During Return to Ravnica preorder season, my friend made a call on Sigarda, Host of Herons, buying 93 at $5 shipped.
A lot of finance people in articles and tweets, as well as myself in private Skype conversations with him, had been singing the praises of the card. I hadn't even seen a dissenting opinion at the time, credible or otherwise, though I'm sure one existed.
He expected to sell copies for between $8-10 during the RTR Standard season after the zombie hype subsided, netting a tidy profit for himself.
Sigarda seemed poised to dominate the new Standard format. Nothing could kill her! She blanked Liliana of the Veil, crushed Tamiyo the Moon Sage, and even blocked zombies with the best of them. The knowledge that Temple Garden would be in the coming set only made the case stronger that Sigarda was a surefire bomb, an obvious buy.
His play looks pretty good right now. Sigarda has been steadily rising since hitting her floor in September and she is buylisting for $8 on Channel Fireball.
What if I told you most of those 93 copies were already gone?
GP San Jose was a pretty insane weekend. I might have slept 7 hours over 3 days and was having trouble adding when I finally got home Sunday night. The most interesting thing that happened that weekend (from a financial perspective) was Entreat the Angels appearing on buylists at $15 when the card was moving at 15-18 in trade.
Overall, a much less relevant thing happened when HotSauce Games gave my friend $7 each on 20 Sigardas.
He was looking to become more liquid by the end of the GP, and throughout the rest of the weekend he flipped another 50 Sigardas for between $6-7 each along with a bunch of other Standard stock, getting his money back on the Sigarda play itself while keeping the 20 that were 'free'.
GP San Jose was held from October 12th – 14th, and the Sigardas were purchased during the middle of September. The $465 spent on the initial purchase was between 15-18% of his liquid bankroll at the time.
When my friend left the convention hall that Sunday, he had netted $0 on his initial investment and 20 pieces of capital that were worth between $6-7 each, and in the 3 weeks since then have grown to $8 each (CFB's buylist). Is a potential $160 or 34% return on a $465 investment acceptable?
Of course it is. My problem is the time involved. He took almost 1/5 of his liquid capital and let it sit for a month. The passive growth he gained is very good by most financial market standards, but Magic is not like most financial markets.
Information is the most valuable commodity available. In most markets, the majority of goods bought and sold are done so by people whose job it is to be informed about said goods and the myriad other things that pertain to them. This is not the case for nearly all of the Magic related transactions that take place on a given day, and for good reason - Magic is a hobby.
People have jobs, school, etc, and, as such, most Magic players/collectors are not able to stay on top of Standard prices, much less Commander/casual or even the eternal formats. The popularity of smart phones has changed this somewhat, and your average FNM player can become partially informed in a minute or two, but nearly all of them never go beyond checking retail prices on a single website.
To be fair, why would they need to know more? This is a trade or maybe a free draft, so why does eBay, MOTL or some store's buylist that's across the country matter? The incremental gains you get because you are informed compound over time the more transactions you make. Every time you sit down with someone else's binder, every time you're around other magic players, its an opportunity.
How many Snapcaster Mages could he have bought and resold, or traded away for value during the month those Sigardas sat? How many $1 rares that he could have bought for quarters did that stagnant capital cost him? I want turnover. I want liquidity and the flexibility it brings. It isn't sexy, you don't get to brag to your friends about your sick picks and complain to them about how you have 100 Havoc Festivals. If you can get even a consistent 10% gain on each trade or transaction, the incentive is to make as many of them as you can.
I think my friend's speculation was fine, and while he sold early, his profits look to be pretty good on the investment as a whole. My dissatisfaction with it came from an evolving mindset about the entire idea of speculation. Being a 'cowboy' as Medina called it on Brainstorm Brewery is fun as hell, but I don't think it's the best way for me to spend my money.