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Gridwalker
Amarr
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Posted - 2008.05.02 18:23:00 -
[31]
Originally by: Candice Bormardin My problem is that I come from a back ground as a historian and engineer where words have specific meanings.
Your problem is that your don't understand business, not that you have a background as a historian and engineer. Your other problem is that you believe that words have "specific meanings", which is patently false if the context isn't taken into consideration.
For example, a coworker told me that our server just went down him. Since we weren't at a restaurant, I had to assume he didn't mean that our waiter was performing oral sex on him under the table. Even that, however, wasn't enough context to understand what he meant by "server" (or even "went down"!). The physical server hardware stopped functioning? The web server crashed? What server?
In EVE, when we are talking about industry, the words we are using are in the context of business and economics. The meaning of the word "cost" in the context of business and economics has a different meaning than the everyday term "cost" which generally refers to physically paying money for something.
With that out of the way...
You keep saying this is a game. That's very true. This game simulates combat and business.
If you habitually get blown up, you may be having fun, but you're bad at combat. If you habitually ignore opportunity cost and make less on what you build than you could have by selling the raw materials, you may be having fun, but you're still bad at business.
By telling people that it is best to mount one weapon of each type on any ship, regardless of the ship bonuses, because "you're still doing damage!" isn't going to help them get better at combat.
By telling people that the materials you gather for manufacturing are "free" because you didn't pay isk for them isn't going to help them get better at industry.
Sure, they may be having fun. It is, after all a game. But they're still going to be bad at what they're doing.
-Grid
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Joe Starbreaker
Starbreaker Spaceways
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Posted - 2008.05.02 18:49:00 -
[32]
Originally by: Candice Bormardin Ore is free. Salvage is free. Navy Ravens are free. Free Tibet. Economics is a lie.
You fail so hard, it's funny. I sentence you to give up one hour of EVE-playing time daily and go read the Wall Street Journal for that hour.
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Joe Starbreaker
Starbreaker Spaceways
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Posted - 2008.05.02 19:02:00 -
[33]
Originally by: Lord Haur TIME=MONEY Therefore, the worth of the mins you mine are directly proportional to the time you spent mining them.
This isn't quite right. It'd be more accurate to say that the value of the minerals is equal to what you could sell them for, which is related to the value of a player's time times the amount of time it would take an efficient person to mine and refine that amount of minerals, multiplied by some kind of a factor that accounts for the risk/volatility of the work.
Opportunity cost means your time and energy is worth the amount you could earn from the next best option you have. Yes your company pays you $20 per hour... that doesn't mean you actually have the option of working 45 hours instead of 40... so you can't say that the five hours you spent fixing your car on Sunday are worth $100. It's not quite that simple.
Even though we can never know the maximum amount you can possibly earn with your time/money/resources, we can generally find some alternatives to estimate opportunity cost. So if you're making stuff out of Tritanium and selling it for effectively 1 isk per unit of trit, we can say for sure you're making a loss, not a profit.
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Candice Bormardin
Caldari Jouvulen Enterprises Inc.
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Posted - 2008.05.02 23:19:00 -
[34]
Akita - ah ha, I now get the point of what you said. I probably should have asked what you meant by it since it is in fact obvious that you did make a profit of 50 million on the transaction you outlined. If I'd been more familiar with the market prices of Golems then I would have understood. That doesn't mean that you aren't wrong. It just means that I would have understood your point.
If you paid nothing for something and sold it for 50 million you HAVE made a profit of $50 million. I answered your point with my comment about selling it for 55 million. The fact that you could have sold it for much more doesn't change anything. Your profit is based on the difference between what you bought it for and what you sold it for.
My understanding is that profit = (price sold for) - (price paid).
You are equating somethings value with the potential gain you might have made from selling it which would be
Profit = (price sold for) - (market value).
Thus, if you don't sell the item for greater than the market value of it - you claim that you have taken a loss.
Since the market value of something fluctuates at any particular location as well as from one location to another, just which price are you staking your claim of a profit on? If you don't check the price in every single region of EVE before selling and miss a location that would have paid you a greater amount - are you claiming that you sold something at a loss?
Suppose your kindly uncle gave you that Golem and you took it to one location and sold it for 180 million ISK - but - if you'd gone to a different region you could have sold it for 185 million. Are you saying that after gaining 180 million ISK for something you paid nothing for that you have in fact suffered a 5 million ISK loss?
Sorry but I don't really think that's how it works.
That extra 5 million is a foregone gain - it isn't a loss.
If you were given a Golem for free - and you paid someone 10 ISK to take it off your hands - then - you might argue that you had suffered a loss.
In your example with the money - if someone gave me that dollar - I and gave it to you in return for $.50, then I actually made $.50 net profit on the deal. If I was paid that dollar and exchanged my time and labor for it (which we don't do in this game as we don't get paid to play) then I would have suffered a net loss.
