Welcome to Jester's Trek.
I'm your host, Jester. I've been an EVE Online player for about six years. One of my four mains is Ripard Teg, pictured at left. Sadly, I've succumbed to "bittervet" disease, but I'm wandering the New Eden landscape (and from time to time, the MMO landscape) in search of a cure.
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Friday, January 11, 2013

Week in the Life: Jumped too early

Every once in a while, a speculator will jump into a market too early.  It's not a fatal mistake, but it can be a costly one.

A lot of the true vets in this game make their ISK by speculating on modules that are changing with an upcoming expansion.  I've played around with this a little bit myself, speculating on large guns in the run up to the release of the tier3 battle cruisers.  In that case, I made a fairly nice pile of ISKies.  But I also speculated in minerals when they were spiking, jumped into that market too late, and lost a fair amount of ISK on that, though I ended up converting my stock of investment minerals to T2 mods.  As a result, I eventually profited, but not nearly as much as a lot of more experienced EVE players.

Jumping into the market too late means that you're left buying a lot of stuff from people who jumped in at the right time, and they profit at your expense.  Then when the price comes back down, you're left holding a lot of crap that you bought for way more than it's presently worth.

But the same thing can happen if you jump in too early, like this guy:


Somewhere out there is a fellow that bought more than 200 Prophecy battle cruisers, anticipating that they are going to be in demand when the balance changes affecting them drop.  He invested about 10 billion ISK in this bet, buying twice as many Prophecies in a single day as have been purchased in more than a year.  Problem is, he jumped in way too early.  It's going to be weeks before we see the new BCs on the test server, much less on TQ.  As a result, it's more or less impossible to predict demand.  His speculation drove the price of Prophecies way up, but they only stayed up for a single day and it's pretty unlikely that they're going to peak that high again before the changes drop.  Anyone who is interested in that many Prophecies is even now buying and researching the BPO...

As a result, on this person's 10 billion ISK investment, they'll probably make about 8.2 billion back or so, for a loss of 1.8 billion ISK.  Ouch.  Bad, but not terminal if this guy had 10 billion ISK to start from.

As I said, I've done it myself.  When I heard that the Guristas Shuttle was going to get a bad-ass paint job, I bought a small pile of them hoping there would be soon-to-be bitter-vets wanting to fly around in a bad-ass shuttle.  No such luck.  There are fairly enormous stockpiles of these things around and the price actually went down a bit after the paint job dropped.  Fortunately for me, I didn't commit that much ISK to this idea; it was just a fun little lark.  And the pleasant thing about this sort of investment is that you can be patient and hope that things turn around.

Anyone want a bad-ass shuttle?  ;-)

Needless to say, I'm still learning how to speculate on EVE expansions.  I haven't quite got the knack of it yet.  But sometimes it's nice to know that I'm not alone in that regard...

30 comments:

  1. Given the probable spike in materials prices of prophy materials _after_ the change he'd probably still do ok if they follow the same pattern as retrievers but looking at what happened withret retrievers it'd take 6-7 months to more then make break even
    I wouldn't count his investment down for the count yet

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    1. Build prices might actually drop, if the Tier 1/2 BPOs are scaled down to be more in par with the idea of s Tier 1/2 BCs being "heavy cruisers", which is where it looks like Fozzie is taking these ships.

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  2. Ask corestwo about Procurer speculation....

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    1. The 3800 or so I recently sold for about three times their original build price, you mean? Granted it's short of their maximum possible profit, but better to take 400% profit now and do it with other things. Like this: http://i.imgur.com/tc0vs.png

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    2. Moongoo is a hell of a drug.

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    3. On the contrary, that's from my personal isk.

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    4. @mynnna - I think that 3800 Proc's at 3x original build price only comes out to around 20-25B ISK, right? Isn't that just chump change for you?

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    5. @mynnna: Oh? You're saying absolutely none of that personal ISK was made thanks in part to advance knowledge of future Goon plans in terms of exploiting the ice or moon goo markets?

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    6. @Anonymous: 5400 procurers total, I just sold the last 3800 in one last sudden lump. I was extremely strapped for liquidity at the time.

      @Jester: The start of the first ice interdiction was actually botched (long story) and I missed my opportunity to get in early; what money I did make on it I made playing the waves as people dumped stockpiles and whatnot, and then actually lost when we abruptly ended the interdiction and the prices crashed. Oops. Hulkageddon was merely financed by us, not planned, and so I had little advance warning there. And the nature of our exploits in the moon goo markets are a holding action more than a speculation opportunity.

      So, no, less of my isk than you'd think has come as a result of that sort of advance knowledge. I'm not going to deny that being a goon has helped my fortune considerably though. My first couple hundred billion resulted from running a business wherein I purchased faction/officer/deadspace loot from goons in goonspace and justified by profit by dealing with the transportation to and sale in Jita, something few people were willing to deal with when it was all contract based. And the seed money from that came from a bond I ran within goonfleet, where goons happily showered me with isk that had far fewer strings and hassles attached than Market Discussions would have. But part of the reason why I was able to get that money no-strings-attached was that I'd demonstrated I knew what I was doing when it came to trading and running a business, and the expansion of my fortune since that business ended has come largely from correctly riding the waves in the mineral market. Oh, and FW...not the Forex thing, since CCP didn't take kindly to it, but farming it along with everyone else.

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  3. Speculators have already been researching the BPOs, and making enough BPCs to fill their manufacturing lines. They are also stockpiling the minerals needed for manufacturing.

    Actual mass production won't start until after the BC changes are more or less finalized and predicting the likely winners is more feasible. If the new Prophecy turns out to be a dud, then they will only be out the price of a BC BPO.

