grayfox1119 wrote:The cost of labor, materials, utilities, taxes, etc. all go up every year, so there is absolutely no way that prices are going to ever go down.
The only reason commodity prices are so high is because speculators pushed them there. Be mad, folks!
I hate to rain on your parade, but speculation only works when things are rising in price for other reasons. The "flipping" of houses worked in a time of high demand for houses. Don't try it now. Speculators are only taking advantage of rising prices, they're not causing them. Everybody is looking for someone else to blame, so the handy target du jour is speculators. Ironically, if tonight's NBC Nightly News is to be believed, Americans have cut back on their driving rather drastically which has caused gasoline prices to stabilize and even fall (it's about $0.20/gallon cheaper here than a few weeks ago). Reduced demand will do that.
All being mad about it is going to do is raise your blood pressure. And all writing nasty letters to companies about prices is going to do is provide a great deal of free amusement for those who read the letters.
Andre
andrechapelon wrote:The only reason commodity prices are so high is because speculators pushed them there. Be mad, folks!I hate to rain on your parade, but speculation only works when things are rising in price for other reasons. The "flipping" of houses worked in a time of high demand for houses. Don't try it now. Speculators are only taking advantage of rising prices, they're not causing them. Everybody is looking for someone else to blame, so the handy target du jour is speculators. Ironically, if tonight's NBC Nightly News is to be believed, Americans have cut back on their driving rather drastically which has caused gasoline prices to stabilize and even fall (it's about $0.20/gallon cheaper here than a few weeks ago). Reduced demand will do that.
Well, I was saying "speculators" which is just a curmudgeonly way of saying "investors". SO I was being a little unfair. But the thing about all that is that investors, while taking advantage of high prices, can cause them to become higher yet, and it can keep going, until the price has actually been driven out of the realm of supply and demand. That's what the president of OPEC meant back in April when he said that increasing production wouldn't cause a drop in oil prices. They already had more production than they could sell at the going rate.
Speculation and investing are 2 different things. Speculators are in it for short term gains while investors are in it for the long haul (e.g. Warren Buffett - whose Berhsire-Hathaway, incidentally, has invested considerable money in BNSF and is now the largest single stockholder). Buffett's advice is to be greedy when others are fearful and fearful when others are greedy. It's just another way of saying buy when things are under-priced and sell when they get over-priced. If they don't get overpriced and the fundamentals are still strong, there's no reason to sell, especially if you're being paid a nice dividend to hold on.
Pumping more oil won't do a bit of good without an increase in refining capacity and that takes time to implement (i.e. investment in new refineries). As for the OPEC ministers blaming speculators for high oil prices, that's rather disingenuous since they're making money hand over fist regardless and it doesn't really matter to them what's driven up the price of oil. Of course, the one thing they are afraid of is that high priced oil makes it economically feasible to develop alternative energy sources which could eventually derail the current gravy train. It'll take time, however.
This thread started out as a complaint about high hobby prices. To the best of my knowledge, there is no speculation in P2K, Athearn or Bachmann futures. No one is buying contracts for BLI/PCM 2011 locomotive deliveries in the hopes of selling those contracts for a profit to someone else. The last thing thing a speculator wants to have happen is actually to have to take delivery of a product.
Actually, there ARE people buying futures in model railroading.
Every time a modeler buys a train or train item that is not yet in production, or available for delivery, he is buying a futures contract. For example, a new engine to be delivered in March of 2009, or
Southern #1Walthers Part # 6-40376HO scale, $22.95, not currently in stock at Walthers, Expected: 31-Oct-2008
If he later sells that train to someone else prior to actually recieving it, he has SOLD a futures contract.
That is all the speculators are doing.
Dave
Lackawanna Route of the Phoebe Snow
Autobus Prime wrote:It can happen, but general DEflation is actually a bad thing. For one thing, it makes your debts go up, because the money you borrowed years ago is still there, while you have less money to pay it off. I'm steering back away before I get mugged by economists again.
