Tag Archives: Business

All About the Gold Cap

First off, here are the answers to a few of the more regularly asked questions about the cap:

  • The in-game maximum amount of currency that a single toon can have is 214,748 Gold, 36 Silver and 46 Copper.
  • The gold cap is specific to one toon and not to an account. You can exceed the cap by spreading the currency amongst your alts.
  • Mail with gold attached, be it from other players or the AH, cannot be picked up. Attempts to do so will result in the warning message flashing on the screen “At Gold Limit.”
  • No more money, even a single copper, from any source including player-to-player trade or looting a corpse can be attained until some currency is removed from the player that has reached the cap. Most attempts to attain more money via these and other methods will result in the same “At Gold Limit” message.
  • There is no award, title, in-game achievement or special designation for reaching the gold cap. It is simply an achievement, in the most basic and personal sense of the word.
  • Items sold to vendors while at the gold cap do not yield any gold. The gold is lost although the item may be repurchased from the vendor, and you charged. Note: we didn’t test this one ourselves but it stands to reason.
  • The guild bank gold cap is higher than the personal gold cap. We didn’t decipher the exact limit but we presume it is the unsigned integer amount listed below.
  • Should you decide to share the news of having reached the cap with your server population, friends, guildmates or on the WoW forums you will be met with varying forms of only three basic categories of comments: A) “Grats!” B) “Grats! Can you give me/buy me/loan me ____” or C) “You must have no life and play all the time.” It is unwise to respond at all to comments of types B or C.

Now, here are a few facts about the WoW gold cap that you may not have known.

It’s Not Really a ‘Gold Cap’ That We’re Talking About…

Gold, in fact, is not the unit of measurement used in the game’s programming. Rather, the currency is measured by the game in its purest form, Copper. Thus, the term “Gold Cap” is not entirely accurate as it is, technically, a “Copper Cap”.

Why Such a Strange Number?

The existence of a maximum threshold at all is because of the way this aspect of the game is programmed. The most plausible explanation for the cap is that the initial developers of WoW declared the variable (that is, assigned it as an adaptable mathematical value) of copper as ‘int32’, a signed 32-bit integer. This type of assignment allows for a maximum of 31 mathematical characters with one space reserved for positive or negative designation. The designation of a variable as a signed int32 allows for a maximum value of negative or positive 2 to the power of 31 (subtracting one on the positive side of the scale). So int32 allows for a range of –2^31 to 2^31-1. 2^31 is 2,147,483,648-1 which is 2,147,483,647. Look familiar? That’s the actual Copper Cap. Translated back to ‘gold cap’ and allowing for understanding that a player must have less than the maximum it becomes 214,748.36.46. See how that works? So in computational terms, the gold cap is a < signed int32 or < 2^31-1. Complex? Maybe. But still entirely understandable.

Can It Be Fixed?

Can it? Will it? Is it even ‘broken’? Ultimately it is up the Blizzard developers to determine if they are interested in increasing the gold cap. The most plausible, albeit short-sighted, solution would be to make the number an unsigned integer thus allowing for a maximum gold amount of less than 2^32-1 or 4,294,967,295 copper (or 429,496 Gold, 72 Silver and 95 Copper) but, of course, we have no idea what impact this might have on the game’s programming or currency model. It seems like a reasonable solution because you can’t have a negative gold balance (although we know some players who sure try hard enough) so what’s the need for the extra character pos/neg designator anyway? Of course, perhaps the only reason you can’t have a negative gold amount is because of this designation so… who knows? The other possibility is that they assign the variable a different declaration, one with a longer character allowance, but again we can only theorize as to the impact of such a seemingly simple yet potentially drastic change.

In our opinion, we’d rather they didn’t attempt to tackle this problem since the work around is simply sending gold to alts or storing in a privately owned guild bank. Ever have problems on patch day? Notice odd bugs come up after the release of major content? Ever have issues with items or mail? We have. Therefore, we’re not very excited about the prospect of messing with a system that might have far reaching and unpredictable results. Particularly when it comes to results that might adversely impact our virtual wallets.

