Going Mad – The Observer Effect

By: Derek Madlem

If you haven’t caught on by now, I’m not your typical #MTGFinance guy. I don’t like graphs or pie charts and I don’t look at the daily gain / loss reports that are generated by various sites. I’ll confess that I don’t even read most of what my compatriots have written outside of Twitter. I often wonder how I ended up writing a weekly column dedicated to Magic finance when I take such an adversarial stance against the concept in general.

The Good Fight

But now I’m on the inside and I like to tell myself that I’m fighting the good fight … dismantling this Diabolic Machine from the inside.Diabolic MachineYou can see me there (sans beard) getting ready to thrust my sword into the evil gears that turn continuously powering this machine of destruction.

Don’t get me wrong, some of what we write about is useful. The basic economics put in Magic terms is hugely beneficial for people’s understandings of card prices and the how and why of their movement.  Understanding supply, demand, and price elasticity goes a long way into understanding how price spikes work. This is great stuff to know.

The finance community has come along way from the weekly articles where Medina taught us different ways to convince a stranger that their cards were worth less than his. But we still do a lot of things that I question.

The Observer Effect

The observer effect is a scientific principle that basically says you can’t measure something without effecting the results of that measurement.

For example, a mercury thermometer can’t take your temperature without absorbing some of the heat your body produces, thus altering your body’s temperature. Another example would be Jane Goodall studying chimpanzees in their natural habitat … you know what doesn’t occur naturally in their habitat? Jane Goodalls. By merely being there to observe, she altered the behavior of those she was observing.

While sometimes the effect of observation is going to be on the impossibly low end of the spectrum, like taking the temperature of the ocean. Other times it’s going to have a direct impact on the results, like you’d see in your psychologists office.

Where am I going with this and does it have to do with Magic cards?

BecvarOne of things you’ll see us Magic financiers do is send out Tweets like this one. We’ll suggest a card publicly because we’re an altruistic bunch and our only interest is to help others. We’re just thinking of the greater good and want everyone to make money. It’s our little way of paying our followers back for making us into the proto-gods that we’ve become in this cottage industry.*

*this paragraph contains copious amounts of sarcasm

Now first I have to admit that I pick Nick for this because we’ve had this debate a number of times and I’ve determined through repeated observations in the wild that he is an absolute monster and most who know him will back this up. He’s also (usually) a good sport when it comes to this sort of dissenting discourse.

Nick, whether intentionally or unintentionally, is having an impact on the demand for Hero of Iroas simply by talking about Hero of Iroas.

Hypothesis: by making a public observation of a card’s value, we’re affecting the price of that card.

The Morality of Intent

This is where things get murky for me, and where the debate has gone off the rails for everyone that I’ve ever attempted to have it with.

Why are we tweeting out or writing about this information? For some of us, it’s what we get paid to do. Providing you with insights on card value is what we’re getting paid to do, it’s why we’re here at all.

For others, it’s about building a brand … I don’t know what exactly that brand is selling, but branding is important you know!

Others still just want to be right, in public. We want that “I listened to this guy and made $100, you should listen to him too” endorsement. We want that credibility and to be considered an expert in our chosen field.

Sleight of HandUltimately it’s a performance, a magic trick we perform so that we can revel in the applause. It’s not enough to simply buy some cards and then tell people how much money we made buying those cards, we have to put on the show. And like any good magician, the audience is manipulated into seeing what the performer wants.

“Whoa whoa whoa, that’s sounding kind of accusatory”
-concerned reader somewhere

The Bandwagon

One of the most noticeable effects we’ve seen the last couple of years is the bandwagon effect in #mtgfinance. It starts with a card being mentioned, then the price starts to move, and then the next thing you know the silent masses buy out the card and relist it at ridiculous prices. But what happens when the buyout isn’t complete? The price comes crashing back down to reality because Bob’s Card Shack is still selling Bösium Strip for $3.

The reality of the bandwagon is that the more people that jump on, the more effective it is. If I invest in some cards and then convince you to invest in those same cards, I’ve created a ripple. If I convince you and 1,000 other people to invest in those cards, that ripple becomes something more.

