Part 2 of this Factoid presented data that expressed the theory that: those pieces that retire quickly and have been retired longer tend to be more valuable. Here in Part 3, we introduce another consideration into our calculations, namely: Edition Size. You might think of this as representing the 'supply factor' in the Supply and Demand logic governing the marketplace.

(I know I promised part 3 would take a look at factors governing value in non-retired pieces. Consider this an interesting little side trip - like going to vist a funky pier head light. We'll get to the non-retireds, it'll just take a bit longer)

In the collectibles arena, not only are pieces governed by supply and demand, but supply can actually influence demand. In the case of two new HL releases, all else being equal, if one piece has a smaller edition size than another, the model with a lower edition size will be in greater demand. And the difference in demand will be relative to the difference in edition size.

We have the opportunity to witness this phenomenon close up with the early '99 release of Hillsborozilla. It has an edition size of 6,500. Thats 3,500 fewer than the edition size of the other LE's released in this time frame. From the get go HL put #225 on allocation to dealers. From HL's point of view (which we adopt) the day a model is allocated it retires. So bingo, Mighty Hillsboro retires in 1 day.

Part 2 of Factoid #11 did not consider edition size in its presentation of a Value Factor. We do this in Part 3 with the following equation: (Age in Days at Retirement minus Days Since Retirement) divided by Edition Size. We then multiply this result across the board by 1000 to give us a more user friendly number. Here again, the lower the result, the greater the tendancy toward higher value. For purpose of easy reference, and for lack of a better name, I call this the Argand Wick Retirement Factor.

And yes indeedy, those pieces with shorter Wicks tend to burn brighter at the top of the scale. Its really only in more recent years that we've seen super rapid retirements. This fact has a significant influence on how the models stack up based on the approach taken in Factoid #11 Part 2. Some might say an undue influence. Thus we saw models like Alcatraz and Cape Canaveral slip ahead of strong pieces such as SEBI and St. Simons.

I think we've only recently (and finally) moved into the Post Thomas Point Affair era where rapid retirements (and thus skewed value factors) are no longer happening as they did when a wild speculative binge gripped the market. Fwiw, I think HL themselves fell victim to those heady days. 10k edition sizes and full dealer store rooms are the after shocks we're living with today as they failed to sufficiently innoculate themselves against Faux Retirement Fever. But enough editorializing. For now at least... :-)

The Argand Wick Retirement Factor acknowledges the validity of the formula presented in Parts 1 & 2 by adopting it as the base against which Edition Size is applied. For comparison purposes the chart in the next message also includes the value factor computed in these prior Parts. This chart picks off the top 47 models from the list of all. I went with 47 because thats the number of lights that came up with a good negative in Part 1. And to bring home the bacon, I've thrown in some Secondary Market prices current ones and from 1997. Caveat: these prices aren't gospel - if
you don't think they're accurate (they are ), feel free to use your own. They're drawn from actual prices or averages of actual prices advertised during their time frames).

So what does it all mean? Ultimately thats for you to decide. I'll continue to suggest this information can wisely inform your purchasing plans, particularly if you're a budding Wacko looking to acquire a strong collection of Limited Editions. Be sure to read Parts 1 & 2. We've been chatting about the data in Factoid #11 down in the FSB - JC opened up a special Therapy Group wherein we can rattle on about this stuff.

A couple tidbits of additional info that may help your interpretations. The average for the Wick Factor across all retired pieces is -166. However, if we cull out CH1 and Coquille (which have a combined edition size of a tiny 1404), this average drops to -45. Hillsboro doesn't show up on our chart - this despite retirement in 1 day, its Wick Factor computes to a -2. If you think about this, you should arrive at some of the other issues that play a role in determining relative placement. (Fwiw, if you haven't reserved a 'zilla, do it soon - I recommend you purchase this piece.)

Also note, I've been fiddling with the dates - particularly Available Date. JC and I are discussing this and my current thinking is that Available Date should be the first date a dealer can purchase a model. Why? Thats the first date a piece has a chance to retire. The first 6 models (HL #s 101-107) have their Available Date modified to 6-1-91 from the previous charts because historical evidence indicates that none of these pieces could be purchased by dealers until June. Please note, HL lists them as available at the 1st of that year, So if you see some differences (mostly slight) between the data in Part 3 and the earlier Parts, it probably because its been adjusted. (If you've got a question here, just ask - could be a typo on my part.)

Hopefully, if your goals match well with the audience this Factoid targets, you may see that it may be more prudent to acquire that Big Red, or Pt. Fermin rather than a couple three 10k '99 releases. Do I have enough 'mays' there to cover my buttons? :-) But doesn't that White River look absolutely super - yes it does, I really like it, but it'll be here this time next year at issue price.

Anyway, as always, I welcome your feedback. Come on down to the Fog Signal Building and tell us what you think. Here, we're strictly

By Da Numbas,
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/im

Oh - what to look at... The chart's sorted on the AW Ret Factor column. Have fun!

[This message has been edited by JTimothyA (edited 01-14-99).]

It's interesting how the NPL miniature earns a higher AW than its bigger brother due to its lower edition size, but commands a lower secondary market value. If the AW theory proves itself over time, the NPL miniature would appear to be undervalued like Point Arena (which would have an even higher negative AW factor if its true surviving number were known). Thanks for another good effort, Tim.

[This message has been edited by Rich Boyes (edited 01-14-99).]

