UNLOCKED PROTRADER: MM2015 — The Unofficial MTG Stimulus

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As a response to the Great Recession of Wall Street, the Federal Reserve initiated a multitude of stimulus programs. They initiated a massive bond buying program and they lowered interest rates to virtually zero. These two actions were done in an attempt to stimulate our economy and drive healthy motivation for investment in stocks.

The jury is still out on how sustainable the program was (is). Some dissenters will likely criticize the stimuli for years to come no matter the outcome. But regardless of what your political leaning may be, the resulting market performance since is impossible to argue with.

SPY

Turning back to MTG finance, one could argue that some particular cards have also been going through some economic turbulence. Original dual lands come to mind immediately – especially the out-of-favor color combinations. Other Legacy staples have also pulled off their recent highs by a measurable amount. Some Modern staples have also spiked recently, only to retreat to a lower price point.

 

Azusa

What’s to become of this developing trend? Could Magic be due for a Great Recession type of pullback?

Certainly not. The game is as healthy as ever. In fact, this week I present a new thesis that supports a new surge in some card prices. Allow me to explain.

Modern Masters 2015

Who’s excited for the release of one of the highest EV sets upon release of all time? Who’s pumped up to participate in or watch the largest MTG tournaments ever? Who’s eager to draft this set, which will definitely be a Limited crowd-pleaser?

No matter your perspective, it’s difficult to argue with the hype behind Modern Masters 2015. Even if you are a complete skeptic, dripping with disdain for some of the wasted rare slots in the set (Endrek Sahr, Master Breeder?!), you’re likely excited about the future prospects of the cards that dodged reprint this set. Speculators have been very busy lately…

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Interests

Six of the top ten price gainers last week were Modern cards that dodged MM2015 reprint. The Tron lands were noteworthy absences, and clearly Inkmoth Nexus and Serum Visions are strong buys on the news. Or at least, they were strong buys before the market overreacted, sending copies up excessively high overnight.

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My conclusion for Modern Masters 2015: while I’m personally not ecstatic to be opening $10 packs with a high likelihood of obtaining a sub-$1 rare, the swirl this set is generating amongst the MTG finance community is nearly tangible. I’m delighted to witness hours of debate on Twitter about card prices. The buzz should continue through GP Vegas without a hitch.

If ever there was a time to engage in MTG speculation and finance, now would be it. And with the return of a Modern PTQ season, we’ve got even more reason to get excited about Modern.

MTG Stimulus: Part 1

When the Federal Reserve bought up many billions of dollars of bonds, they infused a large amount of cash into the economy. Then they reduced rates so low that there was practically no good place to park money other than into investments. The result: a rapid decline in unemployment and multiple years of double-digit gains in the stock market.

Turning back to Magic, we need to recognize how tentative people were with buying into Modern with the knowledge that a massive reprint set was on the horizon. It’s always a feel-bad when we buy cards only to watch them tank in price due to reprinting. Therefore, I suspect players and speculators held cash on the sidelines waiting for Modern Masters 2015 to be fully spoiled. Only then would there be high confidence in which targets would be safe to buy into.

Well, last Friday we received the complete spoiler from WOTC. Various absent cards created quite the surprise – namely, Tron lands, Serum Visions, Aven Mindcensor, Blood Moon, Inquisition of Kozilek, Azusa, Inkmoth Nexus, and more. It’s no surprise that many of these cards are on the move as players and speculators acquire copies for the upcoming Modern season.

Inkmoth

In rapid-fire fashion, everyone is infusing cash into the MTG economy as they scoop up copies of the “safe” cards. This pseudo-stimulus is a combination of self-fulfilling prophecy and pent-up demand. Now that speculators know what cards are likely to further increase in value, they can invest with confidence. After all, what better place was there to invest funds than something like Inkmoth Nexus once we were certain it wasn’t in MM2015?

Now Inkmoth Nexus is a $20 card, and it will likely climb higher in the coming months. As speculators cash out on the movement they’ll have additional funds with which to work. What are they going to do with all their newfound profits?

