[Eve] The Economics of Motivation

I just spent 1.5 Billion ISK.   I went all in on a hunch, that will make or break me, and you our loyal readers get to watch it unfold.

I have done very well financially in Eve since I started playing.  I am certainly not amongst the best, but I probably did as well or better than many pilots in my league over the past few weeks precisely because I had the motivation to do so.   Starting more or less with this endeavour, I got very active on my 3rd account, which is a dedicated trade alt, stationed in Amarr, doing short runs in an Industrial for ISK and station trading in the 0.01 ISK game.

As I indicated in my recount of that PLEX day, I got really excited by seeing 1,000,000,000 ISK in my wallet, even with an asterisk next to it, so I set out to erase the footnote and make it official.   Over the following week, I crossed a billion and kept chugging along until late last week my total liquid cash across all my characters was right around 1.5B AFTER trading in for a PLEX and converting it back to game time.

My focus on these ISK grinding activities was motivated by two factors…  One, I wanted to see that Billion ISK number and so I was excited and motivated by the upticks in my wallet as a result of these dull and repetitive activities, and Two, the wormhole activity had stalled to a point where I was essentially floating in a POS 90% of the time I was online because I was either afraid (rightfully so) of getting ganked, or we simply didn’t have an activity available to do.   Motivation drove my behavior, and profit was the destination.

Late last week, I started venturing out despite the risks.   Exploring low sec, other wormholes, even a gas mining op in a wormhole we found (which I am selling if anyone wants a Worm-Home) and generally getting into all sorts of mischief, which has been very exciting.   Trading is not exciting, and after forgetting to log in my trade alt on a few occasions and losing tens of millions of ISK as the mineral markets went berserk, I started to shy away from trading at all…

The downside of the lost motivation is I have developed expensive tastes and habits over the past few weeks, and its easy to stockpile ISK when the most expensive ship you can fly is a Drake at 50,000,000…   When you start dreaming of Battleships (100-500m) and Strategic Cruisers (500m-1B) having 1.5B stops being all that impressive, and the path to space poverty is a short one.

As all this is going on, I have been reading all the news regarding the changes to the game coming in Escalation and Inferno, to the way the Drone Regions will work, stealth banning of the botting miners, nerfs to Incursion income and of course the hilarious hijinks of The Mittani and Helicity Boson.   How do I profit from this economic tsunami that is brewing before our eyes?   Smarter minds than mine all agree that it isn’t a question of if ship prices will be subject to hyper inflation, but rather how much will they climb.  I decided to start by making a list of what I needed and wanted to buy over the next few months.

One economic truth is that among the largest of detriments to the creation and preservation of wealth, is inflation.   I needed to figure out a way to invest with a significant likelihood of capital appreciation, manage my downside risk and hedge against inflation all at the same time…

My Ship Needs

Raven – I will skill into a Raven today.  I don’t particularly need or want to fly a Raven right now, but having a Battleship option in your hanger isn’t the worst idea, and rolling wormholes in a Battlecruiser is an excersise in futility, so it was time I picked one up.

Hulk – My miner is 25ish days away from the Hulk, which would create a need for a ship right amidst a massive price increase on said ships.

Tengu – This is my ship.  I have wanted to fly a Tengu since I started reading about Eve, and nothing since starting to play has diminished that desire.  I am 45 days away from flying one, and I want to actually fly it without worrying about losing my shirt if something goes wrong.

Manticore – Following my hunting session that I wrote about yesterday, I have decided to detour my Tengu skill plan into this ship since it is only 20days to fly and more than half of that is Tengu plan overlap .  Longterm I want a small fleet of these for higher risk PvP roams and ops so I am not wagering a billion ISK every time I fly out of the wormhole, and I can hop right back into one if I get podded out of an engagement.

So looking at that list, at current prices I need at least 750,000,000 ISK just to buy the Hulls.  If prices inflate by even 25% well that’s a small fortune…   With Hulks being blown up by the hanger-full they could double in price just as I need them.   Buying now would be the same as ‘earning’ a few hundred million ISK, just by dodging that inflation risk.

So here is what I have done, and you can follow the markets with me to see if I was wise or stupid.

