All posts by Jason Alt

Jason is the hardest working MTG Finance writer in the business. With a column appearing on Gathering Magic in addition to MTG Price, he is also a member of the Brainstorm Brewery finance podcast and a writer and administrator for Brainstorm Brewery's content website. Follow him on twitter @JasonEAlt

Putting the “U” Back in “Obvious”

ADVERTISEMENT:


No.

I know what some of you are thinking. “This title is some clever pun about how there is a ‘u’ in ‘obvious’ and it’s a play on the word ‘you.'”

You’re so vain.

No, this article isn’t about you, it’s about EDH cards that make a nice, predictable shape on their price graphs—and how we can use that information to our advantage. If you want, we can talk about the factors that contribute to that shape. Just kidding, we’ll do it if I want, and I want. Sorry if you were looking forward to not learning anything today. Yes, I realize I promised this would be a series about EDH finance, but we still have to talk a little finance.

I feel like the EDH case is easier to make to the finance community than the finance case is to make to the EDH community. If you’re someone who just wants to slang some cards, why would you care about graph shapes?

Basically, my hope for this series is that I may be able to make some of this material accessible enough that someone who is interested in saving money but not interested in speculation or really even paying a ton of attention to the finance market can save some money on EDH staples they will buy at some point regardless. I also think people who are interested in finance but not terribly interested in learning all the idiosyncrasies of EDH can avoid making some mistakes with card buying. This is a concept that both groups can apply without having to learn a ton about what the other group is up to.  Would I hate it if this piece got passed around /r/EDH? Nope, not even a little.

Predictability

We could have made a  prediction about the price of a card like foil Chromatic Lantern and it may or may not have been true. The problem with making a prediction about the value of a card is that sometimes we put our blinders on and look at the price as something we view through a keyhole. We get one glimpse of the value as a fixed point in time and sometimes it jives with our prediction and sometimes it doesn’t. Most people don’t view finance this way anymore, preferring to see a graphical representation of price as being less static, which is preferable. Otherwise, trying to get a sense of a card and how it fits into the overall tableau of prices is akin to the proverb about the three blind men feeling different parts of an elephant and all having very different ideas about what the elephant looks like.

elephant-with-blind-men
Thought of the Week UK

How do we avoid their ridiculous fate and get a sense of what the next elephant will look like before we wait two years for enough data to see if our predictions panned out? Well, we could palpate said elephant for two years, or we could just look at a picture of an elephant and extrapolate. You’ve seen one elephant, you’ve seen them all: that’s how predictability works. So what does an elephant look like?

The Elephant in the Room

Untitled

The “elephant” metaphor is a goofy one, but I think it illustrates how sometimes we put our blinders on. We all do it. I bought foil Lanterns and it was for too much money. I sold foil Lanterns and it was for too little money.  How badly did I punt? Well, not terribly and in fact, I did really well by most MTG finance standards. However, I was groping around in the dark and making guesses based on my experience, which means I was in okay shape since I spend a lot of time doing this. However, when the blindfold came off and I saw the real picture, I felt a little foolish, like a guy who described an elephant as having two tails and no trunk because he spent too much time around the ass end. What did my elephant drawing look like?

ADVERTISEMENT:


Untitled

The black arrow represents where I bought my foil Lanterns and the red arrow represents where I sold. In for $10 (cash on site, no fees or shipping) and out for $17. A 70 percent gain is pretty good in this game, but not great. Now, am I kicking myself for not selling at $25? Nah, the window was too small. Still, now that I have the whole “hindsight is 20/20” picture, we could have easily doubled up and done a lot better. The thing is, I had ample opportunity to buy in at $7.50 (cheaper from players, although anyone who has a foil Lantern isn’t usually coming off of it for $7.50!)—longer than I had to buy in at $10. I was following the price so intently, waiting for it to come down from its initial price of $15, that I didn’t stop to consider that there is a right time to buy and I might not have been buying at the right time. Let’s look at the three parts of a clumsy elephant metaphor an elephant and see where we buy and where we either sell or dive into a theoretical swimming pool full of our theoretical “winnings” like Scrooge McDuck.

Tail

This is a politer way to say “ass end.” It’s possible to buy too early, and when we’re dealing with EDH foils, impatience is a real thing. People are impatient about the cards they want to use to play Standard events, and EDH players have read the spoiler and identified the cards they want for their decks, and the foil people have already decided they want foils. Sometimes buying before the card really establishes itself means you can save money, especially since people tend to assume a two-times multiplier for foils even though the EDH foil multiplier is usually higher. Cards with no 60-card applicability are usually identified as EDH cards very early, and for this reason, it’s almost never a good idea to buy in early if you want a foil copy. For the purposes of simplicity, I’m lumping Cube in with EDH to an extent, which is convenient and not ridiculously intellectually lazy. Cube has nuances, but for the moment, we’ll assume Lantern is a 100 percent EDH card because I don’t feel like picking another example that has no cube applicability now that I’m this deep into the article.

