Most great ideas in history start with, “What if?…” or “Maybe…”
For me, it almost always starts with, “Hmm…” followed quickly by, “I wonder…”
Magic is obviously a very niche and inconsequential subject to have great ideas about. Seriously, we’re not curing cancer over here, or solving starvation, but it’s still one of the most fun things to think about in the world. Anyway, sometimes when they come, these great ideas don’t do anything except change how you and everyone else you know view some facet of the world. That’s what happened to me at the beginning of July, 2011.
People like Magic. They also like making money. They are also generally quite lazy. Combining the first two and overcoming the last is like inventing Reese’s Peanut Butter Cups yourself, adding them to ice cream, and then getting people to pay you to eat them.
I hope you are hungry.
The Duality Basket
In April of 2011, dual lands on Magic Online were dirt cheap, averaging around 9 tickets a land for the lot. The last time I had ever seen them this cheap in my lifetime was when Revised was in print (so 1995 or so). Knowing that all ten were in Master’s Edition 4 and surmising that this would mean they wouldn’t be reprinted any time soon, I bought a full set (4 of each) for my account. I did this because I was disenchanted with Standard at the time and because I wanted to buy them before the price increased too much.
This course of action was a clear mistake.
Why? Because if I was really worried about the price increasing (and I was), I shouldn’t have bought 40 dual lands…
I should have bought 400.
It turns out I was correct, and dual lands continued to rise for the next three months until they were just over 13 average in July (almost a 50% rise in just three months).
Lesson learned.
When the Master’s Edition sealed queues that signaled the end of the MED4 run finished, I started discussing the basic theories I had developed regarding Magic Online speculation with my business partner Zvi. (You might have heard of him—unlike me, he’s kind of a big deal.) I outlined the following points:
- Legacy interest had exploded on Magic Online in the last three months, reflecting what we were seeing in the real world with the giant Legacy Grand Prix and SCG Open Series. You could see it happen via Twitter, partly as a reaction to a s***y Standard environment, and partly because online the format was cheap enough to get people interested. (At that time, an entire set of 40 duals was the same price as 4 Jace, the Mind Sculptor.)
- Because of this, prices on a number of short-print Legacy cards (like Force of Will and those in Tempest Block or MVI) had exploded to high prices even when compared with those in the real world.
- Legacy cards in general on Magic Online had shown positive trends. Dark Confidant was around 4 tix near the beginning of the year; now it traded at 10.
- MED IV contained all 10 dual lands. To me, this meant Wizards of the Coast were unlikely to reprint them any time soon, if at all. MED IV also just went out of print, meaning the market potentially had not caught up to this fact.
- Commander came online on July 4. Cube is rumored to come online sometime in the next year. Dual lands, especially on the cheap when compared to the real world, could be easy pickups for casual players. I think, overall, you’ll see rising price pressure on the original dual lands from a number of vectors, some of which are unlikely to be accounted for.
- The card sales market on Magic Online was now large enough that you could buy a lot of cards at once without moving the market that much. This is especially true for Standard-legal cards, but it might also be true for Legacy. It’s still inefficient overall with regard to the interface and actual buying and selling, but not so much as to make it not worth our while.
Me: So far, I’ve not only been successful in the big stuff, but I think I have a handle on the market fundamentals. A lot of times I can tell when things are going to move, even when I’m not involved at all. Given the above info… does it make sense to buy dual lands? Like… a lot of dual lands?
Zvi: How many is a lot?
Me: Well, I’ve done some calculations, and I think it would take between 22,000-25,000$ to wipe out the screen*. The problem is, I don’t know if prices will change in the process of buying. Obviously we don’t want to catch them all if we have to pay twice as much for the last one as we do for the first.
Zvi: All right, I’m in. Let’s see what you can do…
(* Meaning to buy all the major bot vendors and most of the minors out. The lingo comes from sports betting when you’d see prices for every major book change at once. Someone wiped out the old price on the screen, and now there is a new one.)
To understand my mindset, turn back the clock to 2005. You are alterna-reality Biff Tannen. There you are, sitting at your computer playing World of Warcraft when an older version of you walks in, slaps you upside the head, and says, ‘Stop playing that stupid game and listen to me!’
Instead of giving your teenage self a sporting almanac, old you only managed to swipe one page from StarCityGames.com entire list of prices from 2015—the page with dual lands on it. (Because let’s face it—Biff doing something as clever as stealing a sporting almanac was a stroke of genius on his part and extremely improbable—this kind of cockup seems far more likely.) Obviously as Biff Tannen, you would have no f***ing clue what Magic cards actually were, but your future self seemed pretty certain you should buy dual lands.
The question is: how many should you buy?
The answer we came up with was: a lot.
Here’s the paradigm shift that forced our hand. In addition to being perhaps the greatest game ever designed, providing hours of fun and a massive learning experience in the process, certain Magic cards have also proven themselves to be a tremendous investment over the years. Wizards of the Coast has also proven themselves to be steady and consistent custodians of the game for both players and collectors. With the world economy still in turmoil and stock markets looking very uncertain, would it be a good idea to put a bunch of cash into Magic cards you expected to rise over time?
