Update for week ending May 27, 2012

Assets
Cash                         224,665,617.12 ISK
Sell Orders                  649,845,192.00 ISK
Escrow                       190,760,781.00 ISK
Contracts                              0.00 ISK
                           --------------------
Total Current Assets       1,065,271,590.12 ISK


POS                                    0.00 ISK
Ships & Fitted Modules       261,227,439.91 ISK
Modules                                0.00 ISK
Blueprints                             0.00 ISK
Materials & Commodities                0.00 ISK
PLEX                                   0.00 ISK
Misc Items                    63,736,224.35 ISK
-----------------------------------------------
Total Assets               1,390,235,254.38 ISK
===============================================
   
Liabilities and Equity
Notes Payable                          0.00 ISK
Loans                                  0.00 ISK
Bonds                                  0.00 ISK
                                       --------
Total Current Liabilities              0.00 ISK
-----------------------------------------------
Net Worth                  1,390,235,254.38 ISK
===============================================


This was a pretty good week in terms of business. Overall profits were approximately 317 million ISK, just shy of my 350 million ISK per week goal. Considering the patch issues I've had, and the fact that I'm still playing Diablo III, I'm pretty happy.


Some of the changes I've made were to make sure most of my ISK was active. In other words, if there was ISK in the corporate wallet, it was spend buying cheap goods. As you can see in the Assets above, most of my ISK is tied up in inventory, meaning it's at work. 


Overall network is down a bit, however. This is because I converted a PLEX into game time for my second account. This should have no impact on my ability to continue growing my cash pile, since that PLEX was dead money  (it was not contributing to the growth of cash). I won't be keeping PLEX in inventory anymore. That 450 million ISK could have been used for trading, and I would have made more ISK in the last month. 


Going forward, there are a few more things I want to improve upon. First, if you've read past weekly updates, you may have noticed I had 0 ISK in escrow. That's because my purchases were mostly retail, rather than brokered buy orders. I've started trying out buy orders, but I find the turn around too long (buy orders sit there much longer than sell orders), which causes a supply issue. The buy and sell orders need to be balanced. 


Second, I will probably need to change what items I sell soon. Some of the items I trade are purchased in the high six figures and sold in the low seven figures. Profit margin is good, around 30-40% mark. But the volume isn't great, 10-20 a day. This is perfectly fine when you only have a few hundred million to invest, but when you get near a billion of ISK to invest, the only way to grow your income with this strategy is to grow the number of orders on the market. This requires much more effort (larger ships to move everything, more research time, more order management time, etc). Since my play time is fixed, I just can't scale. 


So my plan is too look for more expensive items to trade. That way, I'll have less orders to worry about, but I can still put the same amount of capital to work. However, because there are fewer high-value items available on the market, there are likely to be fewer retail opportunities with large margins. So I'm going to be using buy orders more extensively to try and keep those margins. I think this is quite doable. The buy orders I put in, I put in at just a few ISK over what was already there. But the margins are already insane, in the 400-500% range. I'm not surprised nothing is moving. I think if I offer reasonable purchase prices, I will get better turn around, and still keep very profitable margins. We'll see how that works out.

Back Online

Downloading the full client worked, I'm now back in EVE. I took the opportunity to try out the new Inferno features, rather than trade yesterday, so my profits haven't gone up much. Still, I managed to make a few buys and sales, so my climb continues.

I do want to mention two things about the patch. First, the new missile animations look amazing.

Patch Day Troubles

Yesterday, May 22, was patch day for EVE. Unfortunately for me, the EVE updater wasn't able to install the patch, so I had to uninstall and reinstall the client from scratch. Fortunately for me, I'm good at following advice, so I set up long skill in my queue, and I put up a bunch of market orders. I'm sure they've not all sold, but at least there was something on the market for me to make some ISK.

