The Price Signal: The Year in Preview
With a little knowledge of the game and the broader trends, the major shifts in prices are straight forward to predict. Coming up with a financial plan is integral to following through on those predictions. In this plan, a broad course is set out for the year and it uses the underlying structure of the market to its advantage. To use the structure of the market means to be acting in a different way than the majority of players are at a given time. This boils down to taking positions 1 to 6 months ahead of whatever the majority of players will focus on, and then reducing those positions during peak interest. Here is a proposed outline of the ebb and flow of the MTGO market in 2012, paying attention to the biggest events of the year and how the player base responds to these events.
January through March
The Modern PTQ season should be in full swing at some point during this time, although it has not been announced at the time of writing. Due to the hair cut inherent to short term speculating on MTGO, this period should be dominated by the selling of staples that were accumulated in the Fall. When demand is at or near a peak, the good speculator should be selling into that demand. At the end of October 2011 cards like Steam Vents and Cryptic Command had drifted down in price from their summer peak. This can be attributed to the shift in focus of most players towards the new Standard environment and Innistrad limited. This resulted in pushing the price on Steam Vents to 10 tix, and Cryptic Command to 6 tix. Both prices were close to or near the prices seen prior to the announcement of the Modern format and represented good value to speculators with a 3+ month investment horizon.
Now, for those who are new to speculating and don’t have any positions to take profits from, keep tabs on tournament results and which are the powerful cards in the best decks. If those cards appear as 3 or 4 copies in a deck, all the better. Stay away from investing in uncommons as the margins are small and the work involved in moving uncommons is non trivial. In a pinch, unloading mythics and out of print rares is always much easier than unloading uncommons. Pay close attention to the price peaks of the best cards. This will provide some guidance to the potential upside of future speculative positions. Be aware of new decks that crop up late in the season that might break into the top tier of decks the following year. Next year's breakout deck is often found in an early form during the current season.
Dark Ascension (DA) release events will occur around the start of March. At that time, a lot of product will be opened. Coincident to this is the attractive prize payout structure in release events that encourage players to liquidate the cards from their drafts and sealed decks in order to play in more events. It's difficult to predict which cards from DA will hold their value at this time, so stay away from getting involved with the latest hype. It is much easier to buy up Innistrad mythics and rares that will be under price pressure from an increase in supply and the temporary shift of focus towards limited. Cards to keep an eye on are mythics from Innistrad that are 2 tix or less. Here are some specific examples.
Grimgrin, Corpse-Born: Current price was 1.75 tix at the writing of the article, and I would have recommended getting in on it at around 1 tix or less. He's already started to crawl up in price. Keep in mind that junk mythics tend to hold a value of between 1 and 2 tix the year after printing, so having an investment horizon of 8+ months will keep the risk on this investment very low.
Angelic Overseer: Current Price of 1.81 tix, buy this one at 1.3 tix or less. For similar reasons to GrimGrin this is a low risk play, though the upside potential is higher. It's yet to find a home, but if it does your upside is at least a double.
Skaab Ruinator: Current price of 2.95, this one has been as low as 2.3 tix. This card has yet to live up to its initial hype, but there is plenty of time and format shifts for that to change. Buy this at 2.3 tix or less.
Innistrad Dual Lands: These range in price from 1 to 2.6 tix. Last year it was profitable to buy up the cheapest Scars duals and wait for swings in the Standard metagame to sell for a profit. With Avacyn Restored being the 3rd set and a standalone large expansion, the play here is buy up the cheapest duals at this time and get your play sets of the others. Scars duals at less than 1 tix all eventually yielded profits of at least 50%. At the extreme, Copperline Gorge was available for .33 tix after New Phryexia release events.
April Through June
Expect to see prices on Modern staples drift down during this period, though it's possible they slide right through the summer. It's difficult to predict exact bottoms, but once prices appear to have stabilized begin to build your positions. In anticipation of M13, steer clear of the shocklands and other cards with reprint risk until the M13 list is confirmed. Rares and Mythics from recent blocks such as Zendikar or Alara carry less reprint risk.
