This week I got a taste of what it’s like being a pro. That’s right I took down GP Columbus!!!1! No, wait...that’s not right. I got to experience the other, more grimy side of being a pro. Yup. I’m writing a MTG article from the luxury of an airport (not as bad as it sounds - It’s actually much much worse).

I “have” to go to a conference in Crete for work. Hopefully the international travel won’t hurt my #BattleOfTix standings too much. I will be abroad when #EMA releases on MTGO, unfortunately…we’ll see how that plays out.

So, now, in the midst of my 24 hour travel extravaganza, I’m going to write about how you can make money simply by telling everyone to ‘suck it!’ with the immortal words of Bart Simpson.

No no no no, that’s not right either.

What we are really going to discuss, is an oft overlooked strategy to eek out profit/value: The Short.

What’s a Short?

One can obtain the maximum balance of coverage and comfort by donning attire that extend, at most, minimally past the knee. Shorts are love, shorts are life. I would know, I wear shorts exclusively – 0°F, 60°F, 100°F – any weather is shorts weather (I’d convert to Celsius, but...#SorryNotSorry).

/seriousface

It’s blindingly obvious how one makes money buying something that they expect to then go up in value…it, uh, goes up in value. However, everything can’t always be increasing in value. Some things have to decline in value. Thus, in finance, a short is a mechanism for making money when you expect the value of something to decrease. I’ll let Wikipedia do the heavy lifting here, while I conjure a (ham-handed) analogy that should make sense to MTG players.



Say you, for whatever reason, just know that Tarmogoyf is going to be banned in Legacy AND Modern, on, let’s go with, July 18, 2016. How can you make money off that knowledge? Buying goyf’s probably wouldn’t work out, as a banning would obliterate their value.

So, what to do? What to do?

What if! You have a friend (unlikely, I know). Let’s call him Ted. Now, Ted’s heavily invested in eternal non-rotating formats and has a couple of playsets of Tarmogoyf in his possession. Let’s say Ted trusts you (again, a stretch) and will let you borrow his Tarmogoyfs for a week or two. Say, starting on July 11th. Being the good friend that you are, you sell Ted’s goyfs, at the going rate, let’s say $100 each - $800 total. Then, Tarmogoyf is banned!



Pandemonium! Cats and dogs living together! Cubs win the World Series! Tarmogoyf’s price plummets to $25 each!

That’s where you saunter in, buy 2 playsets for $200 total, and give the definitely-the-exact-same-ones-you-borrowed-(wink) Tarmogoyfs back to Ted. Ted still has his goyfs. He’s probably real disappointed in the banning. But, you walked away with $600….Good deal, no? What’s the downside? What could go wrong?

Well, what if your info that Tarmogoyf would get banned was bad (shocking, I know)? What if, instead, they unbanned Bloodbraid Elf in Modern (fat chance)? Then, everyone (and their mom) rushes out to buy Jund, with its 4x Tarmogoyf? Now, Ted’s mom has a good bit of disposable income, so she can drop $250 per Tarmogoyf, and thus a Tarmogoyf becomes worth $250. Excitedly, Ted asks for those goyfs you borrowed so he can jam some games (probably against his mom).

Oh, those Tarmogoyfs you sold for $100 a pop? Yeah, now you have to buy them back at $250 each or Ted and his mom kill you…ouch. So, that’s basically a short. If you think a card is a peak value or just going to go down before it goes back up, you can sell it and buy back at a lower value. The end result is you pocketing some cash while maintaining the ‘inventory’ of a card.

Stock brokerage firms can do this all the time, as they are holding significant amounts of stock from all of the investors using their service (thus it is available to “lend”). They don’t care that the stock price is going to fall, as they make money off the transaction fees of you buying/selling and the lending, so it’s all upside for them. However, in MTGFianance, we don’t necessarily have access to people/stores to borrow cards from, to then sell and rebuy when the price drops.