    However, even if the new Prophecy is a winner, this sort of speculation is going to be problematic, unless CCP radically increases the mineral requirements on the BPOs (as happened with the mining barges). Thousands of each of the likely FoTM BCs are going to be built, prior to the changes going live to TQ, and thousands more will still be in the manufacturing queues. The price is likely to fall rapidly, due to oversupply, then gradually creep back up. But, as the BPOs are easily available in high sec (unlike ORE BPOs), the price will never exceed the cost of minerals by any significant amount.

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  4. It's always a gamble. I get more of a rush with speculating than I do with having my ass handed to me in combat.
    free tip; eggs and baskets.

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  5. either this blog is a valiant attempt at market manipulation or you understand the game a lot less than I thought you did

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    1. Nah, as I said, I didn't buy very many of those shuttles and I'm definitely not the one that bought all those Prophecies. It was just a couple of cute points that I thought went well together.

      In total, I've profited from speculating on EVE expansions, just not by very much. I'm an industry guy, not a market guy. To my knowledge, there isn't a blog out there written by a market guy.

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    2. I did find one fairly new blogger, http://merchantmonarchy.blogspot.com/ I'm not sure how good he is.

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    3. There used to be the Eve Weekend report & daily Podcasts

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    4. The Greedy Goblin could qualify as a market blog, although he discusses a bunch of other topics as well (recently afk-miner ganking, previously some shenanigans with TEST).

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    5. Merchant Monarchy knows his stuff pretty well. Greedy Goblin is expert on markets but pretty wild about anything else.

      The Argent Defender is also good but not so frequent these days.

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    6. I wonder if it's a coincidence all 3 of us (myself, Greedy Goblin, and Ardent (not argent) Defender started blogging for WoW.

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    7. I'm a Market and Industry guy and that's how I play EVE. One the things that's a bit harder about being a Market person and a blogger is it's harder to talk about how you make ISK while it's happening. It's hard to talk about what your speculating on without tipping off other players, unless you got some malicious plans doing so.

      So I only tend to somewhat talk about stuff AFTER it has happened or most the assets are sold or gone. It's a hard thing to blog about ongoing business whatever your usual business is. At most I only talk generally about what I do and not often very specific.

      Yes I did start my blog way back in the golden days of playing WoW and even back then I played the market allot there too.

      As for the Procurers on speculation I made out quite well on those and on Retrievers at well over a Billion in profits for a much smaller time trader to the likes of Corestwo.

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  6. How much for one of those shuttles? :P

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    1. It looks like you can get one for just under 20M.

      http://eve-marketdata.com/price_check.php?step=Show&type_id=21628

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  7. "To my knowledge, there isn't a blog out there written by a market guy"

    http://merchantmonarchy.blogspot.ca/

    My blog, it's a small, relatively new blog and most of the articles so far are aimed at new players.

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  8. Bad-ass paintjob??? It looks like some drunk Gurista was flying behind a garbage scow with leaky containers. Instead of getting it cleaned the Gurista decided to see if someone would buy it AS a paint job...............and someone did

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  9. No matter what, they are going to increase the mineral requirement, so anybody who has bougth BCs at a normal price can expect at very least not to lose money.

    How much for one of those cute shuttles?

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    1. Not necessarily.

      Tier 2 BC BPOs are more likely to get a reduction in mineral reqs, since they are being deliberately nerfed across the board.

      Tier 1 BCs are getting an acroos the board buff, but BPO mineral reqs may go up, may stay the same, or may even get knocked lower, depending on where Fozzie wants to position the former Tier 1/2 BCs, as a class.

      It is pretty much a given that Tier 3 BCs (the only "true" BCs - ie. sporting BS class guns), regardless of any changes, will continue to have a higher build cost than Tier 1/2 - holding a position between the former Tier 1/2 BCS and the lowest-end BSs.

      However, the build cost separation between cruisers and battleships is extremely wide, so there is plenty of room to re-position the revised BC classes. The Prophecy currently runs about 3x the cost of a Mailer (the most expensive Amarr T1 cruiser) - so, it would not be unreasonable to see that drop to 2.5x or even 2x - or go up to 3.5x.

      Coin flip, anyone?

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  10. I have a very good recipe for speculation and it never-ever failed me during my quest up to 300B (and beyond):

    DON'T!

    Just don't speculate. Provide some useful service, produce something, haul something, decrease the margin between buys and sells (station trade) and you will surely have profit.

    Sure, there are awesome stories how did a guy make 100B overnight patch day. But there are hundred times more untold stories of people losing 10B overnight.

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    1. Well informed speculation can be quite lucrative, and has the added benefit of being fairly lazy too. It's a nice perk if you're like me and have already done all the more effort-heavy methods of isk making out there, and just want something lazy to continue to grow the wealth.

      Then again, if it's "well informed", calling it speculation may be a stretch...

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    2. To really take advantage of speculation, especially long term speculation like patch speculation requires very deep pockets. You want to be able to buy it all while only using surplus cash that'd just be sitting around doing nothing otherwise.

      My pockets are fairly deep in Eve but they aren't near deep enough yet to tie hundreds of billions (far less trillions) on long term speculation yet.

      Before Eve I was one of the richest players in another game with more cash than I knew what to do with so I did a lot of patch speculation there on top of my usual auction activies.

      Like anything diversification helps. If you put all your eggs into one basket you stand to lose a lot if the speculation doesn't work out. But if you spread it around on multiple speculative ventures then it doesn't matter if 1 or 2 fail, profits from the all the successful ones more than make up.

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  11. "To my knowledge, there isn't a blog out there written by a market guy" Jester! I know you've visited my blog before! http://k162space.com/k162-guides/ I've written a lot of market and industry guides over the years.

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    1. Hee, true enough. But I tend to think of your blog as industry focused rather than market focused. To me, they're two different things.

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