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PLEX - The best long term growth investment.

Author
Le Lancer Strike
Pax International
#1 - 2012-05-05 21:09:52 UTC  |  Edited by: Le Lancer Strike
I've been thinking about how the Eve-Markets work in relationship to the broad number of users out there. As the overall Eve economy grows the worth of isk goes down. So how can a person make isk through investing? Well, I've been thinking the best bets would be something that is relatively stable and something that a very large number of users utilize. For example, basically when a miner raises their price on their goods a chain reaction occurs in that everybody has to raise their price to afford the ore. The ship builder has to raise their price to be able to buy the ore and sell their ships for a profit and so on and so forth as every ripple happens everything is trying to re-balance itself out. So how can a person profit from this knowledge? Well a PLEX bought today will definitely worth more in the long term just because the worth of isk will inevitably go down. Unless CCP decides to take isk out of the system faster than it is created. Which is highly unlikely just because asteroids spawn out of thin air and miners will mine these.

What do other people think? Please share your ideas.
Johnny Frecko
Violence is the Answer
Wormhole Society
#2 - 2012-05-05 22:07:43 UTC  |  Edited by: Johnny Frecko
You're assumption is very wrong in various areas.

i'll start from the bottoms up.

Ore being created from thin air isn't isk going INTO the system, thus your last sentence is void.
On the other hand, it's not void, i'll use it for later.

In the supply and demand balance there's something intresting in eve.
The supply is somewhat rigid going up, meaning that it's easy to get miners to stop mining, harder to get more miners to get to mining.
That means that miners don't decide the sell price, Buyers do.
So the chain works reversed from what you said. It's the increased demand in ships/modules that drives their price up, that drives the mineral price up, that SHOULD get more miners into the system.
As more ships are needed, more minerals are needed - price goes up.

ISK is losing value is true, your statement is wrong.

PLEX bought a year ago was worth around 350-370M. prices took a big hike mainly due to a succesful expansion.
there is no guarentee that a plex bought today will be worth *at least* 15% more next year.

Plex prices are far from stable if you ask me, they change dramaticaly based on supply/demand - and that changes from outside the "closed" market. Supply is maintained through a 3rd party market called real money. demand is pretty much the player base.

ISK value goes down, but the only reason isn't the long term price increase that's planned every year(what you would call inflation).
In fact because we live in a closed market, It's the commodities that got an increase in value. But it's all NOMINAL. a nominal change cannot, in theory, change any real numbers. so a price rise of 50% will in theory raise all prices by 50%, that ofcourse is wrong though at it's very core.

In short, in full market equillibrium PLEX prices should rise steadily with the ongoing 1-3% planned inflation. but it's also very responsive to real life changes that occures to the player base.

WOW i'm writing long today.
Vaal Erit
Science and Trade Institute
Caldari State
#3 - 2012-05-05 22:25:26 UTC
Ok disregarding some of the wrong statements in the OP, I would agree that PLEX was a safe investment option for a long time.
But now PLEX prices are decreasing. This is due to PLEX coming down from the spike due to PLEX for GTX 560 and I have a suspicion that bots use a lot of PLEX so banning bots lessen demand which lower the price. Incursion nerf may have the affect of people dropping some alts that were paid by PLEX as well but that may only be a drop in the bucket.

So as PLEX is somewhat decreasing (saw some at 475m compared to 500m a week ago) it's a bad time to invest. Normally PLEX is a great item to invest in, just wait until we find a bottom first.
Mu-Shi Ai
Ai Capital
#4 - 2012-05-06 00:33:50 UTC
Well, just based on my coming back after several months away from the game, I have to say, T2 mods appear to have been a pretty solid long-term investment. Prices are up way higher in my region than they were before I left, and I had some good stocks left over. So if I were going to look for a long-term investment, I'd also look to stockpiling T2 mods.
Ticarus Hellbrandt
Science and Trade Institute
Caldari State
#5 - 2012-05-06 01:07:15 UTC
ccp put plex on sale and the price has fallen so i doubt you will see a permenant increase in their price lasting forever.
Breaker77
Reclamation Industries
#6 - 2012-05-06 02:18:09 UTC  |  Edited by: Breaker77
Ticarus Hellbrandt wrote:
ccp put plex on sale and the price has fallen so i doubt you will see a permenant increase in their price lasting forever.


PLEX on sale? You mean an increase in prices. The special offer is more than what it costs to buy them one at a time.

6 PLEX for $99.99? How stupid would you have to be to purchase that? a 1 month subscription is $14.95 so 6 months (PLEX) would be $89.70. Why in the hell would I pay MORE to play EVE?

edit: Actually 6 months would be even less than that if you paid for it at once due to the discounts.
Ocih
Space Mermaids
Somethin Awfull Forums
#7 - 2012-05-06 04:52:51 UTC
Breaker77 wrote:
Ticarus Hellbrandt wrote:
ccp put plex on sale and the price has fallen so i doubt you will see a permenant increase in their price lasting forever.


