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It’s been an exciting week here in the world of Magic: The Gathering finance, and I’d like to throw in my two cents on how the format’s shaping up, and what you can do to take advantage of that.
First of all, in the heady rush to get States decks, it’s all too easy to forget that the price of the cards involved is a bubble. While at States, several things stuck out to me as being relevant in a time when every person with economic sense is making their speculative moves on the market.
Me, my speculation was done between 8:30 AM and 9:30 PM Saturday, States.
Crazy Talk
I can imagine what some of you might be thinking, If you’re like me at all, speculation isn’t your thing. The idea of making an educated guess on a low priced card in the hope that it’s positioned well enough for you to cash big is dangerous. And for a risk averse individual like me, the possibility of losing 20, 50, 100 dollars on Urabrask the Hidden gives you cold sweats in the middle of the night.
Speculation, however, is more than just knowing when to buy. For me, speculation is far easier to implement in the form of buying’s polar opposite: the on-site trade.
When a person sits down at states and sees a profound absence of Abrupt Decay, he can use that data to his advantage. The card seemed to be opened an altogether unreasonable amount, and it seemed like there were more floating around the room than people knew what to do with. This read like a neon sign to me, and even if I hadn’t thought about the chance of Abrupt Decay’s value decreasing, the warning signs were all there.
Decay is starting to drop below 10 dollars consistently on ebay, and Star City is down to 15. Even though the the card is absolutely amazing and it seems unlikely that its price floor is as low as some other cards, and even with the comfortable knowledge that it’s got an enormous amount of Legacy potential, it doesn’t feel like a 20 dollar card.
Abrupt Decay suffers from the unfortunate malaise that diseases so many of the potentially explosive cards in Standard- it’s a rare. While my eyes mist over with memories of 20 dollar chase rares holding value for the entire span of their playability in Standard, the era of Wrath of God is past. And a great deal of that is due to a combination of the quantity of product opened, and mythics.
Rares Are Bad, Mmmmkay?
Rather than rant on about the upsides or downsides of mythics, I’d prefer to approach this topic from a more pragmatic direction. Because mythics exist, and are probably here to stay, rares are generally unable to reach the prices they could before. More importantly, high prices are unstable, and unlikely to sustain themselves over time. In a world where most every 20 dollar chase card is now a mythic, why invest in rares? They’re far more opened than mythics, are more likely to crater, and have a lower price floor on average. Better just to buy AT&T stock.
If you had, like many of the readers on this site did, buy a pile of Angel of Serenitys at their opening prerelease price, you’d be Scrooge McDuck’ing your way through a pyramid of cash right now. If, on the other hand, you bought pretty much anything else, chances are you didn’t make that money back.
Lucky me, having seen what a total house Angel was at States, traded three Abrupt Decays for a foil angel, and still made money, without nearly as much risk as betting on the potential popularity of a piece of cardboard. While early speculation guesses what people will want, responsive speculation takes the trending desires into account and simply contents itself on existing ahead of the curve.
This is not, I should note, the way to make your fortune overnight. It is, however, an easy way to work the angles of Magic Finance without ever wondering whether your investment in deathrite shaman was worth the time, and if you'll ever see that cash again.
By the way, you can probably distill most of the last two paragraphs into my easy but firm investing rule: Don’t speculate on rares. It’s far too easy to be wrong, and the chance for reward is very limited by the speed at which you can turn cards around. From Olivia Voldaren and Falkenrath Aristocrat to Angel of Serenity, most of the high caliber low risk speculation targets have been mythics. I trust that trend, and so should you.
Back on Track Please, Mr. McGownd
Back to the topic at hand! While it’s apparent after seeing that particular dead horse beaten that I don’t like the preemptive speculation model which so many people ascribe to, why am I so preferential to responsive speculation? The answer is twofold.
Super Smash Bros. Melee is a very popular game, and while it’s not played competitively on the scale of some other E-sports, it’s not because it’s lacking in complexity or strategy. In SSBM, some characters are not made equal. In fact, if you were to look at the top tier players and their characters of choice, you’d find that the most important factors in determining how good a particular pick was depended on the maneuverability of the character and its ability to react to different styles and approaches effectively without ever being in a situation they couldn’t take advantage of.
By speculating via stock buyout of cardshark collections, you force yourself to react sluggishly to changing events. The best speculators might have copies bought up of a card a few hours after the buzz starts, and even if they get good prices it takes days for the cards to actually get there.
The first jump in Olivia Voldaren’s price, way back when, was followed over the next couple weeks of a corresponding plunge as people pulled her out of longboxes, collections, and binders to put up for sale. As demand rose, people found it more logical to work harder to generate supply, and the cost of the card dropped. Buying her for 5 meant that you might have had to settle with selling at 8.
