It’s been an exciting week here in the world of Magic: The Gathering finance, and I’d like to throw in my two cents on how the format’s shaping up, and what you can do to take advantage of that.
First of all, in the heady rush to get States decks, it’s all too easy to forget that the price of the cards involved is a bubble. While at States, several things stuck out to me as being relevant in a time when every person with economic sense is making their speculative moves on the market.
Me, my speculation was done between 8:30 AM and 9:30 PM Saturday, States.
I can imagine what some of you might be thinking, If you’re like me at all, speculation isn’t your thing. The idea of making an educated guess on a low priced card in the hope that it’s positioned well enough for you to cash big is dangerous. And for a risk averse individual like me, the possibility of losing 20, 50, 100 dollars on Urabrask the Hidden gives you cold sweats in the middle of the night.
Speculation, however, is more than just knowing when to buy. For me, speculation is far easier to implement in the form of buying’s polar opposite: the on-site trade.
When a person sits down at states and sees a profound absence of Abrupt Decay, he can use that data to his advantage. The card seemed to be opened an altogether unreasonable amount, and it seemed like there were more floating around the room than people knew what to do with. This read like a neon sign to me, and even if I hadn’t thought about the chance of Abrupt Decay’s value decreasing, the warning signs were all there.
Decay is starting to drop below 10 dollars consistently on ebay, and Star City is down to 15. Even though the the card is absolutely amazing and it seems unlikely that its price floor is as low as some other cards, and even with the comfortable knowledge that it’s got an enormous amount of Legacy potential, it doesn’t feel like a 20 dollar card.
Abrupt Decay suffers from the unfortunate malaise that diseases so many of the potentially explosive cards in Standard- it’s a rare. While my eyes mist over with memories of 20 dollar chase rares holding value for the entire span of their playability in Standard, the era of Wrath of God is past. And a great deal of that is due to a combination of the quantity of product opened, and mythics.
Rares Are Bad, Mmmmkay?
Rather than rant on about the upsides or downsides of mythics, I’d prefer to approach this topic from a more pragmatic direction. Because mythics exist, and are probably here to stay, rares are generally unable to reach the prices they could before. More importantly, high prices are unstable, and unlikely to sustain themselves over time. In a world where most every 20 dollar chase card is now a mythic, why invest in rares? They’re far more opened than mythics, are more likely to crater, and have a lower price floor on average. Better just to buy AT&T stock.
If you had, like many of the readers on this site did, buy a pile of Angel of Serenitys at their opening prerelease price, you’d be Scrooge McDuck’ing your way through a pyramid of cash right now. If, on the other hand, you bought pretty much anything else, chances are you didn’t make that money back.
Lucky me, having seen what a total house Angel was at States, traded three Abrupt Decays for a foil angel, and still made money, without nearly as much risk as betting on the potential popularity of a piece of cardboard. While early speculation guesses what people will want, responsive speculation takes the trending desires into account and simply contents itself on existing ahead of the curve.
This is not, I should note, the way to make your fortune overnight. It is, however, an easy way to work the angles of Magic Finance without ever wondering whether your investment in deathrite shaman was worth the time, and if you'll ever see that cash again.
By the way, you can probably distill most of the last two paragraphs into my easy but firm investing rule: Don’t speculate on rares. It’s far too easy to be wrong, and the chance for reward is very limited by the speed at which you can turn cards around. From Olivia Voldaren and Falkenrath Aristocrat to Angel of Serenity, most of the high caliber low risk speculation targets have been mythics. I trust that trend, and so should you.
Back on Track Please, Mr. McGownd
Back to the topic at hand! While it’s apparent after seeing that particular dead horse beaten that I don’t like the preemptive speculation model which so many people ascribe to, why am I so preferential to responsive speculation? The answer is twofold.
Super Smash Bros. Melee is a very popular game, and while it’s not played competitively on the scale of some other E-sports, it’s not because it’s lacking in complexity or strategy. In SSBM, some characters are not made equal. In fact, if you were to look at the top tier players and their characters of choice, you’d find that the most important factors in determining how good a particular pick was depended on the maneuverability of the character and its ability to react to different styles and approaches effectively without ever being in a situation they couldn’t take advantage of.
By speculating via stock buyout of cardshark collections, you force yourself to react sluggishly to changing events. The best speculators might have copies bought up of a card a few hours after the buzz starts, and even if they get good prices it takes days for the cards to actually get there.
The first jump in Olivia Voldaren’s price, way back when, was followed over the next couple weeks of a corresponding plunge as people pulled her out of longboxes, collections, and binders to put up for sale. As demand rose, people found it more logical to work harder to generate supply, and the cost of the card dropped. Buying her for 5 meant that you might have had to settle with selling at 8.
This seems good, on the surface, especially compared to stock trading, but after fees… that’s a lot of risk for not a lot of reward. Even more importantly, you can’t effectively respond to the market. You’re dealing with a time lag that’s simply enormous compared to what most floor traders have to deal with.
I was one of the people who picked up a few Olivia Voldarens as soon as I heard the news, courtesy of the QS Insider notices. I didn’t buy out stocks of the card, but knowing that it was popular I traded for it ahead of the curve of people acknowledging its power and utility. I then traded away those same Olivias, sometimes to the same people, at newer, higher prices. I could react quickly and efficiently to changing sentiments without putting real money into the process.
Being able to see how much or how little a card is played gives you a lot of information as to how to prioritize it as a trade target, and whether or not to make a move. Because of this, I tend to not make a dedicated push until I see how the room reacts to the metagame. When I do make my move, I have a large quantity of people at my disposal to obtain product from, or to dump product on if my assumptions about card strength prove to be premature.
Questions, Comments and Snide Remarks Welcome!
Hopefully this helped, and whether you plan to take this path or not my line of logic concerning trading on site makes sense. If it does or doesn’t, if you think I’m right or wrong, I look forward to reading about it in the comments.