Goblin RabblemasterSo what’s the difference between one guy buying out a 1,000 copies of a card and 50 people buying 20 copies each? When one guy relists his cards to sell at a higher price he’s just that crazy guy on TCG that sells things for way too much, but when 50 people relist at higher prices … it just might stick.

The Defense

I’ve asked numerous people why they tweet out “hot tips” if they aren’t trying to get more people to buy in and they’ve given me a variety of answers. Let’s look at a few of those ideas.

“I really think they’re a good investment” – if buying three was a good investment, why not buy six? Why not buy twelve? If you are 100% confident in an investment, why not keep your mouth shut and buy all available copies? Don’t have enough to buy all of them? Why not keep quiet and buy some copies now and go back for the rest when you can? After all, you’re going to make some serious bank right?

If you’re not 100% certain it’s a good investment, how sure are you? Should you be recommending people buy in on a card that you’re only 60% sure of? Are you trying to turn a 60% into a 70 or 80%? Who are you trying to convince that your target is a good spec? Yourself or the general public?

“I’m already going to make enough money off this spec” – Wut?

The idea that you can make “enough money” off of a spec target that you’re buying only to make money is kind of ridiculous.

“I don’t really think my tweet will have an impact” – then why are you tweeting about it? This is akin to the argument about mana weaving before shuffling your deck, either it does something and you’re technically cheating or it does nothing and you’re wasting your time.

Truth in Advertising

When I tweet about a card that I think is a good buy, it’s because I’m not 100% certain (I’m rarely more than 99% sure of anything). If I was ever 100% certain about a spec target, I would silently buy out the entire internet.

I want you to buy in too. I know that the more people who know/realize/believe a card is a good buy the more likely it is to become a good buy.  The more people on the bandwagon, the more profitable it gets.

I want to have credibility. I want to be famous. I want to be an authority on Magic finance. I want people to come to me with opportunities to work for them, I want a large network that provides me more of these opportunities. I want to see my phone lighting up with praise and testimonials.

I want to be honest. I want to be the change I want to see in the world. I want more people to be aware and honest about the things the Magic finance community does. If for no other reason than to avoid being implicated in a global pricing conspiracy orchestrated by a shadowy card Illuminati.

Observation Effect

This is where I restate my premise for dramatic effect and summarize the things I’ve said in a slightly different way.

Making observations on card prices absolutely has an effect on card prices. You know why the price of price of a Revised edition Ironclaw Orcs hasn’t really changed in twenty years? Because nobody cares. As soon as we start caring about a card and making others care about a card, we have an impact on it.

That impact varies from person to person. I could write about a card every week for a month and it would likely have less impact than Chas Andres or Gerry Thompson writing about it once. Some people are starting avalanches while others only have the clout to check the temperature of the ocean, but both are impacting the things they observe.

Command Tower

Let me make one thing clear – I’m not accusing or condemning anyone other than Becvar. If this article causes my peers to think before they speak and my readers to think before they act then I’ll have accomplished a lot.

Whether we choose to acknowledge, deny, or embrace it; all of our observations are impacting the cards we observe. Act accordingly.

For more hot card tips you can find me on Twitter: @GoingMadlem


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UNLOCKED PROTRADER: Safety Deposit Boxes of Khans of Tarkir

By: Travis Allen

After Modern Masters hit the streets not quite two years ago, I started acquiring Modern cards as much as possible. Anything that wasn’t printed in MM was fair game, especially anything with keywords. Spellskite? Scoop ‘em up. Snapcasters. Fast lands. Goryo’s Vengeance. Various other cards that I don’t recall at this point. Suffice to say, I spent well over a year trading for as much Modern product as I could. With the format growing in popularity and the big reprint vehicle in the rear-view mirror, I wanted as much of my stock as possible to be Modern staples. And that’s what I did for months and months.

Not that long ago, my consideration of that format as an iron-clad storage chest for Magic value began to wane. Modern Masters 2015 had been announced, and the number of places reprints were popping up was beginning to outnumber the amount of cards needing reprints. We’re now firmly amidst a sea of reprint avenues, each representing a potential hemorrhaging of value. I’ve been forced to stop stockpiling generic Modern staples and instead have been driven to find greener pastures in which to park my Magic value.