Update for week ending May 20, 2012

Assets
Cash                         508,532,404.69 ISK
Sell Orders                  239,441,828.00 ISK
Escrow                                 0.00 ISK
Contracts                              0.00 ISK
                             ------------------
Total Current Assets         747,974,232.69 ISK


POS                                    0.00 ISK
Ships & Fitted Modules       267,445,157.70 ISK
Modules                                0.00 ISK
Blueprints                             0.00 ISK
Materials & Commodities                0.00 ISK
PLEX                         481,007,575.00 ISK
Misc Items                    59,224,268.16 ISK
-----------------------------------------------
Total Assets               1,555,651,233.55 ISK
===============================================
   
Liabilities and Equity
Notes Payable                          0.00 ISK
Loans                                  0.00 ISK
Bonds                                  0.00 ISK
                                       --------
Total Current Liabilities              0.00 ISK
-----------------------------------------------
Net Worth                  1,555,651,233.55 ISK
===============================================


Despite posting earlier that this would be a low profit week, I did manage to take in almost 148,000,000 ISK in profits. Again though, cash levels never dropped below 350,000,000 ISK, so I'm not optimizing usage of capital. If I had, I think I could have picked up another 175,000,000 ISK of profit, putting me very close to my 50,000,000 ISK a day target.


Overall networth only increased 27,676,000 ISK. This is primarily due to a severe drop in the value of ships. I'm not sure what happened. Not that it matters, since those ships aren't going for sale on the market any time soon. And finally, the PLEX will be getting used next week, as my second account is due for renewal on May 22. This shouldn't impact money making activities, since that cash wasn't used to purchase orders on the market. 


That brings me to another issue. I'm not sure how useful it is to report assets. Right now, I'm really only using one ship, my hauler, to make any money. The others were only used initially for missioning to raise standings, but I haven't touched them in a while. I do need to get back to in to access jump clones, but otherwise, they're not very productive assets. Is it worth continuing to report?


I also wasn't able to put an income statement together. My plan was to use EVE Nexus to extract journal and transaction data and report off of that, but EVE Nexus crashes when I try to get to journal data. I may have to write my own API reader to get that data.

Rich and Social are unrelated

The inspiration for this post was the Greedy Goblin blog. It's a very interesting, thought-provoking blog, and it's one of the few that I read daily. I've learned a lot from that blog, and I use many of the strategies and tactics that were proposed by Gevlon. I have a lot of respect for the research and work that must have gone into his ideas.

Today's post from Gevlon postulates that it's not possible to be rich and social, because "they [the rich] do and force others to do the ultimate suck: working", and working is something that the socials despise. That's because "a social [person] is unable to find any fun in any technical activity, as his definition of fun is "receiving positive feedback from peers (real or imaginary)"".

To me, rich and social have nothing to do with each other. Becoming rich is done through accumulating money, and there are many ways of accumulating money to become rich:

• you can earn it
• you can steal it
• you can win it
• you can inherit it
• you can marry into it

Etc, etc. A social person is not excluded from accumulating money through any of these means. In fact, being social would be really helpful in that last point.


I also don't understand where the idea that social people don't like work comes from. If I categorized people I know into two groups, people who like work and people who don't like work, I'm sure there would be a lot of social and asocial people in both groups.


Gevlon often states that morons & slackers (M&S) are going to have a tough time at making money, and that's a statement I agree with. There are no free lunches. To become rich, whether in a game or in RL, you have to have a minimum of intelligence and energy to work at it. But whether or not you're social is irrelevant.

Quick Business Update

My stack of fail has finally sold out. Total loss is about 3,000,000 ISK. It's not a huge deal, but considering that this lot tied up 187,000,000 ISK, it hurts. Most of my other investment return over 20%, so even by conservative estimates, I should have made at least 37,000,000 with that money, not lose 3M.

A week with low profits

Diablo III is out today, and that's going to suck a bit of time out of my trading activities and blogging. I should be back in a few days, once the novelty of Diablo wears out.

Update for week ending May 13, 2012

Here's the balance sheet for this week:


Assets
Cash                         461,676,588.72 ISK
Sell Orders                  138,448,103.00 ISK
Escrow                                 0.00 ISK
Contracts                              0.00 ISK
                             ------------------
Total Current Assets         600,124,691.72 ISK


POS                                    0.00 ISK
Ships & Fitted Modules       383,233,090.18 ISK
Modules                                0.00 ISK
Blueprints                             0.00 ISK
Materials & Commodities                0.00 ISK
PLEX                         485,289,827.34 ISK
Misc Items                    59,327,474.65 ISK
-----------------------------------------------
Total Assets               1,527,975,083.89 ISK
===============================================
   
Liabilities and Equity
Notes Payable                          0.00 ISK
Loans                                  0.00 ISK
Bonds                                  0.00 ISK
                                       --------
Total Current Liabilities              0.00 ISK
-----------------------------------------------
Net Worth                  1,527,975,083.89 ISK
===============================================

I don't have the income statement setup yet, that will come hopefully next week.