The Auction House Has its Own Gold Cap

Yes, the AH has its own, unique, gold cap. The maximum amounts for items listed in the AH are:

200,000 Gold for bid
429,496 Gold, 72 Silver, 95 Copper for buyout

However- and this is where it really gets strange- you can’t list both maximums on the same auction. That’s right. While you can list items for 200,000 bid OR items for 429,496.72.95 G buyout, you can’t do so at the same time. You have to lower one or the other or the game does it for you automatically. Also interesting is that where the bid level appears to be a hard, or fixed cap, the buyout is a bit more elusive. So any time you try to list an item above 200,000 G bid the Auction button will simply gray out. Easy enough. But listing items above the buyout max level will do things like automatically adjust your buyout level downwards to various, and mostly unpredictable, levels.

Of course, the strangest part of this revelation is that auctions can be set at levels higher than the maximum amount of gold a player can have. Thus, you could theoretically set an auction for a price that no player could possibly pay and, even if they could, you couldn’t receive. Take a moment and just imagine the pain of selling a 400,000 gold auction and not being able to receive it. Which brings us to our next point…

…did seeing the buyout maximum set off a sense of mathematical déjà vu? It should. The limit mentioned above could also be described as less than 4,294,967,296 which is, as stated earlier, 2 to the 32nd power. 2^32-1 is an unsigned int32 declaration. So Blizzard used a signed integer declaration for the gold cap, but not so for the AH limit. Strange. Does this mean, theoretically at least, that it is possible to have a negative gold amount somehow in the game? We don’t think so but it does raise some legitimate questions.

There may also be an in-game mailbox gold cap but, to be absolutely honest, none of us had the balls to test it out.

Capping the Gold Cap Discussion

So that’s the basics of the gold cap logic. Will the gold cap always remain at this level? Hard to say. It seems reasonable that if players are becoming more and more wealthy with each expansion pack, and items and gold sinks costing more, Blizzard would raise the limit if, indeed, they intend the game to go on for a long time. But seeing as how honor is still capped at 75,000 it may not be something that the development team is too worried about.

Hopefully we’ve not bored anyone to sleep just yet. But if reaching the gold cap is a goal you’re striving to meet it certainly can’t hurt to know more about it. Good luck in your own efforts of reaching it.



Filed under WoW Economy News, WoW Market Commentary, WoWenomic Theory and Discussion

What Level is Your WoW Gold Making Skill?

There are so many skills and abilities that are easily measurable in World of Warcraft. Character, Profession, Items, Durability, Progression levels and more are all easily tracked and compared. However, the ability to generate WoW wealth remains subjective at best. A player makes a few gold and suddenly starts thinking that they’ve mastered the gold making meta-game. So how can we tell how good a player is at wealth generation? What metrics do we use to measure gold making success?

In response to these, and other questions, we offer the following assessment chart.

The Casual

The casual trader is the player that posts the occasional item in the Auction House but for the most part finds the entire experience frustrating. When they do trade, they complain of ‘over priced’ goods (before they buy them anyway) and undercutters (and yet, they still will attempt to post). These are the players that selling items in /trade chat for half of what they go for in the AH just because they “don’t want to have to deal with the AH.”

Trading Tools Used: Begging, complaining and delinquent loans
Market Outlook: “There’s a market? Do they sell fruit and vegetables?”

The Apprentice

These are players who have developed an awareness of the gold making game but have no taste for participation themselves. They claim to make ‘enough’ gold for their needs through dailies and selling the occasional items in the AH. They lack a concept of pricing , market cycles, or marketing strategy. Often sells their profession cooldowns. More often than not, these players are also people that have been playing for a while and are accomplished at one or more aspects of the game.

Trading Tools Used: WoW.com, MMO Champion, a few generalist WoW blogs and buying gold for cash.
Market Outlook: “OMG get a life! Who needs that much gold anyway? You only need enough for your mount, riding skill and repairs. Why be greedy?”

