How To Decide When To Sell for a Loss

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My hunt for a piece of Magic: the Gathering original art remains ongoing. Currently, I am working to reconcile a reasonable budget and browsing the market for what is available. Unfortunately for my budget, I sold many valuable cards from my collection in Las Vegas last year. I of course allocated those proceeds toward my kids' college fund. I could dip back into the fund if I wanted, to put some of that money back into Magic, but I try not to do that.

Maintaining that discipline necessitated taking a finer comb to my remaining collection. I needed to pull out cards and sealed product I’m willing to part with in order to enable the anticipated, costly artwork purchase. After identifying the lowest-hanging fruit, I am now faced with tougher decisions.

What to Sell?

Do I sell items that I am attached to, or do I sell things I wouldn’t mind letting go of, but at a loss? Not all my Magic purchases over the years have led to financial gains—there are a good number of Magic-related products I own that are valued below what I paid. It’s bound to happen with a volatile market. Everyone knows how prices spiked during the peak of the COVID pandemic in 2021-2022, only to come tumbling back down again a year later.

Almost any Old School card purchased during the peak is going to be in the red today. Of course, some cards have held up better than others. I've noticed that Dual Lands have remained particularly resilient during this cooldown period. My Beta rares have held up somewhat poorly, but at least I purchased these at a steep discount via ABUGames’ eBay auctions.

I have heard that sealed product and artwork have gone through a similar trajectory, so at least on the buying side I will see some relief. The fact of the matter remains, however, that I need to lick some wounds and move cards at a modest loss if I want to quickly raise funds for another purchase.

Three Reasons to Sell for a Loss

As I considered my eagerness to sell, I realized that I’m OK with taking a financial loss on some cards and sealed products because it is a means to an end. If I'm selling something because there’s something else I am eager to buy, and I don’t want to wait the required months it would take for the market to (potentially) recover, I need to accept the prices that the market is willing to bear at the given time.

What’s more, if I did decide to wait, in the hopes that my cards would jump back up in value, it’s equally likely the item I wish to buy—in this case, a piece of original Magic art—would also climb up in step with the rest of the market. I must expect this trend, so waiting isn’t a good enough solution. As I considered this decision seriously, I thought up other reasons it may be perfectly acceptable to sell something for a loss.

Reason 1: Opportunity Cost

I’ll bucket my motivations to buy something else within this category. Owning something with monetary value carries opportunity cost—that is, the loss of potential gain from other alternatives when one alternative is chosen. By owning item A, you forfeit the opportunity that investments B, C, D, etc. have to offer.

A commentator on CNBC will sometimes state that the decision to not sell a stock on any given day is equivalent to the decision to buy that stock for that day. What does she mean by this? It’s another way of describing opportunity cost, and it indicates the passive choice being made by someone who sits on an asset without selling. It implies that one could have bought other things with that money, but they instead decided to hold that same asset, so that’s where they are deciding to put their money to work.

This goes beyond simple investment allocation management as well. Since we are talking about highly fungible, liquid assets in Magic cards, the resources could be spent pretty much anywhere cash is accepted. Do you want to redo your kitchen or own a Black Lotus[card]? Do you want that [card]Underground Sea or would you rather use that money to pay for urgent car repairs? Would you rather have a large Old School collection or money in a college savings account?

We make these decisions every single day we don’t sell our cards. We’re frequently happy with this choice because of all the enjoyment we get out of the cards, in addition to the financial upside they offer. Sometimes, however, the alternative is correct, and this could be a time it’s OK to sell even for a loss.

Reason 2: New Risks of Value Erosion

You’ve heard the expression, “Don’t throw good money after bad.” Good Life Project explains this concept as follows: once you realize something you’re invested in is not what you thought and likely never will be, don’t keep putting new money into it just because of what you’ve already invested.

This expression is what I think of when I consider the motivation to sell something, even for a loss. A great example here is the risk of impending reprints. You may have speculated on a card for potential long-term growth, only to see it coming up as a reprint in a new supplemental product. The best action to take at that moment is to liquidate, even if you’re still underwater on the card. The price is likely to decay even further before it has any chance of recovering.

