Comments on: Understanding Your Market

By: Corbin Hosler

Corbin Hosler — Mon, 08 Nov 2010 13:01:41 +0000

Also if the Magic market crashes it likely will be completely trashed, so no matter how many cards you invest in, the entire investment would tank if the market for cards crashed.

By: karthik

karthik — Mon, 08 Nov 2010 10:52:45 +0000

while I agree magic has been in a 17 year uptrend, there have been loser recently. power prices are waning and legacy cards are on the uptrend. just look at underground sea vs. like time walk or something.

i work as a stock trader so I am very observant to such trends.

i feel the next cycle of magic will be a huge push toward art…

By: Matth

Matth — Fri, 05 Nov 2010 16:48:53 +0000

In reply to Chas Andres.

@Chas:
Thank you for your post. You and TheHordling both picked up on a fact that my 8-year old self was too distracted by Fallen Empires (only $.99 per pack? But that means I can buy 10 of them!) to notice. Sorry for the oversight.

Regarding your second point, I will concede this point if you'll concede that there are then like fifty times more Googles on the Magic market than there are in the stock market. Almost every set seems to bring a new Google. Yes, two markets are never absolutely equal- this is an analogy I'm making, not an equivocation. I felt the overlaps were significant enough to warrant mention, and that the outlook in the card market could be lucrative, so I chose it as the subject for my first Magic article.

Thank you all for taking the time to read, consider, and respond to my thoughts.

By: Chas Andres

Chas Andres — Fri, 05 Nov 2010 16:01:17 +0000

I came to post what 'thehordling' said: there was actually a huge crash in Magic when Chronicles came out. Cards like Carrion Ants went from $25 cards down to nothing in a matter of days. The Elder Dragons, previously the most valuable cards in the game outside of power, saw their value dip by over 1000%

Also, comparing the APR of one card to the APR of the entire economy is apples to oranges. When comparing Wasteland with another high-performing stock over the same time period (say, Google) you start to get a better picture.

By: thehordling

thehordling — Fri, 05 Nov 2010 13:42:42 +0000

the closest thing to a market crash for Magic was probably when Chronicles was released and everyone was upset that their cards were reprinted and lost value. I feel that probably should have been mentioned in the article, but other than that it was an ejoyable read.

By: Mick

Mick — Fri, 05 Nov 2010 13:05:27 +0000

Here is what I like about this article. Many people have a tough time understanding the processes of the stock market. These sorts of articles provide a comprehendable anology to help those who understand magic. Using previous experiences to connect new information is a great way to learn something new. Nice work.

As for the Wasteland thing, I'm pretty sure this was a hypothetical situation, as I think we all know it would be pretty dumb to invest 10k into a single card. Some people just take everything so literally though…

By: @jc-mtg

@jc-mtg — Fri, 05 Nov 2010 11:11:18 +0000

^above poster is obv. NOT Ben Blue-eyes 😛

I enjoyed your article, Matth. Particularly interested in your comment above regarding "rolling liquidated cards into more speculative investments". Particularly, when you CAN'T roll the money over – what do you do now? In real life, we stop investing in 401k and use the money on Food and Shelter and save into our crappy Savings Accounts from too-big-to-fail banks (hehe).

-John V. sup dude, lol

By: Ben

Ben — Fri, 05 Nov 2010 07:48:43 +0000

If you're "investing" in Magic cards, you're an idiot.

By: the_cardfather

the_cardfather — Fri, 05 Nov 2010 06:07:47 +0000

MTG cards trade a lot more like commodities anyway (since that's what they are). I've always felt that Pre-selling cards was kind of like short sale, or maybe selling a futures contract since every dealer knows the overall value of the set is dropping as more and more cards hit the market.

For the record Bill Gates has sold most of his holdings. He currently holds 618M of MSFT's 7.12B share public Float (shares trading). What is interesting is that nearly 65% of the float is held by institutions. We see this a lot on MTGO where certain bots might be buying and hoarding cards to reduce the amount in circulaton (either to redeem, or to speculate). I wonder what other examples of artifical scarcity there are.

I'm wondering if WotC which knows exactly where every digital object on MTGO is looks at those stats when determining which products to print, for instance the new Legacy Starter Deck Series comming out which essentially caps the value of quite a few staples.

By: Matth

Matth — Fri, 05 Nov 2010 06:00:07 +0000

@Yan & Kirby: While it's true that 625 playsets of something cannot be moved, getting your hands on 625 playsets of Wasteland would have been quite a task as well, not to mention it would be a head-scratching move to invest five figures into a card not on the reserve list. If you take individual quantities to this extreme, then yes, you are correct. But a $10,000 investment could be in multiple playsets of dual lands, force of wills, FNM foil Swords to Plowshares, Rishadan Ports, and Vengevine, filled in with opportunistic speculative purchases like Frost Titan, Stoneforge Mystic, Bitterblossom, Burning Wish (following the banning of Mystical Tutor), Memoricide, Etched Champion, and the like. That kind of setup could be liquified in a week, and appears a rather diverse and stable portfolio. Speculative purchase stock should be shifting with the winds, with short-term speculative gains being rolled either into more speculative purchases, or into more of the high-yield stable staples listed prior, thus compounding your interest.

My intent is not to suggest that Magic is the only market one should be investing in, either. But if you are considering said not-at-all unreasonable serious investment of $10,000 in stock, perhaps part of that investment should be made in the Magic market. It cannot be traded with a mere button click, but this seems (to me) more than offset by the extremely high rates of return on prescient investments.

By: Ramela

Ramela — Fri, 05 Nov 2010 04:03:19 +0000

Which is why you must have a diverse portfolio. 🙂

By: Yan and Kirby

Yan and Kirby — Fri, 05 Nov 2010 02:24:29 +0000

We think one of the reasons that the Magic Cards as Stocks analogy doesn't work, and also a reason why Magic hasn't crashed is that there are fairly significant liquidity issues involved once we try to make substantial volume-based profits. In your Wasteland example, suppose we bought 2,500 shares of Wasteland twelve years ago for $10,000, which not at all an unreasonable serious investment in a "stock." Now, we would have $50,000 or more worth of Wasteland, which seems like a great profit, but how do you propose on liquidating that into something more useful? Are you going to trade 625 playsets of Wastelands? It'd be hard to move that at more than maybe more than a dozen a time if you wanted "retail value" out of them. To be sure, you can buy 20 Wastelands and move them just fine, but then your 50% APR isn't very impressive anymore in terms of dollar value.