Discussion - investment scheme

Insurance? I wish there was a way to insure against losing money due to being over the inf cap

Week 8 (Oct 8 to Oct 12)

Liquid cash: 321,630,272
Market bids: 213,431,296
Unsold goods: 365,400,000 (based on estimated sales price)

Net asset value: 900,461,568


No moolah this time round. Since I missed a week, the next round of dividends are probably going to be on week 9, then again on 11 which is the final week. I will try to catch all of you with uncollected dividends before DXP ends.

I just realized that I've given out 1.2bn in dividends so far. So, this fund has made 2.1 bn in 8 weeks, or slightly over 1bn per month per character, which is consistent with all other cases where I've bothered to keep track of income. It's interesting to note that i16 doesn't seem to have changed this (we're just under a month since the new issue was launched), although transaction volume is definitely lower and I keep getting the impression that I have to be making less money.

DXP has been pretty normal. I don't trade generic IOs or salvage, so any market changes passed me by.

Awesome.

Week 9 (Oct 12 to Oct 19)

Liquid cash: 747,228,672
Market bids: 0
Unsold goods: 460,800,000

Net asset value: 1,208,028,672


Dividends issued: 600m (100m per share)



You know the drill Poke me, get cash

Rare salvage rose moderately after DXP. On the bright side, DXP cleared out a lot of the supply glut and stocks on most IOs are now back to a more healthily low number. There was the usual post-DXP silliness, including recipes selling for more than the crafted enhancement on some items. Other than that it has been a fairly normal week.

The Halloween event starts soon! I remember last year's event caused a huge crash in rare salvage prices, but I can't remember what the cause was, if anything.

Woot, gratz!

Question, does zero market bids mean this was the last week?

No. Coincidentally I ran out of slots, so I couldn't place any bids

Week 11 will be the last week, and by that Monday I'll have cancelled all bids and liquidated all assets.

Mmm, sounds very intruiging. Let me know if something like this starts up on Protector server, I'd be willing to invest some money.

Week 10 (Oct 19 to Oct 26)

Liquid cash: 595,892,608
Market bids: 286,160,485
Unsold goods: 170,100,000

Net asset value: 1,052,153,093


I was wrong when I thought it would be business as usual this week: Halloween has been an unexpected windfall. Recipe prices fell (in some cases, severely) and transaction volume rose strongly, so I've been making more than usual. Turnover is actually comparable to what it was in the late AE era. I'm also trying to take the opportunity to hoard large amounts of recipes for future use. It's been a pretty exciting week.

Since a few people have asked about this, I'll take the opportunity to say that I have no plans to run another such fund for the forseeable future. I now have new characters to IO out, as well as some mid to longterm projects that are going to take a lot of funds, so my attention is going to be occupied for a long time.

This has been fun and successful, but to be honest, I am also mildly burnt out on marketeering after all the frentic action since the start of i14. I marketeer on 9 characters red and blueside now, excluding anything related to this fund, and I spend an hour a day just logging them in and out. I may move into the purple market in the near future, since that has less transaction volume and won't require me to check in as often.

Next week will be the last one. It's been great fun

It's been even more fun for your investors.

I don't think I learned a great deal, but I appreciated the weekly updates and enjoyed keeping an eye on all the totals. I'm still looking for a better understanding of how the markets in CoX operate, in relation to player trends. If you or anyone else is ever interested in running another scheme, I've certainly got the money to burn. Congrats on the final upcoming week!

Great Read! And great work!

It's been a blast working with you, and I'm glad we could satisfy your curiosity towards this project, I hope you learned what you wanted about about the market I'm sure you can follow trends a bit better then others now, and I'm sure I speak for everyone when I say thanks for the honesty, the inf, and a great story See you at final collection time

Fund dissolved on November 2

Net asset value: 1,406,251,319

Payout per share: 234,375,219


This week, market trends reversed; prices started to climb, to above pre-Halloween event levels in a few cases, and supply started to drop sharply in some cases. I sold off nearly all of my hoarded stuff from last week, and actually managed to single-handedly delay any increase in prices in a few cases (the instant I was sold out, prices started climbing ).

Interestingly, this is exactly what happened during the AE era (sharp drop in prices, followed by a steady surge of demand and diminishing supply). No doubt, just like during the early days of i14, people are using the event to powerlevel themselves, and now all the shiny new level 50 characters are going shopping. If any furture event causes massive amounts of powerlevelling, well, now we know what to expect.

And so ends our scheme.

And so ends the great experiment.

Question--that 234M, that's the final payout, right? That doesn't include the previous weekly dividends. Would you be able to update your informational presentation to include, say, the six initial investments, and the total payout? Did I review the thread correctly? With three payouts of 100M apiece, the total investment of each party is six 1 million investments, with a total payout of 534M and change.

534%+ is a heck of an investment, you schemer you.

*devious cackle* I look forward to every nickel and dime of it. :3

I saw you had been on last night, but missed crossing paths with you. Congrats, again!

Collected my 534,375,219 last night.

Enjoyed reading this, sad that it is ending. I've experienced some market related malaise lately, and discussions like this always serve to further energize me in my participation in this portion of the game. Too bad I did not exert undue influence to get in on this, however the true return is the enjoyment related to observing how this has gone.

Thank Laev,

I really enjoyed seeing how this turned out and am surprised at how much profit was made. I too hope you learned what you wanted and I hope it didn't take away from too much of your regular CoH time.

