Non-traditional investing: Magic the Gathering

Data-Driven Decision Making for Business

Ted Kwartler

Instructor

What is a non-traditional market?

Traditional

  • Stock market
  • Housing market

Stock Trading

Non-traditional

  • Crypto currencies (although it's changing)

1 https://www.huffpost.com/entry/beanie-baby-fever-in-1999_n_58af7d12e4b060480e0661fe
Data-Driven Decision Making for Business

Introducing Magic The Gathering

Magic the Gathering Logo

Example of a Magic the Gathering Card

1 https://magic.wizards.com/en/products/core2021?source=MX_Nav2020
Data-Driven Decision Making for Business

The need for more power

$$

Closeup of Game

  • The market for these cards changes often
  • Speculation
Data-Driven Decision Making for Business

Many places to purchase cards

Ebay

Data-Driven Decision Making for Business

Booster packs

Booster Card Pack Contents

Rarity Likelihood
Mythic 1 in 8 packs
Rare 1 per pack unless there is a mythic
Common 3 per pack
Uncommon 11 per pack

$$

* 1 in 6 packs will replace a random card with a foil, limited edition version

If you want a specific card

  • Pay premium to buy a single card from another player
  • Purchase a booster pack
Data-Driven Decision Making for Business

Buy an individual card or take your chances opening a pack?

Booster Box

RISK Each booster pack will have worthless cards from the set.

REWARD Some packs will contain the rare, expensive cards which can immediately be sold for more than the cost of the pack.

Data-Driven Decision Making for Business

Using data to assess risk vs. reward

Virtual Reality

  • Known information:

    • Cards in a set
    • Current prices
    • Probabilities of getting specific cards

  • Simulate pack openings

Data-Driven Decision Making for Business

What is a simulation?

sim1

sim2

sim3

sim4

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Aggregating all the simulated samples

combinedSim

Data-Driven Decision Making for Business

Simulating Magic The Gathering

100 boxes opened

Booster box: 36 booster packs

Booster card pack contents

Rarity Published Likelihood
Mythic 1 in 8 packs
Rare 1 per pack unless there is a mythic
Common 3 per pack
Uncommon 11 per pack
Data-Driven Decision Making for Business

A simple example

$$

Average return
 = ($2 + $5 + $5) / 3
 = $4
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Account for all additional expenses.

Profit

net profit = revenue - cost

$$

$$

$$

Profit margin

profit margin = profit / revenue

Example

net profit = selling price 
             - (purchase price 
                + listing fees 
                  of 10% of sales price)
           = $100 - ($50 + $10)
           = $100 - ($60) = $40

profit margin = profit / revenue
              = $40 / $100
              = .4
Data-Driven Decision Making for Business

Let's practice!

Data-Driven Decision Making for Business

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