Yes - even if given the dollar - I would have suffered a relative loss from my position of having a dollar to my position of having $.50 in our trade. That is true.
Of course none of this has anything to do with whether or not you paid anything for those rocks you mined.
There is no price tag on those rocks - unless you buy them on the market. If you bought the rocks on the market and sold the item you made out of them for less than you paid for them - yes - then you took a loss.
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Candice Bormardin
Caldari Jouvulen Enterprises Inc.
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Posted - 2008.05.03 00:32:00 -
[35]
Originally by: Gridwalker
Originally by: Candice Bormardin My problem is that I come from a back ground as a historian and engineer where words have specific meanings.
Your problem is that your don't understand business, not that you have a background as a historian and engineer. Your other problem is that you believe that words have "specific meanings", which is patently false if the context isn't taken into consideration.
...
In EVE, when we are talking about industry, the words we are using are in the context of business and economics. The meaning of the word "cost" in the context of business and economics has a different meaning than the everyday term "cost" which generally refers to physically paying money for something.
...
-Grid
But - you make my point exactly about loosely using your terms. If you had said "opportunity cost" instead of "cost" you would be correct - according to the terms used in economics - and have a point.
In each example where the term "opportunity cost" is used instead of "cost" what you say is true specifically because the term "opportunity cost" has a specific meaning.
The Term Cost has a specific meaning too - and it isn't "opportunity cost".
The common phrase used in deriding people who sell the items below their mineral value is "they think the rocks are free"
Now here - you have the use of the word Free - and probably the source of our disagreement.
What is the meaning of Free?
Unfortunately Free has 71 different meanings ...
The one I and most people use is:
# 10: not costing or charging anything
The rocks do not cost anything. There may well be an "opportunity cost" associated with them - but you are not out of pocket an ISK for mining them.
Lastly, my point is further made about the fact that people tend to mouth things that they have heard other people say.
How many people playing this game have any background in business or economics - (and yes they are in fact two different things)?
What do most of those people think is meant by Free? What do most of those people think is meant by Cost?
Do they even know what Opportunity Cost is?
I would guess not.
Thus - you are confusing those people by the use of inexact terms.
To most people - all of this blathering and snobbery about "Economics" is just nonsense since they don't understand what those of you who do actually know what the terms mean are talking about.
It is unhelpful to use sloppy phraseology to new people trying to learn the game.
It is patently obvious to anyone using the common vernacular that the rocks are in fact free. So to state that they are not - without defining your terms - is misleading. Why should they pay any attention to what you are saying when you are so clearly not speaking the truth?
But ... this is a posting board ... and it's fairly common for people to exhibit a good bit of inexactitude in their phraseology ... so you can be forgiven for not defining your terms as well as you might.
It's a lot easier to say "Only a fool thinks the Rocks are Free" instead of "some people don't understand the foregone gains they might make from selling their ore rather than manufacturing it into an item that they sell for less than the ISK they might have realized from the sum of it's parts."
*shrug*
I imagine that a lot of people get the gist of what you're talking about - but your lesson would be better learned if it were better explained.
While I always understood what was meant by the phrase, rather than what was being said, my initial reaction to this derision was that the people doing it were simply trying to shame others into staying off the market so they'd have fewer competitors.
Now, just how correct am I in that assumption?
My purpose in posting was, in a probably futile attempt, to bring a greater degree of exactitude to the discussion.
I never said that the point being made was invalid - only the words being used. |
Candice Bormardin
Caldari Jouvulen Enterprises Inc.
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Posted - 2008.05.03 00:40:00 -
[36]
Originally by: Joe Starbreaker
Originally by: Candice Bormardin Ore is free. Salvage is free. Navy Ravens are free. Free Tibet. Economics is a lie.
You fail so hard, it's funny. I sentence you to give up one hour of EVE-playing time daily and go read the Wall Street Journal for that hour.
Joe - you have edited someone else's statements into something they did not say.
You didn't just truncate them to use them as a reference - you changed the meaning by adding in words they didn't say.
This - in case you didn't know - is lame. Only lame people do it.
Yes, I realize that there are a lot of lame people on posting boards.
Congratulations on becoming one of them.
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Gridwalker
Amarr
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Posted - 2008.05.03 00:47:00 -
[37]
Originally by: Candice Bormardin My understanding is that profit = (price sold for) - (price paid).
Your understanding is wrong. Profit, from a business sense is a lot more complicated than that, and there are different kinds of profit. But in a general sense, profit is making a gain.
