Editorial Secion:
Hoarding on MTGO... so what?
If you're new to the collectible game market, you may wonder what the heck is hoarding? Essentially, it's an attempt by an individual (or a small group of individuals, like, say, a Clan) to acquire the vast majority of a certain card or cards. What this does is artificially inflates the value of the cards in question and has some other rather interesting impacts as well.
The first impact I'll discuss is artificial price changes. Artificial price increases almost always lead to artificial price drops. This is a two-fold issue. The first is a pretty easy to see the impact. As card prices rise the cost to play the game increases. Higher costs can drive away customers and, at the least, impact their purchasing habits. If a hoarding attempt works and a small group of individuals has artificially increased the price due to reduced supply then what happens when they sell all those cards and the price drops? That's the artificial price drop that I referred to above. The price is back to normal, but the people who bought them at the inflated price just lost value through the actions of the hoarders.
Another concern that hoarding creates is an increased barrier to entry. A little barrier is actually a good thing, as it makes people strive to get into a format. However, in the case of barriers, there is indeed such a thing as too much of a good thing. Too high of a barrier and the effort involved is no longer worth the pay-off. If this happens long enough, or is consistently too high to offset attrition, the impacted formats will suffer, stagnate, or worse.
I've seen people confuse hoarding and speculation. The actions are similar, but the intent and scope are different. Speculation purchases are generally not done with the intent to control the price of the card in question. They're done with the intent of cashing in if the card price rises. Notice the difference there. Speculations want the price to rise but aren't actively making that happen on their own. Hoarding, on the other hand, is done with the intent of making the price rise on its own, and capitalizing off of that increase.
Dangers of hoarding:
Hoarding to a high degree could kill the format before you resell them. While this seems unlikely, a format like Classic, which has a high buy in already and low niche market of the player base could be killed by this activity. If enough players can't get into the format, and the players that currently play move away, it's entirely possible (although not probable) that the format could dwindle into obscurity. If that happens, the people holding many cards on the expected growth of popularity will be hosed.
Another danger to hoarding is that the card could get reprinted. When Time Spiral's bonus cards were being spoiled the rumor of Meddling Mage being spoiled popped up. The price of an MTGO Mage dropped 8 tickets in one day. This was a fairly clear indication that the price of Meddling Mages were higher than the supply/demand curve would have had them be. Just the possibility of them being reprinted hit their value, not even adding them to the supply chain, just the hint that they could be reprinted.
The last, and very interesting danger is that the card in question could get restricted/banned. Does anyone wonder why the price of Vampiric Tutor never dropped after it was restricted? And why it has in fact increased since that time? Hoarding. The person hoarding them left when the restriction happened, taking his entire supply of Vampiric Tutors with him. As such, they're 37 tickets now, while a nearly identical card is just above 4 tickets. Some day, I expect this seller to come back and make some money off these and reduce the card price accordingly.
What to do about hoarding?
Here's the sticky widget, as it were. I don't know what to do about this problem right now. There are a couple options for certain hoarding problems, but some are simply out of our (the players) control. For example, if someone were to be hoarding a Mirage rare we could, in theory, get more Mirage in the system through drafts or lobbying for some sort of sealed event. However, if someone decided to hoard a MED1 rare, there'd be little the average player could do to fix the problem. Stock markets get past this type of behavior by having oversight comittees and the like, I don't think that's an option for MTGO... and even if it were an option, I don't think it's a good option.
Discussion Items:
Pauper Deck Ideas forum (pdcmagic.com)
If you're interested in playing in the Pauper tournament this weekend but don't have a deck yet, check out the fine forums at pdcmagic.com. A lot of good discussion and deck ideas get tossed around in there.
Force of Will Price Explosion Part 1:
Force of Will Price Explosion Part 2 (CQ.com):
The price of Force of Will shot up this week to land somewhere around 60 tickets. Sixty, and with few, if any more coming into the system, it wouldn't be a stretch to say that it will continue climbing.
