I'm a bit curious of supposed speculators, especially big ones like SCG.
Artificially increasing the price of staples by buying a massive amount could be very dangerous financially. So, let's talk about that.
Let's say SCG bought 10000 fetches and drove up the prices by 100%. In order to start making a profit, they'd have to move at least 5000 of them. I feel like even for a large store like them, this is no mean feat, especially when you consider the opportunity cost.
There is a reason why colluding between large corporations is against the law- but they are keenly watched in some industries because of how tempting it is. For example, if oil companies began colluding (ahem, Middle East) and drove the prices up, we'd have no option but to pay the higher price and buy at the exact same quantity. Airlines are similar in this regard. Ultimately, these companies incur very little cost to gain a huge upside which is why a lot of scandals pop up in certain industries.
So let's forget SCG for a moment, since for all we know they may have the resources to make a profit, even though they operate in a luxury industry, where people can easily refuse to buy. I've noticed that a lot of people like to blame anonymous "speculators" when talking about a lot of price spikes. But think about it. For some random guy to buy enough copies to up the price and have the time to move all of them is bordering on ridiculous because there is no guarantee they'd be able to move them at a fast enough rate to recover the opportunity cost.
Does this mean that there are no buy-outs or speculators? No, I think there are, actually. What this means is that your average savvy player clearly contributes enough to the buyout hype and scare to make it profitable for speculators, if they exist. Perhaps rather than having to buy 10000 fetches to move the market, SCG only had to buy 1000 or even 500. They only had to buy so little because once other players and stores noticed and began panicking, the price was raised.
Okay, so I've brought up two ideas that seem to conflict- what is my point exactly?
My point is, someone directly influencing the market just by buying a massive amount of cards is ridiculous, but they don't have to buy that much because their profit is made possible by price-conscious players. The main enemy of the game isn't actually speculators, but the portion of playerbase who are looking to preserve the value of their collections (and for some, to make a little money on the side). If you haven't noticed, this is A LOT of people- basically anyone who isn't a completely casual player (and even some of them are extremely price conscious).
The game has devolved into being about money, and ultimately, that's why these speculators can win. Thus, there's no real way to change that unless the mentality of the playerbase is changed, and I doubt that's going to happen in the near future.
Edit: I guess the reason I wrote this is because I'm sick of players on the forums always blaming the anonymous speculators lurking in the shadows when some card jumps. It reminds me of blaming the 1% (which has its roots in the West vs. East conflict during the 1700s...) and just like that argument, it's completely unfounded- almost like a mob mentality. But the thing is, those players are sort of right. There are speculators, but the only reason they can speculate is because of the current nature of the playerbase. If those players wanted to punish the "speculators" they'd basically have to punish everyone.
I support your right to free speech and to talk about that topic, including naming names. You didn't flame anyone and I don't think what you're saying is a lie or meant to attack anyone.
Anyhow, I would check your definitions a bit. "Speculation", "monopoly", "market cornering". Know the difference - I think that'll help you make your point better.
We all speculate. When you're at the grocery store and a big bag of chips is 1.40, you might say to yourself "that'll be more next week when I'm hungry for chips.... I should buy it right now", you're speculating. You seem to be talking about attempts to corner the market, price manipulation, and even hinting at the concept of monopoly.
Not sure I understand the title. Speculation motive = money, nuff said.
Also, to definitively 'corner' a market to the point where legal action is possible requires a lot more money than what SCG has, this is NOT the hunts cornering half the world's nominal supply in futures contracts, by any stretch of the imagination. For MTG, there probably isn't a single card seller out there, including SCG with the means to 'corner the market' via a double digit share on most any mtg card. What 99% of the people complain (or brag) about is just cards disappearing from tcgplayer. It's a tiny % of the market, just like all of SCG's listed stock. Do stores follow suit and up their prices? Sure. Stores can raise their prices, you can choose not to buy and vote with your wallet. Stores don't run businesses by not making sales.
Btw, let's be real here, what's a thousand fetches at today's prices, $50k at retail? Hardly a blip in terms of overall print run numbers and cheaper than a luxury car. If it surprises you that any single entity would do this, you are severely underestimating how much money some businesses and even individuals can have.
I'm not exactly sure what you're trying to say. True, you have a sentence which establishes your point, but it really sounds like you're arguing against a perceived viewpoint that in your mind, magic players have against speculators.
I don't share those viewpoints, and it's likely others don't as well. Rancored elf says everybody speculates, and in some sense I agree with that.
So if you want to rebut a perceived perspective, put it out there first.
In my view speculators are just ordinary magic players who make purchases based on their own rational interests or desires.
I support your right to free speech and to talk about that topic, including naming names. You didn't flame anyone and I don't think what you're saying is a lie or meant to attack anyone.
Thank you for pointing that out. SCG is simply one of the most discussed market manipulators- I didn't want to bash them or anything, just state the current perception of them for a lot of people.
Anyhow, I would check your definitions a bit. "Speculation", "monopoly", "market cornering". Know the difference - I think that'll help you make your point better.
We all speculate. When you're at the grocery store and a big bag of chips is 1.40, you might say to yourself "that'll be more next week when I'm hungry for chips.... I should buy it right now", you're speculating. You seem to be talking about attempts to corner the market, price manipulation, and even hinting at the concept of monopoly.
I suppose that's what happens when I cast the net too wide and typed this while being tired. Yes, in principle you're correct, but I was trying to write it from the viewpoint of someone who bashed solely on "speculators" without trying to understand their own perspectives and economic gains.
Not sure I understand the title. Speculation motive = money, nuff said.
