This week, someone on reddit noticed a discrepancy that no one else was talking about.

After doing some research into historical price trends, they combined their findings with their experience in MTG finance. Applying some of the hard and fast rules of MTG finance to the situation they graphed the discrepancy and submitted it to the people on the MTG finance subreddit. A price correction was coming any day now and there was still time to buy in and benefit.

Source

The graph is readable and anyone can instantly see the discrepancy just by looking. It's obvious that the foil and non-foil are the same price, which is not supposed to be the case and that there is a price correction imminent. OP said that the prices being equal now meant that the price of the foil was going to correct upward.

The only problem? The conclusion they came to is very likely wrong.

The Rules

I use something called the reddit enhancement suite so I can tag people who are wrong a lot, are obvious trolls or are people I know. It also tracks how many downvotes I have given the user. The poster here has few downvotes and no such tags.

I think the post OP made is pretty logically sound. This was just an average r/mtgfinance reader who applied some of the rules of finance they had learned to a situation, saw a discrepancy and alerted everyone. I'm also going to conclude that they bought quite a few foil copies from TCG Player, but more on that later.

The first, very basic rule is that foils should cost more than non-foils. That is pretty simple and uncontroversial. Foils are a special, chase commodity. There are more copies of a non-foil rare than there are copies of a foil rare. People who want to optimize (I hate saying "pimp"; it makes it sound like you want your deck to give blowies for money) their decks will pay more for them because they're shiny and special. We have a situation where the foil and non-foil cost exactly the same, and that violates this first rule.

The second is that there is a vague multiplier based on various criteria. People expect foil, Standard-only cards to be worth roughly twice a non-foil. Modern foils can be more than that, Legacy more than that.

Foreign foils have their own unique multiplier based on language and, in no small part, hand-waving and guesswork. With so few data points on cards like Russian foil Tarmogoyf, something as simple as a guy listing them on eBay and having his friend "win" the auction for $6,000 a copy and never pay can determine the price of such a card forever.

These "rules" are pretty vague and imprecise, but in a way they're kind of like Supreme Court Justice Potter Stewart's quip about hardcore pornography, "I don't know how to define it but I know it when I see it." It's not always easy to develop a mathematical formula for what a foil should cost, but sometimes things are obviously wrong. $20 foil Abrupt Decay "felt" wrong. Foil Galerider being the same price as the non-foil, similarly, feels wrong. Even if you don't know what the multiplier for a Standard foil is, you're pretty sure it's not "1x".

Another rule is that for in-demand cards, the price correction will not be achieved by the non-foil tanking so that some sort of golden ratio between the non-foil and foil price will be maintained.

Why would it? Demand typically makes prices go up, not down. With slivers doing things in Standard and desired by casual players, it makes sense that the demand will make prices go up, and that means the foil Galerider is due for an upward price correction. That's the only thing that makes sense when the foil is the same price as the non-foil, right? Demand makes prices go up, and the foil is the only card that can go up.

OP's caption, "These should match in size," refers to the size of the price spikes. If the prices are to maintain their ratio, the price spike for the foil should match the price spike for the non-foil.

In an ideal universe, the lines would maintain an exponential gap and every price increase for either would bring the other along with it, maintaining that golden price ratio. If the non-foil spikes to a certain price and the spike for the foil doesn't match, it's actually just lagging behind and it will eventually spike to catch up. This is sound logic.

Every Rule Has Exceptions

The problem is a fundamental miscalculation about the demand for Galerider and where it's coming from.

Foils should, in theory, cost more than non-foils. In most cases, you're going to have a healthy gap. There are, however, always exceptions to every rule, and one rule we've noticed is that we don't have a very healthy gap for non-EDH casual cards, especially ones where the non-foils are pricey. Let's look at a few examples.

This is a casual card and its price keeps rising the farther we get from M11. So is the foil poised to go up? Probably not. Casual players want their vampire lord, they don't want to foil the deck out. Sure, it's good value to buy the foil if it's the same price, but casual players who aren't building EDH decks typically don't care about that.

There's another factor people don't always remember.

The foil was in an intro pack, further complicating things. While not a ton of intro packs were bought, this still adds more copies of the foil to the equation. This has less of an effect than the fact that casual players aren't interested in foils as much, but it's worth mentioning. These two factors combined make a situation where the foil was the same price on TCG Player.

If not for the intro pack, we'd expect the foil to be worth maybe a dollar or two more than the non-foil. Stores are certainly trying to charge twice what a non-foil goes for, but TCG Player is a good barometer for the market's demand.

So what else do casual players like?