PLEX on sale? You mean an increase in prices. The special offer is more than what it costs to buy them one at a time.

6 PLEX for $99.99? How stupid would you have to be to purchase that? a 1 month subscription is $14.95 so 6 months (PLEX) would be $89.70. Why in the hell would I pay MORE to play EVE?

edit: Actually 6 months would be even less than that if you paid for it at once due to the discounts.


People argue, you pay more because they are a commodity in game. My mindset was always like yours. Why would I do that? Even in my case where I pay for 4 accounts, suppose I wanted to get the 2 for sale and 4 for myself. 15 x 4 + 35 is still cheaper than $100 for 6. Not to mention there has been a plex deal of one sort or another for the past 4 months. I don't know what is pushing them down but at 20 mill on 500 unless you are trying to extract that glorious EVE market 1% profit, its not a big tumble. When they are at 350 again I will consider the market to have crashed.
clixor
Celluloid Gurus
#8 - 2012-05-06 12:29:26 UTC
You could argue that the players who make use of the deal would've bought the PLEX anyway. Only instead of purchasing them monthly they buy them in a single transfer. I.e. It's not like many players who never bought a PLEX suddenly buy 6 of them now.

Ingame demand has temporarely gone down due to bot banning and players dropping accounts due to high PLEX price

After expansions players reactivate accounts to check out new content and new players kickstart their careers with a few PLEX.

All in all IMO the total amount of PLEX added to market is somewhat stable, but as new players get older and become selfsufficient total demand goes up steadily resulting in a long term price increase (higher than inflation).

Akita T
Caldari Navy Volunteer Task Force
#9 - 2012-05-06 12:43:33 UTC  |  Edited by: Akita T
Le Lancer Strike wrote:
As the overall Eve economy grows the worth of isk goes down.

Inaccurate assumption. It has a decent chance of being true for particular stretches of time, but not guaranteed to be true regardless of duration.

Quote:
Unless CCP decides to take isk out of the system faster than it is created.

They don't need to take ISK out of the system faster than it is created for ISK value to go up. There are scenarios where the overall "normal" ISK faucet-sink balance can actually go up but still the ISK value could go down.
For instance, large subscriber growth spurts can diminish the "ISK per capita" number even if the ISK amounts on older characters keep going up.
Also, rich characters "hoarding ISK", while not an ISK sink per se, it's practically just as good as an ISK sink. Same for characters that go inactive, or even just idle.
Those are just two counter-examples, but there's many more.

Quote:
how can a person make isk through investing?

Simple - stay on the ball and watch out for stuff that's likely to increase in either the long term or even medium term, heck, even short term, then sell as soon as you have good reason to believe that increase will stop.
Technetium was one of the best long-term investment possibilities in the past 2 and a half years, might still be the case for a short while extra, but in the long enough term, it's likely to drop heavily due to changes CCP almost certainly needs to implement. We're talking a nearly 70-fold increase in price in around 3 years.
PLEX/GTC were a relatively decent investment opportunity, but nowhere near the benefits of Technetium, and not guaranteed to remain a decent investment for long. The best increase PLEX/GTC managed to made was about 4-fold in half a decade. That's more than one order of magnitude less compared to the best performance of Technetium in a shorter timespan.
Many other items have had even better medium term or even short term performances.

There will always be items that go up in price much faster than the average, and eventually, they will almost certainly go down in price faster than the average.
The trick is buying stuff BEFORE it goes up in price too much and selling it BEFORE it drops in price too much.
NO SINGLE ITEM IS IMMUNE from price decrease if you give it enough time.
Otto3d
Meteor Industrial Complex
Hardly Competent
#10 - 2012-05-06 14:29:21 UTC
I think it is a good long term investment, but not very good for short term investment. You will need to hold onto the PLEX for a few months before they are actually worth any value.

EVElopedia < add this to your sig to show u WANT it back

Kara Books
Deal with IT.
#11 - 2012-05-06 16:18:47 UTC
there is risk that plex will hit 450, most likelly for a short while, there is also risk PLEX will hit 500 again for a short while.

My conclusion:
Plex market is very volatile and recommended HOLD and find other means, for small merchants.
Johnny Frecko
Violence is the Answer
Wormhole Society
#12 - 2012-05-06 16:58:20 UTC
The resistence is probably 500M, but if we stay below 490M for too long the resistence might change to 490M.

The support for now looks like 470M to me, give or take. In case any of those limits is breached we're in for some intresting times.

Ofcourse they *probably* won't :)