Let's say you have no isk. Your friend gives you a battleship worth 100m isk. Your net worth is now 100m isk. You turn around and sell that battleship for 10m isk. Your net worth is now 10m isk. You made a profit when your friend gave you the battleship. You took a loss when you "converted" the ship into only 10m isk, because the ship was worth 100m isk.
Quote:
You are equating somethings value with the potential gain you might have made from selling it which would be
Profit = (price sold for) - (market value).
Thus, if you don't sell the item for greater than the market value of it - you claim that you have taken a loss.
No one is saying that at all. What we're saying is that when you sell something on the market, you are converting that item into isk. If your conversion is less than your initial gain, then you've failed to make a profit on that transaction. Sure, you have more isk in your wallet than you did just before the sale, but you've decreased your net worth.
Quote:
Since the market value of something fluctuates at any particular location as well as from one location to another, just which price are you staking your claim of a profit on? If you don't check the price in every single region of EVE before selling and miss a location that would have paid you a greater amount - are you claiming that you sold something at a loss?
Maybe. Are we talking about moving battleships to 0.0 space, where you can get a lot more for them but the cost in time and fuel cancels out that gain? Or are we talking about moving a batch of missiles one system over? Are we talking about spending six hours to find an extra 2m isk of gain, when that six hours could have been spent mining 40m isk worth of ore?
If we're talking about moving the item in question 2 jumps to be able to sell it for 100m isk instead of 50m isk, then you're darn straight there is a loss involved at selling at 50m isk.
For EVERY opportunity you take or pass, there is an associated cost and gain.
But you are right in one respect: there gets to be a point where the act of trying to squeeze out an extra couple of isk from a transaction turns into a overall loss.
Quote:
Suppose your kindly uncle gave you that Golem and you took it to one location and sold it for 180 million ISK - but - if you'd gone to a different region you could have sold it for 185 million. Are you saying that after gaining 180 million ISK for something you paid nothing for that you have in fact suffered a 5 million ISK loss?
Sorry but I don't really think that's how it works.
You're not talking about calculating build costs anymore. You're talking about trading. If someone gave you a Golem and you wanted to convert it to isk, you want to retain as much value as possible in the conversion. Market average is a good place to base your calculations, since that can be considered a reasonable indicator of value. If 185m isk is above market value and you sold for 180m is which is the market average, you haven't made a loss. You simply failed to maximize your profits. (Maybe, because it might not be worth that 5m isk to deliver the item to the other region.)
Quote:
That extra 5 million is a foregone gain - it isn't a loss.
If you were given a Golem for free - and you paid someone 10 ISK to take it off your hands - then - you might argue that you had suffered a loss.
So, what is your threshold? Up until this point, you've been arguing that the Golem has no value since it was given to you, and therefore even getting 10isk for it would be a profit. So which is it? At what point is it a loss in your mind?
-Grid
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2008.05.03 01:06:00 -
[38]
Originally by: Candice Bormardin Akita - ah ha, I now get the point of what you said. I probably should have asked what you meant by it since it is in fact obvious that you did make a profit of 50 million on the transaction you outlined. If I'd been more familiar with the market prices of Golems then I would have understood. That doesn't mean that you aren't wrong. It just means that I would have understood your point.
If you paid nothing for something and sold it for 50 million you HAVE made a profit of $50 million. I answered your point with my comment about selling it for 55 million. The fact that you could have sold it for much more doesn't change anything. Your profit is based on the difference between what you bought it for and what you sold it for.
My understanding is that profit = (price sold for) - (price paid).
You are equating somethings value with the potential gain you might have made from selling it which would be
Profit = (price sold for) - (market value).
Thus, if you don't sell the item for greater than the market value of it - you claim that you have taken a loss.
Since the market value of something fluctuates at any particular location as well as from one location to another, just which price are you staking your claim of a profit on? If you don't check the price in every single region of EVE before selling and miss a location that would have paid you a greater amount - are you claiming that you sold something at a loss?
The life of a trader revolves around buying something cheap and selling it for more cash, so obviously the perceived individual value for some item is not constant : not across regions, not across time, not across a sample of the population in the same time at the same place. As such, one can only assess a certain average of the value. Best case "fast sell" scenario, you could sell the item (or its recycled components) for ever so slightly below existing sell orders... worst case "fast sell" scenario, you do the same (item or components, whichever's better) but use the highest current buy order.
But in the end, YES, if you sell something below market value, you made a loss... if you sold it above market value, you made a profit. It's THAT simple.
By "profit" one understands the INCREASE in one's owned property, be it in form of ISK or in form of goods. If a person has 100 Ravens but only a measly 1 mil ISK, we can't possibly look at the guy and claim he's "poor"... but we can easily claim he's a multi-billionaire (in ISK). Now, even if he somehow got those Ravens "for free", if he sells them right now for 10 mil ISK a piece, he barely gets 1 bil ISK in his pocket... anybody with half a brain would call that "a loss of value"... but for some obscure reason you insist on discounting the opportunity cost (by not considering it a cost at all) and persisting on the idea that you made a profit since you didn't actually spend money for any of that before you bought them.
