Hobby, Investment or ?

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Hobby, Investment or ?
Posted by traindaddy1 on Tuesday, February 21, 2017 5:11 AM

The recent topic about appraisals got me thinking about my trains.

Am curious as to how you view your participant in the hobby.

As for myself, I have become a "player with" rather than a modeler and certainly not an investor.

As always, many thanks. 

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Posted by cwburfle on Tuesday, February 21, 2017 6:59 AM

Yes, there are investors who speculate in trains. I hope they loose their shirts.
There are also people who justify spending big dollars on trains by telling themselves that they will be able to sell them in the future and get most of their money back, or even make a profit. I think these are the people who have declared that collecting is dying and dead.

These ideas were reinforced and even encouraged by articles in the Toy Train press, and the frequent releases of new price guides with prices spiralling ever upward. The Toy Train manufacturers / importers also incourage these ideas too. Their business depends on it.

Buying any sort of collectables as an investment isn't really a very good idea. I think there will always be collectors, but what they are interested in collecting will change. (This comment isn't limited to trains).

My suggestion: buy the trains you like and can afford, with no expectation of later resale.


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Posted by cwburfle on Tuesday, February 21, 2017 7:04 AM

By the way, there is also a factor that some call "limited demand".

That means when you learn of some item selling for a substantial price, that doesn't mean that every example of that item in the same condition is going to fetch the same money. There are only so many people willing to pay that much. Once they have theirs, the value drops to whatever the next person is willing to pay.

Hertz wrote about this in his book; "The Toy Collector". Its still a good read.

Another thought: Rare does not necessarily mean valuable. If people don't know an item is rare and/or don't care, then that item won't fetch much.

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Posted by Bob Keller on Tuesday, February 21, 2017 7:44 AM

The time to have sold your trains as an investment was probably around 2000. While the saying goes there is still top dollar for top quality (i.e. mint or uncommon) that market is getting smaller (i.e. older).  I wouldn't buy anything in model railroading based on getting a sizable portion of your purchase price back later. Buy it because you like it.

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Posted by fifedog on Tuesday, February 21, 2017 8:24 AM

Hobbyist.  I enjoy running trains, and prefer to operate them on sceniced layouts representing regions that interest me.  The planning stage is just as gratifying as the construction phase.  I still set down with pencil and template, and "reason" my trackplan within the confines of the alotted space given.  My earlier life as a smaller scale "rivet counter", and even an entrepreneur (I custom-painted for over a decade), have given way to much simpler efforts of ready-to-run and plug-and-play.

...and a Collector.  Everyone is "coded" with hunter/gatherer tendencies.  Mine just happen to center on trains.  I discipline myself to stay within a certain era and location, which helps keep the inventory down (my spouse would question that...).  I've added some Postwar toy trains to my collection, for nothing more than the nostalgic, happy feeling that operating these pieces gives me.  My favorite hunting ground is the train show, but I do "haunt" ebay way too much to obtain what I "think" I need.

Never once have I thought of the investment of my collection.  Every item I've bought (or have been gifted) was purposefull only to me.  I remember TCA members during the 80's "buying one to run, and one to collect", often wondering how that worked out for them.  I can't imagine someone these days storing a nearly thousand dollar Legacy, or Vision Line, or Premier engine in Mom's attic for 20 years, thinking they might bring more at resale (if they would even start up and run...).

CWBurfle is correct, your train is only worth what the next guy is willing to pay for them.

I like to think of myself as a caretaker of my trains, and that one day they will bring happiness to the next hunter/gatherer.

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Posted by KRM on Tuesday, February 21, 2017 10:05 AM

I have thought of the investment of my collection but not for long. I buy what I like at the time and when I do spend on e-bay or other places I do it on the cheap. So there is the least investment. If I want to invest I will leave it in the 401K.

For me it is about the hobby, construction, fixing, grand-kids and most of all the fun.

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Posted by Nationwidelines on Tuesday, February 21, 2017 11:16 AM

Great topic. 

I agree that the train market likely peaked around 2000 +/- a year or two and one should not be viewing the trains as a long-term investment that is going to significantly appreciate.

I also agree that I view myself as the present "caretaker" of my items. 

I know that there are all sorts of people interested in trains.  There are the operators, hobbyists, and collectors. 

The one thing that I have found more valuable than the trains, are the friends I have met over the years.  I now spend a full week at the TCA York shows, not expecting to make a great find, but to meet up with friends and talk to the various people I have met over the years.  At the October 2016 York TCA show, I spent very little, but had a great time with my friends. 

