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Insider: Stop Chasing Your Tail

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Last week Phyrexian Obliterator got completely cleaned out on TCGPlayer and other sites. No copies existed, and for about 12 hours it was a $35 card.

Today, there are copies available for $20. Right back where we were before this started.

When the buyout happened, I was ready. I found the last few copies available at $20 on the internet and thought about whether or not it was time to jump in for cash. I had a handful I picked up trading at $13-15 when we originally began talking about this card two months ago, and I was wondering if the right play was to buy in at $20 cash and hope to flip when the card stabilized at $30-35.

I passed. And that proved to be the correct decision.

So why did I make that decision?

What’s the Spike?

As I talked about a few weeks back, there are several types of price spikes cards go through these days. And this was a clear example of a hype-driven buyout.

A few things you should know. As of Wednesday, Phyrexian Obliterator is $26 mid on TCGPlayer. Karn Liberated is $29.

Both are mythics from the same set, and both have some casual appeal. One of these is a Cube, Commander and Modern staple, while the other has some potential Modern applications. One has put up consistent results and one has yet to do literally anything in a major event.

A freaking $3 price difference? Either Karn is massively underpriced, or Obliterator is overpriced. I’ll choose the latter.

It’s this line of thinking that led me to pass at $20, and it’s one that has me fired up about the mindset of some speculators.

The Rant

I’m not accusing any of you of this, nor am I saying that it’s even necessarily wrong. But the fact remains that far too many people are far too impatient to make this Magic finance thing work.

To be honest, I blame the MTGFinance subreddit for part of this. It’s great that the subreddit exists, and even though the content and quality is extremely weak compared to our forums, it’s nice that it’s made more people interested in the financial side of the game. After all, that not only likely makes us more money, but it allows more people to better finance playing Magic, which is great.

But the impatience is almost certainly what drove the spike on Obliterator and Spellskite.

Why do I say that? Consider this: Obliterator and Spellskite are cards we’ve talked about in columns and our forums for months now. They begin to see some increased demand, and the prices gradually rose. Same with Splinter Twin, which we’ll get to in a second.

So Obliterator began to see some movement, and a post was made on the sub about it. That got a few more people interested, and surprise, a few days later someone decides to buy out the card, likely thinking about Splinter Twin and hoping to double up just as it did.

Except it didn’t work, because one of these is a real card with demand and the other is being dragged along the hype train. I imagine whoever orchestrated this buyout is feeling pretty silly right now. Buylists didn’t move an inch, and even if they outed a few on TCGPlayer after buying it out, it can’t have been many. Considering the price was back down in a day, it seems no one was buying at the “new” price.

Look, maybe Obliterator is the real deal, and maybe it’s going to be a $35 card come Modern season. But that was a reason to buy in at $13 when we originally talked about, not $20+ now that everyone is talking about it but no one is playing it.

So back to Splinter Twin. I think we all understand the reasons why Splinter Twin spiked. There has been growing demand for the card, steady growth and dwindling supply. When the market caught onto this and it reached a tipping point the card doubled up and jumped to $10 as everyone bought in. Know what’s happened since then? It’s gone down exactly 50 cents. In other words, the new price held.

When people saw this, they immediately began looking for the next target, and seized on Spellskite. That created a round of buying at $8. Since then, the card has gone to $10 and stayed steady there. That’s a reasonable market correction and one I expect to hold as well (and $15+ in-season isn’t out of the question).

The Point

Two of these three were good buys. Twin was obviously the best, because it flew under the radar of the general population outside of QS and created a good buying opportunity. Spellskite wasn’t a bad buy because if it hits $15 in a few months you’re looking at $4-5 profit a copy.

My instinct is that whoever bought out Obliterator thought they were going to get the next Splinter Twin. And they were wrong, which leads me to the point of this entire article.

Buying a hyped card is almost always wrong.

Concerning Obliterator, rarely have I ever seen this amount of speculative demand created by perceived demand at work (maybe Nivmagus Elemental). The time to buy Obliterator was at $15 based on the results we currently have. (Certainly if you’re convinced it’s the next big thing buy it up, though you better have a good reason why it should cost more than Karn).

But I’m not just talking about Obliterator. Buying into Splinter Twin at $9-10 as it was spiking didn’t work out. Neither did buying into Spellskite at $8, though it may turn out okay down the line.

When you buy a card, you’re counting on someone else to buy it from you. Buying a $7 card to sell at $10 isn’t making you money. And by the time the card has reached the masses, this is usually all you’re doing. It’s why the person who bought out Obliterator didn’t make money, and it’s the reason everyone who jumped to Spellskite not wanting to miss the next Twin is still left holding their copies as well.

This is why we work so hard to stay ahead of the market here. Every single one of these three cards has been pegged as a target for weeks or months, including when New Phyrexia rotated out in the first place. That’s when you get your copies, not now.

