A few weeks ago I wrote an exceptionally bullish article, calling a bottom in many Magic card prices during the winter swoon. By looking at historical price charts, I developed a theory that suggested many cards seeing greater play would finally receive the price bounces they deserved.

In many cases, this was an accurate thesis. I specifically called out Dual Lands as strong targets, and David’s email last week indicated some of these are finally bottoming. Later I called out Stoneforge Mystic as a strong pick-up. That certainly panned out as well:

I originally liked this card because of its significant play in Legacy, but I recently came across a new angle.

The new white Commander deck is practically built around Stoneforge’s synergy with equipment. In fact, I can think of no other card that screams “add me” to the white Commander deck than this one. My guess is that this additional demand is having a significant influence on movement.

Either way, I’ll take it. And I still see $30+ for Stoneforge in the near future.

So it’s clear that some cards are, in fact, bottoming. We’re also seeing renewed buying interest in casual cards like Gilt-Leaf Archdruid and Sliver Hive.

But not everything is behaving so bullishly. And with all the buying I’ve been doing lately, I’m left wondering what to do with both my winners and my losers.

Do I wait for the price spikes I anticipate happening in spring? Do I sell certain cards now to free up cash to enable more buying? I’ll break down my approach this week as I plan for an exciting spring in MTG Finance.

The Winners

In order to boost excitement, I’ll first examine some recent winners. These are cards I’ve bought into – many as recently as one to three months ago – that have since appreciated in value. Stoneforge Mystic is just one example, but another I can mention would be Foil Summoning Trap. Foil Summoning Trap was a spec I bought into after reading about it in the QS Forums.

I bought a few played copies on TCG Player for between $1 and $2, and these now buy list to ABU Games for $3+ and are over $4 on TCG Player. This may seem like a minimal gain. In reality, the absolute dollar gain on each position may be tiny, but the percentage is respectable.

Either way, there has been a number of cases like these for me. Situations where I’ve purchased a handful of a cheap card and watched it gradually rise in price.

What challenges my current situation is whether or not I want to sell out of all these small gains. Thanks to fees and shipping, it’s likely I won’t see much profit. But I know the cards I bought are worth more now than they were when I pulled the trigger.

Kuldotha Forgemaster is another such example. Again we have a very powerful card that has demonstrated value in Commander formats, with a little bit of Eternal play. As a result, the card has surged in value from $0.50 to $2 in a few short months.

As before, I didn’t buy in at the exact bottom. So while my paper gains look terrific – especially from a percentage standpoint – these dollar gains are not really realizable at this time because of fees and shipping associated with selling cards.

Because of this greater trend, I have come to a conclusion.

My strategy for now will be to hold all of my small winners. Their gains have been too tiny to justify cashing out. And, if you’ll notice, the slope on these price curves are incredibly steep and positive in recent days. This suggests we aren’t close to leveling out yet, and we are striving for a much higher price ceiling. This, combined with profits I can’t extract, tells me it’s time to hold.

Note that there is risk in holding some of these cards because they may be reprinted in Modern Masters 2015, but that’s still a few months out. At our current growth rate, I anticipate there will be a wide enough window to bail on some of these cards before MMA 2015 is fully spoiled.

The Losers

Okay, so I’ve decided it’s too premature to sell my winners. They are just now turning a corner and should net me sizable profits in roughly two or three months. So how about my losing specs? Should I cut those losses now so I can free up cash?

Well, let’s first examine what my big losers are. The two most sufferable MTG investments I made lately were Scavenging Ooze and various Theros temples.

This one time all-star has been on a very steady decline since it peaked in September 2013. It has been a painful journey as I watch my initial $10 investment dwindle further and further, essentially reducing by half in value. Now I’m sitting on a handful of $5 copies, still wondering if I should hold for a bounce or cut losses.

Looking at the price trajectory, I am inclined to cut losses and bail. The card isn’t seeing an exceptionally high amount of play in Modern and Legacy, usually included as a 1-of. What’s more, I’m not sure if there’s a reason this card will suddenly see more play any time soon. I personally have no need to include more than one copy in my Modern Pod list.

