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FastLearner
Fury Holdings
Brutally Clever Empire
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Posted - 2007.11.07 19:10:00 -
[1]
Edited by: FastLearner on 07/11/2007 19:14:53
I could, in theory, be interested in participating in such a scheme. There are two key elements I look for before investing Fury Holdings / Fury Bank funds:
1. How well protected am I against scamming/going inactive.
2. What is the likely range of profits (minimum, expected, maximum).
In the case of your proposal, #1 looks absolutely rock solid: the use of a trustee system means (if I read it right) that my only real exposure is to lack of performance. Trustees would be independently conducting organised and coordinated trading to affect the market in a beneficial (to them) way.
#2 is the potential problem for me - as the targetted returns are significantly below the minimum I'd consider acceptable. That, however, isn't necessarily the end of it: as I could see definite secondary profit sources arising from being a participant in such a scheme.
My main concern is the number of participants. To a large extent the success of such a scheme depends on certain key information being kept relatively confidential. Anyone involved in the scheme has the ability to privately profit from the information they have access to. From my perspective I'd seriously consider becoming involved in one of two scenarios:
1. If there will be a lot of trustees and a low entry barrier to becoming one then I'd buy-in at the absolute minimum, regard that pretty much as a written-off cost of doing business and use the information obtained to profit (even at your scheme's expense) to the maximum.
2. If the intent is to keep trustees to a minimum by setting a realistically high buy-in amount then I'd be far more tempted to commit a significant amount of ISK and restrict my side activities to those which would also benefit the scheme as a whole.
Trustees are not only entrusted with (their own) assets, but also with information on the scheme's goals, objectives and tactics. It's the latter which actually concerns me more than the former.
EDIT: I note I've set no figures on what I consider to be significant amounts of ISK. For the purpose of this discussion I'd be looking at 10 billion as about the absolute minimum to even be considered as a trustee - and I'd frankly prefer the barrier to be set even higher (30 billion, or 10% of initial capital would be about my ideal level of buy-in). There'd be nothing to stop potential trustees raising funds from smaller IPOS/bonds - I'd do a burst of promotion on Fury Bank (or finally get around to releasing the long-delayed Premium Bonds) to raise whatever funds I committed.
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FastLearner
Fury Holdings
Brutally Clever Empire
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Posted - 2007.11.07 21:34:00 -
[2]
 Originally by: Letias
My concern with this venture is not trust so much as feasibility. You basically need 300 people to invest 1 billion each and from what i have seen average investment is towards the 250 million mark. I have no issue with the trust of the venture or the ability of Block, but i would prefer to invent in something that i know will sell out. At this stage is just don't see it happening.
I could at the moment put maybe a billion in but who would supply the other 299, would you still start with a small amount or is it pointless in this venture seeing as your aim is market manipulation?
You don't want 300 people investing 1 billion, you want 10 people/organisations investing 30 billion or 6 people/organisations investing 50 billion.
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FastLearner
Fury Holdings
Brutally Clever Empire
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Posted - 2007.11.07 22:07:00 -
[3]
Originally by: Shadarle
Originally by: Letias
Well it seems like he is having problems that kinda was my point.
This is because stating returns of 3-6% is not going to get big investors to buy in.
I think this would work much better as a co-operative venture, rather than an IPO. Get a bunch of rich traders together and get them to promise to keep all discussions private. Work as a collective body or a cartel to manipulate prices one at a time. I'd be far more interested in this than in buying into an IPO.
I tend to agree that it may well work better as a cartel than as an IPO - as that avoids a whole ton of administrative oversight required to run a trustee-based IPO. I'd also suggest that minerals isn't the cheapest or most profitable market to manipulate. T2 materials, for example, would probably be a lot easier/more productive for a few different reasons.
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FastLearner
Fury Holdings
Brutally Clever Empire
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Posted - 2007.11.09 02:51:00 -
[4]
Originally by: tornpain
So you really have no clue how much isk you'll need? Christ, man, do a dry run with a couple billion and extrapolate.
That's just not possible. There's a "critical mass" of ISK required for any decent market manipulation - below that you get your fingers burned and learn nothing about what would happen with more capital. That critical mass varies depending on lots of factors (region, item, source of item etc). The tricky part is picking an initial invesmtment size for this which is definitely large enough to succeed - but doesn't leave too much ISK sitting around idle.
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