The Reason to Diversify – Eve-Online

With the Odyssey 1.1 patch now fully up and running there was a bit of commotion over Mining Foreman Mindlinks. Apparently they can be purchased using Loyalty Points from the store. Normally a change such as this isn’t too game breaking but when the item is worth over 1 billion ISK and the LP required now is minimal it is quite devastating. The market crashed almost instantly and the current value is worth about 50 million ISK. It is important to note that many years ago these mindlinks were worth only 30-50 million ISK and only increased in price when their drop rate changed. There is a reason you should keep your market portfolio diversified and I will help explain how you can do that and still stay profitable.

MMCrashThe message here is that you should never put all your investments into one item. If you placed 100billion ISK into these mindlinks, and that would only be 90,  and you would only profit about 5 Billion ISK if you sold them all.  When the price dropped that 100billion ISK would only be worth 400 million ISK. If you think that this is a rare event, or that it could never happen to you, you’d be wrong. This has happened before, and as an avid trader I assure you players are waking up today to find that they are broke. By keeping your assets and investments in different areas of the market you reduce the risk that you will be caught off guard by a change that could cause you to lose billions of ISK.

Now there is always this risk when investing or trading items in Eve-Online so what else can you do to reduce the potential damage? Well, you should create a maximum number of items to have on hand at any given time. For example I would have no more than twenty Mining Foreman Mindlinks on the market and in my inventory at any given time. By limiting how many items you have in your inventory you are able to mitigate the potential loss that you might have when a change occurs. This does mean that any potential gain is also removed because having fewer items means fewer profits but ill address that later.

How do you determine how many items you should have on hand to trade? Well this is a more difficult question because it depends on many factors. Generally I keep no more items on hand than are traded in one day in Jita. So if twenty mindlinks are traded each day, I wouldn’t keep more than that on hand. You have to realize that unless you have no life and can maintain all market orders all the time you will not be able to sell a full day’s worth in one day. This gives you the ability to buy and sell roughly the same amount each day and doesn’t bloat your inventory with unmovable goods. Of course I also keep a larger supply of cheap items because they are more likely to rise in price and don’t require much investment, and a lower supply of expensive items because they tie up more ISK and are more likely to fall in price.

By keeping your inventory low you also avoid another common problem. Many traders, myself included, will purchase more goods than we can sell and when the market becomes bloated with items the price will gradually decrease causing a loss in profit. This doesn’t mean you will lose all the investment, but it means that you will lose out on potential profit. When prices fall it affects buy and sell orders and if you have already bought an item at 50 million ISK and  sell it at 52 million ISK you wouldn’t make as much money as if you bought it at 48 million ISK and sold it at 52 million ISK. This can be fairly complicated as prices can rise and work for your benefit but generally as with most things in Eve it will hurt you more than it will help you.

It should be noted that the Mindlink information was actually posted in the Odyssey 1.1 patch notes and that most players should have been aware of the change before it happened. I admit that I didn’t even see this change and I thought I read through it clearly. That being said, do not assume that an item will not be affected by a patch because there is no change listed to it. Most of the time items change in value due to an indirect change such as lower drone damage which leads to an decrease in demand of drone-boats. Additionally most changes are not even listed in the patch notes because CCP wants to sneak in a change without anyone knowing, like the increased Veldspar spawn they put in place years ago.

The recent market crash of Mining Foreman Mindlinks should be a reminder that nothing is safe in Eve-Online and players should be careful when investing their ISK in the market. Anyone can reduce their risk of loss by diversifying their portfolio with different items, reducing their inventory, and by reading the patch notes to look for changes to their items. With any luck this will help you avoid catastrophe in the near future and continue to rule the marketplace.

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