Ships I Bought

1x Raven @130,000,000 (This will make its way into the wormhole tonight.)

2xHulk @305,000,000 (Stationed in Amarr)

2xTengu @241,000,000 (Stationed in Jita)

3xManticore @21,000,000 (Stationed in Jita)

Here is my reasoning…

*Hulks: With Jita Burning and Hulkageddon, Hulk prices will rise drastically due to ship loss/ replacement and The MIttani’s price fixing cartel in the Tech Moon regions.   They will also have to be purchased outside of Jita while the Goons are terrorizing that region.   Having two sitting in Amarr to sell when the price is right is a good opportunity to make a few hundred million ISK.  If I am wrong, I needed one anyway, so I have some downside protection there. (High Capital Appreciation, High Inflation Hedge, Moderate Downside Protection)

*Tengus: Apparently Goons are slated to use T3 Cruisers for their Jita Burning assault.   They will no doubt stash a stockpile of T3s in Jita in advance, but if the carebear tears keep flowing, they will keep blowing up ships and eventually they might need to buy some in Jita.   Every sane trader will have long since moved their valuable assets out of Jita, so competition will be slightly reduced and prices should spike.   If I am wrong, I need one Tengu in 45 days, and having a spare relieves the stress of flying your entire wallet into risky situations.   If I am right, I can dump the two Tengus at a big profit and buy a new one in a month when things cool off. (Slight Capital Appreciation, High Inflation Hedge, Complete Downside Protection)

*Raven: I need one of these and I predict they will never be 130m ISK ever again.  Buy now, hedge against inflation.  If a large enough spike happens, sell and profit. (Slight Capital Appreciation, High Inflation Hedge, Complete Downside Protection)

*Manticores: I need these eventually, so it’s the same concept as the Raven.  Since I won’t be flying them for a few weeks, I have them in Jita incase people start buying Cov-ops ships to log killmails during the Jita Burns mayhem, and I can cash out a nice margin.  Otherwise I hedge against inflation down the line.   (Slight Capital Appreciation, High Inflation Hedge, Complete Downside Protection)

There you have it, a nearly 1.3 Billion ISK investment that I feel reasonably comfortable will net me a sizable profit, but otherwise will satisfy my ship needs for the next year and reduce my exposure to rising Mineral prices…

~Cyndre

Carebear Disclaimer: If you try this yourself, and lose ISK feel free to cry about it, but not to me.   I take risks that I am well prepared to lose, and unless you have a plan B for ISK generation you probably shouldn’t be investing your entire wallet into a market that is currently rife with speculation.  I have a several hundred million ISK annuity via the wormhole that will replenish my Wallet regardless of how this turns out, and with that seed money could feasibly restart trading to replace some or all of my lost capital in a reasonably short timeframe if I had too.  If you can’t say the same, don’t try this at home.

14 thoughts on “[Eve] The Economics of Motivation”

  1. Best of luck with your speculation. I can imagine you will get a kick out of waching market prices over the next few weeks and trying to pick the best moment to sell.

    I have a question about your skill training plans though – you seem very focussed on training up for a given ship. What about all the suppot skills you need to fly any ship properly?

    1. Balancing ship goals and the support skills is a fine line. I see a lot of Veterans toss around statements like you need X skill level before you even think about flying Y hull, and quite frankly I find it a very boring and over-cautious prespective.

      I build my skill plans as follow:

      1) What do I want to do?
      2) What ship does it best/ Do I like Best?
      3) Race to sit in that ship.

      Now, I find the ideal fit for said ship…

      1) Can I fit it currently?
      2) Train the minimum skills to fit it properly, minus T2 Turrets or lauchers.

      Basically, by sticking to Caldari specific ships (Drake, Raven, Manticore, Tengu) the support skills are all identical with relativly few exceptions.

      Once you have picked up the bulk of your Core Fitting, Core Capacitor and Core Integrity certificates up to Standard level, you do do anything moderatly well, and grabbing the DPS support skills in Missile Launcher Operation up to say, III or IV puts you in a comfortable position regarding those ships.

      If you sit around training for six months so you have a “Perfect Drake” skills, but you quit after four months because you are bored of flying a drake, it defeats the point of gaming.