The Understudy

Many serious gold makers start their journeys in the role of The Understudy. These are the people who farm relentlessly and supply others with their raw materials or provide dungeon run throughs or boosts. They are capable of making a few hundred gold a day and are usually happy with the results. At some point, however, The Understudy will begin to question just what all the materials are used for and will sometimes even ask around or start reading the WoW gold blogs. In fact, this awareness (that there is more to be had and a desire to get it) is the very moment at which they begin to progress to the next level of the gold making meta-game.

Trading Tools Used: Gatherer and similar farming mods, route planning and daily consolodation web sites and suggestions, upgraded fishing rods.
Market Outlook: “How does he have so much gold?”

The Artisan

This is the beginning of the journey to WoW gold master. The Artisan has a preferred method of making gold but is usually restricted to a single or very few markets. These players enjoy the gold making game and often are on the lookout for opportunities. They usually read at least one of the WoW gold blogs and stay up to date with coming changes to the economy. These players will have maxed out professions and usually a few very rare recipes. They buy and sell profitably and will often advertise their skills and goods in /trade chat.

Trading Tools Used: Auctioneer and possibly other AH tools, analysis and pursuit of the most profitable daily quests and activities.
Market Outlook: “I wonder if I can hit the gold cap? How long will it take?”

The Master of Markets

This trader is very similar to the artisan but takes their mastery of the Auction House to the extreme. These players often have multiple methods of supply for their crafting needs and strictly manage costs. They often dominate very specific markets and are always hunting for more. They understand the more complex aspects of WoWenomics and use spreadsheets, cost analysis and various crafting mods. They are restricted only by their supply and time investment limitations. They are often at least familiar with their biggest competitors.

Trading Tools Used: Auctioneer and related add-ons, QA2, Other AH mod and interface tools, the default friends list, personal banker guilds, steady supply of farmers and exploitation of trading noobs.
Market Outlook: “This current amount of daily profits is nice, but how can I make even more?”

The WoW Tycoon

The Tycoon is most easily defined by the fact that he is quite often not as aware of his competition as the competition is of him. As soon as the Tycoon logs in, his competition breaths a collective sigh and prepares for returned auctions. The Tycoon dominates market segments through a careful mix of scalable supply, demand interpretation, cost management and pricing strategy. They often have their methods of profit perfected and are impervious to all but the best competitors. At this stage of the gold making game, they also end up spending less time in the AH, since they’ve developed a pretty clear understanding of opportunity cost and will thus streamline their selling process. Generally, does not work for tips.

Trading Tools Used: Any AH interface mod (they’ve more than likely tried them all), pricing strategy and an in-depth understanding of scalability, multiple banker alts and guilds, mail, crafting and inventory management mods and tools, specific market domination.
Market Outlook: “This is too easy!”

Bear in mind that anyone can make gold in WoW. All players have a chance to eventually reach the gold cap. So this guide wasn’t created to say who is or is not capable of generating gold but rather to separate the beginners from the experts and to identify the tools, skills and mindsets of all levels of WoW traders.

It is also worth noting that all players, including those at the highest level of the gold making game, performed at the lower levels at some point during their WoW career. Anyone can progress beyond his or her current level with attentive study, practice and planning.

So… what level are you?


Filed under WoW Market Commentary

Blizzard, Customer Service and Reasonable Expectations

As reported widely, connection issues are widespread here in the US tonight in the wake of the implementation of a (relatively) minor patch. Presumably these same issues will also affect the EU realms in the following days. Server instability post-patch is nothing new. In fact, regular readers will note that here at WoWenomics we don’t particularly mind and, in fact, we’ve even developed a profitable strategy for dealing with such issues.

However, what we really ask today is the following:

Is server instability, the game generally being unplayable and unforeseen extended downtime acceptable?

It seems strange to us, from a purely consumer perspective, that we have grown so accustomed to this near weekly outage of service from our favorite game. We’ve been pondering this point for some time at WoWenomics because this is actually the very moment that real and virtual finance intersect. By being unable to play the game that we pay real money for, we are also not able to make in-game money. So, in a sense, we are losing money both in the real and virtual worlds at once. As finance wonks, this just doesn’t sit right.

