Insider: Portfolio Redux- A Lesson in Hedging

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Today I'm putting together a list of some pretty boring spec targets that happen to be cheap and have great catalysts for growth. "Boring" is just a reflection of predictability in price fluctuations. Thanks to MtG format seasonality and block rotations, trying to guess the next spike isn't really necessary; we can just play it safe acquiring "obvious" winners. Let's spend $100 picking up cards we can expect to turn around come Theros/Modern season and hedge those bets picking cards leaving Standard that are getting a lot of play outside of Modern.

The Picks

I like Supreme Verdict, and at $4 and change it could have some upside come Theros. It is also played heavily in Modern Control. Adding a set of four for less than $17 looks like a pretty safe bet.

Terminus is soon leaving Standard and shines in formats with Aerial Responder, Brainstorm and other top deck manipulators. Without many of those options in Modern, Terminus is likely a fringe card in the format. I like this card as a hedge against our bets on New Standard and Modern and $11.50 for a set looks good, although we can afford to wait for Innistrad block to rotate if we want to try and stay under $10 for 4.

Putrefy offers instant speed removal and artifact destruction in one, unconditional, package for Modern Jund. The new Dragon's Maze reprint can be had for less than fifty cents per and with Lotleth Troll, Deathrite Shaman and Scavenging Ooze knocking around in Standard it isn't hard to imagine B/G/x being a thing. Considering what makes Putrefy good today in Standard AND two of the first seven spoilers for Theros (Bident of Thassa, Destructive Revelry) spending $5 to pick up ten copies looks like a good bet.

To hedge Putrefy I selected Abrupt Decay. While definitely not unplayable in Standard or Modern, Abrupt Decay is a card that shines in Legacy's explosive format. For $24 you can buy a playset and while that price might scare off some, I'd say Abrupt Decay is at least worth half as much as Vindicate.

Detention Sphere is $2.14. For a card this flexible and potentially one-sided (token eater to the extreme) that shares colors with Supreme Verdict to be that cheap seems silly. Oh, have you said goodbye to Invisible Stalker yet? Modern playability is proportional to how many times your opponents cast Lingering Souls. Adding two play sets for a little over $17 seems worthwhile.

Entreat the Angels is a one or two of in Legacy Miracles. It makes tokens, angel tokens at that, and will see play in casual formats as a result. With a buy price just a hair under $5 I could see adding four. This card functions a lot like Terminus in the portfolio as both cards are very clunky without effects similar to Top tricks. Again, like Terminus, waiting for Standard players to unload copies might get us a lower buy-in price. Locally at least, I've seen little of this card in Standard and don't expect much of a price drop.

Last, But Insanity Not Least

Here we have about six dollars left to reach $100. Adding a play set of Sire of Insanity for $2.33 gives us a nice finisher that should play well against Control builds in Standard if that becomes a thing. In the looking for way to break category: Notion Thief. Four copies for $2.45 seems reasonable for what is at least a flashy sideboard option. Finally, $1.64 buys a play set of Modern Masters edition Grapeshot. If storm has a prayer in Modern, Grapeshot will be involved. The new art from a small set looks like a long run winner even if Blistercoil Weird tricks doesn't get there.

There you have it, another portfolio this time constructed to demonstrate how to build in hedges. Not unlike buying bonds to hedge against stocks, playing different Magic formats against each other can help protect you against the unexpected: seasonal delays, price spikes, reprints. Until next time, happy hunting!

5 thoughts on “Insider: Portfolio Redux- A Lesson in Hedging

  1. Solid choices all around. Nice article.

    What are your thoughts on the INN Dual Lands? Of course they’re still on a downward trajectory, but eventually these may be decent pick-ups. They compliment the Scars Fast Lands ok because they offer antoher mana fixing option in enemy colors. But upside won’t be tremendous. Curious to hear when you start to think about acquiring these?

  2. I don’t understand why you’re hedging against Standard and Modern. Do you see significant systemic risk in either of these formats? Alternatively, have there been times when in-season Standard or Modern prices have compared unfavorably to prices from other formats that were not in-season? The only format I can see myself hedging against is Legacy (due to Wizards pushing Modern and SCG’s commitment to Legacy in the long-term being kind of up in the air).

    1. Sawyer, good question. really though, what choice do i have? i would maintain the best hedge to singles is always sealed product. risk is unforeseen, see modern season delay. that is why i went ahead and picked formats (legacy/vintage) i see as no/slow growth but also much more stable playing bases. i do expect standard AND modern to grow but a no growth, stable vintage/ legacy market is a reasonable hedge to price fluctuations.

      my actual holdings are about 50/50 sealed to singles.

      i have a real hard time specing for casual formats like edh/ cube. the best cards for those formats that also see little play elsewhere are great foil pick ups (thinking primordials) but availability constraints make price swings up and down larger in my experience = bad hedge if you are looking for something different to growth profiles of Modern/ Standard.

      that said i am making a basic assumption that bigger growth profile = bigger risk, or at least larger price swings.

      1. Personally, I don’t care much about short-term or one-time shocks because I speculate as a hobby (so taking profits a few months later, in the case of the Modern PTQ season change, isn’t a big deal for me). I think this is why our approaches differ. If you’re interested in income smoothing, your strategy makes more sense.

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