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MIZAM
Abrahams Guide
0
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Posted - 2013.06.18 04:48:00 -
[1] - Quote
If I am stepping away from Eve for a break , say up to a year , where is the best place to 'park' the Isk ?
Ships ? Minerals ? Plex ? anything else ?
many thanks |
mechtech
Ice Liberation Army
441
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Posted - 2013.06.18 06:42:00 -
[2] - Quote
PLEX and unique ships if you have the isk.
Minerals are an investment, not an inflation hedge. |
SJ Astralana
Syncore
0
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Posted - 2013.06.18 08:33:00 -
[3] - Quote
Hedging by definition is counterbalancing gains with losses and is successful when your value is maintained through fluctuations. Thus, you want to spread your wealth into 4 or more classes of commodities, for instance 25% isk, 25% plex, 25% materials, and 25% T1 and 25% rigs. Materials and produced goods are essentially the same thing, and buying produced goods diversifies you better than trying to balance out the raw materials. I'd bet anything after a year your purchasing power will be within 5% of where it is currently. |
Tinu Moorhsum
Random Events
223
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Posted - 2013.06.18 09:32:00 -
[4] - Quote
MIZAM wrote:If I am stepping away from Eve for a break , say up to a year , where is the best place to 'park' the Isk ?
Ships ? Minerals ? Plex ? anything else ?
many thanks
I'm thinking ice products and pos fuels will equalize at higher prices than they have right now.
Certain ships like the procurer and the armageddon are currently selling well under their build price and will definitely edge up over time.
Intuitively I would think that some of the moon materials should go up in price as well over time, especially the lower end ones. The reason being that rigth now supply is over-saturated as compared to the costs of POS fuels and this is going to get worse before it gets better. At some point I suspect people will take down some of their towers and opt for buying materials from the market which will impact the supply side of some materials and cause prices to go up.
It's unclear to me how this will work out as people re-organize their reaction chains so it's a bit of a shot in the dark but it wouldn't surprise me at all to see higher prices for R4 and R8 materials in a year's time. Similarly I would predict lower prices for some of the R64's. Supply increased with the last patch and CCP nerfed Goons' technitium monopoly, which will mean a lot of large scale reorganising on that side with unpredictable results. My market sense is telling me that low-ends will be more stable and more like to go up on the 1 year time frame than the higher end ones.
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SJ Astralana
Syncore
0
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Posted - 2013.06.18 09:50:00 -
[5] - Quote
Are we unclear on the concept? Hedging is the diametric opposite of speculating. |
The Chronophage
Garoun Investment Bank Gallente Federation
34
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Posted - 2013.06.18 12:07:00 -
[6] - Quote
the only items of constant value in eve are PLEXes. All other items are either infinitely available (minerals, ice) or subject to CCP modifications (ship stats, drop rate on expensive modules) so price fluctuates.
Think of PLEX as eve gold. The price of gold keeps changing, but at least it can never ever be worthless. Apple shares on the other hand........ |
Kara Books
Deal with IT.
654
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Posted - 2013.06.18 12:12:00 -
[7] - Quote
If we look at world currency history, not a single currency that was not backed by cold hard Gemstones/precious metals accomplished any long term stability.
If we where to look at ISK, Interstellar Kredits, we could in a way say that its value is backed up by PLEX, hence PLEX is the only real hedge we have, AKA if value of ISK goes up, value of PLEX comes down and vice versa.
If you where to diversify, you could perhaps diversify into unresearched T1 BPO's Trade goods like Tobacco, Dairy ETC, Loyalty points (I don't know how your going to pull that one off) Rare ships and items I would stay away from because its known that rare items have bin reintroduced via CCP givaways.
So there you have it OP, your hedge choices. |
Vaerah Vahrokha
Vahrokh Consulting
4189
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Posted - 2013.06.18 12:20:00 -
[8] - Quote
MIZAM wrote:If I am stepping away from Eve for a break , say up to a year , where is the best place to 'park' the Isk ?
Ships ? Minerals ? Plex ? anything else ?
many thanks
You might want to check this article of mine about EvE markets (anti)correlation.
