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Monday: Money Ramp with Zack Alvarado
MTG & The Dangers of Third-Party Speculation
Following speculative advice, regarding uptrending investment targets in the MTG market, is a very risky practice; one that I advise nobody – but the well seasoned – to rely on. This warning extends beyond basic rule isolation of game theory: there seem to be few of us speculators, and many hype-investors. If you want to make the largest profits possible: do your own homework, and cash-in/cash-out before anybody sees you doing it. These hype-investors rush to accumulate plethoras of cards that speculators are stocking; after we’ve already cleared the bottom level of the market – So what’s the difference between us? That’s simple: I have multiple outlets for reselling my singles, and a friendly reputation as a strong trader/player in my community. I never acquire stock unless I’m confident in my capacity to generate a profit from it within a desired margin of time.
Hype-investors, on the other hand, usually end up jumping onto the caboose of new trends; this is because they’re mimicking our speculative purchasing patterns. Again, why is that bad? And again, that’s simple: let’s assume that I’ve speculated the price of ‘Card X’ is going to increase and decide to buy 200 copies for $0.25; then, after I’ve bought my 200 copies: the price jumps to $.50 and hype-investors acquire 200-500 copies for themselves. As soon as ‘Card X’ hits $0.50, I put mine back into the market, and am bought out – making a 200% ROI. After the excitement dies down, the price of ‘Card X’ will likely drop to $0.35, which is still a near 30% increase from its baseline; however, the hype investors have now lost $0.15 (30%) on each card – and they don’t want to eat a loss – so what do they do?
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They take one of two risks, generally: 1, they attempt to buy out the current market; and if successful usually end up with a large stock of stagnant goods, which inflates the price of cards that simply don’t command their retail tags, or 2, they sit on their newly acquired stock, hoping for the market to slowly dry out, and similarly: sit on stagnant goods; taking a long time to profit, if ever. Because most hype-investors take one of these two risks, they harm their fellow investors in the process. And for obvious reasons, this type of financial competition between resellers/investors is bad news for casual players and consumers in general.
People taking the first risk I mentioned will be thwarted by people taking the second risk: if they buy the market out of ‘Card X’ at a rate of $0.35, and raise them all to $0.75, they’ll be making a profit on the initial stock of ‘Card X’ that was purchased for $.50, and also from the newly acquired stock that was purchased for $0.35 – BUT, if they do so and list ‘Card X’ for $0.75, surely whoever took the second risk will list all of theirs at $0.60 – $0.70, shortly after; and it becomes this cat and mouse game of people cashing into others who are seeking to corner the market; and this back and forth consumption of demand based value does nothing but increase the value in false effect: the tangible value of an item increases as the demand, and thus the exchange of it does as well. But the consumption and exchange of trend-cards, which raise their value, occurs mainly between resellers and not end-user players – thus creating a hollow egg of perpetually feigned scarcity. So please, be careful, and assess the market wisely; nobody is going to give you their get-rich-quick tips; this really is a market of micro-econ, and player knowledge – it’s easy to get burned when following the advice of others if you’re unable to confirm their assertions (mine included). This will conclude my fourth installment, thank you all for reading.
Money Ramp Weekly Tip:
[Buy as many Burning-Tree Emissary as possible for $0.50 – people sell ’em left and right]
Until next time,
Zack R Alvarado
zackalvarado@gmail.com
Twitter: Rh1zzualo
Pro Tour Gatecrash and Card Demand
By Andrew Smith
This past weekend a couple hundred of the best Magic: The Gathering players in the world descended on Montreal to compete in Pro Tour Gatecrash. Three days of Standard and booster draft to crown the newest Pro Tour champion. And perhaps more importantly, set the direction of post-Gatecrash Standard. Without a doubt, Standard will continue to evolve in the coming weeks and months, but there are some conclusions we can draw based on the PT results.
A Reckoning
Let’s start with what is now obvious: Boros Reckoner is for real. The week after the release I was suggesting the $15 price tag was the ceiling for this card and it continues to skyrocket. Today the average price is nearly $30. I certainly misjudged the number of decks that want this card. It has its place in aggressive decks, midrange decks, and serves as a great anti-aggro card in UWR control decks. Four of the Standard decks in the top 8 ran four copies of Boros Reckoner. Last time I compared him to Deathrite Shaman, but it’s evident that Thragtusk is a better comparison. He’s going to be an important card in Standard for the foreseeable future. Even without Modern or legacy play, Thragtusk has shown us it’s possible to be a $25-30 Standard rare for quite a while.
Another card making big moves out of the PT: Falkenrath Aristocrat. Only one deck in the top 8 played the big hasty vampire, but it was the deck that won it all. And that matters, a lot. Falkenrath has already seen a 25% increase since taking down the PT.
If you can find someone trying to trade theirs off, this is a pretty safe investment. She reached $25 on some stores prior to Gatecrash when B/R Zombies was a tier 1 deck. No good reason to expect anything different this time.