      Fly what you want to fly when you want to fly it, and save the “theorycrafted, optimal perfection” for wow raiding… If you lose the ship because your dps wasn’t up to snuff or your fit was lacking, it was pixel loot anyway, so just go buy another one…

      1. I should add that when I say “20 days to a Manticore” that means 20 days until I can fit and fly a manticore the way I want, for now (not perfection, but enough to scout, stalk and gank people). The Tengu is 40 days to sit in it and 78 days to be really proficient. If I was looking for Tengu perfection, I am sure I could put a skill plan together that would span a year…

        Chances are, threemonths from now when I have a very comfortable Tengu fit… I will realize I REALLY want to fly something else, and start working on that.

        Call me crazy, but I am going to play Eve my way, and all the wisdom in the world can’t stop me.

        1. Good to hear you haven’t skipped support skills. I found level 3 to be a sweetspot for most skills initially (quick to get to). When you find a hull you want to spend a lot of time in (your Tengu perhaps) then you can think about filling out the 4s and 5s

          1. Oh, ya I have pretty much every core skill to 3 or 4, the important ones are all 4, including most missile dps skills.

            A train like Manticore is 20 days because of Caldari Frig V, Energy Upgrades V and Cloaking IV. Aside from Bomb Deployment, I already have all the other Mantocire skills…

            Tengu is 40 with 99% of it wrapped up in Caldari Cruisers V, and capping Nav, Eng, Elec to V. Then you need to train up each sub-system and the Hull to 4/5 which adds another month to the plan.

  2. BTW Cyndre – Goons are only using T3 Tengus for War Fleets, Not Burn Jita. Burn Jita will be tornados & thrashers apparently.

    FYI

    – nice article though.

    1. It can be confusing to the outsider but he’s talking about Tier 3 Battlecruiser for Jita and Tech 3 Strategic Cruiser for the new Goonfleet doctrine. At various times they’ve both (correctly) been abbreviated as T3. Which is which depends on context. Fun isn’t it?

      1. T3s are the same… Tengu is a Tech 3 Battlecruiser, whose ship class is referred to as a “Strategic Cruiser”

        They are all the same term. The four ships are Tengu, Proteus, Loki and Legion.

        1. Oh I misunderstood your comment… I never meant Tier 3 Cruiser class ship, Tango was correct to assume I was referring to Tengus in goon alpha fleets…

          About a week ago I got wind from a guy I chat with goons were stockpiling Tengus, and this was incorrect or only partially correct after the ‘leak’ of Mittens speech last night.

          My deals and this post had already been written based on that older information.

          Turns out my source was both correct and incorrect. Either way the price of Tengus will go up, moreso with a steady destruction of 200 Tengus at a time in a goon alpha fleet.

          1. Ya may want to invest in scimies as well since all the shield fleet doctines seem to call for them as the logi of choice

            Drake fleet? “I want scimies”
            Tengu fleet? “I’m not moving until I see x scimies”
            Mael fleet? “Scimies!
            I’d assume the same for Rokh fleets as well.

    1. There were a few reasons behind that… it is as much speculation and gamble about what you don’t buy as what you do buy, and here was my thinking…

      I suffer from a lack of capital when it comes to economies of scale, so I have to rely on either repetitetive microtransactions or hope for huge margin changes…

      The hulk for example I expect to double. A 200 million isk margin on each ship would fit ghe current conventional wisdom out there right now, and after a 12% increase day over day, it is possible.

      The modules for T3 have the bulk of their underlying material costs derived from wormhole loot which will go largely unchanged during this inflationary period, so from a profitability standpoint, it didn’t appear to be a good investment.

      Now if I had endless capital, I would have bought them anyway, but I spent the bulk of my isk doing this, and didn’t want to have nothing to get me through until eigher the markets peak, or the wormhole payouts come so I held off on the modules until either of those events occur.

      That and I haven’t really researched fits, so I didn’t have the understanding of the market to act with authority.

  3. Too bad all the faction items made their way into the regular market–I was making moderate income with overpriced contracts.

    I have about 2 bn in market spec at the moment. I think I missed the mineral gravy train, but we will see in a month.

    Another thing about your stealth bomber investment: new models coming out in Inferno. People like pretty ships… :)

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