Grinder Finance – Analyzing Buyouts

price of std

Right?  The price of the winning deck at the SCG Standard Classic in Cincinnati was $555.  Two of the decks in the Top 8 cost about $200 and weren’t a red aggro deck, so we’re making some progress.  But that’s not what people are really up in arms about anymore.

It feels like everyone is all of a sudden surprised that cards started going up in price again.  With the announcement that SCG Cincinnati was the LARGEST Open in the history of SCG with over 1,000 competitors, I’m not surprised.  Oh, it was also a Modern Open.  Sorry Legacy fans, I don’t think this is your year.

Why calling price increases a buyout is bad

The reason cards go up and stay up in price is almost never due to buyouts.  It’s so impossibly hard to buy enough copies of a card to control the market price due to sheer volume.

What's not happening
What’s not happening

Nobody is getting rich off of artificially inflating the price of cards by buying a large amount of the market.  Eventually you have to find someone to sell them or you might end up just losing money.  The reason cards are increasing in price is either due to increased demand or dwindling supply.  Let’s take a look at some examples and figure out the difference.

Increased Demand

eldrazi temple eye of ugin

Steady as she goes then boom.  If you have been keeping up with the Eldrazi in Modern, this has been a “deck” for like a month. Some people won’t buy in until they see it on camera so you had time to get in cheaply.  Actually even very recently.  I don’t buy cards to get a quick buck but I had identified this as a problem early.

eye of ugin tweet

Let’s take a look at the 10th place finisher at the SCG Open this past weekend here.  Oh hey a deck that plays more than 1 Eye of Ugin and a full set of Eldrazi Temples?  The deck is also fairly cheap if you don’t include the $200 spent on the two (theoretically unnecessary) Liliana of the Veil.  Hell there is an even more budget version of the deck (here) that plays a mono-black shell and some more Standard legal bulk rares to beat people with the power of Eye of Ugin and Eldrazi Temple.  The reason we’re seeing spike here is due to REAL demand.  If a few thousand players buy 3-4 copies of Eye of Ugin and 4 copies of Eldrazi Temple people will notice and prices will increase.  It’s clear vendors feel this is a real price increase because buylist price jumps follow almost immediately.

But what happens from here?  Well other cards are going to get more expensive in the deck as people start to build and play it.  I’d recommend working on the harder to find cards like Inquisition of Kozilek and Relic of Progenitus and then getting the cards with Standard demand (like Ulamog, the Ceaseless Hunger and Oblivion Sower).  But please don’t go on twitter and decree that MTG finance is the reason why you can’t build the deck for pennies on the dollar now.  If anything it’s MTG finance that is keeping the retail stores on their toes and keeping the market fluid.  We may see a drop in price in the next few days as more copies enter the market but I don’t see a return to pre-spike prices and that’s okay.

Low Supply

gaddock teeg glen elendra archmage

These are not buyouts.  They’re not caused by a nefarious group of people trying to make Séance happen.  It’s clear from the graphs that multiple months of increasing buy and sell prices has just hit the “bubble” where a small increase just doesn’t get the product flowing.  Both of these cards are from Lorwyn Block and Glen Elendra only had a tiny reprint in Modern Masters.   Eventually vendors or TCGPlayer reach a breaking point where they will violently increase both prices because the market is demanding it.  This can look like a buyout because if there are 12 copies on TCG player and none in stock at retail stores it causes people to panic buy.  The reality of these spikes is they will be back down a little in the next few weeks but they will never be their pre-spike price.  This sort of price correction is really the wakeup call that leads a lot more supply to the market and is generally healthy after the first day of markups.

How to react to these price increases

Don’t panic.  Please whatever you do, don’t panic buy cards.  If anything goes up over 200-300% in one day it is so hard for it to stay that high.  Just wait a few days for the cheaper copies to reach vendors and then you can pick up your copy for less than the buying frenzy prices.  If you buy into hype you only become the greater fool and end up losing the most money.  That’s pretty much the definition of anti-value, so don’t do it!

If you’re trying to save money for cards then watch price trends.  Standard cards flat line in December and then pick up again at the beginning of the next year.  If the card you’re watching is going up $0.20-$0.30 per day (which is hard to really see) then you are better off buying in sooner.  Sometimes there is buyer’s remorse if a card gets reprinted but you stand to lose so much more money by waiting that it’s silly to wait too long in a lot of cases.

Cards to keep an Eye on

  • Ulamog, the Ceaseless Hunger had 12 copies in the top 32 of SCG Cincinnati.  That’s a lot of a Standard Mythic at a Modern event.  Ali Aintrazi (affectionately known as Ali Eldrazi) even went so far as to play three Ulamog and zero Emrakul.
  • Spellskite is 100% going to be an “oh shit I wish I bought this card earlier” card this year.  It’s only gone up since the reprint in Modern Masters 2015 and I don’t see it getting printed again soon.
  • Literally anything in Modern.  There is another Modern Open in Charlotte next weekend and then three weeks later is the Modern Pro Tour.  This hype train has a long track ahead of it to gain steam before more things explode in price like Scalding Tarn.
  • We may see some weird prices on the weekend with no events.  There is no event (GP or SCG Open) the weekend after the Pro Tour.  It will be interesting to see what happens to cards that weekend.