It’s possible to buy too early and this is what happens in 99 percent of cases. If you think a card’s value can go up in the short term (like two to three weeks), preorder, I guess, but this very nearly never happens. If you’re impatient, understand you’re going to overpay and you deserve it. However, I almost bought in at the ass-end by buying in at $10. Buying in even earlier at $15 would have been the mistake I mostly managed to avoid.

ADVERTISEMENT:


Untitled

All you see is a foil non-mythic in the post-mythic era screaming out of the gates at $15. That’s pricey for a card in Return to Ravnica, a set that everyone knew would break sales records. If all you can see is the tail, you might think an elephant looks pretty ridiculous, but figure that’s how things are. You can buy in here if you want, but that’s almost never a good idea.

Trunk

Party! This is the upside area. We saw a decline and then the price started ticking up. If this happens after the card rotates out of Standard and it has no use in Modern or Legacy, it is EDH playability, Cube desirability, and casual appeal that will buoy the price. And buoy the price these things did, sending Lantern to $25 for a brief, shining moment. It will see $25 again, and relatively soon. They aren’t printing more unless they do another Commander’s Arsenal, and even then, the set foil will maintain most if not all of its value.

Untitled

If you’re inclined to sell, this might be a time to do it. You can buy here if you want the card, just like you could have if you were impatient. But the relationship between the trunk and tail is a special one because sometimes people don’t check out the midsection and end up losing out. How? It’s probably pretty easy for you to figure that out—incomplete information leads to incorrect conclusions.

Untitled

If you imagine someone who checked the price of foil Lantern when preorders went out and decided it was too expensive and decided to wait a while for the price to go down and checked after rotation, you can imagine them seeing the price be roughly the same and assuming the price didn’t go anywhere. Finance people check prices a lot more often, and people trying to find a deal may check more often than that, but we’re illustrating a point here.

Cards that are EDH staples have a nice, predictable U shape to their price graphs, and we can use that to our advantage. If you ignore the $15 at both points of the U because you know what the shape is going to look like, you’re in good shape.

“Got it. Don’t pay too much for cards. Great article, moron.”

The point here isn’t that you should pay attention to prices, although you should, The point isn’t that you should avoid paying too much by buying too early or too late, although you should.  Did you already know that a card like Lantern would start high, get lower, and go back up? Great, so did I. And yet, I was a blind man fumbling around to an extent. I knew that prices would go down because supply would go up as more packs were opened and the set was drafted, but my buying activity was still suboptimal. I bought below $15 thinking I was being smart and I still ended up overpaying. I paid too much attention to the numbers on the graph when the letters were just as important.

“Letters?”

Untitled

Peak supply happens when the set is just about to stop being drafted. People redeemed foil sets of RTR for the shocks and gave zero craps about EDH cards. People busted a foil Lantern in a draft somewhere in the world probably once a day.  Why buy in for $10 in March 2013 just because $10 is less than $15 when the price was $2 cheaper a month later? Did I know that would happen? Well, no, but it was pretty predictable, wasn’t it? In hindsight, of course it was. And that is what we want to do in the future.

The Next Elephant

The next card that will follow this pattern will be an EDH staple, likely one printed in Battle for Zendikar. It will preorder at a very high price initially based on Cube and EDH hype. At peak supply, the price will fall. It will likely flag until rotation or after rotation and then it will begin to tick back up as copies dry up and people build more decks.  A lot of the cards in Battle for Zendikar will do this because of how supply and demand works, but EDH cards don’t have other factors obscuring their fates. EDH staples also have the distinction of being identified as desirable foils irrespective of how they fit into Standard.  We can predict an early over-evaluation, a decline, and upside. Does this work for non-staples? Not usually.

Untitled

What’s going on here?

I think I may start ending every article with a “Why isn’t this card worth more?” discussion question. So why aren’t we seeing our sexy U shape here? Is Progenitor Mimic not ubiquitous enough? Does it not get played as much as we thought it would? It has no Cube applicability like we see with Lantern, so does that mean EDH needs to take the hit for all of its price? Was it speculated on early driving the price up artificially? Are we done seeing a decline and seeing the best time to buy in? Does it have room to fall?

Understanding what is going on with Progenitor Mimic is going to help us figure out what to do the next time we see a card that looks insane in EDH, so let’s revisit Mimic next week There’s a lot going on here, and if we decide this is a good time to buy, $12 into a probable $20 feels pretty good if we can avoid getting eaten alive by fees at both ends.