Momir, Mo' Problems Part 1:
Momir, Mo' Problems Part 2:
Momir, Mo' Problems Part 3:
Poor Momir Vig. He used to be the new hotness, now he's old and busted. That hasn't stopped people from trying to get it back up and running again. Since the only way for Momir to get support from WotC is to show WotC that it deserves support, the lovers of the format are starting to mobilize the Momir Brigade with the intent of bringing back tournaments to it once again.
Replace the Anything Goes room?
Another interesting request for a change to the room structure on MTGO. Personally, I'm still partial to renaming the room to "Player Events" from "Anything Goes", but a budget room may not be as crazy as it sounds at first blush. I encourage anyone with thoughts on the matter to provide input into the above thread.
Customer Service Weekend Support Change!
This brings back memories... interesting memories. Once upon a time the community was up in arms about a lack of phone support on the weekend (I was one of them). So I'm happy to announce that they've changed that, are now staffed for phone support on the weekends. A very nice change indeed.
Price Charts:
Top Five Cards sold this week (per format):
It looks like there's some speculation around the Invasion "Protection Bears" (the 2/2 for two mana with protection from <color>), and some interesting movement in Chilling Shade, perhaps some secret tech for this weekend's Pauper PE?
Card Prices:
Mirage jank cards led the percentage droppers but IPA were by far the biggest value droppers. Classic tournament staples led the amount gaining while Pauper staples led the percentage gains.
And of course, the Ham Jones (I'm still looking for the best way to handle this data):
The total value of a 1x card collection went up: 137.57. I'd like to say that that's a good thing, but I'm not sure how much of that value is based on actual demand and how much is influenced by speculation/hoarding. I think over the next few weeks we'll see those prices drop down a bit. At least, I'd expect that to be the case.
Editorial Card Price Section Bonus!
As I mentioned on the WotC message boards, I'd run the numbers in regards to the expected return on the opened cards in some of the draft formats that are available, and here it is. First, I'll explain the section. It will go: Average Mythic Price, Average Rare Price, Average Uncommon Price, Average Common Price. For the Mythic's I'll then divide the number by 8, as that's the frequency of getting one in a booster. So the math will be:
(Myth/8)+(Rare*3)+(Uncom*9)+(Com*33) aka, 3 rares, 9 uncommons, 33 commons, assuming you grab a regular pack's worth of cards...
Ready, Steady, GO!
| |
Mythics |
Rares |
Uncommons |
Commons |
Total |
| MVW |
0 |
1.716 |
0.25 |
0.13 |
11.688 |
| Tempest |
0 |
1.28 |
0.15 |
0.1 |
8.49 |
| XXX |
0 |
1.18 |
0.13 |
0.027 |
5.601 |
| LLM |
0 |
1.354 |
0.08 |
0.03 |
5.772 |
| SSE |
0 |
1.23 |
0.11 |
0.033 |
5.769 |
| ALA |
4.4 |
0.47 |
0.19 |
0.04 |
4.99 |
Conclusion:
This was a topsy-turvey week for MTGO. Card prices rose, but in a rather concerning manner. Conflux beta is about to start! We've already heard about some fixes to functionality coming with this build from the developers on the WotC board, and I for one, am happy to hear about what they've mentioned so far.
hamcrest, out!
51 Comments
To be honest I don't really understand all this negativity towards speculators. In some cases 'hoarders' will make a quick buck, in others they will lose out. Considering there is quite a large spread between the buy and sell prices of most cards it seems like the risk to reward ratio would keep most potential hoarders in check. I'd like to know what mtgotraders considers to be hoarding from a number specific perspective. If I buy an excess of 4 of the same card in the hope of reselling them for more am I a hoarder? Personally I enjoy watching the card market fluctuate and do my best to buy low and sell high to try and reduce my overall cost of building a collection.
Regards,
Nicholas (3soteric)
Well there is a huge difference between speculation and hoarding. Speculators are trying to buy up something that they think is going to sell for more down the line due to other factors, and hoarders are trying to drive up the price of something by just owning a huge amount of the supply.
I don't think anyone would consider buying an extra playset hoarding. Hoarding is what's happening, for some bizarro reason, to Natural Order right now.