It kills me that buy lists have shrank so significantly, but it may truly be time for me to move on. The price trajectory over the last couple months has been steadily decreasing, with no bounce in sight.

The same trajectory applies to some of these Theros temples I’m sitting on. Temple of Abandon is probably my biggest disappointment.

When this card began its bounce after the release of Khans of Tarkir, I truly believed I had a homerun. I even scrambled to buy a few more copies in the $3 range, anticipating a price target twice as high. That never happened, and now I’m stuck holding a bunch of $1.50 temples.

Now I’m left to wonder: do I sell these now and eat my losses, or do I hold out for a potential rebound? There are two factors at play here.

On the upside, Fate Reforged could reshape the Standard format a bit. Should a new strategy using the R/G color combination emerge, this temple could see a small bounce.

On the downside, time is very limited as Standard rotation looms. While that is still many months away, each passing month yields less time for this card to ever have its chance to shine again.

I think my decision will be to wait and see what Fate Reforge does to Standard. But if it doesn’t look like R/G strategies will become more popular, I’m cutting losses and bailing. I do NOT want to be left holding any temples when they leave Standard. Their utility in other formats is far too limited to justify a long term hold.

You Gotta Know When To Hold Them…

One of the hardest parts of investing in the stock market is not in knowing what to buy and when, but rather knowing when to sell.

Clearly, this concept translates to MTG Finance as well. I’m sitting on a very diverse portfolio – some nice gains as well as some painful losses. My struggle, it seems, is determining what to sell and when.

My initial inclination is to sell my winners, banking nice profits and freeing up cash for future speculation. But I think we’re in a strange place with MTG Finance. If spring brings us another surge, then selling cards with momentum would not be the play here. Clearly a card like Gilt-Leaf Archdruid has some momentum behind it. Even foil Summoning Trap has plenty of upside remaining. Why sell cards with such great growth potential?

Conversely, if losers have a downward trajectory and there are no anticipated catalysts ahead, why hold onto them? While it is always painful to eat losses, we shouldn’t let our entry price influence what we sell and when. It may take five years for Scavenging Ooze to hit $10 again. And let’s face it--by then, it could be reprinted in an Event Deck and in Modern Masters 2019.

So I’ve got my strategy. Cards with positive momentum – many casual staples, Modern staples (watch out for reprints!), and certainly Legacy staples – are all holds for me.

Meanwhile, cards that have suffered a lot lately – primarily Standard cards with little life in them – are largely sells.

Every once in a while I manage to make it to an actual MTG event. Perhaps I can unload some of my winners and losers via trades, avoiding fees and shipping. If this opportunity arises, I will certainly take advantage. In these cases, I wouldn’t mind unloading either my winners or my losers, as long as I’m acquiring cards I believe have larger future upside.

But in the meantime, while I deal mostly in buying and selling, this is going to be my primary strategy going forward.

Does this strategy make sense? What do you do with your winners and losers? How do you determine when it’s time to sell each?

Share your thoughts below in the comments field. The more we brainstorm strategies together, the more we’ll all learn!

…

Sigbits

As usual, everyone is buying up cards in anticipation of potential un-banning. I tried this “game” once a while ago… and lost miserably. Apparently others haven’t learned this same lesson. Either that, or they have some inside info I lack.

• Bloodbraid Elf has been the top target. SCG is completely sold out of this card, although their price is still only $2.49 and $2.69 for Planechase and Alara Reborn printings. This card is immensely dangerous. Should she be unbanned, it could completely shake up Modern. Maybe that’s what Wizards wants… who knows?
• Survival of the Fittest is another card that has shot up lately. I don’t think this is because people anticipate a Legacy unbanning. The card was far too problematic while it was legal in Legacy. But, nonetheless, this banned card has been hot lately, and SCG is sold out at $38.25. Expect this one to be restocked closer to $49.99.
• Another card I keep hearing about is Ancestral Vision. This one is also not likely to be unbanned in Modern. Alongside Treasure Cruise, these two sorceries could combine to make an overpowering combination for blue decks. Star City Games still has a few copies of these in stock. Though, it is worth noting they are sold out of the original printing with a price tag of $8.75.