Tuesday 16 October 2012

Payday

Assets sold, towers pulled down and ships parked in the hanger. 

This project is now officially over - thank you to all my investors who supported me with their money.

So lets start with a recap... This project began in May. FCV at the time had 13b of cash and assets and then sold 67 shares (at 1b a piece) raising 67b, bringing the total to 80b starting assets. 

For the sake of simplicity, I have since then assumed that I 'bought in' 13 shares as I provided 13b of the starting capital. That way I too would benefit from the profits. 

So in May 2012:
13 shares (13b) owned by Cheeba
67 shares (67b) owned by investors

So, let's start by looking at FCV's final financial statement first of all:


Summary:
It's been a good final month! The last month's profits come in at 40.9 billion ISK. This is higher than the month's 'actual' profits and is reflective of the fact that I had underestimated the value of some of the assets I was holding in previous month. Having sold all unwanted assets now from the the fulleride towers, I can confirm that the above values are indeed final and accurate. 

Overall - for the 22 odd weeks that this project ran, FCV generate 92.1 billion ISK of profit, more than I ever expected to be brutally honest. With the 80 billion ISK of starting capital, I averaged 16.54% increase in value each month and ended up more than doubling the value of FCV.

Payouts:
So, its time to repay my investors. Given the exceptional performance of FCV, I have decided that from the total profits of 92.1 billion ISK I will be taking a 20 billion ISK management fee in addition to the profit from my own investment. In addition, 2.1 billion ISK will be donated to Vaerah Vahrokha Emergencies Relief Trust. This leaves 70 billion ISK to be divided between investors as shown below:


Therefore, each FCV share's final value is 1.875 billion ISK. 

Payouts will starting happening over the next 24-48 hours.
ISK will be sent to the owners of the shares as I can see in the FCV corp wallet.

Thank you all for your support - and stay tuned for a potential new investment project in the near future ;)

Cheeba o/






Tuesday 9 October 2012

Stats Porn

I'm starting to tally things up. For those interested...

In 20 weeks I produced:

  • 101,000,000 Fullerides
  • 3,000,000 Nova Fury Heavy Missiles
  • 4,000 Light Ion Blaster II
  • 3,500 Fighters
  • 3,200 Hurricanes
  • 3,000 220mm Vulcan Autocannon II
  • 2,000 Shield Boost Amps II
  • 1,600 Drakes
  • 1,600 Tornadoes
  • 1,300 Nagas
  • 500 Drone Control Units
  • 500 Thrashers
  • 240 Capital Armor Repairers
  • 240 Capital Shield Transporters
  • 240 Capital Remote Armor Repairers
  • 15 Talos
  • 1 Revelation
  • 1 Obelisk
  • and a partridge in a pear treeee.
The Build Cost of all the above items was approximately: 555 Billion ISK
The value of the fullerides produced was approximately: 320 Billion ISK

Which meant I required (just T1 mins for now):
  • 31 bill Trit
  • 7,5 bill Pyerite
  • 2,05 bill Mex
  • 507 mill Iso
  • 51 mill Nocx
  • 32 mill Zyd
  • 14,5 mill Mega
Of the 20 weeks this ran, I was wardecced for 5 of them. I only suffered one unintentional loss, for which I then got revenge.

I was suicide ganked once. It could have been a lot worse. 

Wednesday 26 September 2012

Reflecting on Reaction Towers

One of the original reasons I started up the IPO almost 6 months ago was to raise capital to get a good set of fulleride towers running. At the time, technetium (which is required in the fulleride reaction) was around 200,000 isk pu, so to get the reactors rolling I needed 125,000 units just to fill the silos, so 200,000*125,000 =  25,000,000,000 bill. But Im getting ahead of myself. Lets start at the beginning.

Why Fullerides? 

I chose fullerides because reactions that require technetium have the highest requirement for startup capital, presenting a high barrier to entry to enter production. Unless you have your own tech moon, you need to buy tech in Jita and as just mentioned, to set up my 10 towers, I needed 25b in tech alone.
Therefore the reactions involving tech products, having the highest barrier for entry, also tend to have the highest profit margins. You can get an idea of what profit is to be made by checking websites such as this one.

However, tech is a fickle material. With constant wars over tech moons, plus the possible constant threat of 'iterations' (such as the nerf we saw in august that over halved its price), there is considerable risk involved and prices (and profit margins) do jump around.

Tower setup and location

I set up my towers in Black Rise. Caldari lowsec is pretty crowded, but given that nearly all tech is traded through Jita, being close to that hub was important to me.

