MTG Financial Fundamentals: Average Joe vs. The Evolving MTG Market

Because I try to build my Magic collection through buying, selling, and trading, I need to be in tune with the best venues to perform these transactions.  Some popular MTG speculators and finance writers have access to opportunities that may not be readily available to the average player for an array of reasons.  For example, at large attendance tournaments, many cards artificially inflate due to the limited quantities available on site.  These sudden jumps in card prices enable the keen MTG grinder to profit readily.  Having many obligations (wife, full time job, school, etc.), it is often difficult to excuse myself for the majority of a weekend to attend an SCG tournament to take advantage of these opportunities.
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Here is another of many examples.  Whenever Wizards reveals new information to the public, there is often a chance that profit can be made based on the information.  Consider the card Leveler, which increased in price by a few hundred percent upon the spoiling of Laboratory Maniac.  Unfortunately for me, these spoilers often break around midnight, long after I am sound asleep trying to refuel for another day at work.  Another missed chance to make some money.  Likewise, when the banned list is updated and cards are removed from the legacy list, they often see a tenfold jump in price.  Another announcement made in the middle of the night.  The list goes on.  So how does a guy like me find ways to increment his collection? (besides drink a ton of coffee to stay up late)
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As it turns out, there is not a single answer.  In reality, opportunity to profit is everywhere if you are willing to accept a few simple yet critical assumptions:
a)      You will likely not make hundreds of dollars at a time
b)      You have to be patient
c)      You have to be even more patient
d)     You have to accept the fact that sometimes you will miss; but when you do, try to spread the risk
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The above assumptions seem intuitive, yet they are absolutely critical, and risk increases significantly for the average Joe value trader.  Going to a tournament and trading for a particular card at 12$, and then realizing people are now trading it at 8$ can be absorbed rather easily when many trades are being made throughout the day.  Also, with tons of trading, you’re bound to find the statistical extreme and trade with someone who will give you that 12$ on the card since they need it badly.  If I, on the other hand, purchase a dozen cards online at 12$ and by the time they arrive one week later, I can’t move them for more than 8$, the loss hits the bottom line immediately and it isn’t easy to recoup so quickly since I don’t trade as frequently.
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By reviewing in depth each of my four assumptions, I will reveal to the reader how I go about grinding for profit in my sparse free time.  Let me begin with the first one: “You will likely not make hundreds of dollars at a time”.  When you follow some of the big name speculators and read the more commonly perused articles, you see people describing how they bought 100x of a particular card for 15 cents and now they are 8$ cards.  Sure, this does happen, but it’s never happened to me and, if you’re reading this article, it’s likely it has never happened to you as well.  But this does not mean we cannot still profit.  We just have to be more clever and strategic.  We need to find alternatives to going to tcgplayer.com and purchasing the 100 cheapest copies of a given card. Since by the time we get there, shops have caught on and have increased prices.
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Did you know that despite not participating in a single Modern tournament, I still managed to purchase Blazing Shoals and Disrupting Shoals for 25 cents each?  While I was out and about with the wife, I checked my twitter account and noticed that Jon Medina (@mtgmedina) had tweeted that Blazing Shoals and Disrupting Shoals were hot.  Furthermore, the day of PTPhilly, I saw many tweets describing this clever deck that was winning on turn two with Blazing Shoal.  So, I immediately went to cardshark.com and picked up a few at 25 cents each.
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Now stop.  Read that last sentence again.  I went to cardshark.com because I knew that all decent opportunities on eBay, SCG, and other major Magic retailers were gone.  You see, cardshark is sort of like the cars.com of the automotive world.  It is populated with private sellers (not unlike me) who are trying to make a few bucks here and there.  These are not sellers who are closely monitoring the latest Pro Tour for possible jumps.  As a result, I have never had a seller cancel an order because cards suddenly were “unavailable”.  Now, the downside to buying to a random person is that they likely only have a few of a given card for sale, not 100.  That is the other key point I want to make from the last sentence of the previous paragraph: I picked up a FEW at 25 cents each.  With shipping, it ended up that I paid about 1$ for each blazing shoal and disrupting shoal.  Sure, it’s no 17 cents like the cutthroat speculators find, but I still made 30$ on the deal AND I spent the day with my wife along with getting 9 hours of sleep that night.  To summarize, I use cardshark.com, MOTL, and even Twitter to purchase a few cards from people’s personal collection and I rarely have an issue getting what I want on the cheap for an easy flip.
