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Go big or go home?
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CJ Dashto
Doomheim
#1 - 2013-02-22 15:36:17 UTC
I love reading the MD forums. Personally, I don't dabble in the market, but I'm intrigued by it and the (actual) discussions you all have here. If I could, I'd like to spark some more of that constructive discussion.

Andrew Carnegie was one of the most successful industrialists of our time. He was also notorious for investing heavily in a project and losing big. He's been quoted as saying:

Quote:
Concentrate your energies, thoughts, and your capital. The wise man puts all his eggs in one basket and watches the basket.


This goes against the common market strategy of diversification and NOT putting all your eggs in one basket to help minimize risks and losses. While this is a perfectly sound strategy for risk adversity and longevity in the markets, there are also smaller rewards. So I'm curious...what kind of industrialist/investor are you?

Not looking for specific commodities or insider secrets here. Just wondering who among you is more likely to roll the dice and bet big.
Syds Sinclair
University of Caille
Gallente Federation
#2 - 2013-02-22 15:42:31 UTC
..Good thread. The differenc between the gentleman you linked and trading in Eve is: that man's millions could be used by one venture. In eve, you can sink allow your fortune into Caldari Navy Hookbills. There just isn't the demand, trading wise, for that item.

But as for trading theory, I'd rather make 100,000 now then 1,000,000 tomorrow.

♠ Sinclair Consulting ♠
Varius Xeral
Doomheim
#3 - 2013-02-22 15:45:14 UTC
There's a big difference between building a business and investing in paper assets.

The theory behind investment "diversification" is that by statistically selecting assets based on covariance, you can achieve the same expected return for less risk than if you just selected one asset. It is a statistical trick, not a general guide for everything involving capital.

Official Representative of The Nullsec Zealot Cabal
Alex Grison
Grison Universal
#4 - 2013-02-22 17:46:56 UTC
CJ Dashto wrote:
I love reading the MD forums. Personally, I don't dabble in the market, but I'm intrigued by it and the (actual) discussions you all have here. If I could, I'd like to spark some more of that constructive discussion.

Andrew Carnegie was one of the most successful industrialists of our time. He was also notorious for investing heavily in a project and losing big. He's been quoted as saying:

Quote:
Concentrate your energies, thoughts, and your capital. The wise man puts all his eggs in one basket and watches the basket.


This goes against the common market strategy of diversification and NOT putting all your eggs in one basket to help minimize risks and losses. While this is a perfectly sound strategy for risk adversity and longevity in the markets, there are also smaller rewards. So I'm curious...what kind of industrialist/investor are you?

Not looking for specific commodities or insider secrets here. Just wondering who among you is more likely to roll the dice and bet big.



I developed a strategy where I put all of my eggs in my basket.

Slam the basket onto my head.

And run around the station in my underwear dripping egg everywhere.

I find that this drives away the competition.

yes
Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#5 - 2013-02-22 18:28:52 UTC
CJ Dashto wrote:
I love reading the MD forums. Personally, I don't dabble in the market, but I'm intrigued by it and the (actual) discussions you all have here. If I could, I'd like to spark some more of that constructive discussion.

Andrew Carnegie was one of the most successful industrialists of our time. He was also notorious for investing heavily in a project and losing big. He's been quoted as saying:

Quote:
Concentrate your energies, thoughts, and your capital. The wise man puts all his eggs in one basket and watches the basket.


This goes against the common market strategy of diversification and NOT putting all your eggs in one basket to help minimize risks and losses. While this is a perfectly sound strategy for risk adversity and longevity in the markets, there are also smaller rewards. So I'm curious...what kind of industrialist/investor are you?

Not looking for specific commodities or insider secrets here. Just wondering who among you is more likely to roll the dice and bet big.



The biggest problem with not diversifying is: The barrier to entry, in the vast majority of markets in eve, is tiny. And there's no real economy of scale (except with hauling).

That's not true in the real world.

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter
Vera Algaert
Republic University
Minmatar Republic
#6 - 2013-02-22 19:07:59 UTC
Varius Xeral wrote:
There's a big difference between building a business and investing in paper assets.

The theory behind investment "diversification" is that by statistically selecting assets based on covariance, you can achieve the same expected return for less risk than if you just selected one asset. It is a statistical trick, not a general guide for everything involving capital.

but high variance is what enables you to win big in the first place.