I had 10 large caldari towers in total. Caldari larges are the only towers capable of having the cpu to support enough reactors. You will need inside each tower: 6 silos, 2 reactors. You will have some powergrid left over for some small guns, but absolutely no CPU spare for webs, points, shield hardeners etc. So your main defense in lowsec is to be quiet and not piss anyone off. 

My setup was as follows. In towers 1-5 I had platinum (silo 1) and technetium (silo 2) reacting (reactor A) into platinum technite (silo 3). In silo 4 we have carbon polymers which react (reactor B) with the platinum tecnite in silo 3 to produce fullerides (which fill silos 5 and 6).

In towers 6-10, I had the same set up, but with hydrocarbons and silcates reacting to form carbon polmers, which in turn react with platinum technite to produce fullerides. 

Tower Maintenance

Every 3 days, you need to take a freighter or JF and tend to the towers. You alternate between either just emptying the fullerides or emptying fullerides and filling up all the ingredients again. The reason I have 2 sets of 5 towers is that the simple reactions (ie plat + tech = plat tech) produce 200 units of plat tech/carbon polymers per hour. Only 100 units are consumed per hour by the fulleride reaction, so the plat tech/carbon polymers that are extra can be hauled to the other set of 5 towers. That way I never need to buy plat tech or polymers off the open market. Thus people usually run reaction towers in multiples of two, with this complimentary setup style.

A JF is really a requirement if you plan on running two towers or more, or else you will spend all day going back and forth between station and POS. However, most imporantly, you will need it to haul materials and fuel back and forth from highsec to lowsec. 

Tending to 10 towers with a JF takes 30-45 mins every 3 days. Then add time for hauling, buying and selling materials. Once the inital setup, the profit for time spent is great, but as I said, the startup capital was pretty intense. 

The particular 10 tower chain I have was purchased from my old corp for around 45 billion. But since owning it, it has given me probably over 20b profit, maybe 50% more than that (I will have better numbers when I close this bond up, and have tallied up all my data). And that includes a prettty brutal period of loss when tech crashed in august. 

If you have any other questions of how to run, setup or maintain towers, feel free to poke me.

Sunday 9 September 2012

Month 4 Profit Report



Its time for the Month 4 Profit Report. It's been a slow month, but we've still ended green despite some RL setbacks. As ever, lets start with this month's snapshot:



Summary:
The profits for the 4th month come in at 7b and represents an increase in the value of FCV of 5.64% from the previous month, or 64% since the project began.

Discussion: 
While Month 4's profits did not hit the double digit billions, a comfortable 7b was produced. Generated profit came mostly from manufacturing as margins from the reaction towers continues to swing as tech struggles to find a new equilibrium.

Overall profit wasn't as high for a few RL reasons. First of all the PSU on my laptop died meaning I was out of action for a week. Towers and silos were not attended to and manufacturing went on hiatus. An estimated 35b of revenues (3-4b profit) was therefore missed out on. For about 3 weeks as well I was hit with several wardecs which made logistics a bit harder. Despite these setbacks, the month went relatively well, especially considering the slowdown that always accompanies summer.

Outlook: 
As long as no more computer issues arise (PSU is now replaced), this month looks to be relatively straight forward. Profit goal is 10bill + which should be attainable. 

Other notes:
Each share is currently worth 1,640 million ISK.

Previous Profit Reports:

To clarify:
- 'Cash' section represents liquid ISK that is held in the corp wallet at the moment of the snapshot.
- 'Market Orders' represents the ISK value of all current buy/sell orders
- 'In Build' represents the build cost value of all items currently being manufactured
- 'Assets' represents the value of build materials (minerals, components) as well as the value of the tower reaction chain (i.e. the towers/silos etc) and their inputs


If you have any questions, feel free to comment on this blog or post in the FHC thread.

o/ cheebs

Monday 6 August 2012

Month 3 Profit Report


Its time for the Month 3 Profit Report. It's been a difficult month, but let's first start with some numbers from today's snapshot.



Summary:
The profits for the 3rd month come in at 2b and represents an increase in the value of FCV of 1.64% from the previous month, or 54% since the project began.