Manny

Sorry to hear about your market woes, Mod8. It happens to the best of us!

I'm flattered people think this is interesting. I did not keep extremely detailed notes and records (and I'm not qualified to do detailed statistical analysis or anything), but anyway:


Final Report


1. Income

In total, the fund went from 6,000,000 to 3,206,251,319 in 11 weeks, or an average income of 291,477,392 per week, or 41,639,627 per day.

One thing which I was only somewhat sure of before this fund started, but can now state with certainty, is that a top-end non-purple crafting niche is worth about 1bn/month.

How much time did I spend on this project in total? Out of curiosity I went and checked, and the total time spent on the character I used for this fund came to 20 hours, or around 15 minutes per day. (For comparison, Burn Rate - KeepDistance's attempt to hit 1bn in 30 days, back in Jan 2009 - clocked 143 hours, I think.)


2. Competition

How much competition was there? Not a whole lot. I was crafting the same recipe from start to end, and typically I was single-handedly responsible for about 10% to 25% of all stock on sale at any moment. Situations where I was consistently getting undercut were rare. If there was competition, there wasn't enough of it or it wasn't good enough to cause me notice.


3. Market Strategy

3a. 6m-100m

As I originally said, there were two parts to the plan. Plan 1 was to flip salvage and build up capital. For this I used 40-50 uncommons, which are chronically undersupplied (because they're not expensive enough to be worth listing) and in high demand (because the vast majority of recipes crafted are at maximum level). I used Thorn Tree Vine, Unquenchable Flame, Pneumatic Piston and Psionic Threat Report. For some reason Nevermelting Ice occasionally made good profit, too. I'd buy for 10k-15k and sell at 100k-200k, and just delete anything that failed to sell.

This was done in the final month of the AE era. Back then, there were regular shortages on most common and uncommon salvages. I used to think that i16 crashed salvage prices permanently, but they've rose abit since Halloween, and rare salvage (which was dirt-cheap last issue) is now prime flipping material. I don't think it would be impossible to repeat this performance - at worst it would be slower.


3b. 100m+

From here on crafting starts. As a crafter, I don't like to move from niche to niche - it's way too much hassle for me to put up with. I wanted to pick one good niche and stick with it, doing mass production (I like to craft and list in stacks of 10).

What did I craft? I don't intend to disclose this, for all the obvious and selfish reasons. I used to believe that one can more or less pick up any recipe, craft and make a reasonable profit. I now think, however, that there is a fairly limited pool of top end (i.e. ~1bn/month) recipes. I suppose if I have anything even resembling "inside knowledge", arrogant as it sounds, it would be this.

If you plot the supply-demand ratio of all recipes on a graph, on one end you would get everything with high supply but low demand: most mez, debuff, KB, and taunt sets, and nearly every recipe below its set's maximum level. These are obviously worthless for crafting since the supply swamps what little demand there is. On the other end you have things with high demand but low supply: some highly-desirable sets that do not go all the way to level 50 or are out of the popular merit/ticket roll ranges, Pool Cs such as Lv10 BotZ -KB and Luck of the Gambler specials, respec recipes and purples. The profit margin is high, but transactions are few. At the very extreme lie PvP IOs, where supply is inconsistent enough that you might make a huge profit by flipping or crafting one but nothing resembling a constant income.

In the middle lies the stuff with both high supply and demand, things like Crushing Impacts and Doctored Wounds and Thunderstrikes, which are popular and readily available. Somewhere around the 75th percentile lies the sweet spot for crafters: where supply is just low enough and demand just high enough that you can regularly sell for high profits and price gouging opportunities arise every time there is a supply shortage. What lies in this range is left as an exercise for the reader to figure out.

Maybe one day, when I finally bore of the market/invention systems (and thus CoH as a whole) I'll write a crafting guide.


4. Miscellaneous Notes

What else did I learn? Although I said I was doing this for fun, my original goal was actually practice for a for-profit scheme, but I've long since decided that it's not feasible. In this game, returns on investment are high enough that there's little benefit to raising capital through investors. And at a certain point, profit becomes linear that it's hard to give significant returns to a lot of investors. 3.2bn profit is impressive, but divided six ways, 500m is pocket change; the equivalent of 1k Merits, more or less, or slightly short of a single purple set. I wouldn't consider investment schemes feasible income for a marketeer, but nevertheless I had a lot of fun, because I love playing the market.

One thing which I first noticed during the August DXP, and again several times after, is that recipes tend to be easier to price gouge with than enhancements (partly because enhancements are much more hoardable, and speculators resist massive price increases by releasing hoarded stock). The irony is that there are lots of people in the game who want to save money, but not time, and assume the recipe will be cheaper, thinking they're getting a steal. (I admit I do this a lot, too.) I know most people just want to get their enhancements slotted, but it makes my industrious, worker's spirit sad to list a recipe for 45m and the crafted enhancement for 45m... and see the recipe sell for 60m and the enhancement go unsold.

One thing I noticed was that whenever I ran out of stock and left nothing for sale over a day or two, prices almost inevitably rose. Maybe I should stop being so efficient...

Finally, a random note. Pre-i16, my income redside was much better than it was blueside. Post-i16, it's reversed - I'm now making much more blueside than redside. It may simply be that my technique is less suited to the redside market, although I can't imagine why.

Have fun all

Rock, Laeva--this is the post I was looking for. Excellent final report!