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Monday: Money Ramp with Zack Alvarado

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MTG & The Dangers of Third-Party Speculation

http://img.aegen.nl/8E/Bribery.jpg
Bribery. (c) 2013 Wizards of the Coast.

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

Common Cents

Thursday: Common Cents with Aaron Dettmann

Champion of the Parish. (c) 2013 Wizards of the Coast.
Champion of the Parish. (c) 2013 Wizards of the Coast.

This past weekend we saw what the Standard metagame looks like after the Pro Tour, at Grand Prix Quebec. A few new successful decks have emerged as options to play in Standard. There are many cards that normally I would be very keen on acquiring based on those decklists, but I feel I should temper my enthusiasm on the cards that happen to be in the preconstructed Gatecrash Event Decks.

Now, I don’t know for sure how much of an impact a card appearing in an Event Deck has on its price, but let’s take a look at some past cards:

Woodland Cemetery was the hot land as Return to Ravnica was nearing its release date. Everyone wanted to play Golgari, which resulted in that land outpacing its brethren in price. However, shortly after the November release of the Return to Ravnica event deck, Woodland Cemetery plummeted in price; it kept on falling, and it’s only been in the last month that it’s stabilized at around $9.

Thragtusk, on the other hand, is a card that proves that being printed in an event deck is not the death knell for its price. Indeed, this card was actually printed in two event decks (M13’s Repeat Performance, along with Ravnica’s Creep and Conquer), and still held steady at $25 until recently. It wasn’t until Thragtusk was reprinted yet again in a third event deck (Gatecrash’s Thrive and Thrash), that its price fell to its current $15. However, I attribute its resilient price to the factors that it was just that dominant in Standard at the time, along with not as many M13 packs being opened compared to other non-base sets.

Now, with all that information in mind, let’s take a look at a couple of cards that did well over the weekend, but were also printed in a Gatecrash Event Deck.

Based on the results from both last weekend, and at the Pro Tour, Champion of the Parish is normally a card I would really want to buy. It was a 4-of in the winning decklist at the pro-tour, and now it also won GP Quebec in a completely different decklist, along with three total decks in that top-8 playing them. Clearly, this is an extremely important card in an aggressive aggro deck.

Champion of the Parish as of Feb 27, 2013
Champion of the Parish as of Feb 27, 2013

In addition, this is near the end of when you can buy Innistrad block cards cheaply, as people are going to start looking for cards from those sets as the Standard PTQ season is approaching very soon. However, I’m a little hesitant to buy in, as even if store are charging more than msrp for those event decks, it’s undeniable that there will be more copies of those cards floating around. Champion is still cheap enough that I may trade for a few copies, but I doubt it will define the format as Thragtusk did, so I don’t think it has a very high ceiling.

Silverblade Paladin is in a similar situation as Champion of the Parish; it appears in the same Event Deck, and is also usually found in the same Standard decks as well. Silverblade Paladin has more casual appeal, as it is the flashier card that can lead to easy blowout wins, but Champion of the Parish is the card that is always played as a 4-of in tournament decks.

Silverblade Paladin as of Feb 27, 2013
Silverblade Paladin as of Feb 27, 2013

One card I would invest in based on this past weekend is Lotleth Troll. Did you know this card has fallen all the way to $2?! This card has just made the top-8 of a GP, and it has historical precedence of doing well too, as it made the top-8 of multiple SCG opens before R/B Zombies became the popular choice. This is still a very strong card that has many relevant abilities, that has simply been searching for a home. I would pick them up now before they find a popular one.

Money Ramp

Monday: Money Ramp with Zack Alvarado

Increasing Sales via Inventory Organization

Strategic pairing can improve both cards' sales appeal.
Strategic pairing can improve both cards’ sales appeal.

Eric Froehlich’s Naya Zoo deck was composed of 83% rare or mythic cards, making his deck a perfect example of how expensive it is to be a tier 1 competitor. Most of the cards he used are expensive from the perspective of most casual players, but not so expensive that they could not afford a few if they really wanted ‘em. It is certainly obvious that most casual players will not be playing decks composed so expensively as Froehlich’s. Despite this fact, many MTG retailers stock their singles space with mythic and chase rares that sell for at least $10 each. The problem here is that this makes the majority of the inventory held by retailers geared toward a minority of the market; it means that there is just no way that they are all going to sell, and that many cards will be left sitting on shelves not producing profit.

So, the question becomes, “How do magic card retailers gear their inventory toward a larger portion of the market? And how do they clear the inventory of mythic and chase rares that they already have?” By giving the average player a reason to buy expensive cards. Casual players will not be filling their decks with high-priced cards. The only expensive cards that these players will be buying are those which work best with more affordable cards. As you may know, pretty much all of the chase rares work extremely well with less expensive cards. The problem is that not everyone else does, and the solution is proper organization of trade/sell binders. For example, a casual player opening a binder is likely to see the first few pages packed with chase rares that he already knows he cannot afford, and, having no reason to buy, flips right past them without even stopping to give them consideration. On the other hand, the casual player may open a binder and see a combo build with cards that he most certainly can afford or may already have.

