Editor's note: In the interest of sharing information and facts about COVID-19 (Novel Coronavirus), here is a fact sheet from the Center for Disease Control, a news resource from the World Health Organization, and a guide to preventing the spread of the flu. If you haven't already, please take a few minutes to read them before continuing on.  

I recognize the coronavirus is a hot topic for debates, with folks in Washington, D.C., politicizing it and making it a point to further divide the country. This article will do it’s very best to eschew the politics and focus strictly on Magic.

Thousands have died. The Dow Jones Industrial Average has plunged 4,000 points in a week, including a one-day drop of 1,191 points, the highest one-day loss in history. Headlines are unavoidable.

COVID-19 (the coronavirus) is on everyone’s minds these days, and while you should be focusing on your physical and financial health in consideration of the crisis, you might also be wondering about the health of Magic in the face of a potential pandemic. That’s not to say I’m intending to downplay the seriousness of the disease—but this is a Magic website, and someone should explore the potential impact on the hobby we all have come to love.

What Has Happened Thus Far

Italy has been one of the hardest-hit countries by the coronavirus thus far. Large gatherings—especially in regions where cases of the virus are most prevalent—are being canceled or modified. For example, certain soccer matches in Italy are now being played without any fans to spectate. Allowing fans to gather in such a mass would put Italy at risk of a massive breakout for the disease.

Most people are familiar enough with soccer to understand the risk and the decision to play without spectators. Outside of Magic players, however, no one could have anticipated full-blown cancellation of MagicFest Turin.

Those who were looking forward to the Modern event are surely disappointed, especially since there probably aren’t many such events in Italy each year.

Looking ahead, what would happen should the coronavirus become an official pandemic and the disease spreads over more of the globe? Could we see more MagicFests canceled? We know the stock market is suffering, but how does all of this impact the Magic market?

All I can do is speculate…

The Pessimist

The coronavirus gives pessimists plenty of scenarios to worry about. A spreading virus, especially throughout the United States, would lead to additional cancellations of MagicFest events. If the gathering in Turin was going to be too large to be safe, then even larger events throughout the U.S. would also be problematic.

Fewer events mean less demand for cards because players won’t be acquiring the cards they need to participate. Smaller events could be impacted too, with players unwilling to travel far given the current environment. Public transportation, particularly air travel, is negatively impacted by the spread of this disease. Magic players might not be so willing to hop on a plane or train to participate in a game.

Then there’s the economic impact: a pandemic would likely send shares of stocks down further, hurting retirement funds across the globe. Companies would also be hurt by slowing sales and disrupted supply chains, and this could lead to lay-offs and a full-blown recession. When recessions happen, luxury goods (such as Magic cards) tend to be more significantly impacted versus, say, consumer packaged goods.

Demand for Magic cards—especially high-end cards such as foils and rarer printings (Alpha and Beta vs. Revised, for example)—could easily drop. Who needs a $6000 Black Lotus when you’re looking for a job or you’re preparing for a state-wide quarantine? In fact, if put in a tight spot, Magic collectors may be forced to sell such cards to make ends meet. Increasing supply and decreasing demand would make for lower prices.

Even worse, players may give up their paper collections in favor of playing online, where there’s no risk of catching the sickness from fellow attendees. Arena play could increase—to the detriment of paper. This would most negatively impact the prices of newer cards because most popular older formats are not currently available on Arena. But a lowering tide could drop all ships.

It doesn’t take too much imagination to see a significant weakening in Magic prices should this virus start spreading throughout the U.S. without containment or reasonable countermeasures.

The Optimist

Doom and gloom is not a foregone conclusion. While the coronavirus is wreaking havoc currently, there are a couple of things to keep in mind that may give the optimist hope.

First and foremost, the nationwide spread of the disease throughout the United States is no guarantee. While things are starting to move in the wrong direction (community spread of the disease), so far the cases have been limited mainly to the West Coast, with one newly reported in New York at the time of writing. Should local governments succeed in quarantining the right people, the disease’s spread could be slowed or halted. This is the best outcome for everybody—it would lead to a quicker rebound in the stock market and perhaps no more MagicFests would be canceled. Life would still proceed as normal.

Even if the disease does spread throughout the United States, it may not trigger an immediate imperative to sell on Magic cards. Of course, if you need to choose between paying rent and buying food or your set of forty dual lands, you may choose to cash out. I wouldn’t blame you for such a choice, of course.