Also, to definitively 'corner' a market to the point where legal action is possible requires a lot more money than what SCG has, this is NOT the hunts cornering half the world's nominal supply in futures contracts, by any stretch of the imagination. For MTG, there probably isn't a single card seller out there, including SCG with the means to 'corner the market' via a double digit share on most any mtg card. What 99% of the people complain (or brag) about is just cards disappearing from tcgplayer. It's a tiny % of the market, just like all of SCG's listed stock. Do stores follow suit and up their prices? Sure. Stores can raise their prices, you can choose not to buy and vote with your wallet. Stores don't run businesses by not making sales.
Btw, let's be real here, what's a thousand fetches at today's prices, $50k at retail? Hardly a blip in terms of overall print run numbers and cheaper than a luxury car. If it surprises you that any single entity would do this, you are severely underestimating how much money some businesses and even individuals can have.
I think you took my numbers too literally. I used them to illustrate a point. In a world where Magic players didn't care about finance and stores didn't follow trends, it would take significant market manipulation to raise the price- which you noted.
My point was that this is absolutely not the case and that there are multiple factors involved- one of the main ones being the playerbase's attitude toward the market.
Perhaps my title was wrong. I probably should have said something like "A speculator's perspective" or something. People don't step into the other person's shoes a lot when accusing them of something, and this was an attempt to open some of those people's eyes.
I'm not exactly sure what you're trying to say. True, you have a sentence which establishes your point, but it really sounds like you're arguing against a perceived viewpoint that in your mind, magic players have against speculators.
I don't share those viewpoints, and it's likely others don't as well. Rancored elf says everybody speculates, and in some sense I agree with that.
So if you want to rebut a perceived perspective, put it out there first.
Indeed, I think I'm making a "straw man" here. But this is simply based on my observations in various sections of the forums (Rumor Mill, Magic General, Market Street Cafe) that I frequent where I often see people responding to threads where someone asks about the reason for X card's increase with "speculators/SCG/etc are destroying the game."
If you don't share this viewpoint, that's great. I certainly don't. My post wasn't meant to say that every magic player viewed the market this way- but apparently a fair amount of people do, and I wanted to correct that notion because it does nothing but bad.
I thought I did put out that perceived perspective, but in case it wasn't clear..
"Card price spikes and runs on cards are caused by a shadowy group of rich people/stores that buy out cards to raise their price and make a lot of money."
Edit: Now that I think about it, I'm more likely to see responses from players like you who view the market properly who think I'm calling them bozos rather than from people who share that perspective...
In my view speculators are just ordinary magic players who make purchases based on their own rational interests or desires.
Some just have a little more money than others.
If you'll notice, this is the point I was trying to make. However, I was being more specific in defining "rational." I didn't play this game 20 years ago so I can't say something like "Magic players are suddenly more price conscious than they were back then" but today more and more Magic players are observing the market (probably due to the playerbase increase and of course, due to the information age). Since many Magic players make careful decisions about prices in order to increase the size of their collections or maintain their cards' value by buying cards when they begin rising or holding onto certain cards that have perceived long-term value, it's clear that they are, in fact, the shadowy speculators that many view as the source of everyone's price woes.
I like the point that the "average" Magic player is becoming conditioned to participate in runs on cards. i.e., any individual actor doesn't need to take out all supply. They only need to set it in motion and players who watch price indicators (whether the Huge Gainers threads here or one of the various websites) appear to be willing to pile on.
These price runs seem to be more effective when there is a visible explanation for the price movement (i.e., Legendary rule change and Gaea's Cradle; performance of card X last weekend in deck y), but it seems to be possible to move the market even without a clear explanation (maybe there was a specific explanation for Invoke Prejudice, but I didn't see it).
Runs appear very easy to spot in progress and my perception is that it's easy to profit from them. When Average Player Z makes money participating in the first run, I would presume APZ is more likely to partiicpate in the next run.
And given that prices - in general - of (non-Standard) cards have been on a secular upwards trend, there is not likely to be signficant negative feedback to APZ about this behavior.
I also like Dresden's point that there is a VERY SMALL number of cards that are driving the total marketplace. Millions of printed fetch lands where the price is being set by hundreds of dealers/transactions for maybe thousands of cards.
[I'm interested in a broader conversation on bubbles, so won't go there yet. I'm not sure we're in a bubble, but these factors would appear to create risk of bubblicious behavior.]
Also note the difference between a speculator and a group. Sure any one speculator won't drive prices but with all the market streets, quiet spec, scg finance and many more around, a spec is usually run by 10 to 50 ppl easily. Its enough to buy out tcg player if the target is out print.
Ppl are upset these days. Normally there is risk with speculating. Technically wotc could reprint the spec in the next set. But more and more the case seems like wotc is taking secondary market prices into consideration and expensive cards are less likely to be printed. Thus ppl get upset.
I must say market Street is so much better behaved than the general threads when it comes to discussing this kind of thing.
Personally, i liken speculators to value investors.
1) you find a card that is under-valued.
- It may have been hot once, and fell out of favour, but will still be good in the right context (Phyrexian Obliterator, Jace AOT)
- A card that will likely spike should they be unbanned from a certain format
(Ancestral Vision, Bitterblossom)
- Speculators buy-in well before another results or news has been published. They are betting that their analysis of the card and market effects are good.
eg: i read a post asking whether foil goblin guides are a buy. Personally, i don't think so. Foil's appeal to pimpers. Unless Burn becomes a Tier 1 deck, the type of players playing Burn will typically be restricted to budget players (who would not have the finance to pimp their deck)
2) You hold and wait for something to happen
- Once an event causes the card to get attention for whatever reason, (performed well, new card release, unbanned), there will usually be a rush to pick up copies everywhere, thus causing the Price to Spike
3) Speculators will have already sold on the uptrend.
- Once a certain ROI is hit, just sell. not need to be greedy for the last few % points.