Here are a few highlights from the past week:

• I sold the Orca on May 5th for 709B ISK (700B after taxes)
• I purchased two PLEX the same day for 475M each. I immediately activated one, and one is pending activation for my second account.
• Profits (excluding mission loot) are 79,740,014.77 ISK

Overall, the results are disappointing. The metric by which I was tracking my goal is profit per day, which needs to be 50M ISK / day. I'm pretty short of that, at only 8,860,000.00 ISK. Granted, I haven't played in two days (the weekend, at that) because of RL commitments. But even if I exclude those days, my overall profits were only 11,391,000.00 ISK, well short of 50M. 

I see a few reasons for this:

• Remember the items I mentioned buying at a loss on May 8th? I'm losing 49,000 ISK on each unit.
• I never bought more than 100M worth of goods at any given time, meaning 300,000,000 ISK was sitting in my wallet, not working.
• Of the 53 trading slots I have, I never used more than 30.
• I bought any item that had at least 20% profit margin (based on prices at the buying and selling systems). I did make money on these, but I noticed that some items sell at 50-90% profit margin. I should probably raise my minimum profit margin to make my capital work harder.
• Items with the worse margin (5-10%) were also the most expensive to buy, which means my capital doesn't work as hard. For example, one item was bought at 32M and sold at 34M, for 4.5% profit, or 1,429,606.00 ISK. Another item was bought at 20,450,000.00 ISK and sold at 31,000,000.00 ISK, or 52% profit. Had I used the capital from my first item to buy more of the second one, I would have netted 15,000,000 ISK

So while my results aren't great, I'm still encouraged by the fact that I have many areas that can easily be improved. I'm looking forward to the upcoming week.

Organisational and Accounting Changes

I am making a few small changes to how I operate my corporation, Fugawa Heavy Industries (FGW)

Organizational Changes

• Alts have been given the director role in the company. This will give my alts access to the wallet so that they may trade on behalf of Fugawa. Meili, the CEO and hauler, can move from system to system and and transfer items to each regional director, who can then place, modify and cancel orders as required.The regions assigned to directors is classified information, as it would divulge my trade routes.

 Accounting Changes

• Financial information will be reported using a standard balance sheet and an Income Statement. The Income Statement will be slightly modified from the RL equivalent to include some line items normally found on Cash Flow Statement, since I'm not going to bother calculating things like amortization and depreciation. 
• The objective of these forms is to keep track of how FGW is growing, and as well, to present the financial health of the corporation in the event that I want to get outside investments or someone to join the corp. I have plans for neither right now, but in the future, who knows?

Cargo Profit Calculator

It's downtime on the server, so it's a good opportunity to write something up on the blog.

Eve is sometimes jokingly referred to as "Spreadsheets in Space". Given the amount of numerical data in the game, it's actually not far from the truth. And like many other players, I also have my own spreadsheets to help me summarize information and make better decisions.

A few days after starting my new career as a regional arbitrager, I started to realize I needed a better way to determine how much value I could get out of a hauling trip. So,I made a little spreadsheet in Google Docs



(Link here)

 The spreadsheet is pretty easy to use. Fields in blue are the input fields. You enter a bit of information about yourself, such as your Broker Relations skill, your ship's total cargo space, your faction and corporation standings with the station owners, the items you want to put in your cargo hold with relevant information (volume, quantity, purchase and sales prices, etc). The spreadsheet does the rest.

