“The sky is falling! The sky is falling!” – Chicken Little
The folk tale of Chicken Little dates back over 25 centuries. References to the little critter are used frequently in our society. Most often the metaphor is used to describe one who is overly cautious or prone to catastrophizing. In the world of MTG Finance, people may refer to me as Chicken Little.
On Wall Street, analysts who frequently predict a doom-ridden future are known as “permabears.” Marc Faber, publisher of the Gloom Boom & Doom Report, is probably one of the more vocal “Chicken Littles” of Wall Street. CNBC showcases an article with his opinion on a weekly basis.
What value could permabears have for the MTG economy? Can everything truly be so dire? Why am I always so risk-averse?
Hopefully I can shed some light into my motivations in this article, along with why it’s not a bad idea to listen to Chicken Little…once in a while.
Motivations
I’ve mentioned my primary motivation for MTG Finance numerous times already. My son is three years old – in 15 years I hope he decides to pursue a college degree. To help pay for said degree I’m attempting to generate as much cash as possible from this hobby. Once I earn a certain amount of profits, I move funds out of Magic and into a Fidelity account. This Fidelity account houses a well-balanced portfolio of stocks and funds which will hopefully grow and compound profitably over the next 15 years.
That’s my approach. Losing money hinders my objective. The goal is to make money in Magic. Simple enough, right?
What accompanies this objective is a corollary I’ve come to accept: playing the game can be bad for business.
This isn’t always true. I’m oversimplifying here. For one, there’s always the risk/reward balance to keep in mind. Maintaining a Tier 1 Standard deck can be costly when new sets are constantly shaking up the metagame. If you’re a skillful player, that may not matter. You could win enough events to more than cover your expense for maintaining or switching decks in Standard. Guess what: I don’t play frequently enough to be a skillful player.
That means Standard is out. I honestly haven’t been excited about Standard in quite some time anyway.
I used to view Modern as the ultimate compromise. I could build a deck I liked and confidently play it for years to come, maintaining minimally while not having to sink a thousand bucks into a mana base and some Force of Wills. Then this happened:
My Modern deck was blown out of contention by the banning of Birthing Pod. Not only was I left with an unplayable deck, but I was also left with measurable financial loss. Was the loss completely unbearable? No. But remember, I hate losing money.
What is Enjoyment Worth?
I didn’t want to abandon Modern altogether so I built the deck that looked most attractive to me after Melira Pod. That happened to be Amulet Bloom. I bought into the deck, and have since netted a small amount of profit thanks to its rapid rise in popularity. The deck rose to Tier 1 status, and I was beginning to feel energized by the format again.
Then Brian Braun-Duin wrote an article.
When professional players write about and clamor for a Modern banning, I listen. And when it’s my deck in particular they are stating is overpowered, I act. Can you blame me? I was fooled once by holding my Pod deck for too long, shame on WOTC. Do you honestly think I can hold the newly hated Amulet Bloom deck? If I did, I would be the only one to blame. In fact MTGPrice writer Travis Allen put it best recently on Twitter when he exclaimed:
Let me be first to admit this is a bit of a Chicken Little statement in and of itself. There are no guarantees something in the Bloom Titan deck gets banned. Additionally, a potential ban could take months or even a year while Wizards closely examines metagame evolution. Still, you can see why Travis’ tweet struck close to home.
With all this swirl in the rearview mirror, I decided to sell my Amulet Bloom deck. Perhaps my action was a bit rash, but I believe my gut instinct is correct in this case. It all ties back to my motivations. In reality I was playing Modern on a very infrequent basis – other formats are simply more attractive to me. So my net enjoyment of the Amulet Bloom deck was low. Weigh that against the risk of financial downside, and you can quickly see how the logic added up in my mind.
Is there really significant downside in holding an Amulet Bloom deck? I would challenge you to define significant, because that word could mean different things to different people. For some, the blow of even $50 in value could be a major hit worth avoiding. Meanwhile others may laugh at a $50 loss and chalk it up to “the cost of playing the game.” For me personally, it’s less about the absolute number and more about the implication. I will have lost more money from my son’s college fund. And to what end? A few casual games of Modern with no rewards or ramifications to the outcome of those games? I don’t play in competitive Modern events nearly enough to justify this.
