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AVACYN! Hear my prayers! I am but a humble sinner, seeking redemption. Purify me in your fire so that I may sin no more. My sins have cost me that which we value above all: our cherished Event Tickets. Save me! Do not let me become seduced by the hypnotoad Gitrog and its evil, wasteful ways. Unshackle me from the chains that bind me so that I may no longer be a slave to my feeble human emotions that drive me to sin!

The 9 Deadly Sins of MTGOFinance

We are all human and each of us, to some degree, is controlled by our emotions. Yes, we possess the capacity for rational thought. However, this is often clouded by our emotions, leading us astray. I, too, am a victim and have many times forgone a calculated decision, opting instead to act on impulse. The first step to overcoming the ‘weakness’ derived from possessing emotions is to understand what they are and how they affect our MTGFinance decisions. This allows us to develop strategies to overcome them in order to enhance our abilities as financiers. As I go through these sins, I’ll highlight how I, myself, have committed these deplorable acts, which will surely make me look like an awesome speculator and not just a total piece of garbage /sarcasm.

Note: some specs are listed multiple times, as they were part of multiple sins.

Deadly Sin #1 – Lust (Blinded by Shiny New Things)

People like new things. But it’s even more than that, we crave new things. That’s why we have 4 set releases a year and MTG has moved to a biyearly rotation schedule. New is exciting. New is sexy. However, you can’t let that blind your decision making process. Just because a card looks amazing, doesn’t mean it will be a major player in the new metagame. There are so many factors that go into a card’s playability, especially for standard. It’s difficult to determine upon first sight. That’s why we can have breakout decks at the PT like Seasons Past and Cryptoliths – it wasn’t obvious at first glance that these cards would be amazing. Similarly, there are things that look sweet but end up ‘meh’. For example, before the PT, with heavy breath and rapid pulse, I lustily bought:

They looked sexy. I still think Anguished Unmaking looks awesome. I mean, it’s Vindicate in STANDARD. However, none of these cards really found a home. At least, not in decks that did well during the PT. Each of these cards has lost at least half of its value, but I’m still holding on hoping they’ll go up at least a bit.

Deadly Sin #2 – Gluttony (Going too Deep)

I am a glutton. In all things in life – I won’t deny it. I do things ‘too much’. Even when I can identify “Hey, this is beyond what a rational person should do,” I find myself with yet another handful of chocolate already at my mouth, my car making yet another pass around the parking lot looking for a spot at the very front, or buying that 150th copy of a card. In MTG(O) Finance terms, gluttony is going too deep on a card – obtaining too many copies. Going deep is bad for multiple reasons.

The first and foremost is obviously that your bad decisions hurt you more. Lost 1 tix on a card? Not so bad if you only picked up a playset. Oh, you had 200? Well, that escalated quickly.

The second, also important problem with going deep is the limited market of MTGO. This is less relevant for standard cards, but can really hurt you when dealing in Modern cards. You see, there are only so many bots that will pay a decent price for your card. On top of that, many will only buy 4x of a card from you. Even when you have bots that will buy many copies, these bots possess a pricing algorithm that’ll decrease their buy price with every playset sold. So, you’ll be making less and less profit with each playset sold. The converse of this is also true, as you buy a card, subsequent copies are going to be more expensive. This leads to rapidly declining profits per card. Here’s an example (with made up numbers) to illustrate this. Sure, as you get to the 24th playset, you’re still making a profit, but it’s only 0.05 tix, is that worth your time?

Playset # Buy Price Sell Price Profit 1 2.00 3.00 1.00 2 2.00 3.00 1.00 3 2.00 2.90 0.90 4 2.04 2.85 0.81 5 2.05 2.85 0.80 6 2.05 2.70 0.65 7 2.10 2.60 0.50 8 2.20 2.60 0.40 9 2.25 2.60 0.35 10 2.25 2.55 0.30 11 2.30 2.50 0.20 12 2.35 2.40 0.05

I’m definitely gluttonous with my specs and frequently go a little too deep. Sure, I usually still make profit on the last few copies, but it probably isn’t worth the effort. For #BattleOfTix I’ve definitely gone too deep with:

Each has lost significant value and is dragging down the value of my portfolio. Yet, I’m still holding out hoping to take less of a loss (or maybe a profit!).