If you can hold onto your cards, though, there may be long-term benefits to doing so. First of all, I’ve mentioned in the past how Magic isn’t as liquid as stocks. In this scenario, this may work to your benefit—the stock market dropped 12 percent in a week, but Magic card prices can’t possibly react so quickly. It’s highly unlikely that high-end values are suddenly 12 percent lower. In fact, I noticed Card Kingdom actually increased their prices on some desirable Unlimited cards recently (e.g., Gauntlet of Might, Underground Sea, and Scrubland).

An economic slowdown would likely have to take effect for multiple quarters to see any impact on Magic prices.

Going one level deeper, one could make the argument that Magic cards and other collectibles are safer than stocks. The stock market is very fragile right now, with money managers and hedge funds performing an enormous number of transactions to try and get in front of the current sell-off.

Collectibles tend to be stickier assets because of the attachments that people form with them. Stocks are easy to cut in order to reduce risk and raise cash. Parting ways with a beloved painting (or favorite Magic deck) is much harder. In a world where volatility is through the roof on Wall Street, Magic cards could offer stability in your portfolio.

Lastly, I wonder what would happen if more MagicFests were canceled. If the situation gets worse before it gets better, this is not so far-fetched. I’ve begun to wonder—some vendors rely heavily on restocking their inventory by posting aggressive buylists at MagicFests. Tales of Adventure and 95 Games come to mind.

As long as the economy can recover in a reasonable amount of time (within a year, let’s say), I could envision a scenario where major vendors have a difficult time keeping stock of tournament and casual staples. Without as many MagicFests, these vendors may be forced to restock in other ways. They may have to buy more aggressively at the MagicFests they do attend. Or maybe they’re forced to purchase cards online from other sources. The limited liquidity could actually lead to a temporary spike in prices.

This scenario requires a perfect storm of events to occur, but I do wonder if it’s possible.

Wrapping It Up: Sig’s Outlook

I could see the Magic market responding both positively and negatively to the current coronavirus outbreak. The pessimist in me believes an economic slow-down would disproportionately hurt luxury goods (of which I consider Magic to be one). But the optimist in me believes collectibles could outperform the stock market during this tumultuous time.

All possible outcomes considered, my inclination is to hold for now. Because I’m fortunate enough to have a stable full-time job, I don’t anticipate having to sell cards to make ends meet. Therefore, I’m inclined to hold my collection through any potential downswing in prices. In fact, if prices do drop significantly (remember, many Old School cards have already shed most of their gains from 2017-2018), it could make for an attractive buying opportunity.

It would take a fairly dire situation to motivate me to sell out of Magic completely before my son begins college. If prices drop from here, I’d be even less inclined to sell. On the other hand, if people start flocking to Magic as a safe haven while stock performance remains dismal, I could see myself selling cards into any strength. If prices rebound for any reason, I’ll start looking for opportunities to cash out. I wouldn’t sell out completely, but cutting the collection back is something I’ve been considering anyway. Higher prices are just what I’m waiting for to make such a move.

I will sell eventually, but I’m hoping the spread of a coronavirus isn’t the catalyst that forces my hand. I’d much rather make the decision on my own terms. One thing we can all agree upon: let’s hope things don’t get so much worse that all of our hands are forced one way or another!

Practice healthy hygiene habits and stay safe, everyone!

…

Sigbits

• Dual lands have started popping up on Card Kingdom’s hotlist. Right now I see a few: Underground Sea ($300), Volcanic Island ($290), Tropical Island ($230), Bayou ($180), Badlands ($160), Savannah ($100), Taiga ($90), and even Plateau ($75) are all on the hotlist. Cross-referencing these numbers to 95 Games’ recent hotlist, it appears dual lands are fairly strong right now.
• Keep an eye on Gaea's Cradle—last Friday, Card Kingdom’s buylist on the card was up near $270. They must have taken in a few copies at that price because they dropped the number all the way back down to $230. But it remains on their hotlist, and I consider this card in the same basket of stable, long-term holds as duals.
• Book Promo copies of Mana Crypt are back near their highs on Card Kingdom’s hotlist. They are currently offering $190 for the popular artifact. I remember these peaking in the $200 range when they last got this high, so if you’re looking to exit this card then keep an eye on Card Kingdom’s buylist. You may catch a temporary jump, netting you close to the same amount you’d get if you just sold on TCGplayer. Don’t forget, this card isn’t on the Reserved List and could see another reprint someday.