Friday, September 23, 2016

Unbans: The Speculator's Pitfall

With every new set there is a window where people get very excited about bans. It is in these little windows that all eyes turn to Modern, because Modern is where the shake ups happen. Standard doesn’t have a ton of bans (and when there are bans, they are much needed) and Legacy has too small of a player base to make waves in the greater MTG community.
In recent years, Modern has been met with a wave of bannings (some warranted, some not so much) that have really changed the face of the format. Starting with Deathrite Shaman in February of 2014, Birthing Pod in January 2015, and Splinter Twin in January 2016, Modern players have seen the decks that defined the format get tossed by the wayside. Generally, these bans are upsetting to a large number of people who have invested hard earned time and money into purchasing and piloting these decks. But in these same moments of anguish, there is often excitement when cards come off the banned list. Cards like Golgari Grave-Troll, Bitterblossom, Wild Nacatl and most recently Ancestral Visions have returned to a changed Modern landscape. And the impact of each of these cards can be hotly debated, however it isn’t the playability that I want to talk about today. It is the ever looming question that a lot of MTG finance dabblers ask themselves, Should I buy into banned cards and hope for a spike?

There are three cards that everyone seems to be talking about when it comes to the September 26th announcement: Bloodbraid Elf, Stoneforge Mystic, and Jace, the Mind Sculptor. Other cards creep in and out of the conversation, but people seem to focus on these three cards. I am going to tell you right now: DON’T SPEC ON THESE CARDS. If you really want to play these cards should they be unbanned, go ahead and buy. But if you are looking to make money in them, look elsewhere.
I will start by saying that it is possible that any one of these cards will be unbanned on September 26th. I have no inside information on that. And each of these cards will quickly find homes in decks that will post results. However, you have to think about it from an investment point of view. You are not sure which one will be unbanned, so naturally you buy into all three. You buy a playset of Jaces ($75 a piece), of Stoneforge Mystics ($18 apiece) and of Bloodbraid Elves ($4 apiece), a $388 dollar investment, not counting shipping. If they unban Jace, the Mind Sculptor, his price will rise and you could stand to make a tidy sum. But you also invested in Bloodbraid Elf and Stoneforge Mystic because of uncertainty in the unbanning process. So when it comes to profit margins, you now have to subtract those investments out of the profit you made on flipping Jaces. If Jace doubles in price (it isn’t likely because recent printings of the card, and even less likely when you consider that it would have to DOMINATE the format to reach that figure, something that few four drops can do), then you probably make a tiny bit of profit on the venture.
But consider the same set of circumstances if they unban Bloodbraid Elf. Even if it shoots to a $16 price tag (an unlikely figure with three printings) you made $48 profit against a $388 investment. A lot of speccers will tell you about the time they made $400 selling Dragonlords when Atarka and Ojutai spiked, but they neglect to mention the $100 they still lost out on investing in the other Dragonlords. The speculation market has razor thin margins. When you invest in five different cards, you have to take into account the entire capital investment when figuring your profits from the one card that spiked. But there is also another reason why speculating on cards to get unbanned is a dicey affair, the frequency at which unbans actually happens is very low.
In general, it is not a good idea to speculate on cards getting unbanned because it does not happen frequently. Starting with the inception of the format in August 2011, there have been ten instance where Modern cards have been banned out of a possible 17 Banned and Restricted Announcements. In the same time frame, there are only four instances of Modern cards being unbanned. Four instances in five years, or roughly one out of every four announcements. The point being, it is a high risk investment to put money into something that makes you money one time out of four. And while it is true that Wizards might unban the cards you bought into at the NEXT unban cycle (statistically speaking it is always more unlikely that the WON’T, but setting that aside for a moment) you also have to figure that into the cost of the card. With a limited amount to invest, cards that are long term investments that might pay off are capital that is not growing. You have assets tied up that are not moving and now are hard to liquify even at cost because the demand has not moved.
(Sidebar: I write this blog to help you make the most out of your money in MTG. I want you to spend as little as possible and get the most out of your cards. There is no real way to make a ton of money in MTG finance without a ton of capital to make huge investments. What I am trying to do for you is allow you to turn $50 into $100 so you can buy the rest of your Affinity deck. Always treat the money you put into Magic as a sunk cost, money that you will never see again. If you do this, and spend wisely, you will be able to stretch each dollar a little further.)  

