Tag Archives: Sigmund Ausfresser

ProTrader, Sigmund Ausfresser, Unlocked ProTrader

UNLOCKED PROTRADER: A New World of Arbitrage

6 Comments

In recent weeks I’ve dwelt on general finance strategy as we navigate this turbulent Modern season. I suggested trading out of Modern staples as they spike and acquiring some higher end, safer MTG investments. I also touched upon my emotional rationale for abandoning Modern – at least in the short term – to move into a format I am more excited to play.

I had planned on writing an even more bearish article about Modern this week. In fact, I was planning on making the bold claim that Modern was at a local “top.” Prices are destined to fall from here, right?

Except that MTG Price writer Travis Allen already did this. Right here. For your convenience, here’s the excerpt I’m most interested in:

 “…while conventional wisdom seems to be that competitive seasons cause price movement, our evidence from last year doesn’t support that, and neither does the evidence this year. Last year, it seems that all of the spikes happened ahead of a GP, and then either remained stagnant or even fell after the fact. This year, we’ve seen a truckload of price spikes…

What’s our takeaway, then? Well, if history is any indiciation, it’s that we’re sitting at the top of the market right now. Modern staples will generally remain stagnant or even decrease in the next four months.”

YES. Very yes. I applaud Travis for sharing his bold and potentially unpopular opinion that Modern has topped. Frankly, I couldn’t agree more.

Now What?

Let’s assume you’ll consider what Travis has said, and that you’ll sell a lot of your recently inflated Modern staples. You know the ones I’m referring to: your $90 Snapcaster Mages, $50 Blood Moons, $15 Serum Visions, and $5 Lantern of Insights.

Visions

The decision to sell cards like these would generate a sizable cash position. So what do you do with all these newfound profits? Sitting on cash seems miserable, so there must be a better place to park resources right?

Well, you could try and acquire Modern staples which haven’t spiked yet. I can think of a few viable examples: consider Tendo Ice Bridge, which is already practically sold out across the internet (Disclaimer: I have 1 copy listed for sale at an artificially high price in case this spikes).

Tendo

Worldspine Wurm is another example. The card was a four-of next to Nourishing Shoal in the creative reconfiguration of the Goryo’s Vengeance strategy.  While Shoal went from $0.75 to $15, the Wurm barely moved a muscle. Guess which one is likely to have more casual appeal, by the way.

Wurm

Despite these and a few other ideas, I don’t believe Modern is where you want to invest your recent profits. Even if these ideas do move higher, they’ll be facing headwinds all summer as the format quiets down. Better opportunities exist. I can think of lower risk propositions with immediate upside potential. In fact I can think of a number of ways you could apply some capital and generate immediate returns even by buy listing, and it doesn’t require collection buying.

It’s All About the Benjamins

I enjoy relating MTG Finance to stock market investing. I detect many parallels between the two, despite some dissonant opinions amongst the community. At last, this knowledge may provide actionable benefit. It all relates back to the strong US Dollar.

Actually, strong is an understatement. CNBC icon Jim Cramer prefers to refer to our currency as the “Super Freakin’ Strong Dollar”. As ridiculous as that sounds, it’s probably a more accurate statement. Here’s why:

USD

Since mid-2013, the US Dollar has been on an absolute tear jumping in value by 15-20%. This, paired with recent weakness in the Euro, has led to some very favorable exchange rates for the arbitrage seeker.

The result: cards – especially high end cards – for sale in international markets are now more attractively priced. While the US Dollar has pulled back from its highs a few months ago, those in the U.S. still have a clear advantage.

I have a couple specific examples I can share.

First, if you have a friend you can trust in Europe then I’d highly encourage you to explore Magic Card Market (www.magiccardmarket.eu). Through a quick search, I readily found an arbitrage opportunity with Beta Scrublands.

Scrub

One seller has a NM copy listed at 599 euros ($680 USD). If truly Near Mint, Star City Games will buy that same card from you for $900. Card Kingdom would even pay $910. I’m confident there are many other opportunities on the site if you’re willing to spend some time searching. I’d recommend looking at other high end staples such as these.

Don’t have a friend in Europe? No problem! Today your US Dollar can purchase more Japanese Yen than any time since 2011!

Yen

The implications to this are huge, if you are willing to buy from Japanese vendors. The good news is many Japanese vendors will ship directly to the U.S. One site I would immediately trust is Saito’s digital store front, http://www.hareruyamtg.com/en/.

Again I would recommend browsing some high-end cards, though I suspect with the currency conversion so favorable there are numerous opportunities across all formats. Through a recent search, I found a sweet arbitrage opportunity:

Lions

Using the exchange rate Hareruya generously provides, you can purchase an Alpha Savannah Lions for $123 + shipping. Channel Fireball is paying $125 for the same card, and Card Kingdom is paying even more: $135. In this particular example no immediate opportunity exists. Shipping will cause this deal to fall short of immediate profit (though I have requested scans of the card – it truly looks Near Mint). But there is a right to succeed here. I know of a few other solid opportunities on this same site by simply running searches. Putting together a larger purchase could help you overcome shipping costs, enabling arbitrage or, at the very least, very good deals!