Thus, I decided to sell the deck and move on.
Big Picture
In hindsight, perhaps Modern isn’t the right format for me. I’m constantly weathering reprint threats, bannings, and metagame shifts when attempting to maximize value of the collection. And while I DO have a soft spot for the game in my heart, I need to focus on my overarching objective when making financial decisions. This conclusion is what motivated me to write my recent article on why trading Modern is a boon but investing in Modern is a fool’s errand.
We should be buying and selling Modern cards in order to catch jumps in stuff like Raging Ravine and Oblivion Stone.
At the same time, we should also recognize that these price jumps come and go on a daily basis. To avoid losses, it’s imperative that we sell cards on these jumps. For the risk averse (or risk intolerant) like myself, there’s no other way to interact in this format.
This is exactly why I’ve adopted a “permabear” type attitude in Modern; a Chicken Little mindset, for those who want to add humor at my expense. In the five years I’ve been actively involved in MTG Finance, I’ve learned a great deal about my motivations. Acting according to the final objective of funding a beloved child’s college education is only logical. My holding of high risk cards that I use once every two months at a kitchen table simply cannot be justified.
“It’s a Game, Sig”
Magic: the Gathering is a game. We’re supposed to have fun playing and not worry about financial implications.
I could not agree more. That’s why I’m shifting focus to the formats I really enjoy most: Legacy, 93/94, and Commander. These formats allow me to play with cards I love while also enabling me to maintain or increase value of my collection over time. Sitting on a 93/94 deck is like making a long-term investment that you also can enjoy on occasion. I don’t have to worry about my Beta Hypnotic Specters or Juzam Djinns getting banned or reprinted.
Even if I only enjoy playing a 93/94 match once every two months, there’s virtually no threat of sudden price depreciation. As I’ve stated before, it’s the perfect format for the Chicken Littles of MTG Finance. Or for those who have other responsibilities that inhibit them from playing in frequent competitive events.
That includes me.
Wrapping It Up
I do want to mention one other variable my critics fail to give me credit for. By constantly flipping Modern cards for modest profit I’m maintaining high liquidity. Being vested in Modern or Standard decks can soak up a sizable chunk of one’s bankroll. By remaining less engaged in these formats (or alternatively, playing budget decks) I can free up cash for other investments.
So when I sell my Primeval Titans, Summer Blooms, and Amulet of Vigors it’s not like I’m sitting on dead money. The cash is put to work. Having liquidity in and of itself is extremely important. Just recently an MTG friend on Facebook alerted me to an attractive eBay listing: a SP Beta Mind Twist for $120. That’s a steal of a price, and my friend encouraged me to pick it up if I was in the market for the card.
Why didn’t my friend purchase the card himself? He stated he was lacking the funds after purchasing numerous other Old School MTG cards. For those of us who aren’t working with dealer-sized bankrolls, this problem is easy to relate to.
So what’s more likely to appreciate in price in the next 365 days, an Amulet Bloom deck or a Beta Mind Twist? My money is quite literally on the latter. Which is going to be more enjoyable to me during my kitchen table battles? Still the latter, as the Mind Twist fits perfectly in my 93/94 deck.
“The sky is falling! The sky is falling!”
The story of Chicken Little is very well known. It’s obvious Modern is a healthy format with a bright future. Card prices will rise and fall for years to come. My advice to you is to consider your own motivations for MTG Finance. If you’re getting tremendous enjoyment out of your Modern and Standard cards by playing in frequent tournaments, it’s absolutely the right decision to stay the course. You can filter my panic and let my worries go in one ear and out the other.
Permabears aren’t correct a lot of the time. No one should blindly follow them. But what permabears and Chicken Littles do well is they frequently challenge your investment decisions. We are forced to at least consider what they’re saying, which keeps us in check. Hopefully they can help us avoid any unsustainable price bubbles. It’s when the permabears become bullish that we truly must panic, for when the last bear remains bullish we have truly hit a peak. Obviously we’re not there yet.
Chicken Littles can also help us reexamine our motivations, so that we keep our eyes on the prize. For me, I will remain content flipping Modern cards over a short term period to grind profits from the format. This is a very exciting time for Modern prices where spikes happen on a daily basis. There is SO much money to be made here.
