A very merry Wednesday, fallow followers and fellow ~*Financiers!*~

Stefano here, back in Black for a tearful reunion with my fams, bringing you a Very Special Rerun for the holiday season. Think of it sort of like a clip show!

Originally published July 22, 2015, “ILLUSORY GAINS: On Speculation” was the third entry in Bargaining Table—and the first to sprout legs of its own and run around stomping all over the ~*MTG Finance*~ world.

I always intended for Bargaining Table to represent a critical, alternative perspective on the money side of Magic. Although my second column dabbled with slaughtering sacred cows conceptually, this was the first to approach the subject whose issues I really sought to bring to light: the culture.

As I continued with other firestarters like BLATANT THIEVERY: Community Ethics, I was pretty surprised to find that the critical approach was generally appreciated. This piece in particular continues to stand out as one of my most popular and well known writings. I truly hope you enjoy it.

As an addendum, my feelings on speculation did evolve over time. You can get a glimpse of my later ideas in the even more incendiary Bargaining Table series finale (so far), CARDNAME: Why MTG Finance Sucks. I would also like my die-hard Table-legs to know that although I’m not quite there yet (due mainly to my own missteps and laziness), I am close to reaching the lofty year-end goal I set for myself in my pilot episode.

I’m very proud of what I accomplished at the Table, and I couldn’t have done it without you, the readers of Hipsters of the Coast, and all the amazing support and feedback you offered me. Thank you again for the chance to write for you; I hope that my two cents, here and there, helped you make at least a quarter.

As the world so eagerly melts all around us this hot, sweaty, rather fascistic winter, no matter what holidays you celebrate (if any), I wish you from the bottom of my heart a happy New Year full of opportunity, prosperity, free healthcare and tuition, police and immigration reform, better representations in media, safer spaces, the courage you need to do that one thing you keep thinking about that we both know you really need to do, and access to safe, legal weed if you’re into that.

Maybe I’ll see you some Wednesday.

S.
12/30/2015

PS: Follow my Twitter and my Tumblr and read my other shit. Subtlety is for people with time to spare.

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IN WHICH I SPECULATE THAT YOU SHOULDN’T

Illusory Gains

“Yeah, I preordered a hundred copies at a dollar, and now they’re $3 each! You need any?”

– Person with a hundred cards that buylist for $0.75

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Good Wednesday, my rose-strewn ~*~*MTG Financiers*~*~. What shall you be ~*Financing*~ today? What markets shall we manipulate? What massive, earthshaking investments shall we put our mountains of capital behind?

Oh — no mountains of capital? Not even forests or swamps? More like a snow-covered plains, you say?

Oh, then I guess “investing” in cards at market price is probably stupid.

 

WHAT ARE YOU DOING WITH YOUR MONEY?

Wild Guess

No, really. What the hell are you doing?

Everyone in the general ~*MTG Finance*~ community is primarily interested in one thing. If you read articles on sites (that I do enjoy and respect!) like Quiet Speculation, MTGPrice, or /r/mtgfinance itself, what you see may be relatively diverse these days, but it is still ultimately dominated by a focus on speculation: advice on how to predict what cards will move in price, and how much, and when, and why.

This is guessing, this is gambling, and this is bad.

This is a topic I’m not going to mince words about. But first, let me be clear: I’m not saying that no one consistently makes serious money speculating. Just like I’m not saying that no one consistently makes money playing poker, the stock market, or — by golly — competitive Magic: The Gathering.

What I’m saying is that you won’t.

 

VENDORS HATE ME FOR THIS ONE WEIRD TRICK

Mystic Speculation

Let’s back up the Juggernaut for a second. Where did all this heat behind speculating come from?

When I was first introduced to /r/mtgfinance, I had already been trading semi-professionally for a year or two, even though I didn’t recognize what I was doing as such. I just wanted to grow my foil collection and subsidize my competitive grinding (LOL I ACTUALLY THOUGHT PLAYING WAS VALUE), so I looked to leverage my trading skills toward that.

Now, certainly, speculation in the Magic market already existed. I myself remember thinking, when Deathrite Shaman was first released: “If I just had a thousand dollars to throw at this right now, I would buy up all these $7-9 copies and $17-20 foils on TCGPlayer and effortlessly watch them all hit at least 150%, if not 200% or more.”

Deathrite Shaman

And obviously, I was 420% right. Deathrites hit $15.50 on TCG Mid at their peak, and the foils were in the 69s and 70s just as quickly. I never did go in on that spec because I lacked the funds and security to make a significant buy, but I sure as hell traded for my personal playset of foils at 20-30 each as rapidly as I could.

I still bust my friend’s chops about the two foils he traded me for a chipped Onslaught Polluted Delta.