Let’s start talking about Mimic in the comments and the forums and we’ll have our heads right when we revisit next week. Until then!

Track your collection's value over time, see which cards moved the most, track wishlists, tradelists and more. Sign up at MTGPrice.com - it's free!

ADVERTISEMENT:


Please follow and like us:

In Defense of Durdling

Since I am writing finance articles for MTGPrice exclusively now, it felt appropriate to do an introductory “first” article to introduce myself and my goals for the series I’ll be writing. Why the ironic quotes around “first”? Well, as much as this feels like a new beginning, I have contributed to MTGPrice in the past.  This is as much a homecoming as it is an introduction.

Still, a lot of you weren’t around last time I was here, so it’s all new to you. Perfect. Even though I’m merely resuming writing, I am launching a new series and I am excited about it because it’s well within my wheelhouse. Corbin introduced himself and his goals very well, and I think I would like to do the same.

I want to talk about EDH and its financial implications.

I will now take questions.

EDH Finance FAQ

Q: Why not continue your previous series from where it left off?

A: It was a little dry and technical. It was sort of a blueprint for how “not to” MTG Finance, which is useful, but I also said nearly everything I wanted to say in that series. I covered some more related topics on Quiet Speculation, but I think repeating what I already wrote is a lazy way to start a series. I am sure I will end up reiterating some things as they come up, however.

Q: What are your goals for the series?

A: I want to cover the nuances of EDH and how it uniquely pertains to finance in a way that formats like Standard do not. Some of our instincts as financiers are very good and some of them are very, very poor. Learning those nuances is very helpful in finance, and since I’ve been deep in EDH for two years, I feel like I have learned a lot I can pass on. You learn by doing, or by following along with people who have been doing. I am sure most of you would rather just read about my trial and error process than reproduce it yourself. There has been quite a bit of error and it’s been enormously instructive. I’m looking forward to passing that knowledge along to people who have great finance instincts and are eager to learn about how EDH is unique.

Q: Will you cover Tiny Leaders?

A: I am sure I will. There are some corollaries with EDH and there are some wild divergences. I don’t understand Tiny Leaders as well as I would like to, but I am investigating it on a weekly basis and learning more all the time. If I say anything about a format like Tiny Leaders that I don’t understand as well as I understand 100-card, it will be because I’m very confident in what I am saying. The last thing I want to do is lead people astray and have them end up holding the bag on bad specs that were hype-based rather than reality-based. If Tiny Leaders has staying power as a format, it’s worth taking some time to really understand it. I have some impressions on the matter that I will share in the weeks to come.

Q: Is EDH finance really all that different?

ADVERTISEMENT:


A: Yes and no. While good cards are going to be worth money and bad cards are going to be worth not money, just like in other formats, there are some nuances. I have learned a lot through trial and error and I want to impart some of that hard-earned experience. It’s easy to buy too early, sell too early, misread signals, and buy the wrong things. Good cards end up worth nothing three years after they’re printed. Mediocre cards rocket up in price. Even people who understand EDH as a format very well struggle sometimes. How can someone who doesn’t pay attention to EDH at all be expected to make sense of it?

EDH Finance isn’t harder than any other facet of finance, but there are some rules that don’t apply to other types of finance. Once you learn those rules, it will all start to make sense. You could take the time to learn some of the nuances on your own, but you don’t have to. I’ve got you covered.

Q: I don’t care about EDH.

A: …that isn’t a question.

Q: I don’t care about EDH?

A: That’s not really… you know what, forget it. I’ll actually field this one.

I don’t care about Vintage, but if I find a foil Vandalblast in a bulk foil bin for $0.50, whether or not I care about its Vintage implications is irrelevant: I am either knowledgeable enough to stack that scrilla or I’m not. My personal feelings don’t enter into what is essentially a financial transaction. In the same way, you shouldn’t leave money on the table because you aren’t an EDH player. If you know the Blackhawks are going to win the Stanley Cup, you bet on them regardless of whether or not you know how to skate.

Making smart moves in MTG finance requires you to pay attention to as many facets of the game as you can manage, so it will help a lot to at least knowing what’s going on in EDH when major events like a drastic rules change take effect or the spoiling of new cards from a Commander set get revealed. Knowing how to handle those situations means you buy ahead of hype and sell into it. That’s the play, after all.

I keep talking about how I plan to codify as much of what I’ve learned as I can, freeing you up to really focus on other aspects of finance, but I think now that I have outlined my goals for the series a bit and still have your attention, I want to make the case for caring about EDH yourself. I want to help you know what you’re talking about. I am even going to try and convince you to build a deck and play a few games. Do you have to? Nope! But I think you’ll be glad you did. You can take that to the bank.

download (8)
Better do what he says—he looks crazy.