Yes.
In fact, absolutely.
There are some assumptions and caveats made when doing this in the online market, but nevertheless, the answer remained a resounding yes.
Excited by the prospect of something completely different with regard to Magic, we started moving money around.
The Process
It turns out almost no one has tickets for sale at discounts these days in bulk, which was annoying. It also turns out that you can only buy tickets on Magic Online in batches of 999, and after you do that, you have to wait two hours before you can buy another 999.
This type of behavior also makes your credit card company very suspicious that your card is being used for nefarious purposes. That meant it would take actual days to buy anywhere close to what I had initially planned for, and I would need to call the credit card company (registered in a state that would not trigger MODO store sales tax) to warn them about what was coming. (Note: We did this purchase with cash and not by borrowing at crazy credit card interest rates because doing that would be stupid. However, earning heaps of reward points from buying through the credit card first, then immediately paying it off—that was clever.)
Eventually we decided caution would rule, and we’d go with about half the estimated bankroll to take out the screen and see what happened.
Next I created a basket of cards I thought had good potential to rise based on set availability and recent Legacy trends, but the bulk of the purchases would still be dual lands. I also did some back-of-the-envelope guesses on card availability in the real world versus Magic Online. The math here is decidedly squishy and remains so despite my best intentions to make it otherwise.
There were 289,000 of each dual land to come out of white-bordered Revised. There were also a bunch of foreign black-bordered duals printed as well ABU that will have some effect on price. Additionally, there are nowhere near 289k Revised Tundras left in the world. I’d guess in the last 17 years you’ve potentially seen half the Tundras in the world attritioned away by dogs, tsunamis, angry girlfriends, rabid weasels, drunken Jon Corpora… you name it. Anyway, just going by Revised prices (but knowing that other copies have an impact on that price), Tundra has been selling for 78$ per copy recently in the broader cardboard market.
The questions about Magic Online then start to flow. How many Tundras exist online? What’s the ratio of online players to real world players? What’s the ratio of total online players to online players who are interested in owning Tundras? Sadly, I had no bloody idea how to answer any of those questions (Still don’t. I hate information black holes). My best guess says the number of Tundras online is between 7000 and 20000. The ratio of online players to real world players is presumably growing, and the ratio of online players who are playing Legacy is definitely growing. If it weren’t, dual land prices would have been constant or falling when Tundra, etc. were reprinted in MED4. Instead they dipped for a while, but then trended heavily up again (helped in part by this very comprehensive article from Sam Stoddard).
I also had one more feather in my cap regarding this particular purchase basket—the Magic Online Championship Series event at the end of July was Legacy, meaning there would be an additional, unusual source of demand compared to a normal month. Obviously this was a short-term event, but one that might have long-term consequences to the price.
With tickets finally on the accounts, we moved in.
July 15, 2011
BUY
|
Lands |
Purchase |
QTY |
|
9.25 |
XX |
|
|
13.5 |
XX |
|
|
9 |
XX |
|
|
14 |
XX |
|
|
Scrubland[/author]“][author name="Scrubland"]Scrubland[/author] |
12.5 |
XX |
|
12 |
XX |
|
|
15 |
XX |
|
|
16 |
XX |
|
|
26 |
XX |
|
|
9.75 |
XX |
|
|
8.5 |
XX |
This is only a portion of the total basket—I promise to discuss the rest in its entirety next week.
I can tell you that because of Magic Online’s turrible trading interface, it took two guys the better part of five hours to complete the buying frenzy. Tundra already had a minor bump from Stoneblade becoming popular a week or two before, while the rest showed little additional movement in the time it took me to get everything ready. However, looking at the online price ratio of Tundra to Underground Sea versus the real world ratio led me to believe Tundra was still underpriced by 10-15% versus its natural value. It was very useful to learn that not only did prices not change while we were buying the cards, but some dealers even restocked the cards without changing the prices. I just wanted to pinch their wittle cheeks, I was so excited! More Tundras, more Mazes, yes yes yes!
Some of you might scratch your head at seeing Maze of Ith on this list, so let me explain. Maze is absolutely one of the most popular casual lands of all time. In the real world, the price has suffered because it went through a number of additional printings beyond its debut in The Dark, making it widely available to anyone who wanted it, provided they didn’t mind ugly white borders. It is also seeing some play in Legacy decks. Additionally, when scouting around the bot networks, I noticed there weren’t as many of them floating around for sale as there were things like Badlands, probably as a result of the new Commander decks hitting the online store on July 4. To me that meant a price correction was in progress, so we went in on Maze nearly as deeply as the regular duals.
