Investment Pirates of Booty Bay

Till now I’ve really played it safe in the AH. I’ve been generating my gold almost completely through things I absolutely knew would give me a return. Dailies and 20 hr cooldowns on multiple characters generate a solid amount of profit for little effort. This week however, having hit the 50K mark and with the new patch here, I decided to do some investing.

(Note: It looks like Gevlon beat me to the punch on this topic, though we’re both handling it quite differently. Recomended reading Gevlon on Investing for further thoughts on investing.)

Risk VS Reward
Investing can be scary, so there’s a few things you need to understand before you do it. The first thing you need to know before making any investment is that all investments carry some amount of risk. This is as true in WoW as it is on Wall Street. This owes in large part to the nature of a given items value, or as Gevlon is fond of saying “Real Value™”. All items are only worth as much as you can convince someone to pay. A median can be established, and this median is very dependent on various factors such as supply and demand. That said, you need to approach new markets with the mindset of an investment. As stated last week, you need to do your homework. Allow for a research period, if after a week of research you still want to invest in the item, do so.

Again, and this can not be said enough: all investment comes with some amount of risk. The important thing here is to learn to assess inherent risk, and minimize it.

An Example from 3.3
Much as many good Goblins, I was quite aware of the impending release of several major changes coming along with 3.3. One of these changes was the release of a new gold sink, the Portable Hole. It’s a 24 slot bag that sells from Haris Pilton for 3K gold. There is no faction tied to Haris, so you can not get this item with a discount. That said, it’s a nice bag, and a direct descendant of “Gigantique” Bag. That said, it’s a bit pricey. But right now, it’s the biggest bag you can get, and you’re on your main you want the biggest sack around, amirite?

Prior to 3.3 I was using a pair of the Gigantique’s, along with the Dragon bags from Sarth and Ony. I decided, I wanted a set of the Portable Holes, since it’s bigger (and I’m a raiding tank carrying around several sets of gear, consumables, etc at a time). But I also thought that I might be able to make a little quick gold offa these, possibly even enough to pay for getting my own personal set together. So, as soon as the servers came up I bought four and sent them to a mule for resale. I gave them a modest markup, and waited a couple of days. I noted in trade chat, people talking about “some newb put portable holes in AH lulz, how’d pay more for em?” and they were right, the things didn’t sell. So, I was out a couple days of sitting on these things before I finally sent them to Khaas to be equipped.

The moral of the story here is this: Buying these bags was a calculated risk. Worst case scenario, I ended up with the bags I intended to buy anyway. Best case scenario, I deferred some or all of the cost of the bags, and got them anyway.

So Why Take a Risk At All?
It’s a valid question, I’ve definitely learned with my own progress that it’s perfectly possible to make gold with very little effort (past the initial build up atleast). I can log onto an alt, burn a cooldown and make an epic gem (or 5) with my Alchemist(s). Do a daily on each of my tanks, and I’ve got 4 Dragon’s Eyes to sell. In about a half-hour, I’ve made about 1K gold with very little effort (or risk, really). The gems will sell, usually pretty quickly. And as long as I watch what I’m spending my gold on, I’ll continue to get closer and closer to the cap.

But as they say, there’s no reward without a little bit of risk. Even doing something as simple as the gems I do daily carries some risk, if I use it as my only source of income then I have to be concerned about the gem market, if it crashes there goes my major source of income. The same applies to those who only do glyphs as Tella learned. So you’ve got to make sure you don’t put all your eggs in one basket, looking at other markets and investment, then taking a risk. I’m the first to admit, it doesn’t always pay out. But if watch what you’re doing, watch what the market’s doing over time. You should be ok.

The Bloodscalp Report
The Netherweave Bag Market is down, there’s been some bullish competition from several people lately. Add to this the mysterious disappearance of my Chinese connection, and you have a very unappealing situation. Worse, the average price of Netherweave Cloth has been trending up steadilly in the face of the new demand caused by the competition. So, it comes to a point where I ask myself: is it worth shutting these guys down/out? In the end, I don’t think so. I’ll continue looking for deals on bulk cloth, and if I find them, post them. But I’m not going to fight over it, it’s not worth it.

Glyphs are doing well, I’m in the process of building up my little glyph sweat shop. I’ve managed to get quite a few super cheap Books of Glyph Mastery lately (as low as 5g each!) and I’ve been chugging away on the research daily. Meanwhile, I post some popular glyphs everyday as I build up, I’ve added a new guild bank just for my little glyph company.

Enchanting Scrolls are down, they’re moving but the patch has dropped the value of enchanting mats a bit. I’m very glad I didn’t stockpile scrolls now, or I would’ve taken a beating. Once things settle a bit, I’m going to poke my way back into this market (if it proves sustainable again).

Gems like always are moving fast. 3.3 actually bumped their value a bit since people actually need gems again.

What I’m Looking For
Netherweave Cloth in BULK
Titanium Ore in BULK
Tiger Lily in BULK

This Week’s Progress: -1771g
That’s right friends, for the first time since I started doing this… I’m showing a loss, and in a major patch week no less. Several factors went into this, the biggest being that I spent 12K on Portable Holes. Also this has been a notably rough week for me IRL. My wife was in an accident at her job, and I’ve been taking care of her instead of making gold. I know, shame on me. This week I expect to get things chugging along again, and with Winter’s Vale starting today…

Well, let’s just say a sucker logs on every minute.