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  • It's Not Too Late: The Case for Investing in the UCS Super Star Destroyer


    More often than not, the main question LEGO investors are trying to answer is “When is this set retiring?”. As we all know, once a set is retired is when it really has the potential to start growing in value, so it is not surprising that the EOL question is as common as it is in the forums. However, focusing entirely on currently available sets may be causing investors to miss on a potentially lucrative market: sets that have already been retired for quite some time.

    It is not the first time I write about this, and I know some of other members like fellow Mod Grolim used to bring up quite often in the earlier years of Brickpicker, but taking a look at my last article pushed me to write about a set that I see as a potential money maker even at its current market value. Before getting into that though, let’s take a look at some of the arguments in favor of investing in retired sets.

    • Removes the uncertainty of retirement date and, in some cases, performance. Investing in retired sets allows you to reap the benefits of growth as soon as you acquire a set, removing the need to park your money waiting for a set to go EOL.

    • Most of the already retired exclusives that are performing great are way more scarce than any of the newer exclusives will be once retired. It is pretty clear that the LEGO investing market has seen an influx of buyer over the past couple years, prompting LEGO to produce more and more of the popular sets and keeping them around longer; the older sets were not as massively produced or hoarded.

    Of course, there are also a couple of arguments against this practice, and it would not be responsible of me to simply omit them. The ones that come to mind are:

    • Risk of remakes. We have seen the two sides of the coin related to this point, as the remake of the UCS X-Wing failed to completely depress the prices of the older version but the new Winter Village Toy shop completely destroyed 10199. Acquiring an already retired set increases the likelihood that investors will be holding a set at the time a remake is announced.

    • High amounts of capital are usually required. While practically anyone can invest on sets that are currently available, it becomes harder when you are targeting sets that are worth upwards of $500.

    Also, it is important to mention that this article assumes readers are Buy and Hold type of investors. Flipping and selling other sets in the short term can more than likely generate the same or more returns by moving sets quicker.

    The case for investing in the UCS Super Star Destroyer

    Some of you may remember the good old times when we saw the Super Star Destroyer selling for $319 on Amazon. Clearly, those days are over, but that does not mean that it is too late to put some money into this impressive set with the idea of making some good money in a couple of years.

    Why do I even bring this up? Well, just take a look at the following chart showcasing the performance of some of the UCS sets in the past two years1:

     fefe.PNG 

    1Actual values for December 2013 and 2015. 2014 Data is just an interpolation.

    Clearly, the performance of these sets has been outstanding over the past couple of years, and some of them were already extremely expensive back in December, 2013. We are talking about an average return of close to 93% in just 2 years over an average price of $750! (90% if we do a weighted average).

    Even more impressive, most of the sets shown in the graph above have been retired for more than 5 years at this point. Seeing these levels of growth over just two years indicates how solid most of the UCS models are in the long term.

    The UCS Super Star Destroyer is already selling for almost $1,000 based on the latest Brickpicker data. As mentioned before, investing in these expensive sets requires a certain amount of capital and a moderately high risk tolerance, but looking at how similarly valued sets have performed in the 2 years we have data for, it is a strategy with high reward potential.

    Capture.PNG

    Back when the SSD was available for retail it already sold for $400 most of the time, making it one of those sets that are somewhat more difficult to hoard for most investors, reducing supply in the secondary market. Besides this, the set is probably one of the most impressive in both size and detail LEGO has ever released, and one that we are more than likely won’t be re-released for quite some time.  LEGO has so many other sets to re-release before we ever see another SSD in stores (Imperial Star Destroyer, Millennium Falcon, Snowspeeder, etc.).

    Honestly, I see this set with the potential to reach $2,000 in a few years, much like its older sibling the Imperial Star Destroyer. This is only an opinion, but I figured I would bring the topic up for discussion and let each investors make up their own mind about it.

    Thanks for reading!

     


    Edited by Fcbarcelona101


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    Just a thought... 1000$: seems a lot of money in one set. 

    If you pursue diversification, it quickly blows your portfolio off balance. Unless you have an investment budget > 100k...

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    13 hours ago, Drakuhl said:

    As this set can be bricklinked for about 500 USD with minimal effort (doing it right now), so the peak price us probably about three to four times that for a new one or double for a used one.

    For me, the current price is already too much, hence the BLing.

    Actually doing the same. I HAVE a SSD in box, and just haven't brought myself to open it even if I am more collector than investor. Id rather invest the money in a used version via BL maybe pickup some orig instructions and a box and flip it for a little later but build and show it vs keep in a closet. Its all about perspective and you CANT USE THE MERCHANDISE lol.

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    Whatever u guys say ;) just buy the ones I have currently listed out there, mint and sealed for $1100

    Edited by Lordoflego
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    I don't see the sense in this approach. By doing this you've completely missed out on the biggest gain period of any retired set, which is the post retirement pop. You're also hoping that the set's price trajectory is constantly upwards, what if it plateaus for a couple of years, I think there's been examples of major initial spurts, tapering off like the Town Hall.

    I'm not disagreeing that this set may get to $2k or above and I happen to think the remake risk on this set is very low in the medium term, the question is more what is your opportunity cost of buying this, could you get your money working better for you and I think the answer has to be yes. 

    If you buy 4 Sandcrawlers or 5 Ewok Villages or a combination of sets now, would you have a better return in 2 years time than paying $1,000 for the SSD, my own opinion is that you would.

    If I had bought one SSD at the end of last year instead of buying 10 At-At's or 8 ISD's, would I be better off now, course not.