Personally, here are a few cards that i feel are undervalued:
1) Ancestral Vision
2) Primeval Titan
3) Most SOM Duals
Cards that are overvalued
1) Phyrexian Obliterator
2) Chord of Calling
Remember: Price is NOT EQUAL to Value.
Disclaimer:
*I speculate not because of making money (its a good way to keep count, and a nice reward), but the enjoyment of making the right market calls
@KZhang, the OP is describing a purchase that is large enough to drive a price increase in the market place. I think that's somewhat different than the behavior you are describing.
I don't disagree with the content of your post (except perhaps that it's not as clear to me that Chord is overvalued).
Trust me when I say that if the Government recognized the MTG world and the vendors that pull off their "monopoly's" which resulted in such a warped "market".... well simply put there would be several hogs getting thin and sitting in prison for a nickle. The reality is that the Government doesn't care about a card game regardless of how fat the Hogs get while manipulating it. To be frank its just a pin drop in a world of "tender", if Wal-Mart can continue to get fat and screw other reasonable retail stores out of local towns...then nothing will ever stifle the Vendors such as SCG-ABU-CCGhouse with their ethics ect.
Its just the way it is, and I'm referring the mass numbers you're talking about Encendi. As one small time businessman shared with me not to long ago "Most buyers that burn their funds with such vendors don't mind taking it to the "dome" after a lopsided purchase... just as long as they're wearing lipstick when doing so" (This is very Rhetorical).
Many mages really don't understand the big picture of it all...they just want the cards now and pull out the plastic to get them in a pinch. And this is being said even if a vendor is sitting on 1000 copies of the card in need...but only list 5 at their over inflated price's to hit that profit margin you're speaking of.
I'm glad this thread is open and active, it just allowed a rant that will sincerely have no impact on the topic at hand as there's always someone willing to feed the pig
Personally, i liken speculators to value investors.
The problem is convergence between cards as investments and cards needed to play the game competitively. So far wotc hasn't got it right. Stocks on the market don't have a functional use.
Your other points are fine. Just remember your "under valued" cards could tank due to reprint or obsolescence. As long as that's Ok.
I don't disagree with the content of your post (except perhaps that it's not as clear to me that Chord is overvalued).
IMHO,
1) Chord of Calling spiked significantly because GSZ was banned, and it became the de-facto tutor for Pod decks.
2) When a "fundementally" better card exists, there would be a possibility of a new card that falls in between GSZ and Chord of Calling in terms of power level. That would obsolete CoC. Contrast this to a card like Deathrite Shaman. It is probably as strong as a 1drop utility creature can be printed. You will find it hard to imagine that WoTC will print a stronger version of DRS.
3) The value of Chord of Calling is highly correlated to the Performance of Pod decks. It is not played in other decks, and does not have a strong casual appeal. This makes it very vulnerable to metagame shifts. On the same note, if it's not a multi-format / multi deck staple, the risks is much higher.
This is not saying that i don't think Chord is a good card, but rather, at that price, there are far better and safer bets that you can make.
The problem is convergence between cards as investments and cards needed to play the game competitively. So far wotc hasn't got it right. Stocks on the market don't have a functional use.
Your other points are fine. Just remember your "under valued" cards could tank due to reprint or obsolescence. As long as that's Ok.
If there is no chance in losing, whats the fun in playing? =p
While the OP's post was a bit scattered, there's some real issues that can be talked here and might help some members who feel bewildered or even cheated out of cheaper cards. Sorry for the wall of text, but some of the examples are pretty entertaining.
MtG community has become more aware of the value of the cards since I started playing in -95 and doubly so in the last few years. Also major market places have moved to internet, letting people pull accurate price data and listed inventories easily.
This has given certain active portion of players a chance to follow card prices and hit stores who are not as vigilant and in the process make some money, which usually is funneled into making new purchases and leftovers into their collections. It's actually pretty easy and if you start with even 1k$ capital and choose your battles, even a single person can shake the market on niche cards, like commander foils.
I use some old examples how a single person can move the market. Some are even relevant.
Lot of people collect a certain alpha rares, making the price go way up. The oldest I know was alpha Pirate Ship, in 1996 this card was more expensive than most alpha Moxen. When the guy stopped buying every copy from eBay and UseNet, the price slowly dropped.
Magic Rarities group had a 5% race with alpha uncommons, aiming to get 5% of the total alpha print run of freely chosen alpha uncommon. The threads are still availlable on Librarities archive and are fun read. Alpha cards like Goblin Balloon Brigade and Dragon Whelp tripled in price, when the race heated up. To this day the Whelp is bit higher than it should be, while Brigade has dropped back down.
SCG bought from eBay a collectors set of 11% of all alpha Island Sanctuarys. During that time Sanctuary was 120$, while random alpha rares were still 15$ each. There was a guy aiming to get 5% of all the alpha Underground Seas also... That's just 55 alpha Seas.
When alpha and beta duals jumped few weeks after revised had already moved, I went out and bought SCG and several other vendors out, aiming to get a full set of 40 alpha/beta duals while I still could. During that time, I paid 5.4k€ for the full set of 40 a/b duals. I did even end with some extras. But had I had more capital... Just remembering all those beta Volcanic Islands availlable at below 300$.
Last year there was an European buy-out of GURU-lands. The price has been steadily stayed around 300€ per set, before a certain german buyer bought 17+ of each. Everything except Mountains. Mountains stayed at 50 € each, while Plains moved to 110 €. Then somebody made a move on Mountains. Now full set sells for 490-550 € depending on condition, but very slowly. I doubt that the buyer has made any money, but at least he has cool lands for his decks.
