The hot new asset class is Lego sets
January 22, 2019

From Bloomberg:

A lot of fancy things can be built with Lego sets nowadays. Such as a diversifying portfolio that loads on the Fama-French size factor.

Collecting Lego – yes, the plastic toys made of interlocking bricks that become cars and castles and robots – returned more than large stocks, bonds and gold in the three decades ending in 2015, says a study by Victoria Dobrynskaya, an assistant professor at Russia's Higher School of Economics. Aspects of the performance even align with returns sought by owners of smart-beta ETFs.

While the premise sounds goofy, it's serious enough for the academy, especially in a world where intrepid investors will go practically anywhere for uncorrelated returns. You might not know this, but older Lego sets are often resold online for many times their original price. In one extreme case, a kit for Star Wars Darth Revan that retailed in 2014 for $3.99 went for $28.46 on eBay a year later – a 613% premium...

Continue reading at Bloomberg...

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