I Beat the Market

Almost exactly 10 years ago, on my son's 5th birthday, I bought him some large scale (G-scale) trains and track.  It was a logical present given that I have always been a model railroader myself, though with smaller scale trains (HO and now N) and a different approach (for example, I fabricated my own track rather than buying it).

Anyway, I bought 4 boxes of track from the leader in large scale, LGB, for $85 a box  (I know because the price tag is still on the boxes).  We used the track only lightly and indoors.  Over the holidays, 10 years later, we decided to get rid of it.  I almost just gave it way, but put it on eBay instead.

Well, apparently LGB went out of business, and its track is still very much in demand on eBay.  I sold the boxes for an average of $200 a box.  That is an annual return, even leaving out the use we got out of it, of 8.9%.  Compare this to the 10-year return of the S&P500 index as of 1/2/09 of -1.4%.  Can you say, "found money?"


  1. Ironman:

    Congratulations on your railroad track investment return! Unfortunately, comparing your return to the stock market over the same period doesn't say much, considering what was going on in the stock market at the time....

    Still, that 8.9% annualized return would beat a lot of professional money market managers even in good years!

  2. Dr. T:

    I did that with a Nikon CoolScan III film and slide scanner. It worked with older Macs and PCs (if they had a SCSI card), but did not work under OS X. After I switched to OS X and bought a new scanner, I sold the Nikon for more than I paid three years before. There still were people with older Macs, and none of the new scanners were compatible.

  3. Swede:

    Congrats on the fine return. As a fellow model railroader I am into O guage and when my father passed away I inherited his collection. I have several MTH steam engines that are first edition releases that have increased in value. I would sell them but I have to much fun running them. I realize that I may be decreasing the value but when my father gave me my first Lionel trainset which was his as a child it taught me that model trains should be enjoyed and run. As I build my current layout nothing beats the look on my 2 year daughters face as a scale Allegheny pulling a long string of coal cars.

  4. bob prangnell:

    So, you've finally found a case where Light Rail pays!

  5. Miklos Hollender:

    Ah, you're a real Railroad Tycoon :-)))

    BTW how did you fabricate your tracks? AFAIK it's not exactly trivial to keep them parallel and exactly at the correct distance - half a millimeter difference is enough to send a model train off track.

  6. mjh:

    I guess you've stumbled upon a case where investment in (very) light rail was profitable.

  7. markm:

    But only when you tear the rails up and auction them off.