. Suppose I agree the sale price will be
> higher and I buy the PCC now and take a "Long" position. (I expect
> to sell it later to someone else for the market price or higher.)
> If I thought the market price would be lower than $180? and I sold
> you one, (expecting to buy it later for, say $150) I would have
> taken a "Short" position.
Gee I hope no one shorts the PCC! (it's pretty short already compared to the
prototype) Steve is right, it's analogy, but not a perfect one. As it happens,
the auction has ended, the first copy went for 202.49. I had meantime been
selling copies for 180.
Now one could argue that I should take the price up to 200. But I don't think
the market will sustain that, all of Dan's first copies went for more than his
subsequent ones did. 180 "feels" right, I am getting a good take rate.
One could also argue that I should take it down lower to build the volume. But
there is a floor below I don't make enough money and I would be better off
parting out my sets and selling them as parts instead of as different sets.
What that floor is, is proprietary of course (try to get GM to tell you what
it costs them to make a car if you don't see why), but it's not as far down as
I would like. I'm working on that.
This is why LEGO is more like a commodity than a stock. The PCC has intrinsic
value which is the sum of its parts. (plus the value I add making it
worth "more than the sum of its parts) A stock has value only if the company
is liquidated. (My old employer CTP has seen its stock sink from its high of
60ish (after an IPO of 1.66 split adjusted) down to 3 and change. Ouch. The
company is probably WORTH more than that broken up but breakup doesn't happen
instantaneously, and while movement to break up was afoot, management could
blow the rest of the cash hoard or something equally inane.
TLC has great impact on parts pricing... witness the drop off in value of
white train windows for instance. That makes playing futures more risky. If
TLC does what I really WANT it to do, some of my hoarded sets will be worth
less if I had to sell them off as parts.
>
> It's too bad the "LEGO market" is so small - Our system has generated
> a 400%/annum (it's my job to improve that) rate of return on the
> commodities we trade, and it would be great to include LEGO. 8-)
The other problem to automating this market is that sets aren't fungible.
December wheat is december wheat, but let's face it,
http://guide.lugnet.com/set/6329 isn't worth quite the same as
http://guide.lugnet.com/set/1475 (about the same piece count, but actually
builds a much smaller set and cost a lot less originally) today, due to the
differences... age, desirability, etc.
It would be interesting, though.
++Lar
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Message is in Reply To:
 | | Re: level of interest in 7151 / Sith ?
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| (...) You're in the right ball park, but it's a commodity market. I can't believe I haven't been involved in a discussion like this before. One of the aspects of LEGO that appeals to me is the commodity market angle - I get to buy and sell LEGO. (...) (24 years ago, 7-Oct-00, to lugnet.market.theory)
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