This seems good, on the surface, especially compared to stock trading, but after fees… that’s a lot of risk for not a lot of reward. Even more importantly, you can’t effectively respond to the market. You’re dealing with a time lag that’s simply enormous compared to what most floor traders have to deal with.
I was one of the people who picked up a few Olivia Voldarens as soon as I heard the news, courtesy of the QS Insider notices. I didn’t buy out stocks of the card, but knowing that it was popular I traded for it ahead of the curve of people acknowledging its power and utility. I then traded away those same Olivias, sometimes to the same people, at newer, higher prices. I could react quickly and efficiently to changing sentiments without putting real money into the process.
Being able to see how much or how little a card is played gives you a lot of information as to how to prioritize it as a trade target, and whether or not to make a move. Because of this, I tend to not make a dedicated push until I see how the room reacts to the metagame. When I do make my move, I have a large quantity of people at my disposal to obtain product from, or to dump product on if my assumptions about card strength prove to be premature.
Questions, Comments and Snide Remarks Welcome!
Hopefully this helped, and whether you plan to take this path or not my line of logic concerning trading on site makes sense. If it does or doesn’t, if you think I’m right or wrong, I look forward to reading about it in the comments.
One article says speculate on rares, the next says don’t.
-_-
I am new to this finance game, and to this site, however over the past few months I have to agree with this.
I have speculated on rares before, and with the help of this site, and while some things go from 0.50 -> 2.00 the mythic gains are far better and easier to see profit.
You need to offload 10x the rares to make up the mythic price.
I too got in on the Olivia craze, picked up 12 of them @ $4-5 and sold all 3 playsets in the same day for more then double profits.
I am still sitting on 80 Sever the bloodline from the first article suggesting it, and while I think the card is awesome, doubt it will see much profit.
But hey, thats what speculating is for 🙂
I completely agree. I speculated heavily on modern when it was first announced, but after going through my notes I came to the uncomfortable conclusion that the only cards that I bought that made money were powerful mythics, or obscenely powerful rares like noble hierarch. In fact, while I made a pretty penny, if just a couple more of my investments had not made returns I wouldn’t have made money at all.
As for rare speculation, the only times when I’ve seen it work spectacularly were when the speculator saw a pro raving about a card at a major event, as was the case with dungeon geist. Then they had time to pick up a large quantity before the pro raved about it on SCG, and the price exploded.
Thanks for commenting, I’m glad it was helpful!
I find trading for Rares that you’re speculating on is the way to go, and, unless you’re talking speccing on actual bulk rares, Mythics are the only thing to buy in cash.
I happily trade for rares, but speculating on them seems like too much of a risk for my sensibilities. If you have success, however, do what works!
Thanks for the article! I’m another newbie to the speculation thing (and magic at large, actually), so I’ve got a lot of learning to do but am enjoying the process. The articles on this site have been great.
I can’t help but see the logic in what you’re saying here, given the prevalence of rares over the mythics, but my current and only experience runs exactly opposite. As my first foray into the world of magic finance, I looked at the cards that were coming out and my inexperienced brain thought, “The populate mechanic and flickering cards like Thragtusk and Armada Wurm (amongst others) is going to be an insane combination.” Thrag looked too good to be true, and the mythic double-phallus of doom that is the Wurm led me to go for sixteen of each. Currently, Thrag as gone up 75% from where I bought, whereas I can’t see Armada Wurm maintaining at $20 (SCG) much longer, given its dropping like a rock on ebay while remaining largely stocked at starcity. Here’s a case where the converse appears to be true, that the rares are in everybody’s deck but the mythics just didn’t quite get there.
Still, I think generally speaking I’d like to take your advice and cash out on the Thrags while the hype is high and the supply is lower… but I wonder what you’d say? Is Thragtusk an anomaly in this regard?
A question I wanted to ask was where you experienced financiers like to do your pick up of cards. Is it sometimes as simple as scoring every ebay auction you can find? Floor trades mostly, for yourself? Where/how might a rookie go about picking up cards for the best value, and unloading them for the best value. I’ve seen a couple articles about ebay, but it certainly takes a rake.
Also, I can’t help but notice the writers of this site consistently comparing magic finance with stocks, which I can only assume means that you’re all into that side of finance too. As an interested but tragically uninformed party in the world of stocks, is there any resource you’d point a beginner towards to get started there as well?
Thanks again! All the best.
This has other factors involved here –
1. Armada wurm just came out, and is being opened thousands of times daily.
2. Thragtusk, while a rare, was very unopened as core sets are not opened or drafted anywhere near as much as expansion sets, and that is not even touching on the fact that this set is names Ravnica.
