I think there is a misperception here that ixaarii or you "think" that I am calling you irrational or something, but I did not do that. I am just using your name since you are the current #1, and I just want to illustrate that even #1, with networth bigger than #2 & #3 combined, could not do much against the current practice of GLS stocks.
About finding undervalued game in the GLS market, it is very, very difficult. In fact, all of the GLS stock that I monitored have prices beyong my expectation, like that COD4 X360 you mentioned (almost 770 now, which almost reach my most optimistic #).
I agree, the trust fund make the exchange less accurate,
I also believe that starting off with 1,000,000 DKP is asking for problems.
Startups in the real exchange buy MAYBE 2,000 of any one share.
300,000 DKP would be a much, much more accurate starter-up for accounts on the simexchange, not allowing people with dual accounts inflate a stock too much, and just reducing the impact of any one user.
the problem is that there is constant money flowing into the market (time trust, community, new members) and as games have no real definite limit on price as more and more can be brought, more and more dkp is spent on them inflating them to an unreasonable price and it is hard for the more experienced traders to have an impact and reduce them. and as there is no defintive GLS on most products, even if there is from the publisher most of the people that are a problem have no knowledge of them, so it cant be put right, especially when any use of VGC is shot down as you said.
theoretically if enough people got together they could inflate a price to over 20000 dkp(at a huge loss), even though its completely unrealistic, everyone else would short it to hell it could still be achieved by enough people and it would stand as the predicted price.
I don't think there needs to be any solution, because I don't believe there is truly a problem. Stocks can get seemingly ridiculously overvalued in play money prediction markets as well as in real money financial markets. The fact of the matter is that bubbles and crashes will and do happen and they will happen again and again in the future.
It doesn't matter how much money top players have and it doesn't matter good the big money players think they are, vast misjudgements in valuation by the market as a whole will occur. Institutional money, supposedly the smart money on Wall St, controls the majority of the stock market and that didn't stop tech stocks from going crazy in 2000, it didn't stop housing stocks in 2007, and it won't stop the next bubble. I don't think restricting money to new players on the SimExchange markets will do anything to prevent stocks from getting overvalued.
This is just a part of life in any free market and the idea that bubbles might be happening again here on the SimExchange actually reaffirms my faith in these markets and I don't think it reflects poorly on how things are working on the SimExchange at all. If they didn't happen from time to time that would actually make me more suspicious that things were not working and perhaps were being controlled by something else besides a free market.
Prediction markets like the SimExchange are not perfect, but they have been proven over time to be a better indicator of the future than any one analyst.
In my opinion it is much more difficult to make money going short stocks right now than it was in the past. This is not because you have to "fight the crowd" as you put it, but rather because the crowd is now with you and is also heavily short. Just look at the portfolios of most of the top 25, they are filled with short position after short position. When everybody is already going short who will be left to sell after you? It gets harder to make money when everyone is doing the same thing as yourself. Personally I made my best gains going short when there were only a few other people doing it.
In my opinion I think there is real money to be made by being a contrarian and going against market trends. Perhaps instead of looking for overvaluation and sticking to futures you might want to do the complete opposite and and look for undervalued games in the GLS market.
@ixaarii, Thanks for understanding. Although I don't agree with you that there is a problem with GLS stocks it's nice to know that some people can see that I am sometimes unfairly called out. I know I occupy a prominent spot in the lifetime rankings but rarely do I ever see anybody else who is constantly forced to justify their positions.
I think some people believe that since I've built a relatively large lead that I can somehow control and manipulate this market which is absolutely wrong. It is true that can exert more influence than others but frankly if I am wrong and the market goes against me there is very little that I could do about it.
For example I wish I could undo all of my past Call of Duty 4 (XB360) trades or somehow send that stock down. Those who are observant may have noticed that I have had a very large short position in this stock for a very long time maybe 5-6 months and where has that stock gone in that time, no where but up. In fact I still have a huge short position in it because there is not much I can do to unload it, one of the drawbacks of a large portfolio. By my estimates I have lost somewhere between 7-10 million DKP in the various CoD4 GLS stocks and futures.
Frankly I am just tired of people saying I can do whatever I want rational or not, it cheapens the image of the SimExchange. I'd just like to say again I am not the market, I do not control where prices go and I can only influence stocks to a certain degree. Just like everyone else I hope I am right.
I would disagree...a few players in the top 100 can NOT make a noticeable difference. The other day I used some spare cash (I think it was around 4-5 million) and drastically shorted about 5 lifetime stocks. I pushed the values down about 20-30% (I believe, I didn't keep track)...within a couple hours, the stocks were back up to exactly where they were before. This was the largest attempt of mine, though I had tried lowering stock prices before...but with the exact same result.
Due to this, lifetime stocks are only trending upward and any downward movement sems to be reversed within a day. I don't know it it's one person doing this or several, but it means that individual players cannot change the over-valuation of stocks. Months ago, players used to post which stocks looked overpriced...for some reason, that doesn't happen anymore (perhaps due to backlashs against any post that quotes VGC numbers?).
So, what is the proposed solution ? Most of us agree that there is a problem in the GLS stock, but so far we haven't talk about how to solve it.
One thing that come to mind is reducing the 25K DKP limit into a smaller #, like returning to the previous limit : 5K DKP. I am not familiar for the reason of the increase from 5K to 25K, so if any of you remember the reason, I would like to hear them.
