Hello, fellow speculators!

After the biggest Constructed grand prix ever, GP Richmond, we’ve been a whole lot of winding down from card spikes. The market seems to be returning to the regular world of value investing. It sure has quieted down around here in the MTG finance world.

But the slower pace really gives us a time to examine some of the more recent events.

I still like all three of my calls from my last article: [card]Grafdigger’s Cage[/card], [card]Thrun, the Last Troll[/card], and [card]Phyrexian Unlife[/card]. [card]Grafdigger’s Cage[/card] and [card]Thrun, the Last Troll[/card] are cards you want to hold going into the Modern PTQ season, but [card]Phyrexian Unlife[/card] is an easy pump and dump.

But aside from all the self-promotion, I also wanted to more closely examine a question that has recently split the MTG finance community.

What is the Effect of Legacy on Current Card Prices?

To argue that Legacy is going to die is pointless. John Maynard is famously quoted saying, “In the long run, we are all dead.” It’s easy to say that the same is true for Legacy, but it will likely be the same for Modern ten years from now. Or maybe even Standard sometime in the future.

What we want to examine is what effect Legacy has on current card prices, not the future a year from now. Which format Star City Games will choose to support next year—Modern or Legacy—is anyone’s guess at this point, much less how Saturday and Sunday will be structured to support those formats. I like speculating, but I don’t speculate on baseless predictions.

Enough ink has been spilled over this. Let’s jump into some data.

Data

Match(Cuts)

Card Name Cut Reason Abrupt Decay Standard Aether Vial Arid Mesa Aven Mindcensor Uncommon Batterskull Blood Moon Cavern of Souls Creeping Tar Pit Dark Confidant Delver of Secrets Common Ethersworn Canonist Flickerwisp Uncommon Forest Basic Gemstone Mine Common Gitaxian Probe Common Goblin Guide Grafdigger’s Cage Recent Horizon Canopy Inkmoth Nexus Island Basic Lightning Bolt Common Liliana of the Veil Marsh Flats Misty Rainforest Mountain Basic Mutavault Standard Noble Hierarch Plains Basic Relic of Progenitus Uncommon Scalding Tarn Simian Spirit Guide Common Snapcaster Mage Spell Pierce Common Stomping Ground Standard Swamp Basic Tarmogoyf Thalia, Guardian of Thraben Thoughtseize Standard Valakut, the Molten Pinnacle Vendilion Clique Verdant Catacombs

Above is a list of 40 cards that are commonly played in both Modern and Legacy accordingly to MTG Goldfish. The chart above is based on a comparison between the top 50 spells, top 50 creatures, and top 50 lands in both formats. Cards were chosen across the two formats to control for the differences in supply and prices of the cards. Based on the list, a few of the cards have been taken out due to availability (common) or influence from other formats (Standard). I’ve also chosen to take out [card]Grafdigger’s Cage[/card] because its prices doesn’t reflect its playability due to it being a recent printing and the myth that sideboard cards should be worth less (see [card]Spellskite[/card] and [card]Threads of Disloyalty[/card]).

Match(Final)

Card Name Modern Legacy Price Aether Vial 7.53% 12.32% $18.49 Arid Mesa 10.78% 5.25% $46.84 Batterskull 4.91% 6.34% $21.49 Blood Moon 8.28% 6.16% $10.84 Cavern of Souls 3.25% 5.25% $14.96 Creeping Tar Pit 1.98% 4.53% $8.75 Dark Confidant 6.66% 8.70% $65.00 Ethersworn Canonist 4.79% 6.70% $2.96 Goblin Guide 3.65% 3.26% $10.00 Horizon Canopy 3.76% 2.36% $28.49 Inkmoth Nexus 11.09% 1.45% $9.00 Liliana of the Veil 7.77% 17.30% $61.64 Marsh Flats 8.04% 10.87% $40.24 Misty Rainforest 43.34% 23.28% $74.90 Noble Hierarch 12.24% 1.81% $36.95 Scalding Tarn 32.96% 27.99% $76.00 Snapcaster Mage 27.30% 6.88% $27.25 Tarmogoyf 17.59% 18.12% $165.00 Thalia, Guardian of Thraben 3.88% 9.42% $5.49 Valakut, the Molten Pinnacle 3.25% 1.09% $1.37 Vendilion Clique 8.24% 12.05% $53.14 Verdant Catacombs 23.02% 22.37% $47.99

Above is the final list of cards that play in both Legacy and Modern, the respective amount of play in each format, and the lowest listed TCGplayer prices based on data from MetaMox.

Next, I did a regression on Excel comparing each format’s playability as a predictor of price. Feel free to skip to the conclusion section if you’re not interested in the numbers.

Result(Both)

Regression Statistics Multiple R 0.649513678 R Square 0.421868018 Adjusted R Square 0.36101202 Standard Error 29.63703948 Observations 22

ANOVA df SS MS F Significance F Regression 2 12177.91239 6088.956195 6.932233974 0.005486008 Residual 19 16688.72807 878.3541089 Total 21 28866.64046

Coefficients Standard Error t Stat P-value Intercept 6.696302336 10.45167841 0.640691579 0.529375415 X Variable 1 27.64720683 85.57048402 0.323092795 0.750153757 X Variable 2 285.3216566 121.4092381 2.35008193 0.029726643

Something amazing just happened. Allow me to explain.