But we’ll come back to Deathrite Shaman and that trade. The real question is: when did the speculation market — and the market for speculation advice — reach such a fever pitch?

And why?

 

BLACKEST NIGHT

Desecration DemonNightveil Specter

To my eye, it was when Innistrad rotated out and Theros rotated in.

Both of the above cards went from being bulk rares — buylist $0.10, market price about $0.30 — to being Standard powerhouses with a $10 price tag. If you buy bulk rares, that’s 10,000%! Even if you traded for them lazily at a full dollar, we’re talking 1,000% pure profit here! Yeah baby!!!!

Now, before I return to digging Magic speculation’s Watery Grave, let’s actually take a look at what factors enabled these bulk cards to grow so much so suddenly. It would be easy to say, especially in the case of Nightveil Specter, “There was no way anyone could have predicted a sorta-monocolor-themed block, or a mechanic like devotion, or that blue and black would have the strongest payoffs out of any of those decks!”

Instead, let’s ask ourselves what was observable about these cards during InnistradRTR Standard, and why we missed it.

First, Desecration Demon:

  1. Extremely powerful in a vacuum
  2. Variable drawback without clear precedent
  3. Seeing slightly more-than-fringe Standard play
  4. Power level hampered by a single card (Lingering Souls)

And the Specter:

  1. Highly unusual card in several respects
  2. Mechanic more flexible than past iterations
  3. Mechanic lacks precedent on a cheap, evasive body
  4. Highlighted as a Buy-a-Box promo right after Supreme Verdict

All told, these aren’t terribly unclear signals. In retrospect, Nightveil Specter was extremely difficult to evaluate in a vacuum and at least demanded enough consideration to say, “I’ll keep my eye out for synergies with this card during spoiler season.” But I won’t fault anyone for missing it.

Desecration Demon, however, seems like an obvious spec now. I remember not being the only one who was stunned when I first saw it: “A 6/6 flyer for four with a drawback that helps you?!” Then we all saw Rock decks play against Lingering Souls and understood that it was bad — but it was only bad because of Lingering Souls. We all should have reflected on that point a little harder, and yes, bought a crap-ton of Desecration Demons at $0.10 to $0.30.

Instead, when the ship set sail without us, we kicked ourselves and decided it was sane to assume this would happen again every rotation.

And what cards did you all buy and obsess over? What cards did I trade for multiple pages each of? What cards were going to be the next ten-dollar bulk rares?

 

A BUNCH OF CRAP

Herald of TormentPolis CrusherNighthowler

Uh huh. Big payoff.

How very speculative of us.

Now, I’ll give credit where it’s due: all of these cards more or less fit that “unusual, low on precedent, and/or difficult to evaluate in a vacuum” criterion. But none of them were being suppressed by a mechanic that was ready to rotate, none of them are standalone card-drawing engines, and none of them are 6/6 fliers for four mana. The most any one of these cards ever cost at retail, or ever will, was two American dollars.

Foil Heralds peaked at six.

There is logic to these specs, don’t get me wrong. Enchantments might be Standard-defining when RTR block rotates! Nighthowler can be huge for three mana, and it already sees some play! Herald of Torment uhhh kind of physically looks like a Desecration Demon card!

I did profit on some of those specs in a small way, but any profit I made (or could have made) came from other people trying to profit on them — never from the potential player demand the spec was allegedly based on.

Eventually, one trader offered me $1.50 in trades on each of my twelve (12!) remaining Polis Crushers, plus some amount on my playset of foils. I walked away to think about it and sought an opinion from ever-savvy vendor Joel Lim, assuming there must be something I didn’t know: “If someone finally wants this crap for $1.50, it must be about to hit $5!”

Joel told me to snap-take the deal. By the time I walked back, the guy had called his partner up and been reminded that it was obviously a dumb-ass trade.

Well before that, when the hype train on these cards was still full-Steamflogger, I saw the one and only Ogre, king among dealers, behind a booth at a GP. He wanted my three foil Heralds and asked me what was the best possible price I expected to get out of them by sitting on them.

“I don’t know…ten dollars each?

He said, with a dismissiveness I could only learn from: “I’ll give you a Deathrite apiece. There, you won your spec.” At the time, Deathrites were worth about $9.

We made the trade, but I pressed him for an explanation. He basically said: “I don’t speculate. But I do have a guy in this room who will pay $20 each for these today.”

That experience opened my eyes about the difference between gambling and a business model.

Speaking of Deathrite Shaman

 

BUT ALL THESE PEOPLE CAN’T BE WRONG!

Second Guess

Yes they can.

Let’s look at the best-case scenario on my Deathrite impulse. If ever there was an obvious spec, it was this beast of an Elf Shaman at release, and I know now that my assumptions about it played out in reality without a hiccup. In terms of the rate of growth and the foil price, it actually exceeded my cautious expectations.

