What's up boys and girls, its T-Time! Today we will be taking a look at the Yugioh TCG secondary market as a means of investment. If you have taken any econ/finance courses you should be able to follow this pretty easily. For those who haven't, do your best to intemperate things and you will likely learn a lot. The secondary market of this game has its own economy and operates much like a commodities market. There are cyclical changes that you can buy into and there are short to long term investments that you can make. Also, like the commodities market, you can make a lot of money, or get crushed. In finance, there are 3 kinds of animal names associated with people who play market trends. Bulls make money in “bull markets” or when the market is up and everything is rising in price. Bears make money in “bear markets” when a market “bears” or everything declines in price. Pigs are the greedy ones who listen to market tips and think that they are going to make a lot of money by gambling on simple things. The general consensus is that Bears make money, Bulls make money, and Pigs get slaughtered, at least in the long run.
Currently, the secondary market is in a bull market, as it always is right after a new forbidden/limited list is released and a major event hasn't taken place. People are investing in what they think will do the best right off of the bat. There are safe investments, like that of Water or Fire, then there are the risky investments such as Wind-Ups and Six Samurais. With Wind-Ups being hit so badly by the list, the card values were at an all time low and the market “bottomed out”. A few people who were the first movers, saw this as an opportunity and started purchasing those cards, and to great success. People realized that Wind-Ups aren't completely dead and they found a way to continue to use the deck, despite the crippling blows it took. Still, it is Water and Fire that are expected to do the best (with Macro Rabbit in the mix, though it is a pretty terrible investment due to low price across the board), and Wind-Ups and Six Samurais are generally considered the two iffy decks that will see a lot of play at least early on. If Wind-Ups or Six Samurais win, the prices may shoot off into a bubble (yes, like the housing bubble) and make the investors plenty of money.
Buying into Sam/Wind-Up decks right now is pretty risky. The cards are relatively high right now via speculation. They have been doing well on Duel Network and at regionals, resulting in people getting their hopes up. Then again, how often are regionals really the telling tale? For the first major event, they usually set the stage for the most common deck played, and then the winner uses a deck to counter that preconceived meta. Don't believe me? Lets look at some history... YCS Toronto was the first event of last format, but it doesn't really follow this since it was on September 1st. However, with “pre-Toronto” large events taking place, everyone bought into Heroes, and Wind-Up was able to make them look like jokes. Plus, anyone who had held onto their Wind-Up cards, they saw a nice increase in value, even from before when they dominated Nationals, etc. Those who invested saw a huge increase in value of their cards, but yet I digress. Lets look at YCS Long Beach 2012, the first major event after the new ban-list. Despite Darkworld winning, the most popular decks were predicted to be, and were, Wind-Ups and Inzektors. The best overall performing deck ended up being Dino-Rabbit, even though that deck was much less hyped due to the new speed of Order of Chaos. Rescue Rabbit shot back up in price, and Dolkka went up to over $50 from its former $20-$30 price. That is because Dino-Rabbit was a good meta call against what the meta was supposed to be (as predicted by many smaller tournaments leading up to the event).
Lets use another case study, YCS Toronto 2011, won by Billy Brake and Tengu Plants. The events leading up to this saw Agents dominating the format. The general consensus was “when everything else got worse due to the ban-list, Agents get better”. Well, apparently plants weren't down and out yet, as they took the event and shot their metaphorical subsidiaries (daughter companies of a whole corporation, ex the specific cards of a whole deck) back up to full price. There have also been times when the predicted deck held strong. The question is, will this be one of those times? Water and Fire are both safe bets. You can buy $55 Bears and $110 Megalos and hope that your deck wins. If it does, you will see Megalos maybe go to $120 or $130 and Bears go up to $65. However, if the decks don't do as well, you will probably not see your cards tank quickly since they will almost certainly have a decent showing. Those are your low risk investments. Your high risk investments are Ultimate Shi-Ens, Super Six Samurai United, MX-Saber Invoker, etc. Shi-En may not seem like a high risk card, since it isn't as expensive as Bear or Megalo, but if Shi-En is $10, 11 sharks are equal to a Megalo. If you made the same investment and Shi-En went up to $15, you make $55. If Shi-En drops to $7, you lose $33. That is still more than a Megalo dropping to $90, but pays off more than a Megalo rising to $130. It is also important to note that Bear can be related to a Wind-Up build, doubling down its market efficiency, since Fire Fist proved to not be as efficient against current Water builds as we saw at YCS Miami.
Then, of course, you can invest in the absolute gamble decks. Doing this early via research and playtesting is merited. For example, if you tested Gadgets a lot and assume that they will do well at this next event (lets ignore the Tin Goldfish release coming up), it may be wise to invest in them (Gear Gigant X, Super Ultimate Offering, Super Gadgets). If they, in fact, do well, you may see a huge spike in your investment. If you don't “win”, no worries. You can probably sell those cards for what you bought them for. That is real investing in the secondary market, and that is how to make the most money. You can also do it by investing in yourself. Before his 3rd place finish in Miami, Billy purchased over 100 Abyss Squalls/Abyssgaios and over 50 Abyssteus. Guess what? He hit paydirt. Had he failed and he and Jeff not succeed, no matter. Those cards weren't going to plummet in price since they weren't really played to begin with, so he doesn't lose much. The only cost is the holding time, which could've been used to put money into a succeeding deck.
That last paragraph was basically a lead in for me to talk about pigs and how they work. Pigs tend to get swept away in bubbles and go crazy when they see a hot “tip”. For example, Pigs got slaughtered at YCS Toronto this year when they invested in Jeff's Psychic deck. Jeff himself knew the deck wasn't as great as others, but he made a good meta call, outplayed his opponents, and was able to take advantage of people not knowing what his cards did. At that event and online, people were going crazy. They bought Grandsoils for $40-$50, Psychic Nightmares for $20, and Emergency Teleport even spiked to $25! They never saw those prices again, and a quick decline began in the deck. With the pigs not wanting to get off of their cards to cut their losses, they got slaughtered as the cards all dropped to about 25-30% of that price. That is what happens with outlier decks and by blindly following. Those people never tried Jeff's deck out, they just assumed it would be crazy good. As a result, they got fools made out of them. Random good meta calls have dominated many tournaments lately, but buying into the bubble killed Pig after Pig. Especially if you thought it was the best idea to buy insane amounts of Dark World cards right after YCS Long Beach. You may not have lost much, but looks like your holding time was incredibly costly, as those cards slowly continued to decline.
I could go on all day about this, and I would love to, but I wanted to take your time today to talk about the current bull market and how to approach it with YCS Austin coming up. I intend to make many more articles like this, since my expertise these days goes to the market strategy of the game rather than directly to the playing aspect (though I do believe I haven't missed a step as a player). Next week, I intend to talk about bear markets and how to approach them, though a bear market is actually pretty distant. We will likely see a bull market up until around late May/early June. Does that mean you will no longer make money? No! Unless, of course, you chose to be a Pig. Stay smart, and make money! Thanks for reading and invest hard, or go home!