Standard card prices rise quickly and fall off almost as fast. Changes occur on a weekly basis. The entire market is far more nimble and lean than Modern or Legacy. And while nothing is as safe and effortless as plenty of Modern cards are, there’s definite money to be made. I can’t park a few hundred bucks in Spellskites anymore, but as long as I’m paying attention, I can probably make more money. The trick is not to chase weekly tides. Rather, I want to look at long cycles, and get in while they’re at their floors. Today we’re going to talk about Khans of Tarkir, a set that is rapidly approaching its local value floor, and where to put your MTG funbux for the next six months.

AAA Stocks

If you read my article last week all about rotations and pricing trends, you would know that Khan’s price peak should be some time in mid to late October, and that its floor should be between July and August. As good financiers who pay attention to the details though, we may notice that Khans is a little different than other sets . Whereas most fall sets are drafted through the spring, KTK is not. Once Dragons of Tarkir hit the market, KTK packs left the drafting economy. Is this enough to impact the price behavior?

Let’s do some homework and find out. After all, perhaps the most important skill to cultivate in this field is doing your homework. In order to make wise decisions, you need to ask questions, and you need information to answer those questions. And no, bugging myself or Corbin or whomever on Twitter doesn’t count as doing your homework. Check price graphs. Find cards that are similar and note their behaviors. Look back through older sets for comparisons. Without all of this effort, you’re not doing anything other than making wild guesses.

Alright, aside aside, we know the last time a set behaved in this fashion was Innistrad back in 2011. Once Avacyn Restored hit, Innistrad and Dark Ascension dropped out of the draft. Here’s INN’s price graph.

INN

Looks like the price floor is right where we expected it to be; between July and August. Excellent. Right now we’re six to twelve weeks from hitting the floor. How much further of a drop are we talking? Well, between today’s date in 2011 and the absolute floor that summer, Innistrad dropped about 18%. So we haven’t completely bottomed out yet, but we’re close. What we want to be doing now is identifying which cards we think will do the best through the fall rotation, and begin moving in on those. Starting now gives us a chance to decide our best course of action early, and time to start acquiring. Unless our plan is to just dump hundreds of dollars all at once on August 1, starting to trade today is a wise decision.

Today I’m going to start with Khans, and touch on Fate Reforged another week.

People have forgotten about Sarkhan, the Dragonspeaker by now, given Stormbreath Dragon and a general preponderance of dragons in Standard. It may feel surprising today, but there was a time when Sarkhan was being compared favorably to Stormbreath, and he had a price tag to match.

Capture

While I’m not holding my breath for $50 again anytime soon, I do think that $8 is much lower than he can and should be. Admit it, you probably thought he was $10 or $12, right? We’ve collectively forgotten about him, and subsequently didn’t realize how cheap he’s gotten. His power level is undeniable though. He’s a five mana hasty 4/4 indestructible flyer—immune to cards like Ultimate Price, mind you—that can alternatively come down and nuke a tapped Ojutai. He’s a premier planeswalker from Khans, and when the index jumps 80 percent this fall, he’s going to be a big part of it. At the very least, we should see a price of $10 to $12, and I wouldn’t be surprised to see him climb above $15 at some point in October. There’s few safer bets in KTK than Sarkhan.

Take everything I said about Sarkhan and apply it to Sorin, Solemn Visitor, only slightly less so. His price spiked less hard at release, only cresting $30, and he hasn’t fallen as far, with a current price tag of $10, but he’s still a powerful planeswalker that is trading well below his future value. What makes Sorin particularly good is that while Sarkhan is mostly sitting on the sidelines right now, Sorin is still getting in game wins here and there in various stripes of Abzan decks. We know beyond a doubt that Sorin is strong enough for a high-powered Standard format such as this, and when we suddenly lose half the available cards, his relative power level will spike. There are plenty of decks in the format where your opponent casting a Sorin and activating the first ability it is essentially game over. We even see Sorin pop up in Modern decks occasionally, which is a testament to his strength. I can’t get enough Sorins right now.