Stoneforge Mystic

This is the card that comes up the most when I hear people talking about unbans. The movement really started when Dragons of Tarkir was released and Kolaghan’s Command was printed. Everyone thought that the two damage and destroy target artifact modes would allow Stoneforge to come into the Modern world. And it didn’t happen. Then it was announced that Stoneforge Mystic was going to the the Grand Prix promo for the 2016 season. Everyone thought it would be unbanned then. And it didn’t happen. As recently as September 10th, in a poll conducted on Reddit’s /r/ModernMagic, ( more than 1,100 voters (1,139 votes, 20%) believed that the card should be unbanned, putting it second in the polling behind only Bloodbraid Elf. And while I do not expect to see the card unbanned, I grant you that there is a lot of excitement go with the card. However, there is one gigantic reason why you should not spec on Stoneforge Mystic; the Grand Prix promo.
In 2016, there have been 36 Grand Prix Events that were attended by 61,016 people who participated in the main event. Each one of those people received a Stoneforge Mystic promo. First off, this increases the supply of a card that is good in exactly one format, Legacy. With an increase in supply and very low demand, the card has reached a 32-month low, stretching back to the spike that occurred around January of 2014. The GP promo is only the second printing of the card, but the additional supply from the one has brought the price of the Worldwake printing WAY down as well, so if you are looking to purchase Mystics to play, now is the prime time to move.
However, the printing also keeps the lid on the ability to make money on the card. Not all of the GP players are Modern players, but they all got a Stoneforge Mystic promo. Some sold the promo at the event, others traded it at there own LGS, but many of those cards are collecting dust in binders around the world. If the card were to be unbanned, there would be a rise in the demand for the card, which would lead to a price increase. However, at the same time that some players would be looking to buy INTO the card, a great deal more would be looking to move OUT of the card with the potential to make money on the table. This creates a stagnation on the price because the increase in demand will be met with an increase in supply. Many players have held onto the card for just such a moment. And while there would likely still be some increase in the price of the card because players who want them will want four, think about the margins. Shipping the cards, trading the cards, or buy listing them all have a fair share of taxes that take away from your bottom line. Overall, even a large price spike will make you minimal (if that) returns.

Bloodbraid Elf

As an avid Jund player, I have been advocating a Bloodbraid Elf unban for a long time (fairness be damned). I really don’t think that the card adds too much to the new, low curve Jund lists that include cards like Liliana, the Last Hope and Grim Flayer. I think the card is fine for the format, but I do not see an unban coming because it doesn’t make a lot of sense to give the best deck in the format another tool. And if Bloodbraid were to make a triumphant return to Modern, I do believe that out of all the cards on this list, you could stand to make the most out of this one, in terms of margins of course. However, my advice is to grab your four and to steer clear of speculation where this card is concerned.
Bloodbraid has an interesting reprint history, with three reprints that all have different art. This is immediately a warning sign on speccing on the card. This brings into play preference. The Alara Reborn and Eternal Masters versions of this card have foils and the Planechase version has an FNM promo foil. That brings this card up to six different versions available.
So the first hurdle you would have to clear in your speculation would be which one to buy. Price would indicate that the Planechase art was the favorite (with non-foils being $4.50 and foils going for around $15) however, there are other factors that could dictate that price point. There are undoubtedly more Alara Reborn copies of the card available than Planechase ones, as standard sets tend to be the most heavily opened MTG product in each year, so it could be that a lack of supply drives the price up. In any case, the three printings of this card will do some weird things driving some cards to be much higher than others.
These three printings have put a lot of Bloodbraid Elves out there in binders or dusty old boxes, so an unbanning might drive up demand for the card. However, it is a four drop in two different colors. Bloodbraid Elf doesn’t fit into a lot of strategies in modern, and it doesn’t really open up the way to many more (besides the possibility of an Ancestral Visions/Bloodbraid Elf driven Temur deck), so demand won’t be as high as it is with a one color, two drop that can be shoehorned into a lot of existing strategies. Fewer players will be seeking out the card and so there is a smaller chance to cash in on this investment.
Another huge problem with trying to turn a profit on Bloodbraid Elf is that you will hardly be alone in the venture. Some printings of the card reached as low as $2.25 after the release of Eternal Masters, which made it very painless for players to pick up a few play sets “just in case”. Anyone who plays Jund in Modern is more than likely to have bought in with the low prices. Many people are sitting on 20+ copies of the card that they invested very little in and would be more than happy to turn a few bucks on, if the card were to be unbanned. This secondary release of supply will help to sate the market when it comes to large price spikes.
Because of the low initial investment, I do believe that there could be money in this card if it were to be unbanned. However, I think that it would be quite time intensive to maximize the profit potential by selling and shipping each one of these cards individually. If you do buy, buy with care.

