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1% profit/month glass ceiling ?

Author
TornSoul
BIG
#1 - 2012-03-20 18:25:38 UTC  |  Edited by: TornSoul
In that "other thread" I threw out this remark;
TornSoul wrote:
Show me a 99% sure way of making even as little as 1% return on 10's of trillions each month - and I'll accept the challenge. Lol


It subsequently made me wonder, "how high can you go" before you can no longer sustain the 1% profit/month (with close to 99% certainty)

So my question is:

How much ISK *could* you turn around for 1% profit/month (month after month, year after year) (note I said *could* not "want to" Big smile)

And how would you do it? (I don't think any trade secrets would be revealed by that - it's a measly 1% after all)

EDIT (see post #9)
"To constrain the time constraint Cool, lets say this would have to be doable by one guy - But any number of accounts allowed."



I'll start out with an obvious one myself.

Titan BPC's.
Highly dangerous market to venture into, both due to other players and not least CCP.

The glass ceiling here I would put at around 5-10 Titan BPC's a month - Lets call it 5 as to not be to over optimistic.
Baring in mind the competition and the (comparatively) low demand I think that's a fair "round number" for this exercise.

Lets also put a conservative value of 5B on each BPC (having the nerf bat in mind)
That puts it at just 25B a month..
And if 25B is 1% - the total amount would be 2.5T ISK (which is plenty for actually buying the needed amount of Titan BPO's to keep up the needed production of BPCs)

So is 2.5T the best one can do? (and in fact is the above even possible)




Comments and discussion please.

Be warned, if anyone finds a way to easily handle 50T I'll have to open a deposit bank P
Darth Tickles
Doomheim
#2 - 2012-03-20 18:37:41 UTC
How bad have t2 bpos become? <1% a month I assume?
TornSoul
BIG
#3 - 2012-03-20 18:39:20 UTC  |  Edited by: TornSoul
Problem with t2 BPOs is availability.

I can go and buy 2.5T worth of Titan BPO's in the next 10 minutes if I wanted to.

Not so with (profitable) t2 BPO's.
Vaerah Vahrokha
Vahrokh Consulting
#4 - 2012-03-20 18:49:54 UTC
There might be a way but I am not going to discuss it in public. A functioning small demo of it is already running since a while.
TornSoul
BIG
#5 - 2012-03-20 18:51:20 UTC
"might be a way" - Doesn't quite sound like 99% sure to me Cool
Kara Roideater
#6 - 2012-03-20 18:54:29 UTC
This might be cheating somewhat but I could get 10%+ returns a month out of a trillion isk.

How:

1) Take 100bil and run a business plan that returns 100% per month (labour intensive and boring but I have done it in the past).

2) Leave the other 900bil in the wallet (or bump the return slightly with a BPO farm etc).

At 10 trillion this would reduce to 1-2% per month depending on what's being done with the other 9.9 trillion.

The basic point is that the high returns you can get on smaller amounts can bulk out the limited returns from the excess, so a good starting buffer will support an average of 1% across a very large amount earning less than 1%. That will make the amount that a 1% average can be squeezed out of dependent on time availability for squeezing the maximum out of the smaller amount.
TornSoul
BIG
#7 - 2012-03-20 18:58:37 UTC
I would consider that within the "rules of the challenge".

I don't like the "labour intensive and boring" bit though... Considering part of the challenge would be to have to do it for years.

If you think that your Joe average wouldn't go insane doing it - I'd say we have a leader so far with 10T.


Kara Roideater
#8 - 2012-03-20 19:01:40 UTC
Another way of thinking about it is to ask what is the maximum isk (not %) return you could get from running all time-viable business and then work out how much you could have doing nothing before the total return falls under 1%. So, time is going to be the constraining factor, as there are lots of high return things you can do with smaller amounts that would balance doing nothing with the bigger amounts.
TornSoul
BIG
#9 - 2012-03-20 19:06:11 UTC
Time is indeed the ultimate constraining factor (else mining roids would do the trick)

To constrain the time constraint Cool, lets say this would have to be doable by one guy - But any number of accounts allowed.

