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Vilgan Mazran
Aperture Harmonics
K162
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Posted - 2011.04.29 16:43:00 -
[1]
Edited by: Vilgan Mazran on 29/04/2011 16:50:36
So, I'm thinking about getting into a few things that would finally leverage my existing cash, and use up to about 130B more. My issue: I've got 130-145B (depends how you valuate it) in guidance systems left that I can't cash out without crashing the market. Even if I could, it'd be a bit silly given their likely value 12 months from now.
Also, I really don't want to collateralize those to just anyone as the value of the collateral will likely be significantly over the value of the loan in 6-12 months time.
My thought:
Borrow 130B from 1-3 well trustworthy(ish) types who have more cash laying around than they are able or willing to put into use. They get a guaranteed rate on their cash with zero risk (my risk here is much higher imo, heh). I make additional money and then get to sell the guidance systems 12 months later when they are likely 50-80% higher than current market prices.
I'd say something like 2.5% would be appropriate. I'm only looking at 7.5% profit a month with some labor involved, so going much higher makes it not really worth my time.
Btw, the # of guidance systems is 8.1M and valuation was at 16k/unit. 130B collateral value out of them seemed appropriate, but I'm open to arguments about tweaking it. I -might- also be open to selling the whole bundle for a slightly higher value/unit if someone is looking for a long term investment (taking a break?), but would need to think about it for a bit.
Anyway... any interest? I know I'd probably have been willing to make the same loan in the past 6 months as I'd previously been very lazy with cash, but no clue about how this would appeal to others. Probably another month till I'm really ready to rock with this anyway so not in a rush to make a deal.
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Roguehalo
Caldari
Roguehalo Ship Brokers
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Posted - 2011.04.29 17:02:00 -
[2]
I would have thought that the knowledge that 145b of UNSOLD guidance systems exist would crash the market per se. It certainly isn't going to boost it.
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RAW23
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Posted - 2011.04.29 17:33:00 -
[3]
I think you're going to need to offer a higher collateral percentage (and/or a higher interest rate) because this will be an enormous pain in the arse to liquidate in the event of default (it would take many months, possibly 6 or more, to realise market value for that kind of quantity and unless all the collateral is being held by one person the liquidators will be competing with one another to sell). In addition, whilst I agree with you that they are very likely to increase in value over the next year, nothing in eve is guaranteed and with the collateral holders holding them through possibly as many as three patches there is quite a lot of room for nerfbat swinging. Basically, anyone who is comfortable taking on that risk over that timeframe should probably just buy a load for themselves off the market now.
There are also questions of trust involved, due to the workload involved in selling them and the lost opportunity costs implied in this. The fact that you state you would also consider selling them for a slight mark-up does make it look a little like you might be looking for an easy cash-out option on these.
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2011.04.29 17:33:00 -
[4]
Edited by: Akita T on 29/04/2011 17:34:27
Well, let's see...
Using a very eyeballed guesstimate, Guidance Systems trade volume is probably under 100k per day. Even attempting to sell 40k per day will likely crash the market. Anybody holding so many of them (8+ mil) will likely need at least half a year to get rid of them at anywhere near the current price, assuming nobody else wants to get in on the fun and do the same.
Guidance Systems are made from Water-Cooled CPU (price slowly but surely trending downwards) and Transmitter (price fluctuating wildly, but likely to also go down).
Guidance Systems sell for about half of the current manufacture price, so there is some resistance against a price drop even if stockpiles are huge. However, current stockpiles are likely to last for years to come, so price could end up extremely volatile when one of the holders tries to unload them.
All in all, I would consider that particular asset to be too high risk and too difficult to liquidate to justify offering a loan at anywhere near the current collateral's market value.
I WOULD be willing to offer at most a 20 bil ISK loan for the full 8+ mil units as collateral at around 3% per month interest.
Having a trusted 3rd party hold the assets would be acceptable in case you distrust me to hand them back when the loan is repaid, but YOU arrange it and pay the 3rd party, after I approve of the choice of 3rd party.
_
Make ISK||Build||React||1k papercuts
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RAW23
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Posted - 2011.04.29 17:37:00 -
[5]
Edited by: RAW23 on 29/04/2011 17:44:40
Heh - beat you to it Akita  (by seconds, it looks like).
I'd offer 40bil @ 3% against the whole lot. Let the bidding commence!
Edit - Damn your edited undercutting [shakes fist]
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Grendell
Technologies Unlimited
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Posted - 2011.04.29 17:42:00 -
[6]
Let me know if you guys need a 3rd party, once and if you figure out and agree to some solid terms.