My long-term MTG positions however, will remain in safer cards. This helps me sleep better at night, and it also keeps me on track for achieving the end goal of funding my son’s college education. For if that sky ever does fall (no matter how unlikely), I don’t want to be devastated by the ensuing blood bath. Chicken Little will always be one step ahead in this regard.
…
Sig’s Quick Hits
I continue to check mtgstocks.com on a daily basis, and lately I’ve noticed a trend. There are two categories of cards with significant representation on the recent price movers: Modern and older reserved list cards. Everyone knows about the Modern ones, but did you know…
– Tawnos’s Coffin, a rare from Antiquities, has been sold out at SCG for weeks now. Don’t be mislead by the $24.99 price tag – this card has exploded in recent weeks. Finding nice copies of this card for under $50 will be very difficult moving forward.
– Guardian Beast has also been on the rise recently. Star City Games has just 1 MP copy in stock with a $39.99 price tag. Seeing as the top NM buy price according to mtgprice.com is $50, you can be sure SCG’s pricing will be on the rise some point in the near future.
– Don’t ask me why, but Shahrazad – my all time favorite Magic: the Gathering card – has shown up on the MTG Stocks Interests page a couple of times now. The card is deemed by most as completely unfun, although I personally love the flavor. In any event, SCG has just 1 copy in stock with a $79.99 price tag. Don’t expect this to double any time soon, but if you’re looking for a copy for nostalgia’s sake, you may not want to procrastinate forever since this won’t be getting any cheaper.
Is there a version of 93/94 that allows Revised and Fallen Empires? That’s a format I could imagine playing. Going back to dark rituals into Hymns would be good times 🙂
If you don’t already have a public group that plays the format why don’t you just create your own format? Personally I thought about something like a ’94 format myself, because that’s how I started playing Magic. 90% of cards in my hometown’s LGS back then were from Revised with a decent amount of Antiquities and Legends, some more The Dark and later lots of Fallen Empires. With very few exceptions no Arabian Nights and ABU.
The decks were super slow and super crappy, but it was fun and there was no Internet to look any decks up. Not even rules, I remember that we didn’t allow burn spells to target players because in the Revised rulebook it didn’t explicitly say that ‘target’ meant players as well. Shortly after we found out that target means player or creature there was a small tournament and someone with a burn deck won. We hated him for that and thought it was a lame way to win. Good times.
I have heard of some people allowing FE and Revised. Revised certainly makes the format more affordable, and FE allows Hymn (which I’d love to jam in my B/W deck). As Phitt said, find a local group and develop/modify the rules to fit your group’s style best. My friend and I started playing the format and we allow any printing of legal cards to be used, not just A/B/U. Of course, I still strive to go all black-bordered for my own deck because I see it as a strong investment, but my friend doesn’t care and just wants to enjoy the format. It’s been a blast so far!
Thanks for your question!
Sig
I’d rather play what I started with as well Revised through FE.
Love to see how I’d build my UR deck nowadays.
Brian,
It’s all about your play group. If you have people locally who would enjoy playing with cards from the same time period, then spread the word! Just because some people like playing with Alpha-The Dark doesn’t mean you can’t play games using Revised – Tempest, for example. It’s all about having fun in Magic playing a nostalgic format :). (I’m learning this as I go, FYI).
I dont play much modern but over the weekend of origins game fair I sold my playset of oblivion stones…. And then they jumped like 250% in price :/
It’s really annoying how these prices are so volatile. I wouldn’t kick yourself though. I sold a Snapcaster at $40 in Vegas and while it was obviously a short-sighted decision, I won’t let it bug me. Just make sure you’re putting your cash to work elsewhere – there’s a new Modern buyout every day now, so just try to stay ahead of the curve and there will be plenty of profits to be made. Stay the course!
Good luck, and thanks for commenting!
