Market has Stumbled and Fallen! (1 Viewer)

[vandilay]

I guess at the end of the day even if the market does completly tank
and not recover you have got something you have enjoyed.
Just look at the depreciation on a car to see how to realy loose
some money .

 

[Mike97]

I guess it comes down to what a person got into this hobby for in the first place. I've never looked at collecting lead soldiers to be anything other than a relaxing activity, that combines an appreciation of history with youthful memories-and toys. Sure, I've speculated a little, but gotten very little satisfaction out of doing it.
As far as speculation in general, the world is of full of 'investors' who took big losses betting on 'bubbles' (tech stock bubble, oil bubble....now toy soldier bubble?). I suspect we might see some people selling on ebay out of necessity (and I don't wish that on anyone) and that 2009 may be soft on re-sale. Maybe it'll allow some retired items to be acquired at reasonable prices for a change...

 

[Rutledge]

To some, it might matter, but my collection is for my personal enjoyment and not for its market value..never was..Michael

Absolutely. From an economic perspective, toy soldiers are no different than Star Wars figures, Comic Books or baseball cards. They appeal to a limited audience, do not have "natural" quantitative limits, ie., there is only one original Mona Lisa, and are prone to periods of speculation -- especially during an inflationary "asset bubble" such as we have been in for the last 20 years!

We are likely entering a period of deflation. On an annualized basis, the CPI (Consumer Price Index) over the last three months was negative -12.7%! Core CPI, which excludes food and energy, came in at minus 0.3%. Asset prices are bursting all over the place. Discreationary items, like toy soldiers, are the most vulnerable.

The govt will do its very best to jump start the economy so that we avoid a deflationary spiral such as Japan has been in since the early 90's! Whether throwing money that it doest really have will work as intended is TBD. I suspect there will be some unintended consequences at some point down the road.

If you are truly seeking a store of value that can actually be held in your hands, I would buy physical gold like Krugerands or American Eagles.

No offense to anyone, but Ive always enjoyed this quote from Mr. Buffett:
"There are three ‘I’s in every cycle. The ‘innovator,’ that’s the first ‘I.’ After the innovator comes the ‘imitator.’ And after the imitator in the cycle comes the idiot."

Please dont be the latter! Toy soldiers are meant to be enjoyed as they are, and not hoarded or flipped.

 

[Vezzolf]

As we all know by now the severity of this economic crisis will not be short term.......non essential products and services will take a huge hit......Most of us do not need to be too concerned however as we collect for pleasure and don't over do it.........but the few who have accumulated in XS for profit will be in for a bit of a dissappointment.......fortunately we are not talking serious dollars but they will be "storing" their items for some time......... My guess is they will be lucky to lose no more then 35%........This is why I personally treat hobbies as hobbies not as investments and I seldom make multiple purchases of the same items.........My rule is my purchases for hobbies must truly reflect disposeable income; however it is easy to get carried away.......With continually rising prices in this hobby discipline in spending is the key for me......

 

[lancer]

Marriage commandment #10 - Thou shalt not bust thy monthly toy soldier budget.

 

[Louis A. Cortez]

Interesting topic. Good reasoning and thoughts. I really do not have an opinion but I liked hearing all of yours.

 

[Njja]

Production numbers is a delicate balance for K&C ... make too few and collectors who can only afford to buy a few sets at a time complain about early retirements that force them to pay a higher price on the secondary market ... make too many and collectors complain that the collectible value is affected. As Andy has repeatedly posted, someone will always be unhappy.


In introducing Helen Mok Sargent as K&C's Managing Director at his last few talks, Andy has mentioned that Helen has installed programs that allow K&C to track sales on a daily basis, allowing K&C and Andy to see trends like what items are doing well and what items have slowing sales. Except for some direct sales, K&C's customers are dealers, and Andy has also mentioned that K&C are constantly in communication with them to see what items are doing well.

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Steven: Production is always an important factor for any manufacter. That is why so many spend a lot of time understanding exactly who their target market is.

Tracking sales is important but it does not tell you who you are selling to, what their income is, and what percentage is available yearly for your product. The information you recieve from your dealers is influenced by their desire to capture increased market share and again offers little imput into who the actual customers are.

Once you understand who you are selling to, and what their budget is you can plan price point, and number of new releases you might offer based on the current trend in your customer base.

The bigger a manufacter becomes the more difficult it becomes to remain profitable.

 

[Njja]

I guess at the end of the day even if the market does completly tank
and not recover you have got something you have enjoyed.
Just look at the depreciation on a car to see how to realy loose
some money .

