Hello, Constant Reader

In the last installment, we dealt with the Keynesian Beauty Contest and how thinking rationally and a few steps ahead can lead to your avoiding potentially ruinous decisions. Taking into account what everyone else will likely think in a given situation is how you make the best possible informed answer.

In my research for the last piece about the Keynesian Beauty Contest, I stumbled across some reading about the concept of Nash Equilibrium. Did you see “A Beautiful Mind”? Well, that John Nash, portrayed by Russel Crowe in the film proposed the theory. Stated simply, Nash Equilibrium is a Mexican Standoff. In a non-co operative game, situations can arise where each player who knows the other player’s best strategy will not benefit from changing their own. They are essentially in a deadlock, or in Equilibrium.

What defines this equilibrium is whether party A is making the best decision they can, taking into account the decision party B will make, and that all hinges on on Party B making the best decision they can accounting for what Party A is likely to do. This doesn’t even have to be a dichotomy, as any number of players can be involved and they will only be in equilibrium if they make the best decision they can given all of the other players’ decisions AND provided they don’t change their decision.

I got into this topic because I believe artificial price spikes are the kind of system that can be modeled using this theory, but I also believe that in the case of artificial price spikes we don’t have a true Nash equilibrium because I believe there is a party integral to the system that is not making the best decision they can for themselves but rather the best decision for the system based on faulty logic on their part. The result is the same, though, because the decision they make does not disturb the equilibrium of the system. I maintain, though, that it probably should.

In a lot of ways the “cog” in the middle of the great machine is most important and also most tightly-bound to the rules of Nash equilibrium. At its core, it’s a theory that says once equilibrium is established, no one can do better by changing their behavior. Unfortunately, that’s true.

Moving Parts

Why is it the middle cog that is so essential? It’s really simple – in this case, the guts of this equilibrated system are the greater fools we discussed earlier. To recap briefly, the Greater Fool Theorum as applied to Magic finance is a premise that means some people buy into a spiking card and can only expect to make any money if someone more gullible buys the card from them at a higher price. These greater fools are what makes it possible for artificial spikes based purely on hype and buying frenzies to occur, and their unenviable position makes these systems follow the rules of a Nash Equilibrium. The only reason this works has to do with how someone becomes part of the system.

If you are participating in a card spike, you get “in” when you buy in. The first buyer is a store or individual who bought the card for its pre-spike price either because they wanted to have it to play with / in inventory or because they saw the spike coming. There is hype, either from deck results, conjecture or someone initiating the price movement with a big buy-out of a site (it only takes one site, usually; the rest fall like dominoes) but the system is not in equilibrium until there are more players.

This is where the greater fools come in. They buy at a post-spike price that may be lower than the peak price, but once they buy in, they are sunk. They absolutely have to hope for even greater fools to buy from them at the spike price or they are sunk. Lots of people break even in this position, and it’s no fun to be in for a few reasons.

The hallmark of these artificial spikes is a card starting at X, spiking to 2X when it’s bought out, peaking at 4X at the peak of hysteria and going back to 2X as people undercut each other trying to rid themselves of copies of the card. Inevitably in these cases, a lot of fools who buy in at 2X end up bagholders and sell out for 2X again.

The worst part about their position is that they are locked in to Nash’s theory of equilibrium as soon as they buy in. What are their options? Sell out at 2X immediately? That doesn’t help them out of the jam they put themselves in. There really is nothing they can do to improve their position but wait and try to sell to a greater fool, and their inaction doesn’t violate the equilibrium of the system. They really have no options except for hope, and hope is not an investment strategy.

For the other actors, they have few options as well, and they get forced into their positions. I’m not sure you can have a true equilibrium as envisioned by Nash (who also envisioned people who weren’t there, so what does he know?) when people have their initial move determined for them, but I would argue that you have the option to stay out of it, so even making forced moves is still abiding by equilibrium because doing anything else but making the forced move (or staying out of it) is not going to give you a better outcome and therefore are bound to the system. So a player who wants the card to play with doesn’t have a choice but to pay the card’s price at the time they buy in.