The spreadsheet calculates a few things for you:

• First, it calculates how much room an order will take up in my cargo hold. Yes, the game does this, but only after you've actually put the item in the hold. I want to know ahead of time how much room that item will take, before I buy it. 
• Second, it calculates how much value the cargo holds. This value uses the purchase price rather than the sale price because I want to know how much I risk losing if I'm attacked with the hold full. 
• Third, it calculates all of the broker fees and sales tax. You can enter the Broker relation skill, as well as the faction and corporation standings for both the buying and selling stations, and the rest is calculated. The Retail Purchase fields lets you indicate if you put up an order through a broker or you did a simple purchase. If it's a simple purchase, then the Broker Fees aren't calculated. 
• Finally, I calculate the overall profits based on estimated sales price, and I sum everything up in cell B6. You can also enter how many jumps you will do between stations, and that will give you you profit per jump.

I still have a bit of work left, such as replacing sales tax with Accounting skill level, and moving a few of the fields around so it makes more sense. I would also like to create a station data page, so instead of typing in the faction and corporation standings, I could just use a drop down to choose my station and that information would be pulled from it. And finally, I'd like to put this up on Google, rather than in Excel, so I can share it and have access to it anywhere.

But for now, it's a handy little tool.

Tradings vs Arbitrage

Usually, when someone refers to trading in EVE, they're talking about the generic buying and selling of goods on the open market. But there are actually two different trading activities: Station Trading and Regional Arbitrage.

Station Trading is the activity of buying and selling goods without ever actually leaving the station. Traders look for items that have a large enough margin between the buy and sell orders that they can leverage to make some ISK. The margin must be large enough to cover brokerage fees and sales taxes, and have enough left over to make some profit.

Regional Arbitrage is the activity of looking for items in one region and selling it at a higher price in another. As with Station Trading, the margin must be large enough for the arbitrager to turn a profit.

The two activities seem very similar at first glance, but there are significant differences, beyond the fact that you need a ship for Regional Arbitrage, and you don't for Station Trading:

• Research for Station Trading is much easier. As soon as you select an item, you have all the information you need to quickly decide if the margin is attractive enough to place a buy order. With Regional Arbitrage, you either require two characters to compare prices in two different regions, or you have one character go from region to region while you take copious notes.
• Margins in Regional Arbitrage can be more attractive. Because more research is required, a large margin has a higher chance of going unnoticed, whereas large margins tend to get noticed quicker in Station Trading. Turn over is much lower, however, since the goods need to be hauled from one region to another, and it's slower to modify orders if you're undercut, as you'll have to travel within range.
• Regional Arbitrage requires a little less attention. Station Trading is a game of being on top of the buy or sell order list when a seller or buyer shows up. To make sure you fill that order, you constantly have to modify your order price. With Regional Arbitrage, you can choose regions and hubs with a little less activity, so that orders have a chance of selling without too much effort.
• Regional Arbitrage has a bit higher start-up cost. Because you need a ship to move goods back and forth, you'll need to invest some capital in fixed assets. That capital investment could be quite high if you ever need a freighter. You also need to train the necessary skills to fit and fly your hauler. With Station Trading, you only need a shuttle to get to your target station, plus the trading skills.

Both are very viable means to make a large amount of ISK. It's up to the trader to decide which style of trading they prefer.

Finally, profits

My plan to cancel my Jita order and move to another hub has paid off. I managed to sell 9 units of my mistake lot at 50,000 ISK profits each. It's not huge, but it's better than 300,000 per unit loss. I still have 27 units to sell, but at least I'm getting myself out of the hole I threw myself in.

What I'm really happy about are the other trades I've made. I had plenty of room left in my Iteron Mk. V prior to my departure, so I decided to see if there were other items I could try and sell. I did my research, correctly this time, and purchased a few other items that promised good margins and good profits. I'm happy to report they've been selling very well. I checked my wallet this morning, and I was 58,000,000 ISK richer. If I can keep this up, I'll easily make my goal of 1.5B ISK a month.

Limiting losses

I logged on tonight to check the situation with my lot of items that are losing money. This is the item I bought very hastily two days ago without doing proper research, which is now selling at a loss. The price in Jita is now 4,336,637. At that price, my loss is now 19,000,000.

I figure I have 5 options.

Option 1: Keep modifying the market order and liquidate the lot in Jita. By undercutting, I may sell quickly, but I lock in my current losses, and it could get worse if I get under cut myself. This means a loss of at least 19,000,000.  Not interesting.