 

In Defense of Durdling

I am a pretty late EDH convert. I wasn’t excited about the format initially and when I saw huge, durdly games with five players take up an entire card table with gigantic board states and no one able to really swing profitably, it turned me off in the same way it has a lot of people. I couldn’t see myself investing two or three hours into one game without starting to wonder which make and model of pistol had the tastiest barrel.

When Innistrad block came out, trading at large events was still a thing, but barely.  I would spend hours before the event packing my binders with a mix of casual and competitive cards. I would make sure I had a long list of staples specific to the event I was going to. I made sure I knew the prices of every card in my binder so I could cut down on the time people spent looking cards up. I was ready.

I needn’t have bothered.

One particular SCG Open weekend, I got to the event site both days with the cards people needed for either Standard or Legacy. I got a few trades in with people frantically trying to get the cards they needed for their decks, but for the most part, people just bought the cards they needed for the event. The trades I did get in took too long because my trade partners wanted to look up my cards and their cards to make sure that even though I was willing to trade them the card they couldn’t play the event without and take whatever they had in their binder so long as it was worth it for me financially that the trade wasn’t in my favor by as much as a quarter. After the event started, the only people trading were other sharks, and trading with them was only semi-productive. If you are forced to trade straight across with someone who knows prices as well as you do, all you can do is target cards you think will go up soon and try and maximize the number of cards you don’t think will go up that you get rid of. It’s worth doing, but only just barely.

The worst part was that it didn’t even matter that I was showing up with a fully stocked binder. If I’d bought 20 copies of Snapcaster Mage, I could have had the only card anyone asked for and had a better time. People would look through three binders that had thousands of cards and say, “No thanks, I didn’t see anything.”

If this had been a GP, I could have sold cards to the dealers and made the trip worthwhile, but this was an SCG Open, so even that wasn’t an option. Dejected, I slumped down in a seat far from the trade tables and the action of the main event. I dropped my binder on the table a little harder than I meant to and the gust of displaced air buffeted a pile of booster pack wrappers sitting between an older gentleman and his pre-teen son sitting near me at the table.

They looked over at me and both eyed my binder. The older man said to his son, “Why not ask him?” and the kid asked me, “Excuse me, do you have a…” and I thought, “Great, he gets to be person number 400 to ask me for Snapcaster Mage. Best weekend ever.” But instead, he finished his sentence with: “Ludevic’s Test Subject?”

Ludevic's Test Subject.full

I snapped out of my funk. “Uhhh, yeah, absolutely.” I put my binder away and got out a different binder. Both of their eyes widened. I flipped the binder open and asked, “Do you want the set copy or the promo?” which was met with a “There’s a promo?!” from both of them. I slid a copy out and set it on his mat. The thought of looking through a binder didn’t appeal to me, so I was prepared to just give him the card, but he said, “Will you take a Garruk for it?”

I think at the time, Garruk was worth $25, so that made the trade roughly… $25 in my favor. I tried to give him a playset, but he said, “It’s for my blue monsters EDH deck. I only need one.” He handed me the Garruk and turned back to his father, elated, and they started picking up the pack wrappers and throwing them away. “We bought a box of Innistrad but didn’t get any Test Subjects,” the dad explained. I was stunned. He was happier with his bulk rare than I was with my planeswalker.

I had to know their secret. Over the next hour, we went through my binder page by page, pulling out cards for his blue monsters EDH deck and other cards he just liked. Every time I told him it was okay to pull more cards than me, he looked at me like I was either nuts or untrustworthy—like I was someone in a police procedural keeping the criminal on the phone long enough for the police to trace the call.  He pulled out cards until he couldn’t find anything else he wanted and then I made some suggestions for cards he already owned that he could put in the deck.

All in all, he probably got $18 worth of cards and I made his whole weekend. I got a $25 card for $18 worth of bulk rares and garbage, but that wasn’t the most important part of this interaction. I was beginning to realize that I had been trading with the wrong people.

I decided to try and build some EDH decks, and after going to a local shop on EDH night, I was able to trade a small number of expensive cards for two complete decks—decks I could work on improving. Not only that, but I traded out a ton of the weird, foreign, and foil cards I couldn’t sell on TCGplayer and had been sitting on for months. They didn’t just want Snapcaster and the other ten cards that were getting played in Standard. They wanted everything. All of a sudden, my bulk rares were worth their weight in gold.