You are absolutely right that deflation is a bad thing. It is much worse then the typical amount of inflation. For example, Sweden have a goal set to have between 1 and 3 percent inflation each year. The optimum is 2%(for the Riksbank).
Deflation also creates another effect. If you know that your money will be worth more if you wait then why buy now? If that car will be cheaper in 6 months why not wait. Why take a loan and see it increase by deflation? It becomes a very very evil circle where people cut spending, causing sellers to lower prices which increases deflation and so on.
Before anyone else says it, this is a very, very simplified explanation of the effects and causes of deflation, so no need to explain that to me.
Magnus
Phoebe Vet wrote: Actually, there ARE people buying futures in model railroading.Every time a modeler buys a train or train item that is not yet in production, or available for delivery, he is buying a futures contract. For example, a new engine to be delivered in March of 2009, or Southern #1Walthers Part # 6-40376HO scale, $22.95, not currently in stock at Walthers, Expected: 31-Oct-2008If he later sells that train to someone else prior to actually recieving it, he has SOLD a futures contract.That is all the speculators are doing.
That's not a futures contract. When you buy a contract, you're paying for the right to get something at a set price and you're not actually paying the full item price for the contract. Simply ordering an item without paying for it up front doesn't qualify, either. If you sell your order to someone else, for say $1.50 and he's agreeing to buy the thing at $22.95, he's a fool because he could get the same thing for $22.95 (or less from a discounter) without ponying up the additional buck and a half. If you order an item of future hobby production, you generally don't have to provide up any front money (unless you're buying in bulk or if you're ordering an expensive brass loco). The stuff just doesn't trade like pork bellies or frozen OJ.
It also only works when prices can fluctuate on a daily or near daily basis. In order for it to work for model railroad items, items would have to be subject to the same price ebb and flow that happens in the stock and commodity markets. In any case, when you buy a contract, you're not buying items in single quantities (e.g. 1 barrel of oil), but in multiples.
You can also sell both stocks and commodities short (i.e. sell what you don't have on the premise that prices will fall and you can cover your short sale at a lower price). Now if I could sell 500 Blue Line ATSF 3751 class 4-8-4's that I don't own for $300 and buy them down the road for $100, it'd be great. Ain't gonna happen. Not unless I can find 500 people who ain't too bright to buy the things, 500 brand new locos I can "borrow" and a source for the cheaper locos I can buy down the line so I can return them to their original owners. Now THAT would be successful speculation. Then again, I'd probably end up with 500 contracts out on me.
Ah yes, but what about when the item is a limited production single run, who's value WILL increase when it is no longer available.
Selling short is not related to whether or not the comodity is a futures contract.
RRTrainman wrote:Don't get me wrong, I love this hobby with great passion for it. It just seams that with all of the new thing for our hobby, thing seam to be inflated abit. I've have purchased some of the new things and I don't see the differance in it. Like my newest addition my -9 BNSF the only thing I see is a place for my decoder for when I change to DCC some day off. I just don't see a 50% cost increase for a couple of pins on top of the motor to hook it up.
Just because you don't see the reason doesn't mean there isn't one.
Economics and greed are two of the things that cause price increases. And greed isn't always present in pricing decisions. Manufacturing costs are constantly rising because raw materials and labor costs are constantly increasing. Greed may be present but for the most part hgreed only encourages increased competition to the point where it no longer has an effect on the market because increased competition usually results in less demand. And when demand goes down, so do prices.
Irv
NSlover92 wrote:I think this thread is getting absolutly rediculous, I am only 15 and don't remember when to much was cheap, but I think we should just let it go arguing about it doesnt fix any of it., Mike
Exactly. But give it a few years and you'll understand why older folks do it.
You mean like "investment" grade brass engines, the ones who sell for less on an inflation adjusted basis than they cost originally even if untouched in the original box? Increased value is only meaningful if it exceeds the rate of inflation.