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Posted by sir james I on Tuesday, February 21, 2017 12:26 PM

Hotest buy/sell time was late 70s early 80s. The thought then was that prices would keep going up. Today just a few items that suddenly appear popular are about the only real profit pieces. Of course there is still a market for regular items but not with a big profit attached.

"IT's GOOD TO BE THE KING",by Mel Brooks 

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Posted by rtraincollector on Tuesday, February 21, 2017 2:15 PM

Investment not!!. I buy and sell a lot more as something to do. I keep an eye on a lot of items as an idea of whats going on. a lot I buy need work on so it gives me something to do. If lucky I break even. Why do I do it then, as stated something to do. Do I lose a lot not really, I come close to breaking even. But to give you an idea of keeping their value. Go look at some of these 4-6-6-4 etc type engines , what did they sell for new and what they are selling for now ( between 1/2 and 3/4 of original price. ) Post war other than a few ( like SJ said ) most don't even come close, especially once you consider the cost of living adjustment over the years.

I feel lucky as I presently have one car I actually consider rare but will it keep holding it's value. Maybe but I don't bet on it. I feel eventually most trains will lose their collectability. A day I do not wish to see. I mainly collect to enjoy not thinking of profit as a whole.

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Posted by cwburfle on Tuesday, February 21, 2017 4:34 PM

Something I've noticed: anything that I am interested in obtaining is still going for a good buck. But the prices are very soft on all the things I'd consider letting go.  :)

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Posted by Penny Trains on Tuesday, February 21, 2017 6:56 PM

sir james I

Hotest buy/sell time was late 70s early 80s. The thought then was that prices would keep going up. Today just a few items that suddenly appear popular are about the only real profit pieces. Of course there is still a market for regular items but not with a big profit attached.

 

Yeah.  Remember the uproar when Lionel announced a second run of the SP Daylight?  The "investment crowd" went ballistic.

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Posted by sir james I on Tuesday, February 21, 2017 7:04 PM

Yes

And collector cars that were only sold in the sets. You had to buy the set to get one car. Good money made on a break-up but then the set was shot.

"IT's GOOD TO BE THE KING",by Mel Brooks 

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Posted by JoeD1980 on Tuesday, February 21, 2017 7:57 PM

I was kind of caught on the collector treadmill for quite a while.  Then I bought some MPC engines with (ugh, the ignominy!) USED boxes and maybe even (collective gasp!) a SCRATCH or TWO!

Needless to say, in 20+ years of buying/operating/collecting, I've never been happier. I find the more I spend on a train set/engine/piece, the less I enjoy it for some reason.

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Posted by overall on Wednesday, February 22, 2017 11:28 AM

If your want an investment, buy mutual funds. Trains are to be run and enjoyed. If they increase in value, that's fine but it should not be the main reason to buy trains.

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Posted by Expat1 on Saturday, March 04, 2017 2:54 PM

I buy trains that I like and just run them.  I have Lionel from 1906 through 2015 in Standard and O gauge, I have a few modern European tinplate trains from ACE and Darstaed as well as a couple of 3rd Rail scale brass engines with hirail wheels and a 1999 vintage Basset-Lowke O gauge live steam Mogul.  I collect, sort of, I have a few old Marklin, Bing, Hornby and Basset Lowke O gauge from the 1920's and 1930's that are still in running order.  I'm still trying to find a Bowman O gauge tinplate, oscilating cylinder live steamer from the 1925 era, which were made in England.  I'm sure my kids will sell them after I'm gone as I'm the only model railroader in the family.

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Posted by phrankenstign on Sunday, March 05, 2017 12:26 PM

My interest in trains began when my dad bought a Scout-type set in the early sixties.  He'd set it up around the tree when Christmas would come around.  Then in 1963 or 1964 he bought a bicycle wheel to put the trains on.  I don't remember how he did it, but he somehow built a stand that held the wheel at an angle.  He put a bunch of Plasticville buildings on the covered spokes and figured out a way to power the circle of track along the rim of the wheel.  Once the train was on the track, it's weight would make the wheel spin around along with all the scenery on it.  He had to be careful not to run the train too fast or else it would climb to the top despite the angle.  If it reached the top, the speed would accelerate very fast and the whole train would come crashing down onto the floor.  It was only a few inches off the floor, but the whole train would hit the floor very hard.  My dad put a piece of carpeting under it, but only after a few pieces came flying off of some of the cars.  To this day, the #233 engine is missing one of its marker lights, the #233W tender and black #6476 Lehigh Valley hopper have a lot of chips on them, the #6343 barrel ramp car has some broken railings, and the brown, #6017 Lionel Lines caboose has parts of its roof missing.  My dad bought a red bay window caboose, but the body ended up getting damaged to the point it wouldn't stay on the chasis.  He reverted back to using the original caboose with the broken roof.  Both the blue, #6162 NYC gondola with canisters and the noisy #3444 Erie animated gondola escaped noticeable damage.  Luckily the lighted #6434 Poultry Dispatch boxcar escaped with only damage to one of its couplers.