Discussion: 
This past months profits have been pushed to almost nil by the technetium nerf and I apologize on behalf of FCV for this poor performance. As some of you will know, this past month tech went from 200,000 isk/pu to 80,000 isk/pu. Given that I run some rather large reaction chains, I tend to have around 100-150,000 units of tech stockpiled at any one time. That meant in a matter of days the value of that stockpile went from 30b to around 13b. In addition, reaction products dived and sold for under production cost. All in all, bit of a nightmare. I did what I could to mitigate losses, even traded the tech panic selling to claw back some ISK, but after the dust settled, I estimate my final losses from the nerf were around 20bill, and that is a conservative estimate. Also, to add salt to the wound, some griefer corp is maintaining a constant wardec against my alt corp hoping for a payout. Not an issue, but makes logistics annoying!

On the good news front, T1 and T2 manufacturing had another strong month. On the back of their sales, FCV still managed to claw a profit for the month. A small one, but at least a profit nonetheless! Sales turnover is slower this month because of summer holiday, but margins remain good.

Outlook: 
While it has been a painful month, the worst is over. Prices have stabilised and hopefully August sees less turmoil in the tech market. I hope that despite the slower rate of sales in the summer months, FCV can return to double digit billion profits next month.

Other notes:
- 500mill was donated to the Fearless ATX tournament fund, as they are dudes. They even named their vulture after me :)
- As I had spare liquidity, I invested 12b of FCV cash into buying a T2 bpo that I wanted. That 12b will remain apart of FCV assets.

Previous Profit Reports:

To clarify:
- 'Cash' section represents liquid ISK that is held in the corp wallet at the moment of the snapshot.
- 'Market Orders' represents the ISK value of all current buy/sell orders
- 'In Build' represents the build cost value of all items currently being manufactured
- 'Assets' represents the value of build materials (minerals, components) as well as the value of the tower reaction chain (i.e. the towers/silos etc) and their inputs


If you have any questions, feel free to comment on this blog or post in the FHC thread.

o/ cheebs

Tuesday 17 July 2012

Some Aggressive Trading Strategies

Everyone likes to be the next sell order. That's why people 0.01 isk each other constantly. 

This is especially important when the market is at a high. This could be due to a manipulation or natural market cycles, but sometimes sell prices are providing super high margins and its worthwhile to babysit sell orders to make sure that when players make purchases, they are buying your goods.

So there are two key strategies to maximise this:

(1) Multiple Sell Orders

A market order can only be modified once every 5mins. This is very restricting in the most competitive markets. As such, split up your stock in stacks, so you can modify orders more often. More tedious and more work, but sometimes worth it. 



(2) Be Aggressive

The best pvpers never undock! Sometimes when you are in a 0.01isk war, you can drive the price down to a point where its profitable or advantageous to buy out the competition and relist their stock. Sometimes you can turn a decent profit, other times you only break even but you can go to bed knowing that you will not be undercut as soon as you log off. 
To illustrate with a very small example (note: on my market window, I sort sell orders so the cheapest is on top)

I was babysitting some cap mods - I had little stock left and wanted to clear it at a good sell price:



I had the market to myself for a long while, but then a new sell order popped up.



When new orders appear, they often aren't monitored in the cap module market, so I assumed I could quickly undercut. But alas, this guy was obviously monitoring his sell orders. Ah well. let the 0.01isking commence. 


Eventually I realised given the slow turnover of the cap module market, that this guy wasn't going to give up. Ah well, I wanted to go out. Time to be more drastic. I dropped the price by 100,000 isk/pu




Maybe that big drop would put him off. Nope:



Hrmm. He's keen to follow me down. Let's take this further and cut a whole million of the sell price... and what do you know, he cuts his sell price by a whole million as well. 


Well if he is keen to make a sale, a sale he shall make:


And now the market is back under my control - and I will resell his mods for a profit:


K thnx bye!


One word of warning, I have bought out competitors and relisted and gone to bed in control of the market, only to next log in to see my sell orders drowned in a sea of new ones!



^ In cases like that, all you can do is wait for prices to recover!

Till next time, 

cheebs

Thursday 12 July 2012

When to chase the sell price

Anyone who has sold anything in a hub will know the frustration of sellers constantly 0.01isking each other. Its frustrating and drives many traders and manufacturers away from the industry.

However in my experience, while many people mindlessly chase the sell price down desperate to make a sale, being aware of the larger market perspective can help you make better informed choices on how to sell your goods. Having sold a lot of stuff in Jita, I thought I would share some tips on when to join in or avoid the 0.01 isk wars depending on whether you are a trader or a builder.

So to 0.01 ISK or not to?