Westside did a single run of the SP GS-8 around 1973. It cost $135 then, which is about $665 in today's prices. The highest I've seen one in the last few years is $450. Adjusting back to 1973, that's $91 and change. SP is a very popular road and the GS-8 is relatively rare brass engine.
IIRC stock in Berkshire-Hathaway was about $25 or so/share in 1973. $135 would buy you 5 shares of stock (not counting commissions, which were substantial back then). Berkshire-Hathaway is currently selling for $111,700/share for A class shares now ( http://finance.yahoo.com/q?s=brk-a ). Buffett doesn't believe in stock splits. Which would you rather have, 5 shares of BRK-A or a mint Westside GS-8? I'd be glad to sell the GS-8 I have to anyone for $111,750. Shoot, I'll sell the thing for $50,000, I ain't proud. I'll even throw in a 52 inch LCD TV to sweeten the pot.
It is all about choices. Right from the bench work to the locomotives and scenery.
You have to look for other ways to do things, some compromising, making do with what is available, recycling, etc. etc.
My layout is 13'x17', three level, and I believe by careful and studied shopping and purchases I have cut down the costs by about 50% over just going out and buying whatever you see.
For example, Micro Mark has some Bachmann Spectrum Locos on sale right now. I just received in the mail from them a beautiful SD45, DCC/DC which is a $130.00 unit and it only cost me $38.50 plus postage. I love it.
Most of my other purchases have been off e-bay or from sellers and stores that I have made aquantance with through E-bay, who are real square shooters and have worked well with me by email or over the phone to meet my needs and being kept aware of their specials.
My LHS, would not do this and for the last four years only has one kit in his store that is in my road name.
My power is from three "Control Master 20s. Which in my area ,if you can get them, are about $329.00. In total, I got all three of mine for that amount. The answer to this problem is shop, shop ,shop, Know what you need, know what you want, and keep that seperate in your mind. --When buying off ebay, check each seller out, read their feedback, communicate with them and see how they respond. You can virtually tell by these things how you are going to get treated. In over three hundred E-bay purchases, I have only been stung twice, the total being about $25.00. which I don't consider very bad with the total I have spent.
Make good decsions, don't let someone make them for you.
Read lots, books and on the web, there is a host of information that you can use by just studying how others solved and saved in over coming a problem or a project in an efficient and frugal manner.
Johnboy out.................
from Saskatchewan, in the Great White North..
We have met the enemy, and he is us............ (Pogo)
Ah yes. The good ol' days. I remember them well - I had to walk to the hobby shop through the snow, up hill, both ways. You could buy a bundle of brass rail and a bag of spikes for pocket change, go home and cut ties from used popsicle sticks and handlay your track. With a soldering iron and a little creativity you could make a couple of locomotives out of the left over rail. With a little war surplus wire you could wind your own armatures and have the thing running for next to nothing. Everyone made their layouts out of old pallet wood and ran their trains with old car batteries. Yessir you could fill a basement with railroad for a couple of hundred bucks.
Thank God those days are gone and you can get some decent stuff at the hobby shop.
Paul
IRONROOSTER wrote: Ah yes. The good ol' days. I remember them well - I had to walk to the hobby shop through the snow, up hill, both ways. You could buy a bundle of brass rail and a bag of spikes for pocket change, go home and cut ties from used popsicle sticks and handlay your track. With a soldering iron and a little creativity you could make a couple of locomotives out of the left over rail. With a little war surplus wire you could wind your own armatures and have the thing running for next to nothing. Everyone made their layouts out of old pallet wood and ran their trains with old car batteries. Yessir you could fill a basement with railroad for a couple of hundred bucks. Thank God those days are gone and you can get some decent stuff at the hobby shop. Paul
You forgot the part about using scrap aluminum from de-commissioned B-17's to roll your own boilers and using aileron actuators to animate the walking beam oil pumps in your model oil field.
I even heard of one fellow who used the supercharger off a Packard built Rolls Royce Merlin engine from a retired P-51 to provide the air for his home made air brush which he created by melting old C-ration tins into an ingot and then carved the result into the general shape of an airbrush.
