Register
Welcome to the Stormspire.net WoW Gold Forums!

Greetings, guest! Welcome to Stormspire.net, your #1 resource for WoW and Diablo 3 Gold, Professions, and everything in between!


Enjoy what the site offers? Consider Premium Membership if you wish to get the most out of the site. Premium Membership benefits include the acclaimed Goblineer's World of Warcraft Gold Guide, private forum access, a complimentary high-quality avatar, and much more!


If this is your first visit, make sure to check out the Stormspire.net Survival Guide for a quick site orientation. You may also register to unlock all standard forum features, and to get rid of these lovely ads!


We proudly host the Official forums for TradeSkillMaster, The Undermine Journal, and WoWuction.

Page 3 of 4 First 1234 Last
Results 21 to 30 of 37

Thread: ROI vs. GPH

  1. #21
    US -Uldum (H)
    Wind Trader
    Stede's Avatar
    Posts
    1,971
    Reputation
    263
    Tagged in
    1091 Posts
    Add to this user's reputation
    Quote Originally Posted by Kathroman View Post
    But if the availability is altered, won't the RL value decrease as well? If all of a sudden, Tigers are "a dime a dozen", shouldn't they be...a dime a dozen??
    Yep.
    Some will; Some won't - So what? Let em die poor.

    +Rep doesn't buy me beer, but it sure gives me a reason to have one - if you learned something new or thought about something differently, let's celebrate!

    Late Nite With Stede - A WoW Goldmaking Blog / Podcast - LNWS.net
    @StedeUS on Twitter
    Stede#1203

  2. #22
    Diablo 3
    Wind Trader
    Reverb's Avatar
    Posts
    919
    Reputation
    102
    Tagged in
    304 Posts
    Add to this user's reputation
    Quote Originally Posted by Kathroman View Post
    I think I'm misunderstanding what you're saying - it sounds like you're saying that as inflation increases and the price of the item decreases, the value of the investment goes up as well, but that can't be right
    I developed an algorithm just for you @Kathroman , to illustrate my perspective.

    S=Supply, D= demand, N =new, O = original, AG = amount gold, P = price, I = inflation
    Inflation = (NAG-OAG)/OAG
    S/D = (1+delta Supply)/(1+delta Demand) = (1+NS-OS)/(1+ND-OD)
    % Net Gain = delta Sale Price*100 = (S/D*I* OP - OP)*100= OP*(S/D*I-1)*100

    So from that we see that as long as the ratio of supply is at least equal to inflation the investment will break even or appreciate, which due to hyper inflation in wow and that the relevance of mounts does not disappear with an expansion launch due to mudflation the investment is sound.

  3. #23
    US-Emerald Dream(Both)
    Your Favorite Goblin
    Kathroman's Avatar
    Posts
    5,144
    Reputation
    272
    Blog Entries
    17
    Tagged in
    2012 Posts
    Add to this user's reputation
    @Reverb , the point I was making was that if Blizzard did something to vastly affect the supply, to the point where it started to negatively affect the price, inflation would only serve to worsen the investment. ie:

    -Purchase Tiger for 100k.
    -List for 350k
    -Blizzard increases supply of tigers by 10x.
    -increased competition forces price back down to 100k.

    Due to inflation, your investment will not be breaking even at this point, because the 100k will have lost relative value. Therefore (and as you alluded to) your investment is only "safe" based on the CERTAINTY of being able to sell the tiger for an amount greater than 100k, in proportion to the rate of inflation.

    The problem, and inherent risk, still lies in that CERTAINTY, however. Based on current supply/demand numbers, it probably would be a fairly safe investment, but the point is that you aren't 100% certain about the future state of those numbers. What if someone finds a way to dupe them? What if Blizzard introduces a very similar Battle.net mount for sale, and people all of a sudden don't "want" it anymore? What if Blizzard offers some large quantity as an incentive to bolster their slipping subscription numbers? If any of those things were to happen, it would put your investment in jeopardy.
    Like what you see? Become an Ethereal Contributor to help support the site and gain access to additional perks.

        

    Guides: Thunder Bluff Vendor Supply Route | Entry Level JC Strategy | Alternative DMF Guide

    TSM 2.0: TSM 2.0 Groups & Operations GUIDE | TSM 2.0 Basic JC Shuffler | TSM 2.0 ADVANCED JC Shuffler

  4. #24
    Diablo 3
    Wind Trader
    Reverb's Avatar
    Posts
    919
    Reputation
    102
    Tagged in
    304 Posts
    Add to this user's reputation
    Quote Originally Posted by Kathroman View Post
    @Reverb , the point I was making was that if Blizzard did something to vastly affect the supply, to the point where it started to negatively affect the price, inflation would only serve to worsen the investment. ie:

    -Purchase Tiger for 100k.
    -List for 350k
    -Blizzard increases supply of tigers by 10x.
    -increased competition forces price back down to 100k.

    Due to inflation, your investment will not be breaking even at this point, because the 100k will have lost relative value. Therefore (and as you alluded to) your investment is only "safe" based on the CERTAINTY of being able to sell the tiger for an amount greater than 100k, in proportion to the rate of inflation.

