Toy trains not always a good investment

[Anonymous]

Value............

The OLD Lionel Corp. advertised and stressed PLAY VALUE vs. price. In the
ads of old they ALWAYS showed how the trains could be PLAYED with and
how they were INVESTMENTS in RELATIONSHIPS not investments in an
auxiliary INCOME. The train companies of old were trying to UNDERPRICE
the competition, not OVERPRICE as now. The INVESTMENT was in QUALITY
not EXPENSE. J.L. Cowen knew that TODAY'S CHILDREN were TOMORROW'S
PARENTS and as such he was looking for REPEAT customers, not one-shot
"marks" whose wallets could be summarily emptied and forgotten aboout.
JLC constantly railed about POOR QUALITY of products and was a stickler
about his own. A FAR CRY from today's business practices in general and
today's "Lionel" LLC in particular. Heck it's so bad now that companies are
no longer "companies" but " Limited Liability Corporations" so they can't be
held accountable for shoddy products or services! By only having a "limited
liability" towards their "customers" their bottom-line (read: personal profits)
are protected from attack by the very same "customers" looking for their well
deserved "satisfaction". Today's "Lionel Trains" organisation is not even a
pale shadow of its former self in either ideals, business practices, customer
service (WHAT'S THAT?!), or product quality (again...WHAT'S THAT?!).

Old JLC has to be spinning in his grave!

As a result of today's shoddy business practices and product quality (in every
area of business in this country), customers have become "disposable" in
their habits. When something breaks or is no good, they simply accept it and
go out and BUY another replacement. Therefore, there is no incentive to hold
on to anything for its intrinsic (sic) value. Even families are run this way. "Adults"
bring forth children who are instantly handed over to "day care providers" and
government school systems to be raised in absentia while the "adults" go out
and pursue the almighty dollar in order to have that new car (every two years),
or huge pickup truck (what do you need with one of those in the city?), or the
latest techno-gadget that thier friends have. Very few families today seem to
have a bond between their children and themselves. The latest manifestation
of this in society is the very referral to the off-spring as "kids"! KIDS are BABY
GOATS, not little people! CHILDREN and GRAND-CHILDREN are little people!

JLC constantly reffered to his younger clients as "children", "sons", "future rail
tycoons" and the like. I'm sitting here typing this and reading just such ad copy
from a Lionel catalog (not an old one fom the 1930's, either.). The references to
"kids" didn't take place until after JLC left the helm of the company and "newer"
management and "marketing" practices were installed.

A question has been repeatedly posed on this site about whether Lionel LLC
is trying to attract newer clientele such as children and younger parents, and
I wouyld have to "just say no". They need to wake up! Just like any other nat-
ural resource, this generation is NOT limitless and as such one day there
will be no more "collectors" with deep pockets and lots of free time. Therefore
Lionel and their clones will be no more. Not unless they start cultivating a
"renewable resource" in the form of a new generation of purchasers. The ONLY
way to do that is to RAISE quality standard, and LOWER prices along with a
little spending by the advertising department instead of the legal department!
"Kids" don't read The New Yorker or even most Model Railroad mags! They
still read the funnies and watch TV! Put the ads in front of the children and the
rest will take care of itself! Again JLC knew this and explioted it. Other companies
do it. (Look at McDonalds and Nike.)

We ALL have a job to do here if we hope to see our children and grandchildren
appreciate and play and even collect our old TOYS. I realise that I'm whistling
in the dark and singing to the choir here, but ... It can't hurt. Maybe...just MAYBE
some "businessman" or "CEO" will read this and THINK! (Hey! Thinking doesn't
cost MONEY!)

(edited for spelling)

[Dave Farquhar]

Bill, I agree with you except I hope my kids (or possibly grandkids, or my sister's kids or grandkids) will enjoy them as much as I did. Whenever I run my Dad's O27 Lionel locomotives (including his 1952 Scout), it takes me back to when we ran them together in the basement of our house in the mid-1980s. He's not with us anymore, and that's one way I can remember him. Retail value of his trains is maybe $300, tops. But they're priceless to me, because they were his. So I hope that's something my kids and I can enjoy together as well. It can be their connection to a man they'll never meet on this earth, and one of their connections to me after my turn to go comes.

[Anonymous]

Brianel---- What you are wishing, Lionel making quality works of art for kids, is just exactly what they did right after WWII. They were making the best trains they could produce for kids. The times, the skills and the market all coincided perfectly. Nowadays the skills far outstrip the market of young kids. The market depends on PROFITS. Without profit nobody is going to care if kids play with trains or not. Odd-d

[FJ and G]

Brian,

Excellent Post! I'm going to steal a line from your post to make a topic. Don't they say that imitation is the best form of flattery!!!!!!!

Dave

[brianel027]

Kinda nice to read this.... anyone who knows me knows I have been saying this from square one. That and getting kids back into the hobby.