Sig
P.S. Stupid Oblivion Stone – I hate that card. 😛
As cool as “93/94” is, I find it a bit knowingly hypocritical that the 93/94 format does not allow Revised/3rd Ed (published April 1994), or Fallen Empires (published November 1994), especially since both Legends (published June 1994) and The Dark (published August 1994) BOTH came out AFTER Revised/3rd Ed was printed! So, they can preach all they want about “going back to times that will never return” (as they claim on their home website), but there never was such a time as playing Legends and The Dark without also including Revised/3rd edition. The need to, therefore, either rename the format (to Elitist Errant Anachronists), or also allow AT LEAST Revised and then say the cut-off is August 1994 or also include Fallen Empires and therefore correctly utilize the true name of “93/94”. Now, you can find some discussion on their home website regarding that very issue, and I hope they commit to going with the true 93/94 name. I myself no longer have the P9 cards I used to own (all but Mox Ruby & Mox Emerald), but I still do have a ton of great Beta, Arabian Nights, Antiquities & Dark cards with which to play 93/94. But not being allowed to utilize my April 1994-printed Revised duals (complete set of 40) is just silly in a format claiming to represent that era.
Anyone care to play “93/95” with me? I’m just itching to play my $55 pack-pulled Chronicles Blood Moons! 😉
Tim,
According to this site: http://oldschool-mtg.blogspot.com/p/banrestriction.html?_sm_au_=iDV2KRvR5rqtNbMs
The Dark is legal. So there is that…not that it helps much with cost though. Honestly, I’m all for making it a “true” 93/94 format…you know, like how the game was in December 1994. And to be honest, if you’ve got friends interested in playing, your local group could modify the format as you’d like. It may make things tough if you’re going to travel elsewhere to play in events, but as far as kitchen table games go, feel free to use what fits your liking and budget.
Just keep in mind that if you’re looking for solid long term investments too, then you’d want to steer closer to the older cards. That’s where you get to have your cake and eat it to (i.e. play games with sweet cards you’re also invested in).
Thanks for sharing your thoughts!
Sig
Hi Sig,
Yes, I was aware that 93/94 includes The Dark. I’m just sayin’ that if they’re gonna call it “93/94”, then they should also include Revised, since Revised came out BEFORE both Legends AND The Dark (both of which are legal) as well as Fallen Empires (since that too was printed in 1994).
Yet after reading their website, they clearly want a “pimped-out” format, so I can understand not wanting that “trashy” Fallen Empires card pool added to the mix (I like FE, by the way…..It’s the Vorthos in me that appreciates within-set synergies). But, if FE is excluded, which is totally their own right to do, then the format should be renamed to something less self-contradictory.
Yes, I’m completely in the spirit of doing whatever a given local gaming group wants to do. It’s all about the fun! I build decks all the time for wacky formats (mostly multi-player) just for the fun of the EDH-style social experience. For example, I have a sweet Near Mint 5-mono-colored-deck Revised Pente deck set, ready to play with all the Revised “iconic” cards, one deck of each color. That’s more old-school than Legends (by 2 months!). But those cards aren’t even allowed in the poorly-named “93/94” format. Sad.
Regarding investing in old cards, I utterly agree! 11 years ago, in Fall 2004, I took the leap and invested about $2000 in acquiring a Near Mint PLAY SET of every Beta Common and Uncommon, plus completing a NM set of Beta White Rares (my favorite color) plus many other key Beta FUN rares (no Power 9….since casual groups don’t allow those usually) that I wanted for fun decks. After that LONG TERM investment (knowing the values would go up, having been playing since August 1995), and adding in the minor value of the rest of my collection (about another $2000 in pack-pulled fluff), plus lots of pretty decent trading over the years (like a foil Onslought Polluted Delta for $20 in trade-bait), my MTGPrice.com “Instant Value of My Collection” is now listed at $22,000+.
Now, I’ve made A LOT of bad trades & sells over the years, but overall, I’ve done pretty good. And if there’s any lesson I’ve learned that I keep trying to tell these young whipper-snapper players these days it’s this: INVEST IN OLD-SCHOOL MAGIC! EVEN TARMOGOYFS WILL NOT GAIN MUCH VALUE BECAUSE THEY WILL KEEP BEING REPRINTED TO INFINITY TO KEEP THE MASSES FED. Instead, RESERVE LIST CARDS AND WHAT YOU *ENJOY* IS THE ONLY WAY TO GO!
