One of the most common responses a MTG finance writer gets after writing a theory or trading-based article is “What are the hot buys this week?” usually with no regard for the value of what was written in lieu of "buy this now."
Luckily, this is a problem we have a little less of on QS due to the fact a lot of that day-to-day speculation takes place in our forums and the Prediction Tracker. I also like to think that our readership is a little more educated than the crowd that usually comments on some of the bigger sites. Just as strategy articles are allegedly all about the decklists, finance articles are all about the hot buys. It doesn’t matter how great an article was or if there aren’t any good buys at the moment, there seems to always be a crowd screaming “WHAT CARDS I BUY TODAY?”
This is the wrong question.
People love to get in on cards when they’re cheap and feel proud of themselves or show off when the card spikes or goes up a few dollars. It’s great to save a few dollars on cards you might have bought, but this is in no way the same as making money.
I’ve linked to the following article a million times, but if you still haven’t read it, you need to. This type of behavior is known as the Myth of Making Profits, and gets you nowhere if your goal is to actually make real money that translates outside of the cardboard world. As such, the proper question is not “what should I buy?” but this:
When should I sell?
I’ll start out with the basics of the format changes before investigating some other non-format-related concerns about when to sell out. Everyone knows about the seasons of MTG, we go from Limited season (now), to Extended/Modern to Standard. The first and easiest advice I have for when to sell is that you should only sell in-season.
We’ll start by looking at Modern, this year’s Winter PTQ season. You should sell your Modern/Extended right at the beginning of the PTQ season, not in the middle and certainly not at the end.
Despite the established theory that prices don’t drop until the month of rotation, which may hold true for retail prices, that doesn’t get you far when you need actual cash out of your cards. Dealers lower their buy prices on specialty-format cards that are only good in season well before you near the end of the season. This was a lesson I learned somewhat painfully during Extended last season.
Modern prices are depressed right now due to it being out-of-season. Obviously you don't want to sell out now, but you also don’t have the luxury of waiting until the end of the season to move your cards, as every day after the opening PTQ to the end of the season means you’re losing money on your Modern holdings. Wait for the first few results to break out to create the demand for particular decks, then move your cards out as soon as you can after that for cash.
Legacy prices follow a very easy metric in the United States, particularly now that we’re fully past the price correction the market went through following the explosion of the SCG Open Series.
While there will be weekly fluctuations based on the metagame, Legacy prices will always peak right before the one US Legacy GP we have (at least on the old schedule). You’ll notice the run-up in Legacy prices ended very quickly after GP Providence, and depending on how the new GP schedule works out, you can expect the same to happen every year. While Legacy is awesome both as a format and an investment because it holds prices so well, it’s around the time of this GP you’ll find absolute top-dollar.
Ah, Standard. The most volatile format we have. The same rules from above apply, but with a few things we should note.
For starters, Standard is always heavily played, regardless of it being a PTQ format. This means you can’t bank as heavily on the “in-season” rule for selling, at least not with all your cards. Looking at where we’re at right now, I have different suggestions for when to cash out depending on the set.
For starters, I would hold all Scars block and M12 cards that are closer to staple than they are “flavor of the week” (things such as Inkmoth Nexus and Hero of Bladehold are what I consider a staple). I would advise holding onto them until the opening of the PTQ season, when they are both farther out of print and more in demand.
You can’t wait much longer, or you begin to push up until that time when players hold off on buying due to impending rotation, but there is a sweet spot there (generally around the beginning of Summer), where you can use the fact that they are winding down in availability due to natural causes while still sustaining a high level of demand.
On the other hand, you should be moving all the Innistrad block cards you can right now. Not accounting for metagame shifts that can cause spikes, you’re not going to get better prices for Innistrad cards than you would have in the lead-up to States. The annual States tournament seems to mark the point every year when the most recent set begins its downward descent that doesn’t end until the packs stop being opened.
Looking at something like Snapcaster Mage, people are always interested in getting it from me, but I don't have many because I’m not very invested in the card right now. I'm very leery of picking it up at the inflated $30 pricetag that it’s not going to sustain for another year (it already closes at $18 or lower on Ebay, by the way). You have to decide if you can move these cards fast enough to make it worth trading into them at their high prices, but you certainly want to sell (or trade) these as soon as you can. In about nine months, as we move out of Innistrad block and into M13, the time becomes right to start picking the hot cards of the set up again.
There’s an easy analogue that helps this makes sense. I’ve never seen anyone rush into a store that has signs advertising that everything is “full price.” No, it’s when there are sales that people rush to buy. Treat your Magic collection the same.
Let’s start with the myth of the “rotation dip.”
One trend that has been growing more pronounced over the last year or two is the quickening of the rotation dip. Whereas it used to be immediately before and after rotation, that timetable has moved up significantly, due to what I suspect to be greater knowledge among the player base regarding prices. This is directly tied to the rise of Magic finance writing and higher card prices among hot Standard cards, which has educated the player base and caused an ever-growing number of players to try and beat the rush, so to speak.
Let’s look at a few recent examples that dispel this traditionally-held belief.