.
Varius Xeral
Doomheim
#7 - 2013-02-22 19:20:15 UTC
Vera Algaert wrote:
but high variance is what enables you to win big in the first place.


Nonresponsive

You can achieve the same expected return for less statistical risk or, equivalently, a higher expected return for the same statistical risk.

Official Representative of The Nullsec Zealot Cabal
Lakhthaar
STK Scientific
#8 - 2013-02-22 21:17:03 UTC  |  Edited by: Lakhthaar
You can go big in Eve market trading but the opportunities are limited. Discovering one of these opportunities requires that you look at multiple investments. While looking at your possibilities you'll find that there are several things you can make decent amounts of ISK from.

If you want to make ISK trading you have to exploit as many of these as you can. Some will pan out, some will fall flat and some will take longer to payout than you expect. Diversity is the only way to make sure that you have some coming in at all times.

If you pay attention and do your home work you can go big and do some market speculation. I've just recently started doing some market speculation and I've had mixed results. Here are some examples.

Investment A - 43.9B investment with a 19% increase in prices gives a gain of 8.4B
Investment B - 19.3B investment with a 12% increase in prices gives us a gain of 2.4B
Investment C - 16.4B investment with a 9% decrease in prices gives us a loss of 1.4B
Investment D - 15.5B investment with a 5% decrease in prices gives us a loss of 790M.

It's actually really exciting to dump 44B into something without knowing for sure what is going to happen. I certainly wouldn't recommend it for everybody with a fat wad of ISK. So far it's been a pretty positive experience for us. But, like the other dude said, I'd rather make 100K today than 1M tomorrow.


Oh, and no I won't tell what we bought up on these investments.
mechtech
Ice Liberation Army
#9 - 2013-02-22 22:42:46 UTC  |  Edited by: mechtech
I absolutely agree. While I'm usually somewhat diversified, all large jumps in my NAV have come through concentrating on a specific project, usually speculative in nature. In many of these cases, the potential downsides are nothing compared to the upsides.

On the other hand, when you drop everything into a single opportunity, it can take a very long to unwind. I'm still unwinding 2 different speculative investments that are over 2 years old. Of course, they have paid for themselves a long time ago, so liquidity is no issue. That's the pattern for me, huge buy ins with slow wind downs, so that I have a few past investments winding down at the same time, but rarely more than one major investment winding up together.
Candy Oshea
Techfree Investment Group
#10 - 2013-02-23 03:46:32 UTC
Varius Xeral wrote:
There's a big difference between building a business and investing in paper assets.

The theory behind investment "diversification" is that by statistically selecting assets based on covariance, you can achieve the same expected return for less risk than if you just selected one asset. It is a statistical trick, not a general guide for everything involving capital.


This. (In game) & Out.

iCandy  - I have accidently swallowed some Scrabble tiles, my next shit could spell disaster!
Cooyaw
State War Academy
Caldari State
#11 - 2013-02-23 06:17:49 UTC
Mais, I duno T-sha, if you patient enough i reckon you can be like dat man you talkin bout. i put a bunch a zydrine on dat one time, took 2 years to get my money back, i tink dats a long time me.

i done tried dat space truckin too, but quaw!! business went slow, maybe i ain't patient enough fa dat too, i just sell junk at the flea market now T, i always make a little extra isk on dat.
Kara Books
Deal with IT.
#12 - 2013-02-23 23:35:26 UTC
Vera Algaert wrote:
Varius Xeral wrote:
There's a big difference between building a business and investing in paper assets.

The theory behind investment "diversification" is that by statistically selecting assets based on covariance, you can achieve the same expected return for less risk than if you just selected one asset. It is a statistical trick, not a general guide for everything involving capital.

but high variance is what enables you to win big in the first place.


This is fundamentally flawed, long term investments have the highest chance of complete capitulation while say 20 different very short term investments can be insta flipped for a quick buck while others you may have to wait until losing 16% or up to long term investment.

either way by keeping ALL of your options open while refusing to conform to rules, regulations and advice is the correct path.
Greater chances of riches await the one who is not only patient but faster then the next guy, wakes up 5 minutes earlier and so on.

