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cosmoray
Perkone
Posted - 2008.12.04 04:09:00 - [1]
 

Edited by: cosmoray on 04/12/2008 04:13:13
Investing For Beginners (New to MD read here)
So you have some spare ISK. Now you want to invest it, but you are not sure what to do with it or who to trust. You have been reading MD and before you jump in you need to understand the risks.

Well read on.

First off:

READ THE STCIKIES AT THE TOP OF THE FORUM
They have lots of good advice for the beginner.

Market Discussion Background

The Market Discussion is about business and making money.
People who read or post here are looking to make money. This forum is used to discuss and propose business ideas, raising ISK for business investment, the use of tools to run your business and to discuss markets development or effects.

Do not take anything personally, itís just business.

A few important points to remember before you jump in:

Do not take anything you read at face value. People may be helpful, they may not. Business is like PVP. People may reply or post for a number of reasons which can include gaining a competitive advantage, to sow discord or disinformation.

Anything you post here may be used against you in the future.
There may come a time when you want to start your own business and you wish to sell shares, and you write up a nice business plan and you get shot down because someone will link your post from a year ago when you made an off-hand joke about scamming. Be careful!

There are two golden rules of investing in EVE

Only invest what you can afford to lose

There is no such thing as a GUARANTEE in EVE, there is only a level of trust. Remember as long as SCAMMING is legal in EVE anyone at any time can run off with your investment.

Investing Your ISK

You have read all the stickies and you have been reading the posts and now you have decided you want to invest some spare ISK. Where can you invest your hard earned ISK.

A couple of terms:
Interest and ROI (return on investment) = Both terms are basically interest you will earn on your money. In EVE most interest payments or dividends (ROI) are paid monthly.

What follows is a list of the types of investment you can spend your ISK on.

The Banks

There are two well known banks in EVE:

EBank

EBank website

EBank has over 1 Trillion ISK in deposits and has an excellent website where you can manage your account online. The bank has many employees and at no time can 1 person run off with all the money. This is probably the safest investment in the whole of EVE. Due to its high level of trust they only pay 1.5% interest per month.

I would recommend setting up an account, even if it is for only a few 1000 ISK. This will give you a start into the investment world and your money can be accessed at any time. EBank are also talking about releasing a host of new features such as a stock exchange. If you already have an account setup then you will be able to use the new features when they are released.

Dynasty Bank (DBank)

DBank website

DBank is a newer bank and is run by a few people. DBank has over 100B in deposits and also has a website where you can manage your account. There are a number of available savings accounts up to 10% per month. Beware that these high interest rate products will probably be removed soon and only lower rate savings accounts or CDís will be available.
DBank carries a higher risk than EBank but should probably make up a portion of your portfolio.

cosmoray
Perkone
Posted - 2008.12.04 04:10:00 - [2]
 

Edited by: cosmoray on 04/12/2008 04:37:35

The Stock Exchanges

It is possible in Eve to invest in corporations that are publically traded. These corporations can be found on one of EVEís two stock exchanges.

Eve Galactic Stock Exchange (EGSEx)
Real-Time Eve Stock Exchange (RESx)

Links:

Eve Galactic Stock Exchange (EGSEx)
Real-Time Eve Stock Exchange (RESx)

Beware that some stocks that are traded are no longer active businesses. You will have to complete research to find out this information.

Most of the new corporations in EVE in 2008 have chosen NOT to list their businesses on the exchanges. The shares of some current corporations launched this year may come up for sale on the SELL or MD forums.

EBank are promising to launch a virtual stock exchange, with shares and bonds tradable on their website. All shares would be held in the players account, and dividends would be paid directly into the bank account. For further information see the EBank website.

New IPOís and BONDS

We are now starting to head into risky territory. These are investments where players will make a post looking for you to invest in them or their corporation.

Corporate Bonds

Corporate bonds pay you a fixed interest payment each month for the life of the bond. At the end of the bond life, they will pay back your initial investment. The bond may be launched via the issuance of shares to make payment via dividend, but are often made by personal payment each month.
The bonds may be traded and is usually done via the sell forum with a link to the bond offer.

IPOís

This is a direct investment into a business. You will purchase shares in a corporation. The business will pay dividends each month that depends on the profitability of the corporation. There is usually no set end date for a business, but the shares can be traded or there may be a re-purchase agreement from the corporation.

Both IPOís and Bonds are typically riskier investments than the banks, and vary in interest rate or return from around 3% up to about 15% per month. Some IPOís may return much higher amounts but that is rare.

Your decision to invest in Bonds and IPOís will entirely rest on the amount of TRUST you place on the individual raising the bond.

General Advice

1.Read the bond or IPO document CAREFULLY

2.Complete your own background check on the character. Left click the picture and read the previous posts by that person. Use eve-search to look at their posting history.

3.How old is the character.

4.Is the character an ALT. What are they trying to hide withholding their main character?

5.If you donít understand something in the bond or something looks wrong, ask a question.

