It is common knowledge that the MTGO economy is mostly driven by the Standard format. Consequently, prices of Standard playable cards fluctuate according to Standard deck trends, metagame shifts and other tournament results.
A big difference with paper MTG is that prices vary quickly online, up or down. As soon as players get disinterested in a card, its price may drop quickly. And when several sets are falling out of flavor because of their coming rotation out of Standard, the result is a six months-long free fall.
I wanted to keep writing about my portfolio management series, but I feel like taking another break for this article today, as the timing might be important for your current speculations.
I'm talking about the price depreciation of the older Standard sets, currently Return to Ravnica, Gatecrash, Dragon's Maze and M14. This seasonal phenomenon is a classic on MTGO. Starting as soon as April, and even sooner for specific cards, prices really drop and will keep dropping until next Fall.
Ignoring this effect may have very unfortunate consequences on some of your investments.
Seeing this big price drop so early before rotation might encourage speculations, thinking cards are just momentarily dipping and will rebound. In most cases there will be no rebound, only a constant decrease. This can be a very costly trap for the unaware speculator. Falling to 7 or 8 tix from a 18 tix high may sound like a good buying opportunity. You may think that a minimal recovery, even only around 10 tix, may occur and that you will be able to cash in some profits. The truth is, you might end up with a card that is worth 0.3 tix three months later, and a record 95% loss.
My article today is a sort of warning for the newest speculators among us. By looking to what happened to past sets, I am going to explain to you why I recommend selling cards you may hold from the four sets cited above as soon as possible.
Here on out, and with very few exceptions, it's probably a good idea to forget about these sets. It's never too early or to late to cut your losses, and I will even discuss two examples of wrongly-timed investments I made last year at about the same period.
A Crumbling Empire
Unlike paper MTG, this price depreciation really hits hard on MTGO. The demand/supply balance is very well illustrated here. Less and less players are getting interested in Standard, dump their cards, and prices are spiral endlessly.
Mostly starting in April, cards from the older sets in our current Standard start declining. A good illustration of this is the set index. Take a look at Return to Ravnica, Gatecrash, Dragon's Maze and M14 indexes. They have already lost 25 to 30% of their value since April, even with the little rebound that we are experiencing now.
Don't think this will stop here. This trend will keep going for months.
From the Past
You think this is new? M13, Innistrad, Dark Ascension and Avacyn Restored got the same destiny last year, although it was more subtle with Innistrad since Liliana of the Veil (which accounted for 25-30% of the value the set) constantly increased in value during that period and after. And from what we now know about the history of prices on MTGO, the phenomenon also applied to M12 and Mirrodin block.
As you can see on the two graphs from Dark Ascension and Scars of Mirrodin, the drop is rather constant and the trend keeps going until September-October. The only little difference is that this year it seems that we have a marked rebound for Return to Ravnica and Gatecrash.
Let's take a look at some of our (ex)Standard champions.
Mutavault was not so long ago the most expensive Standard rare in the mythic era, and since fallen from 31 tix to 18 tix. Mutavault had lost 50% of its value about two week ago, probably heading to 6 tix or less by October.
Jace, Architect of Thought's trend is typical to what happens to good cards from the fall sets. The blue Planeswalker was rather unplayed during its first year in Standard and supply from Ravnica drafts was constant. Then came its moment of fame, Jace's price started rising to hit an almost 40 tix price tag this past winter.
Its moment of glory was pretty short, for soon after reaching its highest, it started decreasing and hasn't stopped since. Despite a noticeable bump late March, Jace, Architect of Thought is back to its all-time lowest--around 13 tix. No rebound for it, and its price to keep dipping.
Chandra, Pyromaster might have been the best flop of the year. "Best" because after all Chandra generated significant profits for many speculators. After a very strong start and a highest at 25 tix last October, the red Planeswalker didn't stop losing stamina and is currently at 8 tix. Who's playing Chandra now?
Obzedat, Ghost Council had a Standard career with a lot of ups and downs and never really found a place in midrange or control decks. This spring was fatal for the Council. After a big drop, Obzedat is now at its all time lowest.
Domri Rade's trajectory is quite similar to Jace. Its moment of glory was a little bit later, in March. Since then, nothing but a big fall. Now, back to its pre-Journey Into Nyx level after a nice rebound due to several appearances in Jund Monster. I don't think this rebound will last.