A good point, as a vehicle is often a persons second largest purchase care should be taken to minimize the loss many people experience when buying.

 

[King & Country]

Hi Guys,

Re the above subject and the many very, very good and informative comments posted…

I find myself agreeing with most of them!

First of all… buy something because you like it… pure and simple.

If that item is no longer easily available and someone else is willing to pay a premium to obtain it and, perhaps, you no longer need it or would like some spare cash to buy something else… go ahead and sell it for whatever both parties agree on.

The whole ebay phenomenon has by and large passed me by… I have never bought anything on ebay and I’ve never sold anything either.

A wee while ago a lot of people had a lot of spare cash to spend and so they did…

Today there’s a lot less and people are a lot more “canny” (and old Scots word for careful)… that’s only natural.

Also a big thankyou to our friend Steven Chong for his straight-forward explanation of how companies like K&C (and others) work out how many items to actually produce. Over production is the last thing any company wants to do in any business… None of us wants product left gathering dust on any shelves. But for the record you guys might like to ponder on a couple of figures… Take WS043 Michael Wittman’s Tiger… K&C produced, in total, 2,000 sets of that piece and sold it over a couple of years. A while later we sold another 2,000 of our last “Summer Panther”… even in the collecting world these are not huge numbers. Especially for a company that sells on a global basis… not just the U.S.

By the way I’m not complaining… K&C is more than happy to sell these kind of numbers. Generally speaking K&C sells anywhere between 6 or 7 hundred up to that magic 2000… and all numbers in between.

I honestly don’t think we over-produce but occasionally we will over-estimate the actual collector appeal of a vehicle or collection of figures… C’est la vie… C’est la guerre!

If we could always get it right and never make a mistake I’d be sitting on a yacht in Monte Carlo Harbour!!!

Finally, this “period of painful adjustment” the whole world is going through will pass… eventually… and all of us, I hope, will emerge a wee bit poorer but a whole lot wiser for it.

But in the meantime… I’m off to China to see our Sculpting & Design Studio and taking a little batch of new products and ideas to begin work on.

Very Best Wishes to one and all and… even in these times… happy collecting!

Andy C.

 

[nmrocks]

When I first discovered K&C back in the mid 90's, the hobby seemed really small and obscure, the explosion of our hobby and escalating resale values while a great thing were never why I began to collect. Our hobby will survive and prosper, if some fall by the wayside... well name me anything in life were that doesn't happen? You squeeze out some undesirables is probably healthy anyway.
In the end, if the hobby had not taken off and K&C had stayed a obscure low production operation I would still have collected them and been very happy as I am today.

 

[Spitfrnd]

Well I certainly I think it depends on what you are looking for. So far, I have yet to see any glut or decline to a reasonable level of the prices of retired items that I am interested in. Maybe this market needs some more glut or some more tanking.

 

[Saber]

… Take WS043 Michael Wittman’s Tiger… K&C produced, in total, 2,000 sets of that piece and sold it over a couple of years. A while later we sold another 2,000 of our last “Summer Panther”… even in the collecting world these are not huge numbers.

Does this same approximate number hold true for individual figures such as the single napoleonics?

 

[Cyber Field Marshall]

My comment pertains to those for whom K&C is not just a hobby but an investment. In a former life I was a financial advisor and this whole discussion has reminded me of the "risk hierarchy". Investments generally fall into categories based on risk ( the inherent volatility in value of a holding ). Cash = low risk, bonds = medium risk, equities = high risk and art was the riskiest asset.
With that in mind those looking to make profits on their art pieces are taking significant risks with their money due to many of the issues listed in this thread like variable collectors preferences, number of product issued, what is perceived to have value etc.
Even in a good economy art is hit and miss but sometimes it can provide a great windfall however in a poor economy art can really get hammered because it is one of the riskiest asset class around. Its therefore no surprise to me that the secondary market for these pieces is weakening just like other high risk investments have.
Secondly, K&C has passed on their rising costs to collectors by increasing their price points on their product effectively "soaking up" the secondary market profits many of you have referred to and enjoyed in the past. So K&C investors beware of your risk, don't bet the farm on these collectibles unless you can afford the potential loss!

 

[Njja]

Risk, no risk, profit, no profit, most of us are collectors just enjoying our

hobby. If we are reasonable prudent men, after 5 or 10 years in the hobby we

can look around an see that we have spent a fair amount of cash. I placed

the down payment for my first home from my collection years ago. Most of

you know the drill......I put down on our home all my cash......then the bank

called informing us we needed a survey done, house inspection, and my

favorite 3 months mortgage payments in the bank for the loan to be

approved. I came home from work and the wife was upset......."Where are

we going to get this money"? I said "No Problem" that Sunday I went to a

train show with my pal John, when I can home the wife was waiting. I showed

her the new items I had purchased.......she was not amused! Finally I handed

her a fist full of cash and said "No Problem" This was almost 40 years ago,

but the story is still the same. If you have a $30 collection of thimbles no

problem......be a "Big Shot" give us an "I don't care what my collection is

worth" I promise I will be impressed!