I had stumbled into a community that still trades cards. A community that sees the value in cards like Boros Battleshaper and Progenitor Mimic. A community that isn’t looking to optimize their decks, instead focusing on optimizing their experiences. We should be thanking them, frankly, because if it weren’t for EDH and other casual play, only like 100 Magic cards would be worth money.

Standard couldn’t make Chromatic Lantern worth $6, but EDH did. Modern couldn’t make Creakwood Liege worth $11, but EDH did. And Legacy couldn’t make Savor the Moment worth $5—only a speculative, targeted buyout predicated on the notion that the card is somehow good in Tiny Leaders could do that.

Savor the Moment.full

If you haven’t gone to the shop on EDH night, maybe try it one week. Take your trade binder with you, if you even still have a trade binder. You might be surprised at how much fun you have. You might see some cards in play that you weren’t aware of. You may do what I do all the time:  see EDH cards in action and think to yourself, “Why isn’t this card worth way more money?”

That’s one of the burning questions I hope to answer with this series. Whether or not you take my advice and find an EDH group to trade with and learn a little bit from, we’re all going to benefit from discussing EDH with some scrutiny and an eye toward figuring out how EDH-specific finance works.

Thanks for reading! I am glad to be back writing here at MTGPrice and I am really glad to be writing about EDH and finance in the same column, finally! Check back next week and let’s start trying to figure out why certain cards aren’t worth more money.

Untitled

Please follow and like us:

In Defense of Risk

By: Jason Alt

“In order to manage risk we must first understand risk. How do you spot risk? How do you avoid risk and what makes it so risky? To understand risk, we must first define risk.”
– Seinfeld Episode 140 “The Fatigues”

Did anyone see that episode? The whole point of the story arc was that George had to read a book about risk for work but he hated the voice inside his own head so he got a book on tape to make it less boring. The guy reading the book on tape sounded just like him because the Seinfeld universe is really wacky. I think that was the episode where that Jurassic Park guy said “Hello, Jerry.” It was a great show.

If it were me, I wouldn’t need another person’s voice to distract me from boredom to read a book about risk. Risk isn’t boring. At all. Risk is the least boring thing ever. Not risk is boring. “Not risk” is investing 4% of your paycheck into a company approved 401K investment plan because your company matches you dollar for dollar. Risk is e-mailing a picture of your buttcrack to everyone on the company’s e-mail distribution list, telling your boss you want to get a new job as a racecar driver and taking your life’s savings to Vegas to bet it all on black. Russian Roulette is risky. Skydiving is risky. Not wearing a condom is risky. What could be more exciting?

The Risks We Take

Not pictured – my bedroom

I’m not a millionaire. Shocking, right? I don’t have all of the money there is on the planet. Despite experiencing a high degree of success both in picking the correct specs and lucking into some opportunities in the community, I’m not the richest person on earth. That’s because 100% of my specs are not fruitful. (Edit-100% of readers are not able to figure out that I am not saying 100% of my specs are wrong, but that fewer than 100% of my specs are fruitful. It’s a confusing wording, I’ll grant you that.) Sometimes I bet on the wrong horsey. Sometimes the winds shift, the metagame changes, new cards are printed or a card gets banned and a pick that made sense last week is suddenly a poor bet this week. Sometimes you make the right call but you misjudged demand and you end up like Travis Allen did this year. Speculation is hard. You can nail a spec like Travis did and still not make a ton of money on it. You know how often a card quadruples in value? Not often. You know how often a card quadruples in value and someone from the finance community is far enough ahead of it to take advantage of scooping copies? Less often. Much, much less often. We’re not psychics, we’re just keen observers of patterns, holding on by our fingernails, hoping there wasn’t an important variable we missed. If you “hit” on a spec, you feel amazing. And you should – you accomplished something rare and wonderful.

Why We Should Go Deep

I hate myself in the worst way possible, so I spend time in the finance subreddit. Wait, I didn’t think that through at all. Someone’s probably going to link this article there and people are going to read it and be all “say WHAT?” Should have planned that better. Anyway, YOLO.

YOLO? Really Jason?

Yeah, it’s annoying when people say “YOLO” isn’t it? It was supposed to be the next generation’s “Carpe Diem” but it’s turned into a phrase that more often means “Oh, did I make a terrible decision? Oh well, no sense crying over spilled milk. Or, you know, learning.” I don’t see a lot of people saying the literal phrase “YOLO” on reddit. Not that literal phrase. However, I do see that same sentiment reflected and it was the impetus for today’s article.

Travis’ piece about his spec only going up $0.75 was a cautionary tale about a scenario where a spec can “hit” but there are no buyers at the higher price because there was no demand. His piece wasn’t written as a response to the same sentiment I’m responding to, but it does address it. I’m referring to a mentality I see applied to low-risk specs.