One messed up buy-out was Cloudstone Curio just before PT Hollywood (the one with elves-decks everywhere). A group of people, who, most likely, had been playtesting Elves with Curio decided to buy the card out. During that time it was possible to put the cards on shopping cart for 24 hours without actually buying them on MCM, so they made a few fake accounts (this is hearsay by the way, so please fix my mistakes, if you know better) and hid all the cheaper copies and put new ones on sale for 10 € each. The high price lasted for two days, before all the reserved copies returned and all below 3 € were bought out.
I had my playset I was selling reserved at 5 € each and was really happy to get such a price... and not too happy when the reservation just disappeared 24 hours later. I don't know if the group actually made some money out of the deal, but the way MCM works sure got changed. Now you would need 20+ fake accounts before getting this done.
These are real ways for single persons or small groups to move the market. Often there's a real incentive for the price to move and if there isn't, a crash follows the jump. There are plenty of examples of this also. Aluren might be the newest one, but Wasteland has seen similar jump/crash, I think twice now.
I like to play this game and I like having access to all the cards. This makes speculation a handy way to get cards I want bit cheaper and sometimes paying for my purchases. While I was student, I paid the bills by buyiong collections and selling cards. So while I don't like the buy-outs, I like to understand how they work and will sell my extra copies into the hype, and sometimes buy a playset, if I catch the wave early enough.
Almost two years back I got tired of not understanding how the buy-out brigade could profit, so I modelled a worldwide buy-out on Judge foil Sword of Fire and Ice (which was bottomed out just then). I searched the net for reasonable amount of stores and made a price estimate including postage and a plan on accuiring the cards. First buying about 40 copies slowly from different sources before making the first buy-out, when I had my initial supply in hand. After this buy-out I would list my copies at 50$ and wait until other sellers would start putting their backroom stock on sale at around 40$ before buying them all out again. At this point the 50$ copies should start selling and the first batch of bought copies start arriving.
I still have the excel-sheet somewhere, but in the end I ended using about 8.5k$ and would need to sell 73% of the copies befor getting even if through eBay or bit more if to store buylists. In the end unless I could keep the price at 50$, there was no way to turn quick profit on the Swords. Naturally Sword being spoiled being in MMa would have made a huge loss, unless the imaginary seller could have moved over 300 copies of the Sword in less than a year. If the price would have moved to 60$ the profit margins were bit better, but still it's not instant profit.
Last year I also did some quick calculations on a legends card and found it a it better target, with just 4k$ needed and could even use the availlability of italian copies here in Europe to a good effect, but ultimately I will make much more money from doing my regular work.
I'm a collector, so I can understand very well the guys wanting to own 2% of some print run, even when it will make other people trying to get a full set of something much harder. These collectors have similar effects than the guys wanting to buy-out some card and make mad profits. I'm all for somehow making magic cards harder to buy out, but most of the ways to do this will just make selling and buying harder and making players less exited about the collectibility aspect of the game. That I don't want.
So in brief, I like that players have access to most of the cards, but I also like how a hobby I started almost 20 years back can give me some of the money I invested back. There should also be some cards that are hard to get. Maybe it's a playset of dual lands, or for some people the BGS 10 Alpha Lotus or a playset of Wyvern backed Fallen Empires or the summer Lightning Bolt (for me), but every collector should have something to reach for.
But getting there should also be possible. This is something that new players should also feel, otherwise they will get burned out and just quit. If lot of cards suddenly become nearly impossible for new players to get, or they buy at the peaked price time and again, they will feel cheated. Or they sell cards and next week they notice the price being double what they got. That's not healthy for the game.
As for the bubble, I feel there are small bubbles on Modern cards and almost every presale price is built on a small bubble, but those are normal. But if the speculation accelerates and real buy-outs become more common, there will be trouble. The last weeks Cabal Therapy jump should hold a lesson for most of us.
There was a glitch on TCG-player, which somehow made the price show only Therapy foils, which moved the price to 20$. This resulted in a wave of buyers to eBay and as the card is a Torment uncommon, the supply couldn't keep up and prices soared. Stores pulled their stock and upped the price and more and more new buyers jumped into the fray making Therapy now a 16$ card. One with two foil reprints. The card was most likely underpriced, but this shows how accustomed players are to these jumps. Most don't even ask why the card moved, it's just "I want, I want, I want..."
This post is already long enough, I could keep it going, but at some point there will be a limit on card liquidity if the prices keep moving at this pace.
Indeed, I think I'm making a "straw man" here. But this is simply based on my observations in various sections of the forums (Rumor Mill, Magic General, Market Street Cafe) that I frequent where I often see people responding to threads where someone asks about the reason for X card's increase with "speculators/SCG/etc are destroying the game."
If you don't share this viewpoint, that's great. I certainly don't. My post wasn't meant to say that every magic player viewed the market this way- but apparently a fair amount of people do, and I wanted to correct that notion because it does nothing but bad.
I thought I did put out that perceived perspective, but in case it wasn't clear..
"Card price spikes and runs on cards are caused by a shadowy group of rich people/stores that buy out cards to raise their price and make a lot of money."
Edit: Now that I think about it, I'm more likely to see responses from players like you who view the market properly who think I'm calling them bozos rather than from people who share that perspective...
If you'll notice, this is the point I was trying to make. However, I was being more specific in defining "rational." I didn't play this game 20 years ago so I can't say something like "Magic players are suddenly more price conscious than they were back then" but today more and more Magic players are observing the market (probably due to the playerbase increase and of course, due to the information age). Since many Magic players make careful decisions about prices in order to increase the size of their collections or maintain their cards' value by buying cards when they begin rising or holding onto certain cards that have perceived long-term value, it's clear that they are, in fact, the shadowy speculators that many view as the source of everyone's price woes.
