For as long as there has been Magic there have also been people creating strategies to make a few bucks off the game. It's that simple; people will find a way to gain value from anything and everything they can. It's not a snipe, but rather a fact of life. I've done my fair share of MTG investing and speculating over the years, and I can tell you that the better your strategy and sounder your logic, the better the returns will be.
I've been over my picks for Pro Tour Hour of Devastation the past few weeks and I feel really good about them. In fact, even with the Pro Tour just starting, I like where my head was at two weeks ago and stand by those picks as feeling solid and well reasoned.
What makes picks good or bad? Well, honestly, results! However, there are certainly strategies by which we have better or worse chances of hitting. Today, I'd like to go over the basics of how I view the Magic marketplace when it comes to investing. Basically, 99% of trades, buys, and/or sells that I do fall into one of a few basic categories that I will be laying out. Recognizing that a particular card falls into one of these groups ought to make it clear what the right move will be regarding the card.
Standard is interesting because it is literally defined by its short shelf life and volatility. Two things to always keep in mind when it comes to Standard cards.
1. The majority of cards have their highest value on week one when they are released since the demand for the cards is the highest it will ever be.
2. Most cards are, in the abstract, trending down, since they will rotate out of Standard eventually. Most cards do not have significant playability or demand outside of their Standard shelf life.
These two factors play a tremendous role in dictating how Standard finance works. Let's take a look at the archetypes.
When to Buy Standard Cards
There are a few times when it is a great move to buy in on a Standard card.
1. Buy to hold a card for value after it rotates out of Standard (long-term investment).
Typically these are cards with dwindling price tags that feel like they have significant upside in a format outside of Standard. Demand is often low on Standard-legal, Modern-centric staples, which means you can buy in low and wait for the value to slowly climb over time.
Example: The Eldrazi cards are a good example of a potential hold card that could have high upside after rotation. Lots of people are gearing up to dump rotating Standard cards but these are staples that will see play across multiple formats for the foreseeable future.
2. Buy to sell into a price spike (short-term investment).
These are quick-flip types of deals. You essentially are predicting where the metagame is headed, and buying or trading for a card before the market adjusts. You are betting that your information is better than what others have.
Example: Is ramp going to be a thing in Standard? Is the card better than people are giving it credit for? I'm betting yes. We will see what happens at the Pro Tour.
3. Buy and hold for a future version of Standard (medium-term investment).
Good card = good. The basic premise is that you identify a card that you think is great but doesn't currently have a top-notch deck to slot into. The idea is that the card will have its day before it rotates. These are tricky cards to bet on because a card can be very good but never find a home. You are essentially presuming that a card is great and will eventually find a home and garner higher demand and thus make gains.
Example: Relentless Dead came out of the gates with a lot of fire but quickly flamed out and fell into the $2 range. When the card was super cheap, I bought up several playsets. My mindset was that the card is strong, tribal Zombie, and can't really go much lower. To be fair, I was also largely betting on casual appeal and so this buy falls into a cross between categories #1 and #3. However, I also had a hunch that we would see some tribal Zombies in Standard and I got paid off for making that bet.
When to Sell Standard Cards
There are basically two situations that dictate when you should sell Standard cards: Rotation and price spikes.
1. Sell cards in anticipation of rotation.
I mentioned most Standard cards are always trending downward because they will inevitably rotate and lose a ton of demand. From a strictly financial standpoint you want to always be out in front of the curve when it comes to shipping off your Standard cards. There is a bubble, and when it hits, the prices tank hard. You want to dump rotating cards before everybody else gets in that mindset.
Example: Gideon's value is 90% related to how good it is in Standard. Nearly everybody who needs Gideon has Gideon. It's time to move on this card before everybody else starts to. The value will quickly and aggressively trend downward. Don't get stuck holding the bag on this walker.
2. Sell cards into a spike (payoff).
One of the reasons to invest is to make value on investments. When your investments pay off and a card jumps in price—sell it. Trade it. Get rid of it! I'm a large proponent of moving off of these spikes as quickly as possible and reinvesting into more stable cards (which I will get to in the next section).
Example: Before Pro Tour Oath of the Gatewatch I bought up over 150 copies of Eldrazi Mimic for between $0.50-$1.00. After the Modern Pro Tour they spiked up to $10. I quickly unloaded them wherever and as quickly as I could. I put playsets on eBay with Buy It Now for $20.00 when others were welling at $40.
