Insider: My Spec Jumped, Now What?

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What are the biggest movers of the last few weeks? While there are a couple, let’s start with one I’ve been on for the last month or so (along with, hopefully, many of you).

Thundermaw Hellkite

A couple weeks ago in my column I wrote this:

“Thundermaw Hellkite continues to climb. We’ve been ahead of this one for awhile, and it’s starting to pay off. I have a handful in my trade binder that people have been going crazy for over the last two weeks, but I’ve been up front with them that I have to have at least $20 to trade them away. While people scoffed at me at first, it’s now up to $20 on SCG and pushing that on TCGPlayer. Wouldn’t be surprised to see this hit $25 on the trade floor in the next week or two.”

Like I predicted, it’s now up to $25 on SCG. So, if you did like I did and stocked up on it, congrats, you’ve made money! Now, for the rest of the article, feel free to insert Whatever Card Name you want in place of Thundermaw, since this is about more than one card. Heck, the other card I’ve been advising you to stock up on (Hellrider) is up over $7 on TCGPlayer, and I have a few dozen of those I got at $2-4 in trade.

So we’ve “made money.” Sweet. Of course, the truth is we haven’t done anything yet, and you haven’t made a single red cent. The truth is, as we know, you don’t “make” anything until you sell. This is called the Myth of Making Profits, and if you’re unfamiliar I would suggest reading this article, where I laid everything out.

So now back to our Hellkites. The price has steadily gone up over the last few weeks, and we have plenty on hand. What now?

Understanding the Spike

I generally divide price increases on speculation targets into two camps. Which one a particular price increase falls under dictates how I react to it.

The Instant Spec

Let’s start with the “instant spec” camp. This is basically Nivmagus Elemental. In other words, a card that moves based on hype, whisperings or an unbanning. We can look at Scapeshift, Cityscape Leveler, Land Tax and countless others for recent examples.

This spike is characterized by a massive and sudden increase in demand, usually fueled by hype. We see prices jump drastically in a matter of minutes or hours. There’s a lot of money to be made in situations like this, but you have to be very careful about the timing, since these things don’t always pan out (see Elemental, Nivmagus for proof).

In these cases, I always advise to sell into the hype. This means get your copies cheap, and get them on the market as soon as possible. Sometimes this means eBay, other times it just means cashing out on the buylist or even trading them away.

Sure, sometimes these hyped cards pay off and stay hot or reasonably expensive, such as Huntmaster of the Fells // Ravager of the Fells, but the risk is also higher. This is why I sold off my Scapeshifts as soon as they arrived. While the card still commands a respectable price, I was happy to lock in my profits as soon as I could, and in this case it also made me the most money.

Moreover, there’s nothing wrong with leaving a little bit of money on the table in these situations. It’s better to cash out at 80% of the spike rather than wait too long and end up missing your window, losing money or making significantly less in the process.

The Slow Increase

Now, let’s talk about the type of price spike that I feel Hellkite falls under –- the "slow increase."

Hellkite has been coming on for a month or so at this point, and we’ve seen $2-5 increases every week during that duration. What’s so important about this is that when a card’s price rises like this, it’s because there is true demand and most importantly sustained demand driving the increase.

This is important because it means the eventual fall will come in the same way. Now, I’m sure this isn’t 100% true all the time, but it’s been a good rule of thumb for me and it’s proven reliable enough over the last few years.

So with Thundermaw, I don’t advise selling quite yet. There’s nothing wrong with doing so if you want to lock in profits now, but it’s easy to follow the trajectory of a card like this. Just as we started to accumulate it as it made more top eight appearances, we can liquidate it in the same manner. I’m not sure how much higher it can or will rise over the next few months, but I imagine the peak is around $35.

Given that we’ve established the card won't drop quickly in price, I have no problem holding onto mine and watching the decklists come in. If I see two weeks of below-average Hellkite sightings, I’m probably selling. On the other hand, if it continues to put up results I feel comfortable waiting to see if it will rise any more. Either way, you’ll have plenty of time to cash out before the bottom falls out from under it, and that’s really the point.

The risk of holding Hellkite (the slow increase spec) is much lower than that of holding Nivmagus Elemental (the instant spec), so I’m willing to bear that risk in search of higher returns.

It’s Up to You

As I said above, this is just my approach to specs and it’s paid off well for me in the past. But that doesn’t mean this is the 100% correct approach. In the end, you may decide that selling now is the best move, and I can’t fault that. Either way, the most important thing is to consider all the information you have about the card, and the opinions offered by those around you, to make up your own mind about the best course of action, and go from there.

What do you guys think? Are my theories sound? Should we be selling or holding Hellkites? Let us know. After all, the more opinions you have, the more informed your decision will be.

Thanks for reading,

Corbin Hosler

@Chosler88 on Twitter

9 thoughts on “Insider: My Spec Jumped, Now What?

  1. I’ve just sold off my last Hellkites online. I think there is going to be a big shakeup in the Standard format. I mean, new sets always shake up Constructed but we’ve never seen a new large set like Gatecrash get introduced in the middle of a block. What this suggests to me is that unlike previous iterations of Standard which tended to see decks evolve over time by adding in some new cards, making small modifications and adapting, we might see a more drastic change due to the larger influx of new cards. Time will tell, but my bets are on a much different standard environment in 3 months than we have currently.

  2. i just sold mine as well. I nearly doubled up. Maybe I ditch the mythics too soon though, I sold off the consencrated sphinxes around 8. Next time, I’ll hold half until I get the word from here.

  3. Corbin, as usual, your theories seem sound to me. Thanks for the breakdown on these speculation scenarios. What do you find is the best avenue for actualizing profits in the “Instant Spec” scenario? I tend to avoid these and target cards fitting the “Slow Increase” scenario, but I’m guessing I just don’t have as many quick avenues to dump off cards as more experienced financiers such as yourself.

    One interesting point that perhaps we should consider in this discussion is something brought up by Jose Gasque’s post is the option to hedge in the “Slow Increase” scenario and sell part of your holdings off early and keep some around in the event of a further increase.

    1. Thanks! I usually use Ebay on the Instant Spec scenarios, because buylists usually don’t rise as much as sell prices on these. Because it’s almost all driven by hype, people are the ones demanding cards, and stores don’t get quite as giddy. As such, it’s usually worth taking the “ebay hit” and outing on there rather to buylists. I can sometimes score a better deal through one of my contacts, but there’s nothing wrong with Ebay here. For instance, it’s where I got rid of my Scapeshifts after that unbanning.

  4. With TCG Mid approaching your $35 target and buylists now coming in over $20, your article here looks PRETTY DAMN GOOD. There’s a reason he’s the best in the business, folks.

    And about the short-term spikes and selling into them: a wise mentor of mine, a successful investor, told me to leave the last 10% for the next guy. I couldn’t agree more. The capital you liquidate at 80% of a theoretical max that might never come can be shunted into another play as opposed to hoping to grind out another few percentage points.

    The exception here is when you’re taking modest gains to cover your basis and some profits. Sometimes I’ll sell 70-80% of a position if I think there’s still 30%+ upside and it’s easily traded. If I’ve already made cash profits on the play I’ll leave a very limited amount of exposure on the stove 🙂

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