Quiet Speculation: Money Matters

This week is all about catching up on trends and looking at Extended since my last piece. M11 is already having an effect on the market, as the cards that are leaving in the Fall will lose value despite remaining legal for over 2 more months. 2 months is not a long time in the span of things, so it’s time to start moving your Shards stuff that won’t be an Extended staple.

Before we pull up a few case studies, let’s talk about the new Extended and how it will effect big-picture prices. It’s easy to figure out that the newly-relevant Lorwyn block rares will (and have) skyrocketed, while Ravnica duals will lose value. I find the implications for the soon-rotating cards to be more fascinating.

If we look at former Standard staples that rotated into Extended, they lost approximately half their value upon leaving the format. Since Extended is now 4 blocks and 2 core sets deep, as compared to the previous 7 blocks and 3 core sets deep. That means the pool is 40% more shallow, so we can expect an approximately proportional change in price. If we take Cryptic Command, which dropped from ~$20 to ~$10, and add back in 40% of the lost value, we’ll get a better idea of where Cryptic ought to be. Looking at the current prices, it’s right there. This isn’t a bulletproof method to pricing the format, but it’s a good starting point. Value is not a strictly zero-sum game, but when value is gained somewhere, it is lost elsewhere. Ravnica duals, for example, surrendered a lot of value and Shadowmoor filter lands. The numbers weren’t exact, but on the whole the gains and losses were proportional.

A few cards are bucking that trend, and it’s important to understand why. The first one involves me admitting I made a bad play, and missed out on the best part of the card. Murmuring Bosk was at .7 tix when the announcement was made, and at press time it is worth above 4 tix. According to my transaction ledger, I sold my speculative copies at 2 tix a piece. There’s good news and bad news there. The good news is that I made 186% on that trade. The bad news is that I missed out on almost 400% more. Had I held it until today, it would have been the headline trade of the article. In this case, it’s merely a convenient case study.

The reason I sold Murmuring Bosk is because I was aware of the trend. I didn’t have historical data to back it up, which may have lead to a bad decision. On my books, 100% or more looks great. My only goal is to just double up on each trade, but clearly it’s better to squeeze extra value out. I also traded emotionally, fearing that I was over-extending my bankroll and wanted to free up tickets. This was another reason I made a bad call. I had a feeling about the card; the fact that it’s a fetch-able dual land is huge, and could make a Doran deck very smooth. I didn’t trust my gut, traded out of fear, ignored my logical explanation, and fell back on a mantra “just double up” rather than applying dogma. That’s a great example of a profitable trade that still was not “technically correct”.

I wrote about Elvish Archdruid recently, discussing my vision of a Jund-style Elf deck in the new Extended format. Initial messings about were promising, and the deck was a hoot to play with. MTGO clearly agrees, pushing the tribal lord’s price up from the 1 tix to 2 tix area. It’s not a big change, but it could be indicative of the community collectively trying Elf decks, or anticipating one.

Eldrazi Monument continues its march upwards, fueled by a combination of Tier 1 and semi-competitive popularity. Monument decks often feel more invincible than they are; the word “indestructible” will do that to you. They can certainly bring the thunder, but they’re not tough to stop if you care to beat them. Regardless, the shrine to the blasphemous old gods provides a suite of valuable tools to a beatdown deck. If you’re a beatdown deck that has problems with Wrath effects, Monument is the prescription. Side effects of frequent Monument use can result in, sacrificed creatures, angry opponents, and one-sided blowouts. False bravado, empty boards and lost games can occur in extreme cases. Monument is a hell of a card, and will justify its price tag.

No financial article today is complete without a discussion of Jace, the Ab Sculptor. Like the LeBron James free agency talk or a Brett Favre comeback on ESPN’s SportsCenter, Jace discussions feel compulsory these days. He’s come down a bit from his triple digit heights, but when a card is so high, there is a purely psychological aversion to the price. ~$95 and ~$100 are pretty much the same price. We’re squabbling over about 5%, which is small enough in MtG terms to not matter. The fact of the matter is, $95 is curious. $100 is news. In general finance as well as MtG-specific finance, perception can be more important than reality. The psychological difference between the two numbers is far greater than the mathematical, and this should serve as a fantastic case study in emotional investing (and why it’s awful).

Avenger of Zendikar is falling a bit, since M11 won’t contain Time Warp and the Turbo-Land deck hasn’t put up any amazing finishes since its breakout tournament. The deck seems like a one-hit wonder, not effecting the metagame on the bigger picture. Decks like this are usually very powerful and very linear, which means they can be derailed easily. Decks like Jund, on the other hand, are not so linear. They just exploit undercosted cards, synergies, and generate superior value. Turbo-Land is such a deck, since it is just easy to beat if you care to do so. Avenger will surely see play again, but it might be some time before that happens. If he falls far, he could be a strong pick-up if you are willing to bank on a rebound.

M11 looks like another big-deal set, and the slow and calculated spoiling of the sets lately has helped build up hype. There’s some very interesting work being done right now that’s comparing historical data around set releases, and I hope to have some conclusions on that front shortly. It seems there’s a predictable and common decline in value between when a set goes up for pre-orders and when it stabilizes. As these rules begin to get better defined, predictions can become more accurate and based more on mathematics and precedent than gut instincts and theories. Magic is a great CCG, and truly has a robust and deep economy. You can bet I’ll be cracking M11 boxes for my store. My previous hesitation is gone, and is replaced with excitement – nay, giddiness. If Steven Colbert played Magic, I imagine he’d title this section “I’m Gideon My Pants”. Alas, he does not, as far as I know, play Magic: The Gathering, so until next time, don’t invest with your heart, but your head!Quiet