Option 2: modify the order back to something above my purchase price, and leave it on the market with a deadline of 3 months. I may get lucky with the demand that picks up, and my items get sold. This is wishful thinking. It's not likely to happen, as rising prices will attract more sellers, and even if it were to happen it could be a while. I'm better off converting that inventory into cash so that I can invest now and make up the loss.

Option 3: Cancel the order and write off the broker's fees. Reprocess the order and sell the minerals This isn't really an option. Reprocessing, even with my skill levels, would only net me 57,000,000. That's a loss of 130,000,000.

Option 4: Cancel the order and write off the broker's fees. Hold on to the inventory and sell if/when the price recovers. This is similar to option 2, except I lose my broker's fee. If I'm just going to sit on that inventory, I might as well leave it on the market for now.

Option 5: Cancel the order and write off the broker's fees. Resell in another system where prices are holding up This is probably my best bet. The item is selling at 4,850,000 in another region. At that price, I can break even, even with loss on the broker's fees factored in. 

Just so I don't repeat this mistake again, I actually checked the historical prices and volume.There's a bit of spike in the price at the moment. Prices have been rising for a few days, and I suspect it's due to the low number of items for sale. Number sold over the past few days would indicate that the current volume of items available may not be sufficient and the market could support another seller. Even at their lowest, prices are still better than in Jita. 

Option 5 seems to be my best bet. There's no guarantee I can sell my lot at a profit, but even in the worse case scenario, where prices drop quickly, option 5 is still the best option, ISK-wise.

You don't learn from mistakes if it doesn't hurt.

Two days ago, I made a mistake by buying an item that had great margins, but which turned out to be a short-term spike in prices. I hadn't looked at the historical prices before buying. I got lucky, and still managed to sell the items before the price dropped below what I paid for it.

I repeated that same mistake yesterday, but this time, I did lose money.

I was doing some research to find deals, and quickly landed on a item promising 30,000,000 return. I got greedy, and decided to go for a quick sale, rather than do my due diligence. I flew 5 systems out, picked up the lot, and flew it back to Jita. Just in time for the Jita price to collapse. At this point, I'm looking at a 4,000,000 to 5,000,000 loss.

What did I do wrong?

1. I did not pay attention to historical price. The selling price for this item was 5,600,000 at the time I purchased the initial lot. However, this item normally trades at 4,800,000, which is also the price I paid. 
2. I did not look at the profit margin, only the net absolute profit. The margin was a paltry 11% (after broker's fees and sales tax), which doesn't give me much room to manoeuvre if I get into a pricing war.
3. I invested about 1/3 of my total cash in this lot. A fair chuck of my ISK is now tied up in goods that aren't selling.
4. I didn't look at volume. 75-150 units of this item move a day in The Forge region, with the occasional spike in the 300 range. My lot represents a fair portion of that, so it's not likely that I'll be able to sell it quickly. 

Lessons Learned

1. Always check historical prices to see if you're not dealing with an item that's seeing a temporary spike in sales. If the spike is upward, don't invest. If the spike is downward, then it may be worth spending money on it. I think a good checklist of things to verify would be a good thing.
2. Always calculate margins, to see how much room you have to adjust prices. This is the margin of security concept real world investors like Warren Buffett talk about, and it's a rule I've very familiar with. I totally ignored this rule yesterday.
3. Diversify. I was reading Full Disclosure, and saw that Vincent has a large number of items for sale. I think this could help offset losses if you're wrong about a deal or if you run in a one-time negative event. Also, you don't have all your cash tied up in one item. I don't know what the proper limit is though. Maximum 5% available cash? Maximum 10% if it's a really good deal? 
4. Always compare historical volume to current volume on the market.

I also need to figure out how to deal with under-cutters. It's very draining to have to reset prices constantly.

Trust your analysis, not your emotions

One of the tough things about trading is trying to avoid emotions. Humans are highly emotional, it's just how we are. And emotions play a fairly large role in trading and investing in the real world. Anyone who's spent any time reading about trading or investing will know about all the research that went into the emotional side of money. After all that's what marketing and behavioural finance is all about.

It's no different in EVE. In fact, I'd argue it's a little harder, because of the PVP aspect of the trading game.