(1) Know your item 

Sounds obvious but are you clear on what the exact cost was to build your item? Many people sell at build cost or below - why? They are liquidating assets/they got it for free/they don't know better. This is a buying opportunity for traders. For builders, figure out the sell price that you want and stick to it - there are very few reasons to sell at a loss and the market might currently be oversupplied, but the prices will rise again. An example is below - in pink are manufacturers who know what a profitable sell price is. Everything cheaper (ie above the pink) is being sold at a low price and would be a good target for traders to buy up and relist at the same price as the manufacturers. 



(2) Know your sales/brokers tax:

Its incredibly important. For example - I build 50 drakes. They cost 46mill per unit to build. The market is pretty saturated so the current sell price is only 47mill. I think to myself "Ok - not great margins but if I sell the drakes I'll make a tidy 50mill profit".

However, with my brokers and sales tax at 0.61 and 0.75% respectively, I pay almost 34mill in taxes, leaving me with a final profit of 16mill - a terrible return on ~2.3bill invested to build the ships. Unless you are desperate for liquidity, wait for prices to increase. 

(3) Redefine the Sell Price:

Ive discussed it in earlier posts - but if prices are trending slowly down, but the volume on the market is low - traders should buy up stock and redefine the sell price. Below is an example with nagas:


Buy up those lower-priced ships and voila - relist: 



The best part is that the new price point can stick - meaning the resale profits remain good for traders and the margins remain good for manufacturers producing that product:



(4) Know the mineral basket price index:

This is critical. As a trader or builder, you need to know which way the market is moving. If the Mineral Price Index (MPI) is trending down, then you might want to start 0.01isking. With the MPI dropping, the price of produced goods will follow. 
Pay particular attention to the minerals in your product. Nocxium spiking? Wont affect hurricane or tornado prices at all.
If the MPI is trending up, then you can list your products for sale at higher prices, knowing that with patience, the market will move up to meet it. For those interested:


People can be oblivious to these relationships between primary and secondary goods but being aware of the cost of components in crucial in determining the current and future sell prices of goods. 


That's it for now, but I'll talk about further strategies soon.






Friday 6 July 2012

Month 2 Profit Report

So another month has almost passed so I've put together the profit report for the last month by taking a snapshop last night of all the ISK invested through FCV. Results are a bit early (it's not actually the 8th, but I'm busy over the weekend) but they shouldn't disappoint:



Summary:
The profits for the 2nd month come in at around 35b and represents an increase in the value of FCV of 40.48% from the previous month, or ~52% since the project began.

Discussion: 
The profit for the month has been good and in line with expectations. The reactions towers have been getting decent profits, but the real success came from the manufacturing side. With the fluctuation is mineral prices recently, some great opportunities existed to push margins up more than usual. On DCUs alone, I made several billion through pushing the market sell orders about 15% higher than their normal high. Expectations for the next month are similar, providing market conditions hold up. However, sales can slow in the summer as people take holidays etc, so I'm expecting profits of more like 25b as opposed to 35b. 

Profit Distribution:
As can be seen from above, the amount of cash I'm sitting on is growing. However, I dont have the time or build slots to invest that ISK into further building. I would be interested to hear from investors on whether they would be interested in a one-off dividend later this summer, or to wait until the project ends in October to receive a much larger all-in-one repayment. 

Also please note that I haven't decided on what cut I am going to take from the eventual profits. Of the 80b original starting funding, I provided 13b while 67b came from external investors, so I could be considered an equal investor. However, I also sold shares on the basis that investments would return around 5% per month! In anycase, the project still has a way to go - but if anyone is interested in talking to me about the profit sharing - please get in touch. 

On a final note, if any current shareholders want out - I have a buyer who is interested in purchasing a few shares from someone. They would pay their July valuation: 1 share = 1.52b ISK. Get in touch if interested.

To clarify:
- 'Cash' section represents liquid ISK that is held in the corp wallet at the moment of the snapshot.
- 'Market Orders' represents the ISK value of all current buy/sell orders
- 'In Build' represents the build cost value of all items currently being manufactured
- 'Assets' represents the value of build materials (minerals, components) as well as the value of the tower reaction chain (i.e. the towers/silos etc) and their inputs


If you have any questions, feel free to comment on this blog or post in the FHC thread.

o/ cheebs

Monday 2 July 2012

You know someone's messed with the market...

... when the T2 version is cheaper than the T1! :)





Heheh.


Anyway, later this week Ill be posting profit numbers for the past month. Investors will be happy.

cheebs o/

Wednesday 20 June 2012

DCUs - A Profit Story

I wanted to do a write up on this for a while, but much to my suprise, this market just kept and kept on giving. Anyway, time to share with you another profit story...

