Lego - The Toy Of Smart Investors

Victoria Dobrynskaya and Julia Kishilova ()
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Julia Kishilova: National Research University Higher School of Economics

HSE Working papers from National Research University Higher School of Economics

Abstract: We study financial returns on alternative collectible investment assets – toys - using LEGO sets as an example. Such iconic toys with diminishing over time supply and high collectable values appear to yield high returns on the secondary market. We find that LEGO investments outperform large stocks, bonds, gold and other alternative investments, yielding the average return of at least 11% (8% in real terms) in the sample period 1987-2015. LEGO returns are not exposed to market, value, momentum and volatility risk factors, but have an almost unit exposure to the size factor. A positive multifactor alpha of 4-5%, a Sharpe ratio of 0.4, a positive return skewness and a low exposure to standard risk factors make the LEGO toy and other similar collectibles an attractive alternative investment with a good diversification potential.

Keywords: alternative investments; collectible assets; emotional assets; LEGO; portfolio diversification (search for similar items in EconPapers)
JEL-codes: D14 G12 G15 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2020
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Citations: View citations in EconPapers (3)

Published in WP BRP Series: Financial Economics / FE, September 2020, pages - 34

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Related works:
Journal Article: LEGO: THE TOY OF SMART INVESTORS (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:80/fe/2020

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