Now, imagine for a split second that you DID buy those Ravens for 80 mil ISK a piece instead of getting them for free. So you actually had 8 extra bil ISK that you used up buying them 100 Ravens. The situation is not at all different... you still have 100 Ravens, you still have a measly 1 mil liquid ISK. Everything is exactly the same except the fact you have, in the past, actually spent ISK to get your inventory, as opposed to having it dumped in your lap.
Now explain to me why in one scenario you claim a 1 bil profit, while in the other one you can easily claim 7 bil loss ? What's the difference ? If you simply don't know how that person got into the item's possesion (be it having bought them, or inheritance, or whatever), it doesn't change their value, and the expected price you can get for them.
So, again, yes, in the most simplist form : if you sell under market value you made a loss, if you sell over you have made a profit.
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2008.05.03 01:22:00 -
[39]
ISK is not an absolute measure of value, the same can be said about real-world money. The actual value of money is just as much in flux as the value of any particular good. For all intents and purposes, the only items in real-life that maintain an almost constant value are precious metals, and even their value shifts as new deposits of raw ore are being discovered and exploited. You only need to look at the "price of gold" alongside inflation tables to see what I mean... the price of gold almost identically follows inflation (with the usual and unavoidable short-term fluctuations).
You can take a loss or have a profit even by simply doing nothing : if the market value of your stockpiled goods decreases, you just had a loss... if it increases, you made a profit. The fact the goods are not liquid ISK is irrelevant... heck, ISK could be considered a good in itself, in case you have a period of inflation or deflation... if all prices rise and all your value is in ISK but none in goods, you just made a loss even if you still have the exact same amount of ISK... conversely, if all prices heavily deflate, and you have no goods but a load of ISK, you still made a profit.
Sadly, EVE lacks such an item we could use as a reference for value... there's no EVE equivalent of real-life gold in the game. The closest anything in EVE that even remotely resembles real-life gold is T2 BPOs They were created long ago, no new ones are being generated, the global stockpile is constant. Sadly, it's a flawed analogy, because you have no guarantee their value will remain the same in the future, as a simple whim of the developers could twist their value radically (invention tweaks, conversion to limited run BPC, or any other such things).
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Candice Bormardin
Caldari Jouvulen Enterprises Inc.
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Posted - 2008.05.03 01:36:00 -
[40]
Grid,
Yes - I can see your point about my little formula - as stated I did not include a statement that I was assuming the "profit" side of the equation to be a positive value.
As to the next little formula - I was trying to under stand what I thought Akita was saying not anyone else.
As to the discussion about ship prices in various regions the purpose of this section was to point out some of the variables in what she was saying and trying to clarify whether or not she really meant what it sounded to me like she was saying.
I don't have any problem with anything you said on that part.
Lastly I was in no way stating that the ship had no value - I was saying that it had no cost.
Cost and value are not the same thing.
If the ship was given to you - it had no cost.
What you MIGHT have sold it for is one way of valuing the object.
What you MIGHT have used it for is another way of valuing the object.
In each of these two cases there is a POTENTIAL sum you MIGHT have acquired through either selling the ship or using it but these are of course only POTENTIAL gains as if the thing got blown up along the way - then - you could also be said to have suffered a loss.
In this same way - the Asteroids in this game are there for the taking. Just like a ship left floating unmanned in space.
If you acquire the ore from the asteroids or the ship by getting in it - you have paid nothing for them so they have no direct cost.
As to the opportunity cost of what you might have done instead ... well that gets to be kind of hard to judge.
With the Asteroids you might have made a different object from the one you did make or sold it for more or you might have gone out missioning instead of mining.
For the most part you don't really know what all the opportunity costs are of your decision to make a particular item and sell if for a particular price. Though you do know the opportunity cost, to a degree, of not selling it for a higher price. Here though - what have you foregone? Did you forgo the opportunity to make any money at all off the thing you made? Suppose you bid a sale price that is above the mineral prices (etc.) of the item you made - but - all those people you're complaining about NEVER bid their items above that price. You will then NEVER sell it and by holding out for a price you are NEVER going to get - have forgone what you MIGHT have gotten for it had you bid lower. What is your opportunity cost for THAT decision?
It is all well and good to pick a spot in the process and ascribe a value to it at that point - but that doesn't change the fact that you are not charged anything for the basic raw materials.
What ever the other costs are that are associated with what you did do - or with what you might have done - none of that changes the fact that there was no charge for the basic materials themselves.
Stating that there are costs above and beyond the basic materials - is one thing. Implying that there is a charge for them when there is not - is something else.
