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Cista2
Hydra Investment Fund
Posted - 2010.07.08 18:44:00 - [1]
 

Ever since Dominion nerfed the most expensive moon minerals, most T2 prices have been in gradual decline. Now, with the exploding PI prices, we can reasonably expect that there will be some recovery or increase in prices as POS will be more expensive to maintain.

But how much, and how soon? To keep an eye on developments I have constructed a very simple index of T2 prices. It consists of the price of 100 different items (ammo, drones, modules) and I simply count how many of them are trending downwards and upwards.

The parameter I used is the red 5-day trend line, and I can apply the exact same measurement to either 10-day, 1-month, 3-month or 6-month target periods. The question is simply: are prices going up or down within those periods?

I will take these measurements every few days from now on.

Cista2
Hydra Investment Fund
Posted - 2010.07.08 18:46:00 - [2]
 

Edited by: Cista2 on 11/07/2010 07:19:51

July 8 data

I indexed the 10-day, month, 3-month and 6-month periods. i.e. compared the price today with the price 10 days ago etc.

Within the 100 different items the following trends were seen:
Past 10 days: 44 % of items going down, 56 % going up
Past month: 52 % going down, 48 % going up
Past 3 months: 56 % going down. 44 % going up
Past 6 months: 66 % going down, 34 % going up

The tendency is clear, although some statistical uncertainty must be taken into account, especially on the 10-day measure. But nevertheless, in the past 10 days on the market, more T2 items have increased in price than gone down. It looks like the downward spiral that T2 items have been under has already been broken.

Now remains to be seen how powerful the change will be, if we will get a serious inflation in the weeks and months to come.

Zea Aestria
Posted - 2010.07.08 19:40:00 - [3]
 

Originally by: Cista2
100 different items (ammo, drones, modules)



Is there a reason that there are no T2 ships included in the index?

Grozen
Caldari
Titan Core
Posted - 2010.07.08 19:42:00 - [4]
 

end of july.

Cista2
Hydra Investment Fund
Posted - 2010.07.08 19:56:00 - [5]
 

Originally by: Zea Aestria
Originally by: Cista2
100 different items (ammo, drones, modules)



Is there a reason that there are no T2 ships included in the index?
There are several reasons - one of them is that I would think ship prices were slightly slower to react - there are fewer producers, and these might have stocked up on fuels.

So if we start to see a strong trend in the index as I have composed it, it would indicate that the same would happen with ships, with delay. These are just my speculations ofc, in reality I know next to nothing about industry.

Supervisor Grammel
Posted - 2010.07.08 20:09:00 - [6]
 


Ships will follow. E.g., I estimate 700-750M pricetag on Golems within two months time (current price is about 510M sell and 490 buy). Not the investment of the century but certainly a decent payout for such a short period of time.


Zenon Mu
Advanced Assemblies and Sciences
Posted - 2010.07.08 21:52:00 - [7]
 

Edited by: Zenon Mu on 08/07/2010 21:53:00
Please visit your user settings to re-enable images.

To add a different aspect: this is the advanced mineral basket and T2 component basket (ships only) history, based on jita volume and 5-day average on the reporting date. One can assume that advanced minerals and, a bit delayed, T2 components have reached a floor, as the market has now adapted to the post-Dominion situation.

Enter Tyrannis, where POS fuel makes up for 15% (Nanotransistors) to 85% (for racial carbides) of production costs, logistics not included. The estimate of 530k ISK per cycle is from today, and POS fuel is expected to continue to rise. Right now a racial carbide complex reaction yields between -1% and 6%. The last number is an estimation for the case that PI2/PI3 POS fuel doubles in price.

Cista2
Hydra Investment Fund
Posted - 2010.07.08 21:59:00 - [8]
 

Originally by: Zenon Mu
minerals and, a bit delayed, T2 components have reached a floor, as the market has now adapted to the post-Dominion situation.
Awesome graph, thank you very much. My head is spinning with the consequences this will have on the trading profession.

Cista2
Hydra Investment Fund
Posted - 2010.07.11 07:19:00 - [9]
 

July 11 data

I indexed the 10-day period, i.e. compared the price today with the price 10 days ago.

Within the 100 different items the following trends were seen:
Past 10 days: 41 % of items going down, 59 % going up

Compared to the last index value of 56 % of items going up, this indicates that inflation is accelerating.

Mini Tee
Posted - 2010.07.11 07:33:00 - [10]
 

Thanks for the heads up, time to scan the market for long entries.

Ray McCormack
Nordar Innovations.
Posted - 2010.07.11 07:37:00 - [11]
 

You need to analyse both cost and sale prices, they're not mutually exclusive when interpreting 'inflation' trends.