Grendell ♥
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2011.04.29 17:44:00 -
[7]
 Originally by: RAW23
I'd offer 40bil @ 3% against the whole lot. Let the bidding commence!
Oh, you can have'em then. I was thinking initially 30 bil, then I went, "naah, too much trouble, 20 max". If you went 25, I might have countered with 30, but no way in hell am I shelling out 40 for _that_ lot.
_
Make ISK||Build||React||1k papercuts
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TornSoul
BIG
Gentlemen's Agreement
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Posted - 2011.04.29 18:21:00 -
[8]
Originally by: Akita T
Using a very eyeballed guesstimate, Guidance Systems trade volume is probably under 100k per day. Even attempting to sell 40k per day will likely crash the market. Anybody holding so many of them (8+ mil) will likely need at least half a year to get rid of them at anywhere near the current price, assuming nobody else wants to get in on the fun and do the same.
I'd say even trying to sell 10% (~10K) of daily volume traded (on top of what is already traded) would be dangerous.
8M units / (10K/day) = 800 days.
No thanks 
Your best bet if you "want cash now" - Is to outright sell your stock at vastly under market value, to someone with the patience to slowly offload it without crashing the market.
Turning that particular stock around is going to take a very very long time.
And if you don't have the stomach for it yourself, you'll have to pay for that lack of patience.
My guess is you'll still come out with a solid profit though (guesstimating when you bought it) - Just not as much at you thought/had hoped for.
BIG Lottery |
Vilgan Mazran
Aperture Harmonics
K162
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Posted - 2011.04.29 18:27:00 -
[9]
Edited by: Vilgan Mazran on 29/04/2011 18:33:04
Cheap sellout is a point. Dropping the amount slightly to reduce that likelihood would be reasonable. I think a cashout would be more appealing if I was broke and needed cash omgnow, so could do an API link with 150-200B isk already in my wallet maybe (in trader corp/short term investments atm).
Interesting conundrum, in that the people most likely to find this appealing are also less likely to be checking the forums (aka somewhat bored atm, just training skills).
As for market dropping due to someone saying they have 8.1M guidance systems: a) People would have to be morons to find that surprising (at least 50M units left out there total I think), and b) that doesn't bother me too much as the consumption will remain similar and might even go up if the price drops, balancing out in the long term.
How would the 3rd party holding the collateral work? I'm already very bleh at the thought of 3%, and if an additional .5% went to them or whatever that'd be very meh. Holding it "for free" doesn't make a lot of sense tho as it'll get calc'd against them as isk already leveraged.
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Vilgan Mazran
Aperture Harmonics
K162
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Posted - 2011.04.29 18:47:00 -
[10]
Originally by: TornSoul
I'd say even trying to sell 10% (~10K) of daily volume traded (on top of what is already traded) would be dangerous.
8M units / (10K/day) = 800 days.
No thanks
Your best bet if you "want cash now" - Is to outright sell your stock at vastly under market value, to someone with the patience to slowly offload it without crashing the market.
Turning that particular stock around is going to take a very very long time.
And if you don't have the stomach for it yourself, you'll have to pay for that lack of patience.
My guess is you'll still come out with a solid profit though (guesstimating when you bought it) - Just not as much at you thought/had hoped for.
?
I think you are making a lot of weird assumptions. I bought them at NPC price, and have already sold 4M at various price points to hedge bets. If I wanted to "cash out now" I'd just do it, not do some elaborate fake loan thing that would tarnish the name of the person I consider my main.
Also, over 9M have been purchased in jita alone in the past 30 days. About 3M look like someone getting impatient and dropping a bunch to buy orders but the rest look fairly legit. Last I calc'd out drone use and such it was between 175-250k per day, so that jives as well (probably some more selling to buy orders in jita, balanced out by those consumed and not sold + other region sell orders).
Not sure there was much point to this post, but the whole "you have no patience and are trying to cash" implication seemed a bit absurd.
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Akita T
Caldari Navy Volunteer Task Force
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Posted - 2011.04.29 19:29:00 -
[11]
Originally by: Vilgan Mazran
How would the 3rd party holding the collateral work?
You get somebody trusted (like, say, Chribba), you contract the stuff to him (preferably in a can labeled "collateral for loan from <name_of_loaner>"), the ISK lending party sends the ISK to him (plus a note mentioning the agreed upon collateral contents, expected payback value and payback time), the 3rd party sends the ISK further as soon as he verifies the goods are what was agreed upon.
If the initial party sends enough ISK before time is up, they get back the collateral and the other guy gets the returned ISK.
Usually, a fixed fee is paid to the 3rd party (either at the start or at the end), a fee with a value which is negotiable.