Drone Control Units:

DCUs are one of many cap mods I manufacture for the Jita market. Like other cap mods, it is vulnerable to 'thin markets' as they take a long time to build. A run of 10 takes a week or so to build in station so if supplies run thin, it can take a long while for manufacturers to meet demand.

So... it is a market I often abuse. Normally when I buy up stock and relist, the massive margins only last a small while before another trader notices the margin and sources stock, or a manufacturer dumps a load onto the market at much lower margins that isn't attractive for me to buyout. On average, I have a sales window of maybe 12-24hrs before this happens.

Well, with the DCUs... its been over ten days now...

The opportunity:

A week or so ago, I noticed a thin market on DCUs which were priced around 61mill (note: build cost was around 60mill). So I pounced and bought up underpriced stock:


I relisted this stock with some I had manufactured myself.


32 mods - thats a lot of stock. I went to bed and expected to sell maybe 10 of those mods. To my suprise, by the following evening, all 32 had been sold (~480m profit). I even caused a nice bump on the market graph:



 Cool I thought, lets list some more I had built:



And so for the next few days this continued (note how little stock is available). The 15mill markup over build cost remained. If manufacturers had noticed, then it would take them several days to produce stock so I continued to make the most of the lack of supply:


After a few days, it seemed that the new price point I had set had stuck:


Hrmm, I thought, what now?

Well lets take it higher shall we!

So I moved up the price another 10mill. Very reasonable.



And it's been sticking too! Recently the price has trended down to around 81mill, but lets see how long I can keep it up... :)


A recent market graph:



Thanks for reading o/

cheebs


1 month later: Supply has built up driving prices down and the excellent margins have finally collapsed. Nevertheless, over the course of the past month, I sold over 140 DCUs at an average profit margin of ~14mill. It was a fun manipulation.

The Result:


Tuesday 19 June 2012

BPO Sale

WTS:

Capital Propulsion Engine BPO - ME50 PE10 - 1.25b
Capital Armor Plates BPO - ME50 PE10 - 1.25b
(or 2.4b for the pair)

Harbinger BPO - ME60 PE20 - 460mill 


Shield Boost Amp II BPO - 18b





If interested, please a comment here with a name to contact, or post in my FHC thread


Also, I am interested to sell a fully fitted Nyx:






It also comes with 20 fighter bombers, fuel, a lot of comedy items in cargohold (champagne, hookers and blow!), also has a remote shield rep + cap trans in corp hanger, as well as a travel fit, a faction TP, a syndicate cloaking device and other tasty bits. 


Looking for 28b








Thanks o/

Saturday 9 June 2012

Month 1 Profit Report

So its been 1 month since I've kicked this project off and I thought I would provide a quick snapshot as to the finances of FCV and how your invested ISK is doing.

So, without further waiting, here is the Month 1 finance snapshot:



To clarify:
- 'Cash' section represents liquid ISK that is held in the corp wallet at the moment of the snapshot.
- 'Market Orders' represents the ISK value of all current buy/sell orders
- 'In Build' represents the build cost value of all items currently being manufactured
- 'Assets' represents the value of build materials (minerals, components) as well as the value of the tower reaction chain (i.e. the towers/silos etc) and their inputs

Summary:
The profits for the 1st month come in at a little under 7bn and represents an increase in the value of FCV of 8.74% (80bn --> 86.99bn).

Discussion: 
The profit for the month is very modest but was in line for what I expected from Month 1. It took 2 weeks for all of the FCV shares to be sold and there were delays to getting the build jobs going. Getting 20bn+ of build jobs started takes some fine tuning and it is only in the last week or so that I feel that things are finally up and running properly. Now that they are, and I have gotten used to the running of the reaction towers, I hope for double digit % growth for the next month.


If you have any questions, feel free to comment on this blog or post in the FHC thread.

o/ cheebs

Thursday 7 June 2012

How the share sale ended up

As we approach the 1 month mark of this project, I thought I would make an update on what funding was finally accepted by FCV and how that ISK has been put to work. 

This venture was started because while FCV was asset rich, it was also cash poor, and like many companies, needed funding to make use of its assets and to start making some money. 