What we DO have is our MTGO collection, both specs and random stuff lying around. Maybe you have some cards from drafting, casual constructed, or you do/did play in constructed tournaments on MTGO? That’s the pool that we are going to pull from for our ‘shorts’. And, today, we are going to go over ways to leveraging one’s existing collection for value.

How it works

Now, technically this won’t be a short, since it only involves cards you already own. But, it kinda fits the spirit of one, as you make sales based on your perception that the value will decrease in the future (i.e., selling while the value is higher than it will be).

This is going to highlight some of the perks of MTGO – speed, no transaction fees, and spikes. But, what it boils down to is simply keeping on top of the value of your cards. You (hopefully) keep a pulse on things you spec’d in, but you likely ignore/forget about other cards you have, such as draft chaff. It pays to keep on top of these kinds of things, because cards will randomly spike on MTGO. A good recent example would be Chancellor of the Forge. These have been worth just pennies virtually since their release. Thus, if you drafted any, you likely didn’t bother selling them, since it would, quite literally, not be worth the time. However, they’ve recently hit a spike. Yes, it’s only to 0.5 tix, but it’s something. If you are on top of what’s in your collection and its value, you can sell into these spikes before they inevitably crash back down. Then, if you like, you can rebuy your card for pennies – maintaining the number you owned but walking away with some extra tix (or not, just keeping the tix works too).

I’ve touched upon this before, but you can do something similar with cards you have actively speculated on as well. If the card price starts to crash, you can sell and attempt to re-buy at the bottom, before the (predicted) rally in value. This is a bit harder though, as you need to both predict the bottom of the crash AND you have to deal with the spread of the card.

Example: you spec’d on a card @ 7 tix a copy (x12, 84 tix invested). It falls to 6 and looks like it’ll keep going down, so you sell for 5.5 (taking a 0.5 tix hit due to the spread). Total loss of 18 tix, but 66 tix available to spend. If it keeps going down, say to 4 tix, you can then rebuy with the thought that it’ll go back up (16x, 64 tix invested + 2 liquid tix). Then, say it goes back up so you can sell for 6.25/card – that’s 102 tix total. You’ve turned what could have been a 42 tix loss (had you simply sold all copies at the bottom and not bought any more) into a tidy 18 tix profit by ‘short selling’ all the copies you have and re-buying at the bottom**.

As I said, the issue becomes the spread and predicting the bottom. In our example, we pull the trigger @ 6 tix to do the short sell. The bottom is then at 4. However, if the card falls only a bit more, to 5.5…you’ve only broken even (and wasted the time it took to buy/sell). Even worse is if you sell and then the card suddenly spikes in value. That…that’d be the worst. It’s a very tricky game to play, but one that can certainly gain/save your investment.

**Note that if you don’t have a limit of tix to spend, it’s an even better move to simply hold the cards you bought at 7tix and buy more when it hits the bottom. This would result in 0.75 tix/card additional profit for the initial buy-in, as you can sell for the recovered price of 6.25 rather than the 5.5 you’d get as the card is on a downswing. The short described above is best for making do with a limited amount of tix.

MTGO vs. MTG

As you may have surmised from my example, this technique exploits some of the advantages of MTGO. There are no transaction fees. Transactions are instantaneous. There are also major swings in card value. In real life, the time it takes to ship cards you’ve ‘borrowed’ out and then the time to get new cards shipped to you, plus all the associated fees, makes this a tall order. Though, if you are going to a grand prix, where you can buy and sell to the dealers quickly, it could be an option…

Yeah, but tracking card values is difficult…

Ah, here is where I step in to assist! This article was all just a setup, a feint. It’s not really about shorts, but about the third iteration of our Google Sheets Portfolio Manager! Last time, the ability to compare your portfolio value to MTGOTraders hotlist was added. The next step from there is to simply import your whole MTGO collection into the spreadsheet, and you can check the value of THOSE cards, too! Thus, when you go input the current MTGOTraders hotlist to check against your specs, you can also give a quick look over your collection.