Look at Jace, the Mind Sculptor. Using the currently-defunct BlackLotusProject (they’re experiencing some difficulties with MOTL, which has caused them to go down until a replacement is found), we can see that Jace peaked long before his rotation or even whispers of a banning came around. Luckily, QS had you covered on this one, if you were invested into the Blue Man.
This was an example of retail stores being out of sync with a card’s actual market value (though I’m sure they were still selling their copies at inflated prices). But what we want to take from this is the ceiling on Jace came long before he went out of Standard, despite not becoming any worse in the meantime.
The “Rotation Dip” still exists, but if you’re still in the mindset of using the rotation as your benchmark date, you’re far behind. To extract full value, remember to keep an eye on the market and move your timetable up.
Another consequence of the rise of Legacy and now Modern is that players are more aware of what will retain value. This means that the Rotation Dip can also mislead you on this account if you’re not careful.
An interesting case study here is the Zendikar fetchlands. For a while the prevailing theory among many was that you should wait until they rotated to begin picking them up, due to the aforementioned anticipated drop. That’s what I initially thought too, until I began to do some research on them.
For ages, the going rate on the fetches was $10 a pop, and the traditional line of thinking would suggest these would bottom out right after rotation and then increase from there, meaning you should get out at their current price and back in later. But as I dug into it, I found that actual market data (again using BLP) wasn’t supporting this theory. There was simply no continuing dropoff in their Ebay prices. This led me to put a buy/hold call on fetchlands, and that has paid off handily, as their retail price has actually gone up, not down, since their rotation.
While now is certainly a great time to pick them up, the truth is there was never a time to get out of these, further supporting my premise that the “rotation dip” has been overstated.
This is the hardest market to navigate, particularly in MODO. I don’t have anywhere near the expertise to comment as much on that (though this is a good start), but I can speak to how to approach this in paper Magic.
The simple truth is that very rarely will buying in cash on Standard cards net you a lot of money, unless you really get ahead of the game on something like Stoneforge Mystic or Consecrated Sphinx (now I wonder what site was far ahead of those?).
Obviously one of the best plays is to pick up low-priced Mythics in trading because if there is a jump, you’re going to generate the most profit on Mythics. But this is about selling, and my rule is this — Sell first, ask question later.
It’s basically impossible to know if a card is going to stay hot (Sphinx) or make a jump then die later (Frost Titan). If you’ve done your work picking them up on the cheap, just get out, take your money, and worry about it later. You’ve made money, don’t take the chance of losing out by waiting to see if it will eke you out a little more.
Purging the Binder
I’ve touched on this before, but I want to remind you that this is something you should do regularly. I literally begin to get antsy if my binder grows too big, even though I do my best to trade into Legacy and casual staples that will hold their value and not require me to move them within a few weeks or lose out.
Of course, I don’t imagine everyone’s in the same position as me and know buylist prices for the majority of their binder. It’s well worth your time to take your binder to a dealer at a big event and sell off your Standard stock, particularly if you don't do this already. There’s no rush to sell the Legacy/EDH/Casual cards if you don’t want to, but if you can get a few bucks out of a Standard-only card, it’s usually much better to do so than to let it rot in your binder.
I’m not telling you to take bulk rates on your cards just because they’re in Standard or to sell a card you legitimately feel will rise in value, but those Spellskites or Kessig Wolf Runs probably aren’t holding their current price tags long-term. Something to keep in mind.
Wrapping up (Landing a Car?)
I think I’ve covered a lot of the factors you need to keep up with and hopefully made you a little more aware of when to sell your cards. If you’re serious about making money from Magic or aspire to be a successful floor trader, selling cards should be an enjoyable experience, not a painful one.
Many people go through a sticker shock when they realize that their cards aren’t worth nearly as much as they thought (retail is not a cash value). But the truth is, if you are in it to make money you value all your cards at buylist prices anyway, so cashing out is a validation of your hard work, not something to be feared.
If I wanted, I could have traded into one of the most impressive trade binders you could find, but instead I (and many other serious traders) prefer to cash out at regular intervals. It’s nice to have a sweet trade binder and all, but it’s also pretty sweet to buy a TV or an engagement ring with the money you’ve made trading.
Now for the teased project. It's something that started off as a joke, but the more I think about the more I think it’s a real possibility. The goal?
Buy a car with fetchlands.
It sounds crazy, but as a huge Dave Ramsey believer, I only drive used cars, so we’re looking at a reasonable price here.
Looking at the old fetches such as Polluted Delta, I can get at least $20 apiece for them as of today. I expect to do the same with Misty Rainforests and Scalding Tarns in 5-7 years (assuming Gavin doesn't kill Magic in that time), and since only the Zendikar fetches are legal in Modern, that timeframe could be even faster if the format sticks around. A little math shows that to buy a $5,000 car I’ll need to sell about 250 fetchlands. I’m up to about 50 right now, including some foils, and I really don’t think it’s a stretch to imagine I’ll get there in the next few years of trading if I work at it. With dedication and proper managing of your inventory, this is surprisingly attainable. Obviously this a very long-term project that isn't quite as entertaining as Pack to Power or even Box to Extended, but I want you to understand what the stakes are when you're dealing in the cardboard with the funny pictures.
And, in case you’re wondering, Car > iPad.
Thanks for reading,
@Chosler88 on Twitter