Those may seem like horror stories to a "collector", but I remember my dad being so proud of his invention and the excitement/awe/freakout when the train would make it to the top and then crash.  He never tried to make it crash on purpose, but it happened at least a few times.  All of my siblings still remember that layout consisting of a single loop of track---but a mini-world to us---that helped us build a lot of respect for that resilient #233.  It thought it could.  It thought it could.  It thought it could.  And it did!  Only to be rewarded with the spin of death.  BUT IT SURVIVED!!!

Anyway.....my fascination grew from those humble beginnings with that Scout-type set.  I guess the FUN is what I remember most.  To this day, I have run every single train I've bought.  I may not run some as much as others, but they all get a turn on whatever track I set up.  There are a few items in my collection that are probably worth a bit more than I paid.  However I'll never see any monetary profit, because I'm not a seller.  I get play value out of my trains.  My son or daughters may sell everything once I'm gone.  They may make a bit of money out of my stuff.  I only hope they each get the same enjoyment out of the trains I got by setting up at least a loop of track at Christmas.  They grew up with that every year, so I hope I planted the idea Christmas isn't complete without a train around the tree.

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Posted by robmcc on Sunday, March 05, 2017 3:00 PM

I've never bought anything with the thought of making a buck on it a few years later. I'll run everything right from a basic MPC era locomotive right on up to the latest and greatest Legacy locomotives. Mr. Cowen never intended for his trains to be sitting in boxes on a shelf. As mentioned earlier, the boom seems to have passed. I don't see the postwar product fetching the prices it had 20 years ago. I operate and collect mostly Canadian railroads, so for instance, the Canadian Pacific 2373 F3s mean more to me for the name on the side than being a desired collectible. I would still have them if they were a dime a dozen.

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Posted by V8Vega on Monday, March 06, 2017 11:36 AM

2 decades ago I rationalised that it was OK to spend a lot on trains as you could get your money back and even make some. Those were the days of only prewar, post war and MPC plus Marx and early K Line.

I bought more than makes any sense, much are stored.

Today who are you going to sell to? many of potential customers already have everything they want and are 73 like me. A lot of people die around 80 I hate to say.

 

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Posted by cwburfle on Monday, March 06, 2017 1:32 PM

2 decades ago I rationalised that it was OK to spend a lot on trains as you could get your money back and even make some.

A lot of people did.

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Posted by Train Guy 3 on Wednesday, June 21, 2017 5:44 PM

I don't buy automobiles to sit in garages and I don't buy toy trains to set in glass cabinets. Cars were meant to be driven and toy trains were ment to be played with. I would have to come across a very rare car in order to purcahse and not drive it. I would have to come across a pretty rare toy train item for it to just sit on a shelf.

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Posted by artyoung on Wednesday, June 21, 2017 7:55 PM

I always bought to "play with", not invest. I also thought that when I die, any heirs would be able to get some decent cash out of it - not a lot, but enough to waste on their own interests. Well, as the people like me are ageing and dying, there probably won't be much interest in what's left to sell. 

So here's my take on this subject: I've gotten a huge kick out of my toy trains for 65 years, and after I'm dead it really doesn't matter what happens to them because I won't be around to care.

There was a Lionel ad that said "An Investment In Happiness". I figure it paid off quite well.

They're toys. Play with them.

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Posted by Curmudgeon on Thursday, June 22, 2017 12:08 PM

I see the "peak" around 2000 mentioned..then better at 70-s and 80's...that is closer in my memory banks.

The TCA really helped with the collector mentality. You still see the evidence of that when the same guys haul the same truckload of overpriced junk to York every year..then haul it home.

The organization is so afraid to admit (openly) how bad it is, they even have national sales meets to try to buttress up the pricing.

We have gone through several sell-offs locally, the last one the owner/seller realized less than 1/4 his initial investment costs.

The trains are only to enjoy....I even remember the bottom falling out of the Japanese Brass in Half Zero, and how the invested collectors tried to keep it alive (and even the magazines, talking up the wonderful brass....)

