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Insider: The Spike is Here. What’s Next?

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It’s happened. We’re there. The time has come. So on and such.

Winter is no longer coming, it is here. And now that it is, there’s money being made everywhere. Right?

Few things I want to address. The first is the Myth of Making Profits, something I’ve talked about before and which is especially relevant right now. It’s great that you got your Jaces at $10 and now they’re $25. But until you cash out (whatever your outlet is), you haven’t made a penny. Keep that in mind.

The second thing I summed up in a tweet a few days ago:

Screen shot 2013-10-01 at 7.07.59 PM
Let’s address these in order before we talk about some individual cards.

Myths and Theros

If you didn’t read the link, the TL;DR version is this: Until you actually cash out your cards, you haven’t made any money, and your specs have not paid off.

Now let’s look at Theros. Several of the cards I predicted to spike did, including Anger of the Gods and Elspeth, Sun's Champion, but remember that they’re likely at or near the peak right now. Having them to play with is great, and if that was your goal, congratulations. I hope I saved you some money.

But if not, and you want to flip some of these cards, you need to do so in the next two weeks. Lock in your profits now while you can and use that to fund your next few drafts or the rest of your Standard deck. Just don’t let yourself hold onto the cards for too long, happy that you “made money,” while buylists begin to drop.

Now What?

So let’s assume you did the right thing and got in on these cards while you could. What’s the play now?

In short, it’s probably time to sell. Yes, the Pro Tour could shake things up and push some of the premier cards even higher, there’s also another few weeks of busting open Theros until then, and I would refer you to the tweet above. And, remember, everyone is throwing their cards upon TCGPlayer to sell, so the race to the bottom is already in effect.

So what’s next?

Let’s look at what has been my favorite spec target for the last six months: Jace, Architect of Thought.

Screen shot 2013-10-01 at 7.04.12 PM

We see that our friend has gone back over $20, exactly like we predicted he would. He’s all over the Top 8 and will probably continue to be for the coming weeks.

I’m selling mine.

I don’t think a firesale is in order like with Elspeth or Anger of the Gods or anything else, but I do think it’s probably time to take our profits and walk away. To be honest, I don’t really see Jace going below $15 and I could see him spiking again to $30-35 after the Pro Tour, which is why I’m slowly unraveling my position rather than just dumping them all at once.

So really it’s all about how comfortable you feel with your position on Jace. If you got in cheaply, it’s probably time to sell and be happy with more than a double-up. On the other hand, if your “in” price isn’t as good, maybe you see if you can squeeze a little more out of him.

The major reason I’m not in a rush to unload these is because the blue man group of one is just really good. Even if the meta shifts or more copies hit the market, this is not a buyout situation, nor is it a one-week spike. Even if it doesn’t go any higher it’s going to come down slowly, which means we’ll see the writing on the wall and can proceed from there.

Unloading

So, back to the “What’s Next” question, I want to talk about one theory of unloading a spec. There’s not an official name or anything (or there could be in investing theory, I wouldn’t know). Anyways, I’ll call it the “break-even” practice.

Say we own 20 Jaces that we specced on at $9 apiece. Today after fees we can probably get $18 for these. In order to recoup our initial investment of $180, we need to sell ten copies. That leaves us with ten copies to hold.

I don’t always advocate this (because usually I feel like it’s just correct to sell once you’ve made your money), but in this case I think applying this strategy is valid. The major reason for it is that Jace could dip a little in either direction, but he’s more likely to be $30 two weeks from now than $10. With the upside that high and the risk minimal, I think it’s worth playing the market a little here, and seeing how it goes.

It could be a bust and you end up selling the last ten Jaces for something like $14-15 a copy, but even at that you’re still profiting. On the other hand, it exposes you to the opportunity to get $25 a copy, all while guaranteeing you’re still making a profit on the spec as a whole.

Keep in mind that I approach speculation with a conservative viewpoint, and I’m not the all-or-nothing type of guy. I’ll draw the last round of FNM to split packs every time instead of playing it out, and I take the same approach to speculation. But at the end of the day it makes money instead of losing it, and that’s how I’m approaching selling my Jaces.

What About the Rest?

While Jace is a bit of special case, remember that the rest of the cards that spiked this weekend are getting a sell call. One interesting note is that green-white didn’t make much of an appearance at all, which I’m not sure will be representative going forward. I still like holding onto those cards (other than Fleecemane Lion) until we get some more info.

Whether you’re deep into your Theros specs or just have a few Return to Ravnica goodies, this weekend was a profitable one for you, as long as you allow it to be. Sell or trade away some of those specs now to cover your costs, and reap the benefits with the rest.