Considering this type of transaction involves minimum effort and practically zero risk (a couple of mails, a note, and a couple of minutes actual work), the fee should be relatively small. We're really talking a few minutes of work here at two distant times, not a dangerous and lengthy "go to lowsec/0.0 and act as Titan transfer pilot" job.
As for amount, I guess it would depend on the 3rd person. Me, I would say even 100 mil is quite a lot, even 50 mil or less might be appropriate even for a very trustworthy party.
_
Make ISK||Build||React||1k papercuts
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RAW23
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Posted - 2011.04.29 20:13:00 -
[12]
Originally by: Akita T
Originally by: Vilgan Mazran
How would the 3rd party holding the collateral work?
You get somebody trusted (like, say, Chribba), you contract the stuff to him (preferably in a can labeled "collateral for loan from <name_of_loaner>"), the ISK lending party sends the ISK to him (plus a note mentioning the agreed upon collateral contents, expected payback value and payback time), the 3rd party sends the ISK further as soon as he verifies the goods are what was agreed upon.
If the initial party sends enough ISK before time is up, they get back the collateral and the other guy gets the returned ISK.
Usually, a fixed fee is paid to the 3rd party (either at the start or at the end), a fee with a value which is negotiable.
Considering this type of transaction involves minimum effort and practically zero risk (a couple of mails, a note, and a couple of minutes actual work), the fee should be relatively small. We're really talking a few minutes of work here at two distant times, not a dangerous and lengthy "go to lowsec/0.0 and act as Titan transfer pilot" job.
As for amount, I guess it would depend on the 3rd person. Me, I would say even 100 mil is quite a lot, even 50 mil or less might be appropriate even for a very trustworthy party.
It will be low effort so long as the third party does not guarantee the loan amount. I would imagine that any third party in this case would either only agree to hand the collateral over in the event of default or would charge a much higher than normal fee or much lower valuation of the collateral if he is asked to guarantee the loan itself as he will be lumbered with the disposal of the goods.
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Vaerah Vahrokha
Minmatar
Vahrokh Consulting
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Posted - 2011.04.29 21:05:00 -
[13]
I gave a quick glance to GS. Their fair value is below 15k, 12.5k-ish to be precise.
Current price has peaked and went lateral with increasing sell outs starting in March.
If I had to pick up this job (unlikely, I max held about 100B in 3rd party value) I would not commit into eventually liquidating it.
Auditing | Research | 3rd Party | Collateral Holding | EvE RL Charity |
Akita T
Caldari Navy Volunteer Task Force
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Posted - 2011.04.29 23:08:00 -
[14]
Edited by: Akita T on 29/04/2011 23:15:08
Originally by: RAW23
It will be low effort so long as the third party does not guarantee the loan amount. I would imagine that any third party in this case would either only agree to hand the collateral over in the event of default or would charge a much higher than normal fee or much lower valuation of the collateral if he is asked to guarantee the loan itself as he will be lumbered with the disposal of the goods.
Why would the 3rd party ever guarantee the loan amount in ISK ? I never heard of such a thing. A 3rd party is not a liquidator, it's just an intermediary.
The 3rd party's only role here is to ensure the person putting up the collateral doesn't get scammed by the person loaning out the ISK (you know, in case the goods become too valuable and he would rather keep it instead of turning it over when it's time for the loan payback).
In case of a default, the 3rd party simply gives the collateral to the guy who loaned out the ISK, nothing more, nothing less.
P.S. If you want the 3rd party to also become a liquidator, that would indeed cost extra, it would have to be negotiated separately, and it would most likely be a percentage fee now on top of the previous fixed amount.
_
Make ISK||Build||React||1k papercuts
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Vaerah Vahrokha
Minmatar
Vahrokh Consulting
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Posted - 2011.04.29 23:29:00 -
[15]
Edited by: Vaerah Vahrokha on 29/04/2011 23:32:51
Originally by: Akita T
Edited by: Akita T on 29/04/2011 23:15:08
Originally by: RAW23
It will be low effort so long as the third party does not guarantee the loan amount. I would imagine that any third party in this case would either only agree to hand the collateral over in the event of default or would charge a much higher than normal fee or much lower valuation of the collateral if he is asked to guarantee the loan itself as he will be lumbered with the disposal of the goods.
Why would the 3rd party ever guarantee the loan amount in ISK ? I never heard of such a thing. A 3rd party is not a liquidator, it's just an intermediary.
The 3rd party's only role here is to ensure the person putting up the collateral doesn't get scammed by the person loaning out the ISK (you know, in case the goods become too valuable and he would rather keep it instead of turning it over when it's time for the loan payback).