I should have read the article more attentively! :) I guess I am a speculator and not a hoarder. I am the proud owner of 40 Quietus Spike, queue everyone’s laughter. If anyone’s in the market for them give me a shout! :D
Yeah. Those are the folks I'm largely talking about. It's one thing to pick up a few extra copies looking to make a profit if they increase. It's an entirely other thing to attempt to cause the increase in order to profit from a self-created lack of supply.
*grufumble*
Thanks for clarifying! I didn't know about the artificial buy prices, how sneaky of them!
Its actually a bad thing for MTGO since it can in fact kill a Format. Im just wondering if WoC could do something about it but just seems a way to hurt the program without anything "illegal" being done.
Is not part of the problem the lack of a relatively cheap bot software to enable players to make available their surplus cards? I know I’m not alone in having a large amount of extra cards that since the move to v3 have been sitting doing nothing because Yatbot has not been ported over. I often wonder how many cards are sitting unsold and unplayed in similar accounts. If they could be put back in the market, then there would be an increase in supply at least.
An open market (bots for all!) wouldn't really solve it. In fact, it might make it worse.
Right now, hoarders can only really raid automated places, like bots to grab all the low hanging fruit, as it were.
If all the copies of a card are easy to buy on a moments notice, I could see groups being able to easily corner the market on them. Or at least, much more easily than they do now.
Although I still think an open automated system for buying/selling would be an overall improvement, but I do worry about people being able to more completely corner a card out of the market. :(
Also, Speculation is a "good thing" in my book. It rewards some risk and mitigates costs for shrewd buyers. I actually speculate on cards on a fairly frequent basis, sometimes it pays off. Other times I break even or lose a little.
I like the hoarding/speculating. If they get completely out of control yes I agree it can be bad. But these sorts of issues are exactly what make the trading part of this card game fun. Obviously we are talking about some extreme situations. As much as I love mtgotraders and the bot networks in general. It sure would be awesome to have a paper experience where I actually trade cards without an exchange of money. Right now, I only dump money in the system for new cards. I basically have no avenue to trade at all. Anyway I'm getting off topic.
My point is, I think that if bots were integrated into the system and everyone used them that it would be much more difficult to hoarde/speculate. People underestimate how many cards lay dormant on people's accounts that are never even on the market. I have meddling mages, force of wills, etc. and I've never once put them on the market because it would be a hassle. If it were simple and easy the people like me would come out of the woodwork.
Hoarding and greed are the grease that makes a market go. If you are scared of hoarding, create a dynamic pricing system, as more people buy, the price goes up automatically, just like the stock market. When nobody is buying, the price drops. That is how every stock market in the world, which is a trade-able commodity works. There is literally nothing that you can do to stop people from hoarding, if they are willing to pay the price. That is how a market works, and to block someone from spending their money how they choose is basically impossible, and also runs exactly opposite to capitalism, which is the thing that every dealer and bot on MTGO engages in. As a positive note, there is an old saying "pigs get slaughtered", and that is what generally happens when people hoard any sort of commodity, sometimes its the opposite, but generally hoarding doesn't work out as a profitable move.
PS. I currently, nor never have, owned more than 4X of any card, other than commons from drafting. I just don't believe that this is a real issue, there is enough supply of almost any card to get a playset of anything if you are willing to pay the price. I have been playing the game since its inception, and I have never had a single issue buying any card that I have wanted, including daze, dual lands, force of will, orim's chant, and every other chase card that has existed over the years. Granted, I am willing to pay the price, and I have significantly more capital to invest than the average person playing the game.
Noknife
Good comments, but it's missing a little something.
You seem to be confusing the premise of hoarding and speculating. They're closely tied together, but they achieve different results.
In your example, an automated moving price list is extremely susceptible to being taken advantage of by hoarders (in fact, this has happened to bots in the past who used such a list).
I buy all 40 of your at 1.00. ($40)
You raise the buy price to 1.10 and get 20.