Here's an example. A few days ago, I set a goal of making 1.5B ISK a month, in order to pay for two accounts using ISK, and have a bit of cash left over to buy modules for my casual PVP alt. To make 1.5B ISK a month, I need to make 50M a day. With the skills I have, I can maintain 53 orders on the market. That means I need to have at least 1M worth of goods in each of those orders, and I need to turn over all 53 orders each day. But I also need to buy good to sell, so some of those 53 orders need to be buy orders, meaning my sell orders should be at 2M each.

This kind of dawned on me this morning when I was setting up my sell orders. I had items for sale that were selling for 1,200 ISK. When I realized the amount of time I was wasting, I decided to start selling items retail, so that I could keep my market orders for more valuable items. But then I ran into one item with a buy price of 2,500 ISK and a sell price of 9,000 ISK. I have items in my inventory worth millions of ISK, but I was struggling to sell my item at 2,500 ISK, not because I would be losing out on 6,500 ISK, but because I would be giving up an item to a seller who could then resell it at 9,000. He'd effectively be getting MY 6,500 that I would get for selling it myself.

But is my slot worth 6,500 ISK? Absolutely not. I can very easily make far more than 6,500 on a single trade. In fact, yesterday, I made well over 450,000 on a trade I just happened to run into. I couldn't have made that trade without an open slot. (If you'll indulge me in a short side note, this is where the concept of opportunity costs comes in play).

But just to help me get over the emotions of giving 6,500 ISK to a competitor, I did a bit of analysis on his order. The buyer had 52 items left on his buy order, at 2,500. The item was currently selling at 9,000, and I don't think it would go much above that, given the price history and the amount of items already on the market. Assuming he fulfills that order and manages to quickly turn around those 52 units at 6,500 ISK profit, his total profit will be 338,000 ISK. As I've already stated, I made more than that on a single opportunity buy. I'd gladly give up 6,500 to a competitor if it means me being ahead of him by 162,000 in the long run.

Emotional discipline is one of the fundamental traits of all investors. Traders are competitive by nature, so it's especially important for us to keep emotions in check so that we can make the most profitable use of our time and resources.

Learning from mistakes

I was working through my large list of mission loot today, putting everything up for sale on the market. As I'm doing this, I'm looking at the prices, to try and understand how other traders think, how they work (trading isn't just about buy and sell price, it's about your competition). That's when I fell on this little situation:

I spotted this item yesterday, because I had one in my mission loot inventory. When I put it up for sale, I saw the huge discrepancy between the buy and sell prices. I had no plans to start buying yet, since I want to get rid of my current inventory. But I took note of it for later.

This morning I came back to it, and saw the above situation. Clearly, a bunch of sellers aren't paying attention. What I suspect happened is that the person selling at 17,000 ISK came in, opened the Market window, saw the lowest price, and immediately posted without looking where the lowest price was posted. The seller is likely giving up big profits by not posting at 107,000 ISK or so. But then, the next several sellers show up and do the same thing. So now the price in Jita for this item dropped from 108,999 ISK to 14,000 in one fell swoop.

This looks like a great opportunity, no? Just buy all the items in the system selling between 14,000-17,000, then resell them at 107,000. Easy money!

Well, hold on a sec. When something looks too good to be true, it probably is. So I did a bit more research. I checked two things. Does this item actually sell a lot? The price history says this sells between 50-100 units per day during the week, hovers around 100 units per day on weekends, and can spike to well over 200 units every once in a while (once every 3-4 weeks or so). That's not bad volume. If you buy up all the units priced at 14,000-17,000, you'd only have to worry about selling 9 units.

What about historical prices? Here's where the picture muddles a bit. Generally, this item sells for 6,000-7,000 ISK. Every once in a while, the price spikes to 20k-30k. But never 100k+. So the units priced at 14k-17k are actually still a little high.

Unfortunately for me, I did this research AFTER I bought the low-priced units. I'm fortunate, the price I paid for being hasty was less than 150k, and it will be far less than that once these items are sold. But this is a good lesson in looking at all the factors before making a purchase.

1357% profit

I was selling mission loot this morning, and as I'm going through all the items in my hangar, I was taking a look at buy and sell prices, see if anything was worth trading. And sure enough, I found quite a few.

