Welcome back, readers!

This week's article will focus on the subject of organization, specifically in regards to your specs. As someone who previously evaluated cards and purchased them (and then let them sit in a box or binder) until one day I noticed they'd gone up, I wasn't always so organized. Even just a year or so ago, prices kept jumping up so there wasn't always a noticeable cost to my apathy. However, with the recent shifts in the MTG finance marketplace I'm realizing now that cards can actually go down in value even without a reprint.

I know if you'd read this a year ago, you'd think I was crazy. A rampant run of speculation in preparation for what was expected to be a major boon this past summer caused prices to balloon out of control, and likely push potential Modern players out of the market.

But that's a different matter--the point is, we've all seen that the market can only take so much, and in order to maximize our profits we need to be on top of everything. It's time consuming to keep on top of the constant metagame shifts in multiple formats, and time is a variable that is always limited so proper organization of our specs is critical to reducing inefficiencies.

Tracking Your "Stocks"

I often try to mention the similarities between MTG finance and the stock market and that's because I believe that a lot of strategies and concepts can be shared between the two (though to be fair a lot more of these have been well documented and discussed with regards to the stock market). That being said, I looked for a good "stock tracking" spreadsheet to use as a skeleton for my MTG spec tracking. If you want a "blank copy" you can find it here.

MTG Stock Portfolio - blank

Here's the sheet that shows all my MTG purchases through November of last year (I wanted to display it in tabular form, but unfortunately there was simply too much information and our screen size is limited).

MTG Stock Portfolio - 8/18/14

As you can see I'm only averaging 11.5% gains (which isn't terrible), but I have a lot of "red choices". It is important to note that several of the red options are repeats. It's also important to keep in mind the biggest outliers (most of the temples and the Dictate of Erebos's) were meant as longer-term holds and the expected time to sell hasn't hit yet--the temples are for after RTR block rotates out and the Dictates are a 2-3 year investment.

However, that isn't to excuse my choice to purchase them when I did, especially the Dictates. I got excited watching people get blown out by them in Limited and realized that Mono-Black Devotion style decks were currently the best option for the competitive player, so if the Dictate found a home it would likely jump to $4-5 each. Unfortunately, for me, this didn't occur and their price has dropped dramatically since prerelease times.

Consider this a lesson in patience, with very few exceptions--pre-ordering is a bad idea and even then the cost of waiting is rarely that bad. My biggest hits were Slaughter Pact and Hurkyl's Recall, both of which I purchased right after returning from GP Richmond (the first Modern GP of the year) where dealers were out of both cards and people were constantly asking me for them.

This is just another example of patience paying off, as these cards didn't really start to take off immediately. There was a week or two when you could have picked them up cheaply (and in Hurkyl's case, it just had a nice steady incline).

Now back to the spreadsheet. Most of the columns are pretty self explanatory, though I do want to highlight the "card profit" column. This refers to a "price from my door to your door" concept, meaning seller fees and shipping should always be factored in. Now to explain the equations (I'm assuming you did in fact download the sheet).

Total Cost = (Quantity * Cost per Item) + Purchase Fees [This represents the total cost to acquire the cards]

Market Value = (Current Value * Quantity) [This represents the current value of the cards if you were able to sell them for TCG Mid cash in person (i.e. no fees)

Market Value At Sale = (Value At Sale * Quantity) - Sales Fees [This represents the total amount of money you received selling the cards, however not the profit]

Gains/Losses ($) = ((Market Value at Sale (if Cell N# is not 0 else Market Value) - (Total Cost)) [This represents your actual gains or losses, actual or theoretical (if you were able to sell the cards at market value with no fees)]

Gains/Losses (%) = This is the Gains/Losses number above but in percentage form (as that's often a good way to normalize your data). 

You certainly don't have to use this spreadsheet, but I'm finding it helpful in tracking myself. I will be saving a copy and updating the Current Values in each cell every week to track my progress. I did get the basics of this sheet from microsoft (http://office.microsoft.com/en-us/templates/stock-investment-performance-tracker-TC001023352.aspx), but had to add some columns and change the equations around.

Understanding Your Gains and Losses

Like reviewing your play mistakes during a match, it's just as important to review your mistakes speculating. As I mentioned, I missed hard on the Dictate of Erebos's (averaging nearly a 40% loss) and I did well on Slaughter Pacts. What is critical to keep in mind though is that we're not all going to hit 100% of the time. What I really like about this spreadsheet is the "Difference" calculation, which lets you know the total value of your assets currently compared to what you paid for them.

Again, as previously mentioned I'm sitting at +11.5% which for about a nine month time span isn't terrible, though it is misleading as I haven't sold many of my assets--assuming I could do so at current market value and with no fees is quite a stretch. It's far more likely that if I were to sell out of my cards I'd be very much in the red.

Luckily, you can only lose money invested when you sell your investments (a lesson my father taught me at a young age). While my Dictate's didn't pan out, I still think my reasoning was sound. It does seem like a card that can easily break the mirror, there's just no room for it in the current environment.

I pre-ordered the "souls" of M15, primarily because they were all relatively cheap and with the exception of Soul of Theros they have not dropped a lot. This investment was more of a calculated risk. I do rarely pre-order as it's shown time and time again to be a money-losing proposition; however, if any of these cheap mythics did break out in the upcoming PT, they would likely quadruple or more in price (and thus push me into the green). I also didn't buy any M15 boxes and wanted to build my quirky decks for Standard, and the souls seemed like cards you can build around.

You'll also notice that with the exception of Dictate of Erebos, I don't order a lot of any one specific card (usually). This keeps my portfolio diversified, preventing me from taking devastating losses when one doesn't pan out (again..usually). However, this conservative approach also means I don't make a ton of money when one does hit.

My "MTG investment philosophy" is not tied to paying rent/travel/food/insurance/etc. I do it simply because I enjoy it, and because unlike stocks, I feel I have a pretty good grasp of MTG and I'm much more excited to discuss this subject than normal stock investments.

Quick Flips

While I understand the allure of "quick flips" (like Goblin Rabblemaster from the last Pro Tour), my problem is I don't have a quick out for any cards--no online or brick-and-mortar store front. Thus, a card could go from $1 to $4 in a three day time span, but if the buylists for each card don't adjust quickly (and they usually don't) you can be left with a lot of the "theoretical" profits mentioned above, but no real money.

The highest buylist on Goblin Rabblemaster right now is $1.50. Unless you found a seller with a large quantity in stock when they were under $1, you likely paid almost that per copy when you factor in shipping costs. This is the danger behind the "bulk to $4' cards and one of the reasons you don't see any of those buys on my chart.

Reprints

I also want to emphasize that my reasoning behind Dictate of Erebos was partially blinded by Standard potential and comparison to Grave Pact. The latter, despite six printings, is a $10 card and Dictate is pretty equivalent, if not slightly better due to a less restrictive mana cost and flash.

I also assumed that because it had a plane-specific character in its name that it would have a lower likelihood of being reprinted, however, with M15's release we saw both a new Avacyn and a new Ob Nixilis, both of which were characters specific to their own planes.

With this change in core set design philosophy, I am becoming more weary of long-term specs as my previous analysis regarding reprints shows a typical 27% drop in value when a card is reprinted. This will likely increase with the increase in print run sizes (after all if there are more of the original printings around then another mass reprint requires a substantial increase in demand for the value not to plummet).