I buy all 20 at 1.1 ($22.00)
You raise the buy price to 1.5 and get 20
I buy all 20 at 1.5 ($30)
You raise your buy price to 2.00 and get 10
I buy all 10 at 2 ($20, total $112.0)
you raise your buy price to 2.5 and get none
you raise your buy price to 3.0 and get none
You raise your buy price to 4.0 and I dump a ton of the cards I bought to you and to every card bot that shares a list with you for a total of 280 tix, or 160 ticket profit.
This is real, and it does happen.
But like I said in the article... there's no real good way to stop it from happening.
This is really a problem with the automated pricing scheme though. Its not a problem with the market.
Either you just eat these types of losses because of the convenience yoru gaining in the automated pricing or you account for it in the automated pricing scheme or you stop automatic pricing.
Hamtastic i don't how you write this article i mean if you write it the Thursday and then post it the friday, but the problem is always that you post the article the prices from MTGOTRADERS are Updated like a weekly update, so some prices on your charts are outdated look at FoW now is in 70 for a single.
I get my price list on Wed, write it Thursday to be posted Friday. It's the smallest runway I can have to get my article done on time.
Unfortunately, due to the speed of the MTGO economy even a two day old price can be vastly outdated. *shrug*
It's hard to play the format you want when cards cost 30 tix each..
Why nobody made some forex-like system for cards buying\selling mechanism like on stock market. I think it is not so hard and can be very intresting.
There are tons of good ways to stop this from happening. Like I said, every stock market on earth works exactly the same way. Dynamic pricing could also change the sell price of a card on a per transaction basis. Also, why not make only 4X of a card available at a time. If what you are saying is true, then the bot owners will have to get more sophisticated with their buy/sell lists to protect themselves from pumping and dumping.
How effective is hoarding anyway?
It varies.
Usually it's not very effective as the market price will work itself out.
Sometimes, very effective, like in the case of Vampiric Tutor.
One problem is that someone can hoard a card and just sit back and wait. It's not degrading, taking up storage space, etc.
So if someone is for some reason hording Natural Order, there's no need to drop the price to hurry and sell them. They can just sit back and wait for enough people who want it at 3x the price they bought it for. It may take a while, but there's no reason they can't sit on the cards and wait it out. Like Vampiric Tutor.
actually, there is a huge reason to hurry up and sell them, the time value of money. If you are buying this as an "investment" then you are probably interested in taking profits. If the card sits in your inventory, even if the asking price is rising, you realize no gains until you sell the card for a profit. As it sits in your inventory it also ties up your money/tickets from being invested in some other card that you would like to make/take profits on. So the point of buying, hoarding, and holding, shouldn't really work, unless you have a limitless amount of money to invest, and even then it wouldn't really work that well, unless it was a card that was in extremely high demand (staple STD cards), which are coincidentally cards that are in extremely high supply from people drafting. These are not cards that are in fringe formats that have very few players, such as classic, where this can actually possibly be exploited due to the actual supply of the cards, but will ultimately backfire, because the demand for the cards just isn't there. Perhaps in some cases a hoarder will make a profit, but they could have done more with their money making many smaller speculative investments, more often than not they will break even or even perhaps lose money. This issue is a perceived problem, not a real problem
Noknife
I think we'll have to agree to disagree there, nolight, er, noknife.
It actually CAN be a problem and HAS been a problem in the past. It's mostly a problem with Classic sets as it's easy to acquire a lot of those cards and not many more enter the system (and in the case of MED1, NO MORE enter the system).
To believe that it's impossible to happen is either extremely naive or an attempt to deflect perceived criticism.
Yet another problem for MTGO that would be solved by having more players.
MTGO needs a marketing campaign.
I can see the price of Force of Will going up to at least to 120 a single in the near future if WoTC don't do anything, and also the same is going to happen ,maybe not that bad, to other cards like Phyrexian Dreadnouhgt, Grindstone, Lion's Eye Diamond and Daze (until it get reprinted on Nemesis). The Phyrexian Dreadnouhgt isn't as important as FoW is to the classic formats but it has been rising in price since 2 months ago from 18 to 32 for a single and i haven't seen any single copy of it in stock on MTGOTRADERS for a while. Assuming it has been played more but in the last 7 Classic Events it has appeared only in four different players decks (Prolepsis9-3 Times, gimlicolby-3, tallandskinnyman-1 and mrgando-1).