Final Thoughts on Arbitrage

I must acknowledge this article is highly geared toward the US investor. In reality, there are opportunities for everyone to get involved. People in Europe can engage with those in the U.S. to help identify opportunities in the European market. The same goes for those in Asia who have access to the Japanese market. We can all work together and benefit from the gap that exists across continents.

I would also be remiss if I didn’t at least briefly touch on the risks associated with this endeavor. Shipping costs and condition are a huge factor – it’s not cheap to move cards over oceans, especially in quantity. And although a picture is worth a thousand words, it could also cost you a thousand dollars if it’s not high enough quality, causing you to mis-grade a card before buying. There are also currency conversion fees you need to consider. These are all powerful reasons for why opportunities are still aplenty. The risk is sizable and real. But so are the opportunities.

And if international deals aren’t your forte, consider some local “arbitrage” opportunities. High end cards can be very difficult to price correctly if you’re not heavily involved in this space. By searching one of the billion MTG Facebook groups, you may come across a steal.

FB

A friend directed me to a particular Facebook group focused solely on “sick deals”. That’s right – you can’t list a card for sale in that group unless you’re at least 10% below eBay / TCG low pricing.

sick deals

If you don’t like international orders and you don’t like Facebook, I have one last idea of how you can find attractive deals. I have one word for you: misspellings.

Check out the website www.fatfingers.co.uk. This website allows you to search every country’s eBay site for common misspellings of eBay listings. I was skeptical at first, until I tried it out. Believe me when I say, this site works.

Taiga

These Taiga prices may not be the most attractive, especially given their poor condition, but the proof of concept is still there. Notice how both these listings currently have 0 bids? That’s probably because only a handful of people have actually seen these listings. If nothing else, the site can be very entertaining – you’d be amazed at the many ways some of these Magic cards can be misspelled!

Wrapping It Up

With spring’s Modern GP behind us, perhaps we are once again seeing a peak in Modern staples. If this is true, the time to sell could be right now. I have been moving out of Modern very actively in recent weeks, putting my money into older, more stable cards. If history repeats itself, we could see a price bump on stuff like Dual Lands and Legacy staples later this summer or early fall. And even if we don’t see a sudden spike, these are still very solid cards to park your money. You could do much worse with your recent profits.

If you feel like trying something new, give a gander to the websites I mentioned above. The strong US Dollar can drive some very attractive deals on international sites – especially in Europe and Japan where currencies are particularly weak. While I haven’t pulled the trigger just yet on these opportunities, I have been watching them closely in recent weeks. Once I accrue some additional capital I just may make my move.

Just proceed cautiously, as there are risks associated with buying internationally. Fortunately those risks can be reduced by placing larger purchases to overcome shipping costs, and asking for card scans before buying. Using common sense, you should be able to navigate the pitfalls of international buying, leading you to profitable arbitrage opportunities. At the very least, consider international shops (even just north of us in Canada) when looking for attractive prices driven by currency exchange.

And if you insist on staying domestic, give the Facebook groups a try. You never know what deals you may discover.

…

Sig’s Quick Hits

  • I’m not kidding when I say Tendo Ice Bridge is all but sold out on the internet. I see 3 copies on TCG Player and a couple on eBay and not much else. Star City Games is currently sold out at $5.85 but I suspect they’ll relist higher when they do get more copies in stock.
  • Wurmcoil Engine’s price took a hit when it appeared in a Commander product. But since bottoming out last winter, the artifact creature has steadily risen. Star City Games is sold out of nonfoil copies of the card. That $15.35 price tag could approach $20 before the summer is over, especially if Tron remains popular in Modern.
  • I’m going to go out on a limb here. A while back I noticed SCG was frequently sold out of Power. Every time they would get a Mox in, the card would sold quickly thereafter. Then Star City Games shook the entire Power 9 market by bumping their buy prices up significantly. Since then Power has stuck at a much higher price than before. I’m noticing a very similar trend on A/B Dual Lands. They have almost none in stock, despite their already aggressive buy prices. It would not surprise me to see them move the entire market on A/B Duals in the next 6 months should this trend continue.
ProTrader, Sigmund Ausfresser, Unlocked ProTrader

UNLOCKED PROTRADER: Lessons Learned from GP Vegas

2 Comments

Two hours.

That’s the buffer someone important recommends when flying domestically. Being a classic rule-follower, I tend to adhere to such recommendations. Therefore, when my flight leaving Grand Prix Las Vegas was set for 9:10am, you could have bet the farm that I’d be walking through security at around 7.

That left me with two hours to reflect on my trip to the largest Magic event of all time while sitting at my gate in McCarran International Airport. But rather than thinking through my sick draws and tough beats throughout the event, I found my mind drifting more towards the financial lessons I learned while there. These lessons shaped my entire experience and have made me a much better financier.

