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15bil, Uncollateralized, 10%, 30days

Author
Koniforous
Tauren Transit
#1 - 2014-10-30 10:53:35 UTC
I have taken out a 15bil loan for 30 days at 10% with my alliance. This is to expand my trading into another trade hub. All transactions and isk will remain on a separate character, Miina Sohvi, so as not to interfere with TAUTX profit and asset reports.
Tinu Moorhsum
Random Events
#2 - 2014-10-30 19:15:38 UTC
Is this intended to be informative or do you have a question?

T-
Koniforous
Tauren Transit
#3 - 2014-10-30 19:35:38 UTC
RAW23
#4 - 2014-10-31 12:36:36 UTC  |  Edited by: RAW23
Ideally this should have been run by your other investors first and their agreement sought at it increases your public exposure markedly and thus heavily impacts risk on your currently outstanding debt.

Edit - In fact, having just looked at your borrowing caps you seem to really have done an end run around your investors on this one. You limited your bonds and shares together to something like 7.5bil and you have now tripled your exposure and broken through that limit, apparently without consultation. This is 'not a good thing'.

There are two types of EVE player:

those who believe there are two types of EVE player and those who do not.

Koniforous
Tauren Transit
#5 - 2014-10-31 12:52:08 UTC
RAW23 wrote:
Ideally this should have been run by your other investors first and their agreement sought at it increases your public exposure markedly and thus heavily impacts risk on your currently outstanding debt.

You are correct. However, this post is meant to serve as the increased risk announcement to my current banking investors (of who's isk I hold ~5.4bil). Since TAUTX allows withdrawals at anytime, they are free to request a share buyback at anytime should they be unhappy with the new debt increase.
Koniforous
Tauren Transit
#6 - 2014-10-31 12:59:07 UTC
RAW, I want to point out that this is a separate venture than the bank. Koni, and miina's wallets will not be funneling funds between each other to boost or harm profits and NAVs of either project. But, if this large bonds works, I have another trade pilot that can also handle separate market activities, and I would like to eventually set up a TAUTX major investments division; holding about 15bil in bonds on both pilots, while koni maintains all share and low risk nav related bonds.
RAW23
#7 - 2014-10-31 13:45:31 UTC  |  Edited by: RAW23
Koniforous wrote:
RAW23 wrote:
Ideally this should have been run by your other investors first and their agreement sought at it increases your public exposure markedly and thus heavily impacts risk on your currently outstanding debt.

You are correct. However, this post is meant to serve as the increased risk announcement to my current banking investors (of who's isk I hold ~5.4bil). Since TAUTX allows withdrawals at anytime, they are free to request a share buyback at anytime should they be unhappy with the new debt increase.


The issue is that that order of events is wrong. If you were going to triple your taking of isk and then scam they would not be able to take their isk out after you had already acquired the extra 15bil. The fact that you haven't scammed is not material to the increased risk their investments were put in by not being informed in advance and not being given the option to divest themselves of their shares and bonds before you increased your debt by 2-300%. This is particularly significant given that you had explicitly set a cap on your borrowings and sensible investors would have lent with that cap in mind. The fact that you borrowed the present isk for a different venture also doesn't really help as going down this route just says that no cap you ever apply can be relied upon because you can just set up a different nominal company to take in unlimited quantities of additional isk. Any risk assessment will be applied to all your ventures taken together, rather than just one element of your operations.

There are two types of EVE player:

those who believe there are two types of EVE player and those who do not.

Koniforous
Tauren Transit
#8 - 2014-10-31 17:00:48 UTC
RAW23 wrote:
Koniforous wrote:
RAW23 wrote:
Ideally this should have been run by your other investors first and their agreement sought at it increases your public exposure markedly and thus heavily impacts risk on your currently outstanding debt.

You are correct. However, this post is meant to serve as the increased risk announcement to my current banking investors (of who's isk I hold ~5.4bil). Since TAUTX allows withdrawals at anytime, they are free to request a share buyback at anytime should they be unhappy with the new debt increase.


The issue is that that order of events is wrong. If you were going to triple your taking of isk and then scam they would not be able to take their isk out after you had already acquired the extra 15bil. The fact that you haven't scammed is not material to the increased risk their investments were put in by not being informed in advance and not being given the option to divest themselves of their shares and bonds before you increased your debt by 2-300%. This is particularly significant given that you had explicitly set a cap on your borrowings and sensible investors would have borrowed with that cap in mind. The fact that you borrowed the present isk for a different venture also doesn't really help as going down this route just says that no cap you ever apply can be relied upon because you can just set up a different nominal company to take in unlimited quantities of additional isk. Any risk assessment will be applied to all your ventures taken together, rather than just one element of your operations.