First off, I am not Nolight, Noknife is an indie rock band from San Diego that I am quite fond of, that guy is running some sort of MTGO business, I make my money in the stock market, day trading, MTGO is a game I play to pass the time during the day, not my source of income. I see people attempt to hoard stuff constantly, I see institutions (groups of people) try to fix prices of a commodity on a daily basis. Sometimes it works, but it is only in the short term. Ultimately you may not be able to find a certain card at a certain price for a short amount of time, but there is no long term benefit to hoarding something, unless you simply want to make the item unavailable to the general public for some unknown reason, and at great personal expense to yourself, which doesn't make much sense economically. Its a short term problem. Yes, the price of natural order is clearly manipulated, according to your chart. You know how you fight that? Don't buy it at that price. Eventually the price has to come down to its market value, or the person holds onto the natural orders that nobody is buying at their own personal expense. This is how every market in the world works. Long term you pay fair market value for everything. If you choose to overpay for something, you do so willingly. If you would like to explain to me anything else about market economics, I'm all ears.
Noknife
There's a lot of difference between MTGO's cards and the stock market, which I imagine you understand as it's your day job. In fact, trying to compare the two, and the impacts of hoarding in each one is beyond futile. Attempting to do so merely clouds the issues. The two have different models, different requirements, different needs and different uses.
Price manipulation of casual cards is not a huge deal as you mentioned since there are replacements. I don't need natural order for any deck. Some would like Natural order, but it's not a requirement to play Classic.
But what about something like Force of Will. For many decks, it's a requirement. For many decks, if you don't have it you're playing a suboptimal list.
Your solution for fixing that? "Don't buy it". Yep, that can work. It can also keep players from joining the format altogether. Not so great if you happen to enjoy the format in question.
One card being manipulated is not a huge problem. Vamp tutors are in that category already and Classic survives.
Multiple cards being manipulated IS a problem, as it begins to choke off the amount of new players joining the format.
Also, attempting to corner a stock or commodity in the stock market is illegal....
http://www.investorwords.com/1128/cornering_the_market.html
"cornering the market"
Definition
The illegal practice of attempting to purchase a sufficient amount of a commodity or security to manipulate its price.
"security"
An investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity. The official definition, from the Securities Exchange Act of 1934, is: "Any note, stock, treasury stock, bond, debenture, .... etc"
So, if you're witnessing:
"... institutions (groups of people) try to fix prices of a commodity on a daily basis. Sometimes it works, but it is only in the short term"
Then you probably aught to report them to the SEC.
Keep it up, Ham!
Sorry Hammy, but you've got the Pack EV wrong when Mystics are included. You added the value of a Mythic Rare, but neglected to subtract the value of the rare it is replacing. Also, since you are doing three-pack bundles, you forgot to multiply the mythic by 3. And of course there is one fewer common because land is in the pack. Correct EV for Shards should be:
M*(1/8)*(3)+R*(7/8)*(3)+U*(3)*(3)+C*(10)*(3)+L*(3)
Of course, then you need to consider foils:
M*(1/8)*(3) + R*(7/8)*(3) + U*(3)*(3) + C*(10-15/56)*(3) + L*(3) + PM*(15/56)*(3)*[(1/8)/15] + PR*(15/56)*(3)*[(7/8)/(53)] + PU*(3)*(15/56)*[(3)/(60)] + PC*(3)*(15/56)*[(10)/(101)] + PL*(3)*(15/56)*[(1)/(20)]
more generally, the EV of a *single* booster of any set is:
nMinPack*M + nRinPack*R + nUinPack*U + (nCinPack-PRatio)C + nLinPack*L + PRatio*[PM/(8*nMinSet) + PR*7/(8*nRinSet) + PU*3/nUinSet + PC*nCinPack/nCinSet + PL*nLinPack/nLinSet]
where
M: average value of regular mythic rare
R: average value of regular rare
U: average value of regular uncommon
C: average value of regular common
L: average value of regular basic land
PM: average value of premium mythic rare
PR: average value of premium rare
PU: average value of premium uncommon
PC: average value of premium common
PL: average value of premium basic land
PRatio: Frequency of premium card appearance (size of a booster times the replacement rate) [the replacement rate is the ratio given on the packaging/mouse over]
nMinPack: number of regular mythic rares in a booster (1/8)
nRinPack: number of regular rares in a booster (7/8)
nUinPack: number of regular uncommons in a booster (3)
nCinPack: number of regular commons in a booster (10 or 11)
nLinPack: number of regular basic land in a booster (1 or 0)
nMinSet: number of mythic rares in the set
nRinSet: number of regular rares in the set
nUinSet: number of regular uncommons in the set
nCinSet: number of regular commons in the set
nLinSet: number of regular basic land in the set
Why exactly are we calling it hoarding rather than monopolizing? Hoarding usually is done more to protect oneself from a volatile market rather than manipulate the price. Monopolizing ("cornering the market"), on the other hand, is often done with the explicit purpose of price manipulation.