Jace, the Mind Sculptor

Ah, yes. Legacy’s premier planeswalker. Blue’s Poster Child. A lot of players have been saying that this four mana powerhouse would not be too busted for the current state of Modern. They say that decks like Burn and Suicide Zoo would outpace the blue decks playing JtMS to the point that his impact would not take over the format. I will leave that to smarter and better players to discuss. But I don’t believe that it will be unbanned for one reason: this card absolutely terrifies Wizards. There are just a few times in history where they printed a card that far outclassed the rest of the set (Jace and Deathrite Shaman immediately spring to mind), and Jace has the rap sheet to prove it. Banned from Standard in June of 2011 and banned in Modern since the dawn of the format, Jace has proven time and time again that he is a force to be reckoned with. For that reason, I definitely rank Jace last out of these three cards to get unbanned.
From a finance point of view, I think there is a very large reason not to invest here, the price tag. At a whopping $75 for a Worldwake printing, it is hard to imagine forking over $300 for a play set of a card that might be unbanned. I think that this card has the potential to make you the most money of all of the cards, but it is because of the size of the initial investment. If Jace were unbanned on Monday, it isn’t crazy to believe that he could fetch $100 on the open market. Making $25 per card seems like a great investment, however when you consider that is only 33% growth on a card that MOST LIKELY WILL NOT BE UNBANNED, you quickly realize that there are much wiser places to invest your money.


Like I said, I think Monday will come and go and none of these cards will come off the banned list. I think that Modern is in a fine place, if a bit linear. That fact alone should cool you off on investing in these cards. You don’t really want to get stuck with a bunch of specs in your binder that you are waiting on to hit it big. While there definitely are spots for long term investments, make sure that you are doing research on those cards well in advance of buying. Panic-buying cards less than a week before the next announcement in hopes that the card you bought might get unbanned is a fairly good way to assure a bad investment. And if you do buy this week, and your purchase does skyrocket in value, remember that it was a shot in the dark and don’t let that kind of investing take over your mind. Sometimes you can shoot the moon and walk away with a ton of money, but most times, you just end up broke.
If you do decide that you want to buy these cards, the best time to buy is after the ban announcement. If the card that you are targeting does not come off the list, then the price should take a little bit of a downturn in weeks following as people unload their extra copies.
When it comes to profit versus investment, though, I think the risk in this venture far outweighs the reward. You have to invest in the exact right card when it comes off the ban list. And given the uneven nature of unbannings, I think it is hard to do. If you don't mind sitting on the cards for a while and having your money tied up in them, then I think this can be a great opportunity. But the quick in-and-out investment potential is probably not here, because there is no sure thing to be unbanned.
One more thing, if you just want to have these cards more than anything to play immediately when they are unbanned go ahead and buy them. Modern prices generally trend upward. It will be a sunk cost, but if you are hellbent on getting them, make everyone jealous when you are casting them at the first FNM after they came off the list. People will think you are a genius, just don’t tell them about the other 20 cards that didn’t get unbanned.

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