All options on the table, always scanning for opportunity.
Blecktalk Morwoop
Doomheim
#13 - 2013-02-24 02:12:45 UTC
Andrew Carnegie had a steel monopoly. The equivalent to Andrew Carnegie in Eve would be holding all the technetium.
RubyPorto
RubysRhymes
#14 - 2013-02-24 03:29:29 UTC
Steve Ronuken wrote:
That's not true in the real world.


Especially the world in which Carneigie was living.

The modern banking system (which didn't exist in Carneigie's time) has reduced the barrier to accessing capital enormously.


I'm just not sure how valid his advice is in the modern world (let alone EVE). It's like the advice Croessus might have given: "Buy burning buildings (and their neighbors) at 10% of their market value, have your slaves put out the fire, then sell them for a massive profit."


Anyway...

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
CJ Dashto
Doomheim
#15 - 2013-02-24 05:07:07 UTC
Blecktalk Morwoop wrote:
Andrew Carnegie had a steel monopoly. The equivalent to Andrew Carnegie in Eve would be holding all the technetium.


Clearly the point of this thread is lost on you.
Blecktalk Morwoop
Doomheim
#16 - 2013-02-24 05:12:40 UTC  |  Edited by: Blecktalk Morwoop
CJ Dashto wrote:
Blecktalk Morwoop wrote:
Andrew Carnegie had a steel monopoly. The equivalent to Andrew Carnegie in Eve would be holding all the technetium.


Clearly the point of this thread is lost on you.

Perhaps, but clearly you don't understand how Carnegie massed his wealth. Carnegie wasn't a guy peddling warez in a station. He was a douchebag who bought power to get more power and to keep a chokehold on his monopoly.

I'm just saying, if You want to be Andrew Carnegie in Eve, you go for the technetium.
Thoraemond
Far Ranger
#17 - 2013-02-24 06:30:20 UTC
Blecktalk Morwoop wrote:
Perhaps, but clearly you don't understand how Carnegie massed his wealth...

Geez, cut the OP some slack. He says Carnegie, who died almost a century ago, is "one of the most successful industrialists of our time". If the OP truly was a contemporary of Carnegie, that could explain why he might be experiencing some "age-related cognitive decline" by now, to say the least.

• Graph re Market Order Broker Fees (Updated 2016-04-28) • Diagram re Skills for Remote Trading •
Andres Talas
Center for Advanced Studies
Gallente Federation
#18 - 2013-02-24 10:59:04 UTC
RubyPorto wrote:



I'm just not sure how valid his advice is in the modern world (let alone EVE). It's like the advice Croessus might have given: "Buy burning buildings (and their neighbors) at 10% of their market value, have your slaves put out the fire, then sell them for a massive profit."


Anyway...


Thats Mr Crassus, thank you. Croeseus was just a king who happened to make a prudent choice of parents.

Note for "burning buildings (and their neighbours)" we can read "regions that Pandemic Legion are rampaging through" ... but not that Snigwaffe need to be told about firesales, yes ?
RubyPorto
RubysRhymes
#19 - 2013-02-24 11:02:48 UTC
Andres Talas wrote:
RubyPorto wrote:



I'm just not sure how valid his advice is in the modern world (let alone EVE). It's like the advice Croessus might have given: "Buy burning buildings (and their neighbors) at 10% of their market value, have your slaves put out the fire, then sell them for a massive profit."


Anyway...


Thats Mr Crassus, thank you. Croeseus was just a king who happened to make a prudent choice of parents.

Note for "burning buildings (and their neighbours)" we can read "regions that Pandemic Legion are rampaging through" ... but not that Snigwaffe need to be told about firesales, yes ?


Yep, my mistake. M Linus Crassus is who I'm talking about, not Croessus.
Though it's not like Crassus started out life exactly poor.


Fair point on fire sales, though. (Though Waffles usually doesn't deploy to the same places PL does.)

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
Tul Breetai
Impromptu Asset Requisition
#20 - 2013-02-24 11:26:03 UTC
Syds Sinclair wrote:
But as for trading theory, I'd rather make 100,000 now then 1,000,000 tomorrow.


This.

There's nothing worse than an EVE player, generally considered to be top of the food chain in the MMO world, that cannot smacktalk with wit and coherency.
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