Before the share sale began, FCV had the following in cash (ISK) and materials (mins and t2 components):

Cash: 3bn
Materials: 10bn
Total: 13bn


Then the FCV share sale began. Initially, 30 shares were sold to 1 corp and an additional 40bn sold to individual investors for a total of 70b. One investor asked to buy back some shares rather promptly as he actually needed the ISK, and so the final number of shares sold was 67, raising 67bn of capital. While the original goal had been 100bn, this smaller share sale still allowed me to get my projects underway. In hindsight, 100bn was a nice round number but had I raised that much, the final returns on investment would have been less as I am not sure I could have put all that ISK to use. In any case, after the share sale, FCV's books looked like this:

Cash: 10bn
Reaction Towers: 45bn
Materials: 25bn
Total: 80bn

The heavy investment in Reaction Towers was the result of a unique buying opportunity. My former corp was selling off an already running tower chain and I bought it off them, given that I had experience running the towers anyway. Between the reactions, some market trading and my own T1/T2 manufacturing, this meant that FCV's income streams would be nicely diversified should one of them be disrupted. 

As we approach the one month anniversary of this project, I will be posting some updates on how much ISK has actually been made. While my activity will vary over the summer, hopefully this will provide some indication on the sort of returns we are expecting from this project. 

Till then o/


Wednesday 23 May 2012

Low Capital Trading

Having received a question from Brullig on FHC about it, I thought I would mention tips here for how to make the most profit possible from trading when you only have a small amount of capital to start with (<500mill).

(1) Margin trading skill: This skill is super important early on to make the most of the cash you have in your wallet. It is most useful when trading items that have low turnover (say enyos or cap mods) as your buy orders will be filled slowly, so the isk you retain in your wallet can be used for more high volume trading (cap rechargers, damage controls etc). More info on it here.

(2) Other skills: Competition in most hubs is fierce and margins will be cut and slashed to their limits. You need to minimise losses from taxes and broker related skills, so do train broker relations etc to their max level as soon as possible. This is even more important since yesterday... a stealthy change from CCP in patch notes:


(3) Standings: By having good standings to the station owner, you pay less taxes. If you trade at Jita, run some missions for the caldari navy - it will help in the long run by saving you some %s!

(4) What hub? Jita is the hub that tends to draw the most active and powerful traders, mostly because a majority of moon goo flows through it compared to any other hub. However, it also means you have to compete against the no job/no life players who can update orders every 5 mins. I started my trading in Hek around 4 years ago, dealing with +2 and +3 implants. It was a slower market, but I was able to control my few item types with much less competition. I could play less hours, yet still make sure my buy orders remained on top and sell orders the lowest.

(5) Regional Trading: If you run missions, set up buy orders in mission hubs for common items that drop and sell orders for common consumables (ammo, drones). Many others do this, but there are usually good margins to be made as you have a pretty constant player base (mission runners never stop grinding!). This requires hauling, but that is almost a necessity early on.

(6) Do you pvp? Especially, in lowsec... when fleets aren't running or you are camped in station, always browse the markets for items you can fit into a cloaky hauler (so you can safely remove from lowsec). Always have an alt in jita to compare market prices - if you see a deal, especially those where the sell price in lowsec is lower than the highsec buy price - jump on it! Dont forget to check out contracts too, people firesale items all the time.

(7) Live in 0.0? This is how I really made my ISKies originally. Trade between 0.0 alliance hubs and jita. Ofc this requires a carrier and your own cynos (or a JF ideally, but you'd be amazed what you can do with a carrier only). 0.0 folk expect a 5-30% markup, so if you have access to a decent hub, then this can be excellent business.

(8) Start Manufacturing: Depending on how many alts you have, train one to Production Efficiency 5 and start building. By producing and selling an item in hubs, you will learn the most about the behaviour of that product, it's cycles, the main competitiors who build the product etc. Since missions stopped dropping meta 0 items, there is actually space for manufactures to make isk on low-end products. However, ammo is always a safe (but low margin) bet too!

(9) Burnout! The fewer orders you have to babysit, the better. Let's face it, trading isnt super thrilling. If you have 300mill ISK, have buy/sell orders for no more than 5 items. If you have 3000mill ISK, then dont dabble in more than 10-20 items. I try not to have more than 40 buy/sell orders up at any time, as otherwise updating them all (especially in hubs) will make you go grey.

And finally...

(10) Raise equity: This is what I did with FCV, and there is no reason anyone can't do it. Easiest if you have RL friends with spare ISK, this can still be done if you don't. Approaching corp or alliance mates, or approach people with ISK and offer collateral. If taking a loan, many people are happy for small (~5-6%) percentage of your earnings, so if you are trading a lot, a loan can be a sensible idea.