Let’s say your customer has some Spark Troopers, Cloudshifts, or Duskmantle Guildmages laying around in his extras not really being used; then, he opens your binder and sees a Thragtusk that he doesn’t want to pay for, but instead of being surrounded by other cards that aren’t in his buy range – it’s sitting there, right next to a card he can afford: Cloudshift. Hell, he probably already has a playset. It’s a simple, game changing combo that just fell into his lap. The Thragtusk will immediately become more appealing to the customer, and every other customer who looks at that Thragtusk and realizes the potential power it has if used with a card they already own. It’s the same concept a car salesmen will use when selling an expensive car; but, instead of just being a car – it’s leather upholstery, tinted windows, and all the things that contribute to the desire and/or impulse of owning such a luxurious object.

The MTG salesmen version of leather upholstery and tinted windows are:

In other words – organizing your trade stock in a way that allows customers to realize the potential benefits of chase-rares, in conjunction with easily affordable cards, will increase the appeal of otherwise difficult to sell cards. Instead of letting chase rares sit on shelves, doing nothing other than being drooled at by the occasional customer shuffling by, retailers should be reorganizing their binders and cases in such a fashion that these chase rares become more appealing to customers.

Other good examples of cards that are easily made more appealing are:

So, you get it – now go out there – put the rubber to the road and make some extra cash!
This will conclude my third installment, thank you all for reading.

Money Ramp Weekly Tip: [Pick up tons of Sphinx’s Revelations]

Until next time,

Zack R Alvarado
zackalvarado@gmail.com
Twitter: Rh1zzualo

Common Cents

Thursday: Common Cents with Aaron Dettmann

Sphinx's Revelation. (c) 2013 Wizards of the Coast
Sphinx’s Revelation. (c) 2013 Wizards of the Coast

Pro Tour Gatecrash happened this past weekend, and with it came a bevy of new and exciting Standard decks; and with these new decks come changing card prices and new cards to speculate on. A variety of decks made the top 8, and I’ll take a look at some of the common trends the decks share. The course has been set, so now is the time to be prepared so you aren’t caught unaware of what’s hot, and what’s not, in Standard.

An earlier article by Andrew Smith already covered Boros Reckoner and Falkenrath Aristocrat. I agree with his advice in that column, and thought his analogy comparing Boros Reckoner to Thragtusk was especially apt; both are rares that dominate Standard play, yet will see little use in other formats. Thragtusk peaked at $25 – $30 and stayed there until he was reprinted infinite times in event decks, so Reckoner should remain in that price range as well.

A card I would aggressively trade for is Sphinx’s Revelation. Half the decks in the top 8 of Pro Tour Gatecrash ran Sphinx’s Revelation, for a total of 14 copies. Whenever you see a card that fits into multiple decks that do well, you can expect that card price to go up a lot.

Sphinx's Revelation as of Feb 20, 2013
Sphinx’s Revelation as of Feb 20, 2013

Sphinx’s Revelation has already seen a small price bump since the Pro Tour, but I think it has even more room to grow. Remember, Thragtusk and Boros Reckoner are only rares, yet they reached the $25 – $30 threshold; as a mythic, Sphinx’s Revelation could soar past even that price point. There were only two fewer copies of Sphinx’s Revelation than Boros Reckoner in the top 8, so Sphinx’s Revelation is essentially just as oppressive as the Reckoner.

One card I would sell off as soon as possible is Hellrider. Its price has almost doubled in the past month, with much of the reason being due to Saito tweeting the Gruul and Naya decklists that utilize this card. However, those decks generally did poorly at the Pro Tour, and Hellrider in particular had a very poor showing at the Pro Tour with only one deck playing it in the top 8. There were multiple Jund and other decks in the top 8 that had the option to use this card, but chose to go in a different direction instead.

Hellrider as of Feb 20, 2013
Hellrider as of Feb 20, 2013

Because of the low turnout of this card in the top 8, I expect Hellrider to go back down to the $8 – $10 range that it was at prior to the lead up to the Pro Tour.

One last note for now: Stomping Ground and Sacred Foundry have gone up to $20 at Starcity, so be aware that they’re currently worth $5 more than the other Gatecrash shocklands. If you don’t need them immediately for a deck, these two lands are also cards I would sell right away, as once supply increases, I fully expect them to fall in line with the $8 – $12 price point of the Ravnica lands.

MAGIC: THE GATHERING FINANCE ARTICLES AND COMMUNITY