At the start of June there will be Avacyn Restored (AR) release events. The only prior occurrence of a standalone expansion being released as a third set was Rise of the Eldrazi (RoE). For this reason, Worldwake instead of RoE carried the third set effect, as drafters favored the new expansion and largely abandoned drafting ZZW. Prior to the release of AR will be the approximate bottom for cards from DA and Innistrad. This will be the time to pick up play sets and to take positions in cards that have value but carry a low price. Junk Mythics from DA priced at 1 tix or less will be easy low risk purchases.
July Through September
M13 will hit the online world sometime around the end of July. Two major shifts to watch out for. Although not confirmed, it’s probable that the Titans will leave the core set and a replacement cycle of dual lands are introduced. In anticipation of these two possibilities it's worthwhile to reduce holdings of Ravnica block shocklands and to be on the lookout for cards that will become playable in the absence of Titans. If they are not reprinted in M13, the Titans will hold most of their value until the end of August as they have historically been important cards in Standard. Be sure to sell off any Titans you don't need at this time as they will crash in price as they rotate out of Standard.
Also start paying attention to block constructed results to get a feel for what the Fall Standard environment will look like. Pay attention to plants and themes that appear to resonate between blocks and the new core set, as there will often be hints at what cards are going to become more powerful in a newer context. A good example last year was Elspeth Tirel, widely available at 10 tix in September. Picking these up in anticipation of the apparent token theme from Innistrad would have resulted in a double by mid October.
Consider the most powerful cards from Dark Ascension and Avacyn Restored at this time. During the lull of September, there will be an opportunity to buy up mythics and rares from these sets at relatively low prices. Once the Fall expansion is released, the short term supply of cards from Innistrad block flowing from limited play will almost completely dry up. Batterskull, with some applications in Standard and Legacy, went from being widely available at around 9 tix at this time to close to 20 tix in October.
October Through December
Once rotation has occurred with the release of the new Fall expansion, the Standard metagame should see a lengthy period of volatility. After taking positions in the most powerful cards from Innistrad block and M13, be prepared to reduce your positions according to the swings in the metagame. As different strategies come into vogue, prices will act accordingly. This should be the moment when you are building up your investment capital in order to take advantage of the large buying opportunity that rotation represents.
At the end of October, start accumulating the best cards from Scars block and M12, in particular target cards that will see play in Eternal formats, both competitive and casual. During release events for next year's fall expansion players will be selling the cards that have just rotated out of Standard in order to buy the newest cards and to participate in release events. Take this opportunity to buy up cards that will hold value over time. A good example of this effect was the Zendikar fetch lands. During October 2011 both Marsh Flats and Arid Mesa both went below 2 tix, and Scalding Tarn and Misty Rainforest both got close to 3 tix. As a long term investment or just a play on the Modern season, these were good buys.
The fetch lands were really obvious plays and there is no equivalent in Scars block or M12. Mox Opal and Blinkmoth Nexus would be at the top of list for cards that appear across formats. There are also plenty of niche and casual cards that will hold value over time, such as the mythic swords and the Praetors of New Phyrexia. A special mention should go to Dismember and Mental Misstep. This recommendation breaks previous guidelines around investing in uncommons, but the nature of Phyrexian mana means that these cards have such broad utility that they act more like rares in price.
Banning and Restriction Announcements
These will happen four times a year in March, June, September, and December. Pay attention to what Pat Chapin (@thechapin) and Aaron Forsythe (@mtgaaron) say in their tweets, articles, and in interviews about the state of the game. Most of the changes to B/R lists in recent memory have either been predicted or hinted at by these men. This is incredibly useful information. Staying up late and trying to take advantage of vendors who are slow to react to announcements is unnecessary if you pay attention and are willing to take on some risk. Also expect to see more and more vendors shutting down in some fashion in and around these announcements. When Jace and Stoneforge Mystic were banned, Cardbot took Primeval Titan off the market (both buying and selling) in the immediate aftermath of the announcement. Vendors will be more likely to do this more often in the future, so it's necessary to make adjustments in response.
Questions and comments are welcome.
Note: All Historical Prices are approximate, current prices as of January 4th 2012 from www.cardbotmtgo.com