In case of a default, the 3rd party simply gives the collateral to the guy who loaned out the ISK, nothing more, nothing less.
P.S. If you want the 3rd party to also become a liquidator, that would indeed cost extra, it would have to be negotiated separately, and it would most likely be a percentage fee now on top of the previous fixed amount.
I think he wanted something like Collateral Holding and Insurance MRVAHCOIN012 but then he'd have to accept the consequent collateral evaluation, whose determined value is far from what he believes it should be.
Edit:
another two grievous details:
- market prices discount news. Revealing such an huge pending stash WILL have effect on the affected item.
- traders win because of information disparity. He just gave away his insider information.
Auditing | Research | 3rd Party | Collateral Holding | EvE RL Charity |
Sea Sharp
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Posted - 2011.04.29 23:46:00 -
[16]
It's my view this is an attempt to cash out the collateral, so I won't be investing.
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Vilgan Mazran
Aperture Harmonics
K162
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Posted - 2011.04.30 01:08:00 -
[17]
Originally by: Vaerah Vahrokha
I gave a quick glance to GS. Their fair value is below 15k, 12.5k-ish to be precise.
Current price has peaked and went lateral with increasing sell outs starting in March.
If I had to pick up this job (unlikely, I max held about 100B in 3rd party value) I would not commit into eventually liquidating it.
Are you defining the value of GS at 12.5k ea or the value used as collateral as 12.5k ea? I could see the latter, the former would be a bit nonsensical ;p
Shrug, more curious than anything about possibilities. I'd disagree about this being any sort of revelation, as it should surprise no one who is into GS in a big way. Why else would it be trading around half the manufacture cost still?
Anyway, going to assume this is a bit of a dead idea unless I hear from someone who is interested for something like 100B at 2.5%.
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Ambo
I've Got Nothing
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Posted - 2011.04.30 06:27:00 -
[18]
As others have said, the collateral would be too much of a pita. Also, the return is a little low, even for a loan in the 100 bil range.
That said, I might be willing to offer a loan for a smaller chunk if you're interested. Say 1 mil GS's for 10 bil isk at 4% per month.
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Vaerah Vahrokha
Minmatar
Vahrokh Consulting
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Posted - 2011.04.30 07:08:00 -
[19]
Originally by: Vilgan Mazran
Originally by: Vaerah Vahrokha
I gave a quick glance to GS. Their fair value is below 15k, 12.5k-ish to be precise.
Current price has peaked and went lateral with increasing sell outs starting in March.
If I had to pick up this job (unlikely, I max held about 100B in 3rd party value) I would not commit into eventually liquidating it.
Are you defining the value of GS at 12.5k ea or the value used as collateral as 12.5k ea? I could see the latter, the former would be a bit nonsensical ;p
Shrug, more curious than anything about possibilities. I'd disagree about this being any sort of revelation, as it should surprise no one who is into GS in a big way. Why else would it be trading around half the manufacture cost still?
Anyway, going to assume this is a bit of a dead idea unless I hear from someone who is interested for something like 100B at 2.5%.
How I establish value thru my actuarian formulas is not open to the public.
I don't even vaguely look at the manufacturing cost or the presumed excellent returns and promises but at market price. Because at the end of the day, you may pray all day long, find all the obvious, logic excuses (i.e. manufacturing cost HAS to weigh in the future) but price is price, beliefs don't pay.
Removing the plusvalence brought by the speculative bubble is the first operation to perform because collateral has to be calculated at efficient market value.
Then, the hulking illiquidity has to be factored in. A guy once gave me a bunch of Robotics to keep. They were liquidable in few days though. In your case you traded huge liquidity for value and got your pay. Expect the reverse to also be true: in order to have liquidity back, you'll have to give, expecially if someone else has to do it.
Finally, MD rarely got the liquidity to grant a 100B transaction, expecially since every Investor knows to diversify his investments or part with his money sooner than later.
Therefore you'd better to start a sort of auction splitting collateral in lots like the real traders do and see if someone accepts.
Auditing | Research | 3rd Party | Collateral Holding | EvE RL Charity |
RAW23
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Posted - 2011.04.30 07:32:00 -
[20]
Originally by: Akita T
Why would the 3rd party ever guarantee the loan amount in ISK ? I never heard of such a thing. A 3rd party is not a liquidator, it's just an intermediary.
Read more threads  . Third parties act as liquidators and as cash guarantors quite frequently. Reasons for acting as a liquidator, if necessary, include the difficulty of dividing assets between large numbers of investors (see, for instance, Grendell's role in the One Stop offering). As to cash value guarantees, a third party may be willing to offer such if they are happy with the collateral value and would prefer to profit from the sale of the collateral in the event of a default. |
Akita T
Caldari Navy Volunteer Task Force
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Posted - 2011.04.30 07:58:00 -
[21]
So, not really just a 3rd party, but a half-interested investor in which the other investors have sufficient trust ?