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2008.05.03 01:42:00 -
[41]
Originally by: Candice Bormardin Cost and value are not the same thing.
That's just semantics, out of context sematics too. In this particular context, cost IS value and vice-versa.
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Bob Pipe
Minmatar Lyrix Industries
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Posted - 2008.05.03 01:52:00 -
[42]
But... what about this business of fitting rigs to frigs?
Also, if this problem of people selling modules/ships etc below the cost of the minerals used to build them is too great, just sell your minerals for more and quietly laugh at them. If they all wise up won't that make the market _more_ competitive? |
Akita T
Caldari Navy Volunteer Task Force
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Posted - 2008.05.03 02:01:00 -
[43]
Oh, I'm no longer in manufacture for this very same reason. My bussiness is trade and recycle I'm just kind of feeling sorry for taking advantage of them
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voetius
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Posted - 2008.05.03 04:39:00 -
[44]
Bob Pipe - I think you should get a medal for reading to the end of this thread
So if there are any more comments on rigging for frigates |
Pan Dora
Caldari Bears Inc Tenth Legion
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Posted - 2008.05.03 06:49:00 -
[45]
Originally by: voetius Bob Pipe - I think you should get a medal for reading to the end of this thread
So if there are any more comments on rigging for frigates
Agreed, anyone that read all this thread deserve a medal (I fail ) There is several intersting info, enough to make a nice 'basic market guide'. too bad the original subject get a bit lost in all that.
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Venkul Mul
Gallente
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Posted - 2008.05.03 09:28:00 -
[46]
Originally by: Candice Bormardin A
If you paid nothing for something and sold it for 50 million you HAVE made a profit of $50 million. I answered your point with my comment about selling it for 55 million. The fact that you could have sold it for much more doesn't change anything. Your profit is based on the difference between what you bought it for and what you sold it for.
My understanding is that profit = (price sold for) - (price paid).
You are bunching together 2 different operations to say that you profit for the second, while you profit for the first and the lose on the second.
Operation 1: You are given a Golem, your net worth in items go up 700 millions, you profit is 700 millions (Profit includes the gaining of assets, not only the money).
Operation 2: you sell the Golem for 50 millions. Your net wort decrease by 650 millions. You lose a 700 million item and gain 50 million in isk. You suffer a loss.
Your bunching together the 2 operations is a logic fallacy. A very bad one for someone tath claim to have a engineer background (or even for an historian).
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Candice Bormardin
Caldari Jouvulen Enterprises Inc.
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Posted - 2008.05.03 13:11:00 -
[47]
A lot of you people are hung up on the idea of theoretical profits being the same thing as real profits.
You're also hung up on the idea that if you don't sell something for the highest theoretical profit you MIGHT have made - then you've suffered a loss.
Both cases simply aren't true.
Others can't seem to understand the concept of net profits - where in things can be lumped together in more ways than one. If you started with $100 and after five years ended up with $1000 dollars then you made a $900 net profit over your initial investment regardless of what went on in between. None of which has anything to do with history or engineering.
Back in 1987 the stock market took a real dive. I knew a stock broker at the time who told me a lot of his clients had become disillusioned with the market and simply wanted out.
If these people sold their stock for LESS than the Original Price they paid for it - then they suffered a loss.
If, despite the fact that it's market value had gone down - they still managed to sell it for more than they'd originally paid for it - they made a net profit.
If, they held onto their stocks until they recovered and sold them later for more money than they'd paid for them - then they made a profit.
Theoretically they may have suffered constant gains and losses throughout each day as the market price of the stock they held went up and down. But those were just theoretical gains and losses. Only when they actually sold their stock could it be determined whether or not they have suffered an actual loss.
What you might have sold a ship for is a theoretical price. What you did sell a ship for is an actual price. If your ship gets blown up or someone you trust shoulder surfs your password and steals all your stuff - that theoretical price means nothing.
Potential gain is not the same thing as actual gain.
And no Akita - cost is NOT the same thing as value and while some of what we are discussing is merely semantics - this isn't.
As I said ... there is more than one way of judging value. If someone gives you a ship and you run missions with it until it is blown up, the value of that ship includes what you were able to do with it, not merely what the insurance pay out would be or what you could have sold the ship for. While it was still in one piece and under use, the ship had a utilitarian value.
As to rigging frigates - I think we said pretty much all we needed to say about that before the thread got derailed when someone began to rant about all the people who think that the rocks are free (which they are).
You can't really determine what all the potential opportunity costs of some action might be. You might be able to determine some of them - and then only in theory - but not all of them. So - it can be a useless exercise to try and figure out what your opportunity costs were. Real Cost - what you actually paid for something is fairly easy to figure out. It isn't dependent on various potentials - it is based on the recorded costs of what you paid for something and what you sold it for.