SLIVERS! Casual players love the ass out of some slivers, and combining their love of Galerider with the competitive community's adoption of a one-of Galerider to give their Mutavaults some ups, you have a good case for there to be pressure on the price of the non-foil.

Let's not forget the factor on the price that is speculators noticing that Galerider is used as a one-of in Standard and buying out TCG Player. The price of the non-foil is artificially high. Worse still, a lot of "justification after the fact" is going on. Whenever a price spikes suddenly, people apply logic in reverse to justify it. If that logic were sound, it could be applied to other cards to predict price increases, but instead, it's applied after a card went up to make sense of it.

Just read the thread I linked--lots of posters are pointing out reasons why Galerider is so high, but none of it is all that compelling. One-of in Standard Mono-Blue? Sliver deck legal until Khans comes out? Casual demand?

Casual demand isn't making Galerider a $5 non-foil, folks. This was speculators buying out TCG Player. The price of non-foil Galerider is artificially high, and artificially high non-foils don't have an effect on the foil price.

On Foil Multipliers

Our second "rule" dealt with the market's tendency to apply a multiplier to non-foils to get the foil price. Since there are fewer foils, the price should be higher, right?

However, people don't foil out Standard decks. I know some jackwagon is going to throw out some anecdote about the trust fund kid in their store with the foil Standard deck, but it's not a significant price factor and let's not pretend it is. If you know one kid who foils his Standard deck, there's a reason it sticks out as significant--it's an exception, not a rule.

Even if someone were compelled to foil a Standard deck, they're the kind of person who is playing with foil Elspeth, not foil slivers. Casual players don't tend to foil their decks out, and if they did, $5 seems like a decent price for a foil Galerider. $5 for a non-foil is simply not going to be tenable after rotation.

So we have a situation where the non-foil is the same as the foil, and one of those prices has got to change. In most cases, this is achieved by the foil going up in price. However, I think we're seeing the end of the cycle, not the beginning.

A More Sober Prediction

We have a pretty curious situation here where the non-foil is being driven by Standard demand (and speculation surrounding Standard demand) and the foil price is being dictated by Eternal demand. If Galerider gets played in some sort of Legacy Slivers deck (and it will, to the extent that is a deck) you'd expect the Legacy foil price to be roughly 5x the non-foil. How do we know what the "Legacy price" of a non-foil sliver is?

Simple! We look at a time before the card was talked about in Standard. That was the time before the non-foil spiked to $5. It was $2 right when it was new, and the modicum of Standard demand (one-of in one deck) made it maintain its M14 presale price. That in and of itself was quite a feat. For a casual card to maintain its presale price status is remarkable.

Speculation has driven the price up to $5, but we can reasonably assume that post-rotation, Galerider is a $1 or $2 card, tops. 5x $1 is a bit more reasonable, and that's exactly what the foil price is right now.

With no demand for the foil in Standard and the foil price just about right for Legacy demand, there's no reason to assume the price of the foil has any need to correct. It's actually right where it should be, and if it goes up, it's because someone bought out the cheap foils on TCG Player. Possibly the same guy who made a forum post saying, "I think the foil is about to go up." What are the odds he made what he thought was a logical conclusion and didn't buy any copies to benefit from a potential spike?

Let's take all of this into account when we look at the updated price graph.

I imagine all of the sub-$8 copies were snagged both by OP and a few people who found his reddit post compelling. I don't see the buylist price on foil Galerider increasing, and the $8-$10 this card is in a few weeks is going to look downright comical when non-foil Galerider deflates to a buck or two.

Final Thoughts

I applaud OP for noticing there was a discrepancy here. It took a bit of next-level finance knowledge to debunk this as a good spec, and clearly some people bought in. I would not discourage OP from trying to find things like this in the future. Noticing discrepancies is one of the only ways to truly make money speculating in a market where prices move at the speed of light and information exchange is so efficient.

I am not a buyer at $8 and I wasn't at $5, and I don't expect the $10 copies that have been sitting on TCG Player for months to suddenly start selling now. There is no sudden demand, only speculative purchases. Still, this was a good catch even though it's probably a bad spec.

One last thing, the name of the article may not make sense unless you read the thread.

I'd like to thank /u/OSU2015 for giving us all a chance to re-evaluate some of the rules we took for granted, lest our truths become tautology and we're all struck blind by complacency.

Am I full of bologna sausage? Is foil Galerider the nest $20 card? Did I introduce a bunch of personal bias? Would it make you feel better about the conclusion I came to if I told you I had 10 foil copies in my spec box from a year ago? Leave it below and may Supply Side Jesus bless all of you with trickle down economic gains.