In there, you'll also find a link to some valuable tests made by Samroski. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
mynnna
GoonWaffe Goonswarm Federation
1278
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Posted - 2013.06.18 12:33:00 -
[9] - Quote
Park your isk in isk. Monetary inflation in EVE is pretty much a myth. Member of the Goonswarm Economic Warfare Cabal |
Tinu Moorhsum
Random Events
223
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Posted - 2013.06.18 13:40:00 -
[10] - Quote
That's a fair enough point but I would suggest that if you had a year to wait that there are still some good investments to be made. |
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Adunh Slavy
975
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Posted - 2013.06.18 15:13:00 -
[11] - Quote
Monetary inflation in Eve is not a myth. Monetary inflation is simply an increase in the money supply. Such an increase may or may not result in "general rise in prices", which is the definition of inflation used by most, and the context used by the OP.
http://en.wikipedia.org/wiki/Monetary_inflation |
ngaly
Pator Tech School Minmatar Republic
21
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Posted - 2013.06.18 15:58:00 -
[12] - Quote
Inflation is a concept that doesnGÇÖt really apply to EVE because EVE has completely different rules compared to real life.
However, if you want to keep the perceived value of your assets you should invest in something that increases in value by about 10% - 20% (measured in ISK) per year. PLEX has been rising by 15% on average per year. If you buy PLEX you just have to make sure that it isnGÇÖt currently spiking into a bubble (IGÇÖm quite sure thatGÇÖs not a problem right now). You could also buy Procurers, Armageddons or Dominixes even though mineral prices will probably continue to drop by like 10%. Procurer should give you a 20% profit per year for the next 3 years if you buy them for less than 12m ISK but there is a risk that CCP changes the rules within the next 3 years (it could have a positive or negative effect on this investment). Armageddons and Dominixes should give you a 20% profit within less than a year if you buy them for less than 144m ISK and 136m ISK respectively. The Ferox, Cyclone, Scorpion and Typhoon stockpiles will probably last months and give you less than 20% profit. |
Alex Grison
Deep Core Mining Inc. Caldari State
432
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Posted - 2013.06.18 17:52:00 -
[13] - Quote
Let me get the hedge clippers. This thing is out of control. |
Karash Amerius
Sutoka
106
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Posted - 2013.06.18 18:08:00 -
[14] - Quote
Plex and unique ships....everything else has too much risk in my opinion. Karash Amerius Operative, Sutoka |
mynnna
GoonWaffe Goonswarm Federation
1278
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Posted - 2013.06.18 18:15:00 -
[15] - Quote
Tinu Moorhsum wrote: That's a fair enough point but I would suggest that if you had a year to wait that there are still some good investments to be made.
That's not what the OP asked though.
Adunh Slavy wrote:Monetary inflation in Eve is not a myth. Monetary inflation is simply an increase in the money supply. Such an increase may or may not result in "general rise in prices", which is the definition of inflation used by most, and the context used by the OP. http://en.wikipedia.org/wiki/Monetary_inflation
Yes true. I should have said, monetary inflation isn't a myth, but it's "normal" effect is. Member of the Goonswarm Economic Warfare Cabal |
Adunh Slavy
977
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Posted - 2013.06.18 18:49:00 -
[16] - Quote
mynnna wrote: Yes true. I should have said, monetary inflation isn't a myth, but it's "normal" effect is.
Easy enough to get them mixed up, seeing as how badly words are abused on the forums sometimes. :) |
Tinu Moorhsum
Random Events
223
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Posted - 2013.06.18 19:40:00 -
[17] - Quote
mynnna wrote:That's not what the OP asked though, at least if I'm being overly literal.
To my way of thinking the OP, regardless of definitions or semantics, was asking the following question:
"what can I buy today that will be worth more in a year if I do nothing?"
Hence why I approached the question from this angle. |
Airto TLA
Puppeteers of Doom
46
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Posted - 2013.06.18 19:55:00 -
[18] - Quote
THere is no such thing a a safe long term parking place for isk in eve since the underlying rules are subject to change and therefore the relative value of any item to the overall market is subject to the constant nerf/buff cycle.
As mentioned the old tier one BS arena is probaly the best, since it just suffered from a CCP manipulation and the ships were built under the old rules in large numbers and will have to eventually corrrect to replacement costs or the ship will never be flown. |
Ireland VonVicious
Vicious Trading Company
162
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Posted - 2013.06.19 03:41:00 -
[19] - Quote
If you were to hedge some of your isk would need to say as isk as you never know when that faucet might be slowed.
Other then that I'd buy up that which is already at a known low for over a month period as it's potential loss % is low while it's potential gain % is high.