Of course, they don’t listen. But if I had someone telling me that back in 1995, then my M:TG portfolio would be WAY more massively valued right now (closer to $50K+). Dumb me. But I’ve learned my lessons: 1) Invest in what I enjoy often (i.e., for me, that’s casual staples) and 2.)Invest in Reserve List Old School Magic.
Keep spreading the word, Brother Sig! Keep spreading the word! 🙂
Tim
Amen, Tim! I am with you there. I really should have focused more on older cards I enjoyed growing up when I got into MTG Finance years ago. At least I DID get into Legacy during its infancy with the SCG circuit. That made me significant enough money for a starting “bankroll” for my son’s college fund. Sadly I sold out of Legacy too soon (selling out of Legacy at any time is probably too soon) but I don’t mind too much. I re-bought a single Legacy deck and I’m so happy to have it, even though I play rarely. And now I’m honored to be a part of the Old School MTG community with my B/W deck.
Because playing Juzam Djinn is just too sweet for me to pass up. I’ll spread the word if you do 🙂
Thanks again!
Sig
Do you have P9 for Old School MTG? If so, how did you “bankroll” them?
Other than those, I can put together just about any Old School Deck with Original printings (minus, Library, Workshop, Moat & Tabernacle)
While in Vegas I sold some of the Duals I was investing in but wasn’t using. One vendor was paying very well for MP blue Duals. So I sold a few and managed to raise cash to get a Mox Jet and a Mox Pearl. I don’t have the duals anymore, but I have the few I need for Legacy so I’m still happy. No Lotus in my future though. Maybe one day.
Just an FYI from someone in the stock business I wouldn’t call you a chicken little. What you’re doing is how you should treat regular stocks too, your more aggressive buys (ie modern/standard cards) you should be looking to buy low/sell high and never be afraid to take a profit. That profit you turn around and invest in more stable long term dividend paying stocks (ie legacy/reserve list stuff). That’s just smart investing and you should be cautious with your modern portfolio, if you have a decent return on something sell it and move on, no ones ever went broke consistently taking a profit! Anyways good article!
I’ve been thinking the exact same thing. Modern/Standard = Day Traders, Legacy/Vintage = Long Term Investors (the kind who pay for their children’s education via investments).
Also, I wanted to mention that the article is superb, and something the Modern community needs to wake up to. Play Modern for fun, but don’t invest into it Long Term (except in Real Estate).
It’s so reassuring to hear you all voice your agreement to my thinking. Many dealers/active speculators swear by Modern as THE place to make significant bank. And it can be – as long as you have the time to pay excruciating attention to the format. For those looking for a long-term view, there are better formats to play.
To be fair, I am still going to try and flip Modern cards when I can…I just won’t allow myself to fall in love with any Modern holding. Can’t lose money if I’m selling for profit. 🙂
Thanks again!
Sig
Eli,
Thanks for the kind words! I agree with your assessment of my strategy. But many others don’t quite see it this way. They see me constantly selling and condensing holdings and they immediately cite fear as my motivator. Fear of losing money IS a real motivator for me, but it’s not always a Chicken Little mentality. There’s gotta be a middle ground, right? 🙂
Sig
Funny thing is, I was about to heavily invest into a Melira Pod deck with which to play my four NM-/EX+ Beta Birds of Paradise that I acquired 15-years ago for $40 each, but right before I committed, they banned Birthing Pod.
Not cool!
Even though that experience didn’t lose me any money, it made me seriously lose interest in spending much money at all on Modern, since I can only play once in a while. The older Eternal Formats (Legacy, 93/94) are SO MUCH MORE appealing to me because they have STABILITY, something which 40+-year-old adults with families need when they only have time for casual games and once-in-a-while a tournament. We just don’t have time or money (or screwed-up priorities) to spend gobs of resources on keeping up with volatile formats (Standard & Modern). A game should be fun, but once you have “real life” commitments, only older formats really make sense due to their stability, both financially and in terms of the metagame.
Question: Why won’t 93/94 use Revised/3rd Ed? Seems so illogical? If they called it “Pimp Magic”, then I’d be TOTALLY supportive of their format, in terms of only allowing the Pimpest old-school, non-reprint cards. But since Revised was printed BEFORE Legends & The Dark, it just doesn’t make sense.