Agreeably, it’s a big game, there’s lots of unforeseeable stuff going on, they’re working as hard as they can. Yeah, yeah… We get it.

But, regardless of the explanation, the game’s still unplayable isn’t it? Why is this okay? Moreover, why are we not compensated for this down time? If, on Wall Street, we told our clients, “Gee, sorry we didn’t get that trade made in time for you but we were having technical difficulties.” That would more than likely be the last time we heard from that client. Moreover, if we committed to the trade and didn’t actually execute it we’d have to compensate the client, and possibly still face legal, disciplinary and regulatory action. To take it a little closer to home, what if your bank said one day, “Sorry, no money today. Computer upgrades. Should be back up by 11. Okay, now it’s 1. Well for sure by 2. Whoa, hey look at that, just moved a decimal in your account by accident. Whoops!” Would that be acceptable? What if it was the power company?

But this is Entertainment, Not a Critical Service

Well that’s a fair statement. After all, WoW is hardly integral to our day-to-day life. It’s a diversion and a game. But we wouldn’t tolerate the same sort of outages in our other forms of entertainment either. How long would you sit in a movie theater with no movie showing? What’s the longest amount of time you’d sit at a restaurant table waiting for your food? Would the waiter coming over saying “another hour or so” every few hours appease you? Or, perhaps more pointedly, would you stay in an amusement park very long if the rides were all non-functional? At what point do you ask for a refund or at least some form of compensation?

The Waiting Room and No Room for Waiting

One of our team members tells a story of a business professor he studied with while pursuing his MBA. This guy was a well known, published and highly respected businessman- Somewhat of a celebrity in both the worlds of business consulting and writing. Supposedly, this guy would pro rate the amount he paid for doctor and other medical appointments if he was left sitting in the waiting room. He would allow for 10 minutes of tardiness, beyond that he felt that what they lacked was organization and appropriate management. His time cost a significant amount of money (he was paid handsomely for speaking and teaching engagements) so why shouldn’t he charge them for wasting it? After some time pro-rating his payments, guess what happened. His doctors (and even his dentist) started finding a way to see him with fewer than ten minutes of wait time… Always.

Now we’re not advising you pull this kind of thing with your own medical professionals. For one thing it is quite possible that you don’t have the same amount of clout or spending power but the lesson still resonates. What’s your time worth? Is that time of the same value to the people that serve you? Or are you, your money and your attention, expendable?

Blizzard and Service Delays

It would probably be a much more minor issue if we could have a clear indication from the service provider as to the delays and anticipated issues. But Blizzard’s stance is always one of shock and surprise. “Ooops, we didn’t mean for that to happen.” And how about the cryptic messages that come after the predicted up time is missed or new issues occur:

“We are aware of the stability issues affecting several realms and instances this evening and are actively working toward addressing these matters as quickly as possible. Additional updates will be provided as they are made available. In the mean time, your patience during this process is greatly appreciated.”

That sounds like it was dreamt up by a legal team and regurgitated by the public relations department. Is that the best they can do? Why aren’t they “working toward addressing these matters” prior to their start? What, they couldn’t be anticipated? Well guess what, they can. In fact, we’re going to call it right now. You heard it here first folks: next patch day will bring more issues, more lag, more down time, and more bulls**t messages from Blizzard. Now it has been anticipated. And we don’t even work there.

This all seems, again as consumers of this otherwise fine product, a little circumspect. Why is it that we allow, and at this point even expect, these types of hiccups from the provider on patch days? And let’s not even get started talking about expansion pack release days right?

So that’s what we’re asking. Why no financial compensation blizzard? Our monthly fee already allows for a few hours a week down time but an entire day? Why do we accept this as consumers? Why do we come back week after week? Why is it always so unforeseeable and unpredictable? Are we owed anything at all here? Are we really paying for 6 working days a week at the price of 7? And just why is that okay?

Perhaps, at least from Blizzard’s perspective, the apparent lack of giving a s**t starts at the very top no?