Quick flips can work, but they’re also more risky if you’re not at the front of the line. To jump in at the middle part of the process is just chasing your own tail. You’re assuming more risk for less reward, and that’s not how you make money long-term in this business.

I talked about a few of the cards I’m eying for next Modern season, so that when the spikes on these happen (if they do), I won’t be scrambling to buy in and make a few dollars a copy. Instead, I’ll be outing my copies at the peak of the spike. That requires hard work, in staying ahead of the market and acquiring copies cheaply. Most importantly, it requires patience.

That’s why I’ve advocated picking up next season’s Modern cards now, and not two weeks before PTQ season when the general player base is after them.

Look, I get that it’s not sexy to pick up stuff like Avacyn, Angel of Hope and Griselbrand right after they rotate when you can be chasing the quick double-up instead. But today’s easy pick-ups that you tell yourself you have plenty of time to acquire become tomorrow’s “overnight” spike. Just like Splinter Twin and Spellskite and Birthing Pod and Sol Ring and Rafiq of the Many and Restoration Angel and Wurmcoil Engine.

So what do you say we focus on staying ahead of the pack, rather than trying to catch up to it?

Thanks for reading,

Corbin Hosler

@Chosler88 on Twitter

12 thoughts on “Insider: Stop Chasing Your Tail

  1. I still don’t understand why Phyrexian Obliterator – of all things – is the one being hyped. Is it only because of the four devotion count? Because otherwise it’s a mediocre card for Modern.

    1. You hit the nail on the head. It’s not a terrible threat and it’s decently costed, but the fact that it is 4 black means that in all honesty only one deck is going to play it…a Mono-black one, which didn’t exist last modern season so it’s hard to say how good it would be. Modern is similar to legacy in that it has a massive card pool and most decks like to splash in order to use the best cards available, any mono colored themed deck chooses not to enjoy that luxury. And Path to Exile is still the defacto removal spell of choice in modern (just like StP is in Legacy) and Obliterator isn’t too good against path.

      1. Are we trotting out the ‘this creature is weak to spot removal’ fallacy? 😉

        Also, last year, Flores built a Domri Rade deck featuring Obliterator and Demigod of Revenge, indicating to me that there’s room for innovating outside of Mono black. But I agree, at this point, there’s no substantial evidence this card will be used in a deck that is a top archetype. Lots of hype, no results yet. Fortunately, with the return of DEs and PEs, we’ll be getting better data soon from MTGO.

  2. i think once mtgo is back running full steam we’ll find out a little more about whats going on with obliterator. also i think its silly to not consider the fact that monoblack devotion in standard is making people test it in modern…the card pool is much larger and i can tell you its a real deck..and a deck in legacy. i played an scg open winner last weekend who is on the deck (mbd) in legacy and modern. who also took the deck to a day two at the d.c. legacy gp. both lists containing nykthos,grey merchant and obliterator.

    nykthos and grey merchant have made monoblack something that new players can try to make in modern ..with obliterator being one of the older cards in the deck it stands to reason the price will go up,considering the card ( obliterator) has been held up largely by casual demand up to about 13-15 bucks..i actually liked the card as a buy at 13-15 but not at 20 and above. trade is another story though..because if this card starts to win even a little bit it becomes a 30-35 dollar card very fast,and i think we will start to see it in more lists. mbd and maybe even the domri builds. the reason the card is as close to karn as it is is because most decks playing karn are doing it as a one or two of and casual appeal (for whatever reason) is much higher with obliterator and he’s a 3 -4 of in a developing modern deck.

  3. no i don’t have a list but he played nighthawk ,gatekeeper,grey merchant,obliterator,liliana,thoughtsieze..all the hits..after i went to work i realized karn is played in higher numbers..

  4. You make some good points here, Corbin.

    What I find interesting about the “realness” of spec targets is that it’s kind of self-fulfilling. I traded into some Obliterators when it was still around 15, and I’ve had my position in Splinter Twin for a while now, but I would be more likely to sell Obliterator into the spikes, because I honestly believe Twin could go higher and is a legitimate Modern staple, whereas I have little evidence to say the same for Obliterator. If many others feel the same way I do, then it’s no surprise the new price sticks because not as many people are actually panic selling their copies to make a profit and trying to undercut other sellers.

    1. Thanks! Yeah, to some extent it is a self-fulfillin prophecy, but it’s one that takes the entire playerbase to fulfill, not just speculators. After all, if the game at large decides Twin warrants $10, copies under that will be bought. If, like Obliterator, the price spikes high but has nothing to back it up, everyone wants to sell their copies instead of pick more up. At some point, “Prophecy” simply becomes what the market will support, not what we as speculators want it to be.

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