How much would I have bought copies for? Well, there was a brief window during which they retailed for $5, but I missed that. So at the level I was operating on, to have a serious quantity before the prices moved, I would have been spending $7-9 a copy on TCGPlayer.

Boom! They hit $15 Mid. How much can I sell them for?

Well, I can obviously list them on TCGPlayer! For $14!

Oh, that might be after shipping. So $13. But that’s okay! I can list them on Facebook groups!

At $12 shipped, if I want them to move quickly. Hm, all right.

Okay, well, I can always just flip them over to a buylist for quick cash!

For…how much?

You guessed it. $7-9.

And none of this is to mention the amount of time spent doing all that work. That might be fine if this is what I do for a living (it wasn’t), and if I have all kinds of hours each week allotted for researching the market; keeping up with price movements; and constantly updating buy and sell listings on Facebook, Craigslist, TCGPlayer, and PucaTrade (I didn’t).

Oh, and if I had the spare capital to absorb the risk of a huge miss! (I still don’t.)

Oh, and that big trade I was so proud of? I traded an Onslaught Polluted Delta for two foil Deathrite Shamans. At the time it was straight: 30 each for foil DRS, 60 for a Delta (even though mine had one visible bit of corner whiting).

Not long after, foil DRS was in the 70s and slowly approaching 80. Yay! I won!

Not long after, Polluted Delta was close to $120 and DRS got banned. Meh. I broke even.

Not long after, Polluted Delta got reprinted. Yay! I won again!

Oh, I still have a playset of Onslaught Deltas on Magic Online? And Strands? And Foothills? And Heaths? And Mires?

Whoops. I forgot about that because I was so busy checking prices on the 42 Rest in Peace I ordered on rotation for $1 each plus shipping — a spec that looked longer-term, but about 90% as solid as Deathrite Shaman, with a higher potential multiplier. They’re almost $2 now!

I sold them all to a store for fifty cents each to pay for most of a Modern Masters 2015 draft.

 

YOUR PROFIT IS IN ANOTHER CASTLE

Mad Prophet

Of course, I’m wrong about this regarding some of you. Some of you, my honey-festooned readers, are already making good money speculating. Good for you! You don’t need my advice; you read me for the top-tier writing. Just like Playboy!

And look, maybe for someone who really knows the market but doesn’t have a lot of time to spend on making deals, speculation can be a smart, time-efficient way to make a little extra mana. You buy the cards, you stick ’em in a box, you forget about ’em until they hit $X or Y amount of time passes.

(Notice the firm, clearly defined goalposts being established up front.)

Plus, there are obviously smart times to go in on this kind of “backseat” speculating. Like scooping up piles of Modern and Legacy staples just as they rotate out of Standard, when they’re guaranteed to slowly but surely go up!

Like shocklands!

False Prophet

True jokes aside, even if you’re that person, stop misleading everyone else.

And if you’re the casual ~*Financier*~ who keeps speculating despite the misses and only being up about $5 lifetime, stop kidding yourself.

Speculating is almost never “investing.” Unlike the 90 million Warren Buffett dumps into a city newspaper that’s about to assert a monopoly on its market in 1987, the $90 you dump into an Origins rare does not tangibly help it perform.

Speculating, for most of us, is gambling. Educated gambling can be profitable, and there is certainly a skill component to it, just as in competitive poker (or competitive Magic) — mostly in the realm of timing and evaluation.

But if most of us don’t realistically have the time and resources to become professional Magic players, then most of us don’t realistically have the time and resources to become professional speculators. The amount of research, dedicated hours, and cultivated intuition it takes to consistently make money that way is extremely high. Trying to “dabble” in it is like trying to “dabble” in day trading.

You might get lucky, but you probably end up dead in Russia.

And why bother? You’re paying a real opportunity cost by doing all this speculating, when you could be spending that time and mental energy doing something you really love — or posting on Craigslist, buying collections, reselling singles, grinding buylist out of your bulk, and developing your negotiation skills so you can get a premium for your best cards and find the edges on each trade.

You know, things that guarantee you value every time.

 


 

Join us next Wednesday, when we’ll slam our dual lands on the Table and talk about how to gain value by losing value. (To me, if you want.)

Until then, put away the Origins price guide and get your nose to the…

Grindstone

 

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Stefano Black is an NYC-based writer, filmmaker, Arrogant Wurm, and cardboard-drug dealer. He can be found on Twitter as @StefanoBlackest, sharing humor, criticism, and Garfield-related poetry, and is available for hire or collection buying. He also unabashedly wants your money.

If you enjoyed this, check out ULTIMATE PRICE: What Is a Card Worth? and the Bargaining Table archive, and offer your playgroup bulk rares for catching up!

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