Founding of the LEGO Group

In 1932 Danish carpenter Ole Kirk Christiansen founded the LEGO group in Billund Denmark combining the two danish words “leg godt” which translate to “Play Well”. Ole's main source of income was wooden furniture and household items. However, in the 1930's his business suffered from the Great Depression causing a shift in business models. Since Ole was a carpenter the company started making wooden toys such as animals, cars and trucks. The most iconic of these perhaps was the wooden duck with a string attached that is widely considered the first toy produced by LEGO.

By this point Ole had turned his toy company into a profitable business with a factory for manufacturing the aforementioned wooden toys. However, In the early 1940's the company's workshop experienced an electric fire causing the loss of the entire factory and blueprints of all the wooden toys. This combined with the scarcity of materials as a result of World War II, LEGO eventually transitioned to producing toys made of a cheaper material, plastic.

Despite the Major setback's Ole was determined to rebuild his company. By the mid 1940's Ole opened a new factory in the place of the old, now with the popular assembly line concept which sped up the rate at which they produced toys. Around the same time, while on a work trip to Copenhagen, Ole discovered a new injection molding machine from the United Kingdom. This machine allowed for the quick and precise production of plastic parts, which in fact cost much less than wood at the time.

Since LEGO was a family business operated by the Christiansen family, Ole's son Godtfred (The 3rd oldest of 5 children) was the most involved in the company, always looking for new ways to innovate and push the business forward. The Father and son team pair decided to order one of the injection molding machines and begin producing plastic bricks.

The LEGO Brick is Created

In the early 1950's LEGO produced and sold its bricks, which were known at the time simply as “Automatic Binding Bricks”. Unlike the modern day LEGO brick their early ancestors did not have the mechanism of interlocking as they do now. The bricks would simply stack on top of each other. By 1958 LEGO patented an interlocking mechanism for the bricks and officially changed the name to the “LEGO bricks”. Since then thousands of types of LEGO bricks and pieces have been produced yet the ones from 1958 will still work with the modern day LEGO bricks!

LEGO Legacy

In it's 90+ years of existence the LEGO brick has been stepped on by millions of people. The LEGO Group has also become a multi billion dollar company as well as a staple in the homes of millions of families worldwide. LEGO is one the most unique toys to ever exist as its appeal is universal across all ages. The brand has since expanded into other mediums including art, movies, videogames and theme parks. In 2000 LEGO was officially recognised as the “Toy of the Century” once again worldwide.

Why Should You Care About a Pile of Plastic Bricks?

Now that we've gotten a brief history lesson on the LEGO group you must be asking yourself, why does this Danish company that produces small plastic interlocking bricks matter? How does LEGO relate to Investing and the stock market?

The LEGO group to this day is actually still a privately owned company, the parent company Krikbi, is still owned by the Kristiansen family (who have since changed the spelling of the surname). This means it's a private company and isn't traded on the United States stock market. So now you might be asking yourself, how do I invest in LEGO?

Here at Market Apex we're big fans of the LEGO group, their product and what they stand for. Like us, many people around the world have been purchasing LEGO products for many years now. What a lot of people don't notice is how much these sets of tiny bricks can go up in value. In recent years some studies have claimed that certain LEGO sets increase in value better than other investments like stocks or eleven gold and silver. Us LEGO fans can tell you with certainty that no study was needed to arrive at this conclusion. Similar to other classic toys like action figures and Barbie dolls, classic video games and consoles, and trading cards, LEGO sets have also become collectors items.

Options vs LEGO sets

In a way LEGO sets are similar to stock options. Just as we learned with the previous article “What are Stock Options”, all options have an expiration date. Similarly, this means you have a relatively short period of time to decide what to buy and what not to buy. Unfortunately, LEGO does not have the same “Hold Fee” concept like we explained earlier and the retiring dates are not clearly established like they are with options.

Like stock options when buying LEGO sets, you should take you time and do your research about what you're buying. While some sets are better investments than others, many LEGO fans such as ourselves at Market Apex, have missed out on sets for our personnel collections.

When choosing to invest in stock options or LEGO, you should first weigh each of their pros and cons. To learn more stock options read the “What are Stock Options” article. Here at Market Apex we're interested in seeing the best possible trades that could have been done. In the LEGO Groups 90+ years of history there have been many thousands of LEGO sets to choose from to learn more about the best LEGO investments read our accompanying article "The Best LEGO Investments”. At the end of the day, collecting LEGO sets is just a hobby so never forget to have fun in the meantime!

In the next article we will disscuss the historic Best LEGO Investments