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Whats the closest thing to an Inflation hedge ?

First post
Author
MIZAM
Abrahams Guide
#1 - 2013-06-18 04:48:39 UTC
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
#2 - 2013-06-18 06:42:20 UTC  |  Edited by: mechtech
PLEX and unique ships if you have the isk.

Minerals/basic ships are an investment, not an inflation hedge.

Right now you might as well park isk into BSs/BCs/whatever else has been "tiericided" and is undervalued.
SJ Astralana
Syncore
#3 - 2013-06-18 08:33:29 UTC  |  Edited by: SJ Astralana
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, 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.

Hyperdrive your production business: Eve Production Manager

Tinu Moorhsum
Random Events
#4 - 2013-06-18 09:32:02 UTC
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.


SJ Astralana
Syncore
#5 - 2013-06-18 09:50:00 UTC
Are we unclear on the concept? Hedging is the diametric opposite of speculating.

Hyperdrive your production business: Eve Production Manager

The Chronophage
Garoun Investment Bank
Gallente Federation
#6 - 2013-06-18 12:07:42 UTC
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.
#7 - 2013-06-18 12:12:20 UTC
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
#8 - 2013-06-18 12:20:36 UTC
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.
mynnna
State War Academy
Caldari State
#9 - 2013-06-18 12:33:05 UTC
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
#10 - 2013-06-18 13:40:48 UTC

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.
Adunh Slavy
#11 - 2013-06-18 15:13:47 UTC
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

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt

ngaly
Doomheim
#12 - 2013-06-18 15:58:12 UTC  |  Edited by: ngaly
Inflation is a concept that doesn’t 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 isn’t currently spiking into a bubble (I’m quite sure that’s 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
Grison Universal
#13 - 2013-06-18 17:52:41 UTC
Let me get the hedge clippers. This thing is out of control.

yes

Karash Amerius
The Seven Shadows
Scotch And Tea.
#14 - 2013-06-18 18:08:03 UTC
Plex and unique ships....everything else has too much risk in my opinion.

Karash Amerius Operative, Sutoka

mynnna
State War Academy
Caldari State
#15 - 2013-06-18 18:15:20 UTC  |  Edited by: mynnna
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, at least if I'm being overly literal. Blink

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
#16 - 2013-06-18 18:49:52 UTC
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. :)

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt

Tinu Moorhsum
Random Events
#17 - 2013-06-18 19:40:38 UTC
mynnna wrote:

That's not what the OP asked though, at least if I'm being overly literal. Blink


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
Acorn's Wonder Bars
#18 - 2013-06-18 19:55:52 UTC
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
#19 - 2013-06-19 03:41:17 UTC
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
Move along there is nothing here
#20 - 2013-06-19 04:58:06 UTC
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.

I support the New Order and CODE. alliance. www.minerbumping.com

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