+-----------------------------------------------+--------+---------+----------+
|           Item                                |  Buy   |  Sell   | Profit % |
+-----------------------------------------------+--------+---------+----------+
| Alven Surface Targetting Annex                |  8,500 | 123,864 | 1,357.2% |
| Burned out logic circuit                      | 16,000 |  16,025 |     0.2% |
| 100mm Reinforced Crystalline Carbonide Plates | 21,002 |  34,890 |    66.1% |
| Explosive Deflection Amplifier                | 50,500 | 109,990 |   117.8% |

+-----------------------------------------------+--------+---------+----------+

A few notes about the above:

• All items were sold on Jita, but the method of purchase varied
• Someone was selling 5 Targetting Annex at another station in the Jita system for 8500 ISK. I quickly bought them and flew over to pick them up. 650,000 ISK, not bad for about two minutes of work (I couldn't sell anything else on Jita anyway, I didn't have any order slots left).
• Someone was selling the Burned Out Logic Circuits for 16,000, while another player was buying them at 16,025, at the same station. Since you don't incur many fees by buying/selling retail, I scooped them all up. 0.2% profit may not seem like much, and normally I wouldn't bother. But this was an instant retail trade, and the volume was interesting enough (4961). It's only 124k ISK, but since it only took me 10-15 seconds, that's really like 29.5m ISK/hour.

These are abnormalities in the market, so you can't count on them to make ISK consistently. But you should be on the look out for them, since the can fatten your wallet a bit, with almost no additional effort on your part.

Starting Point

As of today, May 5th 2012, here's where Meili currently stands:

Assets
Cash                         647,481,776.32 ISK
Escrow                                 0.00 ISK
                             ------------------
Total Current Assets         647,481,776.32 ISK


Ships & Equipped Modules   1,035,112,325.00 ISK
Items                        158,997,138.00 ISK
-----------------------------------------------
Total Assets               1,841,591,239.32 ISK
===============================================
   
Liabilities and Equity
Notes Payable                          0.00 ISK
Loans                                  0.00 ISK
Bonds                                  0.00 ISK
                                       --------
Total Current Liabilities              0.00 ISK
-----------------------------------------------
Net Worth                  1,841,591,239.32 ISK
===============================================


A few notes about the balance sheet above:

• Cash is the total of Meili's personal cash and Fugawa Heavy Industries' (FHI) cash. The company earns cash through alt missioning, and I prefer using Meili's personal account for trading
• Ships is pretty self-explanatory, but the value of the ships includes all of the modules and rigs currently equipped by the ship. I'm doing this for no other reason than because it's easier to track this way with the tools I use. Also, there's a bit less volatility in this number, since there isn't much change to the list of modules and ships I use.
• Items is whatever is in my hangars, spread out all over New Eden
• I don't have any liabilities at this point, and I don't plan on having very many

In the spirit of full disclosure, I want to explain the high net worth Meili has: I bought a PLEX 6-pack a few years ago. As mentioned in an earlier post, when I started playing EVE, I was in EVE University, and when E-UNI is at war, there are really only three permitted activities:

1. Fleet up
2. Temporarily quit corp
3. Station spin

I chose to do fleet up as much as possible, since I thought I wanted to be a PVPer. But since I couldn't make money, I bought a PLEX 6-pack, figuring the cash would keep me going for a while. A long while, since I was flying mostly frigates and EWAR cruisers. Later, when Tori was biomassed, Meili got all his stuff, and so, she's now worth 1.8B ISK.

I should point out that the current 1.8B ISK net worth hasn't come all from PLEX. At the time, PLEX was selling for 320M ISK, so the 6 PLEX netted 1.92B or so. Since then, I have bought one PLEX at 500M ISK to extend my flight time. I've also lost a few ships along the way, probably to the tune of 100-150M. So only 1.3B of Meili's current net worth came from PLEX. The other 600M was from in-game activities, primarily missioning, salvaging and mining.

Still, that leave me with a bit of a dilemma. Gevlon frowns upon PLEXing for ISK. I don't generally have a problem with it, but in this case, it does feel a little bit like cheating, since the purpose of this experiment is to see if I can make cash, and starting with 1.8B ISK is quite a head start.

So the question is, should I sell some of my assets and turn them into PLEX now or should I just start in the position I'm in?