Plus all the other standards already mentioned. |
Sabriz Adoudel
Federal Defense Union
442
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Posted - 2013.06.19 04:58:00 -
[20] - Quote
I would buy the following:
PLEX, tech 1 ships that were massively overproduced in the Tiericide leadup (I'm looking at you, Exequeror), and keep the rest liquid.
An enemy is just a friend that you stab in the front. |
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Amorir
Cosmic Cimmerians Usurper.
0
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Posted - 2013.06.19 14:30:00 -
[21] - Quote
I don't really think it's possible to have a realistic hedge because there aren't really competing commodities in eve, and there is no branding for competing products. The closest thing would have been buying a large stock of aars and asbs right when the price hit the plateau for both and then hope for some fleet doctrines out ccp changes to emerge to create some volatility. Unfortunately asbs are just better for the most part so that doesn't help.
As for an eve possible hedge, i could imagine that if eve improved its shares system and people started using it, investing in both push industries and red frog could give you a realistic long term hedging scenario for example. |
Whang'Lo
Perkone Caldari State
16
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Posted - 2013.06.20 12:59:00 -
[22] - Quote
I'm guessing you have to log in from time to time to que up training.
I would wait for the market to lose it's mind. It always does every few months.
Like zydrine @ 600 a few months back. That's what your looking for, I would consider everything though.. even drones and ammo.
http://www.quoteclouds.net |
SJ Astralana
Syncore
4
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Posted - 2013.06.21 11:07:00 -
[23] - Quote
It's interesting that plex has been mentioned as the 'gold standard' for inflation hedging. But is that really true? If I were to sink my net assets into 100% plex, the isk value of that asset pile most certainly fluctuates in my ability to convert that into gankageddons over time. However, if I have gankageddons, then that fluctuation is mitigated isn't it? Remember we're trying to hedge isk, not rl$.
It's tough to pin down a 'market basket' because it's always shifting. However a rigged fleet/mining/mission-ready ship is the 'standard' in-game consumable commodity from what I can see. The goal must necessarily diversify across the asset categories of all of eve in the proper ratios, which of course is prohibitively complicated. But if the goal of hedging is to approximate game ratios, I don't see how having rigs and T1 complemented by isk and plex is inferior to any of the other approaches. It's like having gold, cash, pork bellies and frozen concentrated orange juice as far as I can tell. |
Vaerah Vahrokha
Vahrokh Consulting
4192
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Posted - 2013.06.21 13:02:00 -
[24] - Quote
SJ Astralana wrote:It's interesting that plex has been mentioned as the 'gold standard' for inflation hedging. But is that really true?
No it's not.
Not only PLEX is not comparable to gold (imperishable, rare and precious) but PLEX has its own cycles and they also get affected by longer time EvE economy expansions / shrinking cycles.
There's no free meal, every item might hedge another but only for a certain amount of time, so it's left to each investor to study the markets and periodically update their assets holdings.
Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Arch Stanton's Neighbour
Forceful Resource Acquisition Inc
47
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Posted - 2013.06.21 14:59:00 -
[25] - Quote
IMHO the best hedge would be minerals. Ample supply and demand keeps their price mostly free from speculation and their value is directly correlated to the much paraded "isk per hour" so they would follow any inflation (or deflation) very closely. Finally, I could dump 100B of minerals on the market over a week or so and not have a big effect on their price so they are also as liquid as you can get.
Right now I would believe former tier 1 and tier 2 battleships would be a good long term hedge as they're underpriced and correlate strongly to mineral prices from above, so are the former tier 1 battlecruisers as well, but I would limit my investment in them to 10B or so because the volume isn't high enough to dump all on the market at once if I wished to liquidate. See for example that it's been six months from the battlecruiser tiericide and the former tier 1 bcs still haven't caught up to mineral prices. |
Vaerah Vahrokha
Vahrokh Consulting
4192
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Posted - 2013.06.21 19:03:00 -
[26] - Quote
Arch Stanton's Neighbour wrote:IMHO the best hedge would be minerals. Ample supply and demand keeps their price mostly free from speculation
I disagree, I have done and am doing a lot of "speculation" on minerals, for my size and trading method their ample supply is not a problem, but an opportunity.
Arch Stanton's Neighbour wrote: and their value is directly correlated to the much paraded "isk per hour" so they would follow any inflation (or deflation) very closely.
... which means they are cyclic. In order to hedge you need anti-cyclic markets.
