Let me be more specific. Red Steel was stagnant around 47 DKP. News came out that Ubisoft had shipped 950K copies. Yet after this news came out, people who happened to be watching tSE or IGN or the VGC forums at that moment could still go buy stock at 47 and make 100% profit. Because the automated market maker is the last to know instead of the first, anyone in the right place at the right time gets the same advantage an insider trader would get in a real market.
I've long thought that was the key flaw of the automated market maker. Ideally, there would be no automated market maker, but we need more users for that to happen. For stocks which aren't seeing much activity, maybe we do have enough users.
Its just something to think about.
I certainly agree with the statement "Watching all the data and keeping up with industry news probably makes the prediction ability of the average person much better."
In terms of IPOs... With early, high-profile IPOs we have consistently ended up with hugely overvalued stocks. Halo 3 and Smash Brawl jump to mind. These stocks are heavily overvalued because new people join, buy the stock, and never come back, and veterans know this and stay away from the stock (and are driven away further by the frequent poorly priced IPOs providing easy money). If the stock IPOed only a month or two before release, there would be less time for the newbs to buy up, and more importantly, the veterans would be willing to throw their weight behind the game to bring it towards an accurate price knowing raw sales data is around the corner.
5
Let me be more specific. Red Steel was stagnant around 47 DKP. News came out that Ubisoft had shipped 950K copies. Yet after this news came out, people who happened to be watching tSE or IGN or the VGC forums at that moment could still go buy stock at 47 and make 100% profit. Because the automated market maker is the last to know instead of the first, anyone in the right place at the right time gets the same advantage an insider trader would get in a real market.
I've long thought that was the key flaw of the automated market maker. Ideally, there would be no automated market maker, but we need more users for that to happen. For stocks which aren't seeing much activity, maybe we do have enough users.
Its just something to think about.
I certainly agree with the statement "Watching all the data and keeping up with industry news probably makes the prediction ability of the average person much better."
In terms of IPOs... With early, high-profile IPOs we have consistently ended up with hugely overvalued stocks. Halo 3 and Smash Brawl jump to mind. These stocks are heavily overvalued because new people join, buy the stock, and never come back, and veterans know this and stay away from the stock (and are driven away further by the frequent poorly priced IPOs providing easy money). If the stock IPOed only a month or two before release, there would be less time for the newbs to buy up, and more importantly, the veterans would be willing to throw their weight behind the game to bring it towards an accurate price knowing raw sales data is around the corner.
Again... Just something to think about..