Both my accounts are paid up until May 22. I think I will sell the Orca, buy some PLEX to extend the accounts until June 22nd, and take it from there. At today's prices, the Orca and it's modules should sell for 720M or so. Substract two PLEX at 500M each, that would leave me with about 367M cash to invest. I think that's a pretty fair starting point, a little high, but nothing that couldn't be reached fairly quickly by a starting player.

Meet Meili Jiang

Meili Jiang is my trade/industrial/research alt. She was created as a support character for my main at the time, Toritetsu "Tori" Morimoto. Tori was in EVE University, and because of the strict Wartime rules in place at the time, it was almost impossible to do anything but fleet up. So I created Meili both to have an alt I can play anytime, with no restrictions, and to have a character that could make money for my main when I couldn't fly.

She became my main a few months later. When I started playing, I got a little overzealous and I created 4 accounts, with the idea of creating my own mining corporation. I decided to consolidate accounts, and I biomassed Tori to get rid of that complicated name (Tori didn't have many skill points, so it wasn't much of a loss).

Meili was originally slated to be the mining director for the fleet, so she has skills to fly an Orca. She's also the CEO of the corporation, so she has the necessary skills for that. She has some piloting skills, enough to fly Caldari and Gallente battlecruisers comfortably, and she can fly industrials quite well (T2 tanked Iteron V). And recently, I've started training Trade skills. Almost all skills are at level IV, and she's about to get Broker Relations V in a day.

My training plan for Meili is to continue training Trade for now. I've remapped my attributes to optimize learning those skills, so I might as well take advantage of it. Accounting is the next skill going to level V, then Retail V is up, so I can open up Wholesale and train that to level IV. Once I get there, I'll decide if I want to pay the 17 days I need to get Wholesale to V so I can open up Tycoon.

After that I'm not sure. I always thought it would be quite interesting to become a weapons dealer, maybe even a capital ships dealer, so that's one area to investigate. I would also like to raise some of my standings to make trading more efficient, so I could certainly spend some time training more piloting skills.

Fortunately, I have a few weeks to think about it, since I probably have another month of Trade skill training to get everything I want to level V.

Challenge Accepted!

I've been thinking about blogging about trading in EVE Online for a while now. This idea was planted in my mind when Gevlon (from the Greedy Goblin blog) was asking if anyone knew of any good EVE trading blogs. I did a quick check of my bookmarks, and there were only a few. The idea quickly faded from my head, since there were plenty of other RL things going on.

Until today. In a recent post, Gevlon argued against the idea that starting a new MMO blog was a bad idea. His basic premise was that valuable information is always worth spreading, and if someone could write, they should. Near the end of his post, he offered to publicise the blog of anyone who wrote well about EVE Trading (or even general MMO trading). While it wasn't intended or even worded as a challenge, I took it that way, as a personal challenge. I've been looking for an excuse to practice writing, anyway, so this is as good a platform to do so as any.

In addition to a writing challenge, however, I'm making this an MMO capitalist challenge. I've been playing MMOs for a few years now, and by far the most interesting aspect for me has been making ISK/gold/credits. Accumulating wealth is always something I've had fun doing in games, but I really only gave it a serious attempt recently, in WoW. I wasn't exactly poor, but I didn't have unlimited gold either. I was doing some research when I ran into Gevlon's blog. I applied a few of his techniques, and next thing you know, I have more gold than I can spend. I wondered if the same strategies could be applied to EVE. Gevlon wasn't an EVE player back then, so there was no indication from his blog that it would work. Gevlon recently jumped into EVE, and his business results were outstanding, proving that they don't only work in EVE, but they work even better in EVE.

One of the difficulties in EVE is figuring out what to do. Players call it the sandbox because of this objective-less type of game, and I was one of those players that couldn't figure out my goal. This little challenge is exactly what I needed.

My goal for EVE is now to make enough ISK to buy PLEX for two accounts, and to fund in game activities as well.

I don't know the exact amount yet, since I haven't calculated how much my PVP alt costs. But I suspect it's around a billion and a half a month (two PLEX, plus half a billion for ships and such, since I'm a crappy PVPer). In my next post, I'll outline my overall plan for achieving that goal.