One actor we’ve ignored until now is the actor who initiates the price spike. Could this person or persons act in a different way and end up better off? This is the true test of the theory as it applies to the scenario I have concocted. When you think about it, buying low and selling high is probably the optimal play, dumping as many copies onto the market as fast as they possibly can is probably the optimal play (for them) and maximizing their profit in the shortest time-frame possible is probably optimal. There is really nothing they can do to improve on this, and in so many of these cases, this is exactly what we see happen. This actor is in an enviable position, but that doesn’t mean there is any benefit to breaking the rules and making a different play than the one everyone expects.

The Point

Why do we care about the concept at all? Even if you agree with my analysis (assumptions) about the system, what good does establishing the system is a Nash equilibrium do?

I maintain that mtg finance is cooperative, as all system bound by the theory must be. If you buy cards, you help the seller. If you sell cards, you help the buyer. And if you buy an artificially-inflated card for 4X, you help the guy who bought them for X and knows that 8X is a pipe dream. Since this is the case and once you lock yourself in and pay 2X or 4X for a purpose other than just playing with them, you’re locked in. You will not benefit by doing anything other than what everyone expects, and if you think that position is unenviable, it’s probably best to win the only way you can.

Don’t play.

Last time we delved into how to behave when you think the market is being irrational. I talked about the virtues of selling before a card peaked to maximize the number of people who would be buying as the card was rising and therefore would have more confidence in their ability to make money as the card had not yet peaked. Those buyers are the eponymous greater fools and they are an essential part of the market, both rational and irrational. I mentioned then that this theory correlated with something called the “Keynesian Beauty Contest” and I spent the last week or so thinking about that concept and how it applied to the market. Let’s dig in.

The Name of the Game

The simplest possible example, albeit not the most illustrative, was Keynes’ original example, the “beauty contest” example. Imagine there is a contest in a newspaper with several photographs of women. The rules state that you mail in a selection of one of the photographs and whichever gets the most votes will be deemed the most beautiful and every person who voted for the winner is eligible for a prize. In a scenario like this one, there is no incentive to behave irrationally, you’re simply trying to pick the winner.

This example and the subsequent theory associated with it got me thinking about the dozens of examples in the Magic market. We said it’s best to behave rationally and that’s true. However, there are multiple dimensions we need to consider and it may not be as simple as we think right off the bat.

The Different Levels

A first-level thinker will pick the girl he thinks is the most beautiful. “Snap asian girl, not close” he says, using Magic community slang because I invented him and I can make him say whatever I want. He’s a rational guy after all. Asian women appeal to him so he sends off his answer and waits for his prize to come in the mail.

A second-level thinker is going to really delve a bit deeper into the heart of the problem. The actual name of the game isn’t to pick what you like and hope your tastes correlate with the norm. That seems risky and there is too much variance in what people might think. Provided there are enough second-level thinkers they are in a better position here because they tend to behave the most rationally. I’ll explain. Say a second-level thinker also prefers the picture of the asian woman. I am beginning to regret going racial with this and I probably should have just separated them by hair color, but stay with me. The best part about this is that the second-level thinker is going to pick the girl he thinks the majority will go for, irrespective of his own personal inclinations and if that’s not wild enough, think about what will happen if there are mostly second-level thinkers in the contest. A second-level thinker will assess all of the photos, determine that the blonde, western-looking woman is closest to the traditional Western definition of beauty and make the determination that she is the one who will get the most votes even if they prefer another girl. The even more wilder part is that you could get a situation where 100% of the people personally prefer the asian, or redhead or whomever, but the first-level thinkers who pick her will lose because all of the second-level thinkers will think that the others will pick the more traditional-looking girl. They will either think that the others will think she is the most beautiful, or they will think the others will think that everyone will think that. In other words, they know the “right” answer and pick that even if it’s not the true answer.

In practice, many people are second-level thinkers provided the example is as straight-forward as the beauty contest. It could be anything, pictures of cars, flavors of ice cream; NPR’s Planet money did it with internet videos. Enough people know that the “right” answer is always “cat video” even if there is a hamster sneezing or something equally adorable. It’s not about the “true” answer, it’s about what everyone else is likely to think everyone else will think.

Adding More Levels

You can go beyond first and second-level thinking by making the problem more complex. This is better for our purposes because the way cards fit together in the vast framework of a metagame and multiple formats is more complicated than “pick the best removal spell out of a list of three spells.”

