Saturday, 1 March 2014

Financial Report - February 2014

Financial report for the month of February 2014 (last month). Trade oriented since trading is how I make virtually all of my ISK.

I buy and sell faction/deadspace/officer mods, ships, skill-books and implants with traders covering all 5 main trade hubs (Jita, Amarr, Dodixie,  Hek and Rens) plus secondary hubs in most other empire regions. I have 23 active traders, 3 on Jita (one each for mods, implants and skillbooks), 20 more with each covering a different region and a few more in training.

February is the shortest month of the year and I didn't spend very much time working the market this month but my net worth was still up 29 billion after expenses.

I decreased the amount of time I spent working the market again this month. In February I only spent about 10 hours in total and less than 2 hours before the 17th. That's 5 or 6 times less work than last month but I still made 58% as much. Not bad at all, especially not when considering I used over 7 billion worth of PLEX on subscriptions this month and 0 last month.

A lot of my business (probably over half my monthly profits) is now in playing longer term trends on a fairly small number of high volume (relative to the price), high priced items. Those items tend to perform similarly whether I post and update their orders once a week, once a day or even several times a day. My business in those items doesn't drop off very much when I spend less time working things though the business in just about everything else does drop off significantly.

Current net worth is 459 billion with about half in cash and market escrow. Most of the rest is in sell orders and recently acquired stock I haven't gotten around to posting for sale yet. Very little is in assets I don't intend to sell soon, with maybe 4 billion worth of ships and mods I keep for my own use and a small stockpile of PLEX worth another 5-10 billion.

That's my actual current total net worth, I don't pad the numbers by talking about profit made before expenses, adding that up as a running total and only mentioning expenses as an afterthought. My numbers are (and have always been) my actual current net worth after expenses.


  1. Almost half way to the big T :)

  2. So your net worth increases 2.9 billion / hour of actual time logged on?

    1. That's highly affected by diminishing returns. The more time I spend at it the lower the ISK/hour and it goes down quickly. In January I spent 50 or 60 hours and only made 50 billion, not 150.

  3. How do you explain spending less time but making more isk? Why do your buy/sell orders not get beat out by the more active traders, leaving you picking up less and selling less inventory?

    1. I don't exactly "spend less time but make more ISK". However the less time I spend the more I do make for the time spent. There are 2 main reasons for that.

      1. The time I do spend is mostly spent on the most profitable, highest volume items and characters.

      2. Everything else still has buy and sell orders up but I'm not spending any time on them unless some of the buy orders get filled (and then only a few minutes to post the new stock and update or put up buy orders for those items only). No I don't buy or sell as much of these items and I don't make as much in total as I would if I updated/posted orders for them more often but I make larger margins per item on them.

      Another way of saying it is with the market capitalization and coverage I have in 21 different regions there's a certain share of the market I'm pretty much going to get (somewhere between 20 and 30 billion a month) even when I spend minimal time at it.

      On the other hand when I spend more time at it, sure it increases my profits but the competition fights back so the increase isn't linear. At my level of capitalization and coverage there are harsh diminishing returns on time spent working the market. The more time spend at it, the less I make per hour.

  4. Understood and agreed.
    You are diversified to the extreeme and that diversity allows you to continue to make gains on your orders even with little to no effort. But one can argue that the upfront work to establish that diversity and sheer scale of the enterprise certainly demanded alot of upfront, low isk/hr work.

    Now you are reaping the rewards on those efforts and it would seem business is good!

    As a very small scale traded, really just dabbeling with 200m invested (~600m today - 200% growth over 2 months), I have been strongly considering raiseing that to 2b, but recently the time I have needed to put in to get orders moved has been quite annoying.

    So I am very interested in when/where that sweet spot is for me in terms of isk/hr and if I should raise my capital to 2b?

    1. Yes there was quite a bit of upfront work involved growing the business to the point it's at now. But it was spread out over 2 years and always profitable.

      I'd recommend putting as much capital into it as possible. Trading scales mostly with capital invested, not with time spent like everything else. The more you invest the more you make.

      If you have Margin Trading just make sure you keep enough in your wallet to cover the additional escrow. For me, with Margin Trading V and not updating all that often I find if keep my liquid cash roughly equal to my escrow that's enough to cover at least few days worth of buying most of the time on most characters (there are exceptions).

      You should be able to update your orders a lot more frequently than I can so you should be able to get away with squeezing the cash:escrow ratio tighter. As your business grows, you won't be able to update as often and you'll have to hold more cash to fill that additional escrow when buy orders get filled.

      In fact it sounds like you're small enough that your business should scale quite well with time spent. Spending a couple hours a day (not necessarily every day), maybe even doing a little camping during peak times is probably your best bet until you get well into the billions.

    2. Oh and don't get too wrapped up in Profit Margins. While 100%+ margins look great on paper, it can take a while to realize that profit... With ISK tied up in the item(s) the whole time. You'll usually make a lot more *total profit in a shorter timeframe with many quick turnovers on higher volume lower margin items.

      Your main advantage over bigger traders is time so use it to post/update orders more frequently than they can!

      If your orders are getting cut constantly, don't play the 0.01 ISK game, use big cuts until the no-lifers and bots back off enough your stuff starts moving too.

    3. Fantastic advice - thanks so much for your feedback!

  5. I like the idea of some peak time market camping where you burn an hour or so just updating orders and the like.

    But I am having a hardtime comming up with when that peak time is for where I am. Any tools out there for this aside from just going item by item in the market and tracking the table details...ugh....seems like a common tool use so there must be somthing out there. Or is it just commonly known where the peak times are?

    1. Peak times are when the most players are online. Evenings and weekends in general, European and North American time zones in particular.