Cista2
Hydra Investment Fund
Posted - 2010.07.11 07:56:00 - [12]
 

Originally by: Ray McCormack
You need to analyse both cost and sale prices, they're not mutually exclusive when interpreting 'inflation' trends.
I will leave the actual definition of "inflation" to the economists. For me as a trader, I am just interested in what happens to the price tag of a product, if I buy it today and stock it.

Ray McCormack
Nordar Innovations.
Posted - 2010.07.11 08:07:00 - [13]
 

Originally by: Cista2
Originally by: Ray McCormack
You need to analyse both cost and sale prices, they're not mutually exclusive when interpreting 'inflation' trends.
I will leave the actual definition of "inflation" to the economists. For me as a trader, I am just interested in what happens to the price tag of a product, if I buy it today and stock it.

Depends what you're banking on, cost or price inflation. If it's cost, you may as well be invested in the raw materials. But you won't know until you analyse both.

Terrigal
Posted - 2010.07.11 23:23:00 - [14]
 

Edited by: Terrigal on 11/07/2010 23:27:22
One aspect of T2 production youve forgotten is that data core prices have gone through the roof thats going to hurt the T2 market significantly, prices i think will eventually go through the roof because once the pos fuel is no longer seeded it will be difficult to keep your pos's online this is due to the lack of take up in PI buy the greater player base.

Btw i make T2 ships which under the present market is no longer worth doing even with 6 r&d agents.

Breaker77
Gallente
Reclamation Industries
Posted - 2010.07.11 23:44:00 - [15]
 

Originally by: Terrigal

One aspect of T2 production youve forgotten is that data core prices have gone through the roof


Odd as the 2 datacores I use have dropped by about 25% since Tyrannis hit.

EvilCheez
That's Retarded
FIGHT CLUB INC
Posted - 2010.07.12 07:49:00 - [16]
 

Edited by: EvilCheez on 12/07/2010 07:52:51
Quote:
Depends what you're banking on, cost or price inflation. If it's cost, you may as well be invested in the raw materials. But you won't know until you analyse both.



I Don't understand the distinction, but will look it up. What I suspect will happen first with mooongoo is that raws will go down at the same time finished product goes up. As people shut down operations the will be selling stocks of raw materials and putting a short term flood on the market.

Ray McCormack
Nordar Innovations.
Posted - 2010.07.12 08:16:00 - [17]
 

Originally by: EvilCheez
I Don't understand the distinction, but will look it up.

Are costs increasing, or is the selling price increasing? Whilst they may be driven by the same forces and ultimately effect each other, if you're investing in a finished product it would be wise to analyse why the price is going up as a different strategy could reap better rewards.

Cista2
Hydra Investment Fund
Posted - 2010.07.14 06:37:00 - [18]
 

Edited by: Cista2 on 14/07/2010 06:39:02

July 14 data

I indexed the 10-day and 1-month periods, i.e. compared the price today with the price 10 days ago and 1 month ago.

Within the 100 different items the following trends were seen:
Past 10 days: 40 % of items going down, 60 % going up
Past month: 43 % going down, 57 % going up


Conclusion: T2 inflation is now dramatic, also when measured over a full month (57 % going up compared to 48 % going up in the index just 6 days ago).

Fumitsugu Sylwia
Posted - 2010.07.14 10:37:00 - [19]
 

Edited by: Fumitsugu Sylwia on 14/07/2010 10:38:13
Cista, may I ask what were the selection criteria for your shortlist of t2 items?

ed. Out of interest, are there any figures flying around that indicate what percentage of T2 (both copy and invent) is made in NPC slots and not POS slots?

Cista2
Hydra Investment Fund
Posted - 2010.07.14 10:46:00 - [20]
 

Originally by: Fumitsugu Sylwia
Edited by: Fumitsugu Sylwia on 14/07/2010 10:38:13
Cista, may I ask what were the selection criteria for your shortlist of t2 items?
Three criteria I can think of:
1) Variation of items (ammo, drones, modules)
2) Ease of indexing made me pick certain groups
3) I avoided ships as mentioned before, from a haunch that they might react slower to underlying inflation

Cista2
Hydra Investment Fund
Posted - 2010.07.17 14:52:00 - [21]
 

Edited by: Cista2 on 17/07/2010 14:54:11

July 17 data:

I indexed the 10-day period, i.e. compared the price today with the price 10 days ago.

Within the 100 different items the following trends were seen:
Past 10 days: 42 % of items going down, 58 % going up

Conclusion: Same pattern.