Imagine you are asked to pick a number between 1 and 100, but the number you pick isn’t just a random number because the winner is the person whose number is the closest to 2/3 of the average of what everyone says.

In this case, we need to make the first-level thinker dumber. He’ll snap 27 because it’s his favorite number.

Second-level thinkers will likely say 2/3 of 50. They’ll reason that everyone else is a moron, guessing randomly. The random distribution should, in theory, average out to 50 and therefore 2/3 of 50 is the right answer.

Third-level thinkers will reason that everyone else is likely a second-level thinker and therefore the answer will be 2/3 of 2/3 of 50. If you think everyone else is a third-level thinker, maybe you want to go 2/3 of 2/3 of 2/3 of 50. Maybe not.

First Level Magic

A Commander deck was printed with a card in it that sells for more than the total cost of the deck. Obviously you go buy Mind Seize and crack it to sell True-Name Nemesis for value. You’ll spend $30 and make $5-$10 on top of recouping the initial $30 and have 99 free cards. Repeat Ad Nauseum. Might I suggest that that’s first-level thinking?

If you want to think second-level and above (if there is a third level to this example) you need to imagine that everyone is going to be cracking Mind Seizes and selling the Nemeses. What can you do to capitalize on a market behaving this way? For starters, they will undervalue the other 99 cards they get. Some people are doing this to get free cards, most just want the Hamilton that comes from the quick flip. This behavior is going to put downward price pressure on the value of Sol Ring and Baleful Strix for starters. Second-level thinking involves picking up cheap Sol Rings from people who are undervaluing them. We’ve seen the price of Sol Ring dip and rebound before, there’s no reason to think it won’t again, even with all of the copies hitting the market. Since the decks are only getting reprinted at the rate that the worst-selling deck needs reprinting, there won’t be infinite Sol Rings injected into the market. The price will recover, and you’ll be glad you bought very cheap. The same can be said of Strix which sees more and more play every day. Buying cards that are likely to be undervalued is a good way to capitalize on a market with a lot of first-level behavior going on.

A first-level thinker will often speculate on a card based on their own interpretation of its power level. “I think Biovisionary’s effect is powerful” is a good example. Sure, you might like it, but there’s no money in hitching your wagon to Biovisionary, the asian woman of card picks. Here’s the painful part for me; I have been guilty of first-level fallacies myself and a lot of us still are because we don’t realize that we’re thinking on such a primary level. You want to know the battle cry of the first-level thinker? You won’t like this, I didn’t.

“This has been insane in our testing”

I get teased for throwing my support behind the card Seance even though I made some money on that card. I fell victim to the “this is insane in our testing” mentality and I thought that all I needed to do was tell enough people how good it was and they’d eventually test it and come to the same conclusion. I was thinking about how much I liked the picture of a Seance and not thinking about how everyone else was going to pick something else. Second-level thinking would have been noticing that Brad Nelson had brewed a deck that was nearly identical to ours but ran 0 Seance and was winning without it. Irrespective of how much that card improved the mirror, the winner of the contest was going to be Brad Nelson’s blonde-haired, blue-eyed girl next door, and thinking different was, well, first-level.

Finally, the MODO “crash” when a lot of prices tanked and people threatened to quit over the temporary suspension of daily events, a lot of first-level thinkers saw opportunity. With prices tanking, there was a chance to buy low and sell high later. The best part about this example was the conclusion that second-level thinkers came to. The real beauty here is that first-level thinkers aren’t always wrong, what they are is useful.

A second-level thinker saw that opportunity and reasoned that a lot of people were going to buy into MODO for the sake of potential profit. Regardless of MODO continuing to be a good gaming community, Redemption is coming up and was unlikely to be affected by the downtime. Second-level thinkers reasoned that all the first-level thinkers buying in for profit were going to stabilize prices. This made it safe to buy in on Theros block staples that would be essential come rotation and speculate on booster packs because they would be more scarce with fewer being won as prizes in events.

Heck, third-level thinkers probably imagined some of the second-level thinkers were going to stabilize booster pack prices despite them tanking initially, making early booster investment a safe bet.

Wouldn’t you know it? That’s exactly what happened.