Consider Liliana of the Veil’s reprint in Dominaria United, and what it did to her price. This card once flirted with a $100 price tag, but can now be purchased for under $20. If you had picked up a few copies for Modern play a year or two ago, it would have been wise to cash out of the cards as soon as there was news of her reprint in Standard. Back in August, Dominaria United copies were pre-selling in the $50 range; contrast that with her $19 price tag eight months later.

In today’s environment, reprint risk runs rampant. If the card isn’t on the Reserved List, it isn’t safe (with few exceptions). Every time Force of Will tries to break $100, it sees another reprint and pulls back. Fetch lands and shock lands are also perpetually at risk of a reprint—Wizards knows the inclusion of these cards can boost a set’s sales considerably.

In addition to reprints, there is downside risk if a card is about to rotate out of Standard. Metagame shifts can also impact pricing, as can a card’s risk of being banned. All these factors merit a decision to sell a given card, even if your price of entry was higher. There is no sense in holding something simply because you paid more for it—cut your losses and move on.

Reason 3: Altruism

I want to share a personal story that doesn’t put me in the best light—it’s a decision I made many years ago that I regret to this day. Around 15 years ago I was at my LGS trading with folks as was the norm back then. There was a newer player who was interested in one of my cards (I don’t even remember which one anymore). I knew the cards she wanted were valued at around $20, and when I browsed her binder, I didn’t find anything of interest. After hemming and hawing for a few minutes, I apologized and handed her the binder back, declining to trade.

Why is this a regret of mine? I’m disappointed in how I handled the situation. This was a new player, and I had an opportunity to help her out and give her a positive experience in the hobby. This would have been a win for her, a win for Magic, and possibly a win for me in the long term. Instead, I was shortsighted and too value-conscious—I didn’t want to take a small loss and so I declined to trade.

Since when had I become such a miser? I’d like to think that, if faced with the same decision today, I would have been happy to give a new player a great deal in order to help them bolster their collection and strengthen their first deck. It’s not like this player wanted a dual land and only had bulk Standard rares to offer. She wanted some new Standard card, and I balked at a loss of a few bucks.

Don’t be like me. I remember that greedy decision even today, many years later. Helping out a new player is a perfectly good reason to take a small loss on cards if you can afford it. I don’t know if people trade cards anymore, but if there’s an option to help a new player out at a cost of a few bucks, I say it’s worthwhile to make the altruistic investment. What’s good for new players is good for the Magic community.

Wrapping It Up

In an ideal world, every card we purchase increases in price afterwards and every card we choose not to buy continues to become cheaper and cheaper. Wouldn’t that be nice?

Unfortunately, that’s not how it works. Sometimes the cards we purchase decline in price over time, and it leaves us with some negative returns on our investments. Businesses can use these losses as tax write-offs, but for the average player, this isn’t a significant consideration.

Despite the lack of tax help, there still may be a few good reasons to sell cards for a loss. This includes opportunity cost considerations, changing risk profiles, and a desire to help a player in need. I’ve had experiences in all three of these situations, and while I never love taking a loss on cards, I have accepted that it’s the nature of the beast. I am confident I haven’t sold my last card at a loss, especially as my priorities within the Magic world shift away from playing in paper.

As you move forward with your day, I encourage you to scrutinize your collection to see if you’re better off cutting some losses to shift priorities as I have. If nothing else, you’ll develop a greater appreciation for the cards you already own!

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Sigmund Ausfresser

Sigmund first started playing Magic when Visions was the newest set, back in 1997. Things were simpler back then. After playing casual Magic for about ten years, he tried his hand at competitive play. It took about two years before Sigmund starting taking down drafts. Since then, he moved his focus towards Legacy and MTG finance. Now that he's married and works full-time, Sigmund enjoys the game by reading up on trends and using this knowledge in buying/selling cards.

View More By Sigmund Ausfresser

Posted in Buying, Community, Finance, Old School Magic, Original Art, SellingTagged , , , , , ,

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