Filed under WoW Community News

The Best Bank Alt

The WoWenomics team was asked to brainstorm their thoughts on what makes the best bank or Auction House alt. Here are the a few of their ideas:

  1. Private Guild
    First and foremost, a bank alt should have their own guild. We won’t get too deep into the specifics of why beyond saying that it is the most inexpensive storage solution for mass amounts of materials. Bag slots per capita are cheaper when paying for a brand new guild and a few bank tabs then when purchasing additional personal bank slots and crafting or purchasing large bags. Further, you can better categorize your materials by naming and selecting an appropriate icon for tabs (herbs, ore, gems, consumables, etc.). Zekta’s got a nice write up of the benefits to creating your own guild. Definitely worth a look.
  2. Speed
    A selling alt should have fast movement speed. Faster than other players anyway. The idea is that you often have to run back and for the between mail box, the bank and the AH. You want a player that has skills that enable this sort of fast movement. If its something you’re going to be doing lots of, you want to save as many seconds as possible.
  3. Professions
    No need for a gathering skill. Your bank alt will be spending the majority of their time in capital cities so there should be very little gathering involved. You may wish to choose gathering professions while leveling your bank alt and then switch to crafting professions later after you’ve attained the desired level. If you can’t let go of your farmer, we’ve advocated previously that your main should be your farmer as that toon will be spending the majority of its time out in the world. That said, it we understand if your play style prohibits that type of setup. The only thing we min/max around here is our wallets. Just remember that there’s no need to have a gathering skill on your banker. It’s a wasted profession. Ideally your profession should be something that has a neat cool down that provides a unique benefit every day or so also. This way, on days that you can’t really play, you can at least log in for a few seconds on a single toon (one that already has all your materials) and activate your cooldowns and log right back out.
  4. Additional Skills
    We like the idea of maximizing profits. If you’re going to be on your bank alt standing around the cities, why not choose a class that allows you to benefit from an additional skill. Rogues that provide lockbox opening services and water boys that also sell ports come immediately to mind. Both of these skills are fairly easy to level although mages have the edge in terms of easy skill leveling. At any rate, choosing a class that grants an additional, albeit negligible, amount of income is a nice bonus.
  5. Reputation
    This one is overlooked most often by amateur players. If your banker toon is also going to be doing a lot of your AH buying and selling, it will pay off to have a toon that is at least honorable with the city in which you are conducting business. Raise your reputation with this toon and save gold over the long term.
  6. Limit Spending
    There is no need for your bank toon to have expensive mounts, toys or BoE gear. Bear in mind that this toon will mostly sit in the cities and generate gold. Don’t bother buying expensive stuff that won’t get used and instead save the money for upgrades on your other toons. Remember that saving gold is as important as generating gold when it comes to profits.

Hopefully these tips will help you get started in creating a profitable bank or AH alt. What other ideas can you think of to maximize alt production?


Filed under WoW Gold Making Tips

Activision Blizzard CEO Speaks on Corporate Culture

Yesterday, reports Gamespot, Activision Blizzard (ATVI) CEO Robert Kotick spoke at the Deutsche Bank Securities Technology Conference in San Francisco. During the 45-minute presentation he, apparently, discussed a range of issues including the timing of the next cycle of gaming consoles, the possibility of a console-less Guitar Hero future and, most interestingly (to us anyway) the “Culture of thrift” that he instills at the company.

Extracts of Mr. Kotick’s speech include:

  • His intent “to take all the fun out of making video games.”
  • Touting an employee incentive program that “really rewards profit and nothing else.”
  • Pride in instilling a culture of “skepticism, pessimism, and fear” of economic conditions.

While it is understandable, and to be expected, that a CEO of any company focus stringently on the bottom line, we do have to wonder what message this sends to those that create the games that we so enjoy. Already, a few noted game industry insiders have expressed their discontent with working in such an environment. It is worth noting that the Activision Blizzard merger is still in its infancy (or perhaps adolescent years depending on scale of measurement) and, as yet, it is difficult to quantify how this culture might influence Blizzard’s current and future creative efforts. Superficially at least, it does appear to be counter-intuitive with the culture of fun and awesome that we were shown during the Blizzcon ’09 Irvine, CA office tour. Mmmmm, not really seeing the thrift there.

