Market Discussions

When I was a new trader it was pretty simple to determine how much money I was making. I would just add up the buy orders, sell orders, and estimated value of the inventory. I usually had very little inventory compared to the order amount, and the spread and movement of the items was fairly stable so this was a good approximation.

As my wallet grows I find myself doing more "long-term investing" (sometimes involuntarily ) and I'm having trouble with how to value the stock building up in my hangar. If I use the current sell price, it seems undervalued. If I list it much higher in the hopes the price will go up it seems overvalued. The estimated price is all over the place. I have found that having large stacks of certain items opens up opportunities for manipulation and other fun price games, but I'm struggling to tell if I'm actually making any money with them when I have such large stacks of stock I can't assign a value to.

So what are your strategies for dealing with stock when profit tracking? I realize there are a lot of programs out there that do it, but I want to know exactly what they are showing me so I can write my own or tell if I'm being "lied to". I realize there may not be a simple answer, but it seems like the sort of real-world problem that economists have already figured out. I have very little economic experience so I apologize if its actually a silly question. I'm not afraid of math though, if you want to throw that at me.

Hopefully the answer isn't "proprietary"

Being an accountant I like to value everything at buy order prices because it's prudent. Valuing at sell order prices is just recognizing profit that you haven't actually made and relies on successfully selling the items at current prices. This actually applies to the value of sell orders that you throw into the NAV calculation - Just because you've listed it for sale doesn't mean you have increased it's value from an accounting perspective. Not easy to reset that back to cost though so it's a common approach to just take total sell order value as being part of your asset value.

Of course, it depends on the nature of the items themselves. There is an argument that valuing at sell price rather than buy price/cost for fast moving and high volume items such as minerals is appropriate. In addition, EVE is not RL, and finding and reaching the demand due to the way the market works is much easier than RL, so there is more of an argument to recognize profit in an item simply by virtue of owning it.

But, if you are buying from sell orders and speculating then valuing at buy price or cost doesn't really work. In that case I would value at current sell order prices and recognize a (paper) loss if prices dipped. Valuing it at anything higher doesn't really make any sense to me, as it's just an arbitrary figure and relies on future market conditions changing favorably.

Practically, its fairly easy to get an idea of value at either buy or sell order prices these days for lists of items, with the tools that are available (eve-praisal etc). So you can apply a different policy to different types of stock if you want. If the lines are blurred between what is speculation stock and what is just stuff you happen to have between the buy and sell cycle, you'd have to just pick an option. As long as it's a consistent policy your profit measurement over time will be correct anyway and the difference between one policy and another is just a timing difference.

/end ramble

The current buy order price, is the price... since that is amount of money you would actually get if you sold the item there and then

Beyond that you are free to place any value on items that you want... which can be as aspirational as you want...

Alternatively you could calculate the component price (for instance of your 'long term investments') and see if you could reprocess them and turn them into something more short term

I am not sure this is fair. Real life traders often struggle to sell at "market" value if they were to just dump their holding tomorrow. For instance, the value of a house isn't what you could get if you had to fire sale it tomorrow, but what you could get if you spent a few months showing it on the market.

I value the stock on a base price. This base price I use for stock worth calculations.

In short you can only really count the current "liquidation" price on items in your hangar towards your NAV, and your profits should always be measured according to the total liquidation NAV when it comes to how much your stock/share value appreciates.

How much in percent are you returning on your NAV.

This isn't buy order prices on large stockpiles.

Example: I presently have about 4000 Light Neutron Blaster IIs in a station in Uedama. Pretty close to Jita, so let's pretend they are in Jita.

At present the highest Jita buy order for this item is 463k ISK. But there's only about 1000 buy orders at that price.

To dump 4000 at once, I'd have to accept 451k per unit for 3000 of them.

So firesale price is 1.816b on the 4000 units (less taxes, so really more like 1.80b).



I value stock according to what I feel I could sell it for within a week with light effort. Selling it above that is trading profit.

I'm a big fan of Eve Mentat http://www.evementat.com/

It keeps running totals so you can see months down the line the buy/sell relationship of your stock. Unfortunately, I'm coming back to EVE after an extended absence and I can't find my old eve mentat directory. Since eve doesn't store anything over 90 days, that means I have no idea what my profit margin is on all these materials I have scattered in 5 different regions.

I'm just getting into trading myself, and my experience with 3rd party programs is that they mostly all suck and I have to use four different things because each has one thing I like but the others don't, and the guys developing them are winning BIG with all the API/market data they're getting from us plebians.

I don't usually keep track of the value of items, since I burn through them pretty quickly and sell even if it's a loss - better to take a 10% loss than wait 2 months for a 5% gain or just 'breaking even'. Could be hundreds of millions or billions of isk tied up for all that time, which is a cost in itself. You're better off eating the immediate loss and reinvesting.

I also go through periods where I stop trading and let my stock deplete out so I can get an accurate benchmark. An example here. You can see from the first benchmark to the second I made ~800m isk, then from the second to the third I lost about 400m (bought a training plex thing).

We keep a spreadsheet detailing our inventory by group and individual item, with inventory quantity, buy and sell volume, bid and asked price, 12 month high and low price, total market average daily unit volume, and other data. From the data, we're able to derive a wide range of information that is useful in making investment decisions and in valuing the inventory. Our published inventory valuations (see my bio) are based on a simple average of the current bid and asked prices. We believe that this is a fair and accurate representation of inventory value, especially in light of the fact that we deal in industrial materials that trade in high volume and have a relatively tight spread between bid and asked prices.