I’m struggling to reconcile Siege Rhino’s price with everything I know about Magic finance. We have a premier-level threat in two formats—Standard and Modern—and I can currently buy multiple playsets on TCGplayer for $4.25 a copy? What? Yes, it’s a fall set rare, and that means there is no shortage of copies on the market. But so what? Abrupt Decay was a fall set rare and was $10 while in Standard. In fact, it was in the same set as Deathrite Shaman, which was also at least $10. Oh, and both of those were also in the same set as shock lands.

My point is that while fall set rares tend to be suppressed, especially when good lands are in the set, I don’t believe that it’s enough to stop tier-one grade-S staples from hitting high prices. Nearly every year I’m impressed by how valuable some rare manages to be despite being a fall set rare. This year around that card is going to be Siege Rhino. I expect it will at least double to $10, and I think $15 is within the realm of possibility. We’re talking about what is arguably the best card in Standard and is also a full playset in one of the best Modern decks in the format. In fact, my goal between now and July is to sell some excess stock I have and buy up Rhinos in anticipation of this fall.

I was lukewarm on See the Unwritten when Khans was spoiled, but I didn’t know the next set was Battle for Zendikar, either. After BFZ was spoiled at PAX, Unwritten jumped from around $2 to around $6. It’s since pulled back towards $4, which is great for us: the lower the buy-in, the better. As soon as the first Eldrazi is spoiled, Unwritten is going to jump towards at least $8 as people get hyped to flip gigantic otherworldly monsters into play. Let me be clear here: Eldrazi don’t even need to be legal yet for this to double in price. At $3 or $4 in trade, this is a spec that will be profitable on hype alone.

If it’s actually good, we’ll see prices well into the double digits. See the Unwritten is a popular card across several demographics and formats, such as kitchen-table Magic and EDH, so any Standard demand whatsoever is going to push the price very hard. I’m in for seventy copies or so right now and I’ll be looking to expand that investment through trade binders this summer.

We’ve all come to take Sylvan Caryatid for granted. It’s been so long at this point it feels like a permanent fixture. She’s (they?) are on her way out though, and we’ll need something in her stead. Enter Rattleclaw Mystic. There’s really no other comparable mana fixer in Standard right now. It’s possible we get Birds of Paradise, which would be awesome, but I’m not holding my breath.

As a buy-a-box promo, we already know that Rattleclaw Mystic is slated to be a serious Standard contender, just as Sylvan Caryatid was. It plays extremely well with the Deathmist Raptor/Den Protector synergy that is likely to be the backbone of many Standard decks over the coming months, allowing them to splash into red or blue. Battle for Zendikar will have all sorts of cool things to ramp into. What’s not to like here?

Notable Exclusions

While Wingmate Roc performed admirably earlier in the season, I’m not particularly excited about it this fall. Our embarrassment of riches in the DTK dragons is my primary reason for doubting the return of the bird. With so many powerful flying threats such as Ojutai and Atarka, it’s going to be tough to find a reason to play a card like Roc. Does this mean the card has no future whatsoever and is total bulk? No, absolutely not. It could very well come to transpire that Roc ends up being a relevant component of the metagame this fall and hits $10 again. I’m not writing this article to look for “maybes” though. While you could do worse than Roc, I’d much rather put my Magic dollars into what I feel are basically home runs, such as Siege Rhino and Sarkhan.

I’ve been hemming and hawing over what to do with Dig Through Time while writing this article, and I finally realized that my indecision is exactly my issue with the card. Could DTT hit $15? Aaaabsolutely. No question. Is it a 100 percent slam dunk the way I consider these other cards to be? Not at all. It’s banned in Modern, which cuts a big chunk of potential demand out from under it. It sees some light play in Legacy, but rarely as a full playset. Browsing the EDH stats over at MTGS, Dig Through Time isn’t even a top-50 blue card in the format.

Perhaps my biggest concern with Dig Through Time is that it’s already a $6 card. That’s a tough number to make profit on when we’re talking about a rare rather than a mythic. When Siege Rhinos are $4, Dig Through Times at $6 are simply less appealing to me.

