Last year, shocklands were widely touted as a good speculative investment by many MTG finance writers, including myself. Previous cycles of rare lands, such as the Scars of Mirrodin (SOM) fast lands and the Innistrad (ISD) check lands, had seen good price increases (on average) in their second year in Standard. The perfectly reasonable conclusion was to observe the past trend, buy shocklands at or near their price floor, and wait to reap the gains.

Sticking to past trends is a good starting point, but understanding what contributes to the trend is needed for broader analysis.

The Expected Pattern

On MTGO, I would say there are two primary factors that contribute to the trend of real estate being a good investment over time. First, growth in the player base means that the supply of cards from the previous year is relatively small compared to current demand.

Second, when a card is being opened through limited play of the current set, its price tends to be low because players perceive it to be relatively abundant. Players then anchor their expectations of the price of a given card based on current conditions. When a card stops being opened, its price eventually finds a higher level as the market adjusts to the lower supply.

What has happened so far is that the shocklands have not followed the pattern as closely. This can be attributed largely to the strength of monocolour strategies in Standard and the fact that shocklands were widely viewed as a good speculative bet. The large number of people who speculated on them has depressed returns as the price floor was higher than it otherwise would have been, and the price spikes flatter.

Speculating on shocklands over the last year will not result in a loss for me. Sacred Foundry and Godless Shrine have been close to double their lows. Profits on these two cards alone are enough to pull my entire shockland position into the black.

Although technically profitable, the shockland strategy has not been costless. Tying up capital for a year in a marginal position means other opportunities had to be passed on. There were fairly straightforward opportunities for nice gains, such as many Modern staples over the summer. Having tix tied up in shocklands meant that some of these opportunities slipped by without being fully realized.

However, I'm not going to swear off speculating on real estate. There are always lessons to glean from what has happened.

One of the things I've noticed is the relative premium on Gatecrash (GTC) shocklands over Return to Ravnica (RTR) shocklands. Seeking to explain this difference might lead to greater understanding of how to fine-tune speculating on the scry lands of THS block.

The above chart plots two lines over the past year or so. The orange lines tracks the average price of an RTR shockland while the blue line tracks the average price of a GTC shockland.

After the release of Dragon’s Maze (DGM) and up to the beginning of July and the release of Modern Masters (MMA), we see that they are pretty close to one another. This makes sense as they are being opened simultaneously and using average prices means that any one shockland that is heavily played in Standard will be balanced out by others seeing less play.

After the release of MMA though, a gap opens up between the two lines. The average price of a GTC shockland has been higher than the average price of a RTR shockland. Over time, this gap seems to have widened considerably, now at about 1 ticket. Figuring out where this gap comes from might shed some light on the price dynamics of cards like this.

Mtggoldfish tracks the number of copies of cards in decks placing 3-1 or 4-0 in published Daily Events from MTGO. Looking at the most played lands in Standard tells us that at the moment Godless Shrine ranks 9^th and appears in over 20% of decks. Hallowed Fountain is 10^th and appears in nearly 19% of decks. Sacred Foundry comes in at 12^th in about 17% of decks. Watery Grave is 14^th in almost 11% of decks. Overgrown Tomb, Stomping Ground and Temple Garden are next and both appear in around 5% of decks. Blood Crypt, Steam Vents and Breeding Pool appear in around 2% of decks.

Although an imprecise measure of demand, Standard play is a driver of prices. This means it’s reasonable to suggest prices should be roughly in line with their play. However, in comparing some of the most played shocklands, we see Hallowed Fountain at 4.15 tix (prices as of January 2^nd and courtesy of Cardbotmtgo.com) while Sacred Foundry is at 5.8 tix and Godless Shrine is at 5.6 tix.

This is non-intuitive. Why would Hallowed Fountain, at similar levels of playability in Standard, be priced at a discount relative to the similarly played GTC shocklands?

Delving a little deeper, at the bottom end of the scale is Steam Vents at 2.97 tix, Blood Crypt at 3.22 tix and Breeding Pool at 3.99 tix. Even prior to the recent spoiling of Kiora, Breeding Pool held a price of 3.90 tix despite hardly being played at all in competitive Standard decks. Here's another non-intuitive result. Why would the price of Breeding Pool, at similar levels of playability in Standard, be priced at a premium?

Clearly there is some price factor that we are not accounting for. But it should be fairly obvious that GTC lands must be relatively scarce compared to RTR lands. This scarcity probably comes from the nature of the draft format.

Triple GTC draft was a fast format and drafting was fairly simple if you stuck to an aggressive mana curve. Triple RTR was a slower format in general.

Slower formats give more options and can be more interesting with marginal cards having obscure, but relevant uses in a limited format. A fast format is often unforgiving which results in many more cards being relegated to the bench. It’s almost certain that the player base quickly tired of Triple GTC draft, resulting in a lower supply relative to RTR.

The Scry Lands

With this in mind, the strategy for speculating on the scry lands of Theros (THS) block is clear. Due to being opened the most in draft, the THS scry lands should be avoided in favor of scry lands appearing in Born of the Gods (BNG) and/or Journey into Nyx (JOU).  With so much less of BNG and JOU entering the market through draft, the potential price increases on lands from these sets will be larger.

Completely avoiding the THS scry lands is not advisable as playability does matter, but putting an emphasis on the non-THS scry lands will weight the basket towards cards with higher price ceilings.

As of today, I am still not interested in accumulating any scry lands for speculating. The optimal time to accumulate a real estate position in the scry lands of THS block will be after the release of JOU but before the release of M15. At that time, price floors for the scry lands should be established allowing for a good, low-risk entry point on a strategy that should yield a good profit over time.