18 thoughts on “Grinder Finance – Analyzing Buyouts”

  1. I cringe whenever I see someone use the word “buyout” because it always incites fear, ill-advised buying behavior and is almost never used correctly.

    1. I agree. These are really just sudden price corrections. I’d argue there have only been 3 real “buyouts” in the last 2 years and most of the price increases have already become undone.

      1. Modern Master’s 1 Tarmogoyf, Zendikar Fetchlands, and Revised Duals. they were the only things that a large amount of the supply was in a small place at one time to be purchasable.

  2. My reaction to spikes: see if I can get’em cheap when it happens and sell when price goes down again.

    Bought gaddock teeg for 10 and phyrexian crusader for 3 the day they spiked.

    after the spikes, price never ends as low as it was so it’s a sure investment

    1. Even if you “get in” before a spike, it’s not always a good idea to buy. Sometimes it’s just a shortage on one website and there are still plenty left on the internet.

  3. Regarding the Spellskite recommendation, how high could it realistically go from here? This current price is approaching the highest it’s ever been, and it’s already gone up ~$2.50 in the past week.

      1. I guess I’m just reserved bc it’s mostly played as a 1 or 2-of, primarily in the sideboard, and much of the recent uptick is probably due to it being sided in the Eldrazi deck.

      2. No, it’s a card that is played in a lot of decks because it’s a reasonable catch all vs burn, twin, infect, and boggles. It’s also played in decks with creature combos to protect them. It’s the fairly ubiquitousness of the card that makes it expensive not it’s recent play.

      3. Oh I’m not questioning its versatility or the fact that it’s a Modern staple. I just meant that it’s rarely more than a 2-of, and the first time it’s risen substantially since the summer has been in the past 2 weeks, when it showed up in the Eldrazi deck.

      4. Dominance is a pretty helpful factor:
        http://www.mtggoldfish.com/format-staples/modern
        There are more copies of spellskite rampant in modern than snapcasters or goyfs even though they are run as four ofs usually. I would say the one thing that may keep spellskite down or growing slowly, would be that players mostly have their copies. Whenever players switch decks, they keep the cards they need for the next deck so the demand is coming from incremental demand for skites (i.e. going from 2 to 3 copies) but there is also a lack of new supply.

      5. Relative to the prices of the other MM2015 cards, Spellskite is a huge winner already. $30-40 is a perfectly reasonable price expectation, given the MM1 rebounds from ’14-’15.

  4. Great artice, perfect timing. I dig the Aristocrats podcast you guys have been putting out lately, too.

  5. The price of magic cards in eternal formats will almost always increase. The only exceptions are rotation, reprints, and banning. Every grinder needs to accept this. Magic is an expensive hobby and we aren’t entitled to $150 T1 modern decks.

    Analyzing a “buyout” is a lot easier in retrospect. Take foil Merieke Ri Berit as a perfect example. The price shot up with almost no warning. She’s a popular Tiny Leaders commander , so that’s not entirely surprising, . The price is still 2x higher than before the spike, so players are obviously willing to pay the difference. It’s possible that regular demand facilitated the increase, so we don’t really know unless someone takes credit.

    An example where we know for sure: Spawnsire of Ulamog. We know for a fact that DJ bought out 100 copies to create a choke in supply. There was already casual demand, so the price spiked not long after. This casual-only card has maintained nearly triple its average price for the last two months, probably because the consumer values it as a $6-$8 card. Would it have spiked without his help? Maybe, but there’s no way to know for sure.

    Is eye of ugin or eldrazi temple a buyout? It’s going to take weeks (if not a month or two) to say for sure, but we probably won’t know this either. The days of $5 eyes and $2 temples are certainly behind us, which is the fact all of us have to embrace.

    I also think it’s interesting that what we thought we “knew” about buyouts was either never true or is no longer true.

  6. Thought provoking argument. I think the counter argument that spikes aren’t created by “buyouts” has been neatly set forth by Mr. Timbola. He sees a price increase early and immediately moves in to buy out the rest of the inventory listed at pre-spike prices. While this is not a coordinated buyout, it is a natural reaction which then creates a much bigger price swing than would otherwise happen. Even though these guys jump in for short term profit, they often lose because by the time their shipments arrive, the price had abated. Even though the price may be higher than pre-spike, greed (that same greed which caused them to buy in the first place) causes them to hold on to their new inventory in the hopes that the cards will return to peak levels. This inventory disappears and accentuates price increases.
    Thus, there is a “buyout” component to these sudden price increases.

  7. First off, thanks for the great content, the work you guys do is impressive! I’m curious.. what does this all mean for the original print foils of these cards? Eye of ugin, eldrazi temple, all is dust, spellskite… All of their foils are still (relatively) inexpensive even from their original sets. Will they also see a potentially large increase? Thanks again amigos.

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