Patience & Capital: An Investment Strategy

Are you a Quiet Speculation member?

If not, now is a perfect time to join up! Our powerful tools, breaking-news analysis, and exclusive Discord channel will make sure you stay up to date and ahead of the curve.

Welcome back readers! A few weeks back, I took an increasingly bearish stance towards MTG finance, and mentioned some investing strategies I have been reinforcing on myself in anticipation of an MTG market downturn.

Since writing that piece, there was great news out of the LGS segment of our community. Prerelease and release weekends had overwhelming turnout for Guilds of Ravnica, and several store owners reported on the QS Discord that prerelease sold out entirely. The hype didn’t come as a surprise, given set rotation and new life for the Standard meta, but I’m interested to see if this momentum can continue beyond the Pro Tour in November.

As it is, prices continue to see relief across the broader MTG market while the pockets of increases have been driven mostly by Standard and Modern demand. EDH and Old School have cooled off significantly, and we have been chatting on Twitter and the QS Discord about the outlook for higher-end cards.

The sentiment echoed by many of the most respected and knowledgeable voices on both platforms is that higher-end cards should continue to drop through the holidays before hitting their floor. I have been trying to voice this information to anyone looking to acquire higher-end—especially Reserved List—cards, because I think there is still a little money to be saved by waiting. I have also been using this information to help shape my own investment strategy for the rest of 2018.

Applying an Age-old Cliché

"Patience is a virtue," is a phrase we have all probably heard at least once in our life. For me, this time of the year is always tougher with regard to MTG finance. I don’t speculate much on Standard or Modern, and EDH is usually in a holding pattern while GPs and the Pro Tour garner the attention and dollars of most players.

Because of that, my MTG financing strategy during the winter months focuses on a few areas: EDH cards that are hitting peak supply; no-brainer opportunities at their tipping point; or not spending at all. Patience and discipline during the Standard and Modern season become critical to my investing strategy because EDH tends to drag behind, and speculating on anything other than those formats can take six months or more to realize a profit.

The most important thing I have been asking myself before I make any purchase right now is, “Will I use this card if the spec does not pan out?” If the answer is anything short of a firm “yes,” then I pass on the card. As a result, my purchasing habits have declined dramatically compared to springtime, while my sales volume has picked up quite a bit.

To help refocus my MTG finance efforts, I have made a conscious decision to free up some capital. This has involved buylisting bulk I accrued earlier in the year, while also unloading a good portion of profitable long-term specs I hadn’t previously cashed in on. I want to be prepared if the market downturn opens up attractive entry-points to higher-end cards on my wishlist.

Just last week, I turned an Italian Chains of Mephistopheles originally acquired for $250, and two foil Rayne, Academy Chancellor originally acquired for $8, into Scalding Tarn and Flooded Strand Expeditions via the ABUGames buylist. I loved this move for a couple reasons:

  1. Expeditions are gorgeous and they should be easier to liquidate if I need cash.
  2. Italian Legends has become noticeably more difficult to move as budget (replacement) options have hit a wall in this softer market.

This review of my strategy has allowed me to rebalance my portfolio to a better mix of free cash and price-resistant cards. I have always made it a priority to own more desirable and easier-to-liquidate cards over budget/replacement options like Italian Legends or certain EDH foils.

Earlier this year, the rising tide lifted everything, and it was okay to pick up Italian Chains of Mephistopheles because the multipliers to the English version were attractive. Unfortunately, holding the Italian version beyond peak demand hurt me because I missed on the peak sell-point. It is in free-fall now, and could settle 25% or more below the high point I could've sold at before it hits its floor.

Remember this important fact when making a tough decision to rotate cards: profit is profit. It is always okay to miss on 20% when you are already up 50%.

If you need capital, and have cards that have been listed for a long time and aren't selling at the new prices established by the bull market earlier this year, I suggest looking for the best buylist option or lowering those prices just a bit and eating a loss.

I want to be clear, though: I am not suggesting to panic-sell, or even to sell at all. I am merely pointing out that many players and vendors are overextended right now, so having capital available and the patience to wait for a dip on blue chip cards over the coming months is worth considering. My hypothesis is the patient and savvy investors who are able to acquire desirables on the dip will be in for nice profits on the same cards in 2019.