It is, perhaps, relevant to note that Mr. Kotick was speaking at an investment-banking forum in which one would probably be well advised to speak of thrift and restraint given our current economic climate. Along those lines, Kotick also focused a significant amount of his time on discussing “mouth movement technology”. Given that he was talking to a bunch of bankers about one of their favorite topics, savings and thrift, we wonder to what degree he was simply providing a demonstration of the advancements in this emerging field. Mastery of which is, of course, another key trait of any successful CEO.


Filed under Business News, Real Life Finance, WoW Community News

Investment Advice

Financial guidance is a tricky game. There are many different approaches to the game and part of being a successful advisor is convincing others that you are already a successful advisor. Thus we set out, based on the overwhelming questions we’ve received from readers about real world guidance, to provide our own tips for choosing the best financial advice and advisors to follow whether you’re seeking advice for making more gold or more cash.

Who is the Expert

For the layman, the quickest and simplest explanation is almost always preferred. In fact, anything more complex than a basic tip or suggestion is most likely not even to be heard. This is not intended as an insult, it is simply the way the mind works. Even the most astute WoW (or real world) trader could be a financial genius but that doesn’t mean that they would have the desire to discuss the finer points of arthroscopic knee surgery or molecular biology or astronomy or even preparing an exquisite seven course meal. Everybody finds some things boring and other things interesting. The fact that we are so diverse in our interests and opinions is really a blessing in that it makes each of us have a potential value that we can choose to contribute to the vast pool of humanity. However, we can actually do or learn anything we put our minds to. This unique skill to adapt and learn is another gift we have. So, if we can learn anything than can’t we all be financial experts?

No. See, the fact is that while you can do anything you can’t do everything. As humans we end up making choices about where we direct our attention and the things we choose to ignore. So at some point you have to sacrifice certain subjects and learn about others that catch your interest. Ideally you find your passion, follow it, and never look back. But what happens when you want to learn about a subject that you did not have enough interest in to study? In those cases you turn to an outside source for guidance.

Enter the financial advisor. This is the person whose mission is to bring you financial advice, guidance, strategy and knowledge about aspects of money that you may not fully understand. The point is that not having a full comprehension of all aspects of finance is completely within reason. The smartest thing you can do is simply apply this understanding towards seeking guidance (as opposed to responding to some spam mail or something and dropping a few grand on a bad investment).

The best thing you can do, as a potential investor seeking guidance, whether you’re a seasoned pro or the newest of noobs, is to develop the skills to comprehend what your being told. No need to fully understand complex finance, but you certainly should know how to discern good advice from bad.

Types of Advice

There are many categories of financial guidance. It helps to be able to identify them if you’re going to decide what works best for you.

  • Forecasts- Forecasts are predictions about the future of (ideally) specific markets based on (hopefully) historic data that has been thoroughly analyzed. This type of guidance usually mentions terms like cycles, trends, correlation and probability.
  • Strategy- Strategy is an overall approach as opposed to a specific type of guidance. Strategy determines what types of investments you should be seeking and how to set up all of the variables to best succeed.
  • Tips and Tricks- These are quick hits based on what is usually an overlooked or not widely known piece of information. It is the number one thing that that average investor asks for and the last thing a good advisor should ever give (we told you it was a tricky business). The reality is that if someone gives you a hot tip you should consider their incentive to do so (see ‘incentives’ below). If we give you an insider tip based on proprietary knowledge we’re breaking the law and if we had a crystal ball to look in we’d already have done so and, chances are, not have told the average investor about it. The best thing we can tell you here is that there are no short cuts, just thorough research and real life experience. Think about this next time someone tells you that they work in finance and you ask for a “hot stock tip.”
  • Guidance- A good advisor provides suggestions and guidance based on your situation. This involves listening and understanding on their part before they ever say a word. Guidance is a delicate art and requires lots of patience from both parties. There is also an inferred level of trust and acceptance. Someone who provides decent guidance will only let you take on a tolerable level of risk and is really more about helping you develop a strategy (and facilitating that strategy) than they are about selling you a product or convincing you of anything.

