Speculating on Magic Cards can be a lot of work – often it even feels like a second job. I spend countless hours in the evenings and on weekends trying to stay up with trends. With the recent creation of mtgstocks.com and resulting crazy market movements, the task of maximizing value in Magic has truly become daunting.
There has to be a balance. Not long ago I wrote an article describing how our time should have a dollar value associated with it. Negotiation of our time’s value should not be taken lightly, and it is up to us to always keep this in mind. After all, no one else is going to do that for you.
As I’ve thought about this concept some more, I've realized I should take this Magic speculation thing even further. I’ve made some rash purchases in the past in the hopes that I can eek out a bit of profit. I’ll eagerly purchase something like Angel of Serenity at $8 with hopes that come Standard rotation I’ll be able to sell it for $15.
Or better yet, maybe I should purchase fifty Aetherlings since the card performed well at the Pro Tour this past weekend. Surely I can grind out some value there, right?
Is This Worth It?
Even if those Aetherlings do double after the Pro Tour, fees and shipping costs are likely to eat into profits. At the end of the day, a $2 Aetherling purchase sold at $5, even if done so fifty times, is likely to net small profits.
Now, of course, the card could go higher. We could see a dramatic spike like we saw with Wolfir Silverheart last year. In this case, the profits would be much higher and the value vs. time equation would never even become a factor. But statistically speaking, how often does this happen?
Seriously. How often do we speculate on cards and they proceed to increase dramatically, and that price increase is sufficient to have justified our time?
On quick flips like Wolfir Silverheart or, more recently, Deadbridge Chant, one must be highly engaged. The profit window may be a matter of a couple days before a card begins to decline again after an initial spike. Doesn’t it feel like this has become the norm lately, and not the exception? Doesn’t the chart below look familiar?
If you’re fast enough, then there’s definitely profit to be had with each of these spikes. But hesitate too long and you could be left with very little profit considering the amount of time spent. Holding the hot potato may or may not be costly, but it definitely implies greater risk compared with selling immediately upon a spike.
Speculation & Risk
I have made the conscious decision to not participate in some recent jumps. Rishadan Port baffled me quite a bit. I ignored Earthcraft completely. And these Tempest Medallions are awesome and all, but I have no desire to attempt a quick flip on them.
Did I miss some profitable opportunities? Definitely. If I played the quick flip game, I may have been able to find a few cheap copies left under some unturned stones on the internet. One week later and I could have sold them for a handy profit…assuming one week wasn’t too long to wait.
I sometimes get a rush with these speculations. When Craterhoof Behemoth spiked, I made a nice chunk of change selling my copies to Card Kingdom for a stunningly high buy price. But other times, my endeavors are not rewarded. Nivmagus Elemental still stings. Even if a quick flip attempt pays out, often times the net profits aren’t enough. This means I either should not have bothered or I should have gone deeper – sometimes, way deeper.
This means I would need to take on greater risk. Don’t get me wrong, risk is a necessary aspect of speculation. But at that point, it feels more like I’m gambling than investing. If I want to place larger bets on speculations, why wouldn’t I day trade? Surely doing some speculative buying and quick flips with the stock market would have proven more lucrative than doing so on my most recent quick flip, Sliver Queen, which netted me a measly $5 in profit so far simply because I could only find a couple copies underpriced online.
Hey, doesn’t that chart look familiar?
It’s Time To Focus
This risk/reward equation has been out of whack for me. I’ve been trying to get thrills out of quick flips with only moderate success. Meanwhile, other investments I’ve made in the past have been so obvious and provided much stronger returns.
My initial dive into Booster Box investing has proven highly lucrative. Are these difficult to move? Absolutely. But the limited downside and high likelihood of upside cannot be ignored. In the past, I’ve kept the investment in this area under control with the excuse that I wanted to remain diversified. I was fooling only myself – why did I bother buying Sliver Queens in the hopes I could sell within three days of ordering when I could be sitting on one more Return to Ravnica Booster box instead?
The same goes for other high confidence bets I’ve made in the past. After seeing how Scars of Mirrodin Dual Lands trended up in price, I had extremely high confidence Innistrad Dual Lands would follow suit. Many well-regarded members of the QS community agreed, strengthening my beliefs. Yet despite this, I was so concerned with diversification that I limited myself to a mere couple-dozen copies of these lands.
The result – I made a solid profit but missed incredible upside. And it was such a textbook opportunity.
My strategy needs to change. I need to increase the size of my bets, and stick with a risk-profile I’m comfortable with. I have a difficult time stomaching a purchase like Corbin’s 93 Splinterfrights or Jason’s Deadbridge Chants. These are speculative bets with measurable risk (Corbin’s more so than Jason’s).
Meanwhile I’ve been trying to accumulate Supreme Verdicts because I remember what Terminus did last year. By sticking to consistent performers like board-sweepers and mana-fixing lands, I ensure plenty of upside without the need to worry about flipping quickly. I had months to invest in Innistrad Dual Lands and another month or two to sell with plenty of profit.
Contrarily, with Sliver Queen I had one day to buy. And I’ve already missed the window to sell one for profit.
I’m Doing As I Say
My risk-reward balance may not match yours. You may like the quick flips because you can maintain smaller inventory. You may love the thrill of profiting on something very speculative because you anticipated metagame evolution. I can appreciate these benefits, but I’ve realized they’re not for me.
Stability, higher likelihood of profiting, and longer time horizons are what make the most sense for me at this stage in life. You know what – this is comparable to my stock market investing strategy. Rather than trying to flip AMD stock on hype, I would much rather invest in Intel for a few years to earn a solid, relatively safe dividend. Reducing the amount of risk gives me the courage to invest larger amounts, which in turn yields me greater profit.
This sentiment is most recently manifested in my Innistrad Booster Box play. For the first time, I’ve had the courage to go deep on a Magic investment. But I only managed to do so because of the nearly zero downside I know I have taken on with such an investment. Will I make 1000% profit like some people did with Shared Animosity?
Of course not. But I am also taking on far less risk and I’ll have years to unload these boxes for profit. With Shared Animosity, you may be able to find cheap copies online but by the time they arrive it may already be too late to sell. I know which scenario I’m more comfortable with.
Sigbits – Safe Bets
In light this week’s article, I’ve decided to share some updates on safer MTG investments I’m looking at.
- Shock Lands. These are so obvious. I’m confident these will follow similar price trends to Scars and Innistrad Dual Lands. If I’m right, the time to acquire these at their cheapest prices is nearly past. Once Standard rotates, we are going to lose Innistrad Duals. If players are still going to play 3+ color decks in Standard, they are going to lean very heavily on Shock Lands. Naturally I like blue ones the most, but Overgrown Tomb and Blood Crypt seem solid with Jund being so strong in Standard.
- Deathrite Shaman has really stabilized in price. But when Modern season comes around, he should go up in price. Likewise with Abrupt Decay. In fact, I like most Modern-playable rares from RtR block.
- If Standard’s not your thing, may I suggest Worldwake Manlands? These have been on a steady incline lately. They’re not in Modern Masters, and I expect them to increase further when Modern season returns. Honorable mention to Blinkmoth Nexus for being like a Manland – this one is also solid.