Investment Plan

I have been running lean on specs the past two months or so, but I am always keeping an eye out for cards with short- or long-term potential. Here are the notables I picked up over the past two weeks:

Soul-Scar Mage

Affectionately called “SSM,” this card keeps popping up in random Modern chatter I see on social media, and it’s one I couldn’t ignore any longer. By the time this article goes live, I suspect near mint foil copies will be all but gone on the internet. There are a couple at $6.99 on CardKingdom, but for the most part the new price-point on them is showing up closer to $10.

Played foils are still available on TCGplayer under $5 at the time of writing, so if you think you could see yourself running a Red Deck Wins concept with Soul-Scar Mage as part of the package, I would consider grabbing them.

I don’t like the non-foil version as much; it is sitting around $2 already, and in my best estimate it will take a great performance at GP Atlanta (or more solid MTGO results to post) before that needle can move higher.

Second Harvest

With the release of Guilds of Ravnica, EDH token strategies received a huge boost to their arsenal. March of Multitudes, Divine Visitation, Trostani Discordant, and Emmara, Soul of the Accord all come to mind.

Knowing this, I am surprised Second Harvest hasn’t moved higher already. At the time of writing this, near mint foils can still be had under $2 on TCGplayer, while CardKingdom has three in stock at $1.99. Inventory does appear to be waning and I won’t be surprised if foils are selling for $5 in a few weeks. If you need a foil copy or simply want a good spec to add to your portfolio, now is a great time to grab these. They won't stay this cheap for much longer.

Ever After

On a per-mana basis, the value of Ever After is outstanding. Most reanimation effects require five mana to get one creature back to the battlefield. With Ever After, you get two for six. It is important to note the creatures have to be from your graveyard which limits the upside a bit in EDH. The card is also put back into the library instead of into the graveyard after being cast; this small note can have some relevance, positively or negatively, depending on your deck’s capabilities.

I decided to add one of these to my Dragons EDH deck. I grabbed a handful of additional foil copies (all at $1 or less) to add to my spec binder. I think this one will take about six months to mature, minimum, but I also felt for $1 a piece I could do worse. I would not recommend going deep on this one, but I do think it has a very safe floor.

Bonus Card (Watch List Only)

Insult // Injury

I will start by saying I found this one late into my writing and do not believe it is actionable without a little more data and research to back it. That said, the ability to double your damage output for a turn seems ridiculously powerful.

I have noticed this card show up as a one-of in a handful of Modern Burn lists recently (all experimental), and I also couldn’t help but think how powerful this card would be in certain EDH builds as a wincon. I wouldn’t go deep on this one by any means, but it’s a good card to add to your watchlist.

Wrapping Up

Whatever your investing strategy is for MTG finance, I personally advise trying to free up capital in advance of the holiday months. The combination of overextended vendors, Standard and Modern owning the spotlight, and the year-end push for sales goals, should create a perfect storm of opportunity for savvy and patient investors. I believe higher-end cards which pushed to record highs earlier in 2018 will have attractive new entry-points by December.

Over the past two months, I have personally focused on turning over my portfolio and generating free cash flow and store credit in the process. I plan to monitor cards on the higher end of the market closely, and acquire any staples that fit my strategy and hit my target entry-points. I feel this will give me the best chance at owning cards I will be happy to use, while also being well-positioned for another bounce in 2019 should the market pick back up. Worst case, I will own a lot of cards I enjoy and that are relatively price-resistant should I need to liquidate for any reason.

As a reminder, Edward Eng and I will be co-hosting the second installment of Office Hours for QS Insiders at 9 p.m. eastern time on the QS Discord. We will try to answer any MTG finance questions you may have, so please Insiders, come prepared! If you are not an Insider, I highly recommend signing up and giving it a try.

That’s it for today! Talk to you on the QS Discord or Twitter (@ChiStyleGaming)!

Join the conversation

Want Prices?

Browse thousands of prices with the first and most comprehensive MTG Finance tool around.

Trader Tools lists both buylist and retail prices for every MTG card, going back a decade.

Quiet Speculation