One other way is reducing the time trust rate, from 250 DKP every 15 minutes, to say, 250 DKP every hour. Minimizing "free money" will make people more cautious in investing their money, and can minimize the interference from "insane" or "misunderstood" crowd.
Just think about it : 24K x 30 = 720K "free money" per month, or 72% of the new member networth. No matter how stupid you spent your money, it is almost guaranteed that you will never lose 72% of your money, so the "punishment" is not too severe (IMO), since you will alway able to increase your networth by using the "free money".
Nowadays, there are many ways to earn DKP, like doing community activities, so impact to the smaller
Shorting GLS of popular games has been unprofitable for me, it's difficult to fight the crowd on these titles even if you are eventually proven right by sales data. I also agree it is simpler and quicker to make profit or loss on futures than waiting for GLS.
Wii is overvalued for me currently, as long term potential is still unproven in my mind.
@apujanata, I agree with what you say except the part about Zukaus. I see him frequently pointed out as the person who could change things but I think that's unfair: all of us in the top ~100 or so could make great differences, but thing is a lot of us have already realized this problem and moved out of lifetime stocks... which is really bad for TSE imho.
These are exactly the people who are less fanboy-ish and tend to take out a calculator and browse websites for data & information: these are the people TSE would like to make it's lifetime forecasts... but instead these people stay out, newcomers do the lifetime forecasts and the result imho might be that the press out there will see TSE predictions with egg on their face, which is a shame as we've got here many people who could stand their own even against professional analysts, but since all these people are going to stick to monthly stocks, stocks for which there isn't that much need for TSE because people just wait a few weeks and they've got official numbers...
Obviously I realize that for investors NPD numbers are important, but for people and the press at large I think they're much more interested in a lifetime perspective. I suspect there's a limited number of people who are interested in weather a console sells 200k or 250k next month, but there's a huge sea of people wanting to know which console is most probable to last longer...
I know at least that's how I got here first, that's the kind of data that I see at the forefront of news articles citing analysts' opinions... and I'm thinking maybe something should be done by TSE staff to encourage our good analysts to invest more in lifetime & thus make TSE a more interesting and appreciated community for the world at large. Otherwise we might see a day when TSE might be put to shame by somebody pointing out that while an analyst like Pachter gave a +-10% estimate of a lifetime stock TSE has been having console widgets all over the web off by tens of millions changing our community perception from an analyst to another fanboy opinion easily dissregarded.
Well, maybe I'm making a big fuss about nothing. I know stocks are going to adjust in a couple of months-years time... but it's a shame not to have them pointing out the right stuff years in advance of everybody else.
PS: everything I've said here isn't particularly tied just to the Wii stock. I may be totally wrong on this one! My points were more a cry seeing all the veteran traders moving out of lifetime stocks because they're not profitable and thus making them unreliable imho.
@vGInfidel, Except for the fact that the Wii still sells to parts of the hardcore market and has support for the hardcore market. Also, there will still be people that will purchase the Wii even if there is a recession in the U.S. as it is in high demand and still hundreds of thousands that wanted to get it it during the holiday season and could not because of supply issues. A recession in 2008 is very doubtfully going to have any significant effect on videogame sales.
"The major misconception is that the recession which is expected to hit the United States this year (with knock-on effects for the rest of the world) is seriously bad news for games.
It is, of course, bad news for every aspect of the economy - but of all the "luxury" markets, videogames are the least likely to suffer a negative effect. The peaking of this generation of consoles, combined with falling prices of hardware, will more than counteract any negative effect from an overall slump in consumer spending.
While, [it is argued], games are luxuries that nobody "needs", they are generally seen by consumers as cost-effective luxuries. Recession will mean people staying at home more rather than going out, or going on holiday, and videogames, which offer many hours of entertainment in return for their initial investment, will help to fill that gap in people's leisure time."
While the entire article is talking about mostly other topics, it touches upon the recession fears in relation to the entire videogame industry.
Also, just to make it clear, I have not been discussing the recession impact in the context of the current stock prices for the Wii GLS. Though I do believe that the current stock prices have gotten out of hand (at this time, this stock should be at the most 100 million units sold worldwide because of a multitude of reasons including the worries about lifespan for the console and supply issues).
I do believe that 126 mil is too optimistic, but what can I (or you, or ixaarii, or anyone outside of Top 10) do ?
Let's assume that Wii have 100 supporter, or even 500 supporter. They will get fresh cash of 100 x 24K DKP = 2.4 Million DKP / DAY. How can you against them all ? If you are Zukaus, with his 240 Million, he could only survive 100 days against 100 individual, or only 20 days againt 500 supporter.
If 99% percent of population is insane, while only 1% is sane, then the definition of insane and sane will be turned around, and it then became 99% percen sane, and 1% insane.
I myself, I stay away from shorting GLS, since I know of this inherent problem. Even if there is very bad news about GLS of, say, SSBB, but if enough SSBB supporter fight against the rational ones, the price might even stay the same (unless all rational people started to short SSBB, which mean it is possible that the supporter will lose, big time).
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I think there is a misperception here that ixaarii or you "think" that I am calling you irrational or something, but I did not do that. I am just using your name since you are the current #1, and I just want to illustrate that even #1, with networth bigger than #2 & #3 combined, could not do much against the current practice of GLS stocks.
About finding undervalued game in the GLS market, it is very, very difficult. In fact, all of the GLS stock that I monitored have prices beyong my expectation, like that COD4 X360 you mentioned (almost 770 now, which almost reach my most optimistic #).