    The problem, and inherent risk, still lies in that CERTAINTY, however. Based on current supply/demand numbers, it probably would be a fairly safe investment, but the point is that you aren't 100% certain about the future state of those numbers. What if someone finds a way to dupe them? What if Blizzard introduces a very similar Battle.net mount for sale, and people all of a sudden don't "want" it anymore? What if Blizzard offers some large quantity as an incentive to bolster their slipping subscription numbers? If any of those things were to happen, it would put your investment in jeopardy.
    I see what you are saying, however for myself and others we are at a point where it is no longer possible to reinvest all of our gold on non-TCG/shadowmourne items and have nothing of note to buy for our own enjoyment, so that spectral tiger gold has no nontrivial associated opportunity cost so whether the outcome of the long term investment is certain or a loss entirely is not relevant. If a person is in a position where they can entirely reinvest the person should likely do a short term resale, leaving the only impactful scenario as one where a person can reinvest and the drastic event (TCG sold on the store or another scenario you thought of), in case the investment does is both not favorable in terms of accounting and opportunity cost, and was a mistake.

  5. #25
    US-Emerald Dream(Both)
    Your Favorite Goblin
    Kathroman's Avatar
    Posts
    5,144
    Reputation
    272
    Blog Entries
    17
    Tagged in
    2012 Posts
    Add to this user's reputation
    @Reverb . Absolutely. Which is why we should then add another variable into the equation: % of capital. 100k of 150k capital is going to have a much high risk involved than 100k of 1.5mil...

    The point is that it isn't ever going to be 100% risk-free. If you can manage the risk, that's fine, but to ignore the potential sources of risk to ANY investment, be it copper ore or a spectral tiger, would be foolish.
    Like what you see? Become an Ethereal Contributor to help support the site and gain access to additional perks.

        

    Guides: Thunder Bluff Vendor Supply Route | Entry Level JC Strategy | Alternative DMF Guide

    TSM 2.0: TSM 2.0 Groups & Operations GUIDE | TSM 2.0 Basic JC Shuffler | TSM 2.0 ADVANCED JC Shuffler

  6. #26
    Earthen Ring (H) / Stormrage (A)
    Wind Trader
    Z-Man's Avatar
    Posts
    869
    Reputation
    69
    Tagged in
    396 Posts
    Add to this user's reputation
    Seeing as to how I've never seen an tiger on my server, ever, the ROI on such an item is irrelevant. Not only do I have to wait for one to show up, I would then have to wait for a buyer, and it could be months or years before the stars will align for those events to occur.

    Until then, my kids have to eat, which brings us to back to Copper. Buyable now, sellable now. Just churning the herb market each day may earn more than a Vial of the Sands sale, and does it without the initial investment or the waiting for a buyer. On my backwater cheapskate server, high-priced items move slowly, and you could end up with low or negative GPH and ROI after losing enough listing fees. Sometimes you have to go where the money is; Mageweave and Terocone may not be glamorous, but they do serve to pay the bills when the flashy markets are flat.
    Last edited by Z-Man; September 27th, 2011 at 02:02 PM.

  7. #27
    Aeg
    Rewind Trader Emeritus
    Aeg's Avatar
    Posts
    1,037
    Reputation
    59
    Tagged in
    230 Posts
    Add to this user's reputation
    % of capital - Does nothing to change the risk at all, since any duping/change by blizzard does not take into account your capital. % of capital is comfort level.

    I still would rather invest in a spectral over copper.
    Experience for mining/herbing - Making farming tolerable and leveling painful.
    There can only be one Rewind Trader

  8. #28
    US -Uldum (H)
    Wind Trader
    Stede's Avatar
    Posts
    1,971
    Reputation
    263
    Tagged in
    1091 Posts
    Add to this user's reputation
    How long do we really think it would take to unload 100k of copper? 100k says I can sell a spectral tiger in less time.
    Some will; Some won't - So what? Let em die poor.

    +Rep doesn't buy me beer, but it sure gives me a reason to have one - if you learned something new or thought about something differently, let's celebrate!

    Late Nite With Stede - A WoW Goldmaking Blog / Podcast - LNWS.net
    @StedeUS on Twitter
    Stede#1203

  9. #29
    US-Emerald Dream(Both)
    Your Favorite Goblin
    Kathroman's Avatar
    Posts
    5,144
    Reputation
    272
    Blog Entries
    17
    Tagged in
    2012 Posts
    Add to this user's reputation
    @Aeg , but the risk is far lower for you. If you only had 100k, would you still spend it all on that Tiger? Perhaps you might, but it would still be a higher risk decision than spending 100k on underpriced mats and trade goods. Straight ROI doesn't factor in risk, which is a problem, IMO.
    Like what you see? Become an Ethereal Contributor to help support the site and gain access to additional perks.

        

    Guides: Thunder Bluff Vendor Supply Route | Entry Level JC Strategy | Alternative DMF Guide

    TSM 2.0: TSM 2.0 Groups & Operations GUIDE | TSM 2.0 Basic JC Shuffler | TSM 2.0 ADVANCED JC Shuffler

  10. #30
    US -Uldum (H)
    Wind Trader
    Stede's Avatar
    Posts
    1,971
    Reputation
    263
    Tagged in
    1091 Posts
    Add to this user's reputation
    Quote Originally Posted by Kathroman View Post
    @Aeg , but the risk is far lower for you. If you only had 100k, would you still spend it all on that Tiger? Perhaps you might, but it would still be a higher risk decision than spending 100k on underpriced mats and trade goods. Straight ROI doesn't factor in risk, which is a problem, IMO.
    Idk that I'd call that a higher risk decision. It certainly has a higher opportunity cost. Blowing all your liquidity on a single item that may take months to sell affects future investments. It's not a smart move, but I wouldn't say it's risky, per-se.
    Some will; Some won't - So what? Let em die poor.

    +Rep doesn't buy me beer, but it sure gives me a reason to have one - if you learned something new or thought about something differently, let's celebrate!

    Late Nite With Stede - A WoW Goldmaking Blog / Podcast - LNWS.net
    @StedeUS on Twitter
    Stede#1203

 

 
Page 3 of 4 First 1234 Last