Two things have to happen for someone to be successful at hoarding: First, they have to buy large quantities of a card at low prices; and second, they have to be able to sell the hoarded card quickly at a high price.
The bots actually make a profit selling cards, so the real solution to the problem of hoarding is actually fairly simple: limit the bots ability to buy multiple copies of cards within a specified timeframe. After all, no human is going to buy 50 copies of Natural Order for $12 a pop in one sitting, or even over the course of a day. By limiting the buy capabilities of the bots to 4x (or even 2x) per transaction and 10x per day (for the bot/bot chain), you remove the one thing that makes hoarding successful - the ability to sell quickly at inflated prices. This allows the bot(chain) owner time to alter their prices accordingly to the supply/demand.
The other main difference from a human interaction is the ability to remember customers (faces, if not names). If a person goes into a card shop with 50 copies of an in-demand rare card, the card shop owner is going to be suspicious (at the very least) of dealing with that person and remember them whenever they try to do business in the future. With MTGO and the ability to have multiple accounts, having a "watch list"/banning proves pretty useless, as the offender can always make new accounts with very little loss to their profit.
I have two other comments about the bots.
1) How do you find out who the person is behind any particular bot? I feel that every bot should have contact information for the person responsible for it listed.
2) (This is for Heath, specifically) Is there any way to have fractional ticket credits automatically transferred between the buybot and the selling bots? There are lots of people like me (new to MTGO with small amounts of cards) who would like to only trade a card or two in order to be able to get a card or two to complete a deck idea, without having to sell off more cards so that they have more than a ticket sold, leaving fraction credits on both the buybot and selling bot.
well like the subject says, heath and the whole mtgotraders peepz are cool as hell. keep up the good work guys
Wow, interesting week for the article. I didn't expect to see 30+ comments when I first read it.
Regarding the article, I find this topic highly interesting, but I am not one to scour message boards or prices (kinda the reason I like this series so much!), so I have absolutely no background info on the subject. From the graphs and the comments I pick up on the fact that people believe Natural Order is being hoarded, but the first part of the article is too vague to be anything other than a few paragraphs on the difference between hoarding and speculating. While I enjoy your take on its potential effect on MTGO, I really had no idea why the topic was even being discussed. I think it would make the article stronger if you gave some basic background, as if you were talking to a complete neophyte on the subject, which is what I am. The hoarding problem is much more interesting in a non-vacuum. Your topics are always great, so keep that up.
Also, is there some sort of known offender for Vampiric Tutor? These sorts of things are fascinating and would be much more so if described as if the reader has complete background-ignorance.
Loved Bubba's math post. Could we get numbers from those calculations?
PS - Natural Order is one of my all time favorite cards. Glad I got 4x when the set came out, but not glad to see it and Force, Dreadnought, etc, go way way up if it's only due to a bunch of bastards hoarding. I love to see higher prices in general for cards, but only if that's because the demand is so high.
I think the difference is intent.
A speculator is someone who buys cards based on the idea that they are under-valued or have potential for increase (for example, if it will be going out of print). IF the card rises in value, the speculator will sell off cards slowly, not affecting the overall value of the card.
