Magic finance has changed a lot over the years. I remember the olden days before smart phones when people used to use Inquest magazine to determine card values. I also remember a phase when two people would sit down across from each other and ask, "What do you value this at?" over and over again, looking for good deals.
Smart phones and wifi obviously changed the game. Everybody and anybody looking to make a trade has up-to-the-minute data and pricing on every single card all the time. Since everybody has ready access to real-time market prices, Magic finance has become speculative.
In order to maximize the value of my collection through trading, the goal is to trade cards that are likely to trend down, for cards that are likely to retain value or trend up. The end game of such a strategy is that by virtue of having made trades along the way, your collection will be better down the road than if you had made zero trades.
The way that we trade has obviously changed a great deal over the years, but so has what we trade for. Trends change. Demand for specific cards change. However, for the last three or four years, the way in which collectors and financiers went about building their portfolios seemed fairly consistent. There were certain ways to pick value out of Standard cards by selling into spikes and getting out of cards before rotation.
When Trends Became Too Predictable
The problem is that many of these "obvious" strategies became such a predictable and teachable science that everybody with half a brain and three years experience in Magic was buying in. Have you ever heard the adage, "too many cooks spoil the broth?" Well, when there are too many people looking to jump aboard the same trends at the same time, it makes it difficult to capitalize—because so many other people are also trying to capitalize on the same strategy.
Fetches and shocks are a great example:
Based on everything that we have ever learned about MTG finance, fetches and shocks are exactly the kind of card that ought to have dipped at rotation (making it an excellent time to buy in), and then gradually rebounded and grown in value over time as they became more removed from the Standard crowd. However, these cards have grown very slightly if at all over time. Why?
A couple factors have hindered growth on these cards. First, I believe the pace at which new players enter the game is slowing down. The way that I see the model for Magic has begun to change in my mind. Magic is becoming an increasingly complex and difficult game to learn and play. The tournament staple cards are complicated, tedious, and geared toward being enjoyable for players with years of experience.
When the game is primarily composed of players with five-plus years of experience, it makes jumping in a daunting task. Wizards has also largely failed to incorporate a female following into the tournament scene. Tournaments are 99% males—another missed opportunity to expand and bring in new players.
There are a myriad of reasons, but the point is that the game is gaining fewer new players than it was two or three years ago. Without the increasing influx of new players, the trajectory of some of the trends we've observed in the recent past gets thrown off.
For starters, once a set was two or three years removed from Standard, it used to be that new players would highly covet Modern staples as they transitioned from Standard to Modern. Now there just aren't as many new players looking to buy into fetches for Modern as there would have been four years ago.
The players who play Modern (the repeat customer crowd) already own the lands to play the decks they enjoy. So the price is driven down because there are so many collectors and investors all left holding the bag on shocks and fetches. In a sense, on these spec targets it has become a buyer's, not a seller's, market.
Standard: A Lost Cause for Speculation
The inclusion of Masterpiece cards into Standard has driven the prices on staples down so far that, outside of being a store and selling cards to FNM players, there is very little money to be had.
With high-price super foils in the packs, the prices of regular rares and mythics are pushed down. It is a fine idea on the part of Wizards to reduce the cost to play Standard by artificially lowering the cost of cards, and also incentivizing pack sales with a lottery-ticket element.
The problem is that while they did suppress the price of individual cards in Standard, most of the decks revolve around a higher-than-usual density of mythic rares and planeswalkers. Masterpieces help prevent $75 Jace, Vryn's Prodigy // Jace, Telepath Unbound from happening, but every deck still needs ten or more $15 cards. Long story short, Standard is still really expensive and players know their expensive mythics won't be worth squat come rotation time.
It is also worth noting that Standard isn't a format people tend to enjoy at the moment which also drives demand for staples down. The trajectory for 99% of Standard cards is that they presell at their highest watermark and trend down for their entire time in Standard. It is difficult to sell into spikes when nearly all cards trend downward.
As a collector and financier, I don't even bother with Standard cards anymore because the hassle isn't worth the potential gains. If there's a card I think is absolutely busted that's preselling for a really low price, I'll drop a few hundred bucks on it. Cards like this from the recent past include Eldrazi Mimic, Ishkanah, Grafwidow, Hangarback Walker, and Sylvan Advocate—each of these were preselling at a buck, and I felt they were simply too good to stay that low.
Modern: High Risk, Low Reward
Modern was the golden goose and everybody got paid. When Modern really shot up in popularity there was a large across-the-board leap in the prices of older staple cards. It was similar to when Star City Games announced they had adopted Legacy as their Open Series darling, and the prices of cards like Force of Will, blue duals, and Wasteland shot up in value.