As an aside, consider the advantage of more ISK using this example:

Say you have 300mill ISK and lets assume that you can turnover 10% profit per week = 30mill
Lets assume this takes 20mins an evening, 6 days a week, which gives an isk/hour of 15mill/hr.
That's not bad, but you would be better off mining, ratting or missioning all which can easily hit 20mill an hour.

However, lets say a friend lends you 700mill for a total of 1bill. With 10% profit = 100mill/week.
Orders might take 10mins longer to organise per evening, but you are now making 33.3mill/hr.

The point I am making is that 0.0 ratting or mission running have a max profit/hr of around 60mill. And that is by really tweaking all the details (and investing in expensive ratting/mission ships). The profit per/hour in trading is only limited to how much ISK you have to invest. Of course, 10% profit per week is quite a modest amount for an active trader and as an added bonus, trading is super easy activity to have on a second account while pvping with a main. I have made millions while waiting for guns to cycle in big fleet fights with time dilation!



That's all my tips for now - if I have forgotten anything major - do let me know!

Monday 21 May 2012

Thin Markets in action

At the end of last week I posted about a trading opportunity I called 'Thin Markets'. In this post, I want to illustrate it with a example from my own market activities.

The item I manipulated was the Capital Shield Transporter. This is a prime example of a good item for this sort of market play as supply is controlled solely by manufacturers (and doesn't drop in missions etc). Therefore, as supply has a slow response to demand, the market is very flexible to manipulation hits.

As discussed in the last blog post, I discovered a thin market for this item:


I hope you agree that the above distribution of sales looks a lot like this graph with the sales highlighted in the blue box above representing an 'island' of under priced orders.

But before buying up the stock, I had a quick check of the market trends:


Looking at the graph, it looked like the transporters had bottomed out of this sales cycle and would be rising over the weekend. Additionally, buying up 18 units for resale only represented 30-40% of day's sale volume, so I should be able to shift the stock relatively quickly. Prices normally rise over the weekend too as the weekend warriors log on and get shopping. Following the eve trading motto of 'red below green, buy. green below red, sell', I thought this was a perfect example of a thin market waiting to be pounced on.

And so I bought the stock and relisted:



The items did sell over the weekend, and overall a small but easy profit of 80-90mill was made.



Thursday 17 May 2012

"Thin Markets" - a market opportunity

In this post I am going to introduce you to what I call "thin markets" and how one can take advantage of these markets to turn profits in trading. I will start off with a hypothetical situation and tomorrow I will post some screenshots of me (hopefully) pulling it off.

First of all, lets imagine a distribution of sell orders prices for a random item:

Graph A: We can see the distribution of sell orders initially has a normal distribution at the high end of the price range (y-axis is an arbitrary price, x-axis is the sell price from high ---> low).

Of those sell orders, some will sit there unchanged (ie not actively managed) while others are constantly repriced (ie actively managed by market traders). Over time, the distribution of sell order prices will begin to shift toward lower prices (and volume will disappear from market as consumers make purchases).


Graph B: We can see the shifting of sell prices trending cheaper. What can happen next is when opporunities arise. Some traders/sellers might keep agressively pushing the price lower in order to sell stock as quickly as possible. As such, these actively managed sell orders can become cheaper so quickly that they 'seperate' from the original price point (and those high sell orders which remain unchanged). The distribution of sell orders can start to look like this:


Graph C: The peak in red above is what I call a 'thin market' where an island of sell orders has become isolated in price from the bulk of other sell orders on the market. Sometimes, a powerful market play can be made to purchase all the stock in that red peak, and relist at a higher price point as shown below:


Graph D: By shifting the peak back up, profits can be made. This has the added advantage that you have just removed all stock from those actively trading on the market, so it will be easier to control the market for longer and to sell more products at the new higher price.




Of course, this plan can backfire if a new producer comes along and dumps a new large inventory of stock onto the market and undercuts by a large margin. But that's the fun of the game :)







No risk - no isk.



Tomorrow or these weekend I will post the results of a market play just like the one above, so stay tuned.

Tuesday 15 May 2012

Trade Shifts outside of Hubs

To be the most profitable trader in Jita (or another hub), you really need to work from home. 

When devblogs or other clues are dropped about upcoming game changes, those first able to hoard/dump the stock of item X in the hubs stands to gain the most. I'm sure many of you, like myself, read devblogs at work and then realise by the time we get home the markets would have already seen a major shift (and most likely an overshoot of the actual effect,  meaning that buying in late can cause major losses). 