I am predicting that a fraction of 60 % of items going up is about max for the 10-day window in an inflation period. Week-to-week fluctuations will keep it that low. The 1-month or 3-month period could maybe arrive at a 70 % or 80 % fraction of items going up in price, but I am completely guessing that, only time will show.

Here is a link to a spreadsheet of the data I have collected so far (no graph yet).

Thrasymachus TheSophist
Posted - 2010.07.17 15:40:00 - [22]
 

Edited by: Thrasymachus TheSophist on 17/07/2010 15:40:02

Originally by: Ray McCormack
Originally by: EvilCheez
I Don't understand the distinction, but will look it up.

Are costs increasing, or is the selling price increasing? Whilst they may be driven by the same forces and ultimately effect each other, if you're investing in a finished product it would be wise to analyse why the price is going up as a different strategy could reap better rewards.



In other words - WHY are the prices going up. Is it because the inputs have gotten more expensive ("cost push" inflation) or is it because the demand for a limited supply of goods has gone up ("demand pull" inflation).

Its a real economic concept, but I don't think it has much effect in Eve outside of the newest/best items and minerals, both of which are set by demand. Everything else's prices are pretty much set by costs of inputs, I'd imagine.

EDIT: ps - Great project, I hope you keep it up.

Aurum Bellator
Posted - 2010.07.18 13:49:00 - [23]
 

Cista,

This is just a thought and forgive me if it's already been pointed out as I haven't read the whole thread. I do quite a bit of trading in tech 2 items and am very familiar with their price fluctuations.

In my experience, T2 item prices are not linear but rather bounce like a bouncy ball. What I mean by that is, they will slowly go down, down down and then someone in Jita realizes that the going price is too good, and buys up all the stock in the Forge, Lonetrek, and sometimes elsewhere, at which the price will spike and decline again, sometimes quickly sometimes more slowly.

So I don't know if you can find any enduring 'trends' with the type of historical data you are collecting. Probably the best sign of inflation or deflation is to try to look at 30-day lows and highs and see if, over several months, those points are increasing or decreasing.

Just some food for thought.

AUB

Cista2
Hydra Investment Fund
Posted - 2010.07.18 16:14:00 - [24]
 

Originally by: Aurum Bellator
Probably the best sign of inflation or deflation is to try to look at 30-day lows and highs and see if, over several months, those points are increasing or decreasing.
It's just a matter of having a large enough sample so that random error is overcome. I am not expecting that randomness is done away with in every sample I am publishing here, but now it has consistently shown inflation occurring over a number of points in time.

Quantessa
Posted - 2010.07.18 16:25:00 - [25]
 

Having a lot of different data points will also help make this data useful. (ie it's not just useful because it looks at 100 different products it's useful because this thread is accumulating a lot of data from different dates).

Good work Cista2, thanks.

Guilliman R
Gallente
Northstar Cabal
Important Internet Spaceship League
Posted - 2010.07.18 17:20:00 - [26]
 

EANM II's just sent up to 3mil a piece, they've been going up since tyranis, from like 500k to 3mil

Mazen Alane
Posted - 2010.07.18 18:04:00 - [27]
 

Originally by: Guilliman R
EANM II's just sent up to 3mil a piece, they've been going up since tyranis, from like 500k to 3mil


Try harder Embarassed

Grozen
Caldari
Titan Core
Posted - 2010.07.18 19:52:00 - [28]
 

i honestly fail too see t2 going up atm. its mostly still down..

Cista2
Hydra Investment Fund
Posted - 2010.07.20 14:56:00 - [29]
 

Edited by: Cista2 on 20/07/2010 14:57:30

July 20 data:

I indexed the 10-day, 1-month and 3-month periods, i.e. compared the price today with the price 10 days ago, 1 month ago etc.

Within the 100 different items the following trends were seen:
Past 10 days: 47 % of items going down, 53 % going up
Past month: 37 % of items going down, 63 % going up
Past 3 months: 49 % of items going down, 51 % going up


Comments: Over the past week the increase in T2 prices has obviously stalled, perhaps as a swift response to the crashes in PI items? Should be interesting to see what happens next!

The tendency for inflation is very strong when seen over the 1-month period, which has the highest value I have measured for any period so far. And perhaps beginning to spill over into the 3-month period as well.

Here is a link to a spreadsheet of the data I have collected so far.

Cista2
Hydra Investment Fund
Posted - 2010.07.23 07:54:00 - [30]
 

July 23 data:

I indexed the 10-day period, i.e. compared the price today with the price 10 days ago.

Within the 100 different items the following trends were seen:
Past 10 days: 48 % of items going down, 52 % going up

Comments: Prices are now stable on the short term, and this should also be reflected in the 1-month period next.

Link to the data collected.


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