The Modern Market: Is it a bubble?
While I spent last week in China, I learned about their housing market, and I saw some similarities to the current Modern format market for Magic the Gathering. They are both growing at unsustainable rates, although their are some differences. In Magic the growth is due to the increase in player base, and the maturity of its player base where players now have money to spend on cards. In China the growth is pushed by the government to keep the males age 25-35 busy since that is the demographic most likely to rebel. However, Wizards has a good reason to intervene while China is actively trying to keep the growth going.
Since the Magic growth is more organic, it wouldn’t usually be considered a bubble, however that doesn’t mean it cannot crash. Magic is run by WOTC, who benefit from making modern playable and make money reprinting necessary cards like Goyf, Thoughtseize, etc so reprints are very much in their favor. You can almost guarantee that modern staples will be heavily reprinted in upcoming event decks, core sets, Conspiracy, Huey block, etc to help make modern a more attainable format, and along with that you can expect prices to crash. Since Magic’s player base has grown hugely the past few years, cards will be opened in mass quantities where there were likely only a few prior. Brainstorm Brewery has a brilliant article on this concept, but the basic is that Size Matters and sets are being opened so much nowadays that there will be a huge supply increase with reprints.
What should all of this mean to you? It means that you should be cautious. Do not blindly invest, and you should be very careful when speculating even if you are following “experts.” Most people posting articles claim to know what they are doing and point to past recommendations that would have turned out well as a reason to trust them, but keep in mind the Modern Market has been increasing hugely so you could have closed your eyes and thrown a dart at a pile of modern playable cards (not suggested) and recommended what you hit, and it likely would have gone up at least 40% this past 12 months.
I’ll confess I am not a veteran in regards to Magic Finance or Economics, so you should take this all with a grain of salt.