To me, the magic players who view speculators as destroying the market are a small but very vocal subset of the magic population at large. In reality, I'll bet the magic population at large is silent. Most of them aren't talking at any given moment.
I'm glad you put out there the viewpoint you are arguing against because it does make it clearer where you are coming from now.
I think on Market Street a good number of the people here have at least some general education on economics. If they do not, they probably acquired some of the concepts through just being here on market street.
Intuition about how markets work is not something that naturally comes to everyone. But I think for those that have it, they take a more moderate approach to understanding speculators and the magic market. Of course it can be discouraging to see a card you want spike up in price. But as you wrote, sometimes (probably many times) its just real demand moving it upward.
Stocks are used as voting rights within the company. A single note of common stock isn't worth a lot when making decisions, but if you own enough of them you can hold a significant say in the decisions made for the company.
Magic cards have no inherent value and are not investments. They are speculations that rely on a "greater fool" buying them.
If people want to manipulate a collectible market, I say more power to them. At some point, there is a strong risk that they could be left holding the bag and lose a bunch of money. See: Tulip mania, baseball cards in the 1990s.
That being said, there are millions of these cards floating around. Buying out some of the liquid stock from TCGPlayer or whatever can affect the price, but that's not a big deal.
Stocks are used as voting rights within the company. A single note of common stock isn't worth a lot when making decisions, but if you own enough of them you can hold a significant say in the decisions made for the company.
stocks are also shares of ownership in the company. Assets - Liability = Equity
As a stock owner you are entitled to a share of the equity in a company. Theoretically if you own enough shares and you are in a position of making decisions, you have the power to direct sales of the company assets.
Stocks are used as voting rights within the company. A single note of common stock isn't worth a lot when making decisions, but if you own enough of them you can hold a significant say in the decisions made for the company.
Good point. But is the only function of stock. It is a part share in a company. The mtg cards have a play use and at current this Money store use. Play use suffers when cards are taken out of circulation for speccing.
Stocks are used as voting rights within the company. A single note of common stock isn't worth a lot when making decisions, but if you own enough of them you can hold a significant say in the decisions made for the company.
You have votes in the AGM you do not have any control over the day to day running of the company. That is what the management is there for.
1) The original post makes absolutely zero sense as Rancored said. The terminology and how it is used clutters any thoughts in the first post.
2) SCG or any other entity can do whatever they want, when they want because there are no set rules or regulations in place to stop this, nor will there ever be.
3) If you want "buy-outs" to stop on TCG, get the programmer there to implement something that puts a stop gap of 4 per cart at a time. That will make buy-outs inefficient time-wise and should slow them down.
4) It is also not the masses that panic during a buyout, but the few. There are MILLIONS of copies of each card, plenty to go around, but a few ppl panic and then prices go up. Common sense is not in high quantity when it comes to magic players and finance
stocks are also shares of ownership in the company. Assets - Liability = Equity
As a stock owner you are entitled to a share of the equity in a company. Theoretically if you own enough shares and you are in a position of making decisions, you have the power to direct sales of the company assets.
Magic Cards are commodities. Compare them to other commodities (that also have uses) like corn or oil.
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Out of the blackness and stench of the engulfing swamp emerged a shimmering figure. Only the splattered armor and ichor-stained sword hinted at the unfathomable evil the knight had just laid waste.
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Artificially increasing the price of staples by buying a massive amount could be very dangerous financially. So, let's talk about that.
Let's say SCG bought 10000 fetches and drove up the prices by 100%. In order to start making a profit, they'd have to move at least 5000 of them. I feel like even for a large store like them, this is no mean feat, especially when you consider the opportunity cost.
There is a reason why colluding between large corporations is against the law- but they are keenly watched in some industries because of how tempting it is. For example, if oil companies began colluding (ahem, Middle East) and drove the prices up, we'd have no option but to pay the higher price and buy at the exact same quantity. Airlines are similar in this regard. Ultimately, these companies incur very little cost to gain a huge upside which is why a lot of scandals pop up in certain industries.
So let's forget SCG for a moment, since for all we know they may have the resources to make a profit, even though they operate in a luxury industry, where people can easily refuse to buy. I've noticed that a lot of people like to blame anonymous "speculators" when talking about a lot of price spikes. But think about it. For some random guy to buy enough copies to up the price and have the time to move all of them is bordering on ridiculous because there is no guarantee they'd be able to move them at a fast enough rate to recover the opportunity cost.
Does this mean that there are no buy-outs or speculators? No, I think there are, actually. What this means is that your average savvy player clearly contributes enough to the buyout hype and scare to make it profitable for speculators, if they exist. Perhaps rather than having to buy 10000 fetches to move the market, SCG only had to buy 1000 or even 500. They only had to buy so little because once other players and stores noticed and began panicking, the price was raised.
Okay, so I've brought up two ideas that seem to conflict- what is my point exactly?
My point is, someone directly influencing the market just by buying a massive amount of cards is ridiculous, but they don't have to buy that much because their profit is made possible by price-conscious players. The main enemy of the game isn't actually speculators, but the portion of playerbase who are looking to preserve the value of their collections (and for some, to make a little money on the side). If you haven't noticed, this is A LOT of people- basically anyone who isn't a completely casual player (and even some of them are extremely price conscious).
The game has devolved into being about money, and ultimately, that's why these speculators can win. Thus, there's no real way to change that unless the mentality of the playerbase is changed, and I doubt that's going to happen in the near future.
Edit: I guess the reason I wrote this is because I'm sick of players on the forums always blaming the anonymous speculators lurking in the shadows when some card jumps. It reminds me of blaming the 1% (which has its roots in the West vs. East conflict during the 1700s...) and just like that argument, it's completely unfounded- almost like a mob mentality. But the thing is, those players are sort of right. There are speculators, but the only reason they can speculate is because of the current nature of the playerbase. If those players wanted to punish the "speculators" they'd basically have to punish everyone.