I could spend this week writing about my performance in the main event, but doing so would mean an incredibly short article. As it turns out, I was one of the many hundred players who dropped before the event really got going. I wasn’t eager to battle in one event all weekend – I simply had too many other priorities planned. So when my sealed pool contained a foil Cryptic Command and a nonfoil Elesh Norn, I immediately decided to drop. Did I extract 100% of what I paid to enter the event? Close, but probably not. Did I make the right decision in dropping, allowing me to explore a number of other engagements and discussions? Absolutely.

Foil Cryptic

Luckily the story of my main event participation is already over. Now I can focus on the important stuff. This week my hope is to document the tidbits I learned about MTG Finance & negotiation so that you and I can benefit when participating in future events.

Top Objectives for GP Vegas

Heading into the event, I had mentally listed out three primary goals and a number of secondary ones.

– Objective 1a: Purge as much MTG inventory as possible, leveraging top buy prices online and TCG Low to ensure profitable sales were made.

– Objective 1b: Network network network by connecting with as many Twitter people I follow as possible.

– Objective 1c: Acquire some Old School MTG cards (aka 93/94) to begin building a deck for this incredible format, preferably at good prices.

– Other Objectives: Play in some side events, do a little gambling, watch some hockey, etc.

I thoroughly prepared for this event by looking up the top buy prices of all my cards and tabulating the data alongside TCG Low pricing. Doing so ensured I would be selling to a given vendor near the top range of buy prices, extracting as much value from my collection as possible. This strategy yielded tremendous success as I managed to buy list nearly everything I wanted to at target pricing. In many cases I was even able to negotiate with vendors by highlighting their competitors’ buy prices. Paul Feudo (@plfeudo), buyer for MTG Deals, deserves special thanks for his openness to negotiation and for buying nearly all of my Shock Lands at top dollar.

Fountain

My advanced networking with Twitter people also paid tremendous dividends. I met so many new people in the MTG community; I can’t fathom listing them all. By keeping engaged with Twitter throughout the event, I had many opportune meet-ups with some of my favorite Magic players. Highlights included the Friday lunch coordinated by the MTG Finance community, watching hockey and grabbing dinner with Andrew Magrini (@A_Magrini) Friday night, Saturday evening with a group of awesome people, Saturday drafting with Kaesi Corne (@GirlOnNerds), and Sunday drafting with MTGPrice’s own Corbin Hosler (@Chosler88).

Two Out of Three Ain’t Bad

My preparedness for objectives 1a and 1b was top notch, enabling me to accomplish both goals with impressive results. I met a ton of people and I sold a ton of cards at solid prices. Check!

This is around where Vegas luck had to kick in, because my preparations for acquiring old school cards were severely lacking. Sure, I looked up prices on a few cards I was eager to acquire.  But my research was insufficient. Guardian Beast was towards the top of my want list, but I hadn’t realized how few copies would be for sale at the event. What condition was I okay with? What was I prepared to pay for a Chaos Orb? How good of a deal would I need on a Mox in order to pull the trigger? Who had the lowest prices on Juzam Djinn?

GUardian Beast

Sadly I had no definitive answers to these questions. So when faced with certain decisions – especially ones which were not obvious win/lose situations – I hesitated. Such hesitation nearly cost me some very attractive deals.

For example, I was alerted to one vendor’s favorable buy prices on moderately played dual lands by @LengthyXemit. They were offering around $125 on Tropical Islands, $160 on Volcanic Islands, and $180 on Underground Seas. Prices even went higher from there for SP copies!

Trop

This left me with a new question I hadn’t prepared for in advance: am I willing to sell my duals at roughly TCG Low minus 10% to free up cash and acquire some larger old school cards I wanted? After sleeping on the prospect I decided to pull the trigger.

The selling part was easy – I had TCG Player open, comparing quoted prices to what vendors had listed for sale. Most prices checked out.

Armed with the resources necessary, I hopped from booth to booth browsing high end cards in the hopes of finding a deal. I could not have been more unprepared for this shopping experience. Prices on high end cards are highly condition-dependent, and I hadn’t done any advance research to prepare for such a purchase. Completely lost, I reached out to Xemit for his guidance.

He connected me with one particular vendor. Through open discussion, the contact mentioned to me his eagerness to sell some high end staples in order to raise some much-needed funds. Turns out they ran out of cash early in the event! I subtly indicated I’d be willing to pay cash if the price was right.

We didn’t haggle long – he gave me his best price on a key card I was after. What DID take too long was my hesitancy. I sat there hemming and hawing, unsure if the offered price was truly the best. I began second guessing myself, and the vendor nearly lost patience with me as I asked him to take cards out of my binder to act as credit towards the purchase. Luckily Xemit stepped in and highlighted to me other vendors’ buy prices for the card in question. That was all the convincing I needed, and I was fortunate to pull the trigger just moments before the vendor changed his mind.