Oh the way Glenn Miller played,
Songs that made the Hit Parade.
Guys like us, we had it made.
Those were the days.
Stifle, Edith.
Autobus Prime wrote:...I love building stuff, even if I don't get very advanced, and it's a great confidence builder.
...I keep running into people here who do like to "make it work", so that makes me happy. Not a lot, maybe, but more than I thought there were.
AutobusPrime wrote:I keep running into people here who do like to "make it work", so that makes me happy. Not a lot, maybe, but more than I thought there were.
marknewton wrote:Like you, I hope that trend continues. I always enjoy seeing what people have built. I find it far more interesting than seeing what people have bought.
I agree, and wonder if the sinking economy (at least in this country) might help boost the number of people who find less-expensive ways to do things in this hobby that entail learning more than just how to hand over the credit card and open a box.
Ibeamlicker wrote:Gee our old Lasalle ran great,Those were the daysssssss......
LaSalle's drool, Maxwell's rule.
If it was good enough for Jack Benny, it's good enough for me.
GraniteRailroader wrote: marknewton wrote:You're not wrong. I'm sick of all the whingeing. If people are finding the hobby unaffordable, they either need to get a job that pays more, or find another hobby - it's that simple.Mark.Model railroading is a hobby. It's not meant to be in the same category as say, buying your weekly groceries, paying the utility bill, or making your mortgage/rent payment for your home. If you can't afford to buy that 100$ fantasy Athearn locomotive right away, then save up for it. You don't have to buy a new one every month, or have some outrageous hobby budget that's thousands of dollars either.
marknewton wrote:You're not wrong. I'm sick of all the whingeing. If people are finding the hobby unaffordable, they either need to get a job that pays more, or find another hobby - it's that simple.Mark.
Model railroading is a hobby. It's not meant to be in the same category as say, buying your weekly groceries, paying the utility bill, or making your mortgage/rent payment for your home. If you can't afford to buy that 100$ fantasy Athearn locomotive right away, then save up for it. You don't have to buy a new one every month, or have some outrageous hobby budget that's thousands of dollars either.
Agreed. I've got a mortgage and four dependents (plus another four-legged one). My wife goes to school full-time and doesn't work outside the home, so that plus all the bills to keep everyone fed, warm and well (including the vet) eats mightily into my income. I make a very good salary as an IT professional so I can't complain - just make do.
So, how does one "make do?" Well, exactly as the bolded quote above. You don't need one or two of everything featured in MR's new products section. Don't model a Class One mainline located in Chicago fed by dozens of staging tracks (each with it's own multi-unit train), multiple levels of basement-filling benchwork, uber-DCC system plus dispatcher panel, etc. Model something more attainable like a shortline, branchline or secondary line with less traffic, model one town or a yard fed by modest staging, whatever... just avoid prototypes that are beyond your means. That doesn't mean you can't model railroad; you just need to model in a more realistic and disciplined manner.
Do a Google search on 'Lance Mindheim East Rail' to see what I mean - a dream layout that can be attained on a small budget. There are many others out there if you look for them.
Also, to the OP... look to a certain model railroad manufacturer that shares your "handle." Atlas produces some fine RTR equipment in their Trainman line at a very reasonable cost. A couple of Geeps - MB Kleins has them for $55 each - and a couple dozen cars which can be had online for less than ten bucks each will do a guy well. Athearn RTR, Accurail and Walthers can fill out the rest at reasonable prices. If you're even more budget minded, look at train shows for unbuilt Athearn, Roundhouse and Accurail kits. I find loads of these at shows for a good price as some modelers are selling off old kits and going RTR.
Also, last time I checked railfanning is still pretty cheap. I can head up the state highway 15 miles and be right alongside CN's Flint Sub halfway between Chicago and Toronto. For the price of a couple of gallons of gas and some fast food a decent afternoon of trainwatching can be had.
Follow these paths and you'll have plenty of model railroading fun for very little coin.