MTG Stimulus: Part 2

I’ve got a couple ideas of where this money will go. First of all, there will likely be some great buy opportunities on my radar once MM2015 hits the market: namely, the popular reprinted cards. The Modern staples of the set are likely to sell off a bit in the coming weeks, due to both panic and the increased supply. The same thing happened with MMA on a card like Cryptic Command.

Cryptic

Modern demand sent this card up to around $45 in Spring 2013, but the MMA reprint caused a rapid decline back to the $30 mark. But about eight months after the sell-off, Cryptic Command rebounded like never before, shooting up to $70.

Now once again, we’re seeing a rapid sell-off. The blue instant is already back down to $50, with momentum suggesting this could go even lower. But this begs the question: will history repeat itself? Will Modern grow in popularity even more, sending Cryptic’s price right back up to new highs in eight months? It’s certainly not impossible, and I’d wager this was WOTC’s plan. They are hoping to support and stimulate interest in the Modern format with these Modern Masters sets, and time will tell how successful they will be with round two.

Either way the reprinted cards in MM2015 are bound to sell off, but eventually they’ll bottom. When that happens, we as speculators should recognize the buying opportunity screaming at us. And with their newly-minted coin from the recent movement in non-reprinted cards, they’ll buoy the MTG economy into these headwinds.

If you’re not bullish on the Modern format, or if you’re concerned about further reprints in other sets, I have some good news. MM2015 reprints aren’t the only solid buys once the dust settles.

As players discover their Inkmoth Nexus and Serum Visions are suddenly worth a bunch more, they’ll be likely to sell/trade excess copies away. Additionally, [lucky] players will suddenly come into all kinds of money when they pull Goyfs, Cliques, and Bobs in their MM2015 packs, not to mention a lineup of Eldrazi. What will the lucky ones do with their valuable pulls?

While it’s true some players will determine that opening a Goyf is the perfect motivator to sleeve up Abzan Midrange in Modern, I suspect many others will be cashing out of their valuable pulls. After all, if we are assuming the Modern Masters 2015 reprints are likely to lower prices, that means the market must see increased supply. That’s natural supply & demand logic – for the price to drop, demand must drop (not likely) or supply must rise. If supply is rising, that must mean people are selling more copies. Likely this will mean their newly-opened copies…after the initial panic, such as what we’re seeing in charts like Cryptic Command and Noble Hierarch.

Hierarch

As players cash out of their Modern staples, what do you think they’ll look to buy? I saw a well-phrased tweet last weekend from an individual I have high respect for in the MTG finance community.

Tweet

I can’t vouch for Pucatrade specifically, but I condone his overall strategy 100%. Judging by all the favorites this tweet received, I can tell we’re not alone in this sentiment. Moving high-dollar Modern cards into equities on the Reserved List is a brilliant strategy. You’re basically capitalizing on short-term price fluctuations in the Modern market by moving into cards that will never see reprint again. Even if Inkmoth Nexus does rise to $30 during Modern season, we know it will see reprint eventually, right?

Meanwhile, Tropical Island will never see reprint.

Trop

This particular dual land has been out of favor for months now, but perhaps the recent stimulus of MM2015 is just the catalyst needed for movement. Although not on the Reserve List, Wasteland is another Legacy staple that could use some stimulus – the Nonbasic land has stumbled over 50% from its highs.

If high-end Legacy staples aren’t your forte, then picking up other Reserve List cards may be a more optimal strategy. We just saw Ragnar jump in price on Tiny Leaders speculation; why not grab a couple Lady Evangela? I hope to in Vegas, in fact. Or better yet, pick up a couple Old Man of the Seas (Old Men of the Sea?). These have been gaining traction lately. I even see casual stuff like Divine Intervention and Island of Wak-Wak show up on the MTGStocks Interests page on occasion. Not only is this on the Reserve List, there’s really nothing else like it. I have a sneaking suspicion Wizards will never again print a card that forces the game to end in a draw. And what casual Reserve List discussion is complete without mention of my favorite Magic card of all time, Shahrazad?

Shahrazad

You’ll never see a sudden buyout of this card, but it’s worth noting how the top buy list price has gradually been on the rise for the last 2 years.

No matter your personal preference, moving out of spiking Modern cards or recently-opened MM2015 goodies and into Reserve List favorites is a tried-and-true strategy I recommend. It’s a great way to lock in profits and reduce risk at the same time.

Wrapping It Up

A significant amount of money is going to exchange hands this summer. Speculators will rampantly acquire non-reprinted Modern cards. Players will be opening high-dollar cards left and right. This will lead to a sudden surge of value in the MTG economy – a type of stimulus.

My prediction: this stimulus will be just what the MTG economy needed for the past few months. Modern interest will jump and demand for Legacy and casual staples will go higher as well. If you want to get ahead of the curve, consider moving into cards on the Reserve List now, as Xemit suggested. I’ve provided a few sound suggestions, and I’m sure there are many others worth considering.

The tide will rise once more, lifting all ships. Therefore it is a great time to have exposure to MTG assets. My portfolio is currently the largest it has been since I sold out of Legacy over two years ago, and I look forward to seeing my holdings appreciate in value in the coming months thanks to this unofficial stimulus.

Sig’s Quick Hits

  • If you have a large quantity of Modern stuff to move, one sound acquisition target is Bazaar of Baghdad. In fact in the last couple weeks Star City Games increased their price on the Vintage staple from $399.99 to $449.99 for NM copies. It’s a steep price of entry, but you can be confident in this long-term investment’s prospects should MTG continue to grow.
  • One Modern/Legacy card that is not seeing nearly enough buzz is Slaughter Pact. The card managed to dodge reprint in MM2015 (unlike in MMA), meaning we’re not getting any new supply of this rare. Every time I search for the card on SCG’s site, it is out of stock. Today is no exception, and the $10 price tag is almost guaranteed to rise as we head into Modern season.
  • Lion’s Eye Diamond gets very little buzz in the MTG finance community, but the Reserve List card has been a Legacy staple for years. Currently SCG is sold out of this one as well, with a NM price tag of $86.29. There are probably a few more exciting pick-ups to target with newfound profits, but no one can argue with the low risk of LED. The card is off its highs much like other Legacy staples, and this stimulus could help rekindle interest.
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13 thoughts on “UNLOCKED PROTRADER: MM2015 — The Unofficial MTG Stimulus”

  1. I miss reading your stuff Sig and commenting back and forth with you. I understand you put a lot of time into your work but I still wish it was free. Join the dark side with Madlem and Yost and make your articles free again 🙂

    1. Spencer,

      I really appreciate the sentiment. I miss our banter as well. Not sure I really have much say whether or not my articles are behind the paywall. You could start a petition, perhaps? :-P. Or maybe if you simply ask the powers that be at MTG Price, they may listen to your opinion. If many people voice the same intent, perhaps the data would become compelling.

      Then again, it IS only $5…

  2. Great Article. I like how you provide some direction and different avenues to think about during the upcoming Summer months. I wish everyone the best on cashing in on Modern staples now that demand is surging again due to this new “Stimulus Package”. Now is the time to get into Modern, and a TON of new/returning players know it. Players getting into Modern are now much more confident that these expensive cards they are buying will hold their value because there is no longer the “What-if” of a reprint. So its Buy-Buy-Buy.

    Looking to reinvest the money you made on this “Stimulus Package” by picking up reserved list cards that are even more “safe” seems like a good goal to have too.

    You already know what card I’m looking for that is on the reserve list, from our conversation on the Pro-Trader forums. And you were right to be hesitant to sell too. I do hope you keep me in mind if you decide on letting one go.

    🙂

    1. Thanks for commenting and sharing your thoughts. It sounds like you and I are on exactly the same page when it comes to developing a strategy for the summer. Let’s hope everything proceeds as planned!

      I will definitely be looking to sell my unused duals eventually…just not yet. I really am banking on the rising tide to lift all ships in the coming months, and it would be reckless to sell prematurely (no matter how tempting). But perhaps if in August there is still NO movement in duals, I’ll be more amenable to selling. 🙂

  3. Damnit sig seriously… not to be a dick but the magic finance stuff, while good, is so unrelated to the topic you’re trying to link it to, and every damn time I heard more crap spouted about how “unemployment went down”, etc… I just wanted to reach through my monitor and slap you…