That same day I serendipitously stopped by the Aether Games booth to say hi at precisely the right time. They had just picked up an HP Juzam Djinn, which they knew I was after throughout the event. The offer Kyle (@itsyourboyLOPE) made was highly attractive, but once again I felt ill-prepared. My hesitation nearly cost me again! Xemit was nearby, and he confidently stated he would make the purchase if I wouldn’t. Fortunately I didn’t give him the chance, as I paid up almost immediately after he made the statement.

Juzam

You’d think these two experiences taught me the lesson – indecisiveness is a major turn-off to vendors who are incredibly busy buying and selling at the largest Magic event of all time. Unfortunately, my thick-headedness required a third such experience before I would absorb the information.

Once again Kyle Lopez of Aether Games came across some nostalgic cards I was after. Only this time I walked by while Kyle was in the process of buying the cards I wanted.

Commence awkwardness.

Kyle looked up the two cards in question – an HP Chaos Orb and a Tawnos’s Coffin, and he made a simultaneous offer. He offered a given price to buy the cards from the seller, and then offered to sell me both copies for about $10 more in total. My hesitation nearly killed Kyle. Not only was it unprofessional for me to remain indecisive, but it also incorrectly reflected a lack of appreciation on my part. Kyle was doing me a favor that no other vendors in the room would probably consider, and I didn’t have the knowledge to make a call promptly.

With time nearly expired in Kyle’s mental clock, I was fortunate to come to my senses. A quick head-nod, and I became the proud owner of two 93/94 cards at just a few bucks over buylist. Xemit didn’t have to scold me as we walked away (although he did) – I was already scolding myself plenty.

Old Dog and New Tricks

Fortunately I did not make the same mistake a fourth time. I finally learned the power of decisiveness and I wasn’t about to forfeit the knowledge so soon. Sunday night as the event neared a close, I managed to acquire a final high-end card for a favorable price. I obtained the favorable deal by making a decisive offer and stating I was ready to pay cash should the vendor accept. They hesitated a moment, but ultimately gave me the deal! I was elated! Confidence does matter and it can play a huge role when negotiating deals with vendors.  We are emotional beings, and we tend to look favorably upon people who exude confidence – something I had lacked throughout most the event.

While I was selling cards, I was fully prepared. Listing all my cards out along with their top buy prices in advance meant I could confidently negotiate and seek out top dollar from vendors. But my research ended there, leaving me weak-handed at the table when negotiating to purchase the cards I was after.

It took me a while to learn this lesson, but I finally got there after a few near-misses. It turns out you can teach this old dog some new tricks.

Wrapping it Up

Grand Prix Vegas was a tremendously valuable experience, educating me on a number of important MTG Finance matters. Next time I attend a major event such as this one, I’ll make sure to do far more advanced research on the buying side. A lack of preparation nearly cost me a number of attractive deals. Given my indecisive nature, I need to go above and beyond what the average person may do when planning out a buying strategy.

I also picked up other tidbits of useful info. I learned that Zendikar basics are buy listing for as much as $0.75 each now (I cashed out of mine in advance of their potential re-appearance in Battle for Zendikar). I learned which vendors paid well on small-scale casual cards (CoolStuffInc) and which vendors paid aggressively well on obscure foils (Tales of Adventure). Some vendors were highly approachable, while others remained cold and unmoving when it came to negotiation. All of these observations have made me a stronger MTG financier.

And even though I never played in the main event, I could not have been happier with the decisions I made. All that free time enabled me to focus on each of my objectives, primary and secondary. Despite a few hiccups along the way, I managed to accomplish each and every one with time to spare!

I even managed to participate in three MM2015 drafts, where I found occasional success. I am usually horrible in Limited formats, but perhaps MM2015 is one draft format where I sort-of know what I’m doing.

Overall it was a terrific experience and I am very glad I attended. And now I look forward to the next opportunity, where I can apply and sharpen my newly learned skills and strategies, making me an even stronger negotiator and MTG financier. Hopefully after reading this column you’ll also be even more prepared to take advantage of on-site deals by learning from my mistakes.

Sig’s Quick Hits

  • A number of the most successful Modern decks in last weekend’s SCG Invitational contained some number of Tasigur, the Golden Fang. I believe this creature will steadily see more play in Modern, driving his price higher as we approach Standard rotation. But I still prefer foils. Star City Games is currently sold out of set foils with a $29.99 price tag. The foil has around a 4x multiplier, and an increase in the nonfoil could lead to a magnified effect on foils.
  • Amulet Bloom was a highly successful deck during the same event. A few cards from the deck are likely to remain premium pricing, including Summoner’s Pact. SCG has just a couple copies in stock, with NM copies retailing for $14.99. This could be the next $20 pact if it continues to see play as a 4-of in Modern.
  • I’ve noticed Arcbound Ravager gaining some price traction in recent days. The rare dodged reprint in MM2015, and now Star City Games has less than a dozen nonfoil copies in stock. Their NM price is $21.45, but if they sell out completely I could see this tick higher in the coming months.
ProTrader, Sigmund Ausfresser, Unlocked ProTrader

UNLOCKED PROTRADER: MM2015 — The Unofficial MTG Stimulus

13 Comments

As a response to the Great Recession of Wall Street, the Federal Reserve initiated a multitude of stimulus programs. They initiated a massive bond buying program and they lowered interest rates to virtually zero. These two actions were done in an attempt to stimulate our economy and drive healthy motivation for investment in stocks.