I can see where you're coming from, but I disagree and see it differently. Investors may see it their own way, or one of our ways: I do not care. I always make decisions with my investors in mind, and give fair notice before changes within respective modalities. I have maintained dependable and respectable management of my investors funds and policies governing the use of those funds; with TAUTX's anytime withdrawal policy the timeframe for notices of changing policies has been greatly reduced and I am able to quickly make changes and take on new ventures with short notices. For example, it is the end of the month, funds are sitting ready to pay dividends, and also prepared for any withdrawals this new business venture may place on TAUTX.

What may seem like a less than thought out, improperly implemented, high risk bond to you, is not so from my seat. Ultimately, we invest in people we find trustworthy, regardless of the risk, because risk is most notably derived from reputation and trust, with only a small portion of an investments overall risk being derived from the details of the operation. And that is why I am counting on this new venture being applied to my overall risk assessment by others, because I want to prove to myself and others that I can handle large scale investments, but at same time I do not want to affect the stability and dependablility of TAUTX. The caps on debt I place on TAUTX are not placed on me, the player. I am very clear in my wording of policies to this fact. Just like in real life, I treat TAUTX as a corporate entity with its own rules of operations, that do not affect the way I personally play, just the way I treat funds under TAUTX. These new funds are not backed by TAUTX funds, this is a bond issued without any collateral other than my reputation as a successful trader,under my overall player persona, but not that of one of my corporate entities which I operate under specific rules. I rambling....
Nedly Stark
Caldari Provisions
Caldari State
#9 - 2014-10-31 17:46:39 UTC
Two words:

Rep grind
RAW23
#10 - 2014-10-31 20:07:26 UTC
Koniforous wrote:

I can see where you're coming from, but I disagree and see it differently. Investors may see it their own way, or one of our ways: I do not care. I always make decisions with my investors in mind, and give fair notice before changes within respective modalities.


Except you didn't. You didn't give any advance notices before the change to allow investors to decide if they were as happy keeping their isk with you when you were borrowing over 20 bil as they were when you were borrowing 7. You presented them with a fait acomplit and they had no option whether or no they wanted to stay with you when you radically altered your risk profile. Now, a small change is one thing but when you triple your public debt you owe your investors the right to opt out before you take the new debt on. Rapid ability to withdraw after you change things doesn't help the investor at all because any sensible investor, being aware that the point of maximum risk of a scam is the point at which you take possession of the new debt, will want to make the choice before, not after, that point.




Quote:

The caps on debt I place on TAUTX are not placed on me, the player. I am very clear in my wording of policies to this fact. Just like in real life, I treat TAUTX as a corporate entity with its own rules of operations, that do not affect the way I personally play, just the way I treat funds under TAUTX.


Then those caps are meaningless. Capping debt is not just a role-play thing, it is a mechanism to give investors confidence that your exposure will not suddenly rise above the point at which they think you might be at risk of a scam. If you say the caps don't apply to you personally but only to the particular business then they are pointless, or at worst deceptive, because the business cannot scam, only the borrower can. If you approach your caps like this, and ride straight over them without consulting your investors, then at any stage an investor would have to ask him or her self, 'Would I trust Koniferous with hundreds of billions?' rather than with the amount you are actively raising because you could then go on and increase your exposure indefinitely regardless of what you say any particular investment is capped at. If you are not going to cap your own exposure then you shouldn't be pretending that there is any cap as this can only serve to mislead potential investors and will have no practical purpose.

There are two types of EVE player:

those who believe there are two types of EVE player and those who do not.

Cista2
EVE Museum
#11 - 2014-11-01 09:25:16 UTC  |  Edited by: Cista2
Koniforous wrote:
Ultimately, we invest in people we find trustworthy, regardless of the risk

No.
Risk is the opposite of trustworthiness in the eye of the investor, since the investor does not know what the actual default risk is. Risk and trust are not independent, they are wholly dependent. - investors trust noone, they trust what they can see.

Therefore, increasing the exposure = increasing visible risk = lowering trust. You seem to want to bypass that fundamental connection.

Furthermore, you are suggesting to investors that they just ignore that your own alts are also you? These are quite puzzling remarks.

My channel: "Signatures" -

Bad Bobby
Bring Me Sunshine
In Tea We Trust
#12 - 2014-11-01 09:57:53 UTC
Cista2 wrote:
you are suggesting to investors that they just ignore that your own alts are also you? These are quite puzzling remarks.
Suggesting to existing investors, that are his alts, that the side loan given to his alt by his alt alliance is not relevant to the risk level of the ongoing fictitious loan taken up by his alt, which was also filled by alts, because these are seperate alts to the other alts or the alts investing in those alts.

Puzzling how?

Big smile
Koniforous
Tauren Transit
#13 - 2014-12-04 12:03:28 UTC
This has been completed and repaid in full, plus 6 extra days of interest.
virm pasuul
Viziam
Amarr Empire
#14 - 2014-12-04 17:56:32 UTC
RAW23's criticism of your actions are valid and constructive. Even if you disagree with him I hope that you are able to understand what he is saying and why he is saying it. Ignore it sure, but it is important that you understand it.
Well done for not reacting badly to his concerns.