Insider: Managing a Portfolio

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Over the past few weeks I've discussed my transition into focus on MTGO, and switching out of Paper Magic. This has been a very educational process thus far, and I am confident more lessons are on their way. This is really a two fold process: Closing all of my Paper specs; and moving into MTGO markets. Closing paper specs can be easy, and for the most part I took the least time consuming route by unloading most of my stuff via dealers.

While knowing I'm coughing up a small amount of value by doing so, the time I saved was more valuable to me. I've held onto a handful of cards to have a single deck to play with, and that's about it. Transitioning to MTGO has been slower than expected. The main issue is the huge time sink that comes into being a savvy investor on MTGO. That being said, I'm setting up a process for myself to make things as simple as possible.

The major time sink in speculating on MTGO is the format in which trades take place. The only real method for finding places to buy and sell cards is on the classifieds which has an awful search feature and absolutely no mechanism for sorting. If you're looking to buy a card, you simply have to scan classifieds looking for the best price, or use major bot-chains like MTGOLibrary to search on the web prior to accessing bots via the MTGO client. The other side of it is just as time consuming, when looking to sell off cards; however, I've found that creating your own classified to offload cards is much better.

The key is to frequently remove and repost it while you're logged into the client. This ensures that your classified is easily found. Posting your own classifieds is important because not only do you get better value than what the bots offer, but you're often actually able to sell more volume this way. Most bots have a cap as to the quantity of a single card they will buy from you, but if you are slightly undercutting Bot Sell prices, and list your cards as sold by "HUMAN" you'll get a decent response, and most people I've talked to prefer to buy from a person rather than a bot. Mostly because prices are lower, but also it just "feels" right. Given that I'm spending significantly more time to acquire and offload cards than I would in paper, I need to have an effective tracking method to minimize times spent on other facets of speculation.

To contrast the drawbacks to speculating on MTGO, there are some key upsides. The primary benefit is the lack of physical cards. No sorting, no searching for where you left a certain card, no wondering "Wait, do I still have that set of X?" and no worries about condition. You also get a handy filter in your MTGO account, but it's lacking in the features I'd like to see. As a result, I built myself a spreadsheet for tracking my speculations on MTGO without getting them confused with my other junk stuck on my account. Feel free to use or adapt this to your own needs, and if you need a spreadsheet to do something else , I'd be happy to help any Insider customize this sheet to their needs. The theory here is I'll have a front page of my current speculation portfolio and an additional sheet to track closed positions.

On the portfolio side, most of the fields are obvious. Tracking the quantity and price that you got in at is important, but also important is the % of your portfolio that is being used by that single position. If you have one position that greatly outweighs the others in terms of percentage, you're not doing yourself much of a service by diversifying. Diversification of risk is not just how many different positions you hold, but how large they are in comparison to your portfolio. As of this writing, my portfolio has 3 positions, you'll see two of them make up 25% each while the other makes up 50%.

Ideally, my positions would be fairly evenly spread, unless I specifically chose one position to be a stronger investment than the others. My goal in terms of speculation is to get 10 solid specs in the list that each make up about the same percent of the portfolio. This protects you from huge dips in a single card, while also hurts you when only one of your positions is gaining. Each time you open or close a position you should re-evaluate your portfolio and see if you should shift any of your quantities held around to keep the portfolio balanced.

On the Closed Speculations sheet you can track your results. You can see about how frequently you close your positions, giving you an idea on how much time cards typically stay in your inventory. This is important, because when you have specs that aren't moving, you need to know how long you're willing to sit on that idea. With each spec you make you should have a general timeline for how long until you expect it to move. My most confident position right now is Nephalia Drownyard (Notice the pros are already starting to play this card? Both Michael Hetrick and Sam Black are playing it now.) and I expect it to peak around the release of Gatecrash.

When I assess my results, I want to know how accurate my estimations were so I can use that information to revise expectations of other positions while also improving my ability to estimate future predictions. Secondly, you have the track record of gains and losses. It's easy to remember your big gains and losses, but sometimes the small movements are hard to gauge their impact as a whole on your portfolio with out actually keeping track of the numbers and revisiting them. Keep yourself honest.

For those of you who frequent the Forums here, I am going to start a thread for tracking MTGO Bots. (If you aren't using the Forums, you are really missing out). My primary purpose is to report what I find on the Bulk Bots as I am slowly dumping old useless commons on my account that I simply have no use for. It's a painstaking task, but compiling a list of what bulk bots actually will buy and for what price will help you keep the time spent hunting classifieds to a minimum. My time frame for completing all of my bulk sales is still unknown, but I will be updating that thread rather than revisiting this topic again in the future.

Are there key features to tracking your portfolio that I didn't include? What are other issues that come up with speculation online that we can make easier by sharing information in the Forums?

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Chad Havas

Chad has been with Quiet Speculation since January of 2011. He uses price speculation to cover all his costs to keep playing. Follow his journey from format to format and be prepared to make moves at the right times.

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Posted in Finance, Free Insider, MTGOTagged

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3 thoughts on “Insider: Managing a Portfolio

  1. On the bulk bot front, I found one bot chain, I think it was clanmtgbot or something like that, that bought literally everything but basic land. It was like 0.001 tix per common, but I set around 5 k of the bulkiest commons in existence to tradeable, downloaded a macro creation program that could record keystrokes and mouse movements, recorded one iteration of trading it 75, and fired it up while I did Thermo 2 h/w for an hour or so. That was the best way I’ve found to sell large quantities of cards at once without sitting there for forever. That would have taken me probably an hour to two just for 5 tix? No way. But spend 10 min fiddling to find an efficient way to clean my acct and get 5 tix? Worth it. After it was done, I cashed out my credit for tix by hand.

    I probably could have found a better rate elsewhere, but it wasn’t worth looking to me as I originally was going to dump half that and some basic land (which I did) to the shredder bot just to clean my acct out.

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