Types of Non-advice

Just as there is lots of advice, there is also lots of non-advice. In fact, non-advice is the most popular form of financial discussion there is. It helps to understand these types of non-advice whilst understanding that it too has value.

  • Discussion and Theory– This type of guidance is very general and really more of a discussion of possibilities with in the market. These advisors are often vague and will deliberately avoid making any specific recommendations. Nothing ventured, nothing gained- true. However, these guys know that that the opposite is also true and while nothing is gained by vague theoretical discussion, nothing is lost. Thus, you can’t accuse them of losing all your money or giving bad advice. How could they have? They didn’t really say anything.
  • Punditry- This type of advice is designed to make your eyes glaze over. These are the pundits and pontificators. These guys use big words and complex equations with the knowledge that you won’t understand them and will be too embarrassed to ask for clearer language. It is tough to detect this sort of bullshit because it feels counterintuitive. After all, shouldn’t this guy be smart about this subject? Smart? Yes. Confusing and evasive? Not so much. If they’re really smart, and care at all about your money, they will also be able to speak to you in a language you can understand. Every finance pro can do this incidentally, it is the last class they teach us before we graduate, “How to Bullshit and Sound Even Smarter 101”. In fact, we’re willing to bet that everyone knows someone who does this. Typical subjects that perform this linguistic tango are managers and professors- easier to sound smart and intimidating than to actually do something. It doesn’t mean that the advisor doesn’t know what they’re talking about, but it does mean that if you’re going to listen you should ask for a reasonable explanation.
  • Tales of Success- This is the type of advice that consists of not ever telling you what to do but instead, regales you with stories about what the advisor has done successfully in the past. You say, “I have a ton of Titanium Ore right now.” And this type of advisor tells you about how they once turned all of their titanium into bars and had a blacksmith craft a bunch of frost resist gear that they bled into the market and they made a killing. The advisor never told you what to do, or developed a strategy based on your needs but instead told you what they did. Replicating the strategy sometimes works and sometimes doesn’t.

Reporting (and a little more about us)

It is important to distinguish reporting from guidance. Many people make the mistake of thinking they are one in the same when they are actually quite different. Reporting tells you what’s going on. Guidance tells you what to do about what is going on. Reporting tells you that the market is up today. Guidance tells you why and how to react. Get it?

One of the things we like to do here at WoWenomics is report. Yes, by our own admission, we prefer to not give guidance. In fact, when this blog was in its infancy the team agreed, specifically because we all work in finance, that we wanted only to report… just the facts, nothing more. For a variety of reasons we do more than report these days but our favorite type of WoWenomic study is just that, examination of the WoW economy. Hence the name…

This is also why we welcome all other finance blogs and list them right there on the side bar of every page. We read all of these blogs and are constantly on the hunt for more. We don’t view these as competitors (for one thing no one has any financial incentive here- no ads, no sponsors, no guide books) but rather sources of guidance you can choose to follow yourself. They broaden the picture we see and we hope you use them all, from the smallest and news blog to the biggest and furthest off topic, to learn more about this fantastic virtual economy. And please, tell us all about what you’ve found and share your own theories.

The Unknown

As we already said, no one knows it all. It doesn’t matter how good your investment advisor is they will have to deal with an otherwise unforeseen event. This is why a good advisor will give you more than just financial tips, they will also help you diversify, build a safety net and generally plan for the unknown. This is also why you, as the investor, must understand more than just “buy X stock”. You need to understand the basics such as how long it will take to return your investment and how much you can expect to make beyond your seed investment amount.

At the end of the day there are no guarantees, no 100% winners and no short cuts. If you want to be successful in the market, be it virtual or real world, you do your research and plan accordingly or you turn to a trusted source that does this work for you.