The equation that the Excel equation calculated for the price of a card is as follows:

Price = $27.647X %Modern + $285.322X %Legacy + $6.70

What does this mean? It means that from a purely price point of view, for every 1% more play that a card sees in Modern, it translates to a $0.28 higher price, while for every 1% more play that a card sees in Legacy, it translates to a $2.85 higher price.

That is insane! Legacy playability has more than 10 times the effect on price!

Let’s make sure the other statistical variable checks out. The R-square value of 0.422 means that about 42% of the variance in price can be explained by the variance in the playability in the two formats. While 42% isn’t a very high number, it’s not bad either.

What if we isolate the X-variable by format?

Result(Modern):

Regression Statistics Multiple R 0.503803211 R Square 0.253817676 Adjusted R Square 0.21650856 Standard Error 32.81750819 Observations 22

ANOVA df SS MS F Regression 1 7326.863589 7326.863589 6.803100732 Residual 20 21539.77687 1076.988843 Total 21 28866.64046 Coefficients Standard Error t Stat P-value Intercept 17.69553437 10.34801366 1.710041652 0.102728117 X Variable 1 172.0295088 65.9552694 2.608275433 0.016822964

Result(Legacy):

Regression Statistics Multiple R 0.647063885 R Square 0.418691671 Adjusted R Square 0.389626254 Standard Error 28.96585795 Observations 22

ANOVA df SS MS F Significance F Regression 1 12086.22192 12086.22192 14.40514955 0.001134606 Residual 20 16780.41854 839.0209268 Total 21 28866.64046

Coefficients Standard Error t Stat P-value Intercept 7.159058199 10.11861304 0.707513784 0.487410668 X Variable 1 313.4851146 82.5958141 3.795411644 0.001134606

Legacy is still a much better fit based on the R-squared value, .254 compared to .419. The fact the R squared value only a hair less than the multiple regression of Modern playability and Legacy playability suggest that adding Modern playability to the regression model might not be helpful at all.

Interpretation

As with all things statistics, you should take these numbers with a grain of salt. This analysis in particular should be taken with a boatload of salt. Here’s why.

The regression that Excel attempted is a best-fit regression. That means the difference between Modern being the factor with the larger coefficient might not be that different from Legacy being the factor with the larger coefficient.

While we can assume a normal distribution under the Central Limit Theorem despite there only being 21 total observations, it’s not a strong case.

Result(Both):

Coefficients Standard Error Lower 95% Upper 95.0% Intercept 6.696302336 10.45167841 -15.17931198 28.57191665 X Variable 1 27.64720683 85.57048402 -151.4538746 206.7482882 X Variable 2 285.3216566 121.4092381 31.20920081 539.4341125

The lack of observations create a huge variance for the 95% confidence interval, where the true coefficient for X %Modern is likely a number between -$151.45 and $206.75 and X %Legacy is a number between $31.21 and $539.43. We really have no idea if we have anywhere close to the real number!

Conclusion

I would argue that for a given Modern-playable card, its playability in Legacy will be the biggest factor in its price. The conclusion makes intuitive sense. The data set began with cards playable in Modern, and the differences in price can be attributed to how playable those cards are in Legacy. Think [card]Thalia, Guardian of Thraben[/card], which sees minimal play in Modern, but because of its playability in Legacy, has seen its price recently jump from $3 to $7.

Speculation Corner

Will anyone please come up with a better name for this section? Hit me up with your suggestions!

[card]Steam Vents[/card] is already at a 25% spread due to its playability in Modern, and it sees close to zero play in Standard. I would target it in trades and buy into copies if you have additional capital. It’s the third-most-played non-basic land in Modern behind [card]Scalding Tarn[/card] and [card]Misty Rainforest[/card], and there’s always money to be made on the top dogs.

I’ve been calling [card]Grafdigger’s Cage[/card] and I will call it again. By all metrics, the card is massively underpriced. Obviously the supply is what’s stopping the price of the card in its tracks. Short of a ban on [card]Chord of Calling[/card]—that is, a huge metagame shift in Modern—[card]Grafdigger’s Cage[/card] will easily be $10 by next year. The card is also on the top of the list on the thread here, and the Brainstorm Brewery podcast has called the card multiple times. Not many cards on the Modern cards list also see massive Legacy play that isn’t already $10, and the fact it’s already a $20 foil means that it’s not your ordinary sideboard card.

Lastly, [card]Ethersworn Canonist[/card] looks to be a good pickup from a theoretical perspective. It sees cross-format play, and the spread for the MMA copy is only 15%. It’s not a card you would expect because it’s not a sexy card like [card]Thalia, Guardian of Thraben[/card], but it sees slightly less play in Legacy and slightly more play in Modern. People don’t give nearly as much respect to sideboard cards as they should—until all the supply runs dry, that is.

Until next time! Stay liquid and sharp, my friends.

Closing

I’ve provided an honest attempt at using regressions to interpret MTG finance data, and it’s my hope that others who are better equipped and knowledgeable with economics will build on my efforts. I apologize in advance if I’ve made any newbish errors and misinterpreted any part of it—if I only learned anything from my econometrics class! If others would like to combine efforts, I would be happy to offer my help to advance the public’s knowledge of MTG finance trends.

Please see below for the download links to the excel sheets.

Legacy vs. Modern