I fully understand if some of you out there want to go deep because you expect DTT to hit $15 this fall. It’s definitely a possibility. It’s the strongest blue card draw spell we’ve seen in ages, and it’s clearly eternal playable. It comes down to a matter of opportunity cost. For every Dig Through Time you buy, it’s one-and-a-half fewer Siege Rhinos available to you. At the end of the day, I’m more comfortable with Rhinos than Digs, though I can respect those of you that opt to pick up copies.

What do you think about the opportunities out of Khans?

Is it Safe? Part 1

Marathon-Man
This is still better than triple Khans draft

We all want safe investments, don’t we? This week, with a spoiler that purports to contain most (but not all, because… reasons) of the mythics from Modern Masters 2015 circulating and not knowing enough information to comment on it, I decided to talk about something else. Besides, the rares will impact EDH finance more than the mythic rares in MM15, and we don’t have much information on those beyond the same spoiler claiming the Commands cycle will be in the set, likely at rare. Sure, that will impact EDH, but we don’t know much beyond that.

Speaking of the cycle of Commands, it made me laugh to see someone on Reddit question why Wizards would bother to reprint the whole cycle of commands in Modern Masters when only one, maybe two of them even see play in Modern. It’s really funny to me that people don’t seem to remember that Modern Masters printed a lot of cards that were great in EDH and had little to no applicability in Modern. What did those people think when they saw Stonehewer Giant in the first Modern Masters? Did they say, “Well, obviously Ardarkar Valkyrie is a Modern staple”? It’s silly, but it just goes to show that people do a good idea of ignoring the stuff they don’t care about.

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ProTrader: Magic doesn’t have to be expensive.

Editor’s Note: Announcing exclusive content for ProTraders!

Hello!

If you’re reading this, I’m sure you’ve noticed that we’ve been quite busy around here.

Put simply, it’s an exciting time for MTGPrice. We’ve been working hard to increase our content offerings for you. I’m sure you’ve noticed we’ve been running more great content from the best authors in the business (If you haven’t, I suggest you take some time to look over the work our authors have created, it’s truly top-of-the-line). We’re working hard to make sure we’re ahead of the finance game and get that information to you as quickly as possible. We’ve got big plans for more content and features to come, and if you stick with us you’ll see the fruit of those labors over the coming months.

With that in mind, I have an exciting announcement for our ProTrader subscribers. We have an all-star staff of writers here, most of whom have many years of experience in the business and have seen it all when it comes to the financial side of the game. Beginning this week, we are making some of that content available exclusively to our ProTrader subscribers. Whether you’re a longtime member or just giving us a try as part of the Kickstarter, we’re excited to offer this to you.

Our lineup of ProTrader-exclusive articles comes from the most respected names in the business, a group of experienced traders and dealers who have time and again proven why they’re the best there is to offer.

Moving forward, this is the content that will be available exclusively to ProTraders.

Monday: Sigmund Ausfresser

Tuesday: Danny Brown

Wednesday: Jason Alt and Travis Allen

Thursday: Corbin Hosler and Guo Heng Chin

Friday: Ross Lennon

Saturday: Guo Heng Chin and James Chillcot

 

That’s six full days of the best Magic finance writing on the planet. In addition to that lineup, ProTraders have access to the buzzing MTGPrice forums (for all your truly up-to-the-second financial needs), early access to the industry-leading Brainstorm Brewery podcast, advanced tools for tracking your collection’s value over time, and access to raw inventory data from individual stores to track just how much a particular card is moving.

That’s a lot of value for your $4.99 monthly subscription, and if this sounds interesting to you, I hope you consider becoming a ProTrader today.

But if that’s not for you, fear not; MTGPrice will always have some free content as well. Our authors writing for the free side are quite capable, and I’m sure you’ll enjoy reading these guys every week.

Monday: Jared Yost and James Chillcot

Tuesday: Guo Heng Chin

Wednesday: Derek Madlem

Thursday: Douglas Johnson

Friday: Cliff Daigle and Houston Whitehead

 

Magic has made some huge leaps over the past few years, and it’s truly an exciting time to be around the game. We’re going to continue to work hard here at MTGPrice to make sure you’re able to keep up, and we like to think it’s an exciting time around here as well. Spend some time around our site, and I think you’ll agree.

 

– Corbin Hosler

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