Arch Stanton's Neighbour wrote: Finally, I could dump 100B of minerals on the market over a week or so and not have a big effect on their price so they are also as liquid as you can get.
Have you done it? I have and they are not *that* liquid to easily adsorb those operations done in block. If you consider high ends, it gets even worse.
Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Arch Stanton's Neighbour
Forceful Resource Acquisition Inc
47
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Posted - 2013.06.21 20:27:00 -
[27] - Quote
Vaerah Vahrokha wrote:Arch Stanton's Neighbour wrote: and their value is directly correlated to the much paraded "isk per hour" so they would follow any inflation (or deflation) very closely.
... which means they are cyclic. In order to hedge you need anti-cyclic markets. That's not the point. The point is they correlate very strongly to price changes in everything so to the person who wishes to protect himself against inflation, IOW making sure his isk buys him the same stuff six months from now as it does today, it is the best hedge IMHO.
Vaerah Vahrokha wrote:Arch Stanton's Neighbour wrote: Finally, I could dump 100B of minerals on the market over a week or so and not have a big effect on their price so they are also as liquid as you can get.
Have you done it? I have and they are not *that* liquid to easily adsorb those operations done in block. If you consider high ends, it gets even worse. The tritanium market in Jita alone is something to the tune of 120B/day, and that's one mineral in one trade hub. I can't see the difficulty in liquidating 100B over a week. And no I haven't performed that specific operation but I have manipulated several smaller markets so I know how they work. |
Vaerah Vahrokha
Vahrokh Consulting
4192
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Posted - 2013.06.22 00:56:00 -
[28] - Quote
Arch Stanton's Neighbour wrote: That's not the point. The point is they correlate very strongly to price changes in everything so to the person who wishes to protect himself against inflation, IOW making sure his isk buys him the same stuff six months from now as it does today, it is the best hedge IMHO.
In 6 months those prices can drop a lot. Someone quitting in October and returning in April could see a 20% loss. Since EvE markets don't all rise and drop together, the guy will have 20% purchasing power vs the items that did not grow and even less purchasing power vs the items that grew. I prefer considering "hedging" as something that preserves purchasing power vs most items, not just some.
Vaerah Vahrokha wrote: The tritanium market in Jita alone is something to the tune of 120B/day, and that's one mineral in one trade hub. I can't see the difficulty in liquidating 100B over a week. And no I haven't performed that specific operation but I have manipulated several smaller markets so I know how they work.
Pressuring a market for about 10% of its value for 7 days is going to tangibly reduce the profits.
Since it's unlikely to make 30% on Tritanium (possible but not a dependable gain unless some big circumstances happen) then you'll get a portion of your long term investment hammered.
Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Smohq Anmirorz
State War Academy Caldari State
97
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Posted - 2013.06.22 06:29:00 -
[29] - Quote
The closest thing to my inflation hedge is my inflation lawn and the city's inflation sidewalk. |
Arch Stanton's Neighbour
Forceful Resource Acquisition Inc
48
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Posted - 2013.06.22 17:44:00 -
[30] - Quote
Vaerah Vahrokha wrote:Arch Stanton's Neighbour wrote: That's not the point. The point is they correlate very strongly to price changes in everything so to the person who wishes to protect himself against inflation, IOW making sure his isk buys him the same stuff six months from now as it does today, it is the best hedge IMHO.
In 6 months those prices can drop a lot. Someone quitting in October and returning in April could see a 20% loss. Since EvE markets don't all rise and drop together, the guy will have 20% purchasing power vs the items that did not grow and even less purchasing power vs the items that grew. I prefer considering "hedging" as something that preserves purchasing power vs most items, not just some.
You're right, but that's because we're seeing a deflationary period. I took a quick look at Maelstrons, Abaddons, Tengus, Guardians, Scimitars, Sabres, former tier2 and tier3 battlecruisers, carriers, dreads, freighters, and I see overwhelmingly price drops over the past six to 12 months with few exceptions.
Can you say that trend will continue over the next 6-12 months? I don't know. But back to my point, isk put in minerals would retain the same purchasing power overall. If things drop in price, so will minerals and the reverse would be true. So, again, if the goal is to protect oneself against price fluctuations I still argue that minerals are the best shelter.
So keep liquid and risk devaluation due to inflation or valuation to deflation, or invest in minerals and don't risk anything, purchasing power relative to goods remains mostly constant.
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