The jury is still out on how sustainable the program was (is). Some dissenters will likely criticize the stimuli for years to come no matter the outcome. But regardless of what your political leaning may be, the resulting market performance since is impossible to argue with.

SPY

Turning back to MTG finance, one could argue that some particular cards have also been going through some economic turbulence. Original dual lands come to mind immediately – especially the out-of-favor color combinations. Other Legacy staples have also pulled off their recent highs by a measurable amount. Some Modern staples have also spiked recently, only to retreat to a lower price point.

 

Azusa

What’s to become of this developing trend? Could Magic be due for a Great Recession type of pullback?

Certainly not. The game is as healthy as ever. In fact, this week I present a new thesis that supports a new surge in some card prices. Allow me to explain.

Modern Masters 2015

Who’s excited for the release of one of the highest EV sets upon release of all time? Who’s pumped up to participate in or watch the largest MTG tournaments ever? Who’s eager to draft this set, which will definitely be a Limited crowd-pleaser?

No matter your perspective, it’s difficult to argue with the hype behind Modern Masters 2015. Even if you are a complete skeptic, dripping with disdain for some of the wasted rare slots in the set (Endrek Sahr, Master Breeder?!), you’re likely excited about the future prospects of the cards that dodged reprint this set. Speculators have been very busy lately…

Interests

Six of the top ten price gainers last week were Modern cards that dodged MM2015 reprint. The Tron lands were noteworthy absences, and clearly Inkmoth Nexus and Serum Visions are strong buys on the news. Or at least, they were strong buys before the market overreacted, sending copies up excessively high overnight.

My conclusion for Modern Masters 2015: while I’m personally not ecstatic to be opening $10 packs with a high likelihood of obtaining a sub-$1 rare, the swirl this set is generating amongst the MTG finance community is nearly tangible. I’m delighted to witness hours of debate on Twitter about card prices. The buzz should continue through GP Vegas without a hitch.

If ever there was a time to engage in MTG speculation and finance, now would be it. And with the return of a Modern PTQ season, we’ve got even more reason to get excited about Modern.

MTG Stimulus: Part 1

When the Federal Reserve bought up many billions of dollars of bonds, they infused a large amount of cash into the economy. Then they reduced rates so low that there was practically no good place to park money other than into investments. The result: a rapid decline in unemployment and multiple years of double-digit gains in the stock market.

Turning back to Magic, we need to recognize how tentative people were with buying into Modern with the knowledge that a massive reprint set was on the horizon. It’s always a feel-bad when we buy cards only to watch them tank in price due to reprinting. Therefore, I suspect players and speculators held cash on the sidelines waiting for Modern Masters 2015 to be fully spoiled. Only then would there be high confidence in which targets would be safe to buy into.

Well, last Friday we received the complete spoiler from WOTC. Various absent cards created quite the surprise – namely, Tron lands, Serum Visions, Aven Mindcensor, Blood Moon, Inquisition of Kozilek, Azusa, Inkmoth Nexus, and more. It’s no surprise that many of these cards are on the move as players and speculators acquire copies for the upcoming Modern season.

Inkmoth

In rapid-fire fashion, everyone is infusing cash into the MTG economy as they scoop up copies of the “safe” cards. This pseudo-stimulus is a combination of self-fulfilling prophecy and pent-up demand. Now that speculators know what cards are likely to further increase in value, they can invest with confidence. After all, what better place was there to invest funds than something like Inkmoth Nexus once we were certain it wasn’t in MM2015?

Now Inkmoth Nexus is a $20 card, and it will likely climb higher in the coming months. As speculators cash out on the movement they’ll have additional funds with which to work. What are they going to do with all their newfound profits?

MTG Stimulus: Part 2

I’ve got a couple ideas of where this money will go. First of all, there will likely be some great buy opportunities on my radar once MM2015 hits the market: namely, the popular reprinted cards. The Modern staples of the set are likely to sell off a bit in the coming weeks, due to both panic and the increased supply. The same thing happened with MMA on a card like Cryptic Command.

Cryptic

Modern demand sent this card up to around $45 in Spring 2013, but the MMA reprint caused a rapid decline back to the $30 mark. But about eight months after the sell-off, Cryptic Command rebounded like never before, shooting up to $70.

Now once again, we’re seeing a rapid sell-off. The blue instant is already back down to $50, with momentum suggesting this could go even lower. But this begs the question: will history repeat itself? Will Modern grow in popularity even more, sending Cryptic’s price right back up to new highs in eight months? It’s certainly not impossible, and I’d wager this was WOTC’s plan. They are hoping to support and stimulate interest in the Modern format with these Modern Masters sets, and time will tell how successful they will be with round two.