How to Be Going Forward

If you can stay away from some of the pitfalls that beset the first-level thinker and reason what the herd behavior is going to do to the market, you can stay ahead of it and really make some good decisions. Remember, there’s no money in being average. Not when 2/3 of average is the name of the game.

“Jason” people are always asking me “why are your finance articles so boring and heady when your articles over on Quiet Speculation are so fun and so closely resemble fart jokes?” I honestly don’t know how to answer that. I suppose my goal with this series is to delve a bit into some of the things I’ve learned over the years and write a serious article series just to keep people guessing. After all, isn’t that the greatest possible fart joke there is?

Joking aside, I want to launch into a topic that may help you not end up making poor investments in the future. I think there are two types of speculators in the markets, and both are essential to the process. You want to be one of those kinds of speculators and the other kind you do not want to be. At all. Let’s name the two kinds up front and then talk finance.

The first kind of speculator we will call an “Initiator”. If that term sounds somewhat arbitrary I want to assure you that’s only because it is. It’s totally arbitrary. I have a great name for the other kind of speculator but I had to just wing it for this one. I hope it sticks. It certainly sounds cool – you want to be an “Initiator” don’t you? Sure you do. Initiators initiate things. They take initiative. You want to be both of those things.

The other kind of speculator has a few different names. One of them is “bagholder”. Is that equally evocative? I hope so- you don’t want to be a bagholder. Bagholders are trying to sell Master of Waves for $14 on TCG Player right now and no one wants them. Bagholders are pretty upset about this because they bought Master of Waves at $15 when it was on its way to $25 and they thought they were pretty slick. They saw the price going up and thought “hey, me too!” and now they’re struggling to only lose a dollar on the hottest card of last weekend. What happened?

Well, put simply, they didn’t take the initiative. There is a theory in economics that helps us know when to buy and when to sell a card like Master of Waves that seemed like it was on its way to $40 just one short week ago. It’s the eponymous “Greater Fool Theory”

On a market gone mad

A lot of people watched the coverage of Pro Tour Dublin and thought “Wow, that Mono-Blue devotion deck looks incredible”. Thassa shot up from $12 to $25 overnight. Nightveil Specter went from bulk to $5, and Tidebinder Mage shot up from $1 to $6 at its peak. Team Starcity was all over those cards and Starcitygames.com raised their prices. When that happened, all hell broke loose on the markets. There was a sudden run on those cards. Many stores cancelled or modified orders because they didn’t want to “lose” money selling into such a price disparity. They were perfectly happy getting $1 for Tidebinder Mage 24 hours earlier, but that’s another article. Master of Waves went from $5 to $10 to $15 to $20 to $25 some places in a ridiculous frenzy of buying over a 48 hour period. If you saw that they were $20 most places and $25 others, you were smart to buy in at $12-$15 if you could, right?

And since the prices were rocketing up so quickly that many sites didn’t have time to register the increments between $5 and $20, who on earth was selling at $12-$15?

Me.

On history repeating itself

Let me explain. I watched coverage like everyone else, but while many saw the next Jund, I saw the next UW Geists. When Dark Ascension came out, Huntmaster of the Fells was not a card anyone was excited about. It seemed like a durdly werewolf that took a lot of effort to flip back and forth and it wasn’t obvious where the card fit in. At the first few events where the set was legal, the card started to prove that even a small amount of advantage in the form of a wolf and some life made the card worth playing, but at the Pro Tour, no one was talking about Huntmaster of the Fells because Jon Finkel had broken the format.

Finkel took third place with a Delver of Secrets deck that utilized Dungeon Geists, Drogskol Captain, Phantasmal Image and Lingering Souls. The Drogskol Captain kept them from being able to target your Phantasmal Image and kill it, so you could either copy their best creature or make a bunch of copies of Dungeon Geists and keep their creatures tapped forever. The deck was all anyone wanted to talk about. The prices for Phantasmal Image, Dungeon Geists and even Drogskol Captain went up precipitously.

However, the deck would not rule Standard forever as everyone had anticipated. By early March, jund midrange and other Huntmaster decks were running roughshod and Delver decks took a different tack, dropping the durdly Dungeon Geists for more spells. A deck that took a PT by storm, was designed by Jon Finkel and looked invincible was nowhere to be seen.

It was with this in mind that I watched the coverage of Pro Tour Dublin and by Saturday morning, every copy of Nightveil Specter, Tidebinder Mage and Master of Waves I had were gone.