Speculation
My speculation choices for this week are Abrupt Decay and Crypt Ghast. Abrupt Decay has settled in around $7 right now, but it’s getting more Standard play than ever before. Obviously, Boros Reckoner has a lot to do with that. Decay is one of the best cards to take out the Reckoner. It is also seeing an increasing amount of play in Modern and Legacy. Crypt Ghast, on the other hand, was key to Conley Woods mono-black control deck that had a winning record in Standard at the PT. While it didn’t dominate, there are a lot of people out there that love playing mono-black. Currently the average price is just over $3, but can be picked up on eBay for about a buck. If nothing else this is one card to move from your junk boxes to your trade binders.
Friday: Managing Your Inventory with Igor
One of the most essential parts of being a successful floor trader is knowing how to manage your inventory. This is especially important if you are a small scale grinder, since your smaller inventory is more exposed to large value swings of a few singles. There is nothing worse than your entire trade stock depreciating 10% or more due to lazy inventory management. I want to focus on the importance of paying attention to the behaviors and preferences of players and what’s “in season”.
Seasonal Behavior
When I talk about season, I’m referencing the Pro Tour Qualifier Season (PTQ). The format for the qualifiers has a huge impact on price outlooks. Intuitively, it seems obvious that a highly played format will lead to higher demand of cards in that format (especially staples). Unless you’ve been living under a rock for the last couple of months, you are aware of the rapid and sharp growth Modern cards have seen. Almost any card that saw play, even briefly, increased in price. Let’s apply this information to something that happened very recently.
The recently released Gatecrash is a game changer. It has been a while since a set had this much impact on Standard. A fresh format is always popular with players, but this format has proven to be particularly aggressive. The talk of the week has been Boros Reckoner.
This guy preordered for $3.99! He is reported to be the real deal. But let’s discuss the price. $25 for a Standard rare from an in-print set makes me skeptical at first. This guy is no Snapcaster Mage. If we look at precedents, the only other cards to hold that price point have been Cavern of Souls, Snapcaster Mage, and Thragtusk (until recently). But my opinion on this card is that the $25 price point is most likely sustainable for the next month. Pro Tour Gatecrash is coming up on February 15th and the format is Standard. If he sees a strong showing at the Pro Tour I can see him sustaining that price for a longer period. This guy is good in a wide variety of decks, and the way the format looks now, he is going to be delivering the beats. Overall, there is no reason to not benefit from the hype at this point; just take your money and walk away. We’re probably seeing Boros Reckoner’s peak anyway. But don’t feel that you need to be rushed to move your Boros Reckoners.
Modern Masters
As the PTQ season comes to an end, prices should start to come down slowly to what they were pre-bubble (cards like Wilt-Leaf Liege, Thoughtseize, Tarmogoyf, Venser). It’s important to remember that Modern Masters is coming out this summer, and everything before Alara Reborn is fair game. This can be an enormous opportunity to make (and lose) a lot of money.
First, I recommend liquidating anything that has a chance of being in Modern Masters, before the end of the PTQ season. I would not want to own cards like Thoughtseize, Tarmogoyf, or Vendilion Clique. It’s going to be a while until prices get this crazy again.
Now is the time you should be focusing on picking up Modern cards. Between the end of the PTQ season and Modern Masters is when prices are likely to be at their lowest; Modern Masters will significantly increase the demand for Modern cards. Making the format more accessible draws more players in, which means they are going to need more Modern cards when Modern PTQ season rolls around again. Targeting cards that are guaranteed to not be printed in Modern Masters is a relatively safe investment. If Modern Masters causes significant price drops to the cards that were reprinted, I would be targeting those very aggressively. I will be paying attention and keeping you guys updated in my articles on when is the best time to pick up certain Modern cards – so stay tuned!
Trade Targets:
Gyre Sage – This lady is seeing play in a Naya deck alongside Boros Reckoner and friends. Saito has also been talking about her. She is sold out on a lot of websites at $2 and should be $4-6 relatively soon. Great trade target this weekend.
Domri Rade – Another card in the Naya deck. He is currently $25. If this guy sees play in the Pro Tour, expect him to hit 40-50 for a few weeks. Being a mythic from a set that hasn’t been opened a lot has it’s advantageous.
Obzedat, Ghost Council – This card is popping up in some Esper lists. Again, a strong showing at the Pro Tour can lead to a significant spike.
Loxodon Smiter – This pachyderm has the most upside. Being only $2-3 he has a lot of room to grow. Another 4-of in the Naya deck.
Boros Cards (Ash Zealot, Champion of the Parish, Stromkirk, Hellrider) – Boros is becoming one of the most popular decks. The window to pick these up is getting smaller. These cards should be fairly liquid within the next few weeks.
Remember to pay attention the Pro Tour results and coverage. Stay ahead of the curve. Thanks for reading!
Igor Shapiro
Twitter: IgorFinance