In yesterday’s article we covered the basics of MTG Finance. Again, the goal of this practice is to purchase a card and then sell it at a later date for a profit. This is a leading cause of price spikes, which can easily be tracked here. While I do understand why people engage in this practice, I cannot condone it. Today I will tell you my experience with it, the impact it has on the game, and how you can find balance with it in your own Magic life.
Yesterday I told you about my successful speculation on Worldspine Wurm. Ultimate Masters reprinted Through the Breach, Goryo’s Vengeance, and Nourishing Shoal; high-priced staples of Grishoalbrand. This would reduce the price of the deck and make it more attractive to budget-minded players. The supply of cards in the deck that had not been reprinted would not change though while the demand for them would rise. It was plain as day that Worldspine Wurm would increase in price. So I purchased two playsets at $5 per card. Within a week they went up to $15 dollars and I was able to walk away with an easy $80 in my pocket. This was not to brag about my profiteering. This was to shed some light on how easy MTG Finance could be. Herein lies the issue.
Investing in the stock market has many more complicated factors and the SEC is in place to prevent market manipulation. There are no such protections in the card market. Furthermore, when you purchase shares in a company you are providing funding to that company. It allows them to hire people and operate within the economy. So what did I do buy scooping a bunch of cheap Worldspine Wurms? I was initially happy to make $80 with ease. The it dawned on me what I had really done. The end results is that two players who wanted playsets of Worldspine Wurm now had to pay an additional $40 to get there. It is a selfish thing to do and it was the point at which I turned my back on MTG Finance. At this point I avoid looking at price trends at all costs because they just make me upset. Because more often than not, they are the result of profit-interested speculators rather than legitimate buyers.
The Impact on the Game
When players engage in MTG Finance, the overall impact is that they hurt the game and the people who play it. I did it myself and it honestly just made me feel guilty. Sure it is easy money. But this practice is not just generating money. It is not taking money from a large corporation. It is directly taking money from your fellow players. As I explained yesterday, card prices are set by the forces of supply and demand. When I purchased those cheap Worldspine Wurms, I artificially reduced the supply in the market. This meant that when demand caught up to it, the price spiked higher than it should have and then I was able to sell them at an inflated price. Those two copies should have been readily available in the market when those players wanted to buy them but they were not. I was acting as a gatekeeper and made it more difficult to play the game.
This does not just apply to quick buck moves like the one I made either. When a card is reprinted the supply increases and the price will drop until demand catches up to it. If you take these cards out of the market and hold them in a binder for no purpose other than profit, you are gatekeeping. There is nothing wrong with collecting. There is nothing wrong with holding onto a card that you may use in the future. However, I do feel that it is unethical to hold cards entirely for profit with no intention to ever use them. All you are doing is making it more expensive for your fellow players to enjoy their hobby in the future. Unfortunately, we see this with every set release.
A current example would be Mycosynth Lattice. The card has increased demand due to its interaction with Karn, the Great Creator. However, legitimate demand did not take the card from $10 to $60 before Karn was even legal. The initial $30 spike came a full month before the set was released. Of course some of the buyers intended to play the combo in Modern. But many of them were profit-motivated speculators who were eager to catch the price jump and make eager players pay the inflated price in a few weeks time. Those players should have been able to buy the card at a legitimate price determined by the equilibrium of supply and demand.
So many of you may be confused. If I have developed such a harsh opinion of MTG Finance, why did I write an article explaining how to engage in it? Well finance does not strictly mean investing. It is simply the study of money. I present these principles so that you can protect yourself from the ups and downs of the card market. I want it to be clear to you when you should buy and sell the cards that you own and intend to use. The goal is to find balance, not to join in a community of profiteers. I am not here to pass judgement on anyone. What you do with the game is your prerogative but I will not condone profiteering. I cannot tell anyone how to behave but these are principles that I follow now.
The first way is to derive profit ethically. If you do want to use Magic as an investment tool, it is possible to do so without negatively impacting your fellow player. The way to do this is to purchase sealed product. This does not remove the supply of cards from the market. If more booster boxes are purchased, WotC simply prints and ships more boxes to match that demand. You will be able to sell those boxes to players in the future. Yes, they will pay more at that point than they would have in the past. But if players did not buy and hold boxes, it simply would not be possible for players to have fun cracking and/or drafting old sets. You are making this novel experience possible for that player. This practice is a win-win.
The other way is to purchase cards based on speculation but to only buy a card that you may play and limit yourself to a playset of said card. If a strategy springs up around the card, you can test out that deck and then decide whether you want to use it. This means that you will not be forced to pay the profiteers for the card post-spike. If you decide that you do not want to use the card, just go ahead and sell it. You thought you might play the card but you decided that you wanted the cash more. There is nothing wrong with this. You protect yourself from the price trend and just might profit. This is the middle way.
I wish that I could say I bought those Worldspine Wurms with playing Grishoalbrand in mind but that was not the case. I bought eight copies and I knew that I would be profiting from them. It was unethical. So what is your opinion on MTG Finance? Have you ever been burned on a bad investment? Please come and share your thoughts in our discussion group. Or if you would like to take a swing at writing content for the site you can contact us directly here. Tomorrow Luke will stop in to present his personal wishlist for Modern Horizons. Until then my friends.