Thanks for reading,

Corbin Hosler

@Chosler88 on Twitter

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Corbin Hosler

Corbin Hosler is a journalist living in Norman, Oklahoma (also known as the hotbed of Magic). He started playing in Shadowmoor and chased the Pro Tour dream for a few years, culminating in a Star City Games Legacy Open finals appearance in 2011 before deciding to turn to trading and speculation full-time. He writes weekly at QuietSpeculation.com and biweekly for LegitMTG. He also cohosts Brainstorm Brewery, the only financial podcast on the net. He can best be reached @Chosler88 on Twitter.

View More By Corbin Hosler

Posted in Buying, Feature, Finance, Free Insider, Return to Ravnica, Selling, TherosTagged , , , , , , ,

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10 thoughts on “Insider: The Spike is Here. What’s Next?

  1. I enjoyed the article and share your mentality, I too always split the last round of FNM to guarantee myself a decent prize rather than the “all or nothing” approach.

  2. Ugh, I disagree strongly with your statement that people should use their entry price to determine their sell price. I made a long post in the forum, check it out if you get a chance, I’d be interested in your thoughts.

  3. Unlike Kurt, I agree whole heartedly with locking in profits at the breakeven mark. The difference on when to get out though should be based on how deep you are on a spec though, not your starting price. If you are really deep, you should be getting out the ENTIRE time the price is moving upward. Unload into buying pressure. Liquidity is the name of the game. Selling 50 copies of a card is easier at $13, $15, $18… and so on as opposed to unloading 50 copies at $25.

    “Even if the meta shifts or more copies hit the market, this is not a buyout situation, nor is it a one-week spike. Even if it doesn’t go any higher it’s going to come down slowly, which means we’ll see the writing on the wall and can proceed from there.” <— This! This on every spec in which you have low volume (similar to Kurt's theory I believe, although I could be reading that wrong on the forums).

    Spikes on the other hand are different, sell within the second day of the spike. Obviously, first day would be ideal. But in the end, the only way to ensure profits is by selling and locking in profits. Buying because of spikes leads to one good call and 3 losing calls due to shipping times (unless you sell short, but then you are relying on the shipment being sent, being sent on time, not getting lost etc.)

  4. I am a pretty much in line with you Corbin, and you said it yourself: “I approach speculation with a conservative viewpoint”. Paying for your spec and using the remainder of stock to be profit is a perfectly acceptable play. Being able to make back your initial investment and only sell half of the inventory fits right into the conservative viewpoint. A more aggressive speculator may have a different viewpoint, and that’s fine. Different strokes for different folks.

  5. Kurt’s post on the forum raises a good point, and Jace is a good example for that.

    If you think (for any good, or bad reasons) Jace value is 30$ the hype around Jace should only reinforce you “intuition” but should not modified your target/point of view.

    Sure you might sell now your 50 copies for 18$ or20$ in 1 hour. But if you are right in your reasoning about 30$ for Jace, just wait for Jace to be 30$. It will take you maybe 2 days to sell your 50 copies, as the hype has been replaced by the reality: Jace is 30$.

    Many others factors might influence you decision (maybe you know that no pros are going to play UW control with Jace?, you know that WotC is going to Ban Jace after the PT?).

    I guess Kurt’s point is if you think Jace might stably reach 30$ why would you sell for 20 or 25$ (whatever is your entry price). And it is different to say Jace worth 25$ and above it’s too unstable and therefore I sell when Jace reaches 25$.

  6. I totally agree on the concept of unloading and locking in profits, but knowing the right time to do so is the trick. I’m happy with my timing on Jace because I traded them at 20-25 this past weekend. The one I’m not happy about is Chandra. Shoulda waited a little longer on her. Great article man.

    1. Let me add also, this is the future of magic finance. Value trading is almost not a thing anymore because most players are conscious of the price of their cards. The way you make a profit is by identifying spec targets to trade for thereby making money in the long run because the cards you obtain go up in value. You are right Corbin though, if you never sell anything, you never actually make any profit. One addendum to that ideology is that if you continue to successfully trade for cards that increase in value and then trade those cards for other cards that increase as well, pretty soon your collection will grow considerably. Basically, if you don’t sell, you are setting up a savings account that you can cash in at any time. That’s what the last few months have been about for me.

      1. This is why I developed “leave the last 10% to the next guy.” $5 in terms of a card’s value is so variable on something like this. You can sit around forever waiting for Jace to hit $30 instead of $25, but in the meantime people are undercutting TCGPlayer and lowering the price. At some point you just need to be happy with your profit (which is why what you got in at matters), rather than trying to max out.

        I understand that your entry point is a sunk cost, and ignoring it is technically* the right play to min/max profits, but most of us aren’t approaching Magic specs in that fashion; it’s simply not realistic. I would rather advice people to sell out at $25 and lock in profits rather than try and wait for $30 and watch the card come back to $18-20. (Not saying that’s what’s going to happen here, just using it as an example of my logic).

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