Here is what the basket looks like today, just about a month after the original purchase was made.
|
Jul 15 Price |
Aug 16 Price |
|
|
9.25 |
10 |
|
|
13.5 |
15.5 |
|
|
9 |
9 |
|
|
14 |
17 |
|
|
Scrubland[/author]“][author name="Scrubland"]Scrubland[/author] |
12.5 |
14 |
|
12 |
14 |
|
|
15 |
18 |
|
|
16 |
24 |
|
|
26 |
32 |
|
|
9.75 |
12 |
|
|
8.5 |
9.75 |
|
|
FOIL Tundra |
52 |
84 |
Every single one of them increased in value except Plateau, which is and always has been the festering turd of the dual land family. People b**** about Badlands being, uh… bad, but at least Badlands gets invited to dual land family gatherings. Plateau, on the other hand, he’s so bad that Underground Sea regularly tells him the wrong time and place to show up for family picnics, just to make sure he won’t have to see him. Plateau is the Kardashian child that is so ugly, the family won’t even acknowledge the fact that it’s a Kardashian or a Jenner. In fact, rumor has it they gave the child up for adoption to some family named ‘Lebedowicz.’
One Month Return: 22%
Now it’s not like we bought 20% of the total dual lands on Magic Online. Hell, I seriously doubt we bought even 20% of the liquidity. We did buy nearly every blue dual at the major vendors in one fell swoop, but those were replaced at new prices within a week, so a minor price bump of say 10% might be our fault, but 22%… I ain’t buying it. To wit, the major bot chains were well-stocked as of the morning when I wrote this, so don’t go blaming the price increase on hoarding or any other such nonsense—the math simply doesn’t add up.
Important Questions
What is the ceiling for these?
I honestly don’t know, but I could see 30-40 tix for the mid-range ones and 50ish for Tundra and Underground Sea within a year or two. We are holding these for the long-term in the hope that a) Wizards will not reprint them (again—many have already seen two printings in Master’s Editions) and b) they will see returns similar to what has happened in paper Magic.
If I am interested in dual lands on Magic Online, should I still buy?
My opinion is yes, but obviously do your own research before making the leap. With general Magic growth, Magic Online growth, the success of the Duals of the Planeswalkers gateway drug, the increased focus on bringing casual players online (Commander, Cube), and the high level of interest in Legacy everywhere, I don’t think the original dual lands are anywhere near their peak online.
Do I care about whether the dual land is from MED4 or one of the other sets?
You do not. Nobody else does, and there is no redemption factor. The new ones don’t even have grungy white borders, so it definitely does not matter.
What if Wizards of the Coast reprints them?
I will start by sending a very strongly worded email to Worth Wollpert (@mtgonline). Next I will take him and his entire family, including the newborn baby, off my Christmas card list (congrats, dude). Finally I will end up taking a very painful markdown to my Magic Investment portfolio (still money, Vorthoses, not art—settle down) and know not to do this again. However, I’m fairly comfortable with the risk on this given that Magic Online Brand Management seems unlikely to try and fix supply issues multiple times.
Do you have any regrets?
Only that I wish we’d started with closer to the original projections in terms of how much we would invest. Everything else we’ve done so far has gone according to plan and exceeded expectations already.
So there you have it, the inside scoop on what is likely one of the largest speculation purchases to occur thus far on Magic Online. Trading cards are now serious commodities with an extremely large (and surprisingly cash-rich) audience interested in buying them. Liquidity is relatively high, and despite the crappy trading interface, the barrier to entry in treating Magic cards as investments is pretty low. Do I recommend going this root for everybody? Certainly not, but there are definitely much worse places to stash cash right now while waiting for the world economies to start making sense.
Apologies if you found this article about as funny as a screen door on a battleship, but now I have to make like a tree and get outta here.
Next Week: The full Legacy Basket with detailed card explanations.
–CardGame
@NextLevelSpec for financial and MODO stuff
@mixedknuts for everything else (including a lot of English Premier League football now that the season has started)
Bonus Section: My Current Modern Basket
This is still a work in progress, so for now I’m going to present it without comment so you guys can see what you think and where I got in at. I didn’t have a ton of liquidity after the announcement in San Diego that Modern was a real format, so wasn’t able to go too deep or be too diverse in my initial picks, but they ended up being good almost across the board. Since then I have been picking and choosing spots (like Blood Moon) to add to it as good deck ideas cross my path while selling certain cards I thought hit unreasonable peaks (Grove of the Burnwillows, though I am probably wrong there) or might get banned (Hypergenesis). We’ll talk about this in detail eventually, but for now here you go.
|
Jul 24 Buys |
Price Paid |
Aug 16 Price |
Growth |
|
13.5 |
28 |
107% |
|
|
14 |
28 |
100% |
|
|
5 |
13 |
160% |
|
|
8 |
14.75 |
84% |
|
|
6 |
13 |
117% |
|
|
9 |
16.5 |
83% |
|
|
1.5 |
3 |
100% |
|
|
6.75 |
BAN |
BAN |
|
|
0.65 |
BAN |
BAN |
|
|
6.75 |
11 |
63% |
|
|
7.25 |
7 |
-3.50% |
|
|
5.5 |
9 |
63.60% |
|
|
8.75 |
BAN |
BAN |
|
|
5.95 |
13 |
118% |
|
|
Aug 12 buy |
|||
|
1.45 |
3.5 |
141% |
|
|
SECRET PENDING PT |
7.5 |
8 |
6.70% |
|
SECRET PENDING PT |
4.2 |
5.25 |
25% |
|
0.25 |
0.25 |
0 |
|
|
0.25 |
0.25 |
0 |