Hypothetical Scenario

I see a lot of people say something like “I think Prognostic Sphinx is a good spec. It was everywhere at the Pro Tour so I bought a playset.” A discussion starts. Inevitably someone will point out that the Pro Tour was block so Sphinx probably shined because there was a smaller card pool. Someone else might point out that block is a decent predictor of future standard, but not always because Khans of Tarkir could give us something to invalidate the card completely, similar to the way that Dungeon Geists really fell off after that block Pro Tour despite a very impressive showing by the geist deck from players like Jon Finkel.

“But Prognostic Sphinx was only a quarter. If it goes up, I profit, if it doesn’t, oh well. I only bought a playset. I won’t lose anything.”

Sure but if you only bought a playset, you don’t gain anything if it goes up, either.

“YOLO”

  Stop Saying “YOLO”

I speak very highly of low risk specs all the time. The closer to “bulk” you buy in, the lower your risk is. Bulk rares spike up all the time due to changing circumstances. Ryan Bushard, famously, made money off of Death’s Shadow spiking up from a dime to a few dollars not once, but twice. If Death’s Shadow hadn’t done anything, he could have held onto it for as long as he wanted. There is a cost to that- the opportunity cost of having your money tied up in a busted spec. Then, if he wanted to get out, he could sell them as bulk rares. Presuming he got in for a dime, he could get out for a dime with his only breakage being shipping and processing costs. Worse things have happened. With such low downside it made sense for him to buy a playset, right?

WRONG.

If he’d bought a playset and the spec ended up busted, he’d be out a small amount of money, so why not risk it? If the spec had hit, he’s be in… a small amount of money. Practically nothing. Let’s play with made up numbers.

4 copies at $0.12 = $0.48

Shipping = $2.39

In cost – $2.87

After sitting on the cards for a week or so, the spec pays off! Either Sam Black wins a Pro Tour with 4 copies of Death’s Shadow in his deck, or Travis Woo says something that rhymes with Death’s Shadow on his stream. Either way, the card is going to be worth $5 by Monday!

You hope on TCG Player but it’s jammed with people trying to sell their copies for $4.35 and it’s ticking down. Still, Star City upped their buylist price to $1 each! Wow! That’s 10 times what you paid! Cash in, you lucky so-and-so.

Buylist order

4 copies at $1 = $4

– 3% Paypal fee = $3.84

– $2.39 shipping the cards to SCG = $1.45

$1.45 – $2.87 = -$1.42

Congratulations. You correctly predicted a price spike of 5,000% – a jump that only occurs once every year or so. Your reward for having the foresight to see a 5,000% increase coming is you profited negative $1.42. Time to call your boss and tell him to suck it- beers are on you tonight!

Think about it. If you had bought 40 copies instead, what are we looking at?

Your cost is $7.19 instead of $2.87. Not much difference.

Your profit after shipping to the buylist and paying your initial cost is $29.22. That’s still not worth the effort, and we’re buying in ten times the “YOLO” order.

Buy 100 copies and your initial cost is $14.39 (exactly twice what 40 copies costs-thanks shipping!) and you make $100 on the buylist, lose $3 to fees, $2.39 to shipping and actually profit $80. $80 is not a bad payday, but you’re paying yourself minimum wage, probably.

I like these low-risk “penny stock” picks like Death’s Shadow, but what people need to realize is that if you’re not going DEEP on the spec, you’re not making money. 100 copies is not deep unless you have a better out for the copies than the buylist. Can you sell 100 copies on TCG Player while competing with everyone else trying to capitalize on the price spike? eBay?

Like Tahiti, “locally” is a magical place

How about “locally?” This is another thing you’ll read a lot. “I’m not going to sell to a buylist, I’ll just sell these locally and not pay any fees.”

I don’t know about you, but I’m not able to walk into my LGS with 100 copies of Death’s Shadow and walk out with $500 cash. This “sell them locally” response is bandied about more often with respect to small quantities; a playset or two. You don’t pay shipping or paypal fees or take the big hit buylisting if you just sell them “locally.” I guess? Let’s say you have local buyers in place. If you bought a playset of Death’s Shadow and your cost is $2.87 and you get $20 for the playset, that’s pretty good. It’s very good! You can make even more scaling that up. How many local buyers do you have? What’s your plan for the rest of the copies? You’re going to buylist all buy a playset or two, most likely. You profit $20 or $40 extra. Even if your only plan was to buy a playset or two to sell at the shop and you get full SCG retail, cash, no fees, how well did you do? Percentage-wise, you CRUSHED it. Still, you made, what, $40? If you could do it every day, that would be great. But how often is a card going to go from a dime to $5? Once a year? Less? And you correctly predicted such a rare event- you deserve more than $40.