If you have a family, and responsibilities, children to educate, and assist for

the rest of your life (because you brought them here) then you should

have an interest in the value of your collection especially when it reaches

5 or 6 figures!

 

[Gideon]

By the way I’m not complaining… K&C is more than happy to sell these kind of numbers. Generally speaking K&C sells anywhere between 6 or 7 hundred up to that magic 2000… and all numbers in between.

Interesting to finally see some official numbers!

See, this is smart and flexible production. I used to get a kick out of products that came in to me stating "limited edition of just 10,000 models!". This meant that approximately 6,900 - at least - would wind up on closeout store shelves.

That's not good for anybody and it cheapens a brand. Corgi had this problem with their ominbus series, Britains under Ertl and some others I can't think of at the moment.

If you don't over produce then you don't need to use "limited edition" as a ploy unless, like with K&C, it is 1000 or less. That is truly limited and, it can be said, that 2,000 models is limited too.

 

[Spitfrnd]

Interesting to finally see some official numbers!

See, this is smart and flexible production. I used to get a kick out of products that came in to me stating "limited edition of just 10,000 models!". This meant that approximately 6,900 - at least - would wind up on closeout store shelves.

That's not good for anybody and it cheapens a brand. Corgi had this problem with their ominbus series, Britains under Ertl and some others I can't think of at the moment.

If you don't over produce then you don't need to use "limited edition" as a ploy unless, like with K&C, it is 1000 or less. That is truly limited and, it can be said, that 2,000 models is limited too.

Is there a public list somewhere with the production limit for each figure? I have seen as low as 300 for some K&C mounted releases for example but that seems quite low worldwide for such a market leader. Even 2000 seems pretty limited although for diecast aircraft, 500 or less is very common.

 

[Gideon]

Is there a public list somewhere with the production limit for each figure? I have seen as low as 300 for some K&C mounted releases for example but that seems quite low worldwide for such a market leader. Even 2000 seems pretty limited although for diecast aircraft, 500 or less is very common.

Lol, yeah, 2000 is really small production wise. It gives a really good window into the depth of the market. Also considering that a good number of people buy multiples.

It's a small, small, small world.

 

[Peter Reuss]

Not that long ago if K&C could sell, say, 2000 Wittman Tigers, you could extrapolate that there were 2000 WWII K&C collectors out there. It was quite common for people to purchase entire ranges.

As more and more sets have hit the market buyers have become much more selective. While I firmly believe the number of collectors has gone up, the number of any individual item sold may not have changed much. The sales get spread over a much wider range.

K&C does not publish their production numbers.

 

[Vezzolf]

My comment pertains to those for whom K&C is not just a hobby but an investment. In a former life I was a financial advisor and this whole discussion has reminded me of the "risk hierarchy". Investments generally fall into categories based on risk ( the inherent volatility in value of a holding ). Cash = low risk, bonds = medium risk, equities = high risk and art was the riskiest asset.
With that in mind those looking to make profits on their art pieces are taking significant risks with their money due to many of the issues listed in this thread like variable collectors preferences, number of product issued, what is perceived to have value etc.
Even in a good economy art is hit and miss but sometimes it can provide a great windfall however in a poor economy art can really get hammered because it is one of the riskiest asset class around. Its therefore no surprise to me that the secondary market for these pieces is weakening just like other high risk investments have.
Secondly, K&C has passed on their rising costs to collectors by increasing their price points on their product effectively "soaking up" the secondary market profits many of you have referred to and enjoyed in the past. So K&C investors beware of your risk, don't bet the farm on these collectibles unless you can afford the potential loss!

Very sound "insightful" advise...YOU HIT THE NAIL RIGHT ON......In regards to toy collectables unless you own some "very old historical" items they will be unlikely to hold serious monetary value..........paying "inflated" prices in the secondary market for recently retired K/C items is foolish IMO......they simply are not that "valuable".........do you honestly believe that you will find the next buyer to overpay even more for it.... ..If you miss an item at retail.....so be it.... retail prices alone have "steadily" increased any way; "less profit for the speculators"......for most of us earning a dollar takes hard work; invest wisely...// toy soldiers are not investments..... and don't get taken....IMO