Anyhow, I would check your definitions a bit. "Speculation", "monopoly", "market cornering". Know the difference - I think that'll help you make your point better.
We all speculate. When you're at the grocery store and a big bag of chips is 1.40, you might say to yourself "that'll be more next week when I'm hungry for chips.... I should buy it right now", you're speculating. You seem to be talking about attempts to corner the market, price manipulation, and even hinting at the concept of monopoly.
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Also, to definitively 'corner' a market to the point where legal action is possible requires a lot more money than what SCG has, this is NOT the hunts cornering half the world's nominal supply in futures contracts, by any stretch of the imagination. For MTG, there probably isn't a single card seller out there, including SCG with the means to 'corner the market' via a double digit share on most any mtg card. What 99% of the people complain (or brag) about is just cards disappearing from tcgplayer. It's a tiny % of the market, just like all of SCG's listed stock. Do stores follow suit and up their prices? Sure. Stores can raise their prices, you can choose not to buy and vote with your wallet. Stores don't run businesses by not making sales.
Btw, let's be real here, what's a thousand fetches at today's prices, $50k at retail? Hardly a blip in terms of overall print run numbers and cheaper than a luxury car. If it surprises you that any single entity would do this, you are severely underestimating how much money some businesses and even individuals can have.
I don't share those viewpoints, and it's likely others don't as well. Rancored elf says everybody speculates, and in some sense I agree with that.
So if you want to rebut a perceived perspective, put it out there first.
In my view speculators are just ordinary magic players who make purchases based on their own rational interests or desires.
Some just have a little more money than others.
Thank you for pointing that out. SCG is simply one of the most discussed market manipulators- I didn't want to bash them or anything, just state the current perception of them for a lot of people.
I suppose that's what happens when I cast the net too wide and typed this while being tired. Yes, in principle you're correct, but I was trying to write it from the viewpoint of someone who bashed solely on "speculators" without trying to understand their own perspectives and economic gains.
I think you took my numbers too literally. I used them to illustrate a point. In a world where Magic players didn't care about finance and stores didn't follow trends, it would take significant market manipulation to raise the price- which you noted.
My point was that this is absolutely not the case and that there are multiple factors involved- one of the main ones being the playerbase's attitude toward the market.
Perhaps my title was wrong. I probably should have said something like "A speculator's perspective" or something. People don't step into the other person's shoes a lot when accusing them of something, and this was an attempt to open some of those people's eyes.
Indeed, I think I'm making a "straw man" here. But this is simply based on my observations in various sections of the forums (Rumor Mill, Magic General, Market Street Cafe) that I frequent where I often see people responding to threads where someone asks about the reason for X card's increase with "speculators/SCG/etc are destroying the game."
If you don't share this viewpoint, that's great. I certainly don't. My post wasn't meant to say that every magic player viewed the market this way- but apparently a fair amount of people do, and I wanted to correct that notion because it does nothing but bad.
I thought I did put out that perceived perspective, but in case it wasn't clear..
"Card price spikes and runs on cards are caused by a shadowy group of rich people/stores that buy out cards to raise their price and make a lot of money."
Edit: Now that I think about it, I'm more likely to see responses from players like you who view the market properly who think I'm calling them bozos rather than from people who share that perspective...
If you'll notice, this is the point I was trying to make. However, I was being more specific in defining "rational." I didn't play this game 20 years ago so I can't say something like "Magic players are suddenly more price conscious than they were back then" but today more and more Magic players are observing the market (probably due to the playerbase increase and of course, due to the information age). Since many Magic players make careful decisions about prices in order to increase the size of their collections or maintain their cards' value by buying cards when they begin rising or holding onto certain cards that have perceived long-term value, it's clear that they are, in fact, the shadowy speculators that many view as the source of everyone's price woes.
These price runs seem to be more effective when there is a visible explanation for the price movement (i.e., Legendary rule change and Gaea's Cradle; performance of card X last weekend in deck y), but it seems to be possible to move the market even without a clear explanation (maybe there was a specific explanation for Invoke Prejudice, but I didn't see it).
Runs appear very easy to spot in progress and my perception is that it's easy to profit from them. When Average Player Z makes money participating in the first run, I would presume APZ is more likely to partiicpate in the next run.
And given that prices - in general - of (non-Standard) cards have been on a secular upwards trend, there is not likely to be signficant negative feedback to APZ about this behavior.
I also like Dresden's point that there is a VERY SMALL number of cards that are driving the total marketplace. Millions of printed fetch lands where the price is being set by hundreds of dealers/transactions for maybe thousands of cards.
[I'm interested in a broader conversation on bubbles, so won't go there yet. I'm not sure we're in a bubble, but these factors would appear to create risk of bubblicious behavior.]
Ppl are upset these days. Normally there is risk with speculating. Technically wotc could reprint the spec in the next set. But more and more the case seems like wotc is taking secondary market prices into consideration and expensive cards are less likely to be printed. Thus ppl get upset.
I must say market Street is so much better behaved than the general threads when it comes to discussing this kind of thing.
1) you find a card that is under-valued.
- It may have been hot once, and fell out of favour, but will still be good in the right context (Phyrexian Obliterator, Jace AOT)
- A card that will likely spike should they be unbanned from a certain format
(Ancestral Vision, Bitterblossom)
- Speculators buy-in well before another results or news has been published. They are betting that their analysis of the card and market effects are good.
eg: i read a post asking whether foil goblin guides are a buy. Personally, i don't think so. Foil's appeal to pimpers. Unless Burn becomes a Tier 1 deck, the type of players playing Burn will typically be restricted to budget players (who would not have the finance to pimp their deck)
2) You hold and wait for something to happen
- Once an event causes the card to get attention for whatever reason, (performed well, new card release, unbanned), there will usually be a rush to pick up copies everywhere, thus causing the Price to Spike
3) Speculators will have already sold on the uptrend.