If you paid nothing for the rocks you mined - then they have no cost.
If you sold them directly you may have made a greater profit than if you manufactured something but as long as you made some money on the deal - you did make a profit.
The theoretical value you might ascribe to what you may have done with these rocks is only theory. If you tried to haul them all to a station to sell them directly - where if you had succeeded you would have made a larger profit - BUT - were blown up and robbed along the way - turns out to have been a loss instead.
Which is the problem with getting to caught up in economic theory - that may turn out to mean nothing.
Theories can be useful tools but they aren't a substitute for what really happened.
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2008.05.03 13:31:00 -
[48]
I've had more success trying to punch reason into Jehova's Witnesses. I give up. Keep doing whatever it is you're doing and keep believing you're right. I no longer care you don't believe it's wrong.
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Candice Bormardin
Caldari Jouvulen Enterprises Inc.
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Posted - 2008.05.03 13:38:00 -
[49]
And so we finally agree on something - as I feel exactly the same way.
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Venkul Mul
Gallente
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Posted - 2008.05.03 20:07:00 -
[50]
This thread has a great quality. When people say "It is not possible, no one think that what they mine is free" I can easily point them here. |
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Joe Starbreaker
Starbreaker Spaceways
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Posted - 2008.05.03 20:37:00 -
[51]
Originally by: Candice Bormardin
Originally by: Joe Starbreaker
Originally by: Candice Bormardin Ore is free. Salvage is free. Navy Ravens are free. Free Tibet. Economics is a lie.
You fail so hard, it's funny. I sentence you to give up one hour of EVE-playing time daily and go read the Wall Street Journal for that hour.
Joe - you have edited someone else's statements into something they did not say.
You didn't just truncate them to use them as a reference - you changed the meaning by adding in words they didn't say.
This - in case you didn't know - is lame. Only lame people do it.
Yes, I realize that there are a lot of lame people on posting boards.
Congratulations on becoming one of them.
It was a signal... please stop trying! You have failed! Read a book! |
Sakura Nihil
Stimulus
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Posted - 2008.05.03 21:06:00 -
[52]
Let's put it this way.
You mine some minerals, you can either sell them for 60m or build a ship and sell it for 55m. The former is the superior choice - while you make a profit via each method, one is the optimal way (ignoring other considerations) to liquidate your assets.
Oh, and rigging frigates = fail, unless they're faction or T2 frigs. Something that cost a 250k shouldn't have 30m worth of equipment on it, unless its for the lulz. |
Joe Starbreaker
Starbreaker Spaceways
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Posted - 2008.05.03 21:23:00 -
[53]
Originally by: Sakura Nihil Oh, and rigging frigates = fail, unless they're faction or T2 frigs. Something that cost a 250k shouldn't have 30m worth of equipment on it, unless its for the lulz.
Some rigs are cheap, though, and can be of real use. Salvaging rigs on your salvage frigate can be justified as long as you're experienced enough to know how to keep it safe. Probing rigs on an astrometrics frigate used only in highsec are a virtual necessity -- don't leave home without them. If you maybe have a dedicated highsec ratting frigate that you use to zip about in search of commander spawns, that might justify a rig or two. Or maybe cargo/agility rigs for some kind of dedicated courier-mission ship. I think there are a lot of types of rigs that people rarely use, which might be good candidates for frigate use. |
Grandial
Domus Meridian
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Posted - 2008.05.04 10:40:00 -
[54]
A: you have 0 isk B: you get 2500 units trit C you make 1 shuttle and sell for 5000 isk
A->B : profit of 7500 isk (trit valued at 3 isk) B->C : loss of 2500 isk
A->C : profit of 5000 isk
conclusion: Yes you made a total profit. But somewhere along the way you lost isk. you could aswell reprocess your own ship you made and make an extra profit from step C. |
Candice Bormardin
Caldari Jouvulen Enterprises Inc.
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Posted - 2008.05.04 12:21:00 -
[55]
You have no ISK until you actually make the sale. Somewhere along the way you might get blown up trying to make it - so the potential value of something in your hangar is only that - a potential value - not an actual value (at least in ISK).
Once you have made the sale - then you get one amount of ISK one way and another amount through doing something else.
One way may lead you to a larger profit but as long as you don't end up with less money than you started with - you have NOT suffered a loss.
A net loss is ending up with less than you started out with. A net gain is ending up with more than you started out with.
For those of you who want to go on blathering about something you may or may not really know something about - go ahead.
However don't think that others are fooled about the real purpose of the denigrating remarks concerning free rocks.
Again, the real purpose there is to make them feel foolish so they will leave the market and stop cutting into the profit margins of those trying to BS people into thinking they know what they are talking about.