Now you have folks defending evilbait sales that two idiots who haven't a clue bid against each other...and suddenly their stupidity becomes the new price point?

I get stuff all the time, have for decades. But I set the price. If it's cheap (as in really cheap) or free, I'm probably in.

And most of the stuff I have added to my 3-rail trains in the last 20 years has been free.

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Posted by cwburfle on Thursday, June 22, 2017 1:20 PM

Tell us more about the the TCA.
If their shows are so bad, then why do you attend?
If you don't attend, then how could you know what goes on at their shows?

And I'd like to know more about these "national sales meets".
I haven't heard of them before.

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Posted by Curmudgeon on Thursday, June 22, 2017 2:13 PM

I haven't..on purpose. GOOD friend has done quite a few, his exact observations.

I was TCA for one year until I figured out what they were all about, and quit. For discussion purposes, I keep the membership card stuck on a post on my train room.

You don't know about York? Really?

Isn't the description of York "buildings and buildings full of table sales"? Yes, you can find some good stuff reasonable (he did), but a whole lot of those folks have swallowed the TCA mantra that the Lionel stuff is an "investment" so you can send your kids to college.

Read the part about an entire railroad bringing in less than 1/4 the initial investment when sold (in the last 30 days, too).

Might help to read this commentary on a recent MR Editorial:

http://cs.trains.com/mrr/f/88/t/263607.aspx

Note how many responders have figured all thir trains are just going into the dumpster. Yes, most of those folks model Half Zero or smaller, but it's still model railroading.

I could tell you stories about artificial pricing I saw when I was in TCA.

But the funny one, by far the funniest, was the 5344K (700E Kit) that was new in the box, factory sealed, with an x-ray, being sold every coule of years as an "investment", first I heard was $4500, last I heard was $5500.....and the amount of parts that were Zamac tends to make you wonder, when the box is finally opened, will it just go into the trash?

Friend tried to sell off a bunch of older postwar Lionel freight cars (6464 and such) couple three years ago, and couldn't get half of what he paid for them, so back on the shelf, as he wasn't going to give them away (which is basically what he did in the end).

If you treat it as a hobby, not an investment, you will enjoy it.

I can't tell you the places I have been where there are one to six bedroom packed so solidly with "investments" you can barely open the doors.

I figure my stuff will go into the dumpster. Easier.

I have been involved in tearing out several railroads, and it isn't fun, and a whole lot cannot be salvaged.

Treat it as "fun" and a "hobby" and you'll be fine.

Don't think "American Pickers".

 

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Posted by cwburfle on Thursday, June 22, 2017 3:47 PM

If you treat it as a hobby, not an investment, you will enjoy it.
I agree 100% on this.

I guess I missed the TCA articles touting trains as a financial investment.
I do recall CTT articles about investing in trains. That was some time ago.

Lots of folks cannot differentiate between collecting and investing/speculating.

 

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Posted by cwburfle on Thursday, June 22, 2017 3:55 PM

Friend tried to sell off a bunch of older postwar Lionel freight cars (6464 and such) couple three years ago, and couldn't get half of what he paid for them, so back on the shelf, as he wasn't going to give them away (which is basically what he did in the end).

Peoples tastes change. And in general, collecting is not as popular as it once was.

My wife and I were recently watching a current episode of "Antiques Roadshow". For this show, they replayed a show from ten years and updated the value estimates on the pieces they featured. A significant number of the items had lost value, some lost quite a bit. A few stayed the same. Only a couple went up.

If a person is going to collect trains (or anything else), do it because you enjoy it.
Consider the money spent and gone.
Buyng objects is not like putting money in the bank or buying bonds.

I've enjoyed collecting and playing with trains for almost fifty years.
When the time comes for them to go, maybe they'll have cash value, maybe not.
I will have gotten my money's worth out of them either way.

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Posted by Curmudgeon on Thursday, June 22, 2017 4:05 PM

Lots of folks do differentiate. Good thing.

What, you really think the TCA would pubish their underlying mantra?

Or the emema-ray for that matter?

Any time I see any one throwing these type of responses out, I know where they stand, and the attempt it appears to be to sway the conversation back to their comfort place.

Maybe it's just the local TCA guys who advise widows on pricing, where it becomes obvious to even the most wild-eyed TCA regular member, that pricing a junk 736 with scratched and gouged paint, bent cab roof corners, and a HUGE full 0 scale GN boxcar oval on the tender, so big it folds over the top and bottom of the tender sides, for MORE than a decent one is going for.....guess what will happen when they try to sell some of their "investment" at auction?