A hoarder, on the other hand, is someone who drives the price of a card up by artificial means (corners the market on a card to dry up supply, spreads false information about the demand/future demand), then when the price jumps from lack of supply/increased perceived demand, dumps all their holdings of the cards before the prices can react to the flooding of the supply.
1) How do you find out who the person is behind any particular bot? I feel that every bot should have contact information for the person responsible for it listed.
User: Goldbug
Responsible for setting prices on cardbot, mtgotradersbot, cardhoardersbot, abusbot, alphabot. Contact him if you have concerns with the way cards are priced. The websites merely follow his lead. You could say he is God of the mtgo economy.
"Usually it's not very effective as the market price will work itself out."
-Wrong. Any classic card can be effectively hoarded if there is even a modicum of demand.
Next on the hoarding list, Venser. Getcha some.
I did not have a problem with price, it was that I traded a few small cards with a bot (not MTGO Traders) for a fractional credit when I left the bot and returned to enter "sell" mode it said I had 0.00 credit and there is no way to contact anyone to dispute this.
The real blame for any of this goes to WOTC, for creating sets like ME and ME2 that are nearly unplayable in a limited format, chock full of terrible rares, and really only have any value in that they contain Force of Will, and the dualies. That is the main factor limiting the supply of these cards, the fact that not all that many of them have been opened due to the set they are in being absolute unplayable garbage.
What benefit does someone get for hoarding something, if it comes at great personal expense to them to do so? If you answer that there is some modicum of demand at that price, well then, that is the fair market value of the card to that segment that is willing to pay that "inflated" price, obviously the price is not inflated to them, or they would not pay it. Only a foolish person would pay more than they thought was a fair price for something, on the other hand, only a foolish person would sell something for less than what they thought was a fair price. Sometimes either side will settle to make a small concession to either purchase or sell the commodity in question.
MTGO, like the stock market has a bid and an ask price for just about every card, the "real" value lies in the margin between those 2 numbers, which is generally right at about a ticket. If nobody is buying something, the price drops, if a lot of people are buying something the price goes up. It is the most simple economic theory in the world, and it holds true for all markets and economies, MTGO included.
As for the SEC comment, they are well aware of manipulation in the markets being done by large firms that have money, that is where the term "market maker" comes from. It would relate to MTGO terms as a large syndicate of bots or buyers that had enough capital to largely influence the price of just about every single card, if they choose to target it.
Noknife
in between desire, dreadnought, grind, vents and chants my collection jumpped up over 200 dollars in value this week.
i havent been around for quite a while, can anybody tell me why minds desire had such an huge price increase?
Because last week, Luis Scott-Vargas won the Extended Grand Prix Los Angeles with "The Extended Perfect Storm" deck featuring Mind's Desire to find Tendrils of Agony as the kill condition.
I gotta get my article on that done this week.
Unlike hoarding stocks in real life, hoarding digital cards in our tiny little economy does wreck things. With stocks there are always other bets to place and new companies to establish. If you go for the extreme case of hoarding - buying an entire company - then you're basically making a bet that the company will be in higher demand later. No problem.
But the MTGO economy has two problems that make it vulnerable to manipulation. One, it's tiny. The classic community is 200-500 people. I see the same people in every event. We're like the size of one decent brick-and-mortar card store community. And two, the card supply is finite. Furthermore, the Classic sets are especially finite due to their pitiful limited playability. There might be less Chants or Forces than Mox Sapphires out there. I'd love to know. What happened with the in print Vampiric Tutor is more comparable to the story of the De Beers cartel.
I have the following warning for digital hoarders: Wizards established MTGO with the ability to reprint any card anytime they want, for any reason. Whole sets they promise that they will reprint only sparingly. Any old card with a new expansion symbol is fair game. MED8 could have Goyf, Jitte, Bayou, Force, and Psionic Blast as the money rares. Well, maybe the Blast isn't money and MED8 sucks, but that's not the point. The point is that Chant could be in MED3 just as easily as it could be March's promo.
Does anyone have any idea how many copies of specific cards actually are in the system? That would be a great fact.
How about real life cards? Anyone know approx. how many Lotuses were printed?