I still laugh when I think of the (in my opinion) dumb statements Brady from Lionel has made. Whether he's a nice guy or whatever is not the issue... I'm sure he is a nice guy, but Lionel has always taken advantage of the "myth" of their trains being worth their weight in gold and has milked that for more than it's worth over the years. According to the editorial piece he wrote in OGR, Lionel is still looking forward to the collectible status returning again within 5 years. Ha Ha.

On a monetary level, throw the price guides away - your trains are worth exactly the amount of green that someone is willing to place in your hand. The only variation is finding that person who who is willing to fork out a little more green... which of course is the person every seller wants to find. The best reality check today to find out what your trains are worth is to look on ebay.

On a personal level, as witnessed here, the trains are priceless. I know mine are. I'd probably get next to nothing for them money-wise (a thought of mine lately) because I've screwed around and redone and repainted so many of them.

Bill, even though you are right about the "we croak and die" bit (ironically something else that has been on my mind lately), I will always be an artist at heart. My trains are works of art, so I hope when I do croak, I can find someplace where I know they will be appreciated for the works of art that they really are.

It's too bad that Lionel and the others don't put more value and sincere effort in reaching the youth market and in making quality, value priced affordable trains that are works of art instead of worrying about the collector market and hoping the insane pricing/buying frenzy of a decade ago will return again.

May I suggest any investment train collector and John Brady take the time as I have to read the entire span of Vincent VanGogh's letters - several volumes. Thought provoking reading. He made paintings out of love and passion - not for money. People today completely miss the point of VanGogh's life and art - speaking instead not of an man with unmeasurable passion and religious conviction (Vincent was originally a minister), but instead of the prices paid for his paintings.

[Anonymous]

Listen guys, forget about trains as an investment. Just buy what you like and can afford and you'll never go wrong. When we croak and leave this planet, who gives a damn what happens to our trains.
Bill
www.modeltrainjournal.com

[Anonymous]

I certainly am not collecting trains for the money. Once someone who came to see my trains asked me if I would ever sell some of them or if I would let maybe some go if someone offered to buy it. I told him no. The whole point of collecting is to accumulate all the different trains you can. Of course if I get a piece that's in better condition than one I already have, then I will sell the other one because I don't need two. It just makes no sense selling trains for money. What good would it do me? Some people might wonder why I wouldn't sell some rare piece if I could get a bunch of money for it. If I had that much money, all I'd do with it is buy an expensive rare train with it anyway, so why should I sell something that I'd buy with the money it's worth if I didn't have it? Now if I was to sell something other than a train to make money to buy trains, that would make some sense.

[ben10ben]

If you are in trains for the money, you need to find another hobby.

Also, with items such as trains, rarity and demand are only two parts of the price equation. With anything collectible, such as trains, you also have to factor in desirability. An item that has features that make it more desirable is going to be worth more than a low-end bare-bones item.

For example, the 6110 is probably the most difficult to find Scout style engine. Despite this, the 6110 isn't worth more that $40 in excellent condition. On the other hand, the 681 is plentiful, but is a much nicer engine that is much more desirable to own. A 681 in good condition will almost always bring over $120.

[FJ and G]

And, Doug, I think this is a good thing for our hobby, as new blood is attracted to the peculiar 3-rail trains.

If one wants conventional, the big makers pump these out as does Williams; or, you can go as high tech as you want. Why pay for a PW clunker when you can get better operation? Even Williams conventionals operate better than the PW, as do modern transformers.

There will always to PW collectors/operators, but with the deluge of new stuff--mabuchi motor, metal gear, attention to detailing, operating accessories galore, many young uns and even us older dogs are asking the question: "With so much out there, why go looking for PW stuff?"

[cnw1995]

Dave is right. As another example, it's interesting to see the interest in pre-war Lionel wane as the collectors pass away and are 'replaced' by a lower number of interested collectors - as demand drops, so do prices. I realize this is a very very broad generalization, but I've found this is true even seasonally - as gauged by prices on several auction websites - prices (and the amount of available stock) are higher in cold-weather months when there is arguably more model railroading activity than in warm weather months...

[Dave Farquhar]

Collectibles in general are rarely a good investment. At the very least, it's rare for them to outperform more traditional investments. They're just too fickle. I remember 1987-1989 when investors got into baseball cards big time. Values spiked--for a while, people were paying double the value in price guides and thinking they got a good deal. But it was an artificial market. Interest waned in the 1990s. Today most of my cards are worth what they were worth in 1986 or 1987, and that's true whether thay were made in 1987 or 1952. I keep them for sentimental value. I'm sure they'll increase some, eventually, but I don't expect to sell them and get enough to pay for anyone's college education.

My friends who collected comic books at the time saw a similar boom-and-bust in the 1990s.

The other thing about trains, especially postwar, is that right now it's a buyer's market. The trains from the '50s are coming out of basements and attics and there are more sellers than buyers. That's pushing value down, like the 1994 baseball strike killed baseball card values. I can (and do) buy postwar Lionel for less than I pay for new Lionel.