6.If you donít know the person that well, ask for an audit to be completed. Audits will give an overview of the character and confirm his/her skills and abilities and whether they can perform what they are claiming to do. An Audit is NEVER completed by their Ďbuddyí from their corp. An audit is completed by a trusted member of the MD forum.

7.Make sure the character asking for cash answers ALL questions. Note how the questions are answered, are you happy.

8.Remember there are NO GUARANTEES.

If you are unhappy with IPO or Bond, donít trust the character or feel that the character hasn't done a good job explaining the plan, DONíT INVEST. There will be plenty of other opportunities for investing.

cosmoray
Perkone
Posted - 2008.12.04 04:10:00 - [3]
 

Edited by: cosmoray on 04/12/2008 04:19:55
continued...

The questions and checks shouldnít stop even when you have invested.

Once you have invested in a corporation, did they complete their goal?
Are they making their payments on time?
Are they making monthly reports?
Most importantly, was the investment successful and gave a good experience?

If the answers are no, it is likely you wonít invest with that person again!

It is likely that you will invest in a corporation that will SCAM or fail. The investment failures can be minimized. Be diligent!

I invest in less than 10% of all IPO/Bond launches.

Conclusions


For most players investing is about one thing only.

MAKING MONEY

To be successful you need to be ruthless,
Donít get upset when you people criticize you,
Keep a clear head and have some fun.

Remember the Godfather rule:

Nothing personal, itís just business!


Useful links:

Eve-Search

Eve-Search website

Use for background checks on players.


Eve Securities and Exchange Bureau

Eve Securities and Exchange Bureau Website

Contains lots of useful information current businesses. Has links to original offers, start dates, CEO information and returns. Very good for looking at what business plans should look like.

Brock Nelson
Posted - 2008.12.04 04:42:00 - [4]
 

Nice! Stickie please!

Frenden Dax
Dax Acquisitions
Posted - 2008.12.04 04:43:00 - [5]
 

Bravo, cosmoray. Definitely worthy of a sticky; hopefully it will also educate some newer traders.

CCP Mitnal


C C P
Posted - 2008.12.04 05:25:00 - [6]
 

Glue applied.

Amarr Citizen 155
Nordar Innovations.
Posted - 2008.12.04 05:33:00 - [7]
 

Originally by: CCP Mitnal
Glue applied.


Wow, glue applied and dried in just over an hour...... color me surprised. Very Happy

Ricdic
Caldari
Caldari Provisions
Posted - 2008.12.04 08:33:00 - [8]
 

Very solid. Thanks for writing it up Cosmo and thanks for stickifying it Mitnal.

Block Ukx
Forge Laboratories
Posted - 2008.12.04 13:26:00 - [9]
 

Edited by: Block Ukx on 22/12/2008 16:33:41
Block Ships an Ammunitions Corporation (BSAC) is a publically traded corporation that has been in the manufacturing business since May 2006. We manage several investment funds. Please visit our website for details.

Each Fund has its unique investment strategy that is described in the respective prospectus. You should carefully consider the risks factors as well as other information contained within the prospectus before deciding to invest in BSAC. Investors must read the prospectus before purchasing any shares in our Funds. Purchasing shares implies that you have read the prospectus and understand the risk associated with your investment.

BSAC corporate shares can be purchase in RESX, EGSE, and in our own stock exchange. The BSAC Exchange has no trading fees.




EDIT: Exchange link updated

Damien Jax
Industrial Research College Ltd
Posted - 2008.12.18 20:38:00 - [10]
 

Wow, I'm suprised this thread is still stickied after all the poop-throwing going around. It makes you wonder, what's a thread not dealing with the in-game market doing stickied in the market discussion forum? Hmm...

Anyway, this thread should be updated to reflect the fact that MD is no longer the place for IPO's as some assert.

Empuries
Kraftworx Dynamics inc.
Posted - 2009.01.05 10:47:00 - [11]
 

Dear Cosmoray,

thank you very much for this amazing tutorial. I think all newbies interested in investment at eve will appreciate your information and suggestions. Maybe you should offer your knowlegde for money in the future... as consultant of course ;) If you have any interest or questions to start a career as consultant please contact me via evemail.

Kind Regards

Empuries

Shar Tegral
Posted - 2009.01.13 06:11:00 - [12]
 

This, should have been posted here for all to enjoy and learn from.

Kitchie
Gallente
Vikramaditya
Posted - 2009.01.13 06:41:00 - [13]
 

The people who come to the MD seem largely to fit into 3 categories and for all of them, the MD forum has a lot to offer if a few basic rules are followed.

Group 1: Non-regulars coming to ask how to make money trading or how to optimise their trading strategy.

Many of the regulars on MD are long-term, experienced and successful traders. Because of their success, some can come across as being arrogant but hey! You didnít come here looking for humility, you wanted to get advice from experts. The most successful in life are often arrogant, it helps to have an unquestioned belief in yourself Ė watch The Devil Wears Prada if you donít know what I mean.

So donít take anything personally, be the humble student and you will likely get useful information without tarnishing your image.

Group 2: Regulars, non-regulars and lurkers looking for investment opportunities

Bonds and IPOs seem to have picked up quite a bit of late and there are plenty of opportunities for investments but there are also a high percentage of failures amongst them. So how to spot the good ones?