As for your question, even though I am new to this game I have several places I pickup cards
1. Local shops, there are 2 relatively close to me, and the one who has singles in stock of just about anything you want actually bases his prices in most cases off TCG, so I can pickup stuff at a fair price. The other store, is slow as hell at updating their prices. They use CFB and SCG to base their prices, which we all know are high prices. However, when something to speculate comes around, they take ages to update pricing, so I can pickup Falkenrath Aristocrats @ 8.99 until last week =D and sell them back all day to vendors @ $12+
2. TCG player. While the individual pricing varies, and might not always be 100% the best place to buy simply becuase the lower priced vendors have higher shipping costs, I have found that when speculating, and ordering in large bulk it turns out better then using Ebay in many cases.
For example, Sever the bloodline, $2 or slightly less/playset shipped on Ebay at the time I bought them.
TCG had them for 0.39 each, but shipping was 2.99. Well order me 80 of them from the same vendor (this is not always possible especially with mythics) and color me purple.
3. Forums – I use MOTL and MTGS and can often find people selling items at not only fair prices, but usually can barter them down a bit in less then 2 minutes.
4. Ebay
I dont waste time sniping auctions, but I do watch BIN prices. Sometimes you get good deals when people are trying to undercut each other
(12 scapeshift for $6 ea shipped? yes please)
It’s good to have you! Remember to look back into the archives, there’s some great stuff written by the earliest writers that remains true. Remember to sign up for the newsletter, too, so you’re eligible for the free QS fundamentals ebook!
As for the armada wurm issue, there’s a crucial difference I find between real cards and release cards. When a card is first spoiled, one of two things will happen. 1. it’ll be a known quantity- abrupt decay is sweet, it’s worth money. 2. It’ll be a less known quantity- angel of serenity is sweet, but idk if 7 is too much mana. Oh, it isn’t? Seems good.
Armada wurm was in an awkward place where SCG speculated that it’d be good, without it ever actually posting results. Traditionally beefy bodies are only good if they’re sooooo beefy you can’t deal with them, or they avoid hate effectively. Thragtusk is a great green card because you can’t hate him out, and you can’t effectively use removal on him. Removal is far better on wurm, and why play him if you play thragtusk for one less, or angel for only one more?
The problem with speculating in a vacuum is that it’s never realistic. Knowing that Armada wurm is great doesn’t help when one of the best decks in the format is running 7 wrath effects without counting detention sphere, and the most aggressive deck in the format can run roughshod over your mana dorks by turn 4.
I rarely speculate on cards before they see play, because for every angel of serenity there are a lot of armada wurms, vexing devils, and Koth of the hammers.
Another thing to keep in mind is format rotation. Thragtusk before rotation was fine, but in a format dominated by delver he never really hit his full stride. Looking at the spoilers and seeing from my own playtesting how if you weren’t going zombies thragtusk was one of your best bets led me to the conclusion that the price Thragtusk had maintained through standard season where he saw play but not too much was low. I got 12 in trades, none for cash, knowing that if he crashed it wouldn’t likely be more than a couple dollars below what he was sitting at during pre-rtr standard. As such, very little risk, but I still play to the safe side.
A final thing to consider is product being opened. When there is no more product, current supply is all the supply. When olivia is 4, no one cares enough about her to put her in binders, and she spikes. When people blow the dust off their copies, the price comes down (along with her playability). 9 months later, the supply isn’t as high as it was before, she sees play again, price goes back up.
When a set like RTR comes out, there’s no way people are still drafting with m13, so the quantity of 13 product is fairly stable. As such, you can depend on most prices not plummeting unless they completely lose viability (obviously thrag doesn’t fit that description). When a new set comes out, the opposite is true- initial demand far outstrips supply, prices are obscenely high, and you have almost no way to make money in a world where the people you’re dealing with have knowledge of the prices of cards.
As time goes on, product is opened at a prodigious rate, making it very difficult for a card to maintain value- it has to be on the level of Snapcaster mage before this can happen, a card which is absurd in every definition of the word.
As a mythic, armada wurm suffers even more for this since the demand:supply ratio is even more tilted than for a normal rare. It starts far higher, and while it can fall almost as much as a rare if it sees no play and has no demand, it’s practically impossible for it to obtain a better supply and demand curve than something like a planeswalker has a release, when everyone wants 4 right now.
Also, thragtusk is bonkers. Thragtusk, snapcaster mage… there are few example of rares being so consistently high.
I buy cards on behalf of my school and store, so I function like a dealer at the tournaments my school puts on. Because our magic club is substantial, I have a lot of people willing to sell to me, and I buy above dealer prices to make sure everyone’s satisfied. I had a playset of all the chase rares and mythics I wanted by the end of the prerelease. This excluded shocks, because I didn’t trust their price, and vraska, because she’s not as good as jace.
I hope that helps, if I ever want to speculate I go to cardshark or tcg player.
hey guys,
been away for a couple days and have been back to read the comments. i have to thank you all for the extensive replies!
very informative, and i appreciate the time you put into them.
thanks again!
-Cam