Investing 201: Tracking
Buy low sell, high. Double down when the dealer shows a six. Never get involved in a land war in Asia, but only slightly less well known is this—always track your progress. Ahahahahahaha…..haha…..ha………….
In today’s world of investing, the media will all too often glorify a wild call that went right. A hedge-fund manager can make dozens of bad investments, but if he calls the surprise fall of a major company, then he becomes the hero of Wall Street. In fact, unless it’s a high-profile individual, the media almost never tracks results. This leads many investors to jump on a bandwagon with three flat tires (or the Wild West equivalent).
This leads us to where we are now.
You are looking for ways to improve your MTG finance skills. You are learning the ropes and listening to Brainstorm Brewery (if not, then you can’t be very serious about it). The Brew Crew each have thriving business interests and MTG finance cred in the community. And while they each track their own investments, this is the first time that they are taking the steps to review their podcast picks and share the results with the readers.
Every MTG financier purchases from different sites and trades for different values. Some pick up a copy of a card at FNM, others buy 100 deep from TCG Player. However, most sites move up and down together over time. So while the difference between TCG Player and Star City Games makes a difference for a single trade, for our tracking purposes all that matters is that we use the same source and the same investment amount for each trade. We are also using retail prices without accounting for commissions, fees, or buy-listing. We are assuming the retail value of the cards is the value of your portfolio.
In order to keep the high-value cards from overshadowing the cheaper cards, we will be “investing” $100 into each pick, buying two $50 cards or 10 $10 cards. This will sometimes lead to odd card amounts. For example, we would need 22.22 of a $4.50 card. You might be thinking, you can’t buy .22 of a card! Don’t freak out. The percentages scale just fine. “What about sales?” you ask. “You can’t profit from selling!”
On the contrary: If you sell a $100 card for cash, and then it drops to $1, your cash value is 100 times more than if you had done nothing. Also, if you know a way to short-sell magic cards, please call me ASAP!
Unless a ‘Crew member specifically mentions a change in opinion or an initial target price, we are assuming that you held onto or avoided the card based on the original recommendations. To that end, there will be two time-frames examined: the 30 days following the recommendation and the value of the card at rotation. Why rotation? Two reasons:
1. Standard card values are directly affected.
2. In this batch, rotation is at least six months following the Brew Crew pick.
There are many ways to measure performance. You could list total right and wrong. But what if someone is right 51% of the time, but all the bad picks drop 90%? What if someone is wrong 75% of the time but their wins are all 1000% gainers? Here’s the plan: we will be listing the Brew Crew’s win/loss percentages and their total combined returns. So, a 50% gain on card A and a -25% loss on card B will result in a portfolio gain of 25% and a win loss of 50/50. Also, due to market inefficiency and transaction cost, any moves under +/-20% are considered “flat performers” for our purposes.
Every person who plays Magic has a little MTG finance in them. Much like the player psychographics made famous by Mark Rosewater (Timmy, Johnny, Spike) there are also MTG finance psychographics: Alex and Gordon. Alex is the guy who, as a kid during Alpha, lost a little value when he traded his extra Mox for 10 awesome creatures to finish his collection. Gordon (greed is good) Gecco is the guy who offers you buylist prices for your cards and SCG prices for his. More on these guys later.
Please remember these results are from a short time frame—a season if you like. Every season will have different challenges and timing.
Here are some teasers to whet your appetite:
- Which Brew Crew member had a better season average than the Baseball Hall of Fame hitter Hugh Duffy?
- Which Brew Crew member did in six months what Wall Street titans couldn’t do in 12?
- Which Brew Crew member offered three trades on one podcast that EACH returned over 90% in under six months?
Stay tuned for future installments to see how the Crew members did on their picks!
Remember when we asked podcast listeners to volunteer to listen to old Brainstorm Brewery episodes and to tell us what our picks of the week were and what we said to do? Well, the data is in and Brian Dale has analyzed it and above is the introduction to his series where he will present the data and help you figure out which kind of investor you are and whose opinion you find yourself agreeing with more. Is one of the ‘Crew under or over-performing consistently? Are all four members making a net profit with their picks? The most important component of MTG Finance is accountability, and this series looks to keep the ‘Crew on their toes—their picks will be scrutinized. What’s going to come out? That’s half the fun! On behalf of Brainstorm Brewery, I would like to extend our heartfelt thanks to everyone who volunteered to mine our old episodes for this data. We hope when you see how it’s presented in this series you will agree it was worth it. – Jason Alt
Jason is a financier living in Michigan. You can find his work on Gathering Magic, Quiet Speculation, and MTG Price. Jason brings several years of MTG finance experience to the podcast as well as his signature wit and comic relief. Jason joined the podcast as a guest on Episode 10 and again on Episode 12 and it was clear that the group had a great dynamic. He became a permanent member of the cast soon after and the world of MTG finance hasn’t been the same since. Jason is also a disgruntled former member of Team Simic.