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The second and third items on my list go hand in hand, of course.  Patience is so critical; I had to list it twice.  The dedicated MTG finance sharks are great at what they do, and they can sense when others are impatient and anxious to get a particular card.  Therefore, buying cards from speculators or trading at large tournaments always carries that element of risk.  If you truly want the best deals, you need to wait for them.  For these types of opportunities, eBay.com is likely your best bet.  There are always wide spreads in ending auction prices between cards; the key is to simply wait for the right deal.  Now, I cannot describe proper eBay bidding theory in this article as it would quadruple in size, so I encourage you to read about it elsewhere.  For starters, consider the thread “Getting the Most out of eBay” on The Source: http://www.mtgthesource.com/forums/showthread.php?10997-How-to-get-the-most-out-of-Ebay .  Even if you do not want to use eBay, the key here is that patience in both buying and selling will be rewarded.  And on small deals for small profits, every cent counts.
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The last item I want to touch on is around risk, acceptance, and diversification.  Just like the stock market, having a diverse portfolio of Magic cards helps mitigate risk.  In the past couple of weeks, I’ve bought a few Shoals, a couple Birthing Pods, and a couple Paradigm Shifts / Divining Witches.  Notice something about the spread?  They represent Modern, Standard, and Legacy speculations, respectively.  And instead of buying 100 Paradigm Shifts and worrying about if they’ll give me a return, I bought just a few of each.  Best case, I am able to sell them like I did the Shoals.  Worst case, I have a playset of a few interesting cards to play with.  And even if I cannot flip for immediate profit, I can possibly sell to another speculator to at least recoup my money minus shipping.  So in a sense, I am maximizing the resources I have available to me without taking on too much risk.  Since I don’t have thousands of dollars, and unlimited hours a day to dedicate to making profits in Magic, I employ this “light exposure” approach across the board in order to distribute risk and ensure I am not going to get burned, losing a lump of cash on 100 of a card I’ll never need and never be able to sell for more than 10 cents each.
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I want to conclude with a sound byte on trading.  While I have a good handle around buying and selling using the internet, successful, painless trading remains elusive.  Others are experiencing the same tribulations, since they frequently chime in when I vent on twitter about the difficulties of trading online.  In the past, I had attempted to value trade using MOTL.  Bad idea. Shipping fees, picky traders, and sharks will eat into any potential upside you may make on legitimate trades.  Now for trading I normally go one of two routes.  My preference is to trade in person either with others or with stores via their buy lists plus trade in credit.  Before you knock that strategy, some sites pay very competitive prices once you factor in store credit.  Consider Don’s Magic and Sundry, for example, where he lists some cards on which he’ll even give you his sell price in store credit.  On other cards, it’s a flat 60%, rather than mysteriously fluctuating prices.  The sites where prices tend to change daily may give you valuable information and may enable the dedicated speculators an avenue to cash out, but sometimes it is nice to have a blanket percent no matter what tournament may be taking place.
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Alternatively, I can also try to use my sale list on MOTL to drive trades without overtly saying “I wish to trade”.  This path enables me to establish my own prices on the cards I want.  As an added benefit, it keeps the sharks away; if someone wants something from your sale list and they want to cut down on the amount of cash they want to spend, having that buy list is a great win-win enabler.  Besides, even though we’re not stores with professional websites and large inventories, shouldn’t we patient, average Joe’s be able to buy at retail buy prices too?  I certainly think so.
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– Sigmund Ausfresser
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Posted on September 12, 2011, in Articles, MTG Financial Fundamentals. Bookmark the permalink. 2 Comments.

  1. I like this article. I’m in the same boat with wife, kids and little time. I also managed to make some money on disrupting shoals recently and am looking to keep the momentum going. If I could be so bold to give a little constructive criticism, it would make the article a little more reader friendly if you added some bold headers. Makes it easier to follow and people are more likely to read it because it doesn’t look like a huge wall of text.

  2. Sigmund Ausfresser

    Hi Paul, thanks for reading and for the constructive criticism! I’m always open to advice on how to make the column better.

    In this case, it appears there are some technical issues with adjusting the formatting. In order to mitigate this issue in future articles, I’ll make sure to use bold headers for various sections of my article. A great idea!

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