Vested Interest

One of the best tools you can use to determine the quality of financial advice is that of understanding the motivation of the person guiding you. Is this person trying to sell you something? Are they advocating a political or moralistic agenda? What’s their angle? There is an old Wall Street adage that says, “Whenever you don’t know who the loser is in a transaction, then the loser is you.” Some investment advisors get paid salary, others commission, others still make money pushing certain financial instruments. It helps to know where the person giving you advice is getting compensated. Do your homework and get the details. A good example is with the televised investment shows on CNBC and the like. These people often seem like educated and respected gurus and that may even be true to a certain extent. But are they in the business of providing you with sound financial advice? No. They are in the business of selling advertising space or air time. These guys benefit when viewership increases and they sell more advertising, not when you do well in the market.

So Wait a Minute, How do I Identify a Good Financial Advisor?

The best financial advice comes when your incentives are aligned with the person providing you guidance. If they benefit from you doing well, in the form of your return business or commissions or similar, then this person is more likely to give you advice they can use. And how can they know when your interests are aligned? Good question. The way they do that is by listening. If you take only one thing away from this article let that be it. One clear sign of a good investment advisor is someone that understands your situation through a series of probing questions and receptive listening. Not the guy with the flashy suit who tells you to buy X stock.

So, Is This the Part Where You Give Me a Hot Stock Tip?

The best thing we can tell you regarding WoW is that if you’re looking to cash in quick, understand the market has trends based almost exclusively on supply and demand. If you want to understand these trends just read the patch notes and WoW finance blogs and react accordingly. Right now, inscription is the hot profession and Titanium the hot item. But this too shall pass and that’s really our point.

If you’re looking for real world financial tips the best one we can give you (with the understanding that we’re not in the business of guidance at all) is that you should invest as early in life as possible in a Roth IRA. This instrument, used in conjunction with a decent 401k plan through your employer, is like the dual-farming spec of real life. It is a fantastic and simple scheme and requires very little beyond your investment and commitment. It is also what we tell every single person we meet who asks for a “hot stock tip” so there you go.


Filed under Real Life Finance, WoWenomic Theory and Discussion

Profiting from Server Down Time

The WoW alert system is showing that there will be some additional down time this morning in the form of rolling restarts for some servers and an extra four hours of maintenance for many other realms. This is a fantastic opportunity for profit for the opportunistic WoW trader. We’ve previously pointed out some of the ways to make gold from these types of situations. Highlights of opportunities include:

  • Less competition- Less players able to log on means less players posting in the AH.
  • Weaker competition- Your main competitors may not be able to log in. Use this opportunity to gank the AH and jack up the prices. If this is the case, consider posting for shorter durations under the assumption that the competition will return when technical issues are resolved.
  • Expiring auctions- The ‘Monday night effect’ occurs on other days as auctions are due to expire. Look for underpriced bid items and pick the low hanging fruit.
  • New content opportunities- As extended and unscheduled maintenance is almost always attributed to new content releases, prepare for the needs of players running that content. Initially expect to sell healing/mana potions, flasks and other consumables and eventually start selling enchantments, enchanting materials, item enhancements and gems and glyphs. This is a classic seller’s market.
  • Overcut- Yes, we made that word up. But the concept is simple. If the above point is true and some items are going to sell out quickly than there is opportunity to be had by selling at the top price of a market. If you expect an item to sell out (i.e. there are only several listed of an item that usually moves quickly) don’t for them to sell out and then post yours. Simply price your item at a higher price under the assumption that when the others sell out yours will be the only option left. Fantastic opportunities for this type of market manipulation are currently high-end cloth, select flasks, and our favorite, raw epic gems. Several realm’s auction houses scanned this morning showed only 3-5 raw epic gems in stock instead of the normal 10-20.
  • It’s not you, it’s me- In the event that you’re the one experiencing technical issues and unable to log on, ideally you’ve already posted some items in the AH with high prices in anticipation of the downtime. Either way, take this time to brush up on your trading skills by looking through our archives or visiting some of the real world business and trading sites listed on our resources page. In fact, we’ll suggest a few fun articles…

Here are a few favorite real-world business articles from the past few days for your downtime reading pleasure:


Filed under WoW Community News, WoW Economy News, WoW Gold Making Tips, WoW Market Commentary