The greater fool theory

The greater fool theory is an economic theory that says, basically, that in a situation where the price of something is not driven by its actual intrinsic value (which isn’t $5 for Master of Waves but also isn’t $20) but by expectation and speculation, irrational buyers will set the price. Therefore irrational buyers will justify purchasing at a price that is above its likely intrinsic value by theorizing that someone even more irrational will come along and buy it from them. They are buying to sell to a greater fool than they are.

There is a problem with that. You’re taking a sure thing, like Master of Waves tripling and betting on something less sure, like Master of Waves quintupling. If you bought into Master of Waves around $5 (something I didn’t think was a good idea so all my copies came from packs) you had two choices. You could sell to a fool for $15 or hope to make $20.

However, fools had a much broader range of choices. They could buy in at $10 and hope their order wasn’t cancelled (good luck). They could buy in at $15 and hope to sell to a greater fool. They could buy in at $20 and try to trade them out at $20 when they arrived. They could stay out of it entirely, and if they had any $5 copies, they could hold onto them.

Why you sell at $15

Who is buying at $5 and $10? These are the Initiators. They either predicted the trend and bought at $5 or they saw the trend beginning and bought at $10. They took initiative in recognizing potential, and they initiated the precipitation of the price with their buying activity.

Now, the easy way to answer “Why do we sell at $15?” is to simply ask “Who is buying at $15?” Bagholders, that’s who! If people were able to sell at $15 that means people were buying at $15. Now, some of those were people intending to play with the cards, and in a sense they were kind of savvy since they bought the card before it hit $20 and therefore virtually made $5. But given the card’s eventual settling at $12, they virtually lost $3. The people who weren’t intending to play with the card and who bought in at $12-$15 thought they were being smart. You probably think they were being smart, too. After all, $25 wasn’t an unreasonable goal for the card and buying a $25 at $12 is 100% profit, right?

Not so fast. Let’s bring this all full circle. It may seem like those bagholders were buying into a guaranteed 100% profit, but they were in fact banking on being able to sell to a greater fool for $25. A spec is only worth what you can actually realize when you sell it, any other numbers are purely theoretical. If there aren’t enough greater fools buying the card at $25, did you actually realize a profit? Now, the fools who bought at $15 take less of a bath when the card maintains $20-$25, that’s true. But my analysis was that the Mono-Blue devotion deck was a deck, not the deck, and therefore the hysterical high point of $20 was likely very short-term. I realize I gambled, too, but I picked a wager where my worst case scenario was that I tripled up.

In summary, it’s sometimes best to sell a card like Master of Waves that you don’t feel is going to be able to maintain its peak price for long at a price point where you have all kinds of fools buying, both greater and lesser. Don’t speculate after a card has gone up a few times hoping that it will peak at a much higher price- to do so is to fall victim to the greater fool fallacy and to be left holding the bag.

• A lot of people in the finance community are saying now is the time to buy Thoughtseize. I can’t agree. MODO redemption has not kicked in yet. MODO redemption is going to inject more copies into the market, diluting the supply. This will mitigate the demand for Thoughtseize in two ways. It will either lower the price or it will not be enough to bring it down. Injecting more copies is not going to ever bring the price up so you can only benefit by waiting. When the MODO redemption copies start to hit the market, if the price does not go down, buy. If it does, wait for it to go back up a smidge and then buy. You only benefit by waiting.
• M14 is about to be completely forgotten. Redemptions have slowed and boosters are not selling as briskly. This may be the floor for Mutavault. More mono-colored decks means people can get ballsier with their manabases and Mutavault is seeing play. This is an eternal-playable card and this is the cheapest they’re likely to be, ever. A reprint is extremely unlikely.
• I think the weapons are bad specs. Yes, I realized this after I bought a big pile of Hammer of Purphoros. Thanks for reminding me. Even as nutty as Bident is (in that one deck), it’s likely to be a 3-of max and more likely a 2-of. Couple that with it having been a giveaway card and the other weapons being in pre-cons and you have a recipe for price stagnation.

That’s all for this time. Join me next time where we’ll discuss the Keynesian Beauty Contest.