     

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    Were you 100% sure that AT AT or ISD were going to retire when you decided, though? Would you have bought them at full RRP? Did you know there would not be a remake coming out this year of either (we still don´t 100%)?

    Hindsight is 20/20 and, while I totally agree with you that the best and fastest profit has been lost on the SSD, there is still room for upward motion and more so than for a number of other sets that retired since then.

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    I have sold 12 of my ssd the other 18 will see day light in 2 or 3 years.  Got between 950-1000 on them each.  In my opinion this set aside many of the older sets are too high for the risk reward, based on 10179 in today's dollars being the pinnacle.  But there will always be hidden jewels somewhere.

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    3 hours ago, Val-E said:

    Were you 100% sure that AT AT or ISD were going to retire when you decided, though? Would you have bought them at full RRP? Did you know there would not be a remake coming out this year of either (we still don´t 100%)?

    Hindsight is 20/20 and, while I totally agree with you that the best and fastest profit has been lost on the SSD, there is still room for upward motion and more so than for a number of other sets that retired since then.

    I was pretty damn sure they were gone, there were enough of the warning signs there. No, I wouldn't have bought them at RRP, but that's not relevant to my point, because I'm comparing what I could spend my money on versus buying an SSD for $1,000 and I didn't need to pay RRP. I was pretty confident a remake wouldn't come that fast, past form gives us a bit of a gap, also we are probably going to have a 6 month window between us finding out about remakes and the buying public knowing.

    Hindsight would be the perfect business model, but without it we also don't know that the SSD isn't about to plateau, which would be the big risk to @Fcbarcelona101's cunning plan. Obviously knowing that the set is retired and you don't have to worry about competition from stores is a great advantage, but at 150% above RRP already, way too much of the growth is already gone for me.

     

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    Interesting approach but I'm not sure the SSD is a good example. As mentioned before, the part-out value of this set is way below the current NISB value. Apart from the stickers, there are no real exclusive or hard-to-find parts in this set. If you look at other similar sets (e.g. Death Star) the part-out value is way above the NISB value because of parts that are (almost) exclusive to that particular set. I don't see this one hitting 2K anytime soon.

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    I thinks that won´t make a difference - the "cheapskates" who bricklink sets like these are not the target market  as it costs less than 5000 to bricklink a 10179. The buyer wants the full unopened MISB box experience and that is what they pay the premium for.

    Interesting to see that any sets listed for less than 1000 euros on ebay are getting sold quickly but the 1k barrier is proving hard to consolidate.

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    44 minutes ago, Val-E said:

    I thinks that won´t make a difference - the "cheapskates" who bricklink sets like these are not the target market  as it costs less than 5000 to bricklink a 10179. The buyer wants the full unopened MISB box experience and that is what they pay the premium for.

    Interesting to see that any sets listed for less than 1000 euros on ebay are getting sold quickly but the 1k barrier is proving hard to consolidate.

    Definitely a psychological thing. People feel much better about spending 99c vs 1EUR and i think it just scales up.  And then when it breaks 1k it wont break it by a few EUR (although I'd hazard that a lot of people would be willing to let this go at 1k so it might stick there a while).

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    There´s only a few more listings for this than the Seacow so I think that by the end of the year and Rogue 1, we could be hitting a sweet spot of a further price jump to near 1.5k.

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    This got more thinking about another recently retired UCS set. Perhaps it's a silly question.

    What about the 10240 X-Wing? With the poe's version and the up and coming blue version...I presume there won't be another UCS so soon. The price as of now is no where we want it to be for a retired set. It probably is one of the most hoarded as well. So my thought is to hold on to my stash and then buy more in the secondary market if the quick flippers are impatient. Is there a flaw in the plan?

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    34 minutes ago, mattjay said:

    This got more thinking about another recently retired UCS set. Perhaps it's a silly question.

    What about the 10240 X-Wing? With the poe's version and the up and coming blue version...I presume there won't be another UCS so soon. The price as of now is no where we want it to be for a retired set. It probably is one of the most hoarded as well. So my thought is to hold on to my stash and then buy more in the secondary market if the quick flippers are impatient. Is there a flaw in the plan?

    It probably is one of the most hoarded as well - there´s your flaw right there.

    Long term, demand should be strong but Lego´s desire to flood the market with different colour X wings makes it hard to predict how things will pan out with alternatives on the market.

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    I missed 10240 as it retired before i got into lego investment. I did pick 3 up at 250gbp each as i think they'll still see some solid growth within the next year or two.

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    31 minutes ago, mattjay said:

    This got more thinking about another recently retired UCS set. Perhaps it's a silly question.

    What about the 10240 X-Wing? With the poe's version and the up and coming blue version...I presume there won't be another UCS so soon. The price as of now is no where we want it to be for a retired set. It probably is one of the most hoarded as well. So my thought is to hold on to my stash and then buy more in the secondary market if the quick flippers are impatient. Is there a flaw in the plan?

    It depends on your personal circumstances and timeframes. In a way 10212 was disapointing, it retired Christmas 2012 and only now is it getting scarce. Personally i think it may be stuck at sub 350 for quite some time as a lot more people will have bought this, and 90% wont be waiting 2-3 more years+ to sell.

     

     

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    9 minutes ago, Fenix_2k1 said:

    I missed 10240 as it retired before i got into lego investment. I did pick 3 up at 250gbp each as i think they'll still see some solid growth within the next year or two.

    You must have posted that as i wrote mine :) Hopefully your right 

     

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    Cheers guy. I will hold my stash. Will try to pick up another couple if I can get it at rap or close to.

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