Reverse Speculation

Ever seen the show MadMoney? If you have, you're not the only ones watching it that want to make some money. You see, countless investors do exactly what the show tells them, and wallstreet sharks take advantage of all the little fish mindlessly following the show.

How does this relate to the world of warcraft economy?

Take Icy Dragonscales. Players flocked to the auction house to buy these items which are going to be used as many as 40 at a time for a single pattern in Ulduar. What happened to the price? Supply dropped, demand rose.... 300% markup! I'm seeing Icy Dragonscales start to drop again, but not before several smart players took advantage of the influx of buyers.

I saw people buying out the dragonscales at 2-3 gold per when they used to go for 1.1-1.5 gold per. Those players who either read my post, wowinsider's post covering mine, or just saw the sudden surge of buyers, dumped their dragonscales onto the auciton house for great profits. Those players who didn't know the market grabbed as many as they could with the promise that on patch day they'd get more than double their money back.

This whole process is something I call Reverse Speculation. The art of selling goods when buyers are told they are a good deal or will be needed later. There's nothing wrong with this process, it's a totaly legitemate way to make gold, but I'd also like to point out to the newer auctioneers that this is definately something to watch out for.

Have you ever used reverse speculation to your advantage? Comment!

20 comments: on "Reverse Speculation"

  1. Like shorting the market?

  2. The only problem with this is that it SOMETIMES crashes the market:(

  3. I was afraid of this happening on my server but I seem to find a stack or 2 a day that are priced about 20g a stack. This is a good idea though. I am guessing not enough players on my server read the gold making blogs however.

    Bank of Amorob Blog

  4. While 'm wiling to admit I am one of the people who bought a tonne at about 1.5G each, i refused to pay more then 1.75 and am now having lots of fun making money of buying and vendoring them at their crashed price. With them being lower then vendor I can horde them and still be guaranteed to make money come patch day.

  5. Well, they vendor for 1g each, so if you bought them at 1.5g each you are not making money.

    Bank of Amorob Blog

  6. I have over a thousand dragonscales, but I never paid more than 1.25g per...and I'm still buying a few stacks a day. It just seems my server (Cho'gall) either doesn't read your blog, or there is just too much supply. I know I won't make back my money quickly...but I hope to be one of the largest suppliers on my server. I plan to hit the market on patch day with 3 different toons with 3 different and increasing prices. Wish me luck!

  7. Good luck. I am trying the same thing. With the prices of these things being pretty constant on my server I am hoping for a small jump. If they go up to 3g each I will be making a lot of money.

    Bank of Amorob - WoW Gold
    Making Blog

  8. So, I didn't get this clear. Am I or am I not supposed to buy this if under 1.5g each?

  9. What, you need Daddy to tell you what to do?

  10. I don't really think that'll happen honestly. The demand would have to become very very heavy to cause a price variance for such a liquid product. In the end if they're so common most people would farm their own or buy from their guild cheap.

  11. So, you are trying to justify being wrong? "Oh, I meant to do that."

    Your blogging credibility is seriously in question when you reveal that you are using your readers in order for you to make gold.

  12. Funny example.
    I read this blog : Icy Dragonscales will becomre hot.
    Then i bought many many.
    But at one point, my brain said : STOP.

    Because this info was becoming too 'public'.
    Because patch wasnt coming anytime.

    So i stopped, sold them a little bit more than i bought, but i emptied my stock.

    I didnt counter-speculate. I just tried to 'not lose' money, or i thought that the race was going to be 'adventurous'...

    So what can i get after all this? That all the blogs are maybe a good way to see what *may* happen, but at the end of the day, your brain and instinct makes everything.


  13. Yes thats right last Anon Marko has created this blog just to make profit off his readers. This is why he puts up posts about farming places, who to use auctioneer, and things that vendor well. Yep each of those things has a direct deposit line right to Marko's bank.

    Or could it possibly be that economics (even in a *gasp video game) are more complicated then A=profit? Anywhere there are human interactions, including and MMOs, an economy is created. The more people and things in that economy the more complex it becomes. While nothing compared to, say, the real world economy the WoW economy has a lot of moving parts, and can be pushed and pulled in wierd ways with farther reaching effects then you might think at first.

    To the topic of the post, I don't do really speculate, nor reverse speculate. The vast majority of the money I make is from buying goods off the AH and crafting them into something.

  14. @Don - It is possible once they have the new recipes that they will be able to make a good profit creating the reselling the new BoEs. This could push demand up causing something to sell for 2-4 gold instead of vendor prices on the AH. It also probably depends on which server you are on.

    Bank of Amorob - WoW Gold
    Making Blog

  15. Beryllos- This is one of my many posts asking you to use your brain and not be one among many sheep.

    If you don't like the blog, just click away.

    Wowinsider covering the dragonscale post is why it became so public, had they not done that then it would have remained profitable. I have no control over other sites quoting my information or causing widespread buying.

  16. @ Markco

    Do not feel bad. You give some good tips and ideas for people to use, but your bringing up Mad Money is a great example.

    Read the small print and listen to what they say. Jim always says that you need to do your homework. Chances are that investors watching that show are not the only one and if they all run and invest for the same thing, they delude the market where there may/may not have been a good recommendation.

    Remember that bears make money, bulls make money, and hogs get slaughtered! Another thing that Jim says on that show. (I work in the industry also and would never recommend to follow what a show says because you are going off information that has already been moved upon)

    So think about all that when you go and try to buy a ton of items. If you are hogging them, chances are you are not alone and that could cause you not to come out ahead.

    Another thing you need to do is learn what makes money on your server. Just because there are huge profits by one or two people does not mean it will work for everyone.

    Buyer beware!

    On a side note, I love reading your blog since I found it. Keep posting cause there are some great ideas and a different perspective. Love it!

  17. Marko

    Sorry if you took my post wrong, I was trying to point out to the Anonymous poster who left no name above my comment who stupid his idea was.

    Perhaps I should have been more clear on that. I greatly appreciate all the work you have put into your blog and I read it daily.

  18. Aw I'm sorry, that was mean of me :(

  19. man, this is totally ahppening with dreamshards on my server.. this very evening they where accually up at 35 g each!.. i mean seriously, that must be 200% overprice at any server?.. the question is wheter to put some of ur stocking out there or keep em all for patch realease?..

    Oh and i also did a "Reverse" on icy dragonskin myself, bought em all then posted a gang for overprice ^^

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