Joe - you are not the judge of whether or not I've failed at anything - only someone with an opinion. In trying to be clever you are in fact only demonstrating a failure at intelligent discourse.
I can respect the opinions of those who disagree with me - but - trying to be a smart ass gets you nothing but indifference. Why pay any attention to someone who's more concerned with being clever than they are with making a point?
*shrug*
If someone doesn't charge you for something - you get it for free.
Why is that such a hard concept to grasp?
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2008.05.04 13:26:00 -
[56]
Edited by: Akita T on 04/05/2008 13:30:23 Yes, you got them for free.
BUT
That doesn't mean they don't have a value. They DO have a certain value, and that value is given by whatever people are willing to pay for it. If you sell them below value, you incurr a net value loss of your property.
If you don't mind doing that, YOUR problem. If you define profit as "getting more cash as you had before", again, YOUR problem. When everybody is calling you crazy... you have two choices... either believe you are crazy... or believe everybody else is. Same with your definition of "profit"... either believe your definition is correct... or ponder on the fact you might be wrong. _______
Let's bring this "reduction to the absurd" one step closer.
You are in an Amarr battleship with T1 lasers, cruising the belts in some Blood-Raider infested 0.0 region. You don't ever loot, salvage or do anything other than shoot and kill the NPCs.
You got all your ISK for free !
Now, would you kindly sell me your 100 mil ISK for 1 mil ISK ? Please ? Pretty please ? No ? Aww... come on... you make a 1 mil ISK profit from that ! Why don't you want to ?
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Candice Bormardin
Caldari Jouvulen Enterprises Inc.
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Posted - 2008.05.04 13:51:00 -
[57]
Originally by: Akita T Yes, you got them for free.
BUT
That doesn't mean they don't have a value. They DO have a certain value, and that value is given by whatever people are willing to pay for it. If you sell them below value, you incurr a net value loss of your property.
If you don't mind doing that, YOUR problem. If you define profit as "getting more cash as you had before", again, YOUR problem. When everybody is calling you crazy... you have two choices... either believe you are crazy... or believe everybody else is. Same with your definition of "profit"... either believe your definition is correct... or ponder on the fact you might be wrong.
I never said they didn't have value. I said they had potential value and real value.
Which had nothing to do with the fact that the rocks were free.
I don't agree with your definition of profit and loss -
But that has nothing to do with the fact that the rocks are free.
As to the definitions of words - such as profit
I'll go with my interpretation of what I've read there.
Which again has nothing to do with whether or not the rocks are free.
In a way - this long argument is really my fault. It is my fault because I allowed people such as yourself to divert the discussion away from the main point - that the rocks were free - into an argument about the meanings of various terms.
This is the statement that started it all:
Originally by: Ghicolas Naspard
Originally by: malcotch ... I find it best to manufacture the rig and you can effectively do it for free! ...
Just because you didn't pay for it doesn't make it free.
It is this kind of attitude which has caused the current situation in manufacturing where, even someone with good production skills, cannot build and produce anything at a profit, as the people who mine their own minerals to build modules to sell seem to think that the materials were 'free' because they didnt have to pay for them, so they vastly undercut prices so that in the end they are actually selling the items for less than they would get simply selling the minerals!
Sorry for the rant, I just hate seeing people saying this.
It was the underlined statement I was responding to, trying to point out that the basic materials - the Asteroids everything else was attained from - were free.
That was my point.
The problem I had - was that people such as yourself are so caught up in economic and business theory - that you couldn't see the fact that at some point your materials could be had for free.
I tried time and again to point out the simple point I was trying to make - but I also argued with you about some of the things you were saying - which were peripheral to my point. That was probably a mistake. Whether I am right or wrong about the definitions I use - I should have kept the focus of this discussion on my point and not let people like you and the others side track it.
As to being crazy ... well ... I may well be crazy ... but that has nothing to do with whether or not the rocks are free.
What about YOU and the others who were arguing with me - trying to read what a person is saying instead of ascribing your own assumptions to what they are saying.
Opportunity cost is about a decision. Asteroids are not a decision - they are rocks floating in space FREE for the taking. They may well be an Opportunity Cost to the decision to mine - but that does NOT effect the fact that there is no charge to do so and hence - the rocks are free.
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2008.05.04 13:59:00 -
[58]
Edited by: Akita T on 04/05/2008 14:04:49
I guess it's "our fault" too. We don't take (that much) offense to the concept that "rocks are free". We do take offense however at the people that say "rocks are free, therefore no matter how low I sell the stuff I make from those minerals, I still make a profit".
Yes, overall you make a "profit". Or rather said, you get an income. But taken separately, you make a huge income ("profit") from getting those "free rocks", then you willingly discard a part of it by processing it into something you sell cheaper than you could have sold the initial product for.