Deadly Sin #3 – Meekness (Not Going Deep Enough)

The flip side of gluttony is meekness. Yeah, it feels bad to be stuck with 100s of a card when it’s losing you money. But, oh man, does it sure feel good to have a preponderance of copies when something spikes. It’s a delicate balance between the two that is difficult to master (I certainly haven’t). Some #BattleOfTix examples:

Had I been more confident and gone deeper on any of these, I could have made substantially more profit. But, you know what they say: “Hindsight is 20/20”

Deadly Sin #4 – Greed (Attempting Max Profit)

There is a saying in finance “Leave the last 10% for the next guy.” When a spec starts to spike, it’s an absolutely euphoric feeling (it’s not just me, right?).

It’s like riding a rollercoaster blindfolded.

Click.

Click.

Click.

How high will it go?

Are we about to drop?

The tension builds…

Then, your heart leaps into your throat as you dejectedly discover that you missed the peak and prices are plummeting. Adrenaline kicks in, it’s time to sell! You frantically try to ‘out’ your spec (along with everyone and their cousin). With sadness, you settle for lower and lower prices until you’ve completed the sales. Did you make a profit? Sure (hopefully…). Did you get greedy? Most definitely.

It’s virtually impossible to perfectly predict peak value of a card and only sell then. Occasionally, you’ll luck into it (spoiler alert: it feels awesome). It’s important to rationally consider the aspects of what goes into a cards value. For example, it’s not often that a standard legal rare can maintain a value ~10 tix, so when Languish spiked to about that much during/after the PT, it would have been a rational move to sell and a greedy move to expect it to go even higher. I’ve had many specs during #BattleOfTix that were making me money, but I wanted more and got burned as buy prices dropped back to what I bought them for (or lower…).

Examples: Journey to Nowhere, Worldspine Wurm, Primeval Titan, Remand, Heliod, God of the Sun, Xenagos, the Reveler, Life from the Loam, Spell Snare, Groundswell, Gut Shot, Torpor Orb, and Surrak, the Hunt Caller. It’s a long list because it’s a very, very difficult thing to determine. Especially with MTGOs mercurial market…I don’t even know why many of these lost value as I can’t seem to ascertain a concrete reasoning behind the price changes.

One coping mechanism I use is a common technique in real-world finance: dollar cost averaging. This simply involves spreading out your buys/sells over time. If you think a card is nearing its peak, sell a few of the copies you have. You lock in some profit, while allowing for your remaining copies to (potentially) increase in value. If you want to buy into a card because it looks to be at its low – only buy a few playsets. Then, wait to buy more and see if it goes down further. If it goes up, you can just not buy and be happy that you got it at the lowest point. If it drops further, you can pick up more and feel good that you didn’t go deeper earlier.

One other important aspect is that spreading out your purchases/sales will lower the impact YOU have on the market. If you quickly unload many copies of one of your specs, the bot’s pricing algorithm will lower its buy price. If you spread your sales out, it’ll allow other people to buy cards from the bot in the interim, ‘evening out’ the algorithm so that you don’t lose out (assuming the card value would be stable over this time).

Deadly Sin #5 – Fear (Not Buying In and/or Selling Too Soon)

Like with Gluttony/Meekness, Fear is the flip side of Greed, where you sell prior to peak price. You can try to overcome this with the same strategy (dollar cost averaging). This aspect of fear is one of the lesser evils – it doesn’t lose you money, it just reduces your profits. Just as I’ve been greedy and held specs too long, I’ve similarly sold out much too soon. In each of these cases, I could have made much more had I held on to the cards longer:

But there is a second aspect I’d also like to ascribe to fear: unwillingness to buy in. This second aspect is something I’m using #BattleOfTix to actively work on. As I mentioned in my introduction article, I’ve traditionally been very risk adverse in my MTGOFinance. I like to simply wait for good opportunities (historic price lows) to invest rather than chase volatile things that may be awesome or a dud (standard cards). So, pretty much every purchase of standard legal cards (aside from bulk stuff) is me trying to engage this fear by buying in. It’s going to be a learning process for me and has already caused some missteps because it was new territory. Unfortunately, trying to overcome the sin of Fear led me to virtually every sin of Lust that I described above, as I used the goal of overcoming my Fear to rationalize those purchases rather than, you know, actual data or analysis.

