Kelly Reid–Feeding the Beast: How Not to Go Infinite on MTGO

Hey everyone. Here’s a post by Quiet Speculation’s Kelly Reid that he’s kindly written for the site. Enjoy!

While Noah may tend towards infinity, I am a little more pragmatic.  My name’s Kelly, and I’m a MTGO addict.  “Hi Kelly”.  Hi guys.  And girls.  Especially girls.  All three of you who play Magic and aren’t married.   Call me.  Seriously.  It’s lonely at the top.  In all seriousness, I’m taking a moment to reciprocate a favor for Noah today, who was generous enough to do a guest spot on my site, Quiet Speculation.  Since many of you are fellow MTGO addicts, I wanted to do a little Op-Ed piece on the concept of “Going Infi” on MTGO.

First of all, don’t try.

Now that we’ve got that out of the way, I’m going to assume you’re at least half as dumb as I am and you’re saying “Hey, but I’m special and different.  Surely I can go infinite on MTGO!”   That’s how addictions are formed, son.  If you insist in partaking of MTGO’s Wacky Tabacccy, read along.

First of all, people like LSV will tell you that there are two ways to go infinite on MTGO.  For the second time in my career as a MTG journalist, I can say that I was right and LSV was wrong; the first time was when he stated that Goblin Bushwhacker was a constructed-unplayable card.  There are actually three ways to keep the choo choo train of addiction steadily chugging down the tracks to social hermitage and continued seclusion.  

• Be Excellent at Constructed
• Be A God at the Draft Table
• Be an MTGO Stock Trader

You’ll notice the first two goals are pretty lofty.  I’ll lay this out for you in simple terms that your ego may not like much – if you’re not Top 8ing PTQs or at least coming dangerously close (X-2, with your second loss coming in the last two rounds, or better), you’re probably not good enough to do the first two.

That’s OK, because I’m not either.  At least, not yet.  Not yet…Anyway, if you’re not well on the way to already being a pro player, you’re probably not going to go infinite on MTGO.  You might come close to breakeven, you might have fun, you might even learn something, but you won’t go infinite.  If you’re good enough to do so, get the hell off this site and go win a PTQ or something.

So let’s assume you’re at the level where you’re not an all-star PT-caliber player.  That’s fine because most of us aren’t.  Some of us have social lives, girlfriends, wives, high-maintenance dogs, or have drug problems that keep us from grinding matches 24/7.  That means we’re relegated to the third category of MTGO grinder – the stock trader.

Now, there’s a fine art to this science.  It’s as simple as buy low, sell high.  The artform comes in reading markets like a crime scene.  You can derive a lot of information from the movement of a market.  While I cover these topics regularly in my ManaNation and MTGO Academy columns, I can show you the questions to ask yourself when trying to understand a market.  The answers to these questions will guide you to the right plays.

Format: Who plays this card?  Is it a staple in Stnadard?  Is it a key combo card in Extended?  Do 100 card singleton players use this in most of their decks?  Do casual room dweebs love screwing around with it?  This is an easy question to answer, but a vital one.

Quantity:  This often ties in with the format.  A card used in 100CS will always be a singleton, whereas a Standard powerhouse like Baneslayer Angel is most often used as an ideal 4-of.  Clearly, a card used in greater quantities will be more valuable.

Hype:  This is so difficult to quantify, but I’ll give you a very candid and real-world example.  This is a page directly from my playbook.  I bought 26 copies of Bloodchief Ascension when Adrian Sullivan took 3rd place at a PTQ with a brew featuring four copies.  I bought in at $0.40.  Adrian is a highly respected deck builder and when he publishes a list, people go nuts.  Thing was, Adrian didn’t publish a list.  It appeared on QS, Wizards.com, and a few other sites, but ADRIAN didn’t write about it.  I talked to him recently and he will most likely be writing about it on Thursday (his day onSCG.com).  What does this mean?  It means that even though I could sell my copies for $0.75 right now, I’m waiting until his article hits.

Hype.  Sells. Cards.  More than anything else, hype sells cards.  People love to nerd out over new tech and love to get in on “the bleeding edge” of the metagame.   The truth is that Star City Games and company are like the CNBC of Magic.  When it hits on Star City, it’s not hot new tech.  It’s mass-market.  That’s the worst time to buy.  “Retail” customers won’t see the first price spike since the card wasn’t even on their radar.  They’ll see that the $0.75 Bloodchief Ascension is a cheap buy, and they’ll be correct to guess it’ll shoot up to $1, or maybe even $2.  But we got it at $.40, which means we’re making a considerable amount more than the band-wagoners while profiting from their hype machine.

It’s hard to predict hype, but the more time you spend studying markets, the more shocking it becomes to realize that the MTGO market is very similar to the real equity markets.  The saying goes, “Buy on rumor.  Sell on news.”  The rumor was hearing that Adrian made Top 8 with the deck.  The news is his publication of an article.  That’s when the mass-market starts buying, and that’s when you put the card on your list of things to sell.  There are other little bursts of information that can drive up the price in between.

I want to use Bloodchief Ascension as an example of when to sell and when not to sell.  I usually take enough off the table when a card has doubled up to make back my original investment, and reinvest it elsewhere.  This keeps my risk diversified and thus increases my overall profitability.  In this case, since I have a very reliable source telling me that an article will break on the card, I see no reason to take anything off the table.  

If the article breaks as I expect it to, the card will assuredly rise in price.  It is unlikely his article will harm the price of the card, especially considering his comments on the deck when we spoke at the Midwest Masters.

If the article never comes, for whatever, reason, then nothing will happen, and I can safely cash out in part or in whole and reinvest elsewhere while still meeting my basic profit goals.  While a double-bagger is rare in real equity markets, they’re common in Magic and thus represent my minimum goal for a profitable trade.  Multi-baggers, things that triple, quadruple, or beyond, are more rare, but they happen.  They happen most often with the cardboard equivalent of penny stocks, which limits your profit potential slightly.  That’s why I buy 20+ copies of a card.  If I lose everything, I don’t lose a significant amount of money, but the market has already demonstrated a precedent – rares that see tournament play are usually worth at least $1, and more often, $3+.  Thus, by buying a rare at the “bulk” rate of $0.15, I have to be confident that there is approximately a 1 in 6 chance that the card will see tournament play.  Those are modest odds for any educated Magic player.  It’s not difficult to recognize these plays.  If you make 6 plays that are approximately 1/6 to make a sixfold gain, you will statistically break even if your evaluations were correct.  It’s very easy to do better than those odds, and there’s one more phenomenon for which many players forget to account.  

You know when you open a few boxes of a set, there are “crap rares” that you throw in a box in the closet?  Then 6 months, 12 months, or 2 years later, they suddenly become relevant?  This happens often on MTGO as well.  Cards suddenly spring to relevancy out of nowhere, sometimes unpredictably.  If you had such a card in a large quantity sitting around your account, a failed short-swing trade from a few months ago, you still just made a phenomenal amount of money.  This is why I never sell anything at a loss.  The odds that such a jump will happen are higher with cards that have already “tripped my sensors” since its likely that someone else will think in the same way I did, and discover the card.

In general, going infinite on MTGO is tough.  If you have the capital (100+ tickets, I’d say), start looking around for deals.  You might get stuck with 30 copies of Hive Mind – that trade will be good some day, I swear! – but that’s why you diversify.  Stick to speculating on junk rares when you’re new to the game.  It’s much harder to recover from a bankroll-crushing bad call on a Mythic Rare than it is on a stack of Hive Minds for which you paid $4.  Keep diversified, stay alert to all factors effecting the market, and I’ll see you on MTGO!

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