Prices may start to rise once there's little of the postwar Lionel left in private hands and it mostly belongs to dealers and collectors. Or demand may sink, keeping prices comparatively low.

A healthier way of looking at any collectible is that it'll hold its value. That makes things like postwar Lionel trains a better value than other forms of entertainment. But buy your trains with your entertainment money. Save your investment money for stocks and bonds.

[JFermani]

I run everything I buy and do not worry about re-sale values. I have mutual funds and the like for investments - not toy trains. Of course it ia always nice to find out that a piece I bought is worth more than I spent. Most items I have pruchased over the years have gone down in price. Collecting trains for an investment is a crap shoot on which piece will be worth a lot down the road. The original Lionel girls sets is a prime example. No one wanted it when it came out. Many sets were broken up and repainted so they could be sold. Finding an original today in mint condition is worth more because they are hard to find. Who would have guessed their current value back then? That's why I laugh when manufactures make "Collectible" pieces. Its an artifical market. Who knows what locs and the like will be worth a lot in the future. Guys today are upgrading engines, weathering them, adding detail, etc... Finding a mint ??? 50 years from now may be worth something but do you really want to wait 50 years? I'd rather play now and enjoy them for what they were meant to be. Toys.

Joe

[Big_Boy_4005]

QUOTE: Originally posted by NYCentralPA

I was in a situations with a co-worker. She found her fathers' original Lionel 2046 set soup to nuts. They looked almost new, in the boxes complete with the inserts, with a few play scratches. She had the catalog and all the paper work that came with it. She even had a KW in the original box with the inserts. She said she wanted to sell it. She thought it was worth thousands. She asked if I would look at it for her. The transformer cord was old and needed replacing. I got her a new cord, and ran the set for her. When she saw it going around the tracks, she was in tears. She told me she hadn't seen it run since her father was died over ten years ago. She asked me how much it was worth but I didnt have the heart to tell her just then. A few days later she asked me again. I told her it would not be worth it for her to sell them. I told her they would be worth more to her because they were her fathers than the money she would get for them. I told her if she would sell or throw them away she wouldn't forgive herself. She kept them and runs them under the tree at Christmas time.

Nice story, and absolutely correct!!! Total retail value of that set $500 or so. Sentimental value priceless!!!![:D]

[Anonymous]

I was in a situations with a co-worker. She found her fathers' original Lionel 2046 set soup to nuts. They looked almost new, in the boxes complete with the inserts, with a few play scratches. She had the catalog and all the paper work that came with it. She even had a KW in the original box with the inserts. She said she wanted to sell it. She thought it was worth thousands. She asked if I would look at it for her. The transformer cord was old and needed replacing. I got her a new cord, and ran the set for her. When she saw it going around the tracks, she was in tears. She told me she hadn't seen it run since her father was died over ten years ago. She asked me how much it was worth but I didnt have the heart to tell her just then. A few days later she asked me again. I told her it would not be worth it for her to sell them. I told her they would be worth more to her because they were her fathers than the money she would get for them. I told her if she would sell or throw them away she wouldn't forgive herself. She kept them and runs them under the tree at Christmas time.

[Anonymous]

I would like some info on an O gauge set of passenger cars made by American model toys inc.

[Big_Boy_4005]

Supply and demand Dave, and some trains don't have any demand. Everybody wants a set of Santa Fe F3's, but supply is high. Compare that with a set of Canadian Pacifics or some of the other F3's, and it makes sense. Everyone wants what they can't easily get.

I stopped buying trains for value a long time ago. I think it's silly. I buy trains to run and enjoy, and really dont care what the can be resold for, since I don't plan to sell any anyway.[swg]

[Anonymous]

I don't buy trains as an investment. If I did, I wouldn't run them.

My 1957 44 ton diesel switcher is probably worth about $100, according to the guides. It's worth more than that to me, and I still run it.

Tony

[FJ and G]

My former boss, Gordy, grew up with Lionel trains. He still has his 1953 Scout, given to him that year for Christmas. (It is pictured on my layout in Sept03 CTT; he let me borrow it as I installed a new headlight in it). The locomotive runs FAST and is quite heavy. Although Gordy has other modern locomotives, he still treasures the old Scout. It was in a bunch of wrecks but is as intact as it was in 1953.

I did some research for Gordy, looking in a toy train price catalog, where I discovered that the locomotive in excellent condition is today worth less than $100 (I forget the price but $70 seems about right).

I told Gordy what it was worth and he was surprised. Taking into account inflation and 1953 dollars, the Scout has not risen much in value or collectibility. In fact, I found this to be true with the majority of old PW Lionel trains.

A lot of folks think that the old trains in their attic are worth a fortune. A few are, but most are disappointed when they discover that their heirloom sets were a terrible investment.

Dave Vergun