So, we're not so much against "rocks are free", we're against "stuff I have has no value until I actually sell it". But because a vast majority of people that say "rocks are free" and "time is not money" go ahead and commit the mistake of saying "nothing I have has value, therefore no matter how low I sell it for, I still make a profit", we're proactively hunting down everybody who even start with the "rocks are free" thought.
Besides, if you look at it, no, they're still not completely free... they just didn't cost you ISK. There's a big difference. "Free" is something you got for abolutely nothing. _____
EDIT : there I go again trying to argue with somebody who doesn't even want to listen. My mistake, again.
Bottom line is... you do not put value on time. You do not put value on the things you own. You do not consider effort expended as cost.
Since we're operating on different premises (you, completely idealistic, me completely pragmatic), there's no chance to reach a consensus.
___
EDIT 2 :
I'd still like you to answer the "reduction to the absolute absurd" part of one of my previous posts that you conveniently ignored from your quote... if you don't mind.
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Candice Bormardin
Caldari Jouvulen Enterprises Inc.
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Posted - 2008.05.04 15:06:00 -
[59]
OK. Now that we agree that the rocks are free. Which was all I was ever trying to say ...
It seems we can agree on what an OVERALL profit is, though I wouldn't equate income with profit. Income is just money coming in. You could still have money coming in and be operating at a loss. Say your Office costs you a million ISK but you are only bringing in a few hundred thousand. You still have a few hundred thousand as income but it isn't an OVERALL profit.
Whereas - if you are bringing in an income that exceeds all your various expenses and the amount of money in your wallet and the value of the goods you hold (by whatever means you decide that value) continues to increase - then you are operating at an overall profit.
I've no problem with your frustration at being underbid by people who are selling things for less than the value of their materials. However - I did point out that instead of being frustrated by the situation - if you have the money to do it - you could always just buy those people out and reprocess the stuff. Instead of being underbid by them - you would be taking advantage of them to increase your wealth - which I'm sure a lot of people do.
Now - again - the rocks themselves - are completely free.
You may invest time in something - but you can invest time in something where you ALSO have to pay for it. If you manufacture something you not only have to spend a few moments fooling with the blue print - but you ALSO have to pay for the manufacturing run.
So - the rocks being free is one thing.
Doing something with them is another.
I said all this before but I'll say it again.
Rookie ships are free. So you don't have to pay anything to mine.
Now - you can pay something to mine FASTER - you can get bigger ships, better modules, all kinds of things but what you are paying for there - is the ability to IMPROVE your production, not for the basic ability to mine.
You time is free (for the most part).
Yes there is an Opportunity Cost to various DECISIONS you might make about what to do with your time - but the time itself is free. You don't pay someone in ISK or Dollars or Euro's or whatever per hour for the time you spend here.
You do pay about $15 a month to log on. But that is the price you pay to log on. After you have logged in - you can play as much or as little as you want. So - you are not paying for the time you spend playing the game - you are paying to be allowed to log in.
Now that doesn't mean that your time has no value - it just means you are not paying or being paid for your time (unless you are an ISK farmer).
You are not being charged to sit in your hangar and spin your ship, or go exploring, or mining or PVPing. You time is free - but - if you find exploring or mining or PVPing or spinning your ship entertaining - then it has value.
I do put value on my time. I do put value on the things I own. I do place a value on the effort I put into something - but I do not equate that effort to being a cost in a game I'm having fun at.
None of which - again - has anything to do with the fact that the rocks are free (unless you did in fact pay someone for them).
Free Asteroids: Asteroids you find floating in space.
Not so Free Asteroids: Asteroids you find floating in space with a player pirate there telling you that they are HIS asteroids and if you don't pay him to mine them - he will blow you up. (Here again - the rocks ARE still free - but you are NOW being charged to mine them).
Not Free Asteroids: Asteroids you buy on the market, or acquire from another player in return for ISK or in trade for some item(s).
*shrug*
I seem to have missed your Edit ... in any case whether I got my ISK for free or not - no I'm not going to give you part of it whether I was still making a profit or not.
But - if I have ALREADY MADE AN ITEM - and I WANT TO SELL IT - when I go to the trade hub - I WILL UNDERBID EVERYONE ELSE - or I will NOT be ALLOWED to sell it. I have no other choice.
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Dreadchain
Gallente PROGENITOR CORPORATION Intrepid Crossing
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Posted - 2008.05.04 15:39:00 -
[60]
Wow....this thread is cool in so many ways. Candice, can I hire you? Ill pay a thousand isk a hour for you time mine veldspar for me, that equals a thousand isk per hour profit for you. Don't want to do it? How about you make modules with that veldspar and sell them to me for a thousand isk? I don't care, I earn millions either way, you earn pocket change. |
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