Market Discussions

You make it sound like a Billion is a lot. I can buy 2.5 Billion for less than £30.

Faccat,

I currently have a bond going. It started as 2B, and will shortly expand to 3B.

For me, and I can only speak for myself, it was all about liquidity. I was making profits of around 25m a day doing inter region trading, and I was honestly just short of isk to restock all the time. I had a list of over 20 new items to sell, and no isk to do it with. It would have taken me 80 days at 25M/day in profit to secure the 2B that I was able to raise through my bond offering. The bond way KEY in scaling up my operations quickly and maximizing profitability. In August, I ended up with profits of $2,678, 856,304. External costs are 1.2B (2 accounts to PLEX and 200M in interest). There is no way I could have come close to this without the bond.

I am expanding this bond by 1 billion for next month in order to expand into a new market hub. Again, it is all about cashflow. AS a retail trader, my isk is constantly sitting in items waiting to be sold. If I have billions in the bank, then I am not doing my job. I think as a retail trader, it is a constant battle to have enough of an item on hand, but not too much where it is tying up your capital.

I think your point is actually well taken into the next range of bonds. I don't see much use for one beyond 5B. This is becasue you should be generating enough profit to become fully self sustaining rather shortly.

TL:DR, the cashflow was well worth the time it took to research successful bond offerings and the time it takes to produce weekly investor reports. The interest payment is almost laughable, at about 7% of last months profits.

JG

I'll go ahead and answer your question as it sounds like my bond(s) may have prompted your interest.

A 20-30 million SP character will cost anywhere from 5-15b isk. The most profitable characters to trade, typically sell very quickly (there are exceptions to this, for example if the character is improperly advertised its possible to stumble on a gem, there are also opportunities to be found in touching up characters with a 51-day trial) The point is this; character trading is a business that requires a substantial amount of capital on-hand at any given time, and the capital invested is likely to be tied up for quite a while. I have missed several opportunities for lack of 1-2b isk.

On making isk: Mission running will net at most about 50 mil an hour (and that is a VERY generous estimate), so thats 20 hours of work to make 1b. c4 wormhole ops will make you about 130 mil an hour, which is very nice money; however it is a group activity, and 50% of the time there are more interesting things to do (shooting at other players comes to mind ). Perhaps for you making 1b isk isn't a difficult prospect; but for me, and I think most other players, 1b is still a pretty large wad. I have tried station trading, and currently dabble, but I have never been able to make more than 70 mil a day without constantly playing the 0.01 isk game. Perhaps I am just terrible, and lack the patience/game-mechanic knowledge to find and trade the most profitable items. Personally, I think that station trading isn't all its cracked up to be, and that it requires a much larger time investment than people would have you believe. Regional trading/hauling sounds promising, and when I can be bothered to scout mission/mining/incursion hubs and can fly a freighter, I will look into it.

tl;dr: The nature of my business means that every bit of liquid capital I have at my disposal expands opportunity for profit, and I don't think "go out and make it yourself" is easy or viable for most of us. I would gladly pay a monthly 9% interest rate to keep an extra 5-10b isk on hand.

Sometimes, War Sometimes a MAJOR purchase such as a supercarrier, can put a merchant in the hold, disrupting their usual trading patarns, in those cases up to 20B sometimes has to be loaned, because its no secret, sometimes you just need to take credit, or lose much more in lost revenue then paying out, even a measly 10% per month, sometimes people have to take this extra step, so they can enjoy the finer things in the game, OR not lose them in a War, because battles cost ISK, especially lost battles.

But, I have to agree, it seems like loans are being given out left and right, so Non-Chalante, as if the next one is probably going to be a scam.

Very special precautions should be taken, Mostly for game sake, a few bill loss isn't the end of the world for your hearty and well established merchant.

Thank you all for your considered responses.

I assure you I wasn't picking on anyone's bond issue in particular. There just seemed to be several in a range I couldn't understand loaning to or borrowing from.

I guess a good chunk of it is my perspective. Here is my style:
7B in buy orders
3B actual due to Margin Trading
80-120 orders out at time (generally evenly split)
Intra-Regional trading
Lots of contracts to move stuff to hub, a few regular haulers
3-4 updates of orders a day, about 15 minutes each - I may not hit all of them
One major overhaul of what I'm doing once a week; prune buys, write contracts, accept contracts, sort, stack

Doing all of that was netting me about 100mil a day from the time I had 3B ISK.

I'm up to 20B, but at no time was I ever utilizing that last 10B. So it is interesting to see why some of you have chosen to issue/buy bonds.

Faccat,

judging from your posts in this thread it seems to me that you lack the creativity or will to put your excess ISK into a profitable venture beyond what your current style is. However there are people other than you and they are capable of this.
Also, while you yourself have mentioned twice in this thread that only once you had reached 3bn you could employ your current style to the current extent (at which you seem to be happy with), somehow you fail to see that getting these 3bn in the first place is something a bond could help with.



To answer your questions:


Because you need money to make more money, and time is money.


Sometimes.


Irrelevant. Would you buy a bond just because they did make their first billion or more? (You would certainly not I think.)
More relevant would be if a business proposal is reasonable, in that regard only (mostly) your own experience helps, and if the person is able and willing to follow it through.




Correct me if I am wrong, but it does not look like you have ever tried to sell a bond so how would you know how much "hassle" would be involved? It just might have been worth it.

I have seen many posts citing that they get involved in the MD community for the RP aspect of it. Its not necessarily just about the value involved but more about engaging in the process ...and exploring an out-of-game Eve element.

As to the risk, its part and parcel of providing capital to new or expanding ventures. Giving your hard earned iskies over to a stranger and hoping they pay you back is what helps to create that immersion when one engages in the MD forum offerings.

Sheesh, even one of the auditors (VV) has a Certificate of Incorporation (or something of that nature) on their website.

MD is serious business RP wise.

Fly safe. o7

if I dont have anything else to spend money on and see an offering that doesn't seem to get the attention it would imho deserve - yes.

I think the outcomes of bonds can mostly be grouped into four categories:

(1) default - business failure
(2) default/scam - lack of motivation
(3) scam - premeditated
(4) scam - impulse

You cannot do much to protect yourself from (4) other than to avoid investing in persons that you know to be unstable.

For small bonds (1) and (3) are extremely unlikely as the goal is easy to reach (especially in trading where the principal can be directly repaid at maturity and only the interest has to be earned) and as the opportunity to step up into the higher investment brackets (which offer better cost/reward for scammers) is virtually guaranteed for business managers that have completed a few small offerings .
(2) is also alleviated a bit (but generally hard to protect against) as the problem of earning enough to repay principal+interest does (hopefully) not appear unsurmountable or discouraging to the investee.

As for "could someone worth 20b really need 1-3b?" the answer is "yes" as a lot of these 20b may be tied up in assets that are illiquid and not suitable for collateral.
Especially people that have played EVE for a long time but did only recently start trading tend to run into such issues by having most of their NAV tied up in characters, pvp ships, ...

Speaking from personal experience I had made (and spent/lost) several billion ISK before I could call a full billion in ISK & (non-character) assets my own for the first time.
I don't think my ability to earn money on the market is worse than that of other traders but I am really bad at keeping my trading capital untouched and reinvesting profits - however, this wouldn't necessarily make me a bad investment as the effects of my lack of discipline are averted when working with other people's money (can't go and spend your principal on shinies - in contrast to my own trading capital).

and do NOT undock .. terrible things can happen