Either way the reprinted cards in MM2015 are bound to sell off, but eventually they’ll bottom. When that happens, we as speculators should recognize the buying opportunity screaming at us. And with their newly-minted coin from the recent movement in non-reprinted cards, they’ll buoy the MTG economy into these headwinds.

If you’re not bullish on the Modern format, or if you’re concerned about further reprints in other sets, I have some good news. MM2015 reprints aren’t the only solid buys once the dust settles.

As players discover their Inkmoth Nexus and Serum Visions are suddenly worth a bunch more, they’ll be likely to sell/trade excess copies away. Additionally, [lucky] players will suddenly come into all kinds of money when they pull Goyfs, Cliques, and Bobs in their MM2015 packs, not to mention a lineup of Eldrazi. What will the lucky ones do with their valuable pulls?

While it’s true some players will determine that opening a Goyf is the perfect motivator to sleeve up Abzan Midrange in Modern, I suspect many others will be cashing out of their valuable pulls. After all, if we are assuming the Modern Masters 2015 reprints are likely to lower prices, that means the market must see increased supply. That’s natural supply & demand logic – for the price to drop, demand must drop (not likely) or supply must rise. If supply is rising, that must mean people are selling more copies. Likely this will mean their newly-opened copies…after the initial panic, such as what we’re seeing in charts like Cryptic Command and Noble Hierarch.

Hierarch

As players cash out of their Modern staples, what do you think they’ll look to buy? I saw a well-phrased tweet last weekend from an individual I have high respect for in the MTG finance community.

Tweet

I can’t vouch for Pucatrade specifically, but I condone his overall strategy 100%. Judging by all the favorites this tweet received, I can tell we’re not alone in this sentiment. Moving high-dollar Modern cards into equities on the Reserved List is a brilliant strategy. You’re basically capitalizing on short-term price fluctuations in the Modern market by moving into cards that will never see reprint again. Even if Inkmoth Nexus does rise to $30 during Modern season, we know it will see reprint eventually, right?

Meanwhile, Tropical Island will never see reprint.

Trop

This particular dual land has been out of favor for months now, but perhaps the recent stimulus of MM2015 is just the catalyst needed for movement. Although not on the Reserve List, Wasteland is another Legacy staple that could use some stimulus – the Nonbasic land has stumbled over 50% from its highs.

If high-end Legacy staples aren’t your forte, then picking up other Reserve List cards may be a more optimal strategy. We just saw Ragnar jump in price on Tiny Leaders speculation; why not grab a couple Lady Evangela? I hope to in Vegas, in fact. Or better yet, pick up a couple Old Man of the Seas (Old Men of the Sea?). These have been gaining traction lately. I even see casual stuff like Divine Intervention and Island of Wak-Wak show up on the MTGStocks Interests page on occasion. Not only is this on the Reserve List, there’s really nothing else like it. I have a sneaking suspicion Wizards will never again print a card that forces the game to end in a draw. And what casual Reserve List discussion is complete without mention of my favorite Magic card of all time, Shahrazad?

Shahrazad

You’ll never see a sudden buyout of this card, but it’s worth noting how the top buy list price has gradually been on the rise for the last 2 years.

No matter your personal preference, moving out of spiking Modern cards or recently-opened MM2015 goodies and into Reserve List favorites is a tried-and-true strategy I recommend. It’s a great way to lock in profits and reduce risk at the same time.

Wrapping It Up

A significant amount of money is going to exchange hands this summer. Speculators will rampantly acquire non-reprinted Modern cards. Players will be opening high-dollar cards left and right. This will lead to a sudden surge of value in the MTG economy – a type of stimulus.

My prediction: this stimulus will be just what the MTG economy needed for the past few months. Modern interest will jump and demand for Legacy and casual staples will go higher as well. If you want to get ahead of the curve, consider moving into cards on the Reserve List now, as Xemit suggested. I’ve provided a few sound suggestions, and I’m sure there are many others worth considering.

The tide will rise once more, lifting all ships. Therefore it is a great time to have exposure to MTG assets. My portfolio is currently the largest it has been since I sold out of Legacy over two years ago, and I look forward to seeing my holdings appreciate in value in the coming months thanks to this unofficial stimulus.

…

Sig’s Quick Hits

  • If you have a large quantity of Modern stuff to move, one sound acquisition target is Bazaar of Baghdad. In fact in the last couple weeks Star City Games increased their price on the Vintage staple from $399.99 to $449.99 for NM copies. It’s a steep price of entry, but you can be confident in this long-term investment’s prospects should MTG continue to grow.
  • One Modern/Legacy card that is not seeing nearly enough buzz is Slaughter Pact. The card managed to dodge reprint in MM2015 (unlike in MMA), meaning we’re not getting any new supply of this rare. Every time I search for the card on SCG’s site, it is out of stock. Today is no exception, and the $10 price tag is almost guaranteed to rise as we head into Modern season.
  • Lion’s Eye Diamond gets very little buzz in the MTG finance community, but the Reserve List card has been a Legacy staple for years. Currently SCG is sold out of this one as well, with a NM price tag of $86.29. There are probably a few more exciting pick-ups to target with newfound profits, but no one can argue with the low risk of LED. The card is off its highs much like other Legacy staples, and this stimulus could help rekindle interest.
ProTrader, Sigmund Ausfresser, Unlocked ProTrader

UNLOCKED PROTRADER: Advanced Economics and MTG Finance – Part 2

16 Comments

Polling is closed and results are in. I am delighted to report that despite the fact that my article last week was untraditional and lacked money-making insights, the majority of readers commented their desire to read part two! This is an encouraging result for me because I truly have passion for this field of exploration. Combining MTG finance, real life finance (“RL Finance”), and economic theory is a niche area that really invigorates me. Glad I’m not alone.