 1-In which skepticism is admired

What I think all of us here at MTGPrice.com learned is that you should never emphasize that an aspect of MtG Finance is easy, because people lose their minds. “If it were that easy, everyone would do it!” was the overall thrust of the responses I got to my first article wherein I talked about the principles of the technique and gave a few examples. People were skeptical, which is fine- everyone should be skeptical, especially when something sounds too good to be true. A few of you asked me some follow-up questions to get a better feel for what I was talking about, and that’s cool. A few of you pointed out a few things that make an arbitrage opportunity seem better than it is, and I promised to write a follow-up article about caveats, this article, and that’s also fine. A few of you called me a liar, and even that’s fine. I got a good laugh out of it, especially considering this isn’t exactly a revolutionary technique I’m claiming to have invented.

Another thing that I think we all learned is that years of the internet have made people foam at the mouth when they see the word “free”. “Nothing’s free! WARGARBL!” was the general thrust of the responses the launch of the “Free Money” arbitrage tool got. I recognized that it was meant to be tongue-in-cheek. Many people on the internet did not. They saw a side ad that said “A schoolteacher figured out this easy trick to get free money from card websites. Card sites hate us! Click this link to get your free money or at least make your penis 3 inches longer XxVIAGRAxX!!!!!111eleven” Again, it’s cool that you’re skeptical. Is the problem here that people think I made the concept up? Did I make it sound like it’s too easy? I’d apologize for that, but, well, it kind of is really easy. It’s just harder than you might think.

2-In which caveats are discussed

 The Aribtrage Tool on this site is just that; a “tool.” A Screwdriver is also a tool. Your fingers are poorly-suited for screwing pieces of wood together so the tool helps leverage the power of the wedge and the inclined plane and all sorts of wonderful simple machines to help you in your task. You don’t just hold the Screwdriver in your hand and say “It’s assemblin’ time!” and wait for a fully-formed Ikea coffee table to appear in your rumpus room. You’re going to have to apply some torque to some metal. The Screwdriver isn’t garbage because of this limitation- what it did was save you lots of time. Similarly, the Arbitrage tool is saving you time by not making you check lists of every card for sale everywhere and check them against every buylist. You are, however, going to have to verify that there is indeed a genuine arbitrage opportunity there, but the time you saved will be invaluable, especially to those of you with a half-assembled coffee table in your living room.

The first caveat, therefore, is to verify that there was no electronic mistake. Verify that there are copies for sale at the target price. Verify that the buylist in question is buying copies at the target price. This will take a non-zero amount of time. This is not an issue because it is on the order of seconds and minutes, not weeks and months. A lot of “false positives” only take a cursory glance to rule out. Is the card sold out and that’s why the price is wrong? Did someone miss a decimal point? Either someone missed a decimal point today, or Brassclaw Orcs is a big mover now that someone has them for sale for $20.00, making the average price $17 and change and making me laugh. Remember, you’re not going to be able to retire because you found an arbitrage opportunity where a dealer is paying $400.00 for a card you can buy for a nickel. You’re going to make a percentage on each copy, but enough of a percentage that it’s worth doing. Huge discrepancies are the first to check because those are most likely to be mistakes that don’t lead to an arbitrage opportunity and it’s best to rule them out first. Also, big discrepancies pay the best, so why not make sure you have those on lock right off the bat?

Another important caveat is to have a sense of which buylists are inclined to not honor the price if it takes you some time to get this deal together. If a site is overpaying on Hammer of Purphoros today and you can buy them cheaper on eBay, I’d leave it alone. They want them NOW. Generally, if you commit to sell them at that price and complete the buylist “checkout” procedure, they’ll honor the price as long as you get the cards to them in a timely manner. This is good news if you’re sitting on X copies of Hammer of Purphoros and they want X- it’s less ideal if you can buy them and have to wait for them to show up. Hammer’s a new card, its price is volatile and the waiting for the copies to come in is a great way to get burned. A few rules of thumb should help you.

• Older is generally better. The buy prices are tied to restocking due to the card being sold out rather than there being a run on the card and the price will be ignored by many and honored for longer
• Rare is generally better. Again with the Hammer of Purphoros example. How many different people have enough loose copies to fill that order in a day or two? Now imagine a store wants to buy an Italian Mana Drain or a JSS foil Volcanic Hammer. Not too many people are sitting on those so you have a chance to find a cheap copy online and ship it – your window is a little bigger.
• Don’t forget to check eBay if you see a good candidate card! Try a search with a few misspellings- hard-to-find auctions receive fewer or no bids and are a great opportunity to buy for cheap.

