Question about Spikes/Buyouts
Economics forum
Posted on March 14, 2018, 2:28 p.m. by Profet93
Hey guys, I wanted to get some more insight with regards to buyouts/spikes.
How can you differentiate whether or not a card has been bought out with the purpose of increasing it's price or if it just sees more play and therefore increases in price?
For example, let's assume someone bought out Replenish. It's a reserved list card so it won't be reprinted, therefore it's supply is low. If someone bought it out, it's price would increase (at least temporarily) but then would it settle down due to the lack of demand in the market?
2A. Would this be different if the card wasn't on the reserved list?
Thank you so much for your detailed response. I really appreciate it. I guess providing context and going back to the original example, what are your thoughts on Replenish? I'm not trying to buy out the card, but I think it's a decent target for a buyout.
It's on the reserved list and sees some play in commander decks. I also feel that with Dominaria coming up with the new saga enchantments, it might be more in demand.
There is only 1 printing of the card as well
March 14, 2018 6:12 p.m.
DarkMagician says... #4
Just want to point out that while prices will eventually drop after a buyout they almost always settle at a price higher than what they were at before the buyout.
March 14, 2018 7:39 p.m.
I heard about that as well. I'm just trying to "predict" certain card buyouts by getting a better understanding of buyouts, their causes and effects.
March 14, 2018 11:33 p.m.
Squirrelbacon says... #6
My personal thought on replenish is that it won't be a target for a buyout... it is fairly narrow in it's use and doesn't see much play so it is probably safe.
But being on the reserve list and only having one printing does theoretically put it in the 'risk' category, but even if something does happen the most (in the long term) it'll raise to is probalby between 25-30... I wouldn't be too concerned about trying to get this right now.
Now watch though, in 2 weeks it'll be 50 suddenly, no one will buy it, and it'll go back to 30 lol (that's how my luck goes)!!!
Squirrelbacon says... #2
Buyouts are really really weird since it ultimately depends on the card being bought out.
First of all, the card needs to have 2 major factors.
1) The card needs to have a limited print run (in some way/shape/form). This can mean an early set (Alpha, Beta, Unlimited etc.) or hasn't received much in terms of print run (Commander exclusives/promos/conspiracy).--> the issue with the second option is there are still a lot of copies, so it's harder to buyout.
2) The card needs a moderately high demand! If the card does not have high demand, a buyout will do nearly nothing (in the long term) to the value of the card. Ex. Grave Robbers, the card is currently around 1.50, so if we bought out a ton of copies (not all) and set the price to say, $8-$10 ish, would you buy this? For that price? Most people wouldn't.
In terms of how to tell the difference between price raise and buyout, it isn't always east to tell. Over time, at least in theory, many older cards will go up in price. This is due to legacy, vintage, block constructed and oddly enough casual play. If a card spikes COMPLETELY out of nowhere and took a large jump (>25%), I'd assume a buyout. If a deck posts results with a new card in it, and then grows in price, that's most likely just people buying cards and wanting to try some new spice. It's all about context vs. value when looking to figure out buyout or natural increase.
I hope that helps to answer your first couple questions...
In regards to your (2A) question, most buyouts are going to be reserved list cards simply because, if you are going to buyout a card, it's safer to order these to expect to profit. However, it does not have to be on reserve list in order to qualify for a buyout, but it doesn't happen often. I don't think that the effect would be much different, it only has to do with age and value. I think a simple example would be City of Brass. It has been reprinted a ton! However, the Arabian Nights expansion City of Brass is worth nearly 57x the amount since it was original printing and has a much lower supply.
Obviously, it would be practically impossible to buyout City of Brass, however, it isn't on the reserve list but could be bought out and doubled in price to fit extended/block constructed events (if people play those much anymore). Over time, it would probably come back down, but the card is played much more so it would take longer. The price may stay higher than it was originally, but not by much. If it is bought out, it may jump to 450, then over time fall and settle around 350 or 360. In short, not being on reserve list wouldn't differ in buyouts, just depends on the card!
Hopefully this helps! Take everything I say with a little grain of salt as I'm not a finance major or super researcher on stuff like this, but over time and hearing and seeing these things happen, you tend to pick up some info! Best of luck and if you're thinking about it, I wouldn't try to buy anything out!
March 14, 2018 4:31 p.m.