Have you tried to run this analysis with a date two or five years in the future? It would be interesting to see if the rankings change.

Alan,
For Tim to extrapolate the data he needs, he would have to run a serveral forcasting models and linear programs to predict retirement dates.

SORRY, couldn't resist.(LOL)

Good points both Rich.

Taking the conservative end of John's view, if we assign Point Arena an edition size of 2500, this yields a healthy Wick Factor of -344 (calculated today, 1-14-99). This easily makes it the cheapest piece in the Top 25.

Either of the New Point Lomas are strong additions to any collection. My own view suggests the mini, although quite rare, will always be, well it'll always be a mini. It won't reach valuation equivalent to a full size piece with the same Edition size. But thats just opinion.

If I was in the market, what do I like on this list? Its great to see Holland finally living up to its potential. Big Red was a bargain this time last year; if you can find one for less than $150, snap it up. Barnegat and Montauk are consistently among the front runners in every formula I've tested. Historically they've been priced within $10-20 of one another. Looks like Barnegat has made a surge ahead; but this shouldn't hold up and I think they'll even out again. Thus Montauk could hit $225-$250 before the year is out; find one at $175 today, and you've found a bargain.

A sleeper? Not one of my favorites, but Diamondhead deserves consideration. I agree with JC's pick of Cape Henry. And I wouldn't wait too long before nabbing little Sunken Rock.

Rgds,
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So you wanna know Future Facts, eh Alan? With the aid of a special Astrolabe that Mark keeps in the basement of the Fog Signal Building, I can tell you this: Two years from now things will look different. :-)

I won't go through all the numbers, but on January 14, 2001 the above chart would show the following for the Top 15.

1. CH1
2. New Point Loma Mini
3. Coquille
4. REXA
5. Rose Island Mini
6. NPL
7. Burrows Island
8. Barnegat
9. Montauk
10. Red Legacy!
11. CH2
12. Cape Neddick
13. Point Arena
14. Portland Head
15. Ponce de Leon

Won't find a cheaper time then now to buy a REXA.

With the help of my computer I take a look into the future,
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Tim - could you run that projection and tell us what the numbers would be if a collector's PC isn't Y2K ready?

Would you then OWE thousands on a lighthouse yet to be produced?

Inquiring minds want to know.

And are you stocking up the FSB with survival gear for the new millennium?

John

>>And are you stocking up the FSB with survival gear for the new millennium?<<

Well... would you believe we're buying stock in Smith-Corona. [vbg]

Tim,

Thanks for the peek into your crystal ball (or is it silicon?)

I am surprized that REXA is higher than NPL. I think that REXM will be a drag on it in the secondary market. The computer probably could not factor this in. I am really surprized at the movement of the red Legacy. This makes me rethink getting one.

Thanks for your hard work and a job well done. This kind of analysis is just the thing to justify our whackoism. (The computer made me do it.)

AB in Ala_Bama

Thank you Tim for all your time and effort expended on this project. After study, your projections make sense to me. Thank you for sharing your results with all us fellow Whackos.


------------------
Keepin' the flame

Shamelessly promoting this thread to the top of the pile for the newbies.

Alan makes an excellent point about REXM being a drag on REXA. Although its a 'Future Fact, neither the Fog Signal Value Factor' nor the Argand Wick Factor takes this sort of thing into account, so caveat calculator.

Rgds,
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[This message has been edited by JTimothyA (edited 04-25-99).]

I'm promoting it, too. I've followed Tim's analytical suggestions with excellent results.

I couldn't resist... :-)

I am very delighted with this information and I appreciate the time you spent posting it this is a great post i will be following!

Hey Tim, I can answer your "What to buy" question in less than four words: "Buy them all!"

That way you won't miss out on anything!

Bob

Bob has the right idea, but few can buy all at once, and besides, its more fun to acquire them over time. :-)

The apt question is what to buy when, or when to buy what. If you're a Collector considering the purchase of several models, especially if you'd like ones in the older 5500 series, this factoid is for you. Its not so much about valuation as it is about relative desirability as calculated from edition sizes and retirement dates. The latter factor particularly gives us insight. Of course there are exceptions, but over time the smaller the edition size and the faster the retirement the more likely the piece is to be either harder to find, or more expensive.

Assuming you only have so many dollars to spend on model lighthouses, I'm a big believer in forgoing the purchase of newer models which will be on the market at retail for several years and targeting those early editions you've got your eye on. With the market down, now is an excellent time to pick that Point Fermin or Old Mackinac to fill a hole in your collection.

The market sees different models go in and out of popularity. For example, today Ocracoke is 'Le Hot Belle' - but she wasn't always so. While as a Belle her popularity is warranted I believe the market seeks it proper level over time and eventually we will see a resurgence of interest in St. Augustine, Ponce de Leon, Key West, and Hilton Head. It should be a good time to pluck of these lights for your collection while they are priced right.

The above chart - which I will update with 2000 prices - has the virtue of not considering aesthetics or dispersion. Until its data changes radically I'm sticking to the belief that it is a good representation of desirabilty against which the fluctuations in prices can be measured.

With so many lights having high edition sizes its tough to find 'sleepers' among the 9500 and 10,000 series. I'm musing over the data and will come back in a later post to offer some predictions about newer pieces you should consider acquiring today.

Thanks Lainey for the positve feedback. :-)

Rgds,
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[This message has been edited by JTimothyA (edited 02-08-2001).]