Bonds and IPOs will default for 3 reasons, being Scam, Business Failure or burnout.

Burnout is very difficult to predict and too many outside factors can cause this, even with the most honest characters. Your only protection against burnout is if the issuer has left some form of collateral with a third party. Collateral is always good but will also represent the issues with the highest demand.

However Scams and Business Failures have a much higher chance of being identified here in MD. Read the forum for a while before considering investing. Learn who the most experienced experts are in each business field Ė it doesnít matter whether you like them or not, the more aggressively that they dissect the issuer and business plan, the more likely it will be that scams/failures will be identified. You might miss some issues because they were snapped up too fast but at least youíll still have your capital.

Group 3: Anybody trying to raise money through an IPO or Bond Issue

Eve is awash with players who think that they can make good ISKies with their own business plan and in my opinion, a scam is as much a business plan as any other so I wonít distinguish between them in this section.

Firstly, if you have a major business plan then do an IPO through here, even if you already have the resources to execute it without raising capital. Why? Basically because your plan will be torn apart with every little detail questioned. It might be a great plan but you will also learn a lot that you may well not have thought of, so use the expertise thatís available at little or no cost.

Always be willing to submit to an audit. Nobody can steal anything through an audit, the established auditors here have an excellent reputation for discretion and an audit will establish your planís credibility.

Be polite, responsive, use a spell checker and read through your responses twice before posting. Sloppy posting is a precursor to sloppy business management.

And most importantly, donít be offended by anything that might be said. Youíre here to raise capital so donít sink yourself by getting into a slanging match with someone who offended you Ė youíll only come across badly to other potential investors.

Posted here by popular demand (erm.. does that mean Shar is popular?)

Thoraemond
Minmatar
Far Ranger
Posted - 2009.01.13 10:30:00 - [14]
 

There are some quasi-helpful articles in the Evelopedia related to the markets and trading. As it improves over time, the wiki might be a good place to put some of this stickied information from Market Discussions.

Perhaps I missed an article or two, but it looks like there is still room for people to develop one or more specific articles relating to (i) IPOs, (ii) bonds, and (iii) auditing. There is also ample opportunity for the knowledgeable in Market Discussions to fix up and improve upon these articles:

  • Evelopedia : Economics 101: as the label suggests, covers a couple of key economic concepts (e.g., opportunity cost), could stand to be updated with some more (e.g., time value of ISK).

  • Evelopedia : Market Guide: covers the Market UI and the laundry-list of items in the hierarchy of categories.

  • Evelopedia : Advanced Trading: this article seems too long and too 'wall-of-text' to me, but does have some useful information.

  • Evelopedia : Trading (Profession): cribbed from something written for EON, this article covers some of the same ground as the above, but is a touch less 'wall-of-text'.

Loney
CyberDyne R-D
Posted - 2009.01.22 03:46:00 - [15]
 

Ah... a nice useful post!

Thanks

Forceflow
Chernobyl Trading Corporation
Posted - 2009.01.22 04:19:00 - [16]
 

Edited by: Forceflow on 22/01/2009 04:20:12
EDIT: apparently we cant use brackets when putting in links.

Makes my post irrelevant.

Dr Karsun
Gallente
Coffee Lovers Brewing Club
Posted - 2009.03.08 20:39:00 - [17]
 

Seems a great guide for begginers on the big market (so people like me). I think I may even try buying some bonds o.O

Thanks you and thanks for making sticky :)

Koltus Kraken
Posted - 2009.04.07 05:55:00 - [18]
 

As a beginner, I've been reading about the markets, but I still don't understand the actual mechanics of buying stock. Do I have to contact a broker in-game? Does my character get anything to hold to represent shares, or do we both just record the transaction?

cosmoray
Perkone
Posted - 2009.04.07 09:13:00 - [19]
 

Originally by: Koltus Kraken
As a beginner, I've been reading about the markets, but I still don't understand the actual mechanics of buying stock. Do I have to contact a broker in-game? Does my character get anything to hold to represent shares, or do we both just record the transaction?


If you buy shares in a new business you would receive actual shares in that organization. The shares are located in your wallet under the share tab.

If you purchase shares from the exchange you will use a third party broker, if you purchase shares from the sell or MD forums I would suggest a trusted third party. In both scenarios you should receive shares.

When a company pays dividends all shareholders are paid and you will receive an eve mail if you have been paid.

Some organizations do not use shares but keep a ledger of who invests and you would be paid manually. Be careful of these investments and only use this procedure if you truly trust the CEO. These bonds should only be traded with the CEO's knowledge so the ledger can be updated.

CCP Mitnal


C C P
Posted - 2009.05.17 16:21:00 - [20]
 

Unstickied.

The thread has been added to the resource sticky.

Ji Sama
Caldari
Tash-Murkon Prime Industries
Posted - 2009.05.17 16:26:00 - [21]
 

Originally by: CCP Mitnal
Unstickied.

The thread has been added to the resource sticky.


Mitnal has spoken!


 

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