How To Get What You Deserve

Put yourself in a position to actually benefit from a card’s price spiking. Predicting price spikes is HARD. Make sure you’re rewarded for being correct. It’s not easy to do and you can’t count on it happening often, so treat each spec opportunity like it’s once-in-a-lifetime.

Buy enough copies to actually make money if the card’s price goes up. I can’t emphasize this enough.

Don’t spec with money you can’t afford to lose. Most of the time this isn’t a stock market, it’s a slot machine. Gamble responsibly.

Make sure you diversify your investment portfolio. Don’t jam all of your eggs in one basket. Have a nice mix of long and short-term specs. Turning those short-term specs over means you can have some money liquid to buy into new opportunities as they arise. You don’t want to sell your long-term holds prematurely for practically what you paid for them to have the money to buy into something else that comes along. Bankroll management is bankroll management whether it’s with money or specs.

Final Thoughts

You’re risking your money when you speculate. If it were a sure thing, I’d be a millionaire. Even if I were only going to make $0.75 a copy like in Travis’ sobering scenario, if I knew 100% that I would make $0.75 a copy, I would just take out hundreds of thousands of dollars in loans and just print myself a fortune $0.75 at a time. There are limitations to the amount we can spend, the number of copies we can get in, process and sell. There are limits to the number of copies any given person or buylist will take off of our hands. But if you believe in your spec, go deep! Have fun- speculation is fun, so treat it as entertainment and you’ll be less gun-shy about investing. Remember- this is hard to do and being ahead of a spec doesn’t happen every time. You made an intelligent play by getting ahead of a spike, so make sure you make it worth your while.

Please follow and like us:

Know What You’re Talking About

I was on Facebook earlier this week.

Yes, I know; Facebook is terrible. Everyone’s parents are on Facebook and they’re reported to potentially lose 80% of their users and Zuckerberg just sold 3.2 Billion in Facebook stock; it’s a cesspool. I get it. It’s useful to join Facebook groups to engage with brands you like and find sales and trades and it’s fun to see who from High School got fat and went to jail. It’s also (sometimes) instructive to see what people are saying about cards. Some people think that they have to set the record straight when people are wrong about cards, but it’s really more useful just to sit back and see what different groups are saying.

This set is bad. I don’t think I’m shocking anyone with that proclamation. Not every set can be good, that’s an impossible standard. But no set should be this bad. There are literally 3 cards I care about and one of them I only want to get copies of because I can virtually guarantee it’s overpriced by 300% and I want to trade it out for cards that will retain value. I’ll give you a hint- it’s blue and black and it rhymes with “Den Hacks”.

Given that the set is bad, people are doing something very curious, which is to try and find nice things to say about bad cards they would normally skip. I actually think that’s a great practice, because people who play mostly standard tend to ignore about 90% of every set and focus on the 10 cards that are going to get played in Standard and they tend to miss the stuff with the most financial potential. I happened upon a conversation one day in a Facebook group that was discussing a new card that was just spoiled.

One succinct, one-word review proclaimed “EDH” as if to say “Boom. Nailed it. Moving on.” That would be a pretty good way to handle not spending too much time on a card that was clearly not going to see play in Standard. There was just one problem.

This isn’t really that great in EDH.

Card Analysis is Hard

Even pros get it wrong sometimes, but Standard players are generally about 95% accurate with their gut reactions to cards. Bad stuff is usually very obviously bad, limited-only stuff is generally pretty obvious as well. Good stuff can be even more obvious, and though some cards are initially under or over-rated, Standard players are usually pretty close. They know what they want to play in those formats and it’s easy to identify.

With more people getting involved in MTGFinance, it seems like every set there are fewer and fewer opportunities to make money pre-ordering cards from Standard. Sphinx’s Revalation was embarrassingly-low as was Angel of Serenity. I ordered Thragtusks for $5 apiece from eBay. Five. Actual. Dollars. Price corrections happen much faster because people are on top of it more and more each set. 50 copies of Pain Seer at $2 sold in minutes and the price was corrected very quickly. I am not convinced Pain Seer should be more than $2, but the people buying it at $10 a copy disagree.

With it getting tougher to make money by analyzing the cards from competitive formats it is even more important to learn how to analyze the cards from other formats. The person who gave Astral Cornucopia a dismissive “EDH” as if the card were a waiter who reached for his salad plate before he’d finished picking at it probably won’t lose any actual money by not correctly evaluating the card (and I likely won’t lose any if I’m super wrong and Cornucopia is just what people need to go from 9 mana on turn 6 to 13 mana on turn 7, thus winning all of the EDHs forever) he’s probably going to lose out on a lot of money eventually by failing to correctly evaluate EDH cards. If you see a card that is worse than Darksteel Ingot at 3 mana and worse than Gilded Lotus at 6 mana and say “EDH players will want this”, you should probably play a game of EDH, ever.

