Non-traditional investing: Magic the Gathering

Processo decisionale basato sui dati per le aziende

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

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

The need for more power

Closeup of Game

The market for these cards changes often
Speculation

Many places to purchase cards

Ebay

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

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.

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

What is a simulation?

sim1

sim2

sim3

sim4

Aggregating all the simulated samples

combinedSim

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

A simple example

Average return
 = ($2 + $5 + $5) / 3
 = $4

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

Let's practice!

Processo decisionale basato sui dati per le aziende