Just to put some kind of cap on it (else the roid mining wins every time)
Kara Roideater
#10 - 2012-03-20 19:12:29 UTC  |  Edited by: Kara Roideater
TornSoul wrote:
I would consider that within the "rules of the challenge".

I don't like the "labour intensive and boring" bit though... Considering part of the challenge would be to have to do it for years.

If you think that your Joe average wouldn't go insane doing it - I'd say we have a leader so far with 10T.




You could do it for years without going insane but it would feel like a psychologically unrewarding full-time job. How long you could stomach it is really dependent on what stage the isk becomes meaningless to you.

As to maxing things out, with a team to split the tasks I have a sufficient library of business plans to churn out at least 250bil a month if they were all fully funded. That would take a lot of people grinding the plans, though, and probably something like a trillion or more in actively used capital but would sustain 1% on 25tril. If you expand the labour base I could probably find another 250bil of opportunities in a week or two but I'm not sure you would want to go down this road as you could, with enough time/labour, take a 10% slice of every trade and manufacturing opportunity in the game (or more depending on what % of the eve population you enslave to your nefarious scheme Pirate). God knows what that would return, but quite a lot I suspect. I might be best to ask the question within a fixed framework of time expenditure.

Edit -Rgr. was posting when you replied.
TornSoul
BIG
#11 - 2012-03-20 19:25:01 UTC
OK - So just for score keeping.

One guy - 10T aka 100B profit is what you say could be done with your scheme?
Kara Roideater
#12 - 2012-03-20 19:49:12 UTC  |  Edited by: Kara Roideater
TornSoul wrote:
OK - So just for score keeping.

One guy - 10T aka 100B profit is what you say could be done with your scheme?


Yeah, one guy could manage that. But let's add your Titan BPC farm as well, as that could be run concurrently by the same person, for 125bil profit total or 1% on 12.5 trillion.

The most I've ever heard someone claim to be able to earn a month was 168bil but I can't speak to the truth of it. It was on a large scale manufacturing operation, so I assume that the invested capital would be under 10 trillion.

Edit - You could also concurrently run a supercap manufacturing business of at least some extent but while I made the plans for that I never got round to trying them, so I don't know realistically how big you could go on that without overstepping the time limit. That would also have considerable risks re: the safety of your building space, which might make it unattractive.
TornSoul
BIG
#13 - 2012-03-20 19:58:03 UTC
Would you care to elaborate on that 100B 100% business plan - Just a little bit.

At that "low" capital amount I'd understand not wanting to give away the whole thing.

But just the general gist of it
(so that others can evaluate if you're full.. of err hot air or not P - I say that jovially P Please don't take offense)
Kara Roideater
#14 - 2012-03-20 20:46:48 UTC  |  Edited by: Kara Roideater
TornSoul wrote:
Would you care to elaborate on that 100B 100% business plan - Just a little bit.

At that "low" capital amount I'd understand not wanting to give away the whole thing.

But just the general gist of it
(so that others can evaluate if you're full.. of err hot air or not P - I say that jovially P Please don't take offense)


Heh - none taken. I was running this business with the single workload distributed over a three-man corp when VV audited me about a year ago (I collected a quarter of the profit for c. 1-1.5 hours work a day P). I'm not sure if she looked into the corp business in detail or not because the audit was of me as an individual but she might be able to offer some verification. I've also licensed out the plan a few times but I don't think any of the licensees ever got up to the full potential heights (and the current licensee might not want his name mentioned in case he becomes a target).