You Should All Play a Game of EDH, Ever

I’m serious. I was a very late adopter of EDH but I’ve seen the value in how playing it has allowed me to access an entirely new customer base. EDH players are way better to trade with than people who only play competitive formats. After weekends at SCG Opens where some competitive player would look through three of my binders and say “I’m pretty much only looking for Snapcaster and Boros Reckoner” I thought I would quit trading altogether. What I found when I traded with EDH players was that the amount of stuff they were looking for was way higher and they had no reservations about coming off of competitive cards. Having an EDH deck to play a few games will not only introduce you to those players, it may demonstrate the power level of certain cards you may be able to hook them up with to improve their decks.

EDH isn’t a joke. It’s not a fad. It’s not something to deride or dismiss. It’s a completely new card game that uses the same cards you already have and if you don’t know anything about it as a financier, you’re doing it WRONG.

Build an EDH deck. You probably have a dozen of each Commander 2013 deck, right? Bust one open. Jam some better cards in there. Evasive Maneuvers seems fun given you can generate infinite mana with the general Derevi, a Deadeye Navigator and a Gilded Lotus (or an Astral Cornucopia at X=3…maybe I was wrong about that card. No I wasn’t). Power Hungry is begging for you to jam a Parallel Lives and a Doubling Season in there and go to token town. It would take you 20 minutes and $20 to make a serviceable EDH deck with stuff you have in binders and boxes and you can trade for the rest. Once you play a few games, you’ll know right away what is good in EDH. You may have been playing since 1996, but you’re about to get humbled when you have to ask someone to hand you a Black Market or a Mana Equilibrium so you can read it.

Then, One Day, You’ll Get it

You’ll learn that you can never buy too many copies of Sol Ring at $2 or Gilded Lotus at $3. You’ll learn that Japanese foil EDH generals aren’t quite as liquid as you thought, but your group can’t get enough copies of Food Chain and Pattern of Rebirth. You’ll learn why it was a good idea to snap foil Sylvan Primordial for $1 the first week the set was out but not buy foil Chromatic Lantern yet. No article can teach you how to truly evaluate cards in EDH as well as playing a few games, building a few decks, meeting a few people who come to your shop every week but whom you’ve never met because they don’t play FNM.

You’ll also learn that there are different kinds of EDH groups, and while competitive players will not play a card like Astral Cornucopia, casual EDH players might. When games go a million turns, playing this for 15 to tap it for 5 may be what they want to do. That won’t drive the price up that high and won’t make this card suddenly a good investment, but it will let you know which kinds of EDH players might want this off of you. But how will you ever meet them if you don’t play with them?

Just like someone who plays Standard will recognize the immediate impact of cards like Brimaz, someone with a few EDH  decks and some experience is going to correctly identify the sheer, awesome power of a card like Prophet of Kruphix or Progenitor Mimic and they are going to recognize that although a card like Astral Cornucopia looks durdly and mana-intensive, that isn’t a bad thing to every group . They’ll know that by having an understanding of the format, some experience playing and some decks built so they will know what their own specific needs are.

Also, once you’re building EDH decks and picking up cards to build with in the future or trade to your group, you’ll pay more attention to prices. I’ve made way more money picking up underpriced Vigors from competitive players who only cared about the ten cards that get played in Standard from each set than I have trafficking in Huntmasters and other cards with thin margins due to a low spread. I’ve had 10 copies of Thespian’s Stage disappear out of my EDH deck stock box in one night and had 10 sit unsold for weeks on TCG Player despite being the cheapest listing. You won’t have to ask twitter why Kami of the Crescent Moon and Wheel and Deal and Forced Fruition are quintupling in price because you will have seen the power of those cards in a Nekusar deck demonstrated and you will have stocked up before the big spikes.

Rather than handing out a few fish, this week I wanted to teach you to fish and in this case, learning to fish involves playing Magic. It’s not even going to feel like work.

Finance Quick Hits

  • Nekusar isn’t done making stuff spike. Any card that makes people draw extra cards and hasn’t been reprinted is a good target.
  • For the love of Heliod, didn’t anyone read Pain Seer?
  • Bitterblossom getting bought weeks in advance of the B&R announcement is a new trend. Don’t expect to be able to have a full shopping cart at 11:59 like you used to. I really don’t expect this (or anything) to be unbanned next week and I expect the price to tank back to where it was.
Please follow and like us: