fbpx

Building A Portfolio

In this article, Chas puts together a $1,000 spec portfolio. At the end of his articles over the next few months, he’ll look in on the portfolio and see how well he’s doing.

By

Last week we talked about basic speculation strategies. General tips to help you navigate the world of Magic finance. This week we’re getting specific.

I’m lousy at keeping records of my spec attempts. I buy things at random and hoard them for years, forgetting to sell them when they peak. I trade for things and throw them in my spec box. When I draft a set where the singles are being undervalued—like Dragon’s Maze right now—I set the rares aside until the market rebounds. Keeping records takes work. It isn’t fun. So most of the time I just eyeball my wins and losses.

This approach hurts when I attempt to evaluate my prowess as a speculator. I can trumpet my wins and bemoan my losses, but I don’t actually know how much money I’ve made buying and selling Magic cards. Aside from my lucrative collection buying, I don’t even know if I’ve made a lifetime profit on my spec efforts. Is it even worth my time? It’s time to find out.

In this article, I’ll be putting together a $1,000 spec portfolio. At the end of my articles over the next few months, I’ll look in on the portfolio, make transactions if needed, and see how well I’m doing.

Here are the rules I’ll be following:

I will be buying all of my cards at SCG retail prices. If you’re a shrewd speculator, you know that there are tons of different ways to acquire the cards you want: trading, buying collections, finding underpriced stuff in the case at your local store, or even sniping last-minute auctions. For the purposes of this exercise, I will simply be “buying” cards at full retail. This is going to be a project about speculation, not time-consuming arbitrage.

I am limited to buying the number of cards that SCG currently has in stock. The portfolio has to be realistic. If a card spikes from $2 to $10 and SCG is sold out but hasn’t updated their price, I can’t dump $500 fake dollars into that card for a guaranteed profit. That would be cheating.

I can sell cards at any point for SCG retail minus a 25% fee. I give other finance guys crap sometimes for patting themselves on the back because their “breakout card” jumped all the way from $3.99 to $4.99. Most of the time a gain this small is irrelevant to speculators—you still haven’t made back your shipping or PayPal fees, much less the difference between the retail cost of the card and the price you’re actually going to be able to sell at.

Is the 25% fee too low? Quite possibly. It’s true that I would be ecstatic to get 75% of SCG retail for my cards most of the time. That said, I’m already limiting myself to buying cards at SCG prices that SCG has in stock, so I think docking myself a full 25% of my gross profits on every single sales transaction is punitive enough. Think of it this way—I have to make at least $250 on this project just to break even.

I can buy and sell at any point during the week, but I have to tweet the transaction when I do. The world moves fast. Sometimes I’m going to want to buy at card at 10 AM on a Tuesday and sell it at 5 PM the same day. I certainly don’t want people accusing me of playing the market in hindsight and only making “transactions” that I knew would pay off. Follow me @ChasAndres on Twitter where I’ll tweet my portfolio maintenance in real time.

Now let’s get to buying, shall we?

Week 1 Buys

I can sit here and throw out sleeper calls all day long. If I pick enough cards as “sleepers,” I’ll invariably be right on one or two of them. Then I can spend months bragging about how awesome it was that I was right. Aren’t I good at Magic finance?

Yeah, that kind of lazy writing won’t help me here. I have to find cards that fit the following criteria:

Undervalued. No use buying cards that are worth what they should be.

Undervalued on SCG relative to the market as a whole. Every site prices cards differently based on their current inventory, sales figures, etc. Since I’m limited to SCG retail, I’m limited to the cards that SCG is pricing aggressively. I just missed price rises on cards like Blood Baron of Vizkopa that I would have otherwise bought for sure. Drat.

In stock. Sowing Salt is kind of a neat little spec right now. People are realizing how good it is in sideboards against Tron in Modern. Too bad SCG is sold out completely.

Could spike in price relatively soon. It’s no use buying things like Zendikar Islands for this project. It’s a nice long-term spec, but I will end the project before those can turn too much of a profit.

Could spike in price relatively high. Since I have to eat 25% of every spec I make right off the top, I can’t waste my time with stable low-ceiling spec targets like booster boxes. Those things are great in real life, but they’re awful here.

Most M14 cards are out—the set is too new, so there’s still a bit of a built in “novelty tax.” Most Innistrad block cards are out—they’ll bottom out in September / October before going up in price next spring. Most Modern cards are out—the format will be dormant until next summer. Most older casual and Legacy cards are out—they tend to be too stagnant.

So where does that leave us? Here are the cards I’m considering.

M14

Chandra, Pyromaster – $15, 26 copies available

This is the only M14 card I’m really considering right now. Chandra has started to see some play and seems to have stabilized close to $15. This was billed as the marquee card in the set, and I think WotC was expecting it to influence the metagame a little more than it has. If this card does start showing up a lot more, it could hit $40 or even $50—planeswalkers in sets that aren’t opened very much have massive upside. $15 is an expensive gamble, though, and it’s more likely the card will continue to bump around in the $10-$20 range.

Dragon’s Maze

Voice of Resurgence – $35, 31 copies available

It’s briefly worth mentioning this card because it was $60 at one point and is down to $35 now. If you believe that the price reduction is due to people being bored with Standard over the summer instead of metagame changes, you might be tempted to pick some of these up. The card sees play in Modern as well, so it will likely maintain its value somewhat regardless of how next season plays out. Overall, though, spending $35 on these is too big a risk for me—I’d have to sell them for almost $50 to make a profit.

Progenitor Mimic – $4, 31 copies available

This casual gem has made a slow slide from $10 to $4. I have it on my radar because it is one of my favorite cards in Return to Ravnica block; I could easily see it rebounding back toward $6-$8 on casual play alone. Any tournament play—and it has seen some—would be icing on the cake.

Aetherling – $3.50, 36 copies available

This premier finisher bounced between $5 and $6 before the August doldrums set in. I suspect it will see just as much play after rotation, and it could spike as high as $10. This card could—and should—double in price at some point. I just don’t know whether that will be in the next two months or in the spring.

Advent of the Wurm – $3, 17 copies available

This card started at $7 and spiked as high as $10. It has seen some high level tournament play. It is in the same color combination as Voice of Resurgence. It dropped to $3 this week and has never been this low before.

Varolz, the Scar-Striped – $2, 29 copies available

Not only is Varolz a casual all-star, but he sees play in both Standard and Modern. I’ve read several articles by big name pros talking about how Varolz will have a role in tournament Magic going forward, and $2 is his all-time low.

Exava, Rakdos Blood Witch – $2, 30 copies available

This card has been as low as $1, is in an Event Deck, and hasn’t ever really seen any play. With Olivia Voldaren, Hellrider, and Falkenrath Aristocrat set to rotate, however, this color combination is soon going to be in dire need of a powerful four-drop. Many believe that Exava is the heir apparent.

Deadbridge Chant – $2, 34 copies available

This is a powerful build-around-me mythic rare from an underopened set. It’s an enchantment, which might be relevant for Theros. It is only $2 and has been as high as $10. Interesting.

Beck // Call – $0.75, 18 copies available

This card was supposed to be a breakout star in Modern, acting as the missing piece that would make the Legacy Elves deck Modern playable. That didn’t happen—at least not yet—but $0.75 is quite low for such a potent spell.

Blood Scrivener – $0.75, 21 copies available

This is another hyped card that never went anywhere. It’s a two-drop that started at $7! Could it finally start seeing play in the fall?

Plasm Capture – $0.75, 26 copies available

This is a 75 cent Mana Drain. Sure, it’ll never see any competitive play, but it’s Commander gold. If any of these $0.75 cards hit $2, we’ll be quite happy with our investment.

Sire of Insanity – $0.50, 31 copies available

Uh, wasn’t this supposed to be the breakout rare in Dragon’s Maze? The vaunted control killer? Scourge of Sphinx’s Revelations everywhere? It actually saw play too, right? I didn’t make that up? And now it’s just $0.50?

Gatecrash

Obzedat, Ghost Council – $8, 28 copies available

This card has been seeing more play as of late, but the price has kept coming down. Will there be a place for a hard-to-cast Orzhov rare in Ravnica / Theros Standard? If so, this could recover most of its lost value quite quickly—the power level certainly isn’t the issue here.

Aurelia, the Warleader – $6, 32 copies available

Mythic Angels are among the safest investments available. Even the “bad” ones tend to hold their value or rebound quickly thanks to overwhelming casual demand. Aurelia has even seen some tournament play, making her a better than average bet to recover some of her value sooner or later.

Prime Speaker Zegana – $2.50, 28 copies available

This mythic has actually been the flagship rare of a pretty good deck. It’s hard to cast, but when it hits play it’s an unholy beating. Might there be room for this card—which has been $15 twice—to make another run?

Thespian’s Stage – $1, 28 copies available

I drove this one straight up from $0.75 to $2 myself a while back. Now it’s back down to $1. I still love it over the long term and buying in at $1 could be an easy double up for us.

Return to Ravnica

Deathrite Shaman – $15, 34 copies available

It’s hard to believe, but this card has never gone higher than $18. That is why it’s interesting to me that Deathrite Shaman hasn’t dipped below $15 all summer—people clearly aren’t willing to sell theirs any cheaper because we all know it’s a multi-format staple. Could this finally make a jump to $25 in the fall? It’ll have to go higher than $20 for me to make any money on the spec, but this is certainly one of the cards I feel the strongest about as a post-rotation Standard staple.

Jace, Architect of Thought – $10, 20 copies available

This card was a house in Block play, leading many to believe that it will become a Standard powerhouse in the fall. That may still come to pass—it’s too early to tell—but as of now this card hasn’t seen much play in Standard. If this does surge, it could easily hit $20 or $25.

Watery Grave – $8, 39 copies available

At a time when the shocklands have finally started to trend upward, SCG actually lowered their price on Watery Grave from $10 to $8. While U/B might be out of favor for the moment, is that a color combination you’d like to bet against over the long haul? The U/B member of each dual land cycle is usually worth the most. No way should this be the cheapest shock on the market for long.

Angel of Serenity – $6, 22 copies available

Some of the cards on this list are total fliers: finishers that might start seeing play, combo cards that might never go anywhere, or busted former prospects. Angel of Serenity has been there before. She’s dominated the format and been the finisher of choice. Is it that hard to imagine her doing it again?

Supreme Verdict – $4, 38 copies available

I don’t get this one. Verdict was $7 very recently and still sees a ton of play. It is the premiere sweeper in Standard and likely the best in Modern as well. I never bet against U/W, and this seems like it could be a screaming steal at $4. This one will make the portfolio for sure.

Desecration Demon – $3, 23 copies available

This card has started to see a bunch of play in black midrange decks. As of now, though, the price hasn’t gone up much. It spiked to $4 briefly and has been as low as $1. I don’t think this card will jump too much over the short term, but it will easily hit $6 if the deck is good after rotation.

Armada Wurm – $3, 38 copies available

After an unsustainable peak at $20, Armada Wurm actually had a slow and steady rise back up to $8 before falling off to its lowest price ever at $3. This is still a massively powerful card that is begging to be broken, even though I don’t expect populate to come back for quite a while. It wouldn’t take much for this one to double in value though.

Lotleth Troll – $2, 34 copies available

Lotleth Troll has fallen to $2 before and recovered—it wouldn’t take much to see this one come back honestly. If Varolz seems like a good deal, why overlook Lotleth Troll?

Older Cards

Scalding Tarn – $50, 17 copies available

This doesn’t seem like a good deal, but SCG is actually at the low end of the market, selling these things at $50 right now. They’ve continued to spike across all platforms as people realize they are the key to building decks in Modern. Could we get in at $50 and hope to sell at (gag) $75?

No. No we won’t. Remember, kids, don’t buy in to hype.

Glimpse the Unthinkable – $17.50 (MP), 5 copies available

We’re cheating a little here—SCG is sold out of NM copies at $20 and is down to just a few MP copies of the card. I do want to bring this one up, though, because the card is oozing with potential. For years, casual play—not even Commander play, just straight up 60-card casual—kept this spell between $15 and $20. Now that Breaking // Entering is a thing, people are trying to make a dedicated mill deck work in Modern. If this takes off, it could be the perfect confluence of a low printed casual card suddenly nearly tripling in price. The immediate ceiling is somewhere in the $50 range.

Cavern of Souls – $15, 21 copies available

At $15, this feels like a slam-dunk long-term spec. It could go lower than $15, sure, but how low can it realistically go? $12? $10? This is both a Legacy and Modern staple land, so it shouldn’t stick below $20 for long. I don’t know if it will turn around quick enough for the purposes of this project, but if you’re speculating in real life, you might want to buy in now-ish.

Birthing Pod – $6, 30 copies available

Melira Pod and Kiki Pod are both still good decks. They’re both still doing a whole bunch of winning. Meanwhile, Birthing Pod has been incredibly stable at $6 for months now. I know Modern season has been pushed until next summer, but there’s still a chance that random demand will cause this card to go up in price sooner than that. It’s worth a look at least.

Raging Ravine – $4, 39 copies available

Celestial Colonnade spiked to $10, and Raging Ravine has steadily climbed from $1 up to $4. It probably sees the next most play of any of the manlands, and eventually Modern demand is going to push this up toward the $8-$10 range as well.

The $1000 Portfolio

While there were a lot of tempting choices for speculation opportunities, here are the cards that I ultimately decided to go with:

How many of these cards would I have bought with real money? The Sire of Insanitys certainly, and probably some of the other Dragon’s Maze cards: Varolz, Aetherling, and Advent of the Wurm. I already own a ton of shocklands in the $6-$9 range that I bought earlier in the summer. I have a couple Deadbridge Chants. I have a bunch of Thespian’s Stages too. I’m less sure about stuff like Desecration Demon, Jace, and Armada Wurm—the things I bought less of—but I wanted to fill out an interesting portfolio and just including a ton of $0.50 cards would have been boring. This project rewards me more for going in on low value cards, but I have to shoot high as well, right? That’s what will make it interesting.

I opted to keep $300 in cash so that I can act fast when the next great spec opportunity comes along. Chances are I won’t want to sell any of these cards before Theros comes out or I’ll be locking in a guaranteed loss. I’d like to avoid that if possible. Look for me to spend most of that $300 on preorders if the right cards come along.

What do you think of my portfolio? Did I miss any sweet cards to spec on? Did I make any major mistakes? As always, hit me up in the comments.

Until next week –

– Chas Andres