So without further ado, I’ll dive into the second installment of advanced economics and MTG finance.

Where We Left Off

My recap of last week’s column will be brief. If you wish to explore the full background I encourage you to read the piece in full before proceeding to this one.

In last week’s article I introduced the field of Game Theory and explained why I felt Magic card buyouts were an example of a “game”. Then using certain assumptions I concluded that the outcome of the Magic buyout game is comparable to the typical outcome of the Prisoner’s Dilemma. Even though there is a strictly better outcome for the entire population, a non-ideal conclusion is reached due to everyone’s (understandably) selfish motivation to maximize profits.

Despite any efforts we as a community take to combat this phenomenon, I call almost guarantee that the suboptimal outcome will always be reached. Buyouts will continue to occur rapidly leading to a temporary, artificially-high price. This will result in some players overpaying for their copies and other players unable/unwilling to purchase copies at the new, elevated price. A few speculators who bought cheap copies may be able to out some for profit, but the net value across everyone involved isn’t optimal. It would be more favorable if everyone cooperated – purchasing only the copies they needed and encouraging others to do the same – mitigating price spikes and enabling slow, healthy price appreciation.

I used the term “healthy” to describe price appreciation that doesn’t reflect buyouts because gradual, natural price growth is often more sustainable. Many casual cards not dwelt on in Twitter chatter fit this mold. Corbin recently wrote a terrific piece describing why he likes casual play and its effect on finance. This would be one of my favorite aspects; namely the gradual increase in prices driven by natural supply and demand shifts.   Avacyn, Angel of Hope comes to mind as a perfect example – the price chart shows a monotonic increase in price over years of time.

Avacyn

On the other hand we have Ragnar, a different kind of casual card that was suddenly bought out on the internet on Tiny Leaders speculation. The result: a $6 card is now a $30 card and players interested in picking this guy up for Tiny Leaders are now stuck between a rock and a hard place. Either pay way too much for a card with very narrow utility or sit on the sidelines and wait.

Ragnar

I don’t think I need to provide any further explanation as to why Avacyn’s price increase will be sustainable and continue further (until she’s reprinted). The jury is still out on Ragnar, however. His price certainly won’t tank – the card is too old and it’s on the Reserved List. But I’m not quite sure players are going to want to pay $30 for him, either. There are certainly other Bant options for Tiny Leaders. I suspect his price drops back down to the $20 range in the next couple weeks, as copies slowly trickle back into the market.

If you want a recommendation here, go buy Jenara, Asura of War. She’s a far better Bant general for Tiny Leaders and she hasn’t been forcibly bought out. Instead, the Bant angel continues to steadily appreciate in price. Barring reprint, she will continue to become more and more expensive as players and angel collectors alike seek out their copy. No one is buying this card out, so you can trust that the higher price is sustainable.

Jenara

Application 2: Where You Buy

Let’s assume for a moment that you want to play the buyout game. You’ve decided you like the Ragnar spec because there are just so few copies in existence and the artwork is too cool to ignore. You notice the buyout is happening and you decide to act.

What do you do next? Likely you navigate to a well-known website like TCG Player or eBay and buy some copies…you and everyone else. Motivations for using these large sites vary. Some like the large selection and array of sellers. Others simply like TCG Player because they want their purchases to move the market (via mtgstocks.com).

But do you know what happens when many people flock to the same location to purchase their copies of a card? In Prisoner’s Dilemma style, people steal cards out of each other’s cart and cause that artificial price spike. Latecomers could potentially blindly overpay for their copies because of their assumptions that TCG Player (or eBay) is the best place to buy cards. Star City Games, Channel Fireball, and other major retailers also sell out quickly during these buyouts, but at least they go “out of stock” so you don’t end up overpaying.

This is where an advanced economic analysis could be beneficial. Because everyone is prone to “defect” and purchase many copies of a card during a buy out, the price artificially jumps. But do you ever notice that TCG Player is often where a card’s price jumps first? It’s naturally one of the first places most people go.

It’s comparable to a mad dash through a doorway into a room – everyone pushes and shoves their way through, causing significant discomfort with a few unhappy stragglers in the back. What would happen if some people would stop shoving in the largest, most heavily used doorway and instead walked around to the side doors? Those side doors would have far less traffic, making the experience much more enjoyable and less competitive.