    The only solace I take is what’s happening in Magic is not in ANY way related to the disaster that is the US economy right now. Unemployment is not down whatsoever. As a matter of fact, unemployment is UP beyond anything we’ve seen since Jimmy Carter and before that the Great Depression, look at the data (and neglect my political insertion in there… the data is taken straight from the US Bureau of Labor Statistics database):

    http://i61.tinypic.com/2vjocad.jpg

    If the MTG world looked like that, I’d be out so fast it’s not even funny. Please say you didn’t understand this and plan on correcting it, I hope you don’t believe that these two are related in any way…

    1. I can tell you are very passionate about this subject. I’m not as passionate as you are, and my opinion isn’t in line with yours. Therefore, I’m not going to attempt to engage in a debate here as I suspect you’ll overpower me with links and harsh language.

      That being said, I believe the stimulus analogy holds BUT nothing beyond that. I’m not going to argue what unemployment number is “correct”, who is buying shorts (not Warren Buffett FYI), and the state of the overall economy. That’s not the point. The point is that MTG Finance could be entering a bull market with MM2015 as a catalyst. I believe we at least agree on that one 🙂

      Thanks for your comment – I always encourage constructive feedback, though in the future there is no need to slap folks for having a different viewpoint than your own. 😉

      1. It’s just a smack of love… you know that.

        Just saying, it’s hard to argue with that graph. Actual BLS statistics showing the “unemployment” rate, compared to the red line, which is % of people 16+ years old that aren’t working. It’s not even # of people, it’s % of people… that’s *bad*

        1. Matt,

          I have heard these arguments before. The “Unemployment rate” is really low, but the number of people out of work is high, the number of people working full time is lower than we’d like, etc. etc. I hear you. I had no intent of selling people that the US economy was thriving and what not (though I DO think it’s healthier than most other countries). That’s why I tried to gloss over that portion…it’s very controversial and I didn’t want to get derailed into those topics in my article. I am also not qualified to write about unemployment and all that jazz.

          So I tried to create a clever link between Wall St. and MTG finance, at the detriment of providing a complete picture of the U.S. economy. Sorry about that – I can certainly see how that would be frustrating if you’ve got passionate opinions in this area!

          Slaps of love are more acceptable 😛

  4. I forgot to mention… ALSO nearly every professional investor out there holds massive short positions on the market right now. What it’s doing makes no sense whatsoever, it’s all hype and emotionalism. It’s due for a major correction, not sure when, but it’s going to happen.

    I don’t think MTG looks like that. Yet another reason I’m glad these two are completely unrelated to that asinine stimulus.

  5. Sig, I enjoy your articles. Sometimes I feel like I’m too slow on the draw when it comes to buying stuff that will go up. The other problem is I have a lot of my funds tied up at the moment in Standard/Modern items that are specs and haven’t increased enough to warrant cashing out to cash into modern items that will increase.

    Then I just put it on my credit card and sit on more product *sigh*

    Thanks for the good read.

    And I too, will politely agree to disagree on our political beliefs ;).

    1. Korias,

      Thanks for the comment. I am perfectly fine to place political beliefs aside for the sake of strengthening the MTG finance community. :).

      I’m sitting on a lot of shock lands and RtR booster boxes that are just ROTTING. It’s brutal. I want to have more capital freed up to make aggressive buys – especially given the stimulus I am anticipating from MM2015 – but I’m so locked up in these bond-like assets that it’s really frustrating. I am thinking of moving all my shocks in Vegas if I can find an aggressive dealer with good buy prices. Knowing my luck, they’ll jump the following week.

      Thanks again!
      Sig

  6. This was an extremely good article, and I’m glad to see the community agrees. I was looking forward to seeing the response while I was editing this. This is high-level thinking that you won’t find many places.

    1. Thanks for the kind words, Corbin! I’m glad my political implications did not detract too much from the article’s utility to readers. I guess I can come out of the closet as a true capitalist, eh?

      In all seriousness, hopefully the community enjoys these non-traditional article topics. I recognize they’re not following a standard mold of “buy XYZ it’s doing really well in tournaments, but sell ABC!” but I find the other writers on our staff here at MTG Price already do a terrific job covering these topics. So I’m trying to bring a fresh perspective…hopefully it’s working.

      Thanks again. Look forward to hanging out in Vegas!
      Sig

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