In any case, for those of you in this position - use alts to scan other regions that lack major trading hubs. In my case, given the way T1 and T2 prices have surged in the last 2months, I spent some time poking around the lowsecs surrounding Jita (with my pvp main - 2birds1stone etc). As market orders are updated or filled slowly in lowsec, many sell orders were now very cheap relative to the hubs. So I bought mostly T2 ships off the market, hauled them to Jita and sold them to buy orders for nice profits with a minimum of work. Below is a snapshot of some buy/sells using muninns and devoters:

 
As you can see - I was getting from 12 - 16mill ISK profit per hull. 

So for those of you with a real life - dont forget how the regions surrounding market hubs often lag behind the trade patterns established in those hubs - opening up a range of profitable trades waiting to be exploited. 

Till next time.

Friday 11 May 2012

Who needs 100billion ISK?

When you start a fund for raising more than 10bill, eyebrows are always raised. Up to that amount and many investors dont think twice - it seems like a reasonable amount.

However, there are many market opportunities that exist that can only be exploited by those with a lot of liquiduity available to them at all times. 

A prime example would be how I made the first 600mill profit for FCV with only 10minutes work. 

Fullerides market in Jita can be pretty volatile, as few people playing that market hold stock off the market to list at a later date (Fullerides are so valuable that they often need to be sold immediately to regain ISK to buy more reactants and so on).

Anyway, a stock of underpriced goods was identified and purchased at 3799.95 pu, and then relisted at 4017.30 pu...


Competition on the market meant I had to cut sell prices to 3980/70...


As you can see, over 600mill profit was made and orders had to be adjusted only two or three times. However, if I didn't happen to have a spare 12bill ISK available, this easy money making opportunity would have been lost.

Have a good weekend, and lets see what market surprises I can hustle up for you...

Thursday 10 May 2012

Share Sale Complete

The sale is over!

While the original IPO plan was to raise 100b, after reviewing my plans I realised that I could fufill my industrial goals with slightly less initial capital and also offer better per-share returns in October. Therefore the total number of shares sold so far is 70, with 10 held in reserve for investors who don't currently have the ISK on hand, or should I need to raise more equity in the future. While 100b was a nice round number, the risk was that during the next 6 months, large piles of isk would sit un-invested and thus would reduce the overall ROI of the project.

And I am aiming for a high ROI :)

So, to start off with - who invested? While I wont be publishing names, I will share where investors came from. Despite the suspicion of scam - FCV has raised funds from 3 main sources: (1) current and former corpmates (2) "Institutions" - in this case failheap and (3) corp ceos who have worked with me in the past and who are interested in investing corp savings.

So, some piecharts:

And to break down those numbers further into who purchased how many shares each:






So with the share sale complete, making space dollars can commence. I will post more info on that soon.

If you are interested in purchasing some of the reserve shares, then do get in touch.




Monday 7 May 2012

EVE-O thread

The EVE-O MD thread is live.  Viva the eve-o trolls!

VV has posted his audit in there too. I expect the share sale to complete within 48hrs now.


Share Sale Progress

The share sale has been following the following schedule:

Phase 1 - Shares are sold to preferred, corporate and institutional investors
Phase 2 - Shares are sold to the public
 

Phase 1 has run from the 2nd of May and so far over 57 shares have been sold, with a further 10 shares reserved. This leaves only 33 shares up for sale.

Later today, Phase 2 sales will begin to the EVE-o public with a MD thread to be posted soon.






A link will go up later with the MD sales thread. If you are interested in getting invested, please send ISK as soon as possible to 'FireFly CEO' as shares are sold on a first come, first served basis.




Saturday 5 May 2012

Audit is done

Great news, Vaerah Vahrokha has completed his audit of this project. 


For details, go here.

If you have any questions, feel free to evemail Cheeba Don.

Now that the audit is complete, phase 2 of the share sale will begin soon.

Welcome

Welcome to the FCV Blog

Instead of a newsletter, I will be using this platform to keep investees and those interested in the project up to date with my activities.

The share sale is currenlty in Phase 1 sales (preferred investors) but will open up to the general public soon. Phase 2 sales will begin later this weekend.

Business proposal and details of the project can be found here.

Shortly I will be posting an audit report done by Vaerah Vahrokha for those interested in getting confirmation that I have the assets, skills and experience to fuel this project.

To note:

To purchase shares - send isk to 'FireFly CEO' - he is CEO of a Firefly Capital Ventures, a one man holding corp created specifically for this project.