- Once a certain ROI is hit, just sell. not need to be greedy for the last few % points.
Personally, here are a few cards that i feel are undervalued:
1) Ancestral Vision
2) Primeval Titan
3) Most SOM Duals
Cards that are overvalued
1) Phyrexian Obliterator
2) Chord of Calling
Remember: Price is NOT EQUAL to Value.
Disclaimer:
*I speculate not because of making money (its a good way to keep count, and a nice reward), but the enjoyment of making the right market calls
*Most of my assets are in stock markets.
I don't disagree with the content of your post (except perhaps that it's not as clear to me that Chord is overvalued).
Its just the way it is, and I'm referring the mass numbers you're talking about Encendi. As one small time businessman shared with me not to long ago "Most buyers that burn their funds with such vendors don't mind taking it to the "dome" after a lopsided purchase... just as long as they're wearing lipstick when doing so" (This is very Rhetorical).
Many mages really don't understand the big picture of it all...they just want the cards now and pull out the plastic to get them in a pinch. And this is being said even if a vendor is sitting on 1000 copies of the card in need...but only list 5 at their over inflated price's to hit that profit margin you're speaking of.
I'm glad this thread is open and active, it just allowed a rant that will sincerely have no impact on the topic at hand as there's always someone willing to feed the pig
S.M.
The problem is convergence between cards as investments and cards needed to play the game competitively. So far wotc hasn't got it right. Stocks on the market don't have a functional use.
Your other points are fine. Just remember your "under valued" cards could tank due to reprint or obsolescence. As long as that's Ok.
IMHO,
1) Chord of Calling spiked significantly because GSZ was banned, and it became the de-facto tutor for Pod decks.
2) When a "fundementally" better card exists, there would be a possibility of a new card that falls in between GSZ and Chord of Calling in terms of power level. That would obsolete CoC. Contrast this to a card like Deathrite Shaman. It is probably as strong as a 1drop utility creature can be printed. You will find it hard to imagine that WoTC will print a stronger version of DRS.
3) The value of Chord of Calling is highly correlated to the Performance of Pod decks. It is not played in other decks, and does not have a strong casual appeal. This makes it very vulnerable to metagame shifts. On the same note, if it's not a multi-format / multi deck staple, the risks is much higher.
This is not saying that i don't think Chord is a good card, but rather, at that price, there are far better and safer bets that you can make.
If there is no chance in losing, whats the fun in playing? =p
MtG community has become more aware of the value of the cards since I started playing in -95 and doubly so in the last few years. Also major market places have moved to internet, letting people pull accurate price data and listed inventories easily.
This has given certain active portion of players a chance to follow card prices and hit stores who are not as vigilant and in the process make some money, which usually is funneled into making new purchases and leftovers into their collections. It's actually pretty easy and if you start with even 1k$ capital and choose your battles, even a single person can shake the market on niche cards, like commander foils.
I use some old examples how a single person can move the market. Some are even relevant.
Lot of people collect a certain alpha rares, making the price go way up. The oldest I know was alpha Pirate Ship, in 1996 this card was more expensive than most alpha Moxen. When the guy stopped buying every copy from eBay and UseNet, the price slowly dropped.
Magic Rarities group had a 5% race with alpha uncommons, aiming to get 5% of the total alpha print run of freely chosen alpha uncommon. The threads are still availlable on Librarities archive and are fun read. Alpha cards like Goblin Balloon Brigade and Dragon Whelp tripled in price, when the race heated up. To this day the Whelp is bit higher than it should be, while Brigade has dropped back down.
SCG bought from eBay a collectors set of 11% of all alpha Island Sanctuarys. During that time Sanctuary was 120$, while random alpha rares were still 15$ each. There was a guy aiming to get 5% of all the alpha Underground Seas also... That's just 55 alpha Seas.
When alpha and beta duals jumped few weeks after revised had already moved, I went out and bought SCG and several other vendors out, aiming to get a full set of 40 alpha/beta duals while I still could. During that time, I paid 5.4k€ for the full set of 40 a/b duals. I did even end with some extras. But had I had more capital... Just remembering all those beta Volcanic Islands availlable at below 300$.
Last year there was an European buy-out of GURU-lands. The price has been steadily stayed around 300€ per set, before a certain german buyer bought 17+ of each. Everything except Mountains. Mountains stayed at 50 € each, while Plains moved to 110 €. Then somebody made a move on Mountains. Now full set sells for 490-550 € depending on condition, but very slowly. I doubt that the buyer has made any money, but at least he has cool lands for his decks.
One messed up buy-out was Cloudstone Curio just before PT Hollywood (the one with elves-decks everywhere). A group of people, who, most likely, had been playtesting Elves with Curio decided to buy the card out. During that time it was possible to put the cards on shopping cart for 24 hours without actually buying them on MCM, so they made a few fake accounts (this is hearsay by the way, so please fix my mistakes, if you know better) and hid all the cheaper copies and put new ones on sale for 10 € each. The high price lasted for two days, before all the reserved copies returned and all below 3 € were bought out.
I had my playset I was selling reserved at 5 € each and was really happy to get such a price... and not too happy when the reservation just disappeared 24 hours later. I don't know if the group actually made some money out of the deal, but the way MCM works sure got changed. Now you would need 20+ fake accounts before getting this done.
These are real ways for single persons or small groups to move the market. Often there's a real incentive for the price to move and if there isn't, a crash follows the jump. There are plenty of examples of this also. Aluren might be the newest one, but Wasteland has seen similar jump/crash, I think twice now.