Deadly Sin #6 – Pride (Not Recognizing Defeat)

Sometimes a spec doesn’t work out. It happens. Metagames shift. Cards are banned. Other speculators get scared (or satisfied) with their investments and cash out. These things can cause a substantial decline in a cards value, losing you money that you’ve invested. Sometimes it’s just a small blip on an otherwise long-term growth trend – nothing to sweat. Just sit on your investment and wait it out. Other times, a card just loses value day after day after day. It’s important to recognize and identify this so that you can get out with minimal loss. You’re committing the sin of being prideful if you steadfastly hold onto a card when its price continues to tank. Even if you think the card will rebound, it can still be beneficial to sell. For example:

Buy in at 10

Price starts to drop, finally ends at 4

Value eventually rallies and buylists are at 12

If you held onto the card the whole time, you make 2 tix. Congrats? If you sold when the drop started, say at 8, you could have bought two copies at the floor of 4 tix. Then, sold when it rallied back to 12….a 4 tix profit.

I will admit that I’m pridefully holding onto several specs that I shouldn’t be…and they are killing my portfolio. Top amongst these are Zur the Enchanter, Mishra's Bauble, Counterbalance, and Torpor Orb (darn you Coldsnap!!!!!!). It mostly comes down to having the confidence that a card’s price will continue to decline, because nothing could be worse than buying in to a card, then selling at its low point expecting to go down, but it instead rallies. It’s quite the nefarious thing, the sin of Pride.

Deadly Sin #7 – Sloth (Not Respecting the Speed of MTGO and the Effort of MTGOFinance)

MTGO is fast. If you check out price histories using MTGGoldfish, you’ll often see spikes and troughs that vary day by day, creating a jagged pattern akin to how a child draws teeth. This makes MTGFinance seem pretty fast-paced. However, I’ve got an unsettling secret: it’s actually much faster than that. MTGGoldfish captures a price each day (used to be noon GMT, IIRC, but I don’t know when it is now). However, that daily snapshot does not capture the full volatility of prices on MTGO. This is especially true during PT coverage. If you happened to be refreshing prices during the live coverage you’d be treated to quite the spectacle. Sometimes spikes won’t even be caught by MTGGoldfish, only by looking at a bots own site (like Goatbots.com or Cardhoarder.com) because they spike and fall back down on the order of minutes, longer than MTGGoldfish’s update interval.

Committing the sin of Sloth is not respecting this speed. If you want to spec on MTGO cards, it’s not just an investment of money, but of time. You can’t sit idly by, it’s necessary to frequently check prices to catch spikes. Did you know Norin the Wary was about 2 tix on MTGO once? I wouldn’t fault you for not knowing, because it lasted for less than a day (Jan 2014). Spikes happen fast, and they can end even faster. Sometimes the only way to make any profit is to actually catch these, and you’ll never do that if you aren’t actively checking prices.

During the past weeks 3 & 4 of #BattleOfTix, I was forced to commit the sin of Sloth repeatedly. I was out of town for a full 2 weeks with minimal internet access, and it showed. I missed virtually all of the prerelease and the PT coverage. Where some of my colleagues made a mint, I was relegated to the sidelines. Thankfully, I did get to do a bit of trading during Saturday of the PT:

While I was able to get good value off Hallowed Moonlight, Drownyard Temple, and Cryptolith Rite, I utterly failed with Avacyn. I bought some before bed Saturday night, when her price plummeted. I was happy to see some gains in the morning, but I had to set out and drive 700 miles while the T8 played out. Knowing I wouldn’t have any internet access, I went ahead and sold. Had I been able to monitor the T8, I would have held and tried to sell if she wasn’t faring too well. She obviously fared quite well and I lost out due to my inability to be on MTGO during the T8.