However, since the initial boost in value, the prices have tended to stay fairly consistent. Cards do trickle up in value and occasionally post large jumps, but for the most part a $20 card stays within plus-or-minus $5. There are exceptions of course, and cards can spike.
Through the Breach is a card that has spiked a few times over the past few years and now has a pretty nice price tag. The problem is, what happens when Through the Breach is inevitably reprinted in Modern Masters 2017 as a regular rare? Don't we almost certainly arrive at a place where the pricetag is cut in half?
Holding Forever vs. Selling into Spikes
In the olden days it was common knowledge that Magic cards did nothing but go up in value—therefore the best play possible was just to never sell your cards. The longer you held them, the more they would be worth. So you'd never cash out unless you needed the money to make some other investment.
I'm not so sure that is true anymore. The days of constant growth seem far away now. With Legacy in the toilet, both Modern Masters and Eternal Masters promising a neverending stream of reprints, Standard being awful, and the influx of new players waning, it would seem that Magic cards in general are less safe of an investment than in the past.
At the very least, investing in the same old tired ways has become less safe. Khans fetches and Ravnica shocks haven't exactly worked out thus far—and that was a super obvious, super safe investment. It's worth noting that these cards haven't gone down—a fair point—but they haven't made the money that everyone expected yet.
Magic is changing. Modern is the new Standard in many ways. It's the format players prefer and it's rapidly eclipsing Standard in terms of popularity. Wizards wants Modern to be their bread and butter when it comes to retaining players and selling product. The Modern Masters series shows us that. The fact that we are finding Modern staples in every new set also suggests this trend. Wizards isn't going to let the prices of Modern spiral out of control, because that would hurt what they have going now.
We know that Modern Masters is a check to keep prices reasonable, so anytime a card creeps up it will inevitably be brought back down to earth. Outside of my personal playset, for example, I would absolutely sell every single copy of Through the Breach right now while the iron is hot, rather than hold onto it hoping it will grow.
Risky, Outside-the-Box Specs
I've always been a big fan of this type of speculation targets because I believe they pay off big more often than they fail. In all actuality, I don't find them to be particularly risky at all.
I like old cards. Alpha, Beta, Arabian Nights, Legends, and Antiquities. I like cards that have a lot of collectible swagger. These old cards are cool and have a lot of historical appeal. I also believe that fringe formats like Old School and 1994 have given these old cards a second wind and second life in terms of popularity and demand.
I have strongly advocated that the best strategy for MTG finance is to zoom in on cards that can't possibly go lower and have a reasonable chance of gaining value in the future. I stand by that and it has always done me well in the past. In terms of older cards there are a lot of opportunities on old rares and uncommons that really can't be less expensive but could easily become more expensive over time.
It also helps greatly to focus in on the Reserved List, because those cards have a 0% chance of ever seeing another printing. That's extremely significant in a world where Modern Masters and Eternal Masters are a big cash cow for Wizards.
Last but not least: good cards. I know, broad enough for you?
Over the many years I've had my Danger Room/Battle Box, I've noticed it has consistently appreciated in value. I pimp my stack out and all of my cards are Beta or the best possible foil version. However, random cards that I've acquired and put in there because they are foil and cool have tended to spike up at some point.
Here are a few off the top of my head:
- Foil Big Game Hunter that I paid $0.50 for out of a bulk box: $10.
- Foil Kitchen Finks that I paid about $10 for: $30.
- Beta Royal Assassin I traded for at about $40 back in the day: $200.
The stack is over 600 cards, and the vast majority are worth more than what I paid for them. The point is that great cards are great cards no matter how you slice it. I wasn't buying these cards as investments—I wanted them to play with because they are sweet!
Some Things Never Change
All things considered, the "sweet in Danger Room" investment strategy probably isn't too far off the mark for picking winners at an above-average clip. The point is that I'm picking up foils that are generically awesome cards that I'd want to play with in the abstract. In the abstract is important because it isn't just for a generic deck that's good right now, but rather the kind of card that I'd simply want to play if given the opportunity. At some point, these kinds of cards tend to find their way into a sleeve.
I like the idea of picking up low-cost, highly playable foils and just holding onto them for the long haul.
Magic finance has changed a lot over the years. Heck, it has changed significantly in the past year or so! However, some things don't change. Good cards that people love will always be in demand. The Reserved List is and always has been a gold mine. Buying in on cards that can't go lower and have a lot of opportunity to grow has always been the way.