_
Make ISK||Build||React||1k papercuts
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Vaerah Vahrokha
Minmatar
Vahrokh Consulting
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Posted - 2011.04.30 08:18:00 -
[22]
Originally by: Akita T
So, not really just a 3rd party, but a half-interested investor in which the other investors have sufficient trust ?
3rd party is limited to items swap, this is an "collateral holding for months" operation, this introduces appreciable risk of one party defaulting and leaving the collateral holder with an huge mountain of junk.
Imagine what happens in July - August, when prices across the board tank, the collateral holding operation has still to be profitable or on par even in this case.
Auditing | Research | 3rd Party | Collateral Holding | EvE RL Charity |
TornSoul
BIG
Gentlemen's Agreement
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Posted - 2011.04.30 08:30:00 -
[23]
Originally by: Vilgan Mazran
Originally by: TornSoul
<snip>
?
I think you are making a lot of weird assumptions. I bought them at NPC price, and have already sold 4M at various price points to hedge bets. If I wanted to "cash out now" I'd just do it, not do some elaborate fake loan thing that would tarnish the name of the person I consider my main.
<snip>
Not sure there was much point to this post, but the whole "you have no patience and are trying to cash" implication seemed a bit absurd.
"I bought them at NPC price" : Which is what I guesstimated (to have a reference point for your profit)
"you have no patience and are trying to cash" implication seemed a bit absurd.
Not sure why you get so defensive... I don't care what you do/want to do. Thus not pointing any accusing finger either way.
You want ISK to play with _now_ (thus taking out a loan), as opposed to selling of the stock (slowly) yourself.
So I don't see how my patience point is so absurd...
As the discussion here shows, you are unlikely to get a loan for the full (current) market value of the stock.
As this is the case (and you want ISK now) you might as well sell the whole stock (at below value) and
1) Be done with it
2) save the interest (which will eat into your profit)
3) You negate the opportunity cost (you can start making the ISK on the business you wan't to get in to - Thus not losing out on this opportunity).
If the value of 2) and 3) off-sets the loss of selling your stock below market value, then it's a no-brainer imo.
I don't find that sort of reasoning weird or absurd in the least.
Each to his I guess.
BIG Lottery |
Vilgan Mazran
Aperture Harmonics
K162
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Posted - 2011.04.30 14:14:00 -
[24]
Originally by: TornSoul
You want ISK to play with _now_ (thus taking out a loan), as opposed to selling of the stock (slowly) yourself.
No, I don't. The goal was to find a way to double dip of sorts on the value (or a reasonable %) of the stockpile via a loan while still getting to enjoy the appreciation value of the GS after the loan is complete.
I think the 40B RAW mentioned earlier is a reasonable offer. It isn't one that interests me, but that's because I have plenty of cash and the hassle/cost isn't worth it. I could see that being appealing if a large % of my assets were stuck in the GS or if I had some omg awesome opportunity to earn effort free 10-15% on my money, but sadly I don't :P
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Ray McCormack
Nordar Innovations.
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Posted - 2011.04.30 14:54:00 -
[25]
By your own logic, any amount of ISK would be worth it; so I'm not sure what the argument of 40b not being of interest to you is doing here.
I agree that shooting people with a headache in the head is a good idea, because it will stop their headaches. |
TornSoul
BIG
Gentlemen's Agreement
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Posted - 2011.04.30 18:00:00 -
[26]
Originally by: Vilgan Mazran
The goal was to find a way to double dip of sorts on the value (or a reasonable %) of the stockpile via a loan while still getting to enjoy the appreciation value of the GS after the loan is complete.
Double dipping I understand well, as thats usually how I promote BMBE
Fair enough.
Perhaps I wrongly put too much emphasis on this bit in your original post
Originally by: Vilgan Mazran
I could see that being appealing if a large % of my assets were stuck in the GS or if I had some omg awesome opportunity to earn effort free 10-15% on my money, but sadly I don't :(
(Yes you stated 7.5% - But that could be a "ploy" to keep the interest rate down after all )
----
But then you go and say this:
"I have plenty of cash"
If you have "plenty of cash"... Why go through the hassle of a loan for more ISK... I mean... You already have plenty?
That's the kind of thing that makes it sound as if you're trying to offload your stock through a "bad loan".
*Not* saying that's what your trying, just pointing out that your choice of words gives that perception.
BIG Lottery |
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