What's up boys and girls, its T-Time! Last time I compared the Yugioh secondary market to basic economic principals of the stock market and US economy. I went over the current state of the game and how it currently reflects a bull market, but today, I am going to talk about what happens when the economy bears. No, not Brotherhood of the Fire Fist-Bear, that card is bullish. Bear cards would be more like a known reprint or a formerly popular card that sees no play anymore.
Since we aren't in a bearing stage of the market, I have to use past examples to explain how it works. Lets rewind to just after nationals last year. The banlist was being speculated/announced and even the most expensive cards in their respective decks were taking a nose dive due to speculation of them being banned/restricted. Inzektor Hornet fell from $30 to around $12 (and later even lower when these suspicions were confirmed). Wind-Up Carrier Zenmaighty fell form $20 to around $10 (again, later would drop even further). Even Evolzar Dolkka and Rescue Rabbit took $20-$30 dives out of fear. The contributing factor that sparked all of those decks going down is fear. That is how it is in the world economy as well. When situations get sticky and confidence drops, the dollar drops. That tends to bring down stocks and currency and increases the price of commodities and metals (gold in particular). If you want me to give a good example of commodities in the world of Yugioh, think of them as good, reprinted staples. Some are riskier than others, some are not. A good example of this would be Maxx “C”. The card isn't going down anytime soon and it isn't going to spike way up either. Its a safe investment while everything else could tank. You can also make a decent amount of money on the card, since it will rise when everyone else wants it out of fear.
Gold in considered the ultimate safe-haven in commodities trading. As of late, it has been up and down pretty heavy, but so has the economy. Gold is supposed to reflect the “true dollar”, since so many fiat currencies are running rampant. Though it hasn't been the truest lately, holding onto gold as a long term investment generally means slow and efficient gains. So in Yugioh, those cards would be premium rarities of good cards like Ultimate Rare 1st Edition Effect Veiler, Secret Rare 1st Edition Pot of Duality, and Super Rare Bottomless Trap Holes. They are high ticket items that are hard to find and are in high demand, which means as time goes on, they are likely only going up. If you have the money to sit on them, they will almost always bring you a small degree of profit in the long run and are pretty safe to invest in.
The second thing that causes fear, and inevitably a bear market, is the possibility of reprints. Again, I am going to take you back to the fall of 2012 when the 3 separate tins were all coming out. People were getting off high ticket cards left and right, knowing that they were in danger of being reprinted. This tanked the price of pretty much every high ticket card such as Maxx “C”, Rescue Rabbit, Cardcar D, Photon Strike Bounzer, and even Shooting Quasar Dragon. Some of these cards got reprinted, some of them didn't. Those that didn't saw their price shoot back up to normal (sometimes even higher), but it still caused an overall dip in the Yugioh secondary market. When this happens, it seems like it is pretty hard to make money, but actually this is my favorite kind of market. You just have to know how to play it right.
The first thing to note is that when the economy dips down, it has to eventually correct itself by swinging up. The advantage of everything becoming so cheap is that it becomes a buyer's market. You can pick up lots of relatively safe cards that are being affected by the overall price drop in cards, and then turn around and sell them when everything is back to normal. Also, the closer you get to the announcement day (ban list/reprint), cards drop further. You can also use that fear as a catalyst to purchase cards for even lower than their already deflated prices. People don't want to see their $100 card become worth $10. My example is always Gladiator Beast Heraklinos. That card didn't go from $150-$200 to $10-$15 overnight. It steadily took its drop until it settled around there. It also had to do with the deck no longer seeing mainstream play. Immediately after the reprint was announced, people were selling Herks for around $50, but within a week it settled back around $80-$100. The best time to buy big ticket cards like that is immediately after the reprint is announced.
When a reprint is announced, big ticket cards immediately become worthless to some people. Soon as it was announced, some people were selling Photon Strike Bounzers for $5, when really they were $20. The mad panic allows investors or buyers to come into these cards for very low prices, and if they sell them quickly, they will make their money. In this kind of a buyers market, you want to invest in things that are derivatives of cards going down, because people often classify them as those kinds of cards and then they sail back up. A good example of this as when Wind-Up Carrier Zenmaighty was restricted to 1. People thought Wind-Ups were dead, but that was hardly the case. Anyone who was fine picking up Wind-Up Sharks and Rats for $1-2 really made bank when they soared to higher than they were before the restriction. How did this happen? Because people who had those cards sold them, creating a mad scramble to buy those cards back, and the people who purchased them made them pay dearly.
Another decent investment around the time of a new Forbidden list is coming out is reasonable banned cards or cards that could possibly increase in the quantity allowed to see play. It is also best to buy the absolute highest rarity of those cards in anticipation, in order to have the desire. A perfect example of this is Goyo Guardian. When that card was rumored to be coming back, the card shot from $5 to $40 overnight. Did the card actually come back? No. However, even the rumor was enough to give someone 800% profit. If it actually came back, great, even more profit. Other cards that are in the same boat are Sinister Serpent, Ultimate 1st Ed Brain Control, or Super Rare Magician of Faith. If they do come back, you make insane amounts of money. If they don't come back, you can likely sell them for what you paid for them and your only cost was the money spent in holding costs on those cards. Also remember that if a card comes back and is terrible, such as Tsukuyomi, it is still going to spike in price by default.
So there it is. Bear markets are buyers markets and Bull markets are sellers markets. You can make money during any market as long as you understand the fundamentals that drive those markets and what to do in those situations. With this game getting dramatically more dog-eat-dog, it is much better to stick to the fundamentals than trying to rip off kids. Besides, it leaves a bad taste in your mouth and can even get you banned these days. Also, once you get enough money/cards, this method is much more lucrative. You can buy thousands of dollars in cards to make hundreds or thousands by doing almost nothing, or you can hustle your butt off to make a few bucks. Even in small doses, this can be the most effective for a player who is just trying to build up a quantity of good cards. Understand the fundamentals and you won't be ripped off. Understand the trends and you will always be able to make money in this game, and in reality, be able to play for free. If you can sell your deck for more or as much as you paid for it, then you are doing it right. Until next time, play hard or go home!