Now, it's hard to say too much without giving the game away but the overall plan is an integrated and optimally efficient trade/manufacturing business (buying mats from buy orders, building, selling the finished product on sell orders, all within highsec). It is the efficiency that really pays off, so it is not so much the market niches (which are quite numerous) that are at issue, so much as very, very fast turnaround combined with absolutely minimal time and resource wastage. The efficiency is the ultimate problem, though, because once you have that maxed out there is absolutely nothing left of interest to do (except occassionally rotating product lines). At that point it is just a case of rinse and repeat, day after day after day. So I had enormous fun building the system but got very little satisfaction from running it as I don't actually do anything with my isk other than try to make more isk and most other isk-making schemes (bar the supercap production) seem superfluous now (although I would very much like to know a bit more about the claimed 168bil/month plan!).

I'm not really sure what more I can safely say ... the first 50bil of capital and the first half of the time used earns about 75-80% of the profits; the plan involves building less than 200 different item types per day; best to be as close to Jita as possible ... but I'm not sure I can say too much that will offer any real confirmation of my claim without running through the numbers publicly (which I will do if my licensee ever stops stumping up my cut Cool).

Edit - Should the current licensing agreement come to an end I'll offer you first refusal on purchase of the plan if you like. You can scope it out and check the numbers before paying me of course.
TornSoul
BIG
#15 - 2012-03-20 21:30:41 UTC
That's plenty good enough description for me.


Kara Roideater wrote:
So I had enormous fun building the system but got very little satisfaction from running it

^^ Amen brother Cool I know exactly what you mean.
DoraTheExplora Taft
Hoover Inc.
Snuffed Out
#16 - 2012-03-21 02:40:26 UTC
The problem is the market isn't big enough to make this easy. You could probably sink it into commodities over the course of several months without distorting the market way up and losing isk. Then you could slowly sell back over the course of several months. Assuming general inflation continues then that would be a sure way. As for what those commodities actually would be I guess it would have to be as many of them as possible and whichever have the largest market, again so as not to create a bubble.

Course the only problem with this is the small isk traders out compete you in the .01 isk war so... idk honestly. Maybe giant contracts for high volume to get around the market? idk.
TornSoul
BIG
#17 - 2012-03-21 09:44:42 UTC
DoraTheExplora Taft wrote:
The problem is the market isn't big enough to make this easy


Yup there's a limit.

Hence this "challenge".

Just how high can you go?

I'm off to catch a plane to FF now, looking forward to seeing more ideas when I get back Lol
Adunh Slavy
#18 - 2012-03-21 12:14:12 UTC
A trillion ... can hire a lot of mercs with that. Threaten people, extortion. Not my style, but wouldn't put it past someone in Eve.

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

Liberty Eternal
The Scope
Gallente Federation
#19 - 2012-03-21 12:53:21 UTC
TornSoul wrote:
In that "other thread" I threw out this remark;
TornSoul wrote:
Show me a 99% sure way of making even as little as 1% return on 10's of trillions each month - and I'll accept the challenge. Lol


It subsequently made me wonder, "how high can you go" before you can no longer sustain the 1% profit/month (with close to 99% certainty)



That degree of profit is probably achievable, but the degree of certainty you're asking for must surely be impossible. You would only be able to channel the money through very safe pathways to keep it at 99% probability.

The obvious answer that springs to mind is that you would have to collaborate with a group of experienced traders and investors. If not necessarilly sharing money, then sharing information and tasks. There are many half-active traders out there who might enjoy the challenge.
Darth Tickles
Doomheim
#20 - 2012-03-21 12:59:45 UTC
DoraTheExplora Taft wrote:
The problem is the market isn't big enough to make this easy. You could probably sink it into commodities over the course of several months without distorting the market way up and losing isk. Then you could slowly sell back over the course of several months. Assuming general inflation continues then that would be a sure way. As for what those commodities actually would be I guess it would have to be as many of them as possible and whichever have the largest market, again so as not to create a bubble.


As a reprehensibly lazy commodities trader for over a year and 100b in profits now I can confirm that it is not easy to get guaranteed returns, and it gets harder and harder as you try to pump more money in.

If we were just talking about methods where you could hypothetically inject huge sums of isk for profit, then yes. However, the challenge has been fleshed out to exclude activities that amount to a second full time job, where you really could be applying the same effort in real life and making real money.
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