The Big Things: Reserved List Lessons

Happy New Year, everyone! 2022 has come and gone, and now’s the time to look towards the future. New Magic, new me (well, new all of us). So, let’s get into it!

Since the turmoil and fallout from Magic 30th Anniversary Edition's release has largely come to pass, the overall Magic marketplace has been relatively quiet over these past few weeks. With Dominaria Remastered and Phyrexia: All Will Be One on the horizon, most consumer eyes (and as such, quite a deal of money) are currently held up in anticipation of products to come. Whether people are waiting to pick up sealed product, needed reprints, or new singles, one thing is certainly clear: the market is quiet right now, and little money is being spent on older releases.

This lull provides us with an interesting opportunity as we enter the new year; a moment to sit back, evaluate the state of things, and plan how to move forward.

While the S&P 500 lost an overall 19.4% in 2022 (alongside its Magic counterpart, the reserved list, which fell an average of 30%) and the advent of "Amazon-dumps" has inspired fear in the marketplace for en masse sealed product purchases, this shouldn’t necessarily be interpreted as a warning sign to steer clear of investments and other Magic purchases in 2023. Rather, if we look a little more carefully at the data, a pattern of stability emerges which can help to guide us through the coming year.

When scrolling through the reserved list, an interesting trend emerges; while there were certainly both losers and gainers from across all tiers and price points, overall, the majority of reserved list losses came at the hands of cards in the speculative third tier category, whereas the more tried-and-true sections of the reserved list were stable (or at least didn’t fall as significantly) in 2022.

Stepping back a moment, let’s break down the reserved list card tiers.

First off are the tried-and-true investment class reserved list cards. These cards come primarily from Alpha, Beta, Unlimited, Arabian Nights, Antiquities, Legends, and The Dark. This group holds cards as varied in power level as Black Lotus to Ali from Cairo, primarily being linked by their incredibly limited print supply. While there certainly exists a hierarchy of demand from within this tier, these cards are nonetheless historically backed by relative price stability and a gradual trend upwards.

The second tier is comprised primarily of playable cards from high print run sets, beginning with Revised. This tier isn’t based as heavily on card rarity or scarcity, but moreso on demand (as such, this is why the dual lands from Revised are here as opposed to with their Alpha/Beta/Unlimited counterparts in the first tier). Other examples of cards in this category include Grim Monolith, Lion's Eye Diamond, Mox Diamond, and Gaea's Cradle. This category is frequently subject to buyouts and more speculative price action, while simultaneously being a more turbulent asset class due to the living nature of play-based demand.

The final tier of reserved list cards is, well, the rest of them. These cards blur the line between OTC stocks (funds not listed on major exchanges) and speculative low volume movers, existing as an opportunity for experimentation but frequently falling short of achieving long-term price stability. This group makes up the bulk of the reserved list and was responsible for the majority of value loss across the reserved list as a price index in 2022.

Looking at these sections individually, two key trends are identifiable: the first and second tiers drifted slightly lower overall across the year, while the third tier crashed. This is because of a lower influx of money into the first two tiers of the reserved list corresponding with lower overall demand, especially when compared against the explosive growth in 2020, while the third tier experienced an exodus of funds as the capital necessary to support speculation dried up almost entirely. As such, although there is no escaping the fact that the reserved list fell in 2022, it is important to note that a significant cause of this devaluation was a collapse in speculation, as opposed to a true index-wide collapse at the hands of a cessation of investment.

As we move into 2023, understanding the reserved list tier system and the corresponding market behaviours which define it is crucial because doing so allows for a better-informed approach to investment and speculation. The markets of 2022 displayed the important lesson that buying and holding any given card from across the entirety of the reserved list isn’t necessarily a safe bet simply due to the reprint-proof designation. Rather, each tier of cards has its own defining characteristics, and, given the current bear market, it appears that the resiliency of the first tier will provide for the most risk-averse Magic investments as we begin to weather 2023.

---

Read more from Harvey McGuinness on Commander's Herald as well.