We were sitting in a bar having a few beers after a round of golf when a friend of mine who happens to be very much into trains made a comment that was sort of a shocker. He said in 10 years it will all be over. The baby boomers will have grown old, and the train market will fall apart.
Obviously I am very much involved in the train market. And that very question has passed through my mind many times. What will happen to the train market when the baby boomers are gone? I think I know the answer, and I am pretty sure my friend is wrong. Here's why.
Fifteen years ago another acquaintance made a similar remark about Lionel Pre War Trains. Actually he was a dealer who dealt mainly in pre war trains. He said in 10 years that market will die because all the older collectors will have to sell their trains for one reason or another. Thus flooding the market, and prices will collapse.
Funny, but around 5 years ago, right when he predicted the Lionel Pre War market did slow down. There was a short period where it was hard to sell pre war trains. But that has changed drastically as now it is hard to buy them. And I don't think it is because all the older pre-war guys regained their interest!
As long as I have been in the train market I have noticed definite cycles. One year American Flyer may get very hot, the next year Lionel gets hot, and then something else becomes of greater interest. We have so many different categories within the train market it seems as though the hot or cold item is constantly changing. But the overall market with the exception of the 1960's and early 70's has been very robust Let's face it, even our economy goes through recessions. Actually I think a recession is good in a way as it tends to lower prices, bring us back to reality, which helps make the market stronger in the long run.
For instance in the early 90's Lionel MPC items peaked. (MPC stands for Model Products Corporation which owned Lionel at one time. This abbreviation has stuck and I use it to refer to Lionel products after 1970.) Prices rose so fast and got so high it was hard to keep up with them. This became almost a snowball effect as prices were actually artificially high for three reasons. First at that time dealers played games with the market. Since prices were going up so fast dealers would put some of their incoming stock away knowing that in a year the items held back would have more value. Actually sometimes it didn't take a year. Many times a month was all it took for the prices to soar on certain items. Second Lionel was doing a good job of keeping production of certain items low, and the combination just kept pushing the prices up. Of course what goes up must come down, especially when prices escalate that fast and that is the major reason prices have come down over the last several years. The third factor is the Lionel/MTH war causing the two manufacturers to over produce trying to eliminate each other. In the last couple of years Lionel has produced more than was produced in all of the decade of the 50's. The market has to be pretty strong to be able to absorb all these new products.
It is interesting to note that within the last year or so MPC has moved much better. (I'm referring to pre 1995 MPC, which is my market--I don't deal much in the brand new trains.) I feel that is because that particular market has or is very close to bottoming out.
I used to deal in coins as you might know. Coins went through a very similar period when the Hunt brothers tried to corner the silver market in the late 1970's. That is when gold and silver bullion got so high that they peaked and then fell drastically within a very short time. You might note that the key is that happened within a very short period of time. The MPC market fell over a very long and gradual period of time. I feel that represents a much more stable market in the Lionel MPC area. Although the coin market is very healthy today, there were a number of years that were very tough to make a living. And actually that is why I am in the train business today!!
If you compare the two markets electric trains have a lot going. First individual trains are much rarer than individual date and mint coins. Although the market sizes are different, and I suspect the coin market is larger.
But trains don't just have to be put in a book which is opened occasionally to admire. Trains can be played with. And as long as people can play with something that is fun and serves a purpose, it will be around. Not to say coins won't, because they are a collectible commodity. And collecting things seems to be very popular these days. In addition coins seem to be more of an investment commodity. Actually trains have done very well monetarily over the years as well, but I never recommend that trains be used as an investment. (Although I do that myself!)
Please don't confuse collecting with investing, because there is a big difference. Collecting something is trying to complete a series. Basically you set your objective, and then the hunt begins. That's the fun of collecting something. I'll bet anyone who likes Easter egg hunting loves collecting. Have you ever met anyone who doesn't like Easter egg hunts? To be honest with you I have never met anyone who didn't enjoy watching an electric train journey around a track!
In short trains not only have the collecting aspect, but also the operational and toy element that is so enjoyable and recreational.
Yes, those baby boomers are growing older. But most of those boomers have children. And even though children seem to be more interested in computers and video games these days, every holiday season I sell more and more beginners sets that are intended for children.
I have a theory that there is some sort of a gene within us that forecasts what type of a person we are going to be and what our interests will be. Of course environment is a very big influence also, but most people who are kind enough to give their children a train for Christmas are probably giving a great environment, so that does not become as big of a factor as those children with the ‘train' gene. And I'll tell you I have seen many, many children with that train gene, even though I may only see them during the holidays, they are out there in vast numbers and growing with the population.
And I know many young adults loose interest in trains as they grow older. But did you play with trains during your college days up through your twenties? I see it happen over and over again, a person starts a family, they go and buy their kid his or her first train for Christmas and the bug hits them. Sometimes very hard. It is a cycle, and I am pretty sure it is an endless cycle once it is started. Especially when that train gene is involved.
But what would happen to electric trains if everyone stopped playing with them in 10, 20, or 50 years? Will they loose their value? Not a chance. They will be antiques. How many antiques have you ever heard of loosing value?
Young people don't listen to classical music for the most part. As a matter of fact possibly a small portion of people in relation to the general population listen to classical music. But the majority are older over 35. And classical music has flourished over many, many years. People keep saying it will eventually die. But that is impossible. It is to beautiful, it is part of living. Classical music is life itself, it is just that not everyone knows that yet! It will never die.
And guess what? Electric trains are of the same breed. They are precious to many people. They bring joy, they bring happiness, they take people away from their every day problems.
With the growing population of the United States and the World, I feel strongly that trains will be more popular than they are now 50 years from today. Nostalgia is a powerful emotion and there is that Holiday season that always brings the trains out.
Baring a world wide catastrophe such as the dinosaurs experienced, people will still play with electric trains, and people will still collect them. Trains are a part of American history as are their miniature replicas. The train market will only get stronger with time possibly with some recessions along the way. But they'll always come back stronger and stronger.
Electric trains are as American as apple pie, and enjoyed all around the world! And thank goodness it is going to be that way for a very long time. At least I've convinced myself that they will!!! Hopefully you agree. If you have time please click on the blue ‘email' in the red bar below and tell me what you think.
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