Moving back to MTG, this would be comparable to purchasing a hot card from a less-popular website. How many times have you visited ABU Games upon discovery of a new buyout taking place (like during a Pro Tour)? How many people have shopped from Ideal808.com before? Who first visits Cardshark.com, Amazon.com or even Coolstuffinc.com before trying eBay and TCG Player?

I find I have the highest success buying from sites that do NOT use TCG Player as an alternate way to sell cards. Channel Fireball usually sells out with the rest of them because they also sell on eBay. The same is true for Troll and Toad. But ABU Games doesn’t list many cards on eBay or TCG Player, so they often have cards in stock hours or even days after a buyout. Because everyone is so fixated on the most popular sites, these smaller players have copies that remain after a buyout. By walking into the metaphorical room through a less popular side door, you can still get inside the room without any jostling. This is truly the optimal outcome.

And this is the key application of the Prisoner’s Dilemma to MTG Finance. It was my primary motivation for writing on this subject in the first place. By “cooperating” and visiting diverse sites when purchasing cards we can mitigate artificial hype and price spikes. What’s more, we’re more likely to grab the copies we want near the “old” price!

Knowledge is Power

You may be left wondering if this is truly practical advice. You may be thinking “this sounds logical in theory, but it would never work in practice.”

I have plenty of examples that prove that application of this knowledge can lead to profits. I’ll share three.

Example 1) A few weeks ago there was a mad dash on Foil Teferi’s Response. The card was bought out all over the internet, and the only copies still available for sale on TCG Player and eBay were in the $20 range. I sifted through various sites hoping to find copies at the “old” price. I was in luck.

Order1

ABU Games still had a few copies for sale, and although they were all played the price was too good to pass up. I pulled the trigger.

Was I able to out these for profit? Indeed. I sold one copy to a friend on Twitter and two copies on eBay. But do you want to know the best out for the remaining copies? I buy listed them right back to ABU Games again…for twice what I paid them!

Order2

Example 2) I suppose I should have seen Ragnar’s buyout coming, because it mirrors the earlier buyout of Tetsuo Umezawa almost perfectly.

Tetsuo

The Legends rare suddenly jumped from $20 to $40 and then $50, likely due to more Tiny Leaders speculation. Rather than rush to TCG Player and buy copies there, I first went to one of my favorite go-to sites: Card Shark. I was in luck.

Order3

I grabbed these two copies the day after the card already spiked and proceeded to sell them on eBay as soon as they arrived. Shopping at less popular sites led to easy profit.

Example 3) The jury is still out on my most recent example, but I am confident this will pay out. Every day I visit mtgstocks.com to view the most active price movers in Magic. And recently the site added a new, foil Interests page. Last week’s foil Interests page looked like this:

Interests

Noticing the sudden jump in foil Pride of the Clouds and foil Fumiko the Lowblood, I did my usual, thorough search. Once again I struck gold.

Order4

It seems yet again ABU Games was forgotten in these buyouts, allowing me to casually visit the site, add copies to my cart, and make the purchase. I am confident I will be able to sell these for profit in the near future – if anything, ABU Games may up their buy price enough so that I can sell these back to them again.

Wrapping It Up

Game Theory is a powerful field. It predicts so many phenomena in real life, such as nuclear arms races and advertising. It predicts defection when cooperation would be the optimal strategy. Magic: the Gathering finance is not immune to the theory. Buy outs in particular are exercises of the Prisoner’s Dilemma, whereby people rush to buy copies from popular sites, causing unnecessary price jumps. Those too late to the game either overpay for their copies or sit on the sideline frustrated with their inaction.

But there is one way we can “cooperate” and avoid the hassle of the buyout. By searching less popular sites, we are afforded extra time to obtain our copies without the mad dash for profits. Let everyone else rush through the main doorway, causing jams and headaches. We know there are plenty of side doors with no line, allowing us to pull up a chair and watch the circus that ensues. And even if the price jump doesn’t stick, at least you’ve paid the “old” price rather than the rapidly rising buyout price. And who knows? Maybe a buyout will happen again, giving you the chance to move your copies. After all, selling into the hype is definitely more fun and more profitable than buying into it.

…

Sig’s Quick Hits

  • It’s only a matter of time before Lady Evangela gets the Ragnar / Tetsuo treatment. She’s another old-school Reserved List general option for Tiny Leaders. But for now, she’s not attracting as much attention. SCG still has a few in stock: NM at $12.99 and SP at $11.99. Watch this one closely for potential movement.
  • Engineered Explosives has really been hot lately. There’s now only 1 copy in stock across the two printings: copies from Fifth Dawn are $10.49 and Modern Masters are $9.69. These will both increase soon, I suspect.
  • Here’s a penny stock worth keeping an eye on: Retract, from Darksteel. The card is getting attention in some Modern brews. And although I haven’t seen the card in action yet, I did note that Star City Games is out of stock. NM copies are listed at $0.49 and foils at $2.99, but I suspect both numbers to rise soon.