Very well put! It sounds like we are very much on the same page when it comes to our attitudes towards Modern.
You pose a very sound question – one which I have no answer. However, I’ve put out a Tweet to some members of the 93/94 community. Let’s see what they say. 🙂
https://twitter.com/sigfig8/status/610508310379237376
Sig,
Don’t worry about what everyone else says. The market has averaged 9%+ annually since inception yet the individual investor avg’s about 3-4%, if you start sounding like everyone be very scared! I think what you should say is you’re not afraid to lose money, you’re afraid to lose a profit. If you buy a card today and a week from now it’s down 10% that’s fine, you don’t lose until you sell, before that it’s just fluctuation. In the same vein if you buy and the value increases 10% you haven’t made a dime until you sell and lock in that profit, and if you get greedy and wait to sell and it dips again you’ll regret it, so again don’t feel bad making a profit :).
Eli,
Very fair point – couldn’t have put it any better myself (and in fact, I didn’t!). Really appreciate the words of encouragement. Your feedback means a great deal to me.
I’m realizing how different my approach to MTG Finance is from the most vocal on Twitter. I guess I just need to be “ok” with having a differing opinion!
Sig
Can’t there be some middle of the road solution? Merfolk is a solid deck with des additions and is pretty light on the budget. Swap a few cards and you end up with legacy merfolk. I think there are ways to enjoy both formats. Delver is also pretty stable with the spells. After initial acquisition, the cost of maintaining the list isn’t that bad.
I feel like this needed to be mentioned.
Ben,
This is a terrific build! I’ll admit while in my disgruntled state, I neglected to mention any compromises. In fact, Merfolk did cross my mind – it’s attractive to build a low-ish cost Modern deck in Merfolk that could also be useful in Legacy. Although, let’s face it….Merfolk hasn’t been too relevant in Legacy for quite a while now. But the principle is still valid.
I’ll continue to monitor the Modern metagame and if a deck pops up that is low-cost and looks fun, I may jump back in. But believe me when I say I’m going to be much more cautious with my purchases going forward.
Thanks for the build – really appreciate the feedback!
Sig
I love Marc Faber. I’ve met him once in passing, subscribe to his channel and pay close attention to what he has to say. He’s not the doombear everyone thinks. He just firmly believes in rational expectations.
Tom,
Wow, I’m really jealous. I wish I could get some time with the expert financial analysts out there. That must have been a really cool experience.
The media tends to portray him as a doomsayer (isn’t his nickname “Dr. Doom”?). So I’ll admit I just ran with it for the article. Then again, in the short term we know the market isn’t really rational…both stock market and MTG market. But I think my points still stand, right?
Thanks,
Sig
Well Marc Faber is firmly entrenched in the belief of Austrian Economics. He isn’t bearish on governmental bonds and fiat. He’s bullish on commodities because of governmental bonds and fiat. He ( and I to a much lesser extent) understands that an economy is far to complex to control and predict (hence the founding study of praxeology). Imagine you are the central bank. The economy is a beach ball and the pool is the world. The minute you take any form of control of the ball (like creating and dictating interest rates) you’re pushing it under water. This is possible for a certain period. You can push or pull the ball around for a certain time and at a certain depth. The water on the top of the pool remains relatively stable. After awhile due to being tired or from unforseen circumstances you lose control of the ball. What happens? It violently shoots skywards creating quite an effect. The idea behind centralized economic planning has been to keep this ball under water and that if it does break free to put a guidance system on it. It’s fraught with a never ending line of potential disasters where the remedy is often times invented on the spot. It’s far better to let the ball drift on the surface and watch it wander around the pool NY either the wind or other people splashing around. Faber doesn’t like one person always holding the ball. I asked him how fast he’d taken his Hayabusa. “150. There isn’t enough road to get it any higher”.
Lol sounds like an intelligent and engaging individual. Perhaps you can introduce me some time? 😉
I’d have a better chance at introducing you to Peter Molyneux who could introduce you to Peter Schiff who would introduce you to Marc Faber lol. I want to meet Jim Rogers personally.