I didn't realize that the community was that small for classic. If that truly is the case, then yes, manipulation of a price would be quite easy. I assumed that there were far more players which would sort out the supply and demand of most of the card pool, mainly by simply opening up packs of MED and the like. Ultimately though, it is still the fact that these sets have no value in limited play that has made the supply of some of these cards so low. There is very little reason, if any at all, to ever open up a pack of a set that has such a high proportion of low quality cards, like MED or MED2. In fact, for sets like MED that have absolutely no value outside of the classic format, I wouldn't even assume to see much continued support from WOTC, it can't be terribly profitable to waste time coding for such a small pool of potential customers. Maybe if they made the sets actually playable, instead of a pile of chaff with a few chase rares, it would be a different story.
Speaking from personal experience, it has never been a problem for me getting 4X of any card, and I may add that I have 4X of just about every playable card in print. I do not feel that I have ever overpaid for any of my cards. I generally buy from bots, and generally pay slightly more than I would pay if I had up a buy ad in the marketplace, but I consider those lost tickets a "convenience charge" since I would rather just have the cards than sit around and wait, than save a few bucks in the process.
Noknife
I dont see speculation as a huge problem either its how some of us finance our future MTGO purchases, how ever if you add up the groups of us who do speculate then well no hoarders can come close to our buying power. For instance i had i beleive 5 play sets of FOW I picked up before it jumped to around 40. I kept one for classic play, now imagine five more people held even one or two extra play sets. It adds up to alot. Now I sold all mine off as soon as it hit around 40 rather narrow sighted on my part now but hey wasnt out to make a killing just increase my collection. You get 40 speculators saving an extra play set thats 160 cards, i dont see any problem with it personally but just saying one hoarder can not do the same damage as 40 plus speculators, and by no means do i pass judgment im guilty too (of specualting that is)
you don't think a hoarder can come close to the buying power of 160 copies of a 40 ticket card? You must grossly underestimate the amount of money that some people use as their investment money. That would cost only $6400 to buy every single copy that you had in question at $40 per copy. The current market value is over 50, making a profit of over $1000 on your $6400. Granted, most sane people do not look at FOW as an investment vehicle, due to the demand being pretty low, as well as the time it will take to move all of them out of your inventory. But to assume that a group of speculators who want an extra playset can somehow block the purchases of someone who has real buying power, you are naive in that respect. A few extra hundred as an "investment" in this situation would net you about an extra 50 bucks profit on the additional playset, not to mention the time you have to wait to move the cards, other than the fact that it is free money, it is basically not even worth the time and effort required to purchase the cards and find buyers for them at that amount of profit. Now I know that we are probably talking about some really small time operations when we are talking about MTGO "hoarders", but if someone with some actual money really wanted to, they could easily buy over 300 copies of FOW without even batting an eyelash. Granted, most people that have that kind of investment money would be better served putting it somewhere else, unless they enjoy the satisfaction of running up the price on MTGO cards, which I guess if that is your thing, well then, the market is there for it on some of these chase rares.
Its not that i dont think a hoarder can, i am sure there are some out there that think MTGO is a sound investment. How ever if you have that kind of money and are out to invest why invest in something you do not actually own. All you are hording is digital rights. If you have that kind of money lying around you would be better served else where.
My point was although we may look at the speculators as small time, if you add up all those who maybe seculated they honestly probally did more damage than a few hoarders. I am guilty of speculating on FOW but it was out there everyone was saying fifteen was way too low, so i bit. Really hoarding unless you have the means to do so is pointless and very risky unless you are doing it to a classic set. With the amount of drafts for std sets that launch it would just be a futile attempt to manipulate price.
The only ones who would be capable of doing hoarding for std sets would be those with the abiltiy, network, and means to do so. By this i mean dealers and not the small shops but larger ones for give me heath like you. You have already made it clear you dont, and I beleive you cause so far as long as i and many other have dealt with you have done nothing but been there for the community. It does not mean that other larger chains are not practicing this.
Time wise I agree its not worth it, you have find buyers or cut profits by selling to shops.
agree with you dragondung, 100%
Noknife