I like to play this game and I like having access to all the cards. This makes speculation a handy way to get cards I want bit cheaper and sometimes paying for my purchases. While I was student, I paid the bills by buyiong collections and selling cards. So while I don't like the buy-outs, I like to understand how they work and will sell my extra copies into the hype, and sometimes buy a playset, if I catch the wave early enough.
Almost two years back I got tired of not understanding how the buy-out brigade could profit, so I modelled a worldwide buy-out on Judge foil Sword of Fire and Ice (which was bottomed out just then). I searched the net for reasonable amount of stores and made a price estimate including postage and a plan on accuiring the cards. First buying about 40 copies slowly from different sources before making the first buy-out, when I had my initial supply in hand. After this buy-out I would list my copies at 50$ and wait until other sellers would start putting their backroom stock on sale at around 40$ before buying them all out again. At this point the 50$ copies should start selling and the first batch of bought copies start arriving.
I still have the excel-sheet somewhere, but in the end I ended using about 8.5k$ and would need to sell 73% of the copies befor getting even if through eBay or bit more if to store buylists. In the end unless I could keep the price at 50$, there was no way to turn quick profit on the Swords. Naturally Sword being spoiled being in MMa would have made a huge loss, unless the imaginary seller could have moved over 300 copies of the Sword in less than a year. If the price would have moved to 60$ the profit margins were bit better, but still it's not instant profit.
Last year I also did some quick calculations on a legends card and found it a it better target, with just 4k$ needed and could even use the availlability of italian copies here in Europe to a good effect, but ultimately I will make much more money from doing my regular work.
I'm a collector, so I can understand very well the guys wanting to own 2% of some print run, even when it will make other people trying to get a full set of something much harder. These collectors have similar effects than the guys wanting to buy-out some card and make mad profits. I'm all for somehow making magic cards harder to buy out, but most of the ways to do this will just make selling and buying harder and making players less exited about the collectibility aspect of the game. That I don't want.
So in brief, I like that players have access to most of the cards, but I also like how a hobby I started almost 20 years back can give me some of the money I invested back. There should also be some cards that are hard to get. Maybe it's a playset of dual lands, or for some people the BGS 10 Alpha Lotus or a playset of Wyvern backed Fallen Empires or the summer Lightning Bolt (for me), but every collector should have something to reach for.
But getting there should also be possible. This is something that new players should also feel, otherwise they will get burned out and just quit. If lot of cards suddenly become nearly impossible for new players to get, or they buy at the peaked price time and again, they will feel cheated. Or they sell cards and next week they notice the price being double what they got. That's not healthy for the game.
As for the bubble, I feel there are small bubbles on Modern cards and almost every presale price is built on a small bubble, but those are normal. But if the speculation accelerates and real buy-outs become more common, there will be trouble. The last weeks Cabal Therapy jump should hold a lesson for most of us.
There was a glitch on TCG-player, which somehow made the price show only Therapy foils, which moved the price to 20$. This resulted in a wave of buyers to eBay and as the card is a Torment uncommon, the supply couldn't keep up and prices soared. Stores pulled their stock and upped the price and more and more new buyers jumped into the fray making Therapy now a 16$ card. One with two foil reprints. The card was most likely underpriced, but this shows how accustomed players are to these jumps. Most don't even ask why the card moved, it's just "I want, I want, I want..."
This post is already long enough, I could keep it going, but at some point there will be a limit on card liquidity if the prices keep moving at this pace.
Set to default
To me, the magic players who view speculators as destroying the market are a small but very vocal subset of the magic population at large. In reality, I'll bet the magic population at large is silent. Most of them aren't talking at any given moment.
I'm glad you put out there the viewpoint you are arguing against because it does make it clearer where you are coming from now.
I think on Market Street a good number of the people here have at least some general education on economics. If they do not, they probably acquired some of the concepts through just being here on market street.
Intuition about how markets work is not something that naturally comes to everyone. But I think for those that have it, they take a more moderate approach to understanding speculators and the magic market. Of course it can be discouraging to see a card you want spike up in price. But as you wrote, sometimes (probably many times) its just real demand moving it upward.
Stocks are used as voting rights within the company. A single note of common stock isn't worth a lot when making decisions, but if you own enough of them you can hold a significant say in the decisions made for the company.
If people want to manipulate a collectible market, I say more power to them. At some point, there is a strong risk that they could be left holding the bag and lose a bunch of money. See: Tulip mania, baseball cards in the 1990s.
That being said, there are millions of these cards floating around. Buying out some of the liquid stock from TCGPlayer or whatever can affect the price, but that's not a big deal.
stocks are also shares of ownership in the company. Assets - Liability = Equity
As a stock owner you are entitled to a share of the equity in a company. Theoretically if you own enough shares and you are in a position of making decisions, you have the power to direct sales of the company assets.
Good point. But is the only function of stock. It is a part share in a company. The mtg cards have a play use and at current this Money store use. Play use suffers when cards are taken out of circulation for speccing.
You have votes in the AGM you do not have any control over the day to day running of the company. That is what the management is there for.
2) SCG or any other entity can do whatever they want, when they want because there are no set rules or regulations in place to stop this, nor will there ever be.
3) If you want "buy-outs" to stop on TCG, get the programmer there to implement something that puts a stop gap of 4 per cart at a time. That will make buy-outs inefficient time-wise and should slow them down.
4) It is also not the masses that panic during a buyout, but the few. There are MILLIONS of copies of each card, plenty to go around, but a few ppl panic and then prices go up. Common sense is not in high quantity when it comes to magic players and finance
Magic Cards are commodities. Compare them to other commodities (that also have uses) like corn or oil.