Deadly Sin #8 – Ignorance (Not Understanding MTGO’s Market)

Ignorance is simply a lack of knowledge. Making uninformed financial decisions is a recipe for disaster. Sure, things can randomly work out, but it is much better to be informed and make rational, well thought-out decisions. Most of a card’s value is tied to the metagame, thus this would be the #1 thing to keep in mind – is the current metagame amenable to this card’s playability? But, there are other aspects that play key roles as well. Did you know that redemption drives the prices of bulk mythics? You should know. What about the timing of that? Check out the historical prices for Clever Impersonator, Zurgo Helmsmasher, Hooded Hydra, and Pearl Lake Ancient on MTGGoldfish. None of these patterns should have been a surprise (though I was surprised by the magnitude) if you were informed and knowledgeable about trends on MTGO. Likewise, the timing around set release and rotation are things you can research and prepare for. There is no reason to lose value on a card because you waited until too close to rotation to sell out. Similarly, if the metagame shifts and a deck falls out of favor, maybe you should sell? If a new deck is becoming popular, perhaps buy in? But, you can’t make those decisions unless you know what’s going on.

Deadly Sin #9 – Frivolity (Not Valuing Your Time)

Do you ever check MTGGoldfish’s ‘Movers and Shakers’? Have you ever seen a card drop in value significantly and thought “Hey, maybe it’s a good time to pick up a few of those?” What did you do after that, check the historical value, perhaps? Did you then, maybe, discover that the recent drop was immediately preceded by a spike, so the card is probably still overvalued? Yeah? If the exact same card drops in value next week, will you go through this whole process again and, again, conclude it’s too early to buy? That’s being frivolous with your valuable time. You’ve forgotten the analysis you did last week, so you have to go through it again to reassess if the card is ready to be bought. Sure, if you have a fantastic memory you can:

Analyze a card

Decide on a price to buy in

Remember said price

Instantly assess cards on a downswing to determine if they are ready to be bought or if prices need to drop further

But, what about us mere mortals that can’t remember a long list of “prices where I’ll buy in”?

Write it down.

It’s that simple. If you go through the effort of assessing a card, record your conclusion somewhere. Don’t leave it up to the human mind’s poor ability to remember. Keep a small book or an excel spreadsheet. This’ll allow you to rapidly determine if you want to buy or sell a card. Is it at or near the target buy or sell price I decided? Yes = transaction. No = wait. This can be a huge timesaver, as it semi-automates your decision making process. As an added benefit, this process uncouples the decision to buy/sell from the transaction itself. You can set targets while you are calm and rational. Then, you rely on those when you are actually buying/selling and may be weak to making impulsive decisions. I try not to commit this sin and have a long list of target prices. Though…I do spend time doing things like writing this article….maybe I am Frivolous with my time after all.

End Step - Cleanup

With that, I hope I’ve aided in everyone’s transition to a ruthless, calculated, and cold MTG(O) Finance machine. One that is able to make rational decisions free of any human emotion. Wait, wait, wait, that’s not totally right. That would be great if everyone in the market behaved that way…

But, they don’t.

The market is still full of humans that make emotion and impulsive decisions. They will get excited and buy into hype, making cards spike extra hard and they will get scared and sell into declines, making the troughs even lower. This is the ‘next level’ aspect of the finance game. You can make a rational decision to not Lustily buy a card from the next new set, but….other people are still going to do it. Knowing that, you can potentially time things to make use of their ‘bad decisions’. Sometimes doing the wrong thing is the right thing but, it’s all about timing and having a plan. So, rather than completely discarding all of your emotions, feel them. Then, rationally dissect them and make a plan before you act. Try not to sin, but know others will and take advantage of that fact.

Next time

Over the next few weeks of #BattleOfTix articles, I’m going to focus on some tools that can help you overcome Deadly Sin #9 – Frivolity. Spreadsheets are great for recording and organizing MTGFinance information and both Excel and Google Sheets are extremely powerful programs that can do some neat things. I have a Google Sheets page that I’ll go over and share next week, and then iteratively add new functions to in the following weeks Hopefully, these’ll turn into valuable tools that are helpful for anyone attempting MTG(O) Finance.

As always, questions, comments, and salt can be directed at me via reddit or twitter (@MTGKaioshin)