The point was that I knew that price wasn't sustainable, and I wanted to get out of every single copy I had while the price was still high. Don't hold things too long. When it spikes, make your money and reinvest in something more stable.
The rules of investing in Modern have changed dramatically in the past few years. Primarily because of the Modern Masters reprint sets. In the olden days, the strategy for everything was simple: "hold onto it and it will go up."
Not so much anymore. Reprints have dramatically altered the way that I think and feel about investing in Modern cards. No Reserved List for Modern cards means that nothing is sacred anymore.
When to Buy Modern Cards
1. Buy into a potential price spike because of a hot new deck or tech.
The theory is the same as with Standard. If you can predict based on playtesting or MTGO results that a deck is gaining in popularity, it is always a great move to buy in on the staple cards of the archetype. Players will move in on it, demand will increase, and price will go up.
Example: If you saw Devoted Druid coming and made a move, good job. You don't need to be a genius to figure out that a new infinite combo is going to get hype and make sales. It doesn't necessarily have to pan out in the long term with regard to the Modern metagame, it just needs to look spicy enough that people will buy in on the cards.
2. Hold and hope it doesn't get reprinted for a while.
Reprints make this strategy really dangerous, since any card can get a reprint at anytime. However, there is something to be said for hoarding up potentially great cards and hoping they dodge a reprint for a while and spike in price.
Example: Mishra's Bauble is a great example. The pricetag is gigantic and that tag is a representation of two factors: demand (it's in the best deck) and supply (it has miraculously dodged a reprint!). This strategy is strange, because not only do you have to pick "good cards" but they also largely need to dodge a reprinting to spike.
3. Hold onto cards with secure prices as investments.
Standard cards are always trending down. Modern cards are always at risk of a reprint and taking prices. What's the point? Invest in cards with extremely high demand like fetch lands.
Example: The point here isn't that I'm looking for Flooded Strand as a long-term hold or a potential spike. I'm looking to turn the cards I've already spiked into something with a less likely chance of decay. The demand for cards like shocklands and fetchlands keeps the price relatively stable, despite the inevitable possibility of reprinting.
Basically, it is good value to turn a card that is trending down into a card that is trending stable, that also has high demand and thus high liquidity.
When to Sell Modern Cards
1. Sell into a price spike.
The same rules apply as with Standard. When it spikes I nearly always want to dump it, regardless of whether it is a Standard or Modern card. The only exception are Reserved List cards.
Example: Every card that has every spiked ever and then slowly went down in value as the demand subsided.
2. Sell/trade/reinvest into better cards.
Modern cards are more stable than Standard cards. Reserved List cards are more stable than Modern cards. It's always good to turn your Modern cards (which can be reprinted) into cards that cannot (or are less likely to be).
God-Tier Cards (Reserved List)
If you are doing it correctly, the endgame is either to get more money in return than you put in, or end up facilitating a series of trades that turn into better cards. You can spike a bunch of Standard cards, but if you don't either cash them out or turn them into more solid cards, the value will eventually trend quickly downward.
Reserved List cards are a great investment because they cannot be reprinted. Also, many of these cards are just great from a collectibility angle because they are iconic and super powerful.
They don't make 'em like dual lands anymore. Every Commander, Legacy, or Vintage deck from now until forever will want these cards. Long after Magic stops making new cards (which could be decades from now) people who play the game for the experience (much like how people buy Vintage Pac-Man arcade games) will still want dual lands and Power 9.
If you set your cards aside for five years and randomly discover a box of MTG in the basement, it is always better if that box contains Reserved List cards than anything else. They consistently increase in value and have an extremely high demand among players and collectors.
In the end, you want either more money than you spent in your hand, or to have traded your Standard cards into Modern cards, then into Reserved List cards.
I also think that identifying which of these categories a card falls into is extremely helpful in terms of knowing what to do with it. If the card falls into a category that dictates it should be sold or traded away, I sell it. If the card falls into a category that suggests it has a high probability of going up, I hold onto it (unless I am trading for a better quality of card such as Modern mainstays like fetches or Reserved List cards).
It's kind of funny, but following these simple rules and letting the rules dictate what you trade away, what you trade for, what you keep, and when you sell, is extremely consistent when it comes to gaining value.