Others Have the Time of Their Life
Even if this decline affects the average of older Standard sets, it doesn't affect all cards. Because of recent metagame shifts, and notably the popularity of Jund Monsters, the cards that compose this deck are up. And sometimes like never before!
Abrupt Decay is the removal of choice in several Modern and Legacy decks, and hasn't been terribly popular in Standard. Recently, mmono black devotion decks added a touch of green, and three to four copies of Abrupt Decay. It is near its all time high right now. If you hold some copies, I would suggest to sell, as there is very little room to grow now with Standard rotation just ahead.
Rackdos's Return is making a nice comeback. The red-black sorcery doubled over the last two weeks, but still remains low compare to its highest.
Vraksa the Unseen is being played more than ever before and in several decks, including Jund Monsters and BG devotion. Vraska gained 50% in one month and is close to its all time high.If you were looking for a good opportunity to sell this Planeswalker, this should be it.
What Does it Mean in Terms of Speculations?
Globally, the four sets that are Return to Ravnica, Gatecrash, Dragon's Maze and M14 are on the loose. This trend is very likely to be definitive and should only stop next fall with the release of Khans of Tarkis. Nonethless, it appears that a rebound is occurring for several cards from Return to Ravnica and Gatecrash.
What do we do with that? If a rebound is possible with some cards, is it with others? Why not buy every card that was previously good (Jace, Mutavault...) now that they are cheap?
Previous Good Cards
My point of view is rather radical, as I highly recommend staying away from all of these. As low as they can be, investing now is extremely risky and any speculation at this point could result in serious loss. They are bound to lose value until next fall. Only a sudden shift in the metagame could momentarily revitalize these cards.
Last year, several of us, including me, tried to speculate on two major cards in Standard, Thragtusk and Restoration Angel, buying them at about 9 tix and 12 tix, respectively, during the same period as now.
We were hoping for a decent rebound in both of them. Well, as you see on the graph, that was a great disappointment and a good lesson for everybody.
The lesson being not to try to speculate on rotating Standard cards. As tempting as it can be, as good as the cards have been, there's so little to gain and so much to lose.
For now, if you still hold some Ravnica Block and M14 cards, I strongly encourage you to sell all your positions from these sets. And I know it may not be easy to sell losing positions.
Waiting and praying for a miracle is what I did with Thragtusk and Restoration Angel, with the loss we all know. Thragtusk finally hit 0.3 tix, 97% of the value I had bought it for. You don't want to be caught in this situation.
For the few cards that are clearly rebounding, or breaking their highest, I wouldn't be too patient with. If you hold some, whether you would make profits or not, I also encourage you to close these positions. Rotation is still around the corner for all cards. The following dip for rebounders could be even more abrupt. Watch out not to get caught here.
Very very few cards didn't lose value. Among them are Liliana of the Veil, Griselbrand and Mox Opal--three very special mythics. I don't see any rare "surviving" the rotation effect, and I don't see Vraska the Unseen or Domri Rade escaping this trend.
Waiting For Rotation
In case my strategy here isn't clear enough: as you await Standard rotation, sell all your Ravnica block and M14 positions. Free yourself of further loss and/or very risky speculations.
This year, M15 wil bring with it its Standard PT. With one more set, the Standard metagame could be modified. New decks could appear and previous unplayed cards could suddenly be under the spotlight... for merely two months. Remember that this Standard with two core sets is only playable for a handful of weeks. During this period of the year, not many people play Standard. Everybody is waiting for the fall set and to start with a fresh new Standard metagame.
However, the PT M15, as every Pro Tour, should have an impact on some cards and their prices. Here again, quick flips might be doable, with Theros block or Ravanica block cards. Knowing that most of the players are not going to be interested in Standard with Ravnica, I'm curious to see if any card from Ravnica or M14 is going to spike, even for two days.
Another thing to do while waiting for rotation is to monitor the price evolution of cards that are potential pick up for Modern, such as Abrupt Decay or Domri Rade. Even if most cards are likely to hit their bottom around the release of Khans of Tarkis, we saw last year that not all, particularly the mythics, bottom as expected.
Thank you for reading!