Finally, make sure you’re not going to end up holding the bag. If this price discrepancy is most likely caused by acute, short-term demand that is not going to be sustained, you likely won’t have time to flip your copies unless you’re sitting on them already or find them at an LGS. The “Older is better” point is crucial because older cards are less likely to spike due to short-term demand and you’ll find people eager to sell out. This gives you time to find cheap copies online and ship them out- this isn’t something you can do when a dealer is paying $3.50 on Burning Earth due to an emergency and you can buy copies cheaper than that on Cardshark. That’s a scenario where you likely end up with a lot of copies of Burning Earth to try and break even with because someone else shipped them faster. Don’t forget, dealers don’t want infinite copies of everything- they will almost always state how many copies they want, and when they have that many, the price goes way down.

Once you do this a few times, you’ll get a decent feel for which opportunities are good ones and which are bad. You will also get a feel for which dealers are more likely to be slow to update their list and therefore less likely to drop the buy price while you’re still waiting for the copies to show up. Online discussion forums are filled with feedback from people who ship to buylists and you’ll quickly get a feel for which sites you want to be shipping to. Quiet Speculation and MTGSalvation both have good discussion forums and Quiet Speculation in particular has an entire section devoted to reviews of dealers you should either sell to or avoid. What I can say is that there are a few sites who are slow to update, almost always honor their buy prices and frequently pay the best (overpay, since we’re talking about arbitrage, here). You’ll ferret those out right away.

Armed with these instructions, you’re now ready to go try and scoop some “free” money. It’s not really free- you have to buy cards up front, hope the buy price is the same when you get the cards, do some leg work and a lot of research. It’s also easy, not that time consuming and a good way to spend your time at the computer or killing time on your phone. Account for the breakage associated with shipping costs by placing decent-sized orders (sites that undersell for one card will have other cheap stuff to mitigate the shipping costs, sites that overpay tend to pay well on other stuff, too), don’t wait too long to get stuff in or ship it out, watch out for stores that don’t pay in a timely manner or honor their buylist prices, and learn how to use the tools we’ve provided. I know you’ll have some fun, and if you have any questions about the process, let me know. I’m here to help.

3- In Which Tips Are Given

• Master of Waves is really making waves at the PT. Regardless of whether the card is actually good, you’ll want to watch what it does this weekend. If there is hype, you’ll want to sell into it, and scooping any copies under $7 right now if you can find them is a good way to be prepared. The consensus is that there is low downside to buying in under $7.
• You’ll want to watch all of the PT Dublin coverage. A lot of aggro cards spiked as a result of the two SCG Opens of the new season of legality. Pro players in Dublin are more likely to make control cards spike, so stay glued to coverage. Ashiok could spike, Elspeth could move, Detention Sphere could leap up. Also, all of those cards could really take a big hit if they don’t perform. We saw the aggro spikes already- watch Dublin coverage for everything else.
• Speaking of Dublin coverage, any aggro-type cards that are moving upward already will really benefit from success at the PT. Did you buy Advent of the Wurm? This could be the first chance it has to see real upward movement, and a huge spike could make it a good weekend to sell. Monday morning everyone will be trying to build PT decks. Be ahead of them.
• What was the deal with Beetleback Chief this week? Generally an unexplained spike like that is something to ignore unless you can figure out why the card spiked. In this case it seemed like there was nothing to back it up and the card is back down already. Sell into the insane hype in cases like this. People who bought Chief at $2 or $3 thinking they were smart are going to lose money, here. People who had copies lying around and sold to those people are laughing all the way to the bank. Remember- sell into hype, don’t buy into it. If you were able to buy chief at $0.50 you may be ok because price memory should see the new price stabilize a bit higher.

All this talk of Beetleback Chief leads nicely into a discussion about the “Greater Fool Theorum” which would be a great discussion for another day.

Were you hoping I’d cover something I omitted? Hit me up on Twitter @JasonEAlt or message altjason17@gmail.com and I’ll be all over it.