by Matth Ward

Some of you may call this game we play “Magic.” I call it, “The most successful global market in the history of human existence.” Tall order, huh?

Not so fast, consider the “Matth.” What global economy has ever experienced seventeen years of economic prosperity without a single recession, widespread market downturn, or “market-sized” bubble bursting? I’m not talking about the microbubble that popped when your Chameleon Colossi’s value evaporated. When has the Legacy market crashed? Never, not when it was “type 1.5,” not when it became Legacy, and never since.

I hope you’ll take a moment with me to consider how incredible this is. I first ventured into Magic at the tender age of eight. Lost in my world of elder dragons, I had no idea I was investing in my first market. I continued playing Magic casually throughout my childhood, breaking for about two years and missing most of Odyssey and Judgment blocks. Thankfully, I elected not to sell my collection. When I returned, I hungered for more, and began to consider the game competitively. Although it started costing more, it also began to pay off. As of today, I estimate my total investment in the game to be roughly $6,000 (tournament fees included but travel expenses not). Despite all the bad trades, years of wear, and cards lost/stolen/ruined by giant containers of orange juice, I can say only one meaningful thing about my collection: It’s worth more than that.

Don’t worry, I’m not here to talk about my collection. Consider instead your Legacy staples--your Force of Wills, your dual lands, your Survival of the Fittests, etc. A 300% increase in value (appreciation) over the last ten to thirteen years is the baseline for many of these cards; others, like Wasteland and Underground Sea, have seen closer to 400-500% appreciation over the same period. Imagine the card Wasteland as the awesomest share of stock ever (in case you didn’t know, most stock certificates can’t destroy any nonbasic land). If you invested $1,000 into Wasteland during its reign in standard, you could have picked up approximately 250 shares of Wasteland at ~$4 per share--pricey for an uncommon. If you simply held those shares of Wasteland for ten years, your investment would have appreciated 500%. By dividing this percentage by the ten year duration, we see an APR (annual percentage rate) yield averaging at 50%. To put this in perspective: The Clinton Administration presided over the most profitable economic period in the U.S. stock market’s history. Many claim that the recession that came a few years later was the product of arrogance on the part of investors--who could believe that we could possibly maintain an 8% APR yield for investors throughout a period of this length without endangering the market’s future?

So an 8% APR in the stock market is impossible to maintain over eight years without disastrous implications (and usually a huge loss of said profits), yet we Magic players have enjoyed sustained yields of 20-50% APR for fifteen years from our investments without even trying? Do you really think that Matth at ages 8-15 had the market expertise of a hedge fund manager? Let’s not be absurd. The answer is that we’ve stumbled across something of a Magic[al] market (sorry, just couldn’t help myself). And 20-50% APR on these cards is assuming we make no moves. There are long-term traders and there are day traders. Why not be both? If we (investors) become better at predicting and exploiting price spikes in this market, there is even more money to be made in the margins. Now, a lot of cards have lost value as well; no market is without risk. But, given its stability and unbelievable yields over the last seventeen years, the Magic market has been, quite literally, an unbeatable investment sector.

This is the moment I would like to thank Richard Garfield and Wizards of the Coast for their brilliance, and Hasbro, Inc. for their wisdom and temperance in allowing WOTC to remain a mostly independent arm, and therefore an endless ATM for revenue. We’ve lost a lot of great things to corporate expansion. Thankfully, the most successful global market in modernity was not one of them.

So, accolades aside, why am I writing this article? To invite you to regard the Magic market as I do. We’ll begin with some terms:

●    Market Capitalization (Market Cap): A publicly traded company’s net worth, as determined by multiplying its stock value by the number of shares of the stock on the market. You have probably heard from someone, “Bill gates is worth $___ billion,” or perhaps, “Microsoft is worth $___billion.” The amount is determined by the applicable stock’s market cap. Bill gates owns 51% of Microsoft, which has a market cap of $224.1B. (.51)*(224.1B) = $114.29B; Bill Gates’ net worth. Must be nice. There are three categories of stocks when defined in terms of market capitalization: “Large cap,” “small cap,” and “micro cap.”

●    Large Cap investments: These are your Apples, your Googles, your Microsofts and Citigroups. Everyone has heard of these guys; high share value, tons of shares constantly trading hands. In the Magic market, these are your Jace, The Mind Sculptors, your Primeval Titans, your Force of Wills, and your dual lands. These are high value, low risk, moderate yield investments. We should always remain mindful of set rotation, however, as it’s one variable not easily relatable to other markets.

●    Small Cap investments: These are the smaller “established” companies trading on the market. Because they lack the giant capital and widespread investment of your Microsofts (or Jaces), you haven’t heard of many of them, but action still happens. If you’re lucky enough to catch a small cap investment expanding to large cap status, you can make a bunch of money. A current “small cap” card with a bullish trend is Memoricide. One that just moved from “small cap” to “large cap” is Frost Titan.

●    Micro-Cap investments: Your tiniest startups and companies, with feeble value but a big heart. These are commonly known as “penny stocks.” You can get them for almost free, because they usually go nowhere. But when they do, you stand to make more money here than anywhere else in the market. These are your Grindstones, your Dark Depths, your Flash, or in different terms, your Thada Adel, Acquisitor. Big dreams, small successes. So far.

●    Bullish trend: Something that’s trending up.

●    Bearish trend: Something that’s trending down.

●    CDs: Certificates of Deposit. You can buy these at any bank. You “lock in” X dollars at Y interest rate for Z amount of time. When you cash them in, you’re guaranteed to make a little money. This is the lowest-rung of the ladder in terms of investment risk, because there is none. Therefore, yields are low. Although there are no real CDs in Magic, I consider investing in power to fall into this category. An Ancestral Recall bought today for $400 will probably be worth $450 in a few years. We know this, but we also know that we can probably make much more money elsewhere.

I hate to leave you hanging, but I hope I’ve piqued your interest. I started thinking about Magic in this way just after the 2008 recession started, when it dawned on me that my most stable investment in life has been Magic. If I had a million dollars today, I would invest it in Magic before I invested it in the stock market, real estate, or “the next big film.” Those investments ultimately fall into the hands of others to use or abuse. In Magic, the investment is in your hands. You’re your own broker. Better still, you’re a broker with the power to explode your own investment with a tech deck you build.

The Magic market is one that has never crashed, and although it could, it has remained stable for seventeen years at extraordinary yields, something no other investment sector in the world can boast. In my next installment, I will examine small and micro-cap card trends and suggest how you, too, can find yourself profiting from the next Frost Titan. After all, investing in any market is Simply Matthematics.