 

Oh, well, HER junk 736 went for this much, so OURS is now worth much, much more.

Obvious.

Or the MDT 6 wheel diseasemal switcher (yeah, not Lionel), shell off, screw mounts all broken out, no idea if it runs or not....thirty bucks. "Oh, the boys told me to price it like that, and I believe them".

Grab a semi-current MR off a table, open it to the IHC ad, at the bottom is that engine, new in the box, not broken....$6.98.

It was just stuff like that month after month, you get a real good "feel" for how their game is played, hence the refusal to ever join again.

I can probably do this longer than you can.

TOC

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Posted by cwburfle on Thursday, June 22, 2017 4:53 PM

Maybe it's just the local TCA guys who advise widows on pricing, where it becomes obvious to even the most wild-eyed TCA regular member, that pricing a junk 736 with scratched and gouged paint, bent cab roof corners, and a HUGE full 0 scale GN boxcar oval on the tender, so big it folds over the top and bottom of the tender sides, for MORE than a decent one is going for.....guess what will happen when they try to sell some of their "investment" at auction?


Does one have to be a TCA member to advise widows on pricing?

Regardless, I guess I've met a widow or two who was ill advised on the value of her husbands trains.
I'd guess that the folks were trying to be kind, not realizing that the widow was actually going to try to sell the trains at those prices.


Oh, well, HER junk 736 went for this much, so OURS is now worth much, much more.

If their motive was to make their own stuff seem more valuable, they were only deluding themselves.  It's not like the widow was going to purchase more trains.






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Posted by scrambler81 on Thursday, June 22, 2017 6:09 PM

My collecting has been as much about passing time as it has anything else. I love going to shows, hobby shops, antique shops, etc. I enjoy wandering around, seeing what is there, and buying things that appeal to me. I don't need these things I buy, I just like them. I rarely go out knowing what I'm looking for, I'll just know it when I see it. My 0 gauge collection isn't huge, but it is more than enough, which does not mean I'll stop anytime soon. My toy collection is huge. Even if I didn't buy anymore, I still enjoy looking at everything I have, building displays, and changing what is on display.

 Two weeks ago I set up at a toy show, and I sold off much of my old HO equipment, as well as a ton of Johnny Lightning diecast cars, and some other odds and ends. Most expensive thing I sold was $15.00, yet I cleared over $600.00. Technically, I lost money. However, I've gotten countless hours of enjoyment out of those items, and I now have some money that I didn't have 3 weeks ago. Could I say that if my pastime was golfing, or going to the casino, or hanging out at the bar with the guys? Not likely. I have a lot of fun, and they are still worth something when I'm done. So I think my trains and toys represent money well spent.

 Oh yeah, I've also been known to give away Johnny Lightnings as treats on Halloween. At $3.00 to $5.00 each, they are a little more expensive than a Snickers bar, but I can't put a price on the looks I get from little kids when I hand those over.

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Posted by Curmudgeon on Thursday, June 22, 2017 6:30 PM

cwburfle

Maybe it's just the local TCA guys who advise widows on pricing, where it becomes obvious to even the most wild-eyed TCA regular member, that pricing a junk 736 with scratched and gouged paint, bent cab roof corners, and a HUGE full 0 scale GN boxcar oval on the tender, so big it folds over the top and bottom of the tender sides, for MORE than a decent one is going for.....guess what will happen when they try to sell some of their "investment" at auction?


Does one have to be a TCA member to advise widows on pricing?

Regardless, I guess I've met a widow or two who was ill advised on the value of her husbands trains.
I'd guess that the folks were trying to be kind, not realizing that the widow was actually going to try to sell the trains at those prices.


Oh, well, HER junk 736 went for this much, so OURS is now worth much, much more.

If their motive was to make their own stuff seem more valuable, they were only deluding themselves.  It's not like the widow was going to purchase more trains.






 

 

And it was done so she could sell the stuff at the TCA meets. They knew full well.

Being the oldest of 5 of a widow, I know how this works..and smells. From a distance.

And, yes, the items started showing up later on from those same "advisors" at higher prices.

Anything you can do to "increase your profit", right?

Funny what life experience does to how you view things.

If you think it was right for them to overvalue her "junk", knowing it was going to be sold at TCA meets (where else would an old lady take it?) then okay, fine, good.

You've never, ever heard any (specific) TCA member mention "one of those just sold at the TCA auction for a HUGE amount!" or something close...which now in their mind set the new, higher price.

Where do you think the evilbait business model came from?

You see the same stuff...."one just like this sold for ten times what it's worth!"

TOC

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