Of course, hotlist doesn’t buy every card. On top of that, things can spike in value but never appear on the hotlist, so we need some other ways to track value. That’s why I’ve also added the ability to check MTGGoldfish prices via the spreadsheet. It’s implemented in the same manner as the hotlst feature. You paste in data from a MTGGoldfish page (such as a particular set or an index you are interested in). This feature, of course, can also be used to check the value of your active portfolio as well, so a new column has been added to that sheet as well.

Now, there’s also a third way to go about this. As many of you may already know, Cardhoarder has recently implemented a feature to this very site called Card Keeper. This allows you to very easily import your MTGO collection and then filter and sort, displaying Cardhoarder’s selling and buying prices. This is a great way to rapidly determine if there are any ‘hidden gems’ in your collection – cards you thought were worthless but actually worth half a tix, a whole tix, or more! It’s possibly a better method than any of my spreadsheets, depending on your particular collection and goals, honestly.

So, if you’re interested in these new features of the spreadsheet, here are the links to all of them so far and a new video going over how to use these new features:

Portfolio Manager #1

Portfolio Manager #2

Portfolio Manager #3 (this weeks’)





Progress Report

Did you think I forgot this part?

Here’s a link to my closed positions up to this point.

This page will be updated weekly, even when I don’t have an article, but it only includes completely closed positions.

Current Portfolio:





It’s been a somewhat slow 2 weeks. On the buying side, I’ve picked up some things that seemed undervalued – lands, Atarka's Command, Ulvenwald Hydra, and Avaricious Dragon. These have already risen a bit, though some of my purchases from last time (Snapcaster Mage and Omniscience, specifically) are doing poorly. Hopefully they’ll rally with renewed interest in Legacy?

Regarding selling, I managed to get in on The Great Aurora and pick up some more of that Budget Magic Cash. That….that was also why I bought Greenwarden of Murasa, as I was like “Yeah, you can loop The Great Aurora with the Greenwarden of Murasa”. Then, I was informed that The Great Aurora exiled itself on resolution. Sigh. #RTFC

I still think I’ll probably make money off the Greenwarden of Murasas, they were pretty cheap. We’ll see!

I also closed out the Drowner of Hope spec. That was part of a penny-stock diversification I did right at the start of the competition. I picked up Drowner of Hope, Honored Hierarch, Smothering Abomination, and Brutal Expulsion hoping at least one of them did something interesting. It was about 3.5 tix total investment between the 4 cards and Drowner of Hope made more profit than that all by its lonesome. I don’t necessarily expect any of the others to do anything awesome, but you never know, and I will have made at least 4 tix from that set of positions…every tix counts.

Strategically, I’m still attempting to keep a decent tix stash (and ‘stache, as always), so that I can: a) take advantage of random dips in prices and b) buy into #EMA specs when it is released online.

As always, if you have any questions, comments, or suggestions (particularly about features you’d like in a spreadsheet), I can be contacted via reddit, Twitter (@MTGKaioshin), or email (MTGKaioshin at gmail dotcom).





Disclaimer Post Publication:

I was not intending for people to actually go through with the scenario of borrowing/selling/rebuying. It was just a way to explain the process.

In reality, what I'm trying to suggest is thinking of your OWN collection as 'another person' and 'borrowing' from that to do the shorts. It's something people may not be considering. "Why would I sell my Verdant Catacombs, I USE those?" Well, if they have peaked in price and you weren't necessarily going to use them in the next week or two...you can sell them before that spike ends.

As I mentioned, MTGO facilitates this because of no transaction fees, instant transactions, and random spikes/dips. Don't believe me? It quite literally just happened with Verdant Catacombs. So, rather than playing the market, it is more a suggestion to be cognizant of your collection value so that you can take advantage of random, short lived spikes (short by borrowing from yourself, not another person). Of course, it's possible to lose money if the spike is legitimate and the card maintains the new value. But, let's be serious, this is MTGO, virtually no cards actually maintain their value.



